Ninth Circuit Approves California's Net Neutrality Law, Shifts Focus to FCC

In Short

The Situation: California enacted a net neutrality law in response to the Federal Communications Commission's ("FCC") 2018 decision to reclassify broadband internet access service and repeal the FCC's 2015 net neutrality rules. 

The Result: The U.S. Court of Appeals for the Ninth Circuit upheld California's net neutrality law, concluding that the FCC's deregulatory approach to net neutrality did not preempt California's regulatory approach.

Looking Ahead: President Biden's promise to revive federal net neutrality rules will shift the focus back to the FCC in 2022.

In 2018, the FCC deregulated broadband internet access service, repealed its 2015 net neutrality rules, and specified that these actions were intended to preempt state net neutrality laws. On appeal, the D.C. Circuit upheld the FCC's reclassification of broadband service and the repeal of its net neutrality rules, but vacated the FCC's preemption order. By reclassifying broadband service as an information service, the D.C. Circuit reasoned, the FCC had stripped itself of its regulatory authority and, accordingly, of the preemptive authority to displace state net neutrality laws.

In response to the FCC's 2018 deregulatory decision, California adopted its own net neutrality law that essentially codifies the FCC's 2015 net neutrality rules. California's Internet Consumer Protection and Net Neutrality Act of 2018, or SB-822, makes it unlawful for broadband service providers in California to block lawful content, degrade or impair lawful internet traffic on the basis of content, engage in paid prioritization, or unreasonably interfere with or unreasonably disadvantage a user's ability to access the internet. 

In ACA Connects v. Bonta, the Ninth Circuit rejected a federal preemption challenge to California's net neutrality law. Tracking the reasoning of the D.C. Circuit, the Ninth Circuit concluded that when the FCC reclassified broadband internet access service from a "telecommunications service" to an "information service" in 2018, the FCC had abandoned its regulatory authority with respect to net neutrality. Because the FCC abandoned its authority over net neutrality, California was no longer preempted from enacting its own net neutrality protections for broadband service provided to California residents.

The Ninth Circuit's decision shifts the focus back to Washington, D.C., where President Biden issued an Executive Order in July 2021 encouraging the FCC to adopt "Net Neutrality rules similar to those previously adopted" by the FCC in 2015. In order for the FCC to achieve the President's objective, the FCC would need to reclassify broadband service as a "telecommunications service" to restore the FCC's ability to adopt the former net neutrality rules. 

Despite President Biden's July 2021 Executive Order encouraging the FCC to reinstate its former net neutrality policy, the FCC has been slow. President Biden designated Commissioner Jessica Rosenworcel to serve as FCC chair in October 2021, and the Senate only recently confirmed her to another term in December 2021. And at present, the FCC remains short one commissioner, with two Republican and two Democratic commissioners. President Biden's additional nominee to the FCC, Gigi Sohn, could advance his goal of restoring net neutrality if she is confirmed by the Senate.

Three Key Takeaways 

  1. California's net neutrality law essentially codified the FCC's 2015 net neutrality rules, though only applicable to broadband service provided to California residents. 
  2. The Ninth Circuit held that the FCC's 2018 deregulatory approach to net neutrality did not preempt California's regulatory approach.
  3. As soon as the FCC has a full roster of commissioners, the FCC will likely move toward fulfilling President Biden's goal of restoring federal net neutrality protections by reclassifying broadband service as a Title II telecommunications service and reinstating the 2015 net neutrality rules. 
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