California’s Net Neutrality Adventure: Right Goal, Wrong Path

California Governor Jerry Brown on Sunday signed into law SB 822 that adopts a state-level net neutrality requirement for broadband providers operating in California. However well-intentioned this effort may be, it is deeply legally flawed. It also contains substantive provisions that would serve as a major barrier to broadband investment.

From the very inception of net neutrality as a concept more than a decade ago, a series of orders from the Federal Communications Commission (FCC) — under both Democratic and Republican FCC chairmen — have preempted the states from adopting network neutrality rules. The network neutrality order entered under Republican Chairman Pai in the fall of last year prohibited state action on this subject, as did the 2015 network neutrality order entered under the chairmanship of Tom Wheeler, a Democrat. These are but the two most recent examples in a long series of state preemption in net neutrality-related matters under FCC rules.

This morning, the US Department of Justice sued the state of California in federal court asserting federal preemption and asking that the court adjudicate the California law to be preempted and accordingly invalid under the Supremacy Clause of the US Constitution. There is little doubt that this action by the Justice Department will succeed.

Moreover, the California statute contains substantive provisions that are well beyond the scope of the net neutrality orders entered by the most recent Democratic FCC chairmen to address the subject: Julius Genachowski, under whose tenure the 2010 Open Internet Order was promulgated, and Tom Wheeler, author of the 2015 net neutrality rule.

For example, the California law contains rules on interconnection pricing between Internet Service Providers and those offering content. It opens the door to private enforcement of its provisions rather than restricting enforcement to the appropriate governmental entities. Private enforcement would be a boon to trial lawyers who would besiege broadband providers with litigation, including class actions, based on little or no evidence of net neutrality infringements.

These substantive mistakes would impede Internet investment by broadband providers at a time when it is urgently needed as we stand on the brink of the rollout of 5G wireless technology, by far the most efficient and useful service consumers will have seen in the broadband space and by far the most expensive in terms of deployment costs for the carriers.

Concerned public officials in California and other states that have debated state-level network neutrality guarantees could make constructive contributions by working with their bipartisan congressional delegations to advance federal legislation that settles the long-running net neutrality debate once and for all.

For those of us who support net neutrality, there is a better way. Concerned public officials in California and other states that have debated state-level network neutrality guarantees could make constructive contributions by working with their bipartisan congressional delegations to advance federal legislation that settles the long-running net neutrality debate once and for all. A simple bipartisan bill would contain the explicit guarantees of net neutrality outlined in previous FCC orders. The Open Internet Order entered by Chairman Genachowski in 2010 would be a good starting point. At the same time, the bill would declare that broadband is an information service subject to the light-touch FCC regulation that prevailed from the time of the Clinton administration until 2015, and which prevails again today.

Such a bill would be a simple win for both Democrats (who would receive statutory permanence for strong net neutrality protections) and for Republicans (who would receive assurance that broadband is an information service, providing the regulatory certainty necessary to stimulate broadband investment).

There have been productive discussions in both houses of Congress about such a bill; however, much more work needs to be done, and a strong push from states like California, Washington and Oregon could make a real difference in moving a bipartisan bill to passage.