Business Groups, TechFreedom Urge Court To Nix California Net Neutrality Law

Siding with internet access providers, the think tank TechFreedom and business groups including the Chamber of Commerce are urging a federal appellate court to invalidate California's net neutrality law on the grounds that state-by-state broadband laws are impractical.

In a friend-of-the-court brief filed Tuesday, the free-market organization TechFreedom argues that allowing California's law to remain on the books will result in "chaos."

“The very concept of state regulation of data use is problematic,” the group writes. “Almost all data bounces between states at some point. And unless states apply the same rules to data that passes through their borders -- and if left to their own devices, they won’t -- chaos will ensue.”

California's net neutrality law (SB 822), which was passed in 2018, largely recreates the Obama-era regulations.

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The California law 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.

The Obama-era FCC voted to pass similar regulations in 2015. But two years later, the Trump-era FCC voted to repeal the utility-service classification as well as the bulk of the 2015 rules.

Former FCC Chairman Ajit Pai, who shepherded the repeal, claimed the prior rules depressed investment.

TechFreedom supported that repeal, as did the Chamber of Commerce.

But net neutrality advocates say net neutrality rules are necessary to prevent broadband providers from limiting people's ability to access streaming video, search engines and other online services.

Several states, including California, responded to the repeal by passing their own versions of net neutrality laws.

Four major broadband lobbying groups (ACA-Connects, CTIA--The Wireless Association, NCTA--The Internet & Television Association and USTelecom--The Broadband Association) challenged California's law in court. The organizations sought an injunction that would have prohibited the state from enforcing the law

The industry contended that California's law is invalid because internet access is “inherently interstate,” and therefore not subject to state laws. The carriers also argued that California's law conflicts with the FCC's decision to revoke the Obama-era rules.

In February, U.S. District Court Judge John Mendez in Sacramento refused to block the law.

California's rules went into effect in late March. That same day, AT&T ended a zero-rating program that exempted HBO Max streams from customers' monthly data caps.

Earlier this month, the broadband industry asked the 9th Circuit to reverse Mendez's ruling and block California's law.

TechFreedom, which backs that request, argues in its friend-of-the-court brief that California's law should be blocked for several reasons, including that broadband shouldn't be subject to state regulation.

“If SB-822 is allowed to stand, it will be open season for passing state-level net neutrality laws,” the organization writes. “A second law could contradict the first, a third could contradict the first two, and so on.”

The U.S. Chamber of Commerce and other business groups make a similar argument in a separate friend-of-the-court brief, also filed Tuesday.

“The Internet is also a fundamentally nationwide network that is uniquely ill-suited to a patchwork of overlapping and inconsistent state regulations,” the business organizations write. “If California may impose its own rules on the handling of Internet traffic, then other states will surely try to do the same, with the result being confusion, complexity, and the chilling of investment in economically critical broadband infrastructure.”

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