The Internet Sector Takes Legal Action Against California’s Net Neutrality Legislation

The California internet sector is taking legal action against the state’s newly enacted net neutrality law.

The lawsuit, initiated on Wednesday by prominent trade organizations representing broadband providers, marks the second significant legal challenge to the state’s law—the first was from the Justice Department.

On Sunday evening, California Governor Jerry Brown enacted what is deemed the most stringent net neutrality legislation in the nation. The law prohibits internet service providers from blocking or throttling specific content or applications, as well as from charging companies fees for expedited access for customers.

Shortly after, the federal government launched a lawsuit claiming that California is “trying to undermine the Federal Government’s deregulation stance” concerning the internet. The Department of Justice contends that states cannot implement their own regulations for internet providers, as broadband services extend across state borders. This legal dispute stems from a provision in the 2017 order that rolled back Obama-era federal net neutrality protections, in which the FCC asserted its authority to supersede state-level net neutrality regulations.

Legal experts anticipate that the upcoming court battle could extend for several months or longer, as noted by Daniel Lyons, an associate professor at Boston College Law School with expertise in telecommunications and internet regulation, during an interview with CNN.

The outcome of this case carries significant implications. California’s law is recognized as the most comprehensive net neutrality legislation passed at the state level, setting a potential model for other states to follow suit.

A victory for California in court could pave the way for similar legislative efforts in other states. However, as Lyons pointed out, the FCC may respond by reissuing an order aimed at curbing these states’ initiatives.

California is expected to argue that the preemption clause is invalid, while the federal government will likely seek an injunction to prevent the law from being enacted, asserting that its implementation would lead to negative consequences.

“The request for a preliminary injunction appears weak and is likely to be unsuccessful for reasons similar to those that prevented the Internet Service Provider [ISP] sector from obtaining a stay against the FCC’s earlier net neutrality regulations in 2015,” stated telecommunications lawyer Pantelis Michalopoulos, a partner at Steptoe & Johnson LLP, who has handled net neutrality cases. “The ISPs present speculative arguments about potential irreparable harm, which do not seem to meet the criteria for a preliminary injunction.”

Industry representatives involved in this new lawsuit advocate for major players such as AT&T, Comcast, and Verizon, along with various cable companies and wireless networks throughout the United States. The groups had already lobbied against the state law. (CNN is owned by AT&T.)

“We are opposed to California’s attempt to regulate internet access, as it could adversely impact services for millions of consumers and hinder new investments and economic growth. Both Republican and Democratic administrations have repeatedly recognized that such actions are preempted by federal law,” the trade organizations USTelecom, CTIA — The Wireless Association, The Internet & Television Association, and the American Cable Association stated in a joint announcement. “We will continue advocating for Congress to enact bipartisan legislation that establishes a permanent framework to safeguard the open internet that consumers expect and deserve.”

Attorney General Xavier Becerra expressed the state’s intent to defend its new law in a statement released on Wednesday afternoon.

“This lawsuit has been filed by powerful entities with clear financial interests in maintaining their grip on public access to online content. California, as the nation’s economic powerhouse, has the right to exercise its sovereign authority under the Constitution, and we will do everything possible to uphold the rights of our 40 million consumers to access information freely and openly over the internet,” Becerra remarked in a statement.

State Senator Scott Wiener, a co-author of the bill, previously indicated to CNN that he anticipated lawsuits from ISPs regarding the new law.

“The internet service providers are within their rights to challenge California, just as California is within its rights—indeed, has a duty—to safeguard our residents’ access to an open internet,” Wiener stated following the filing of the trade groups’ lawsuit.