State versus federal battle looms as California signs net neutrality into law

California Governor Jerry Brown has been busy; 31 state bills vetoed and 34 signed into law, including the controversial net neutrality rulings, kicking off another state versus federal battle.

State Bill 822, claimed to be the strongest net neutrality laws in the country, has officially been signed into law in the State of California, but it only took the US Department of Justice a few minutes to throw a wobbly. Before the army of busybodies and privacy advocates could even get their own press releases out, the Justice Department filed a lawsuit alleging that Senate Bill 822 unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet.

“Under the Constitution, states do not regulate interstate commerce – the federal government does,” said Attorney General Jeff Sessions in the filing. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order.  We will do so with vigour. We are confident that we will prevail in this case – because the facts are on our side.”

Democrat FCC Commissioner Jessica Rosenworcel is clearly excited despite the legal complications:

After being passed back in February 2015, the appointment of FCC Chairman Ajit Pai saw a Republican led assault, with the telcos playing a supporting roles in the wings, on the rules. It didn’t take long for Pai to dismantle net neutrality, the vote to repeal the rules was won on 14 December 2017, though the backlash was almost immediate. Washington State was the first to pass local net neutrality rules, though with 23 Attorney Generals throwing their weight behind the cause it was only going to be a matter of time before other got involved. California is a different beast however, a worthy opponent of the US government.

With a population of roughly 39 million and a gross state product (GSP) of roughly $2.6 trillion, it is the largest in the US in terms of population and economic output. Globally, the economy is only smaller than the GDP of the US, UK, China, Germany and Japan. It is also home to Silicon Valley and the lobby power of the likes of Facebook, Google and Twitter.

While we do have sympathy with California and the internet giants, we do not feel net neutrality is the right way to go. Pai’s approach, reinstating the wild-west internet with the telcos as the tyrants of terror, is equally wrong. Both approaches are too extreme, the right answer lies in the middle, with the telcos afforded the opportunity to make money but still held accountable ensuring the consumer and businesses are not held to ransom. Taking the sensible, middle-ground is the logical approach, but set against the backdrop of such a combative political environment, it will be some time before fairness sets in.

But why is this such an important battle?

In its law suit, the Department of Justice is completely correct in stating California has overstepped its jurisdiction. No state should have the right to impose its own rules on another and the internet by definition is an interstate (international would be more accurate) playground. For these rules to be accepted on a legal basis in the US, California would have to ensure it was only applying the rules to traffic which originated, remained and terminated in California. Not only would this be pretty much impossible, but it would likely only account for a very small percentage of the total.

The stickiness is the clauses in the Communications Act, the piece of legislation which acts as the foundation of all communications orientated rules and precedents in the US. One clause dictates a state is entitled to draft its own rules, assuming it does not contradict that of the federal government. This is the very scenario which California has crafted. If SB 822 is allowed to stand it undermines the whole Communications Act; who is to say other states, businesses or advocacy groups could not use this example as a means to ignore other clauses, aspects of the Communications Act or precedent which has been set. In legalising the contradiction, the risk is to undermine the very basis of the communications industry across the country.

With California retaliating against the FCC’s decision to reverse net neutrality, the consequences are much more significant than they appear on the surface. This is now much more than a battle of technology regulations.