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California governor signs tough net neutrality bill, and Justice Dept. sues

California Gov. Jerry Brown signed the nation's toughest net neutrality measure Sunday, requiring internet providers to maintain a level playing field online, and on the same day, the Justice Department responded by filing a lawsuit against California.

Advocates of net neutrality hope that Brown's move in the home of the global technology industry will have national implications, prompting Congress to enact national net neutrality rules or encouraging other states to follow suit.

It's the latest example of the nation's most populous state seeking to drive public policy outside its borders and rebuff President Trump's agenda. As far as the Justice Department is concerned, California's new law is an attempt to subvert the federal government's deregulatory approach.

Attorney General Jeff Sessions, in a statement Sunday, said, "Under the Constitution, states do not regulate interstate commerce—the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy."

FCC Chairman Ajit Pai said in a statement that he was "pleased" by the lawsuit and asserted that it properly falls to the federal government to regulate the internet. He complained that the California regulation would hurt consumers, arguing for instance, that it disallows many free-data plans allowing consumers to stream content exempt from data limits.

These plans, he said "have proven enormously popular in the marketplace, especially among lower-income Americans." 

Under the Obama administration, the Federal Communications Commission imposed net neutrality restrictions in 2015. Last year the FCC repealed the rules that prevented internet companies from exercising more control over what people watch and see on the internet.

California's measure is also likely to face a legal challenge from internet companies.

Telecommunications companies lobbied hard to kill it or water it down, saying it would lead to higher internet and cellphone bills and discourage investments in faster internet. They say it's unrealistic to expect them to comply with internet regulations that differ from state to state.

Net neutrality advocates worry that without rules, internet providers could create fast lanes and slow lanes that favor their own sites and apps or make it harder for consumers to see content from competitors.

That could limit consumer choice or shut out upstart companies that can't afford to buy access to the fast lane, critics say.

The measure, written by Democratic Sen. Scott Wiener of San Francisco, prohibits internet providers from blocking or slowing data based on content or from favoring websites or video streams from companies that pay extra.

It also bans "zero rating," in which internet providers don't count certain content against a monthly data cap — generally video streams produced by the company's own subsidiaries and partners.

Oregon, Washington and Vermont have approved legislation related to net neutrality, but California's measure is seen as the most comprehensive attempt to codify the principle in a way that might survive a likely court challenge. An identical bill was introduced in New York.

Paula Reid contributed to this report.