With Comcast owning NBCUniversal, Verizon owning Oath, and AT&T owning WarnerMedia (née Time Warner), internet and wireless providers appear to have more incentive than ever to play favorites with the sites and apps that people can access. But California is poised to curtail how these carriers can use their customers’ internet access. California state legislators approved a bill last week that would require internet and wireless providers to treat all internet traffic equally, a concept called “net neutrality.”
While states like Washington, Oregon and Vermont have stepped in to pass their own net neutrality laws, California’s bill “is the toughest net neutrality law,” said Marc Martin, a partner at Perkins Coie and chair of the law firm’s communications industry group. But what’s net neutrality and what makes California’s bill different than other states’ policies?
Remind me: what’s net neutrality?
It’s the idea that companies providing access to the internet, like Comcast and AT&T, shouldn’t make it any easier or more difficult for people to access certain sites or apps. AT&T shouldn’t be able to make its subscribers pay a delivery fee for access to Netflix while letting them stream video from AT&T-owned HBO without any extra fee, at faster download speeds or without counting against their wireless data plans. In short, there shouldn’t be a toll road for internet traffic.
So why did California decide to pass its own net neutrality law?
Because the U.S. no longer has a nationwide net neutrality law. In December, the Federal Communications Commission voted to repeal the net neutrality rules that were put in place in 2015. Those rules had barred internet and wireless providers from slowing down access to certain sites or apps while demanding payment from others in exchange for faster delivery speeds. If California’s bill becomes law, it would forbid internet and wireless providers from speeding up, slowing down or blocking access to certain sites or apps and from demanding they pay the providers for people to access their properties.
What’s different about California’s bill?
It would outlaw zero-rating. This is the practice by which an internet or wireless provider exempts access to a certain site or app from counting against a subscriber’s data cap. Zero-rating is an especially important issue these days as providers like Comcast, AT&T and Verizon also own media companies and could use zero-rating to incentivize people to use those sites or apps in favor of competitors’ properties.
Net neutrality sounds like a good thing to protect. Why are businesses against it?
Money. Net neutrality’s repeal opens opportunities for new revenue streams, like charging media companies and streaming platforms to speedily distribute their content or having advertisers subsidize that accelerated delivery as AT&T has tried. That revenue could help the providers to offset the increasing costs of delivering that content, especially bandwidth-sucking video.
Would California be the only state with its own net neutrality law?
Nope. After Washington, Oregon and Vermont, California would be the fourth. That could pose a compliance headache for the internet and wireless providers. However, since California’s law is considered more onerous than the others, companies may be fine so long as they abide the Golden State’s rule. “To paraphrase Frank Sinatra, if you can comply [in California], you can comply anywhere,” said Martin.
Didn’t the FCC say states can’t have their own net neutrality laws?
Yep, but that hasn’t stopped 30 states from introducing their own net neutrality laws, including California and the three that have passed them into law since the FCC’s repeal. States have side-stepped the FCC’s decree because it’s unclear if the FCC has the authority to make such a demand. Most likely, if internet and/or wireless providers file lawsuits against California’s net neutrality law, the case could make its way up to the Supreme Court. If that happens, then President Trump’s latest Supreme Court nominee, Brett Kavanaugh — who had come out against net neutrality in 2017 — could be the decisive vote.
Why doesn’t Congress take up the issue?
Congress might have to. Internet and wireless providers could lobby federal legislators to pass a nationwide net neutrality law that would likely take precedence over the state laws and could water down some of the states’ rules, such as the zero-rating provision. “The policy that [California sets] is going to go a long way toward pushing net neutrality back in front of Congress. They’re going to have to pick this up,” said Lyon.