California Passes Tough Net Neutrality Law, Challenging Trump FCC

On September 30, 2018, California Governor Brown signed into law SB 822, establishing the strictest net neutrality rules in the country.  The bill goes further than the Federal Communications Commission’s (FCC) Obama-era net neutrality rule, which was recently reversed by the Trump FCC. 

SB 822 protects internet users from having their access to the internet manipulated and shaped by Internet Service Providers (ISPs).

Most people in the U.S. get their high-speed internet access from only a few large telecommunications corporations, such as AT&T, Comcast, Cox, CenturyLink, Charter, and Verizon.  When individuals send or receive data over the internet, they do not expect these companies to analyze or manipulate the data. However, telecom companies do have the technology to interfere with the flow of our data.  This interference can come in the form of slowing down or blocking traffic or communicators that the companies do not like, or speeding up traffic they do like (or that pays them extra).

Phone companies are not allowed to engage in this type of data manipulation because telephone service is treated under the law as a “common carrier” that has a responsibility to treat all traffic neutrally.  According to the ACLU, “[n]etwork neutrality means applying well-established “common carrier” rules to the internet in order to preserve its freedom and openness.”  These common carrier rules would prohibit the owner of a network that “holds itself out to all-comers from discriminating against information by halting, slowing, or otherwise tampering with the transfer of any data (except for legitimate network management purposes such as easing congestion or blocking spam).”

In 2015, the FCC enacted protections to prevent broadband providers from doing this type of data manipulation.  The Trump FCC reversed that policy, claiming not only that it had no authority to enact net neutrality rules but that states were preempted from enacting their own net neutrality legislation. 

The new California law, like the short-lived Obama FCC rule, prohibits carriers from prioritizing certain traffic over other traffic or charging content providers or users differentially based on content.  The California law goes further, prohibiting a practice called “zero-rating.”  In zero-rating, a carrier exempts certain services or content from data caps.  For instance, Verizon Wireless could count Netflix towards your data cap, but not Verizon-produced content.  SB 822 prohibits that sort of discrimination based on content, lessening the influence that carriers can have over the content their users see.

The federal government recently announced that it was suing the State of California, seeking to enjoin enforcement of SB 822 on the ground that only the federal government can regulate internet service providers.  It is unclear whether the law will be enforced while this challenge is pending.

By Thomas Gottheil | October 30, 2018

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