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The broadband industry’s attempt to kill California’s net neutrality law appears to have very little chance of succeeding in the U.S. District Court where the case is being heard.
On February 23, the industry’s motion for a preliminary injunction was denied by Judge John Mendez of the U.S. District Court for the Eastern District of California, as we reported at the time. We did not have much detail on Mendez’s reasoning last month, but we have since received an as yet unpublished transcript of the trial in which he issued his oral verdict against the order. (He did not issue a written ruling, citing time constraints caused by a shortage of judges in his district.)
The denial of Mendez’s mandate means that California can apply its net neutrality law while the case continues, leaving open the possibility that Mendez could eventually enter the broadband industry. But Mendez explained during the trial why he thinks the industry is unlikely to succeed with the trial.
“I do not find that the plaintiffs at this stage of the lawsuit have a likelihood of success on the merits,” Mendez said.
California law prohibits Internet service providers from blocking or restricting legal traffic. It also prohibits charging fees from websites or online services to deliver or prioritize their traffic to consumers, prohibits paid data release (so-called ‘zero-rating’), and states that ISPs may not try to protect net- evade neutrality by not slowing down traffic at network connection points.
AT&T stops charging for zero rating
Mendez’s ruling is already having an effect, as AT&T announced on Wednesday that it will end its “sponsored data” program in which it asks online services for the release of data space.
“We deplore the inconvenience to customers caused by California’s new ‘net neutrality’ law,” AT&T said. “Because the Internet does not recognize state borders, the new law does not only end our ability to provide California customers with such free data services. AT&T also complained that a “patchwork of state regulations” is “unworkable”, not to mention that AT & T’s long-standing battle against the rules of net neutrality in the US helped ensure that states would issue their own laws.
Ernesto Falcon, senior legislative advocate for the Electronic Frontier Foundation, wrote on Twitter that “AT & T’s version of a zero rating with low data capital was a way to drive their users to content they own. That’s why low – income advocates in California want it to go away. Users who only had mobile devices were tend to have low income and do not have full internet. ‘
Judge did not buy ISPs’ interstate argument
Most of the transcripts of the court hearings consist of the judge asking questions on each side, and he has far more skeptical questions to advocates in the broadband industry than in California. His skepticism shifted from the argument phase of the trial to the section where he announced and explained his decision.
The industry, represented by lobby groups for the largest providers of cable, DSL, fiber and mobile Internet providers, has claimed that the Communications Act gives the FCC the exclusive authority to regulate interstate communications, which only allows states to to regulate purely intrusive communication, ‘Mendez said. “But the court finds that the provisions of the law on which the plaintiffs rely do not support the arguments raised.”
For example, Article 152 of the Communications Act “gives the FCC the power to regulate interstate communications while prohibiting it from regulating intrusive communications, but this permission of the FCC does not indicate the power of the states,” Mendez said. said. The fact that the U.S. Communications Act “specifically excluded certain types of interstate communications from the jurisdiction of the FCC, such as intelligence services, indicates to this court that it is not the kind of pervasive regulatory system that left no room for state law, he said.
Under former chairman Ajit Pai, the FCC reclassified broadband as an intelligence service rather than a telecommunications service, abandoning the title II power. The FCC must regulate ISPs as general providers. Pai’s FCC also claimed that laws on the neutrality of the state should be preceded because it violates a federal policy of non-regulation.
“In the California case, Internet service representatives argue that the general regulations of public service providers of information services will be an obstacle to the decision of Congress to immunize these services against such regulations,” Mendez said. But Congress has not made it clear that it wants to eliminate state and federal regulation of intelligence services, he said. Mendez then quotes a passage from Congress’s 1996 update of the Communications Act that states: ‘This Act and the amendments made by this Act may not be construed to prejudice federal, state or local law. or to transgress, unless expressly provided in such law. or amendment. ”
Precedent cited by ISPs is irrelevant
Mendez also addressed the argument of the ISPs “that the Supreme Court has long ruled in analogous contexts that where Congress prohibits federal regulators from imposing specific obligations, states may not impose such regulations without violating the Supremacy clause. “
The ISPs’ argument is based primarily on a 1986 ruling in a case involving federal regulation of wholesale gas in the interstate state, Mendez said. But the case, in which federal law “occupied the field and hindered state regulation … was a direct application of field exemption that does not apply here,” Mendez said.
Pai’s FCC decides it lacks authority ‘
Mendez also criticized the ISPs ‘argument that California law violates “the FCC’s broadband Internet access deregulation policy’ spelled out in Pai’s repeal of net neutrality rules. As Mendez put it, the Pai reinterpreted the FCC’s’ order broadband Internet as an information service covered by Title I of the Communications Act, rather than as a telecommunications service covered by Title II, and thus outside the FCC’s regulatory framework. placed.’
Mendez continued:
The result is that the [FCC’s net neutrality repeal] order is not a case of affirmative action, but rather a decision of the FCC that it has no authority to regulate in the first place … [A]national regulations may only prescribe state law if the agency has delegated authority on the subject. If an agency does not regulate a practice, it does not have the governing authority, it merely shows that it respects the limits of its powers; he does not exercise delegated authority to decide whether or not the matter should also be of state regulation.
The FCC does have the power to decide whether broadband Internet access is an information service, but Mendez said “the deregulation objectives behind the decision do not have a preventative effect.”
This is similar to what a federal appeals court ruled in 2019 when it upheld Pai’s repeal of the federal net neutrality rules while blocking a nationwide abolition of state regulation. “[I]”In any area where the Commission does not have the power to regulate, it also does not have the power to obstruct the right of the state,” the ruling said, despite blocking Pai’s effort to promote the country. is, it is said in the 2019 ruling that individual state laws can be challenged in a case, as the case may be, so that the process can continue against California.
After Biden replaced Trump as president, the U.S. Department of Justice dropped its own lawsuit against California, allowing ISPs to continue without federal support.
Zero rating ban is not rate regulation
The transcript also shows that Mendez does not agree with the broadband industry about California’s ban on Internet services to charge online services for ‘zero rating’, the practice in which AT&T and other service providers exempt specific services from the computer account. The internet service providers have argued that the provisions of a zero rating improperly regulate the rates, ‘Mendez said. He refuted the argument and explained:
The zero rating provision states that mobile broadband providers, as with paid prioritization, cannot manipulate their subscriber’s access experience to favor paid or affiliated content over other content on the Internet.
But as defendants note, these provisions do not determine how many providers can charge their customers, because providers can charge the user as much or as little as they want for the service, and so there is no conflict with the [Communications] Deed.
Prevent damage to internet users
After thoroughly disputing the ISPs’ arguments, Mendez said the denial of the order could not irreversibly affect the industry. “The court finds that there is no likelihood of success from the arguments, and also finds that there is therefore no irreparable damage. [to ISPs], ‘Mendez said.
California and its supporters submitted a letter[ing] in detail how the regulations are essential for fair access to the internet, “Mendez said. He continued:
These are not hypothetical concerns. The accused, for example, filed a statement by Anthony Bowden, Santa Clara County Fire Chief, describing how Verizon allegedly suffocated the fire department connection amid their reaction to the Mendocino Complex Fire.
Defendants also commented on the New York Attorney – General’s finding that major ISPs made the deliberate business decision to obstruct their network connections with traffic, using the congestion as leverage to extract payments from others.
It turns out … that the issuance of an order would have a negative effect on the ISP companies and on the well-being of the public, the State of California. The court clearly does not find it in the public interest to issue the order and the balance of shares, according to the court, weighs in California’s favor.
While ISPs appeal, the judge calls on Congress to act
The ISP’s lobby groups are appealing Mendez’s denial of the order to the U.S. Court of Appeals for the ninth circuit. The lobby groups are also likely to appeal if Mendez rules against it after the case has been fully heard.
Mendez, who was nominated by President Bush in 2008, said there was an elephant in the room. There is clearly a political tone to this issue. ‘Mendez said that his ruling against ISPs was a legitimate decision and that it should not be looked at through any political lens … it is clear to all of us that this matter raises issues that, frankly, are better resolved by Congress can be, rather than the federal courts. ‘