California Puts Net Neutrality Law On Hold

Faced with lawsuits by the Department of Justice and the broadband industry, California said it will hold off on enforcing the state's new net neutrality law, which largely reinstated the Obama-era open internet rules.

California Attorney General Xavier Becerra, the DOJ, and representatives of the broadband industry said in court papers filed Friday that the stay will last until courts rule on the validity of the Federal Communications Commission's decision to repeal the prior rules.

FCC Chairman Ajit Pai cheered news of California's decision.

“This substantial concession reflects the strength of the case made by the United States earlier this month,” he stated. “It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”

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California's law, SB 822, prohibits broadband providers from blocking or throttling traffic, charging higher fees for fast-lane service, and from exempting their own video streams from consumers' data caps. Governor Jerry Brown signed the measure in late September. Within an hour, the Department of Justice sued to block the measure. Several days later, the four major broadband industry groups -- the American Cable Association, CTIA -- The Wireless Association, NCTA -- The Internet & Television Association and USTelecom -- The Broadband Association-- also sued.

The California bill largely restores the Obama-era open internet rules, which were repealed last December by the FCC's so-called “Restoring Internet Freedom” order. That order also blocks states from enforcing their own net neutrality measures.

Tech companies including Mozilla and Vimeo, along with consumer advocacy groups and 23 attorneys general, have asked the D.C. Circuit Court of Appeals to invalidate the order.

Net neutrality supporters argue the rules are necessary to prevent Comcast, AT&T and other broadband providers from censoring sites or discriminating against competitors like Netflix.

It's not yet known whether courts will invalidate either the repeal, or the attempt to override state laws.

Pai has often claimed the former rules depressed broadband investment, but other observers disagree. The pro-neutrality advocacy group Free Press said last year that investment by 13 major broadband providers increased in the two years after the FCC passed the net neutrality regulations.

Pai also has been particularly critical of the portion of California's order that prohibits companies from exempting their own video streams from customers' data caps. The former rules didn't explicitly ban data-cap exemptions, but had been interpreted as prohibiting some forms of zero-rating -- including AT&T's "Data Free TV," which allows wireless customers who purchase DirecTV to stream video without burning through their monthly data caps.

The FCC Chair argues that consumers like those types of billing arrangements. He said Friday that California's decision to hold off on enforcement “will allow Californians to continue to enjoy free-data plans that have proven to be popular among consumers.”

The broadband industry groups that sued also cheered California's decision, stating the move “will allow continued innovation and investment while these deliberations continue.”

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