AT&T Successfully Derails California's Tough New Net Neutrality Law

This truly is, as they say, why we can't have nice things.

In the wake of the FCC's ham-fisted net neutrality repeal, more than half the states in the country are now exploring their own, state-level net neutrality protections. California's proposal, Senator Scott Weiner's SB 822, was seen as particularly promising in that it went even farther on some important issues than the 2015 FCC rules it was intended to replace. The EFF went so far as to call California's proposal the "gold standard" for state-level net neutrality laws, noting it did a better job policing many of the problem areas where modern anti-competitive behavior occurs, such as zero rating or interconnection.

You probably saw that AT&T just got done spending $86 billion to acquire Time Warner. The company harbors dreams of using its combined dominance over broadband and media content to anti-competitive advantage, something that's undeniable if you've watched AT&T do business for any particular length of time.

Since California's law would have severely hampered AT&T's dreams of dominating the streaming video and ad wars to come, the company got right to work derailing California's legislative push in its usually-underhanded way. The company managed to convince California Assemblyman Miguel Santiago to introduce a series of last-minute secretive Tuesday night amendments that were then voted on without debate during a Wednesday morning hearing:

"The committee, lead by Assemblyman Miguel Santiago, D-Los Angeles, issued amendments to the bill late Tuesday night. Among its recommendations were to permit a controversial internet service provider practice called “zero rating,” where some websites and apps don’t count against a consumer’s data allotment. Opponents view zero rating as a backdoor way of discriminating against online services that don’t strike free-data deals with broadband and wireless companies."

In the early days of net neutrality, ISPs like AT&T engaged in more ham-fisted and non-transparent abuse of their broadband monopolies. Like the time AT&T blocked Facetime from working unless users upgraded to more expensive data plans, or the time Comcast throttled all upstream BitTorrent traffic then repeatedly lied about it.

As people got smarter to what ISPs were up to, ISPs began getting more nefariously clever. Like the time ISPs let their peering and interconnection points intentionally congest to kill settlement-free peering and drive up costs for companies like Netflix, slowing down Netflix streams for everyone until the company paid up. Or the way that ISPs now impose arbitrary and unnecessary usage caps, then exclude their own streaming services from them while still penalizing competitors (aka zero rating), something it took years for the last FCC to finally realize was just as anti-competitive.

Fast forward to this week. To convince lawmakers to back off the restrictions on zero rating, AT&T first employed the use of a group dubbed CALinnovates, one of numerous groups AT&T covertly funds to pee in the discourse pool. CALinnovates then circulated an incredibly misleading study among lawmakers falsely claiming that AT&T's anti-competitive use of usage caps is a huge boon to the state's minority populations (err, false). AT&T then got state lawmakers to approve of a list of major amendments Tuesday evening that would cripple the most important parts of the bill.

Specifically, AT&T convinced Santiago to strip away all rules governing zero rating, all guidance preventing interconnection shenanigans, as well as a rule that would have prevented ISPs from charging other companies "access fees" if they want to reach AT&T customers. Santiago's office refused any and all contact from reporters (myself included) on Tuesday night, then quickly rushed those amendments through the voting process before they could even be debated . Disgusted by the railroading, Weiner ultimately pulled his bill entirely, arguing that it no longer adequately protected consumers:

"It is no longer a net neutrality bill,” a visibly frustrated Wiener said after the vote. In an unusual move, the committee voted on the bill before Wiener was given a chance to testify. “I will state for the record ... I think it was fundamentally unfair,” he said.

Net neutrality activism groups like Fight for the Future were notably less subtle in their own statements:

"The level of corruption we just witnessed literally makes me sick to my stomach,” said Evan Greer, deputy director of Fight for the Future, a digital rights group with more than 350,000 members in California. "These California democrats will go down in history as among the worst corporate shills that have ever held elected office.Californians should rise up and demand that at their Assembly members represent them. The actions of this committee today are an attack not just on net neutrality, but on our democracy."

If you've watched AT&T do business, the fact that it was able to scuttle this bill in such a "progressive" state shouldn't be surprising. AT&T's political power over many state legislatures is often downright comical, to the point where AT&T lawyers are quite literally the ones writing terrible state law. That's particularly true in states like Tennessee, though in ignoring the undeniable will of the public on this subject, California has proven itself no better.

All told it has been a great year and a greater few weeks if your name is AT&T. Net neutrality formally died on June 11, the company's latest megamerger was approved thanks to a comically narrow understanding of the markets by a Federal Judge, and it managed to scuttle state-level net neutrality in California, purportedly a stronghold for net neutrality activism. This on the heels of successful efforts to neuter FCC oversight of historically unpopular and anti-competitive incumbent ISPs. What could possibly go wrong?