California's net neutrality law is slated to take effect on January 1, 2019 unless the US government convinces a federal court to halt the law's implementation.

As we reported yesterday, the Department of Justice sued the state of California shortly after Governor Jerry Brown signed net neutrality legislation into law. The Trump administration claims the California law is preempted by the Federal Communications Commission's repeal of net neutrality rules.

The government lawsuit filed in US District Court for the Eastern District of California seeks a preliminary injunction that would stop implementation of the law pending the outcome of the case.

If the US District Court refuses to grant a preliminary injunction, the California rules would go into force as scheduled on January 1. Like the former federal law, the new state law applies to home Internet providers and mobile carriers and prohibits blocking, throttling, and paid prioritization.

The DOJ's motion for a preliminary injunction claims that implementation of the law would cause "irreparable harm" to the United States. It isn't realistic for ISPs to comply with different net neutrality standards in different states, the DOJ argued, so the California law would effectively govern the entire nation.

"Because its regulatory approach directly conflicts with the FCC's, SB-822 inflicts irreparable harm on both the United States as well as the public interest more generally," the DOJ told the court. "As this Court recently noted, '[t]he United States suffers injury when its valid laws in a domain of federal authority are undermined by impermissible state regulations,' and '[f]rustration of federal statutes and prerogatives are not in the public interest.'"

By contrast, "California will suffer no cognizable harm from being unable to disrupt the status quo by enforcing an invalid law," the DOJ claimed.

California's net neutrality law "is expected to be enforced through litigation under California's Unfair Competition law, which authorizes courts to issue an injunction against and impose civil penalties of up to $2,500 per violation" on violators, the DOJ lawsuit said. Under that California law, lawsuits can be pursued against companies by the state attorney general, district attorneys, county counsels, and city attorneys. Private citizens can pursue lawsuits if they are directly harmed by a company's actions.

DOJ argument “fatally flawed”

Whether the US government can preempt California's net neutrality rules is not certain. Dozens of litigants, including more than 20 state attorneys general (including California's), have already sued the FCC to reverse the net neutrality repeal and attempted preemption of state laws. The lawsuit is pending at the US Court of Appeals for District of Columbia Circuit.

"The legal argument for preemption is fatally flawed: the FCC claims that it has no authority to regulate broadband Internet service," attorney Andrew Schwartzman, who represents the Benton Foundation in the case against the FCC, said in a statement responding to the DOJ lawsuit. "Courts have consistently held that when the federal government lacks authority to regulate, it cannot preempt states from regulating."

The DOJ's lawsuit against California characterizes the FCC's deregulation of broadband as "an affirmative 'deregulatory policy' and 'deregulatory approach' to Internet regulation."

The FCC repeal of net neutrality rules thus "does not constitute an absence of regulation for States to fill," the DOJ wrote. Instead, "it is a uniform, national regulatory framework, the metes and bounds of which were carefully considered by the Commission in exercising its lawfully delegated authority."

The DOJ continued:

In the face of this clear exercise of federal authority, California has tried not only to reinstate the same rules the FCC repealed but to impose new requirements that have never existed at the federal level. And given that ISPs cannot realistically comply with one set of standards in this area for California and another for the rest of the Nation—especially when Internet communications frequently cross multiple jurisdictions—the effect of this state legislation would be to nullify federal law across the country. Only an injunction from this Court can address that unlawful result.

DOJ: Preemption should be presumed valid

Although the FCC repeal is being tested in a separate lawsuit, the validity of that repeal should not be considered by US District Court, the DOJ argued. "[T]his Court must presume that the 2018 Order, including its preemption provision, is valid and resolve only whether SB-822 violates the 2018 Order," the DOJ suit against California said.

Noting that California is one of the states suing the FCC to reverse the net neutrality repeal and preemption of state rules, the DOJ said that "California should not be permitted to effectively shift its burden by enacting preempted legislation while its DC Circuit challenge is pending and then argue that the equities cut against an injunction."

FCC Chairman Ajit Pai praised the DOJ lawsuit, saying, "The Internet is inherently an interstate information service. As such, only the federal government can set policy in this area." Pai also said the California law is "illegal" and "hurts consumers" by prohibiting some types of data-cap exemptions that "allow consumers to stream video, music, and the like exempt from any data limits."

The DOJ complaint said the California rules go beyond the former federal law by outlawing certain types of zero-rating, the practice of exempting some Internet content from data caps. The California law would prevent ISPs from demanding payments from websites or online services for zero-rating, but it allows ISPs to exempt entire categories of Internet content (such as video and music) from data caps.

States fight back

California State Senator Scott Wiener (D-San Francisco), author of the net neutrality bill, expressed confidence that the US government won't be able to block net neutrality in California.

Wiener said in a statement:

[US Attorney General Jeff] Sessions and his boss Donald Trump aren't satisfied with the federal government repealing net neutrality. In their world, no one is allowed to protect an open Internet. We've been down this road before: when Trump and Sessions sued California and claimed we lacked the power to protect immigrants. California fought Trump and Sessions on their immigration lawsuit—California won—and California will fight this lawsuit as well. I have complete confidence that [State] Attorney General Xavier Becerra will do a great job defending this law.

Washington state also previously imposed net neutrality rules, with the state law's legislative sponsor arguing that "the FCC doesn't have preemption authority just because it says so."

Other states have taken less direct approaches to regulating net neutrality. Oregon, for example, didn't impose net neutrality rules directly on ISPs. Instead, the Oregon law forbids state agencies from purchasing fixed or mobile Internet service from ISPs that violate net neutrality principles.

The governors of six states (Vermont, Hawaii, Montana, New Jersey, New York, and Rhode Island) have also issued executive orders to impose net neutrality rules on ISPs that provide Internet service to state government agencies.