The Legal Debate Over Net Neutrality Shifts to State Laws

A little over a month ago, the deadline for appealing the D.C. Circuit’s decision in Mozilla v. FCC expired.  The Mozilla decision upheld the FCC’s 2017 Restoring Internet Freedom Order (“Order”), which rolled back Obama-era net neutrality regulations to largely deregulate broadband internet service provider (“ISP”) practices.  No party sought Supreme Court review of the D.C. Circuit’s decision in Mozilla, ending the two-plus-year challenge of the FCC’s Order.  This has now prompted a shift in focus to the states.

A number of states enacted net neutrality laws in the wake of the FCC’s Order.  Most of these state laws sought to impose regulations akin to Obama-era net neutrality policies, including, for example, restrictions on certain network management practices such as throttling or paid prioritization.  Challenges to these state laws by broadband ISPs were held in abeyance pending the outcome of Mozilla.  Now that Mozilla has been resolved, questions have arisen as to whether and how these state challenges will continue, and what the outcomes will be.

California and Vermont are key states in the net neutrality debate, as both jurisdictions agreed to delay the enforcement of their net neutrality laws while Mozilla was pending.  Now that Mozilla is resolved, challenges to these laws have resumed.

In California, the U.S. Department of Justice (“DOJ”) and several broadband ISP trade associations filed new complaints and motions for preliminary injunction on August 5, 2020, reigniting litigation that has been dormant since October 2018.  California’s law would ban ISPs from blocking, engaging in paid prioritization, throttling, and/or zero-rating Internet traffic.  California’s law would also require ISPs to publicly disclose information regarding network management practices.

Also on August 5, 2020, the DOJ and several trade association co-plaintiffs renewed their challenges to Vermont’s net neutrality law.  Vermont’s law would prohibit state agencies from contracting with ISPs that do not certify their compliance with net neutrality guidelines.

State officials in both jurisdictions have decided to continue to forego enforcing their net neutrality laws until these renewed motions for preliminary injunctive relief have been resolved.

Four other states—Colorado, Maine, Oregon, and Washington—also have enacted some form of net neutrality law, and a number of other states have adopted net neutrality-minded resolutions or have legislation pending.  But, it is currently unclear whether laws in these jurisdictions will be enacted or challenged.

Although the Restoring Internet Freedom Order’s deregulatory regime remains in place, state laws could significantly affect the regulatory landscape if they survive legal challenge.  The upcoming election in November could also affect the situation, as changes in leadership in the White House, Congress, and/or the FCC could result in yet another new approach (or the return to an old approach) when it comes to net neutrality policy.

For now, the focus of the net neutrality debate is on the states, and the outcome of pending litigation in California and Vermont will likely shape—or foreclose—state regulation moving forward.  California’s net neutrality law, unlike Vermont’s, applies to all ISPs operating in the state, not just those seeking state contracts. The outcome of the litigation is also being closely watched for any broader implications as to the scope of state ability to regulate ISPs or other providers of services classified by the FCC as interstate information services. Thus, regardless of electoral outcomes, federal litigation over the California and Vermont net neutrality laws merits close attention.

FCC Seeks Comment on Section 230 Petition

FCC Chairman Pai announced today that the FCC would seek public comment on the Administration’s July 27 Petition for Rulemaking on Section 230 of the Communications Decency Act (CDA)—the law that to date has meant that social media companies, ISPs, and other “online intermediaries” have not been subject to liability for their users’ actions. Comments will be due on Wednesday, September 2 and reply comments will be due on Thursday, September 17.

While there is much that is novel about the Petition itself, the FCC’s decision to seek comment on it appears to follow standard operating procedures. At this point, there is no indication of whether the FCC will take more formal steps attempting to adopt any of the rules proposed by the Administration. Continue Reading

IoT Update: UN Takes the Driver’s Seat for International Regulations on Connected and Autonomous Vehicles Cybersecurity and Software Updates

On June 24, 2020, the United Nations Economic Commission for Europe (“UNECE”)* adopted two regulations that will have a significant impact on manufacturers of connected and autonomous vehicles (“CAVs”). These regulations impose obligations relating to cybersecurity and software updates for passenger cars, vans, trucks, and buses, while the cybersecurity regulations also reach light four-wheeler vehicles if equipped with automated driving functionalities from level 3 (conditional automation) onward. The regulations will enter into force in January 2021.

The European Union, South Korea, and Japan are expected to take steps to adopt these UNECE regulations in their respective national laws in the next couple of years. Given the widespread use of UN Regulations in the automotive sector globally, we anticipate that other countries will also adopt these regulations. Once implemented, any manufacturer that sells vehicles in the implementing countries must comply with the regulatory requirements, including by ensuring that its supply chain would not prevent compliance. As a result, the effects of the regulations are likely to flow down to vehicle manufacturers even in countries that do not adopt them, such as the United States. Continue Reading

AI Update: EU High-Level Working Group Publishes Self Assessment for Trustworthy AI

On July 17, 2020, the High-Level Expert Group on Artificial Intelligence set up by the European Commission (“AI HLEG”) published The Assessment List for Trustworthy Artificial Intelligence (“Assessment List”). The purpose of the Assessment List is to help companies identify the risks of AI systems they develop, deploy or procure, and implement appropriate measures to mitigate those risks.

The Assessment List is not mandatory, and there isn’t yet a self-certification scheme or other formal framework built around it that would enable companies to signal their adherence to it.  The AI HLEG notes that the Assessment List should be used flexibly; organizations can add or ignore elements as they see fit, taking into consideration the sector in which they operate. As we’ve discussed in our previous blog post here, the European Commission is currently developing policies and legislative proposals relating to trustworthy AI, and it is possible that the Assessment List may influence the Commission’s thinking on how organizations should operationalize requirements relating to this topic.

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U.S. AI, IoT, and CAV Legislative Update – Second Quarter 2020

In this update, we detail the key legislative updates in the second quarter of 2020 related to artificial intelligence (“AI”), the Internet of Things (“IoT”), cybersecurity as it relates to AI and IoT, and connected and automated vehicles (“CAVs”). The volume of legislation on these topics has slowed but not ceased, as lawmakers increasingly focus on the pandemic and the upcoming national election. As Congress processes Appropriations bills, it continues to look to support and fund these technologies. We will continue to update you on meaningful developments between these quarterly updates across our blogs. Continue Reading

IoT Update: The European Commission launches an antitrust sector inquiry into the sector of Internet of Things for consumer-related devices and services

On 16 July 2020, the European Commission (“Commission”) announced that it has launched an antitrust sector inquiry into “consumer-related products and services that are connected to a network and can be controlled at a distance, for example via a voice assistant or mobile device.

Commission Executive Vice President and Competition Commissioner Vestager said that “[t]he sector inquiry will cover products such as wearable devices (e.g. smart watches or fitness trackers) and connected consumer devices used in the smart home context, such as fridges, washing machines, smart TVs, smart speakers and lighting systems. The sector inquiry will also collect information about the services available via smart devices, such as music and video streaming services and about the voice assistants used to access them.” Connected cars are outside of the scope of the inquiry. Continue Reading

Lawful Access to Encrypted Data Act Introduced

Senators Lindsey Graham (R-S.C.), Tom Cotton (R-Ark.) and Marsha Blackburn (R-Tenn.) have introduced the Lawful Access to Encrypted Data Act, a bill that would require tech companies to assist law enforcement in executing search warrants that seek encrypted data.  The bill would apply to law enforcement efforts to obtain data at rest as well as data in motion.  It would also apply to both criminal and national security legal process.  This proposal comes in the wake of the Senate Judiciary Committee’s December 2019 hearing on encryption and lawful access to data.  According to its sponsors, the purpose of the bill is to “end[] the use of ‘warrant-proof’ encrypted technology . . . to conceal illicit behavior.” Continue Reading

Supreme Court Invalidates TCPA Government-Debt Exception

Today, the Supreme Court issued its decision in Barr v. American Association of Political Consultants, which addressed the constitutionality of the Telephone Consumer Protection Act (TCPA).  Although the Court splintered in its reasoning—producing four separate opinions—the justices nevertheless coalesced around two core conclusions: (1) the TCPA’s exception for government debt collection calls is unconstitutional, and (2) the exception can be severed from the rest of the TCPA.  Six justices determined that the TCPA’s government-debt exception violates the First Amendment, and seven justices concluded that the exception is severable from the rest of the statute.  The end result is that the government-debt exception is invalid but the rest of the TCPA—including its general prohibition on automated calls and text messages to mobile numbers—remains intact.  The narrow scope of this ruling suggests that it may have limited practical effect for most parties.

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Bipartisan Bill Seeks to Create National Artificial Intelligence Research Resource Task Force

On June 4, 2020, Representatives Anna Eshoo (D-CA-18), Anthony Gonzalez (R-OH-16), and Mikie Sherrill (D-NJ-11) introduced the National AI Research Resource Task Force Act.  This bipartisan bill would create a task force to propose a roadmap for developing and sustaining a national research cloud for AI.  The cloud would help provide researchers with access to computational resources and large-scale datasets to foster the growth of AI.

“AI is shaping our lives in so many ways, but the true potential of it to improve society is still being discovered by researchers,” explained Rep. Eshoo. “I’m proud to introduce legislation that reimagines how AI research will be conducted by pooling data, compute power, and educational resources for researchers around our country.  This legislation ensures that our country will retain our global lead in AI.”

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FCC Issues Two TCPA Declaratory Rulings, One Clarifying Autodialer Definition

Earlier this week, the Federal Communications Commission’s (FCC’s) Consumer and Government Affairs Bureau released a Declaratory Ruling clarifying the agency’s interpretation of the “Automatic Telephone Dialing System” (an “autodialer” or “ATDS”) definition in the Telephone Consumer Protection (TCPA).  The Ruling clarified that, in the context of a call or text message platform, the definition does not turn on whether the platform is used by others to transmit a large volume of calls or text messages; instead, the relevant inquiry is whether, in this context, the platform is capable of transmitting calls or text messages without a user manually dialing each such call or text message.

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