Story Stream
recent articles

Imagine a world in which a single state could override federal law nationwide.  That’s exactly what California did in 2018 with its “net neutrality” law.  The Ninth Circuit—unsurprisingly, yet nevertheless breathtakingly—upheld the law in a recent ruling.  The Supreme Court must review and reverse this decision as unconstitutional under the Commerce Clause.

In 2015, the FCC enacted so-called “net neutrality” rules that prohibited certain business activities by broadband providers.  Recognizing the harm that these rules caused, the FCC under the following administration reversed course, ultimately rescinding the rules in 2018.  California didn’t agree with this decision; a mere eight months later, it effectively reinstated the prior rules via state-level decree.

It's one thing for a federal agency to implement federal law.  But for a stateeffectively to do so is another matter altogether.

That’s because the activity at issue here—the provision of broadband service—is inherently interstate.  In most of America, companies like AT&T, Charter, Comcast, T-Mobile, Verizon, and others provide Internet access.  These companies provide the same access to the same Internet nationwide, usually at nationally-advertised prices.

Of course, each state may have separate consumer protection laws covering certain matters such as billing formats and informational disclosures.  But under our Constitution, a single state cannot insist that its residents have fundamentally different access to the interstate realm known as the Internet than what is available in other states.

This is because of the Constitution's Commerce Clause.  This clause dictates that only the federal government, not the states, can pass laws regulating interstate commerce.  This principle applies to any activity that “substantially” affects interstate commerce.  It also applies to areas of commerce that the federal government has the power to regulate, even if those powers are “dormant.”

The Internet is an inherently interstate service that is both itself a form of interstate commerce and inextricably intertwined with most, if not all, of today’s interstate commerce.  Thus, the provision of broadband service is inherently interstate in nature.  Because of this, state-specific laws such as California’s regulating Internet access violate the Commerce Clause.

There are powerful reasons for this limitation on state power.  If one state could regulate an inherently interstate service, it would impose its own decision-making on consumers and businesses in different states that didn’t vote for the government making those decisions and who, in many instances, would not support those decisions.  It would also open a Pandora’s box of potential conflicting laws from 49 other states, the sum cacophony of which would result in the inability to maintain a single, unified, coherent, interoperable interstate stream of commerce.  The loser wouldn’t be any particular state government, but instead the American consumer everywhere.

Yet this is exactly what California did with its “net neutrality” bill.  The law effectively prohibits broadband providers from offering services in California that they are legally entitled to provide in other states under the FCC’s 2018 order.

These limitations are harmful.  Broadband customers might wish to subscribe to broadband access that blocks antisemitic sites or content inappropriate for children.  Subscribers might want to pay for their Zoom and Teams meetings from their work-at-home setups to be prioritized over their Netflix-binging neighbors.  They might want to subscribe to TV and cell phone service from the same company so that watching TV on their phones doesn’t count against their mobile data cap.  Veterans might want to access telehealth services that similarly don’t count against their data cap.  California’s law imperils or outright prohibits each of these practices.

Regardless, broadband providers cannot meaningfully offer Internet access with California’s mandatory restrictions while simultaneously offering a different form of Internet access without them in other states.  It isn’t hard to imagine why that might be a problem.  Suppose another state passed a law that only allowed broadband service that in its terms explicitly allowed for the types of conduct prohibited by California’s law.  A broadband provider could operate in that state, or in California, but not both.  Alternatively, the provider would be forced to essentially break up its business into state-specific access providers in order to meet the peculiarities of the laws of each state.

Suppose, alternatively, that another state adopted the same principles of California’s law, but it applied those principles not to broadband providers, but instead to Internet platforms like Twitter and Facebook—entities long known for their controversial and seemingly ad hoc content moderation practices.  In that state, broadband providers would be legally prohibited from allowing residents to access such websites that violate similar “anti-discriminatory” principles.  California likely wouldn’t be pleased with such a law.  Nor would many consumers.  State laws applied to the Internet ultimately harm consumers.

Throughout its history, California has enacted such stringent state laws that it effectively required businesses to craft state-specific products in order to comply with said laws.  While making these state-specific products is costly, it’s at least feasible.  But it isn’t clear that broadband access can be similarly balkanized.

The Internet doesn’t recognize state boundaries.  It doesn’t recognize national boundaries either, save for those of totalitarian regimes.  Neither the Internet nor access to it is the exclusive domain of California—or any other state.

In reviewing California’s law, the Ninth Circuit focused on whether it was consistent with federal communications law.  The court concluded that it was indeed consistent.  But ultimately, this was the wrong question to ask.  The proper question here, independent of federal communications law, is whether California’s law regulating broadband, or any similar state law regulating broadband, is consistent with the constitution.

The Internet is an inherently interstate service.  Piecemeal state laws regarding its operation that conflict not just with federal law, but potentially with each other, are simply untenable.  In situations such as these, the Constitution has a remedy: the Commerce Clause.  The Supreme Court must review California’s “net neutrality” law and reverse it as a clear violation of this longstanding constitutional principle.

Harold Furchtgott-Roth is a senior fellow at the Hudson Institute.  Kirk R. Arner is a legal fellow at the Hudson Institute.

Show comments Hide Comments