NJ Gov. Murphy Follows New York Lead Bringing Net Neutrality to New Jersey

ISPs That Conduct Business in New Jersey Must Follow the Principles of Net Neutrality Under an Executive Order Issued by Gov. Phil Murphy

Internet Service Providers (ISPs) that conduct business with the State of New Jersey must follow the principles of net neutrality under an executive order issued by Gov. Phil Murphy. The order responds to the Federal Communication Commission’s (FCC) controversial decision to end net neutrality on the federal level.

Understanding Net Neutrality 

In basic terms, the term “net neutrality” refers to treating everything on the Internet equally with the goal of preserving its openness. Users are guaranteed the same connection speeds, as well as the same access to platforms like YouTube and Netflix, with no preferential treatment given to a specific service by their particular ISP. Accordingly, ISPs can’t block or slow access to a site because it competes with their services.

In 2015, the FCC adopted strong guidelines for ISPs that included reclassification of broadband Internet access as a telecommunications service under Title II of the Communications Act. The Open Internet Rules also banned certain practices, such as:

• No Blocking: Broadband providers could not block access to legal content, applications, services, or non-harmful devices.
• No Throttling: Broadband providers could not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.
• No Paid Prioritization: Broadband providers could not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind. The FCC also banned ISPs from prioritizing content and services of their affiliates.

Executive Order’s Impact on New Jersey Businesses 

Gov. Murphy issued Executive Order 9 on February 5, 2018. It directs that New Jersey state agencies may only buy Internet service from ISPs that adhere to net neutrality principles. It specifically provides: “The Division of Purchase and Property, within the Department of the Treasury, and all other contracting units or officials of any State entity, shall require that all future contracts for Internet, data, and telecommunications (Internet and broadband) be awarded only to ISPs that adhere to ‘net neutrality’ principles.”

Under Executive Order 9, adherence to “net neutrality” principles means that an ISP may not, with respect to any consumers in New Jersey (including but not limited to State entities):

• Block lawful content, applications, services, or nonharmful devices, subject to reasonable network management that is disclosed to the consumer; or
• Throttle, impair or degrade lawful Internet traffic based on Internet content, application, or service, or use of a nonharmful device, subject to reasonable network management that is disclosed to the consumer; or
• Engage in paid prioritization; or
• Unreasonably interfere with or unreasonably disadvantage: i. An end user’s ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice; or ii. An edge provider’s ability to make lawful content, applications, services, or devices available to end users.

The executive order further provides that “adherence to ‘net neutrality’ principles means that an ISP shall not [violate the rules] with respect to any consumers in New Jersey (including but not limited to State entities).” ISPs must specifically provide the following to all New Jersey customers: accurate information regarding the network and transport management practices (including cellular data and wireless broadband transport), and performance and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings. 

“We may not agree with everything we see online, but that does not give us a justifiable reason to block the free, uninterrupted, and indiscriminate flow of information,” Governor Murphy said. “And, it certainly doesn’t give certain companies or individuals a right to pay their way to the front of the line. While New Jersey cannot unilaterally regulate net neutrality back into law or cement it as a state regulation, we can exercise our power as a consumer to make our preferences known.”

The executive order will apply to all contracts between state entities and ISPs that are executed on or after July 1. Governor Andrew Cuomo of New York State previously issued an executive order that mandates that ISPs adhere to net neutrality rules or forfeit the ability to contract in New York state. The state of Montana has done the same within its jurisdiction. 

The FCC’s repeal of the Open Internet Order also preempts states from enacting their own net neutrality rules. That’s why the executive orders issued by the governors of New Jersey, New York, and Montana exclusively target ISPs that provide Internet service to state agencies. 

Efforts to Restore Net Neutrality on the Federal Level 

The Internet Association (IA), the lobbying group representing the country’s largest Internet companies, such as Facebook, Google, Amazon, and eBay, is continuing to put pressure on Congress to restore net neutrality. In an open letter to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Charles Schumer (D-NY), IA argued that net neutrality is essential to combating the ill effects of the broadband monopolies that exist in many areas of the country. It called on lawmakers to use the Congressional Review Act (CRA) to overturn the FCC’s action. The CRA allows Congress to overturn any federal regulation enacted within the past 60 days.

“Americans rely on and deserve the lasting certainty of an open internet enshrined in the U.S. Code. Strong net neutrality rules are necessitated by, among other factors, the lack of competition in the broadband service market,” wrote Michael Beckerman, president and CEO of the IA. “More than half of all Americans have no choice in their provider, and 87 percent of rural Americans have no choice. The CRA is an important step in solidifying open internet protections.” 

The FCC’s decision to rollback net neutrality is also facing legal challenges from 21 states. In addition, the U.S. Government Accountability Office (GAO) recently agreed to look into the claims that millions of American citizens had been fraudulently impersonated during the FCC’s public comment process.

Bottom Line for Businesses

For ISPs and the customers that rely on them, net neutrality will continue to be an evolving issue. The FCC’s repeal of the Open Internet Order is currently the subject of litigation in federal court. At the same time, states executive orders may also face legal challenges. Businesses in industries impacted by net neutrality should stay on top of legal developments and discuss their potential implications with experienced counsel.

If you have any questions about Net Neutrality, please contact us

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, David Einhorn,or the Scarinci Hollenbeck attorney with whom you work at 201-806-3364.