Broadband Monopolies Lose Fight Against California Over Net Neutrality

With the industry on its heels, California will soon have the toughest net neutrality protections in the nation.

Feb 24 2021, 4:01pm

California will soon have the toughest net neutrality rules in the nation after a several year battle with the broadband industry. California judge John Mendez on Tuesday refused the broadband industry’s request for an injunction that would have blocked the law, allowing it to take effect after several years of legal wrangling.

While the case isn’t formally over, Mendez made it clear in a ruling from the bench that the industry was very unlikely to prevail. Bill creator and California State Senator Scott Wiener applauded the heavily anticipated decision. 

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In late 2017, the Trump FCC voted to kill popular federal net neutrality protections, falsely claiming that the rules had hindered broadband investment. California subsequently joined several states in passing its own net neutrality law in September of 2018.

California’s law went somewhat further than the FCC’s original rules. The law not only prevents broadband giants like AT&T and Comcast from abusing their monopolies to block services they compete with (something the industry has a long history of flirting with), but also mandated that ISPs be transparent about what restrictions exist on a consumer’s broadband line.

California’s rules also took aim at zero rating, the practice of exempting certain traffic from the broadband industry’s already arbitrary and unnecessary usage caps. Some ISPs, like AT&T, have subsequently abused such restrictions to give themselves a competitive advantage against streaming competitors like Netflix, Amazon, or Apple.

Surveys have repeatedly shown net neutrality rules have the support of a bipartisan majority of Americans, something that wasn’t of much concern to the federal government. 

Hoping to set a precedent, in late 2018 the Trump Department of Justice sued California for passing the rules, claiming the restrictions were “illegal” and “radical.” But the Biden DOJ dropped the federal government’s lawsuit earlier this month, leaving the broadband industry’s lawsuit as the only remaining obstacle to the California effort.

The FCC’s net neutrality repeal didn’t just kill net neutrality. It eroded the agency’s ability to hold broadband giants accountable for much of anything, be it anticompetitive behavior or billing fraud. The FCC’s repeal also attempted to ban states from being able to hold telecom providers accountable, an argument repeatedly shot down by earlier court rulings.

“The judge found, as I’ve long argued, that an agency that says it has no power to regulate, it has no power to tell others they can’t regulate,” Barbara van Schewick, a law professor at Stanford University, said of the ruling.

Broadband providers like AT&T and Comcast worked tirelessly to try and scuttle California’s rules before they could even be voted on. The broadband industry also utilized robocalls to target elderly Californians with false claims that California’s net neutrality protections would raise their cell phone bills

When that failed, the industry filed suit against the California government, claiming that net neutrality had dramatically stifled broadband investment, something disproven by numerous, subsequent studies. The industry was unsurprisingly unhappy with Mendez’s ruling.

“A state-by-state approach to Internet regulation will confuse consumers and deter innovation, just as the importance of broadband for all has never been more apparent,” a coalition of broadband industry organizations said in a joint statement. “We agree with the Court that a piecemeal approach is untenable and that Congress should codify rules for an open Internet.”

Granted the broadband industry created this fractured, state-by-state approach to internet regulations by repeatedly suing to dismantle federal level rules at the FCC. Meanwhile, difficulty getting net neutrality rules through a gridlocked Congress awash in telecom campaign contributions is why the FCC, and states, intervened in the first place. 

The industry first successfully sued to kill relatively flimsy net neutrality rules passed by the FCC in 2010. The industry then fought tooth and nail against tougher FCC rules first passed in 2015, even employing firms that used fake and dead consumers to generate bogus support via the FCC website. Trump FCC boss Ajit Pai then actively blocked law enforcement inquiries into who was responsible for the fake comments. 

The broadband industry has engaged in similar tactics to repeatedly derail efforts to create meaningful state and federal broadband consumer privacy protections.

“Telecom lobbyists used every dirty trick in the book to try to kill off California’s gold standard net neutrality law,” Even Greer, Deputy Director of consumer group Fight for the Future said of Monday’s ruling. “They spent millions on lobbying. They drove misleading robo-calls to senior citizens. They propped up fake astroturf organizations, paid off an academic, and lied through their teeth. And they still lost.”

While the federal government is expected to restore net neutrality via the FCC, that can’t happen until the Biden administration selects and seats a third Democratic Commissioner, something expected sometime in the next several weeks or months.

The broadband industry enjoyed no limit of favors under the Trump administration, be it the wholesale dismantling of the FCC, billions in subsidies and tax cuts for doing absolutely nothing, or the rubber stamping of job and competition-eroding megamergers. With California’s legal win and the FCC regaining its footing, the industry’s luck appears to finally be running out.

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