CA State Assembly Passes Bill that Would Reinstate Net Neutrality Regulations

Source: WSJ | Published on August 30, 2018

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California on Thursday moved to reinstate Obama-era open-internet rules, challenging Trump administration rollback efforts and setting the state on a path to have the strongest net-neutrality rules in the nation.

The California bill would forbid internet service providers from blocking websites, intentionally slowing down a website or app or accepting payments to make online services go faster. Such regulations resemble those adopted by the Obama-era Federal Communications Commission.

The fight over net neutrality has become a rallying cry for Democrats since the FCC, led by Trump appointee Ajit Pai, last year did away with the 2015 rules governing internet service providers.

The bill passed the California assembly Thursday by a preliminary count of 59-18, according to the clerk’s office, and now returns to the state senate, which previously passed a similar version. If it passes again there and is then signed by Gov. Jerry Brown, a Democrat, California would have the nation’s strongest net-neutrality rules.

Mr. Brown hasn’t publicly indicated his position on the bill.

Some experts doubt whether state legislation imposing net-neutrality rules can withstand the eventual legal challenges that are likely to come from telecommunications trade groups. The FCC rollback last year claimed to pre-empt state rules on net neutrality.

An FCC spokesman declined to comment.

If states prove unable to impose their own standards, net-neutrality advocates are hoping the California legislative action will lend support to their current legal challenge against the FCC rollback, which they say was legally flawed. That case is pending in a federal appeals court in Washington, D.C.

Cable and wireless companies lobbied aggressively against the bill. Elizabeth Hyman, executive vice president of the Computing Technology Industry Association, a trade group, said the measure would result in an unworkable patchwork of regulations.

“The internet is not configured to handle geographic boundaries within the country and a system of barriers and levies across the internet will have a crippling effect on commerce and innovation,” she said in a statement.

The effort in California got a surprise boost last week, when firefighters battling huge wildfires said their commercial cellphone service was slowed dramatically because they had hit a speed cap. The firefighters argued the throttling was a violation of net-neutrality rules, because they had been promised unlimited coverage.

The provider, Verizon Communications Inc., apologized and said the restriction should have been waived because of the emergency circumstances but mistakenly wasn’t.

The governors of six states—Hawaii, New Jersey, New York, Montana, Rhode Island, Vermont—have signed executive orders reinstating some net-neutrality provisions. State legislatures in Oregon, Vermont, and Washington have also enacted net-neutrality legislation.

But none of those states has gone as far as the California measure would, industry experts say. The bill bans, in certain cases, the increasingly common practice of allowing free content streaming, known as “zero rating,” when it gives certain services an edge over others. A typical example is when an internet service provider such as AT&T Inc. doesn’t count video it owns against its customers’ wireless data plans, giving them a strong incentive to favor AT&T content over competitors’.

The California bill also says interconnection agreements—in which an online service pays a cable or wireless provider to carry its traffic—can’t be used by companies like streaming video services to circumvent the open internet rules and improperly receive faster speeds.

California Democrats say the legislation is necessary to protect a competitive internet.

“I would much prefer a national standard,” said state Sen. Scott Wiener, the author of the California bill. “But the reality is the same ISPs that are complaining about state-by-state patchwork regulation…are the same companies that asked the Trump administration to get rid of net-neutrality protections.”

On Wednesday, U.S. Sen. Dianne Feinstein (D., Calif.) tweeted support for the bill. “ I urge legislators in Sacramento to take action so that users, not their internet service providers, control their online experience.”

At the national level, Democrats scored a rare win on net neutrality in May, when the U.S. Senate voted 52-47 to repeal the FCC rollback and reinstate the 2015 rules. But the repeal measure has stalled in the House.