California’s net neutrality mess that imperils veterans being cleaned up by man who created rule

Tim Wu is pushing back against the law he fought so hard to promote

The Biden administration’s point man on the telecom industry, National Economic Council official Tim Wu, is known as the father of “net neutrality.” Now he finds himself in the awkward position of pushing back against the law he’s fought so hard to promote.

Wu’s about-face involves California’s efforts to impose a state-wide net neutrality law, which makes it illegal for telecom companies to prioritize certain kinds of content. Net neutrality would prevent a company like AT&T from making content it owns, like HBO, quicker to access or slowing down access to companies it competes with, like Netflix.

One unintended consequence of implementing net neutrality in California is that providers will no longer be able to provide free services selectively such as a telehealth app that low-income veterans rely on.


As the state law went into effect today, telecom carriers continue offering free service to access the app -- VA Video Connect -- even as their lawyers advise them it is in violation of the new policy. One telecom executive told FOX Business, "The carriers may just keep offering the service and hope California doesn't actively enforce the law by suing them."

FOX Business has also learned that Wu is lobbying the telecom industry to find what has been described as a “work around” so the service to veterans can be saved. People with direct knowledge of the matter say Wu has been having conversations with Tom Power, senior vice president and general counsel of the Cellular Telecommunications and Internet Association (CTIA), one of Washington’s most prominent telecom lobby groups to maintain veteran’s access to the program even if it technically violates the new law.

Wu declined to comment to FOX Business as did the CTIA, though neither denied that discussions over preserving the veteran's program are underway.

In a statement to FOX Business, a Department of Veteran Affairs spokesman said, “VA is aware of California’s Net Neutrality law and is reviewing to determine whether it impacts the partnerships VA has developed with cellular carriers to assist Veterans with limited data plans connect with their healthcare services. VA is currently communicating with the State of California to ensure Veterans are not unintentionally impacted in California and elsewhere by the law.”


Last month, the Department of Justice dropped a case against California that prevented the state from implementing net neutrality. The DOJ's decision to drop the case surprised many telecom insiders.

“This is another example of the regulatory uncertainty for wireless and tech industries as a whole,” Nathan Leamer, vice president at Targeted Victory, a public affairs firm, told FOX Business. “There was a lot of frustration that Biden’s DOJ dropped the suit in a heel turn.”

Net neutrality was initially adopted by the Federal Communications Commission (FCC) during the Obama administration. Most of the rules were repealed by the Trump administration's FCC chief, Ajit Pai. A free-market conservative, Pai, argued that the measures were an anti-competitive insertion of government into private business dealings between competing companies.

Politico reported Wednesday that the VA is worried veterans in California will no longer have access to its VA Video Connect, which offers telehealth services to veterans because of the California law.

Telecom companies have subsidized this service by allowing veterans to access the app without charging them for the data it takes to use the app. That subsidy violates the state’s net neutrality edict.


“The California law expressly and broadly prohibits carriers from offering free (or what the statute calls ‘zero-rating’) access to content/applications,” said FCC Commissioner Brendan Carr, one of two Republican appointees on the commission.

Carr added that "offering free access to a standalone mental health app like the VA’s is squarely in the crosshairs of the law.”

White House officials are worried about the blowback that limiting access to the telehealth app could cause. Wu’s calls to CTIA are part of a broader effort to carve out some exemptions in the law that would allow telecom companies to continue offering free services to certain disadvantaged groups.

Wu, a long-time advocate of net neutrality in various government positions and as a law professor specializing in antitrust law, is credited with coining the term, net neutrality.

As FOX Business has reported, the Biden administration may look to re-introduce net neutrality principles at the federal level and are eager to ensure the rollout of those policies goes smoothly in California.


Conservative policy types are already arguing the Veterans Administration kerfuffle is proof that net neutrality helps consumers rather than hurts them.

The politically progressive Wu was appointed to the National Economic Council as special assistant to the president for technology and competition policy in early March. In his role, he will look broadly at possible anticompetitive practices across a range of industries.