Net Neutrality Supporters See State Actions as Statements; Foes See Stunts

State net neutrality actions show a strong public rebuke of the FCC December order that took effect Monday (see 1806110054), consumer advocates said on a National Regulatory Research Institute (NRRI) webinar Wednesday. But a Montana commissioner and broadband industry officials dismissed efforts as politically driven and probably not effective. A Rhode Island net neutrality bill cleared a key Senate committee Tuesday and lawmakers could pass restrictions on state ISP contracts by the end of next week, said sponsor state Sen. Louis DiPalma (D) in an interview. California lawmakers plan more hearings next week.

“Politics and misinformation” drive state actions on what is now a “populist” issue, said NCTA Vice President-State Affairs Rick Cimerman. Net neutrality’s wide popularity makes it a “wedge issue” in purple states, said Montana Public Service Commission Vice Chairman Travis Kavulla, who disagreed with an executive order by Gov. Steve Bullock (D). Bullock is term-limited and trying to raise money for future campaigns, said Kavulla, an elected Republican. Executive orders are “splashy” when announced but relatively cost-free politically, he said.

States are stepping forward “because the FCC stepped back,” said Elin Swanson Katz, president of the National Association of State Utility Consumer Advocates. The issue may be populist, but state actions aren’t political stunts, she said. Free Press Director-Strategy Tim Karr agreed: “It’s not right to be dismissive of what’s happening at a local level because there’s some notion that populism -- that what the people want -- is somehow a bad thing.”

Effectiveness of Bullock’s executive order is inconclusive three months later, Kavulla said. It appeared to chase one provider from a request for proposals for data transport services, but all five other bidders didn’t drop out, he said. Two agreed to contract language, and the other three are still negotiating with the state, he said. State procurement shouldn’t have conditions restraining lawful corporate behavior that may be unpopular, because that may lead to abuses of power, Kavulla said. State agencies lack technical capacity to administer rules, the commissioner said. There may be cases where the state may want paid prioritization for essential government services, he added. A Bullock spokeswoman declined to comment.

Washington state maintained net neutrality rules after its law took effect last week. An Oregon law restricting state contracts to net neutral ISPs previously took effect (see 1804100024). Vermont enacted a state contracts bill last month that will take over from Republican Gov. Phil Scott’s executive order in April (see 1805240043). Governors in Hawaii, New York, New Jersey and Rhode Island issued executive orders restricting state contracts.

NRRI found 36 states where lawmakers at least proposed action, though many haven’t passed. Cimerman said the map paints an inaccurate picture since it includes, for example, states where a lone Democrat pitched a bill in a state where Republicans have a power trifecta in government. Of 12 pending states, said the cable industry official, California is “highly likely” to act; Massachusetts, New York, New Jersey may act; and Pennsylvania and North Carolina seem “highly unlikely” to pass measures.

There will be lawsuits against state actions, which are pre-empted by the FCC order, said USTelecom Senior Vice President Jonathan Banks. USTelecom CEO Jonathan Spalter threatened aggressive industry challenges (see 1803260024) and also rejected state actions in a Wednesday speech (see 1806130064). It’s “inconceivable” that state laws mesh with an internet that flows outside state borders, Banks said. States will be pre-empted, and they know it, as shown so far by Washington state being the only state to pass full regulations like the 2015 rules, said Cimerman.

State Bills

It was “irresponsible” for the FCC to remove net neutrality rules, and if Congress won’t pass a national law, states must “take matters into our own hands,” said Rhode Island’s DiPalma.

The state's net neutrality bill is headed to the Senate floor after clearing the Senate Commerce Committee by a 7-0 vote, with the committee’s lone GOP member recorded absent. S-2008 included an amendment to conform language to Democratic Gov. Gina Raimondo’s April 24 executive order restricting state contracts to ISPs that follow open-internet principles (see 1805070029). DiPalma predicted a Senate floor vote by Tuesday. In the House, Speaker Brian Kennedy (D) has a bill (HB-7076) pending in the Corporations Committee that will soon be amended to match S-2008, DiPalma said. State lawmakers hope to finish the session by June 22, he said. Democrats control large majorities in both chambers and the governor’s office.

Two California net neutrality bills are set for hearing by the Assembly Communications and Conveyance Committee next Wednesday. The committee initially had SB-460, by U.S. Senate candidate and California state Sen. Kevin de León (D), on this week's agenda. But it now plans to weigh the bill alongside Democratic state Sen. Scott Wiener’s SB-822, the bill endorsed by ex-FCC Chairman Tom Wheeler (see 1805310050). Amendments to SB-822 entered Monday largely tweaked language without affecting the bill’s substance, including one edit to explicitly exempt enterprise services from the bill’s definition of mass market. Also next Wednesday, the Senate Governance and Finance Committee plans to weigh AB-1999, a municipal broadband bill by Assemblymember Ed Chau (D) that would require local agencies to follow net neutrality principles.

ISPs are increasing resistance to Wiener’s proposed California ban on discriminatory zero rating, Electronic Frontier Foundation Legislative Counsel Ernesto Falcon blogged Tuesday. Lobbying led by AT&T and its partner CALinnovates “has legislators contemplating whether discriminatory zero rating practices should remain lawful despite their harms for low-income Internet users,” Falcon said.

“While others waffled or took the bait for partial, temporary protections, CALinnovates consistently insisted on codifying important consumer rights in federal legislation,” emailed Executive Director Mike Montgomery. “Americans deserve a robust debate about the future of internet regulation that focuses on facts, not rhetoric, hopefully without Trump-like name calling that politicians so often rely upon these days to get attention."