California Fights for State Net Neutrality

SACRAMENTO (CN) — Dodging heavy fire from AT&T and Verizon lobbyists, California lawmakers on Tuesday advanced a first-of-its-kind measure that would fill the regulatory void left by recently nixed federal net neutrality laws.

State Sen. Scott Wiener’s consumer protection bill narrowly passed its first legislative test after he agreed to a series of amendments. The bill advanced past the Senate Energy, Utilities and Communications Committee on an 8-3 party-line vote. Wiener said the bill has been vetted by professors, industry experts and the state attorney general to clear legal scrutiny.

“Without strong net neutrality protections, we seriously risk an internet manipulated by internet service providers for economic gain,” Wiener said. “We need to avoid these practices and we will only do so with strong legal protections.”

The country’s largest internet and cable providers — some of which have donated to Wiener’s political campaigns — rallied against the San Francisco Democrat’s bill Tuesday.

The deep-pocketed industries argued that Senate Bill 822 goes much further than the old nationwide net neutrality standards, and that they would prefer a set of federal guidelines as opposed to a patchwork of 50 states’ regulations.

They cast the Federal Communications Commission’s contentious February decision to repeal net-neutrality rules as an “historic light-touch approach to encourage investment.”

AT&T testified that the committee’s amendments did not correct the bill’s flaws and would be “complex and difficult” to understand and implement.

“The bill goes well beyond the FCC order of 2015,” Bill Devine of AT&T testified.

In an opposition letter submitted to the committee before the vote, a trade association representing AT&T, Verizon and others said new state laws would clash with federal laws. Instead of clearing red tape, the opponents said, adding regulations would pass internet infrastructure improvement costs down to consumers.

“The proposed state net neutrality rules on the operation of internet access service are also in direct contravention of the FCC’s recently adopted framework,” the US Telecom letter states. “State laws such as SB 822 will undermine these pro-investment and pro-innovation changes.”

California and a host of states are pursuing new legislation in response to the FCC’s contentious February decision to repeal net-neutrality rules. While dozens of states are challenging the repeal in federal court, the rules are to take effect Monday, April 23.

Wiener’s bill has gained nationwide attention because it’s the first to address a practice known as “zero-rating,” in which providers exempt certain streaming data from customers’ bills. Major providers hook up with companies such as Netflix or ESPN and allow unlimited viewing of the companies’ content.

Critics say the agreements gives companies such as AT&T a clear advantage over smaller providers, exploit customers who can’t afford zero-rating plans, and ultimately restrict internet access.

Wiener, who sits on the 11-member committee, collected a horde of supporters before Tuesday’s vote. Along with the Electronic Frontier Foundation and the American Civil Liberties Union of California, three former FCC commissioners and the mayors of Los Angeles, Sacramento and San Francisco and California Attorney General Xavier Becerra are backing SB 822.

The committee analysis recommended that Wiener amend several sections of his bill, including the section establishing the California Public Utilities Commission as lead enforcement agency.

The analysis cautioned that low-income internet users could be directly affected by the new regulations.

The California state conference of the NAACP agreed.

“Ending free internet data is particularly harmful to younger, low-income and minority Californians who are more dependent on their mobile devices to access the internet,” the NAACP said.

Devine said that AT&T already offers zero-rating services to all content providers, regardless of size. He said SB 822 threatens the fledgling practice that has become popular with customers and that amendments should continue as the bill progresses.

“Consumers love the service, and this bill puts significant limits on zero-rating and denies consumers a service that they enjoy that is less costly,” Devine said.

Wiener disputed the assertion that he is proposing a ban of zero-rating, and said the state could exempt plans that are not deemed anti-competitive. He said providers could still offer zero-rating plans so long as every company in the specific genre is allowed to be included.

Under the accepted amendments, the state Department of Justice would replace the California Public Utilities Commission as lead enforcement agency.

The state Senate has advanced a similar net-neutrality bill by state Sen. Kevin De Leon, D-Los Angeles. That proposal cleared the Senate in January but has not been taken up in the Assembly.

“We do have a real problem here, where we have anti-competitive and monopolistic behavior,” Wiener said. “We don’t believe the FCC has the power through its administrative order to preempt 50 states from acting, and the FCC has lost that argument before.”

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