The FCC's repeal of net neutrality contains a preëmption clause preventing state and local governments from imposing their own inconsistent restrictions (1), and it will be using its authority under the Commerce Clause of the Constitution to defend it (2). I understand their claim to be that it's impracticable to distinguish between interstate and intrastate network traffic, and that states would only have authority to constrain the latter. (3)
I'm not sure how my dear state of California is working around that, or if this action is just kicking off a ball that will be headed directly to the courts.
(1) FCC 17-166, https://transition.fcc.gov/Daily_Releases/Daily_Business/201... , para. 195.
(2) Ibid, para. 197–204. (FCC's authority under the Commerce Clause is established in the Communications Act of 1934, updated under the Telecommunications Act of 1996. These and existing case law are cited as legal justification.)
(3) Ibid, para. 200.