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Calif. Senate braces for court showdown over net neutrality bill

California legislators appear poised for a legal battle that would pit efforts to restore and expand upon Obama-era broadband regulations in the state against federal regulators' efforts to stop such actions.

The California Senate on May 30 approved S.B. 822, a bill designed to ban any practice that hinders or manipulates consumer access to the internet to favor certain types of content, services or devices. If passed by the state Assembly and signed into law, the bill would specifically prohibit broadband providers in California from blocking or throttling internet traffic or prioritizing certain traffic in exchange for payment, much like the federal net neutrality regulations recently overturned by the Federal Communications Commission. The California bill would add additional regulations as well, prohibiting certain types of zero-rated offerings — which allow customers to view subsidized content without it counting against their mobile data cap —and blocking broadband providers from charging services access fees to reach certain consumers.

The bill passed the California Senate in a 23-12 vote despite several lawmakers acknowledging they expect the measure, if signed into state law, would almost certainly face legal challenges. A May 26 analysis of the bill from the state Senate said it "will likely be the subject of litigation, regardless of its constitutionality." The analysis also hinted at a potential legal defense for the state action, saying the legislation "does not create a state-level regulatory framework for net neutrality. Instead, it would enable the attorney general to review consumer complaints regarding ISPs on a case-by-case basis and bring legal action against violating ISPs."

The Republican-majority FCC, in voting to overturn the agency's net neutrality regulations, also sought to pre-empt states from passing their own net neutrality measures. The new FCC order, set to go into effect June 11, specifically prohibits "any state or local measures that would effectively impose rules or requirements that we have repealed." Despite this, dozens of states are considering their own net neutrality measures, even as the U.S. Congress remains divided on whether the FCC's full net neutrality rules should be reinstated or whether there should be some other legislation on the issue.

California state senators from both major parties expressed reservations about S.B. 822, but also a desire to move forward with restoring net neutrality protections repealed by the FCC.

"The federal government screwed this thing up," said State Sen. Bob Hertzberg, D-Van Nuys. Before voting in favor of the bill, Hertzberg said he expected the bill to face legal challenges due both to the FCC's state pre-emption language and because the California bill goes even further than the previous federal net neutrality order.

"I just think we've gone a little too far," he said, adding that he hopes as the bill moves forward in the state legislature, it will be amended to be more in-line with legal precedent. "I believe that there is a path here to win in the courts," he said.

In the California Senate's own analysis of potential legal challenges, it noted key differences between other state laws such as those passed by Washington and Oregon. For instance, "if California enacts this bill, it may be the first state to adopt legislation prohibiting certain paid interconnection agreements and selective zero-rating through legislation," the report said.

State Sen. Holly Mitchell, a Democrat from Los Angeles, said she had received letters from constituents expressing concern about the ban on certain zero-rated services. S.B. 822's author, state Sen. Scott Wiener, D-San Francisco, said the bill would not ban all zero-rated plans, such as those that provide free access during particular times of the day. Rather, it would only prohibit those plans that try to steer customers toward content that is owned by the ISP or that has been subsidized through a commercial agreement.

Major ISPs including AT&T Inc. and Comcast Corp. have pushed for a federal legislative solution that would guarantee neutrality and transparency but would protect various business practices, such as prioritization and zero-rating. "Legislation would not only ensure the rights of consumers are protected and enforced but it would also provide consistent rules of the road for companies across all websites, content, devices and applications," Tim McKone, AT&T's executive vice president of federal relations, said earlier this month.

Following the state bill's passage in the California Senate, it will now head to the state Assembly. After the May 30 vote, bill author Wiener tweeted: "If our federal govt won't protect a free & open internet, the States must step in."