California's Net Neutrality: State-Wide Vote For Internet Freedom

California's net neutrality law, SB 822, was passed in 2018 with bipartisan support, despite opposition from AT&T, Verizon, and Comcast. The law, authored by California State Senator Scott Wiener, prohibits internet providers from blocking or throttling legal apps, websites, or services, bans paid prioritization of data, and prevents unfair tactics from telecommunications companies. It is the only state-level law that restores all net neutrality protections that the FCC eliminated. The law faced legal challenges from the Trump administration and ISP trade associations, but these were eventually dropped, and the law was upheld by the Ninth Circuit Court in January 2022, allowing California to enforce its own net neutrality protections. This decision affirmed that when the FCC reclassified broadband internet as an information service in 2018, it abandoned its regulatory authority over net neutrality, and therefore, California could enact its own protections.

California's SB 822 Net Neutrality Act

In 2018, the Federal Communications Commission (FCC) voted to repeal net neutrality protections. California responded by adopting its own net neutrality law, SB 822, which went into effect on January 1, 2019. The law, proposed by California State Senator Scott Wiener, aimed to provide the most comprehensive net neutrality protections in the country.

The California Internet Consumer Protection and Net Neutrality Act of 2018, or SB-822, makes it unlawful for broadband service providers in California to block lawful content, degrade or impair lawful internet traffic on the basis of content, engage in paid prioritization, or unreasonably interfere with or disadvantage a user's ability to access the internet. The Act was adopted pursuant to the police power inherent in the State of California to protect and promote the safety, life, public health, public convenience, general prosperity, and well-being of society, and the welfare of the state’s population and economy, which are increasingly dependent on an open and neutral Internet.

The Ninth Circuit upheld California's net neutrality law, rejecting a federal preemption challenge and concluding that the FCC's reclassification of broadband internet access service from a "telecommunications service" to an "information service" in 2018 had resulted in the abandonment of its regulatory authority over net neutrality. This decision allowed California to enact its own net neutrality protections for broadband services provided to its residents.

The enactment of SB 822 faced opposition from the United States, which sued to overturn it just hours after then-Governor Brown signed it into law in September 2018. A coalition of trade associations representing major ISPs in the country also joined the lawsuit a few days later. However, the lawsuit was paused until a separate court challenge to the FCC's 2018 repeal order was fully resolved. California agreed not to enforce the law during this interim period.

The FCC's repeal of net neutrality rules

The 2015 net neutrality rules were met with strong opposition from the cable and wireless industries and other stakeholders aligned with BIAS providers. On the other hand, consumer advocacy groups passionately argued that BIAS was too critical to the public to be left unregulated. Despite this opposition, the FCC under President Donald Trump moved to repeal its net neutrality rules in 2017, with a final vote taking place on December 14, 2017, resulting in a 3-2 party-line vote approving the repeal. The current version of "Restoring Internet Freedom" was made public on January 4, 2018, and officially codified on February 22, 2018, with the rules taking effect on June 11, 2018.

The FCC's decision to repeal net neutrality rules was not without controversy. There were allegations of fraud and irregularities in the public commenting period, with millions of comments found to be fraudulent and using anti-net neutrality wording. Additionally, FCC Commissioner Jessica Rosenworcel alleged that the FCC was withholding evidence of fraud and called for the vote to be postponed until an appropriate investigation was conducted. Despite these concerns, the repeal was approved, and the FCC's 2018 deregulatory decision effectively removed its authority over broadband providers.

In response to the FCC's repeal of net neutrality rules, California and several other states, including Washington, Colorado, Oregon, Vermont, and New York, adopted their own net neutrality laws. California's Internet Consumer Protection and Net Neutrality Act of 2018, or SB-822, went into effect on January 1, 2019, making it unlawful for broadband service providers in the state to block lawful content, degrade or impair lawful internet traffic, engage in paid prioritization, or unreasonably interfere with a user's ability to access the internet. The Ninth Circuit upheld California's net neutrality law, concluding that the FCC's reclassification of broadband service as an information service abandoned its regulatory authority, and therefore, California was no longer preempted from enacting its own protections.

The Ninth Circuit's approval of California's law

In January 2022, the Ninth Circuit ruled unanimously that California's net neutrality law could continue to be enforced and could not be overridden by the FCC. This ruling was a result of the case ACA Connects v. Bonta, in which the Ninth Circuit rejected a federal preemption challenge to California's net neutrality law.

The Ninth Circuit's decision was based on the reasoning that when the FCC reclassified broadband internet access service from a "telecommunications service" to an "information service" in 2018, it had abandoned its regulatory authority over net neutrality. This reclassification meant that the FCC no longer had the power to prevent states from enacting their own net neutrality laws. The Ninth Circuit's decision was in line with a previous ruling by the D.C. Circuit, which had also upheld the FCC's reclassification of broadband service but vacated the FCC's preemption order, allowing states to implement their own net neutrality regulations.

California's net neutrality law, known as the Internet Consumer Protection and Net Neutrality Act of 2018 or SB-822, makes it unlawful for broadband service providers in California to block lawful content, degrade or impair lawful internet traffic, engage in paid prioritization, or unreasonably interfere with or disadvantage a user's ability to access the internet. The law was enacted in response to the FCC's decision to repeal its 2015 net neutrality rules and essentially codified those rules at the state level.

The Ninth Circuit's ruling was applauded by many, including the San Francisco-based Electronic Frontier Foundation, as it allowed California to enforce its gold standard state net neutrality law and paved the way for other states to follow suit. The decision also shifted the focus back to Washington, D.C., where President Biden had issued an Executive Order encouraging the FCC to reinstate its former net neutrality policy.

The impact on internet service providers

The California Internet Consumer Protection and Net Neutrality Act of 2018, or SB-822, is a law that prevents internet service providers (ISPs) from engaging in various practices. These practices include blocking lawful content, applications, services, or non-harmful devices, impairing or degrading lawful Internet traffic on the basis of content, application, or service, and zero-rating some content in a category but not all content in that category. The act also prohibits ISPs from offering or providing services other than broadband Internet access service over the same last-mile connection as the broadband Internet service.

The impact of this law on ISPs in California has been mixed. On the one hand, some ISPs, such as Cox Cable and Comcast, have had to stop blocking or throttling certain types of traffic, such as VPN usage and file-sharing. This may result in a more open and neutral Internet for Californians, which could benefit ISPs by promoting innovation and competition. Additionally, the law prevents ISPs from creating a tiered system where content and service providers must pay for higher levels of service, which could promote a more level playing field for all Internet companies.

On the other hand, some ISPs, such as AT&T, have argued that complying with the law is difficult and requires significant engineering efforts. For example, AT&T claims that it would be challenging to stop zero-rating its own video services for Californians only. However, California's response to this argument points out that AT&T could simply opt-out all California customers from such services. Overall, the law likely increases the regulatory burden on ISPs operating in California, as they must ensure that their practices comply with the state's net neutrality requirements.

The California Net Neutrality law has also had an impact on ISPs outside of the state. Cogent, which operates one of the world's largest internet networks, has stated that state net neutrality laws do not pose any inherent problems. This suggests that ISPs may be able to adapt to the new regulations without significant issues. Additionally, the Ninth Circuit's ruling that California's law may be enforced sets a precedent that could encourage other states to adopt similar legislation. This could create a patchwork of different regulations across the country, increasing the complexity and cost of doing business for ISPs operating in multiple states.

In conclusion, the California Net Neutrality law has had a significant impact on ISPs, both within and outside the state. While the law promotes a more open and neutral Internet, it also increases the regulatory burden on ISPs and could lead to a patchwork of different state-level regulations. The full effects of the law will likely continue to unfold in the coming years, particularly if other states follow California's lead in enacting their own net neutrality protections.

The future of net neutrality at the federal level

The Federal Communications Commission (FCC) has historically played a key role in shaping net neutrality policies in the United States. In 2015, the FCC adopted the Open Internet Order, which established rules requiring transparency and prohibiting blocking or unreasonable discrimination to ensure internet openness. However, in 2017, the FCC under the Trump administration proposed rolling back these net neutrality protections, and in 2018, the FCC voted to repeal the 2015 Open Internet Order and restore "internet freedom". This decision was met with widespread opposition, with multiple states, including California, introducing their own net neutrality laws to protect their residents from potential misbehavior by internet service providers (ISPs).

The FCC's repeal of net neutrality protections at the federal level has had significant implications. It effectively removed the FCC's regulatory authority over broadband providers, as they were reclassified as "information service" providers rather than ""telecommunications service" providers. This reclassification shifted the focus to the states, allowing them to step in and enact their own net neutrality protections. California, a pioneer in this regard, passed its own net neutrality law, SB 822, which went into effect on January 1, 2019. The Ninth Circuit Court upheld California's law, affirming that the FCC's reclassification of broadband service had stripped it of its authority over net neutrality.

Net neutrality enjoys widespread public support, with a 2022 survey finding that 73% of Americans, including majorities from both political parties, favored it. However, the FCC's authority to issue net neutrality rules has been challenged, with the Sixth Circuit Court of Appeals overturning the FCC's 2024 rules. This ruling underscores the ongoing legal and political battles surrounding net neutrality, and it remains to be seen whether the FCC will be able to reintroduce robust net neutrality protections at the federal level.

In summary, while net neutrality has strong public support and states have taken the initiative to enact their own laws, the future of net neutrality at the federal level remains uncertain. The FCC's slow response to President Biden's executive order and the legal challenges it faces indicate that achieving nationwide net neutrality protections will be a complex and protracted process.

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