Internet Providers Say Commitment to Net Neutrality Doesn't Prevent Challenge to Vermont Law

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When the FCC decided to roll back Obama-era net neutrality rules including blocking, throttling and paid prioritization, many internet service providers nevertheless stated publicly that they were committed to avoid such practices regardless of oversight from federal regulators. Those commitments have now set the stage for a fight in Vermont court over whether those same companies, represented by trade groups, are really injured by the state's attempt to do what the FCC won't.

The American Cable Association, CTIA, NCTA, New England Cable & Telecommunications Association and USTelecom are suing over Vermont's own net neutrality law, contending that the Supremacy Clause and the dormant Commerce Clause of the U.S. Constitution protect broadband ISPs from a patchwork of inconsistent regulations throughout the nation. In a summary judgment motion filed Wednesday, the plaintiffs also want a judge to declare Vermont's law as preempted by the FCC's "Restoring Internet Freedom" order.

Vermont officials, fighting the lawsuit, are borrowing a favored legal tactic in corporate America. They are questioning whether the ISPs can really demonstrate any suffering of harm. After all, injury is required to establish standing to sue.

"Plaintiffs do not allege that any of their members have ever done anything in Vermont inconsistent with net neutrality or been prevented from doing anything inconsistent with net neutrality by State contracting requirements," stated a Dec. 24 motion to dismiss. "To the contrary, Plaintiffs allege that the FCC requires disclosure of 'blocking, throttling, [and] paid prioritization' and that their members have all 'made public commitments to abide by open Internet principles' that are fully enforceable under 'unfair and deceptive trade practices laws.'”

On Wednesday, the trade groups responded to this argument.

According to the opposition brief (read here), when these broadband companies made their net neutrality commitments, they stopped short of pledging to honor the FCC's old "Internet Conduct Standard." The trade groups say that the standard is "overbroad and ambiguous." The standard prohibits ISPs from "unreasonably interfering with or unreasonably disadvantaging” end users’ access to internet content providers or internet content providers’ access to end users. So, for example, Comcast wouldn't be allowed to interfere with someone's ability to stream Netflix shows.

"Plaintiffs’ members have not made commitments to abide by this ambiguous 'conduct standard,' and it is impossible for ISPs to know what it proscribes," states the opposition brief.

The trade groups later provide an example of what it might proscribe.

"Consider zero-rating, for example — a practice that allows ISPs to exclude certain content from an end user’s monthly data usage allowance," continues the memorandum. "When adopting the Internet Conduct Standard, the 2015 Order asserted that zero-rating plans may or may not run afoul of the standard. ISPs then faced an FCC investigation lasting more than a year as to whether certain zero-rating plans violated the standard, with the FCC ultimately unable to reach a definitive conclusion."

As for blocking, throttling and paid prioritization, there might have been commitments, but does one cable company's definition match everyone's understanding?

"What a particular state considers 'throttling,' for instance, may well differ from what another state considers to be 'throttling' or how an ISP uses the term in making its commitments to end users," argues the trade groups' lawyers. "Plaintiffs’ members thus still face harm to the extent the State enforces these so-called 'bright-line' restrictions in a manner inconsistent with ISPs’ commitments."

These arguments come just a week before the D.C. Circuit Court of Appeals holds a hearing over challenges to the FCC's decision to repeal net neutrality rules. Vermont wasn't the only state to pass a law in the wake of the rollback. California did, too. But an industry lawsuit over California's law was put on hold pending appellate resolution of the legality of the FCC's repeal. Vermont officials have similarly pointed to the upcoming appellate battle as reason to pause the case over its own law. But in this instance, the internet providers are demanding to move forward absent a commitment from Vermont to not enforce its net neutrality law.

According to the trade groups, Vermont "cannot have it both ways; it cannot rush to adopt measures that violate an FCC order while the State’s challenge to that order is pending, but then ask this Court to delay its review of those unconstitutional measures until after the State’s appeal is resolved."