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U.S. Justice Department Challenges California Net Neutrality Rules

The Justice Department is suing California over the state’s just-signed net neutrality law

Rightly so, as it’s hard to imagine a market that better fits the definition of ‘interstate.’ The Internet crosses state and local lines countless times everyday and that means its regulation is a matter for the feds, not states or localities. Federal Communications Commission Chairman Ajit Pai has correctly described the Internet as, “inherently an interstate information service. As such, only the federal government can set policy in this area.”

The idea of service providers laboring under potentially fifty different regulatory frameworks would make a mess of online communications. The federal government’s authority in this market is well established and letting states act otherwise would create major inefficiencies for all who use the Internet. Internet service providers would make better use of their time and resources innovating and expanding for their customers, instead of navigating multiple regulatory regimes.

Not only does California have no legal right to regulate the Internet, but the state’s legislation is also bad policy on the merits.

Many states, including Oregon, Vermont, and Washington, were motivated by last year’s repeal of the Obama-era Open Internet Order to pass their own net neutrality legislation. But in true over-regulatory California fashion, the Golden State’s bill goes even further than the 2015 federal regulations. It bans blocking, throttling, and paid prioritization like the old FCC order, but then goes further to ban zero-rating agreements (where service providers stream favored content without counting that data against consumer’s data plans), prevent some interconnection agreements (commercial agreements among providers), and institute a general conduct rule (which empowers regulators to prohibit any future business decisions they find unpalatable). CEI has detailed why these regulations, both old and new, are harmful to consumers and businesses; those objections hold at both the state and federal levels.

The hysterical predictions of the “end of the Internet” never materialized after federal net neutrality regulations were removed, but allowing states to over-regulate on their own and in fifty different ways would be a serious blow to the net. Consumers need more innovation, not more regulation online.