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Ninth Circuit upholds California’s net neutrality law

Dealing the telecom industry another blow, the panel cleared the way for California and other states to enact their own net neutrality laws.

(CN) — Awarding California another win against service providers in the fight over net neutrality, a Ninth Circuit panel on Friday upheld the state’s landmark law which bars companies like AT&T and Verizon from throttling internet speeds.  

In a unanimous decision, the judges found California’s net neutrality replacement framework isn’t preempted by federal law as the telecommunications industry had argued. Friday’s ruling comes nearly one year after a federal judge also declined the industry’s motion for a preliminary injunction against the California law, Senate Bill 822.

By reclassifying broadband services as information services in 2017 at the behest of the Trump administration, the panel says the Federal Communications Commission essentially shot itself in the foot and opened the door for states like California to fill the net neutrality void.

“The FCC has not adopted any regulatory measures. It has instead diminished its authority to regulate by its reclassification of the service providers to a relatively unregulated category under the Communications Act,” the panel’s order states. “There is thus no conflict between the state’s enactment of SB 822 and the FCC’s order.”

Net neutrality became one of the many flashpoints between California and the Trump administration after the FCC dashed an Obama-era policy that required internet service providers to treat all internet traffic equally.

Just hours after then-Governor Jerry Brown signed SB 822 in 2018, the federal government sued in the Eastern District of California, casting the bill as an attempt to regulate interstate commerce. Heavy hitters within the telecom industry followed suit, arguing the California law clashed with the federal Communications Act.

The measure bans providers from offering “fast lanes” or better access in exchange for payment and limits “free-data plans” where consumers are allowed to access certain content without having the data counted toward their monthly limit. Backers say the legislation is needed to prevent providers from picking “winners and losers” and several other states have since adopted their own net neutrality rules.

While the Biden administration reversed course and dropped the lawsuit initiated by the former administration, a coalition of internet service providers led by Verizon and AT&T are still looking to disconnect California’s net neutrality framework.

The coalition says complying with a patchwork of state net neutrality laws would be extremely difficult and argued in federal court that the loosened regulations haven’t harmed consumers.

“The fact is, the internet is open and will remain open,” the providers’ attorney Matthew Brill claimed in February 2021. “The internet is performing beautifully.”

Undeterred, U.S. District Judge John Mendez ruled from the bench and found for the state. The George W. Bush appointee told the industry to read the political tea leaves and move on from the fight with California.

“Where’s the harm?” Mendez asked. “Your clients are going to deal not only with SB 822…but the FCC reclassifying your clients again.”

On appeal, the internet industry found another cold audience.

Writing for the panel, U.S. Circuit Judge Mary Schroeder ruled the appellants’ preemption argument has already been dashed by the D.C. Circuit in a similar 2019 net neutrality case, Mozilla Corp. v. FCC.

Though the D.C. Circuit kept the 2018 rollback intact, the court struck down a portion of the order that barred states from putting in place their own regulations that go beyond what the federal government requires. California was one of many states to join as plaintiffs in Mozilla.

Schroeder and the Ninth Circuit panel, rounded out by U.S. Circuit Judges Danielle Forrest and Clifford Wallace, said they were tied to precedent as was the district court.

“The Mozilla decision is important to our decision here,” the Jimmy Carter appointee acknowledged.

Backers of California’s law cast the ruling as a triumph for open internet.

“This is a victory for everyone who uses the internet — who needs it for work, school, or simply connecting with family and friends,” said state Sen. Scott Wiener, SB 822 author. “Given the importance of the internet in our society — now more than ever — this is a landmark day for our state.”

San Francisco-based Electronic Frontier Foundation also applauded Friday’s decision on Twitter: “BREAKING: The Ninth Circuit has upheld California’s net neutrality law, which was under attack from big national ISPs. Regardless of what the FCC does in the future, the state laws can now be used to keep the internet free and open.”

California Attorney General Rob Bonta agreed.

“Today’s decision secures net neutrality for California's 40 million residents, ensuring that internet service providers can't interfere with or limit what we do online,” Bonta said in a statement. “As the pandemic continues to rage and our lives move more and more online, net neutrality has never been more essential for public health and safety, education, and our economy. This battle isn't over yet, but today’s victory should send a clear message: We won’t stop fighting to protect Californians’ access to a fair and open internet.” 

In a statement, telecoms ACA Connects, CTIA, NCTA and USTelecom said it's time for Congress to act.

“We’re disappointed and will review our options. Once again, a piecemeal approach to this issue is untenable and Congress should codify national rules for an open internet once and for all," the companies said.

In a concurring opinion, Judge Wallace chastised the providers for using up court resources, saying they were better off continuing the case in district court.

“I emphasize that appealing from a grant or a denial of a preliminary injunction to obtain an appellate court’s view of the merits often leads to “unnecessary delay to the parties and inefficient use of judicial resources,” the Richard Nixon appointee concluded the 35-page order.

Judge Forrest is a Donald Trump appointee.

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Categories / Appeals, Consumers, Technology

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