Trump DOJ picks new fight over net neutrality

The Trump administration is opening a new front in the net neutrality fight by suing California over its open internet law.

The Justice Department is seeking to block the nation’s toughest net neutrality law, arguing that states don’t have the right to ignore the Federal Communications Commission’s (FCC) decision to repeal the Obama-era regulations.

The dispute, which is now headed to the courts, will have serious implications for the broadband industry. Industry has pushed strongly for the FCC to roll back the federal rules and now faces the possibility of having to navigate a patchwork of state law on net neutrality.

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“We have clear principles in our Constitution and in statutes that require a federal approach to interstate commerce,” Jonathan Spalter, the head of the industry group USTelecom, told The Hill, adding “there’s nothing more interstate” than the internet.

He added that internet providers are committed to protecting an open internet and encouraging innovation.

“You can’t do that through a mosaic of 50 different state rules.”

California Gov. Jerry Brown (D) signed S.B. 822 into law Sunday night. The Trump administration announced its lawsuit just hours later, arguing that California was attempting to impose “burdensome state regulations on the free Internet.”

But supporters of the bill argue that net neutrality principles don’t regulate the internet itself, but rather the companies that provide access to it. The FCC rules, passed under the Obama administration in 2015, banned service providers from blocking or throttling websites or charging them for faster delivery. Those rules were repealed under Republican FCC Chairman Ajit Pai.

The California law would reinstate those restrictions and go a step further by prohibiting providers from giving customers free data for use on apps the company owns. The law’s backers say this practice, known as zero rating, gives telecommunications giants the ability to unfairly give preferential treatment to their own services at the expense of smaller competitors, but Republicans and the industry say consumers enjoy having the extra data.

“The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits,” Pai said in a statement this week. “They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them.”

Pai’s repeal of the 2015 rules prompted widespread opposition from consumer advocates and Democrats across the country.

California is just the latest among dozens of Democratic-led states to respond to the repeal by passing their own laws or executive orders codifying the net neutrality principles.

Officials like California Attorney General Xavier Becerra (D) argue that states shouldn’t be forced to go along with the Trump administration’s deregulatory agenda, which he believes leaves consumers vulnerable.

“California has the right to exercise its sovereign powers under the Constitution,” Becerra said in an emailed statement to The Hill. “We’re prepared to demonstrate that when it comes to protecting 40 million consumers and their right to access information.”

This latest court case could decide whether the FCC has the power to pre-empt state regulations on internet service providers. States like California are defying a provision in the commission’s repeal order expressly blocking them from pushing their own regulations.

Marc Martin, a communications attorney with Perkins Coie and a former FCC staffer, thinks those states could have an uphill battle in court.

“They’re going to spin it as, ‘We’ve still got to protect our residents,’ ” Martin said in a phone interview. “And there’s a possibility that may work but there’s a lot of precedent for pre-emption.”

But others think that the FCC’s order could be vulnerable. In repealing the net neutrality regulations, the agency rolled back its own authority over internet service providers by reclassifying them as information service providers instead of telecommunications providers.

“While the FCC’s 2017 Order explicitly bans states from adopting their own net neutrality laws, that preemption is invalid,” Barbara van Schewick, a professor at Stanford Law School’s Center for Internet and Society, said in a statement on Sunday. “An agency that has no power to regulate has no power to preempt the states, according to case law.”

Sunday’s lawsuit marks the second major court case between the states and the federal government over net neutrality. Becerra and 21 other state attorneys general sued the FCC earlier this year, asking an appeals court in D.C. to block the repeal altogether. That case is likely to drag on for months and has the potential to reach the Supreme Court.

And net neutrality supporters in Congress have also mounted a last-ditch effort reinstate the rules. In May, the Senate passed a bipartisan bill to reverse the FCC’s repeal, but the resolution has stalled in the House.

With regulatory uncertainty growing in the wake of the repeal, the industry and the GOP have called for a federal legislative replacement to the FCC rules. But net neutrality supporters don’t believe a Republican Congress can come up with a law strong enough to preserve an open internet. Democrats are also unlikely to come to the table while an appeals court is reviewing the FCC’s repeal.

For now, both sides are keeping a close eye as the net neutrality cases work their way through the courts.

Martin said Congress might not make a serious effort at legislation unless there’s an uproar over industry practices after deregulation.

“At some point someone’s going to be tempted to get more aggressive with this freedom that they have to throttle or block websites, and then somebody’s going to get really upset and it’s going to become the rallying call for legislation,” he said.

“But until then, I don’t think it’s going to happen; you need that sort of bloody shirt to wave.”