Editorial: California can’t be the final refuge for net neutrality

In the latest sign of detente between the federal government and California, the U.S. Department of Justice has withdrawn a federal lawsuit that sought to revoke the state’s net neutrality law, which was enacted in 2018 to bar internet service providers from meddling with their customers’ choice of online sites, apps and services.

It was a necessary step, but not a sufficient one. For the same reasons the department dropped its lawsuit, it should weigh in against a similar challenge brought by cable and phone companies. Meanwhile, supporters of net neutrality on the Federal Communications Commission should begin the process to reverse course — again — and seek rules to protect all U.S. internet users. Congress should do so as well.

At issue is what rules, if any, apply to how Comcast, Spectrum, AT&T and other internet service providers manage the data flowing between their customers’ devices and the web. Broadband internet service providers have the incentive to favor the sites and services they own or partner with, as well as the means to do so — for example, by imposing interconnection fees or data caps that affect rival services but not their own. And in most communities, consumers have only one or two options for affordable and truly high-speed broadband today, so there’s little or no competition to keep ISPs from misbehaving.

ISPs argue that they value net neutrality but that any rules limiting their potential revenue only deter them from making investments in faster networks. Yet there’s another side to that coin; the lack of net neutrality protections may deter investments by websites, services and bandwidth providers that would be hurt if ISPs favored their competitors.

Despite the ostensibly common goals, consumer advocates and ISPs have fought bitterly over how to preserve a neutral internet. Federal regulations have blinked on and off over the years, with rules adopted, challenged and then repealed by the courts or by deregulatory-minded Republican administrations. The fight reached its apex — or nadir, actually — in 2017, when a Republican-led FCC repealed the tough net neutrality protections adopted two years previously. The new rules, such as they were, gave ISPs the freedom to do pretty much whatever they pleased, as long as they were transparent about it.

That turnabout prompted California to enact Senate Bill 822, which imposed many of the strictures the FCC abandoned, minus the price controls and other regulatory baggage that had drawn fire from Republicans and the ISPs. But the Trump administration filed suit immediately, arguing that the state law was preempted by the FCC’s latest rules.

The lawsuit was as illogical as it was cynical. The FCC had not only erased its net neutrality rules, it had declared that federal law gave the commission no power to regulate ISPs. In other words, if ISPs put their thumb on the scales of competition online by favoring some sites or services over others, the FCC said, it was powerless to stop them. That left a regulatory void to be filled by the states, which have a long history in enforcing consumer protections and fair business practices.

The new Justice Department was right to withdraw the lawsuit. But now it should turn its attention to the industry’s lawsuit against SB 822, which likewise claims that the state law is preempted by the federal deregulation, and urge the court to reject that argument. The D.C. Circuit Court of Appeals held in 2019 that the FCC’s new rules left it no authority to preempt state laws, and the same reasoning should apply to the industry’s complaint here.

That’s not to say, however, that we’re well served by a state-by-state approach to regulating ISPs. It would certainly be better if the FCC crafted clear rules protecting net neutrality nationally. And better yet would be for Congress to end the regulatory gyrations by mandating these protections and giving the FCC the authority and the obligation to carry them out.

There’s some hope that Congress will finally get off the sidelines. Rep. Anna G. Eshoo (D-Menlo Park), a longtime advocate of net neutrality rules, noted that there are now leaders in the House, the Senate, the Biden administration and the FCC who are “net neutrality champions.”

Still, there’s a lot of opposition among Republicans to regulating internet access, even as they push to dictate how social media networks and other sites handle user-generated content. California’s law increases the pressure on ISPs and their Republican allies to seek a deal with net neutrality advocates on legislation to set national standards, rather than having a patchwork of state rules. The Justice Department should help sustain that pressure by throwing its weight behind California in the remaining legal battle over SB 822.