California Tightens the Screws on Washington Over Thorny Tech Issues

The net-neutrality standoff is only the latest battle in the state’s escalating push to pressure D.C. into tackling progressive tech priorities.

Jerry Brown speaks at the annual Sacramento Host Breakfast in Sacramento, Calif. on May 24.
AP Photo/Rich Pedroncelli, file
Oct. 3, 2018, 8 p.m.

There’s a saying about California politics: “As goes California, so goes the nation.” And when it comes to tech policy, Sacramento legislators appear increasingly eager to test that proposition.

Gov. Jerry Brown’s approval Sunday of legislation imposing strict net-neutrality rules statewide sparked an immediate lawsuit from the Justice Department. But it’s only the most recent skirmish in an intensifying conflict between the Golden State and Washington over the future of U.S. technology policy.

Last week the governor also signed a bill mandating cybersecurity requirements for Internet of Things devices, the first legislation of its kind in the United States and a potential blueprint for federal action. Still another bill that Brown signed requires bots to identify themselves in all online interactions with California consumers, a crackdown on both foreign and domestic misinformation campaigns that’s so far eluded federal lawmakers. And the June passage of the California Consumer Privacy Act—a data-privacy framework rivaling the European Union’s new rules in scope and aggressiveness—spurred Capitol Hill to finally begin work on its own data-privacy legislation.

Sacramento legislators have a long history of leveraging their proximity to Silicon Valley and the state’s enormous economic power to tackle difficult tech issues facing the U.S. But experts say a surge in public interest in privacy, net neutrality, and online manipulation is merging with the state’s increasingly progressive political climate to drive the confrontation between California and the federal government to new heights.

“It’s certainly more aggressive than what they’ve done in the past,” said Berin Szoka, the president of libertarian think tank TechFreedom.

And on issues as varied as net neutrality, content moderation, and online bot-prevention, federal lawmakers expect that California’s unwelcome pressure—and the example it’s setting for other states—will continue to push D.C. into action.

“I’m hoping that on all these issues, it’ll put pressure on Congress,” said Sen. John Thune, chairman of the Senate Commerce Committee. “Because if you’re going to be dealing with 50 different state laws—whether it’s privacy or net neutrality—it’s going to be kind of a nightmare, I think, for anybody in the business.”

California has never shied away from setting the tone for U.S. technology policy. State legislators passed the nation’s first data-breach notification law in 2002, which many states and territories later used as a model for their own rules. In 2003, California's Online Privacy Protection Act was the first state law mandating that websites and online services post a privacy policy. By 2014, Sacramento had passed a comprehensive student privacy law, and in 2015 legislators followed up with the California Electronic Communications Privacy Act, which bars state law-enforcement agencies from requiring businesses to hand over digital communications or metadata without a warrant.

But even as other states have sought to emulate California’s policies, the federal government has remained largely ambivalent toward some of Sacramento’s more ambitious moves. That changed this year, after California’s new privacy bill injected urgency into a long-stalled push for federal data-privacy legislation. The tension only escalated with this week’s lawsuit, as the DOJ seeks to head off state pushback to last year’s repeal of the Federal Communications Commission’s net-neutrality protections.

Most experts frame California’s leadership on tech policy as a product of both its massive economic clout and the legislature’s proximity to the world’s top tech firms.

“It’s definitely something that’s well known in Sacramento, and kind of a source of pride for Sacramento legislators, that California can kind of lead national policy by the size of the economy here and the types of companies that the state has direct jurisdiction over,” said Ernesto Falcon, the legislative counsel at the San Francisco-based Electronic Frontier Foundation.

“Sacramento is only spitting distance from Silicon Valley,” said Alan Friel, a tech lawyer at BakerHostetler’s Los Angeles office. “The legislature there feels they have a strong grasp on tech policy, and if there’s a federal void, they are not afraid to fill it.”

Szoka believes much of California’s increased combativeness on tech policy is due to the Democratic supermajority that rode into state office on a wave of anti-Trump sentiment. “When Democrats were in charge [in Washington], or at least when they had the White House, there wasn’t the same impulse to do this,” he said.

Others pin California’s confrontational attitude vis-à-vis Washington to increased public awareness and Sacramento’s particular sensitivity to voter pressure. The rollback of the FCC’s net-neutrality rules and the Cambridge Analytica scandal triggered intense consternation among California’s electorate, with hefty ratios of voters supporting state-level action.

The state’s frequent ballot initiatives also give voters a more direct impact on policy. In fact, it was an aggressive ballot initiative on data privacy that compelled California’s legislature to pass its own, slightly more-flexible bill this summer. “There’s been an acceleration in the public discourse about these issues,” Friel said.

Sacramento’s efforts are likely to be emulated in several states. Scott Wiener, the state senator who sponsored California’s net-neutrality bill, says he’s already spoken with lawmakers from New York, New Jersey, North Carolina, and Tennessee about how they can craft their own net-neutrality legislation to challenge the federal government.

“Other states have begun to act, and will act,” Wiener told National Journal. “And hopefully the federal government will eventually come to its senses.”

Most experts expect Sacramento to continue exerting pressure over national technology policy once the legislature returns to work in 2019.

“California is really focused pretty heavily on combating bots and misinformation online,” Falcon said. Another bill passed this year requires the governor to put together a task force to consider ways to hold tech companies liable for foreign interference, misleading behavior, or hate speech found on their platforms. Falcon believes that task force is likely a prelude for additional legislative activity.

“I expect that will be the next big tech-industry issue,” he said. “Who is responsible for what, in terms of how information is distributed or conveyed on the internet.”

Tech companies and their supporters in Washington are unlikely to take kindly to that effort, and Falcon worries about the “slippery slope” inherent in granting government the power to determine what’s true or false on the internet. But Wiener said California shouldn’t be in the business of confrontation for its own sake, or of needlessly kneecapping Silicon Valley.

“I don’t want to legislate around technology just for the sake of legislating, or the sake of being provocative,” Wiener said. “I want to legislate where there are real problems that need to be addressed.”

He added, “I think we need to be careful, because we also need to foster the technology sector. And I want California to remain the heart of innovation.”

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