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State Net Neutrality Laws Get Green Light in Court Ruling (1)

Oct. 1, 2019, 4:58 PMUpdated: Oct. 1, 2019, 7:56 PM

States can enact their own laws banning internet service providers from blocking or slowing data flows, the D.C. Circuit said in a decision upholding most of the Federal Communications Commission’s repeal of Obama-era net neutrality rules.

The ruling is a victory for the attorneys general from 22 states and the District of Columbia that challenged state preemption language in the FCC’s rollback of rules governing how ISPs such as AT&T Inc. and Comcast Corp. handle data traffic. It could lead more state legislatures to advance their own net neutrality measures without as much fear of a federal counterattack, telecom analysts said.

“Much of the reason you didn’t see states rushing forward was the threat from the Department of Justice to come in and preempt,” Phillip Berenbroick, policy director of pro-net neutrality tech group Public Knowledge, said.

The Oct. 1 decision by the U.S. Court of Appeals for the District of Columbia Circuit in Mozilla Corp. v. FCC also could create differing state internet regulations that the FCC and ISPs both would want to preempt.

“What you’re likely to have as an outcome of this is the 22 states likely to pass their own provisions and have a patchwork of laws,” Christopher Terry, professor of Media Law at the University of Minnesota, said.

Case By Case

The agency may not be powerless to block new state laws, however. The ruling only overturns the blanket prohibition on state net neutrality laws, Doug Brake, director of broadband and spectrum policy at the Information Technology and Innovation Foundation, said.

The FCC and other state net neutrality law opponents could challenge individual state laws by alleging a particular law conflicts with federal policy, Brake said.

All the FCC would “have to do is show that the state rules conflict with the FCC’s preemption on this order,” Brake said.

Several states, including California and Vermont, have enacted their own net neutrality laws since the GOP-controlled FCC scrapped most of its rules. The Department of Justice and telecom industry groups are suing to block the California and Vermont laws. The issue of conflict preemption is likely to take center stage in those cases, Brake said.

Washington, Oregon, Maine, and Colorado also have enacted net neutrality laws. Twenty-nine state legislatures introduced net neutrality bills this year, according to the National Conference of State Legislatures.

The California law establishes Obama-era rules there, and bans “zero rating,” in which ISPs allow consumers to stream certain content, often their own, without it being counted toward their data caps.

“Today’s decision blocks the FCC’s effort to preempt state net neutrality laws through regulation,” California Attorney General Xavier Becerra (D) said in a statement.

The Vermont law requires all ISPs that contract with the state government to abide by net neutrality principles.

California and Vermont aren’t enforcing their net neutrality laws until the federal case is resolved.

“Inevitably, this will lead to Commission case-by-case preemption efforts and more litigation,” Republican FCC Commissioner Mike O’Rielly said in a statement.

Mozilla Corp. v. FCC, D.C. Ct. App., No. 18-01051, decision 10/1/19

(Updated with additional reporting)

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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