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California is Wasting Taxpayer Funds Enacting a State Net Neutrality Law

California is on the verge of wasting taxpayer money in an effort to make a political statement. State legislators are about to pass legislation reinstating heavy-handed, Title II regulations on the internet—regulations the Federal Communications Commission nullified with a vote late last year.

The proposal, when enacted, would prevent Internet Service Providers (ISPs) from blocking or throttling connections, engaging in paid prioritization, or from zero rating most services. According to the progressive technology blog Gizmodo, the California proposal would “effectively reinstate, at least for California residents, the Title II-type protections repealed by the FCC’s Republican majority”

The last two provisions are quite troubling. Zero-rating, which was too radical for the 2015 Obama-era Open Internet Order, permits companies to exempt some apps from data quotas. T-Mobile, for example, exempts most video streaming services and music streaming services from its data caps. Similarly, AT&T exempts DirecTV from its data caps. Paid prioritization, similarly, allows some companies to pay more for dedicated speeds. Some illustrations where paid prioritization may be a good idea include 911 calls, telehealth-related data (remote surgeries, and so on), and others.

Supporters of California’s legislation are arguing the state has the right to pass such legislation using such language as “states’ rights” and federalism.” These supporters misunderstand federalism.

The founding fathers envisioned a system of dual sovereignty. This system provided the federal government with specific, enumerated powers, which are primarily found in Article 1, Section 8 of the Constitution. Within Article 1 is the Commerce Clause. The Commerce Clause provides that only Congress may regulate interstate commerce. Supreme Court cases interpreting the Commerce Clause, including the first case ever decided on it, recognized that states may not enact policies that are either designed to regulate policy outside their borders or that have the practical effect of doing so. This is called the “Dormant Commerce Clause.”

Supporters of the California legislation admit the purpose is to change policy both within California’s borders and across the country. The Verge reports that one of the bills coauthors bragged “‘The Trump administration destroyed the internet as we know it, plain and simple,’ Assembly member Miguel Santiago (D-Los Angeles), a coauthor, said while presenting the bill. ‘We have an opportunity in California to lead this nation by voting yes for this bill.’”

While the proposal certainly runs afoul of the Commerce Clause, it is also preempted by the text of the 2017 Restoring Internet Freedom Order and principles of preemption. The text of the Restoring Internet Freedom Order expressly prohibits states from seeking to reinstate heavy-handed, Title II style regulations on the internet. Principles of preemption would mean that courts would look to Congressional action and whether the federal government has “occupied the field” regarding regulations.

Congress has spoken regarding regulation of the internet. In Section 230 of the Communications Decency Act, Congress stated that its goal was to preserve the internet free from “federal or state regulation.” The Restoring Internet Freedom Order seeks, in addition to reversing the 2015 Open Internet Order, to carry out Congress’s goal of a lightly-regulated internet.

Because Congress has spoken, and because the FCC has occupied the field through the 2017 Order, both the legislative branch of the federal government and a federal agency have occupied the field of internet regulation. That is to say, because of the law and the FCC’s actions, there is no room for states to enact net neutrality laws.

Several other experts have written, or spoken, on the topic of preemption. Brent Skorup at the Mercatus Center at George Mason University and Seth Cooper at the Free State Foundation have examined the topic of preemption and state net neutrality laws in detail. Similarly, the Federalist Society has published a podcast on the topic of federalism and net neutrality.

California, and other states that have enacted state net neutrality laws, are wasting taxpayer money. Eventually someone will sue to overturn the laws. And that lawsuit will likely be successful, meaning that the legislature spend valuable time debating and defending a policy that had no chance to succeed from the start.


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