As part of the deal, California officials have agreed not to enforce their new rules on broadband providers when the state law — viewed by many as the nation’s toughest — officially takes effect on Jan. 1.

Signed by Gov. Jerry Brown (D) last month, the law prohibits companies such as AT&T and Comcast from blocking or slowing down online content and makes it illegal for them to demand special fees from websites and apps.

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“We are committed to a free and open Internet for Californians,” said California Attorney General Xavier Becerra. “Every step we take, every action we launch is intended to put us in the best position to preserve net neutrality for the 40 million people of our state.“

The Justice Department didn’t immediately respond to a request for comment.

The accord highlights the complexity of the legal tussle surrounding net neutrality, as well as the sky-high stakes tied to a case brought by consumer advocates and digital rights groups in Washington appealing the FCC’s decision last year to rescind its own net neutrality rules.

That case confronts some of the same issues as the one now facing California, such as whether the FCC’s new, lighter approach to net neutrality takes precedence over state laws. A ruling on that front by the U.S. Court of Appeals for the D.C. Circuit could have major ramifications for the Justice Department’s California suit.

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Attorney General Jeff Sessions has alleged that California’s law violates the Constitution by circumventing the FCC’s deregulatory order. But if the D.C. Circuit rejects the FCC’s 2017 rule change under FCC Chairman Ajit Pai, it could lead to new questions about how far federal regulators may go in preempting states such as California.

In a statement Friday, Pai celebrated the deal, calling it a “substantial concession” on the part of California. “I am pleased that California has agreed not to enforce its onerous Internet regulations,” Pai said. “This substantial concession reflects the strength of the case made by the United States earlier this month.”

But defenders of California’s law, known as SB 822, said they were confident that the eventual court battle would ultimately conclude in their favor.

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“Net neutrality ensures open access to the Internet and guarantees that each of us can decide for ourselves where to go on the Internet, as opposed to Internet service providers making that decision for us,” said Scott Wiener, the state senator who co-wrote the legislation. “I look forward to successful litigation on this issue and to the restoration of strong net neutrality protections in our state.”

Broadband industry advocates who have joined in suing California called the agreement “a win for consumers." The coalition includes the nation’s top wireless, cable and telecom associations.