On Friday, Attorney General Xavier Becerra announced an agreement with the U.S. Department of Justice to temporarily delay implementation of California’s so-called “net neutrality” law while a federal lawsuit moves forward in the courts.
California lawmakers would be wise to seize the opportunity from this time out to repeal this misguided state law.
Sacramento acted in the first place in response to efforts by the Federal Communications Commission to restore internet freedom, bringing back the historical light-touch regulatory framework before net neutrality that for twenty years instilled certainty. In turn, this certainty created an environment resulting in more than a trillion dollars in investment, bringing better broadband services for consumers.
The FCC had to act to overcome the heavy-handed Obama administration net neutrality regulatory scheme that was harming consumers by depressing telecommunications infrastructure investment and putting so much innovation at risk – including the next generation of broadband.
After pro-regulatory internet advocates lost their fight at the FCC, they riled up activists in California and other states to try and force their view of the world on all of us.
Their idea was simple: have states like California pass measures that would bar internet service providers from providing consumers with a great experience and free content. Pro-regulatory advocates also moved to force companies doing business with state government to follow restrictive regulations regardless of where they are located. This is their effort to push the entire country under the rules they prefer for us to live under.
California leapt at the opportunity as state politicians lined up to brag about how they would protect citizens. However, the law passed by the California legislature, and signed by Gov. Brown in September, does no such thing. Instead, the law reduces consumer choice, puts government in charge of their internet, wastes taxpayer dollars, and hampers the very industries the state depends on for jobs and revenue.
Californians will bear the cost of net neutrality. Consumers will now be denied the opportunity to receive free data as those in other states may receive. Evidence supports that internet infrastructure spending will decrease in the state, just as it did nationally during the brief period that the FCC had in place a similar scheme.
Innovation will also decline. As US Telecom’s recent report on broadband investment for 2017 shows, internet service providers reduced new investments in 2015 and 2016 under net neutrality. But broadband investment rebounded in 2017, increasing by $1.5 billion. California will now see reduced infrastructure improvements, particularly in underserved areas, lagging the national trend. This will harm the most innovative industries in the state, causing further economic decline.
The bottom line? Expect higher costs for consumers in California to acquire older, less capable broadband service not managed by experts but by bureaucrats — a slower-growing internet ecosystem in California.
But the law is merely a political stunt — a vehicle to poke the eye of the current administration rather than a reasoned decisioned based on facts. The law ignores even the most rudimentary understanding of internet technology. The internet is by its very nature interstate, and in our constitutional system of federalism is beyond the control of just one state.
One could hardly design a system more interstate than the internet. An email sent to a neighbor creates hundreds and thousands of data packets that travel on non-direct paths before arriving in their email box. The e-mail is pulled to her in thousands and millions of data packets from servers spread around the country, if not around the world. The internet is not, and cannot be, merely intrastate. Our constitutional system works perfectly in the internet age, allowing California to govern what happens in the state and the federal government to govern that which passes between states.
Imagine if California’s position was correct, that the state could force its will over interstate commerce. We would descend into a world where every state would regulate the internet as they see fit, balkanizing the web. The result would be a chaotic jumble of regulations and laws that would lead to websites only as wide as the state lines and similarly limited in appeal. California companies that derive their success from the national and global reach of the internet would be impacted the most.
The internet has been so successful because it works. The key to it working is its borderless nature. State seizure of national platforms as a means to force the state’s priorities on the country destroys the openness, the very freedom, of the internet ecosystem. Hopefully, state lawmakers will realize this while California new neutrality law is on hold, and act responsibly to repeal it.