Internet providers sue to halt California Net-neutrality law

Internet providers have sued California in an effort to block its new Net-neutrality law from going into effect, adding momentum to a highstakes legal fight over the future of the Internet.

The suit, filed Wednesday in federal court, widens a legal challenge filed by the Justice Department on Sunday minutes after Gov. Jerry Brown, a Democrat, signed a bill imposing strict new requirements on companies such as AT&T and Comcast.

A victory for the federal government could dramatically constrain the ability of states to regulate broadband companies within their borders, some legal experts say.

At issue are California’s new rules — which are set to take effect Jan. 1 - banning Internet providers from blocking or slowing down websites. Although the carriers have said they are not interested in degrading the speed of Internet traffic, the legislation goes further, prohibiting them from charging websites special new fees or selectively exempting favored apps and services from customer data caps.

Wednesday’s suit by four groups representing cable and Internet providers — USTelecom, the American Cable Association, CTIA-The Wireless Association, and NCTA-The Internet and Television Association — echoes the Justice Department in alleging that the California law conflicts with federal regulations and should be overturned. The Federal Communications Commission in June officially deregulated broadband providers by taking its own Net-neutrality rules off the books, dismaying consumer advocates.

But the industry suit expands the attack on California’s law, known as SB-822, by asserting that it seeks to regulate Internet providers beyond state lines, in violation of the Constitution.

Because Internet traffic typically bounces across multiple servers in various states before arriving at a final destination such as a phone or PC, Internet access is considered interstate commerce, according to the suit. As a result, it says, jurisdiction over Internet providers belongs to the federal government — not the states.

“SB-822 violates the ‘dormant’ or ‘negative’ Commerce Clause of the United States Constitution by regulating conduct occurring wholly outside California’s borders,” the suit reads.

On Wednesday, California Attorney General Xavier Becerra — who is in charge of defending the state — slammed “power brokers” with “an obvious financial interest in maintaining their stronghold” over consumers’ Internet experience.

“California, the country’s economic engine, has the right to exercise its sovereign powers under the Constitution,” he said in a statement.

A bigger legal fight is being waged before the U.S. District of Columbia Circuit Court of Appeals.

Public-interest groups, companies and 32 states, including California, have also challenged the FCC’s decision. A ruling is expected sometime next year.

The lawsuit by President Donald Trump’s administration asks that California’s new law, which is supposed to take effect in January, be put on hold until the D.C. Circuit court rules.

If the D.C. appeals court decides the FCC acted arbitrarily and capriciously, Net neutrality could return nationally. The court also will decide whether states can issue regulations of their own.

Jonathan Spalter, president and CEO of USTelecom, an industry trade group, said Congress, not multiple states, should set the rules for the Internet.

“The Internet is an interstate service, and states are expressly pre-empted from regulating broadbands,” Spalter said.

Supporters of California’s law counter that the federal government has exited the business of regulating Internet service providers. When there are no regulations, states may impose their own, they say.

“Under their police powers, states do have authority to adopt rules, even if related to interstate commerce,” said Stanford Law professor Barbara van Schewick, who supports the California law.

A 1978 law passed by Congress that deregulated the airline industry and prohibited states from passing their own regulations was upheld by the courts.

But supporters of California’s law say the Net neutrality case is different. At issue is an action of a federal agency, not a law passed by Congress.

Santa Clara University Law professor Catherine Sandoval, who also favors the California law, said the 10th Amendment of the Constitution gives states police powers to protect and promote the safety of their people.

She and others cited the case of a Santa Clara County fire protection district whose Internet access was hindered in July while fighting the huge Mendocino Complex fire.

The fire department said its data connection had been “throttled” down to one-twohundredths or less of previous speeds, even though the agency believed it had paid for an unlimited data plan.

The fire department said the throttling impeded its ability to respond to a crisis and provide essential emergency service. Its complaint was submitted as an addendum to the states’ challenge before the D.C. Circuit.

But Verizon said the situation had nothing to do with Net neutrality and blamed a “customer support mistake.”