California Unveils New Net Neutrality Proposal

California lawmakers unveiled a bill Wednesday that would require broadband providers to follow the Obama-era net neutrality rules.

Among other restrictions, Senate Bill 822 would prohibit providers from blocking or throttling websites, applications, and services, and from charging companies for faster delivery of their content. It also would prohibit some forms of "zero-rating," which involves exempting some material from consumers' data caps.

The proposed bill comes three months after the Federal Communications Commission voted to repeal a set of net neutrality rules that were passed in 2015. Those rules, like California's proposed measure, prohibited broadband carriers from blocking or throttling online traffic and from charging companies higher fees for prioritized delivery.

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Net neutrality proponents say the rules are needed to to prevent carriers from discriminating against competitors and small companies that can't afford high fees for fast-lane service. But FCC Chair Ajit Pai, who pressed for the repeal, says they rules were "heavy-handed" and depressed investment.

Since the repeal, the state of Washington enacted its own net neutrality rules. Around half of the other states are currently considering following suit. Governors in five states -- New York, New Jersey, Montana, Hawaii and Vermont -- also signed executive orders requiring state agencies to contract only with broadband providers that promise to follow net neutrality principles.

The California proposal's provisions about zero-rating would prohibit companies from exempting select content, apps or services from consumers' data caps, but would allow providers to exempt an "entire category" of content, apps or services. In other words, companies apparently would be allowed to zero-rate all streaming video, but wouldn't be allowed to only zero-rate streams from certain companies.

The Obama-era FCC said it planned to evaluate whether zero-rating practices violated the net neutrality rules on a case-by-case basis. In early 2017, shortly before President Donald Trump's inauguration, outgoing chairman Tom Wheeler said AT&T and Verizon were violating net neutrality principles by exempting some companies' video streams from consumers' data caps. (AT&T exempts data streamed through DirecTV's app from customers' caps, and Verizon zero-rates video streamed from its Go90 mobile app.)

But current FCC chairman Ajit Pai endorsed the companies' zero-ratings offerings and officially closed the agency's investigation into the matter.

It's not clear whether individual states can enact net neutrality rules. When the FCC voted to repeal the Obama-era regulations, the agency also attempted to block states from crafting their own rules. But some legal experts say the FCC may not be able to enforce that prohibition.

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