California’s Net Neutrality Law

Society’s increasing reliance on technology for communication and entertainment has raised important questions about access to the internet and how (or even if) that access should be regulated. Concerns have coalesced in a debate over net neutrality. The Obama administration passed the essential net neutrality regulations in 2015, forbidding Internet service providers from favoring certain users or companies by either speeding up or slowing down access to sites. The Trump administration lifted those regulations in June 2018, which means that a company can now pay a service provider to ensure that its content streams faster than its competitors’ content.  This means that smaller companies or those with fewer resources might be treated differently by service providers and might have less access to potential customers.

In the absence of broad and uniform federal regulations, some states have stepped up to pass legislation regulating internet access. Oregon, Washington and Vermont have enacted legislation that replicates some Obama-era net neutrality rules, but the scope of those rules is fairly narrow. Far more sweeping in its ambition and in its potential effect is California Senate Bill 822, which was signed into law by Governor Jerry Brown on September 30, 2018.  Among other things, the new law:

• Prohibits ISPs from blocking, speeding up or slowing down websites, applications, and services.
• Forbids charging online companies for access to an ISP’s customers and blocking those that do not pay.
• Bars ISPs from entering into deals with online companies that places them in a fast lane to the ISP’s customers.

The California law also closes certain loopholes in the Obama-era net neutrality rules. For example, an ISP may not exclude its own apps from any data limits the ISP imposes, a practice that encourages consumers to use the ISP’s apps rather than their competitors’.

California’s stringent new law could provide other states with a roadmap for reinstating net neutrality – if the law manages to survive challenges by the Department of Justice. As soon as Governor Brown signed the bill into law, the Department of Justice filed suit, alleging that the state is attempting to usurp federal functions and undermine the federal government’s policy of deregulation. Attorney General Jeff Sessions has argued that the bill is unconstitutional and promises to see it overturned. The lawsuit raises questions about the ability of states to enact more stringent protections than those offered by federal law and about the nature of interstate commerce. The conflict promises to be not only an important new chapter in the saga of net neutrality, but a test of federalism as well.