California Prevails on Net Neutrality Rules

The Ninth Circuit Court of Appeals has rejected a legal challenge that attempted to bar enforcement of California’s gold standard state net neutrality law. Major ISPs had insisted that the Federal Communications Commission could define and enforce net neutrality protections, so when the FCC decided to eviscerate those protections, the rest of the nation simply had to live with the consequences. The Ninth Circuit held otherwise, finding that once an agency has abdicated its authority to regulate, as the FCC did in 2018, it also abdicated the authority to prevent others from doing so. In other words, the federal government can’t simultaneously disclaim any ability to meaningfully protect net neutrality and also prevent anyone else from stepping up to fill the gap that disclaimer creates.

California’s net neutrality law, also known as S.B. 822, was passed in 2018 in the wake of the repeal of the FCC’s 2015 Open Internet Order. In that order, the FCC chose, despite massive evidence to the contrary, to classify broadband as an “information service” rather than a “telecommunications service.” That choice had real consequences because it limited the FCC’s ability to regulate. The California legislature responded by crafting net neutrality rules that covered all non-net-neutral activity by ISPs in the state. Not surprisingly, the large national ISPs immediately challenged it.

The stakes over this court case for a free and open internet were very high. Losing would mean users would be dependent on the leadership of the FCC or an act of Congress. As EFF explained in an amicus brief in support of the law, users need more certainty, particularly low income users who rely on mobile devices and can’t pay expensive (and arbitrary) overage fees. Now, Californian broadband access users are protected under their own net neutrality law and more states can follow until the FCC reinstates net neutrality.

This result also thwarts the political strategy the big ISPs hatched when former FCC Chairman Ajit Pai took office and announced his plans to repeal net neutrality. The goal was to get the FCC to designate their industry as companies that cannot be regulated at the federal level—under Title I of the Communications Act—while simultaneously using the FCC’s power to block states from regulating in the absence of the FCC. Today’s decision, in combination with a ruling following similar reasoning from the D.C. Circuit LINK TO MOZILLA, marks the failure of that plan.

How We Got to This Court Decision

The major ISPs have been waging a campaign to eliminate not only net neutrality protections but also consumer privacy rules. Their hopes hinged on the so-called Restoring Internet Freedom Order, in which the FCC (under Ajit Pai) abdicated its responsibility to hold ISPs accountable.

That tactic only worked if the states couldn’t pass their own laws to replace the eliminated federal rules, so they set out to leverage the FCC and the Trump Administration’s Department of Justice (DOJ) to fight against states that regulated ISPs. They wanted courts to agree that the FCC’s abandonment of the field meant that states couldn’t enter it themselves. They were able to temporarily stall California’s law while hoping that their argument of limited state power would prevail in the lawsuit challenging the Restoring Internet Freedom Order (known as Mozilla vs FCC).

While the D.C. Circuit deferred to the FCC’s decision to repeal net neutrality, it did not agree that states were powerless. The Mozilla decision in fact was the first domino to fall when the court supported the notion that states could pass laws because FCC authority was removed. The ISPs maintained that federal law in general prevented states from passing their own laws and took that argument back to California. This time they did not have the backing of the DOJ–  the new Biden Administration dropped the case shortly after taking office. The ISPs alone had to argue against measures designed to protect Californians and against the many Californian organizations, led by the EFF and ACLU, that explained the public interests at stake.

The ISPs lost and Californians prevailed, in district court and, today, on appeal. 

What This Decision Means for Broadband Regulation

 EFF and other public interest lawyers have long argued that the FCC’s 2018 Order cleared the way for states to fill the void that order created. The Ninth Circuit agreement suggests that California can proceed with other efforts to protect a free and open internet, with less fear that those efforts will be preempted by federal law.  Policymakers will likely look to the decision as they consider how to support local competition, affordability, open access, digital redlining, and other issues in need of public oversight and intervention.

Most importantly, Californians and any other state that wishes to follow, can safeguard their internet access through their local elected officials rather than depending on the FCC. That means if a new FCC tries to further undermine net neutrality, those efforts may not affect the people of California. It also means California’s policies can benefit people beyond its borders. For example, when AT&T eliminated its regressive data capping policy on HBO Max that raised the cost of broadband in compliance with California’s net neutrality law, it do so across its entire network to the benefit of low-income users in the remaining 49 states.

The FCC cleared the way for today’s victory three years ago, at the behest of the major ISPs themselves. If those same ISPs are regretting that choice today, they have only themselves to blame. We look forward to working with lawmakers to build on SB 22, in California and others states, until the dream of a truly fair, open, and accessible high-speed internet is a reality for all.