October 1, 2018 / 12:34 AM / 14 days ago

U.S. sues after California governor signs 'net neutrality' law

WASHINGTON (Reuters) - The U.S. Justice Department late on Sunday filed suit after California Governor Jerry Brown signed legislation to restore open internet protections known as net neutrality in the state after the Trump administration repealed the rules in December 2017.

This marked the latest clash between the Trump administration and California, which have sparred over environmental, immigration and other hot-button issues.

U.S. Attorney General Jeff Sessions said on Sunday in a statement that “states do not regulate interstate commerce — the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy.”

California’s net neutrality law is set to take effect on Jan. 1, but the Justice Department late Sunday in a court filing sought a preliminary injunction to block it from taking effect, warning that internet companies “cannot realistically comply with one set of standards in this area for California and another for the rest of the nation — especially when internet communications frequently cross multiple jurisdictions.”

The government said that California sought to “second-guess” the federal government and warned “the effect of this state legislation would be to nullify federal law across the country.”

In December, the Federal Communications Commission said in repealing the Obama-era rules that it was preempting states from setting their own rules governing internet access.

California Attorney General Xavier Becerra said on Sunday the Trump Administration was ignoring “millions of Americans who voiced strong support for net neutrality rules” while California, which is “home to countless start-ups, tech giants and nearly 40 million consumers - will not allow a handful of power brokers to dictate sources for information or the speed at which websites load.”

The Trump administration rules were a win for providers like Comcast Corp (CMCSA.O), AT&T Inc (T.N) and Verizon Communications Inc (VZ.N), but the net neutrality repeal was opposed by internet companies like Facebook Inc (FB.O), Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O).

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In March, Brown accused the Trump administration of essentially declaring war on the most populous U.S. state after the Justice Department sued to stop policies that protect illegal immigrants against deportation.

Under President Donald Trump, the FCC voted 3-2 in December along party lines to reverse rules that barred internet service providers from blocking or throttling traffic or offering paid fast lanes, also known as paid prioritization.

FCC Chairman Ajit Pai, who led the effort to reverse net neutrality, said in a statement on Sunday that “not only is California’s internet regulation law illegal, it also hurts consumers. The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits.”

Gigi Sohn, a former senior aide to FCC Chairman Tom Wheeler, who ran the agency when the net neutrality rules were adopted, said the California law “is now the model for all future state and federal legislation ... this is what internet users across the political spectrum have said they want by overwhelming majorities.”

Jonathan Spalter, who heads USTelecom, an industry trade group, said California’s law will not “help advance the promise and potential of California’s innovation DNA.”

He argued that instead of 50 separate state laws, “we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all.”

In August, 22 states and a coalition of trade groups representing major tech companies urged a federal appeals court to reinstate the rules. Oral arguments are set for February 1.

The U.S. Senate voted in May to reinstate the net neutrality rules, but the measure is unlikely to be approved by the House of Representatives and the White House also opposes it.

The FCC in December handed ISPs sweeping new powers to recast how Americans use the internet, as long as they disclose changes. The new rules took effect in June but providers have made no changes in access.

Reporting by David Shepardson; Editing by Meredith Mazzilli

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