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Broadband Industry Ends California Net Neutrality Lawsuit

After losing their federal appeal earlier this year, the trade groups dropped their case to overturn California's net neutrality protections.

Sarah Tew/CNET

In a major victory for net neutrality supporters, broadband industry trade groups on Wednesday dropped their lawsuit to block California's law that regulates internet service providers and prevents providers from slowing or blocking access to service.

In a federal court filing in Sacramento, the groups and California Attorney General Rob Bonta jointly agreed to dismiss the case.

The move followed a 3-0 decision in January by the 9th US Circuit Court of Appeals, which allowed enforcement of California's 2018 net neutrality law that bans internet providers from slowing down or blocking access to websites and applications that don't pay for premium service. Last month, the appeals court rejected a petition to rehear the case, leaving the last remaining option for an appeal to the US Supreme Court, which takes very few cases each term. 

"The case is finally over," Bonta said in a statement. "With this victory, we've secured a free and open internet for California's 40 million residents once and for all."

The groups' decision to end the litigation is a major victory for net neutrality proponents in the ongoing battle over how, or even if, the internet should have protections in place that ensure broadband companies can't abuse their power as gatekeepers to slow down or block traffic on their networks or favor their own content over a competitor's.

"After a string of defeats, including failing to convince a single judge on the 9th Circuit to vote to rehear their case, the group of internet service providers suing to overturn California's net neutrality law has realized its efforts are futile," John Bergmayer, the legal director at consumer watchdog Public Knowledge, said in a statement. 

California adopted its new rules in 2018 after a Republican-led Federal Communications Commission in 2017 repealed federal rules that had been established under President Barack Obama. Telecom and broadband industry groups had sued to get the state law thrown out, arguing that since federal net neutrality protections were dismantled, the state had no jurisdiction to regulate broadband service. 

The four industry groups that filed the lawsuit in 2018 were USTelecom, CTIA, NCTA and the ACA. Together these groups represented companies, such as AT&T, Verizon Wireless, Charter Communications and Comcast, as well as mobile carrier T-Mobile. 

The court in January said that since the FCC reclassified internet services in 2017 as more lightly regulated information services, the commission "no longer has the authority to regulate in the same manner that it had when these services were classified as telecommunications services."

A lower court judge refused to block California's net neutrality law from taking effect after the Justice Department withdrew its separate legal challenge to the state law in February 2021.

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California's law, which codifies the federal protections originally put in place during Obama's term, prohibits internet service providers from slowing down or blocking access to websites or applications. It also prohibits broadband companies from charging fees to companies to deliver their service faster than a competitor's offering. It also goes further than the Obama-era FCC net neutrality protections and also prohibits practices such as zero-rating, which is the bundling of access to certain content or services for free as part of broadband service. An example of such a service is a promotion once offered by AT&T, which exempted its own streaming services from its wireless customers' data caps. 

After the Trump-era FCC dismantled the rules, several states began passing their own protections. In addition to California, six other states have adopted net neutrality laws: Colorado, Maine, New Jersey, Oregon, Vermont and Washington. Several other states have introduced some form of net neutrality legislation. Attorneys general in New York, Massachusetts and 16 other states filed a brief urging the court to uphold the California law as a valid exercise of state police power.

Net neutrality comeback?

Net neutrality is the principle that all traffic on the internet should be treated equally, regardless of whether you're checking Facebook, posting pictures to Instagram or streaming movies from Netflix or Prime Video. Supporters of net neutrality say rules are necessary to ensure broadband companies aren't taking advantage of their power over the infrastructure that delivers content to your internet-enabled TVs, laptops, tablets and smartphones. But broadband companies and Republicans in Congress and on the FCC say the old rules gave the agency too much power, stifling broadband investment.

The result for the past decade has been a ping-ponging of federal net neutrality regulations based on the political party in charge. 

The back-and-forth is expected to continue, with President Joe Biden's pick to fill a Democratic seat on the FCC being a strong supporter of net neutrality. Since Biden's inauguration last year, the FCC has operated with a 2-2 split between Democrats and Republicans. If confirmed, Gigi Sohn, who Biden nominated in October, would be the third Democrat on the FCC, and the trio would have the necessary votes to reinstate net neutrality rules. 

But Sohn's nomination has been stalled, as some Senate Republicans have taken issue with her past as a strong consumer advocate and some moderate Democrats, who formerly served in Congress, such as former Sen. Heidi Heitkamp of North Dakota, accuse her of being biased against rural areas of the country in favor of cities. Sohn's supporters say the attacks are largely about politics in a midterm election year. Sohn has appeared for two confirmation hearings before the Senate Commerce Committee, but her nomination hasn't been voted out of committee, as the vote was split along party lines 14-14. 

There's been talk in recent weeks of Senate Majority Leader Chuck Schumer of New York bringing the vote on her nomination before the full Senate. If Sohn is finally seated as a commissioner, it's expected the FCC will move to adopt net neutrality protections and also reestablish the FCC's authority over broadband providers. FCC Chair Jessica Rosenworcel, who's now in her third term on the FCC, was a commissioner who voted for the 2015 rules. She also voted against the repeal in 2017 and was outspoken about her opposition. 

Sohn has spent much of her career advocating for net neutrality protections. As an adviser to former FCC Chair Tom Wheeler, she helped craft the 2015 rules. 

Public Knowledge's Bergmayer said it's "great news" that the industry backed down from the fight over net neutrality in California. "But the effort to enact net neutrality rules nationwide must continue," he said. "The Senate must act to ensure we have a full Federal Communications Commission that can restore these important consumer protections for all Americans."

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