Four lobby groups representing the broadband industry today sued California to stop the state's new net neutrality law.
The lawsuit was filed in US District Court for the Eastern District of California by mobile industry lobby CTIA, cable industry lobby NCTA, telco lobby USTelecom, and the American Cable Association, which represents small and mid-size cable companies. Together, these four lobby groups represent all the biggest mobile and home Internet providers in the US and hundreds of smaller ISPs. Comcast, Charter, AT&T, Verizon, T-Mobile US, Sprint, Cox, Frontier, and CenturyLink are among the groups' members.
"This case presents a classic example of unconstitutional state regulation," the complaint said. The California net neutrality law "was purposefully intended to countermand and undermine federal law by imposing on [broadband] the very same regulations that the Federal Communications Commission expressly repealed in its 2018 Restoring Internet Freedom Order."
ISPs say the California law impermissibly regulates interstate commerce. "[I]t is impossible or impracticable for an Internet service provider (“ISP”) offering BIAS to distinguish traffic that moves only within California from traffic that crosses state borders," the lobby groups' complaint said.
The groups asked the court to declare that the state law "is preempted and unconstitutional, and should permanently enjoin [California] from enforcing or giving effect to it."
California now faces two major lawsuits challenging the net neutrality law signed by Governor Jerry Brown on Sunday. The Trump administration's Department of Justice also sued California and is seeking a preliminary injunction that would stop the law from being implemented. California' net neutrality rules are scheduled to take effect on January 1, 2019.
Multiple court cases will affect state law
Like the DOJ, broadband lobby groups argue that state net neutrality laws are preempted by the Federal Communications Commission's repeal of federal net neutrality rules. The FCC and DOJ claim that California's net neutrality law conflicts with the federal government's deregulatory policy for broadband. California argues that the FCC gave up its authority to regulate broadband and therefore cannot preempt states from regulating the industry.
Ultimately, the question of whether the FCC's preemption of state laws is valid will be decided in a different lawsuit pending at the US Court of Appeals for District of Columbia Circuit. In that suit, state attorneys general and other litigants sued the FCC in order to reverse the repeal of federal net neutrality rules and the preemption of state laws.
But the US District Court in California must rule on requests for a preliminary injunction from the DOJ and lobby groups. Because of that, the US District Court will decide whether California can enforce its law while the US Court of Appeals case is pending.
The new California state law prohibits Internet service providers from blocking or throttling lawful traffic and from requiring fees from websites or online services to deliver or prioritize their traffic to consumers. The law also bans paid data cap exemptions (so-called "zero-rating") and says that ISPs may not attempt to evade net neutrality protections by slowing down traffic at network interconnection points.
California's ban on paid zero-rating would force AT&T and Verizon to stop charging companies for data cap exemptions. The California law also prohibits zero-rating some applications in a content category but not others. For example, an ISP could zero-rate all video services but would not be allowed to zero-rate some video services while counting other video services against data caps. AT&T's zero-rating of its DirecTV streaming service could thus violate the California law because AT&T doesn't provide the same data cap exemptions to all other video services.
In a statement on their lawsuit, the four broadband lobby groups suing California praised themselves, saying, "The nation's broadband providers are the innovation engine of America's digital economy and remain committed to an open Internet for consumers. We oppose California's action to regulate Internet access because it threatens to negatively affect services for millions of consumers and harm new investment and economic growth."