On May 30, 2018, the California State Senate voted to pass a bill that will ensure net neutrality on the internet in the State of California. With the FCC’s repealing of Obama-era net neutrality rules going into effect on June 11, 2018, California’s bill will provide for continued net neutrality protection. Officially known as Senate Bill 822, the senate passed SB 822 by a vote of 23-12. The bill will next go to the State Assembly to be voted on by the end of August. If the bill passes the Assembly, it must finally be signed by Governor Jerry Brown in order to become law.
If made into law, the bill will prohibit Internet Service Providers (ISPs) from manipulating internet traffic. Net neutrality rules ensure that ISPs cannot slow down or block access to certain websites, or give some websites and content quicker access speeds than others. Preventing willful alteration by ISPs of internet connections between devices and sources of content is the key focus of net neutrality rules. SB 822 will also allow the state to supervise commercial interconnection deals between corporate customers and ISPs to ensure that corporate customers are not taken advantage of by ISPs’ dominant market power. Interconnection arrangements typically occur between content providers such as YouTube and Netflix, and ISPs such as Spectrum or AT&T.
The net neutrality rules would also ban third-party paid prioritization, as well as application-specific differential pricing. Paid prioritization occurs when content providers pay ISPs a fee in order to ensure that users have higher access speeds to their websites than competitors’ websites. ISPs claim that preventing this business model may cause an increase in the price that consumers pay for internet service. Differential pricing is when goods or services are offered at different price points to different consumers. For example, a company such as Microsoft may charge a higher fee to corporate customers for Microsoft Office software than to a personal user who purchases the software for use at home. Differential pricing comes into play in the net neutrality laws with regards to user access to applications, content, and platforms (ACP).