In the wake of the Trump administration’s decision to sell out consumers on net neutrality, more than half the states in the nation are now considering state-level net neutrality rules to protect consumers from anti-competitive behavior by their ISPs. In California, the fight is getting particularly heated as the state considers passing some of the toughest net neutrality protections yet seen on the federal or state level.
California state Sen. Scott Wiener’s SB 822 largely mirrors the 2015 FCC net neutrality rules ISPs like Comcast have worked tirelessly to eliminate. The bill prohibits ISPs from blocking, throttling, or otherwise hurting competitors. It would also prohibit ISPs from striking anti-competitive “paid prioritization” deals letting companies buy a network advantage.
In some ways, California’s proposal goes even further than the FCC’s 2015 rules. More specifically, SB 822 takes aim at “zero rating,” or the practice of exempting an ISPs own content, or the content of a partner company, from usage caps and overage fees. Usage caps on fixed broadband networks are already arbitrary, annoying, and unnecessary, and the practice of exempting some companies can easily disadvantage smaller companies and nonprofits.
Without restrictions on zero rating, ISPs like AT&T, Verizon, and Comcast have begun letting their own streaming services bypass usage cap restrictions, while still penalizing streaming services like Netflix. It’s one of several ways incumbent ISPs plan to use a lack of competition in broadband to try and hamstring emerging competition in the TV sector. Groups like the EFF have called California’s net neutrality proposal “the gold standard” for state-level rules. The bill also has the support of nearly 60 California startups, more than 40 public interest and consumer groups, and former FCC boss Tom Wheeler, who called California’s proposal “essential to our economy and democracy.”
Despite net neutrality enjoying broad bipartisan public support, ISPs don’t want states protecting consumers in the wake of federal apathy, and their lobbying groups have already threatened to sue any state that tries. They also lobbied the Trump FCC to include legally dubious “pre-emption” language attempting to ban states from passing their own protections. With SB 822 slated for hearings before the California Energy, Utilities, and Communications Committee this week, activists note ISP lobbyists are hard at work trying to derail the bill, claiming (as we saw on the federal level) that that there’s nothing wrong with the uncompetitive broadband sector, and that consumer protections aren’t necessary. Killing the bill outright could prove difficult given public anger, so consumer advocates say that lobbyists have convinced some Democratic California lawmakers to push for a massive watering down of the legislation. They say the end product of that lobbying is a new committee analysis recommending the weakening of many key provisions. Consumer groups say the recommendations include trimming back oversight of the kind of interconnection feuds that resulted in Netflix customers seeing slower service a few years ago, after ISPs were routinely accused of letting their peering points intentionally congest to drive up costs for content companies (complaints that magically evaporated in the face of FCC rules).
“[The committee’s analysis] recommends removing the bill's protections against using interconnection practices to circumvent the bill's net neutrality protections,” Stanford Law professor and net neutrality expert Barbara van Schewick wrote in a detailed analysis of the recommendations. “That would be a big step behind the 2015 Open Internet Order and re-create a giant loophole that the ISPs have exploited in the past, creating massive harm to consumers,” van Schewick added. More simply, after ISPs began facing backlash for more heavy-handed net neutrality violations (like throttling), they began using more clever tactics like zero rating and interconnection to behave anti-competitively. Remove meaningful protections governing those end arounds, and you’ve effectively made net neutrality protections pointless, activists warn. The Committee's analysis appears to manufacture some claims out of whole cloth. Not only does it try to falsely claim that SB 822 tries to “prohibit peering agreements,” it inaccurately argues that ISPs would face financial hardships due to the protections. Both the FCC’s 2015 rules and SB 822 ban anti-competitive paid prioritization deals, while providing ample leeway for legitimate prioritization (medical services, VoIP.) ISP lobbyists for Comcast and Verizon routinely try to conflate the two, claiming that net neutrality somehow harms the sick and disabled. That’s never been true.
In reality, ISPs only run afoul of these protections when they’re engaging in anti-competitive behavior, making the hand-wringing over the financial impact disingenuous. You’ll notice some similarities between ISP lobbying claims and the committee’s analysis, which tries to insist that policing such deals will result in harm to “lower-income Californians.” “A long-term absence of other mechanisms to pay for infrastructure upgrades could increase cost pressures for consumers,” the analysis says. “It is likely that cost increases for consumers would disproportionately impact lower-income Californians and increase needs for universal service programs that supply broadband access at affordable rates.” Again though, reasonable net neutrality rules only prohibit anti-competitive prioritization and interconnection, and while ISPs routinely like to claim that net neutrality hurts their ability to make a living, analysis of their earnings reports (not to mention public CEO statements) routinely undermine these claims.
Consumer advocates aren’t particularly impressed by the way the Committee’s analysis mirrors many common ISP talking points. “It’s outrageous that California democrats would produce a document that looks like it was literally written by lobbyists for AT&T and Comcast,” said Evan Greer, deputy director of consumer group Fight for the Future. “They’re calling for giant loopholes that would gut SB 822 and leave California residents vulnerable to ISP scams and abuses,” said Greer. “These senators need to know that the entire Internet is watching them, and will not forget if they side with giant telecom monopolies over the basic rights of their constituents.” The EFF is looking for the support of California residents willing to help pressure lawmakers to pass the bill intact. In the interim, the FCC is gearing up for a massive legal showdown amidst accusations that it not only sold out the public to the benefit of telecom monopolies, but it turned a blind eye to identity theft and fraud during the repeal’s public comment period.
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