Federal Appeals Court Upholds California’s Net Neutrality Rules

January 28, 2022 – The Ninth Circuit Court of Appeals on Friday ruled against broadband companies seeking to block a state net neutrality law, and internet policy advocates are calling it a win for consumers in California.

The ruling comes after industry trade groups, including US Telecom, the cable industry groups NCTA and ACA Connects, and the wireless association CTIA, sought to overturn California’s law on the grounds that the Federal Communications Commission’s now-abandoned federal rules on net neutrality conflict with California’s state level rules.

The court found that because the FCC determined – in a prior ruling during the Trump administration – that it no longer had authority over broadband consumer protection, California’s broadband consumer protection law could go into effect.

SB 822, or the California Internet Consumer Protection and Net Neutrality Act of 2018, restricts internet service providers from some activities. For example, the state law prevents paid prioritization, or agreements that would optimize data transfer rates large companies including Facebook, Google and Netflix.

The law also prohibits so-called “zero-rating” practices that some believe exploit consumers by allowing free access to some services but not others.

John Bergmayer, legal director at Public Knowledge, called the ruling a “great decision and a major victory for internet users in California and nationwide.”

“When the FCC has its full complement of commissioners, it should put into place rules at least as strong as California’s nationwide, making some state measures unnecessary. But even after that happens, this decision clarifies that states have room to enact broadband consumer protection laws that go beyond the federal baseline.”

But Randy May, president of the Free State Foundation, said “like a lot of Ninth Circuit decisions, it is arguable that the court got the law wrong regarding whether California’s net neutrality law is preempted. Given the inherently interstate nature of today’s tightly integrated broadband internet networks, there’s a good chance that other circuits might reach a different conclusion regarding preemption.

May said that the risks of a patchwork of state regulations “should prompt Congress to resolve the decades-old net neutrality controversy by adopting a new law that prevents consumer harm while recognizing the technologically dynamic nature of today’s Internet ecosystem.”

The opinion was authored by Ninth Circuit Chief Judge Mary Schroeder and joined by Judge Danielle Forrest with a concurrence by Judge J. Clifford Wallace.