On Wednesday May 4 2020, the cable, phone, and wireless companies suing California over its historic net neutrality law withdrew their lawsuit after three consecutive losses in federal courts in California.

Statement from Professor Barbara van Schewick (professor of law at Stanford University and the director of Stanford Law School’s Center for Internet and Society). Van Schewick testified at every hearing on the bill, and filed two amicus briefs on the key issues in the case.

“Today is a historic win for Californians and the open internet.

After losing three times in federal court, the ISPs have finally realized that they can’t overturn California’s net neutrality law and that they should just stop trying.

As I’ve said from the beginning, California’s net neutrality law is based on a solid legal foundation. When the FCC abandoned net neutrality in 2017, it lost the power to stop the states from stepping in to protect their residents.

Thanks to the hard work of California’s Attorney General and the wide coalition that helped defend the law in court, the ISPs gave up instead of fighting this to the Supreme Court.

While California has been free to enforce its net neutrality law for over a year, today removes any doubt that the state has the right to protect its economy and democratic discourse from the whims of large phone and cable companies.

Californians are protected by the best state net neutrality law in the country. Thanks to the law’s lead author, Senator Scott Wiener, who fought tenaciously on its behalf, California’s law restores all the crucial protections the Trump FCC abolished in 2017 and is a model bill for other states.”

Background on the Case

On Wednesday, May 4 2022, the trade associations for the nation’s largest wireless, phone, and cable companies that were suing to overturn California’s 2018 net neutrality law agreed to voluntarily dismiss their lawsuit, following three consecutive losses in federal court.

The lawsuit, now known as ACA Connects vs Bonta, was filed by the Trump Administration and ISP trade associations shortly after the bill was signed into law in September 2018. They claimed that California had no right to create its own net neutrality protections after the FCC abolished all net neutrality protections in 2017. The elimination of federal net neutrality upended two decades of FCC work by Democrats and Republicans to ensure an open and free internet free from meddling by the companies Americans pay to get online.

When the FCC revoked net neutrality, it simultaneously claimed that it lacked any authority to create net neutrality protections even if it wanted to but that it had the authority to tell states they couldn’t create their own protections.

California’s net neutrality law (SB 822), authored by Senator Scott Weiner, passed in 2018 with bipartisan support despite fierce opposition from AT&T, Verizon and Comcast. It remains the only state-level law in the country that restores all of the net neutrality protections that the FCC eliminated and is widely viewed as a model bill.

The law went into effect on January 1, 2019, but California agreed not to enforce the law until a challenge to the FCC’s repeal was heard in a D.C. federal court. That court narrowly upheld the FCC’s repeal of net neutrality, but said that the FCC lacked authority to issue a blanket ban on states passing their own protections.

The California case resumed in the summer of 2020, and had its first hearing in federal district court in February 2021. (The Justice Department, then under the Biden Administration, withdrew from the case weeks before that hearing.)

A short blog post explaining the key issues in the case

At the first hearing, Judge John Mendez of the US District Court for the Eastern District of California issued a surprise ruling from the bench, saying that the ISPs were unlikely to win the case and that California was free to start enforcing the law. Specifically, the judge agreed with Professor van Schewick’s argument that an agency that lacks the power to regulate also lacks the power to tell the states they can’t regulate.

Within weeks of that decision, AT&T stopped its anti-competitive favoritism of its own video services nationwide, while Verizon ceased giving an unfair benefit to its video service for Californians.

The ISPs then appealed to the Ninth Circuit Court of Appeals in San Francisco. On January 28, 2022, the three judges who heard that case, two of whom were appointed by Republicans, unanimously upheld the district court’s decision allowing the California Attorney General to enforce the law.

The ISPs then appealed for an en banc rehearing at the Ninth Circuit, which was denied on April 21, 2022. Not a single judge voted to take the case.

The ISPs could have asked the Supreme Court to hear the case, but did not.

The California Attorney General and the ISPs agreed to dismiss the case without prejudice, meaning that the ISPs could refile a case in the future.

Since the Ninth Circuit covers a number of western states, the Ninth Circuit court decisions apply also to Washington State and Oregon’s net neutrality laws.

While those laws are not as comprehensive as California’s, they are now clearly enforceable as well.

(Originally published by The Stanford Center for Internet and Society on May 4, 2022)