American Cable Association et al v. Scott et al

Filing 1

COMPLAINT against Philip B. Scott, June E. Tierney, John J. Quinn, III, Susanne R. Young filed by American Cable Association, CTIA - The Wireless Association, New England Cable & Telecommunications Association, USTelecom - The Broadband Association, NCTA - The Internet & Television Association.Summonses issued. LR 73 Forms issued. (Attachments: #1 Exhibit 1, #2 Exhibit 2, #3 Exhibit 3, #4 Exhibit 4, #5 Exhibit 5, #6 Civil Cover Sheet)(law)

EXHIBIT 5

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State ofVennont
Agency of Admlnbtratlon

Office of the Secretary
Pavilion Office Building

[phone] 80:z-828-332:z
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SO:z-828-3320

109 State Street, sdl F1oor
Montpelier, vr 05609-0201

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MEMORANDUM
TO:

All Members of Senate Committee on Finance

FROM:

Sus:mne Young, Secretar;, Agency of Adm:ni~tration
John Quinn, Secretary, Agency of Digital Services
Clay Purvis, Director of Telecom and Connectivity, Department of Public Service

DATE:

February 1, 2018

SUBJECT:

S.289 - Net Neutrality

The Administration believes maintaining Vermont's open and unrestricted access to the value and
economic opportunity the Internet offers is important, and the Administration is concerned about the
impact that the FCC's Restoring Internet Freedom order will have on Vermont consumers and businesses.
The FCC's order limits how states can respond, but the Administration is monitoring the issue, and
exploring ways we can ensure equitable access to infonnation on the internet continues. In response to
the Senate Committee on Finance's inquiry to the Department of Finance and Management, we would
like to take this opportunity to highlight a few concerns for consideration in S.289.
S.289 would require all state contracts for broadband internet access services to include a provision that
the internet service provider adheres to net neutrality principles for an consumers in Vennont. The bill
would impact all government contracts for data in all branches of government, including wired and
wireless services. Compliant companies would be prohibited from throttling, blocking, or paid
prioritization of content. The Bill proposes to require the Agency of Administration to develop a process
by which internet service providers may certify compliance with consumer protection and net neutrality
standards. S.289 could have adverse impacts for state government IT operations, especially for district
offices located in exchanges with only one provider. Without an appropriate safety valve in law some
.. state offices could be left with no connectivity, while others will have insufficient competition for
services.
Currently, the State of Vennont purchases broadband internet service for its offices and hundreds of cell
phones for its state workers. These services would be subject to the requirements ofS.289. The State of
Vermont purchases data setvices from multiple vendors, and in some cases, there is only one available
vendor at a state office. Although the bill would allow exceptions for network management and paid
prioritii.ation that the Secretary of AOA finds to be in the best interest of the state, the law would by-andlarge impose net neutrality on any vendor doing business with the State ofVennont. Vendors who

choose not to certify compliance with net neutrality rules would be prohibited from bidding on state
contracts for these services. This will reduce the number of eligible vendors and in some cases leave state
offices and employees without adequate service. For instance, some telephone rural local exchange
carriers (RLECs) operate in monopoly areas and have no competition. Should these companies choose
not to adhere to state net neutrality principles, state offices in those exchanges could be left without any
viable alternative for landline data. In competitive areas, the loss of potential vendors could increase
prices for service. S.289 leaves the Secretary of Administration with no opportunity to ensure
connectivity in these places at reasonable prices.
Several important functions of state government could be adversely impacted. Public Safety first
responders, including DPS and E91 l, rely heavily on wired and wireless internet services. The State of
Vennont's data centers require redundant circuits to maintain connectivity in an outage. Most data
centers have only two providers available and should the centers lose one provider, they will lose
redundancy. Many state employees rely on cell phones, both as an office phone and for remote working.
These employees could lose those services under this scheme, unless the two major Vermont cell
providers, Verizon and AT&T, certify compliance. The bill could negatively impact essential
government functions, including emergency operations, and leave many state employees without essential
telecommunications services.
Lastly, the bill could to lead to costly litigation. The FCC's recent net neutrality order made clear that the
new rules preempt any state attempts to regulate internet traffic. Although this bill may ultimately evade
the scope of the FCC's preemption decision, it will likely still lead to lawsuits with providers. It is also
possible that the bill would be challenged on alternate constitutional grounds.