California's Zero-Rating Restrictions 'Irreparably Harm' ISPs, Groups Argue

Internet service providers will suffer “irreparable harm” if California is allowed to enforce its net neutrality law, which includes restrictions on carriers' ability to exempt video streams from data caps, trade groups told a federal judge this week.

“Plaintiffs’ members are faced with precisely the sort of dilemma that courts regularly find constitutes immediate and irreparable harm,” the American Cable Association, CTIA -- The Wireless Association, NCTA -- The Internet & Television Association and USTelecom -- The Broadband Association contend in papers filed with U.S. District Court Judge John Mendez in the Eastern District of California.

The groups add that the law's restrictions on data-cap exemptions forces carriers to choose between facing the threat of enforcement actions, or ending current practices -- an option the groups say would result in “monetary losses, forgone business opportunities and innovative offerings, and loss of customer goodwill.”



The lobbying organizations make the argument as part of a push to convince Mendez to prohibit California from enforcing its net neutrality law, which was passed in 2018 after the Federal Communications Commission repealed nationwide rules.

California's law prohibits broadband providers from blocking or throttling traffic, charging higher fees for fast-lane service, and exempting their own content from data caps. 

Some carriers currently engage in those type of data-cap exemptions. For instance, AT&T excludes HBO Max streaming video from wireless subscribers' data caps. 

California's law largely recreates the now repealed Obama-era net neutrality regulations, which also prohibited carriers from blocking or throttling traffic and charging higher fees for prioritized delivery. 

Those former rules didn't explicitly ban companies from zero-rating -- or exempting material from subscribers' data caps. But the Obama-era rules contained a "general conduct" standard that was interpreted as prohibiting some forms of zero-rating.

In 2017, the FCC voted to repeal those rules. At the time, the agency also said it was prohibiting states from passing or enforcing their own open internet laws.

Two years ago, the broadband groups and U.S. Department of Justice challenged the California law in court. Among other arguments, they pointed to the FCC's decision to ban states from crafting their own net neutrality protections

Since then, a federal appellate court upheld the bulk of the FCC's de-regulatory move, but struck down the agency's decision to override state laws.

Despite that ruling, the lobbying groups argue that California's measure is unlawful because it would regulate interstate communications -- meaning transmissions between California residents and servers throughout the country. Only the FCC can regulate that traffic, the lobbying groups contend.

“For more than a century Congress has drawn -- and courts have enforced -- a brightline jurisdictional division: the FCC has (and the ICC before it had) exclusive jurisdiction over interstate communications services; states have jurisdiction over intrastate services,” the organizations write.

California isn't the only state to attempt to craft net neutrality rules. Lawmakers in Vermont and Washington state lawmakers also imposed restrictions similar to California's, as did governors in Rhode Island, New York, New Jersey, Montana and Hawaii.

Broadband groups have also challenged the Vermont law in court.

The state agreed to hold off on enforcing that matter until there is a decision regarding the California law.

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