Vermont follows Califorina into the dock over net neutrality

The State of Vermont has been hit with a net neutrality lawsuit after passing a Senate Bill and signing an Executive Order forcing ISPs to follow the banned principles for government contracts.

The lawsuit, filed by the CTIA, cable industry lobby NCTA, telco lobby USTelecom, the New England Cable & Telecommunications Association, and the American Cable Association (ACA), calls into question requirements for ISPs to follow net neutrality rules should they want to be considered for government contracts. The lawsuit follows the same argument as the California case; it contradicts the Communications Act, the ‘Restoring Internet Freedom’ rules and two clauses in the US Constitution.

“This case concerns two interrelated attempts by the State of Vermont to unconstitutionally regulate the provision of broadband Internet service” the filing states.

“As the FCC has repeatedly recognized, Internet traffic flows freely between states, making it difficult or impossible for a provider to distinguish traffic moving within Vermont from traffic that crosses stateborders. Both the Supremacy Clause and the dormant Commerce Clause protect broadband Internet service providers from a patch work of inconsistent regulations that are impossible for them to comply with as a practical matter. The Court should declare that the Executive Order and S.289 are preempted and unconstitutional, and should permanently enjoin the Defendants from enforcing or giving effect to them.”

Senate Bill 289 was signed by Governor Phil Scott on May 22, while the Executive Order from Scott was signed in February. The telco lobbyists might be a bit slow off the mark, but this is a bit more of a complicated matter.

In California, and Washington State for that matter, net neutrality rules are being applied to the ISPs in every context. This is a much easier position for the telcos to push back against, though in the Vermont case it is only conditions for public sector contracts. The argument here is relatively nuanced; organizations should be allowed to apply their buying power to place requirements on vendors competing for lucrative contracts, but it does contradict rules set forward by the FCC.

Because this is not a blanket approach to net neutrality regulations, as is the case in California and Washington State, there is a better chance of the rules standing. The rules are being applied to specific relationships which lean on conditional approval and benchmarks for applicability. These are not unusual concepts in the world of procurement, but the net neutrality seems to be too contentious for any exceptions to be considered. The court will be interferring with market dynamics in Vermont, it is a delicate matter.

Another interesting idea is that of precedent. States such as Hawaii, New Jersey, Montana and Rhode Island have all passed similar rules, dictating ISPs wanting to compete for public sector contracts would have to adhere to net neutrality principles, and will be watching the outcome of this case closely. If Vermont wins there is precedent to maintain their position, however a win from the telco coalition will destroy the foundations.

Both cases, California and Vermont, come down to the old state versus federal battle ground and the interpretation of clauses in the Communications Act and the US Constitution. This is the bueaty and beast of the legal world, interpretation of the law and its implications means so much. The telco lobbyists do have a strong position though, especially considering the potential for a constitutional crisis.

Finally, perhaps the most interesting aspect of this on-going saga are the lawsuits themselves. In searching for a more light-touch regulatory landscape, the telco lobbyists are, ironically, seeking state intervention to maintain their position.