State officials vigilant as net neutrality repeal takes effect
By Xander Landen and Elizabeth Hewitt
Jun 12 2018, 6:57 PM
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Michael Schirling
Commerce Secretary Michael Schirling is concerned about the possible impact on Vermont businesses. Photo by Mike Dougherty/VTDigger
WASHINGTON — Obama-era regulations designed to maintain equality in internet service are officially no more.
The repeal of the net neutrality rules went into effect Monday, six months after the Federal Communications Commission voted along party lines to overturn the 2015 regulations.
But Vermonters may not feel the full impact of the repeal because of a new state law passed this year.
Critics of the federal repeal say that removing the regulations will open the possibility of internet providers offering tiered services for different price points.
A telecom company could, for instance, throttle access to one television streaming service in order to give priority to a different service that pays a premium. Internet users may be charged different amounts for access in “slow lanes” and “fast lanes.”
However, supporters of the repeal say the regulations imposed a heavy burden on service providers, which stifled initiatives such as building out infrastructure.
Legislation signed by Gov. Phil Scott last month requires internet service companies that the state contracts with to adhere to some net neutrality standards. It also directs the state to study the issue and make recommendations about whether lawmakers should adopt more stringent regulations.
Vermont is one of three states that have passed legislation to preserve net neutrality in some form, according to the National Council of State Legislatures
Last month, Scott signed into law a bill that pushes back against the FCC’s net neutrality rollback.
The new law will require internet service providers who do business with the state to abide by net neutrality principles and entrusts the Attorney General’s Office with determining whether providers who operate in Vermont are following such principles in the wake of weakened regulations.
The Scott administration, the House and the Senate each had different approaches to pushing back against the federal net neutrality repeal. In the end, the new law struck a compromise between the two legislative versions and an executive order Scott signed in February.
Scott’s order prevented providers who obtain state contracts from blocking content, engaging in paid prioritization of internet services or acting to “throttle, impair or degrade lawful Internet traffic on the basis of Internet content, application, or service.”
Legislators largely replicated the governor’s order, but the Senate made one major change to address what many lawmakers called a “loophole.” In some circumstances, the state could get a waiver to work with companies that disregard the net neutrality provisions if it is in the state’s interest.
Critics said the loophole would allow companies to avoid the rules, but others said it’s an important provision to ensure that state agencies in rural areas with few internet providers don’t lose service.
The finalized legislation, which the governor signed, will leave the loophole in place until April 2019.
Laura Sibilia
Rep. Laura Sibilia, I-Dover. File photo by Erin Mansfield/VTDigger
Rep. Laura Sibilia, I-Dover, who worked to finalize the bill in a conference committee, said the loophole provision is important to ensure that state facilities with access to only one internet service provider, like the state prison in Springfield, don’t lose their connection.
She said the bill and discussion surrounding net neutrality is compelling leaders to think about the “advisability of some of our state buildings actually not having more than one option for internet service.”
The new law gives lawmakers and the administration time to think about whether tougher regulations should be put in place and provides the state the opportunity to study whether internet service providers are actually reducing the quality the service they provide to Vermonters, according to Sibilia.
Vermont policymakers did not go as far as other states in reacting to the federal net neutrality repeal.
Washington, for instance, implemented its own net neutrality requirements on Monday, concurrent with when the FCC’s change went into effect. Oregon has also passed a net neutrality law.
However, associations that represent the telecom industry have raised concerns about the state-by-state approach to setting net neutrality provisions
“Adopting a patchwork of standards that vary from state to state could stifle innovation and hurt consumers,” Tim Wilkerson of the New England Cable and Telecommunications Association said in a recent statement on Vermont’s new law.
While the federal rule change has officially kicked in, state officials and industry players do not expect internet users to see a change in their online experience right away.
Michel Guite
Michel Guite, president of VTel. File photo by Erin Mansfield/VTDigger
Michel Guite of VTel said Monday the company has no plans to change its service in the wake of regulation change.
“Because we have so much capacity, we have no desire in any way to prioritize any category of traffic,” Guite said Tuesday. “The more the better.”
He characterized the company as “quiet bystanders” watching the policy discussions.
Guite said he trusts FCC Chair Ajit Pai’s judgment on net neutrality. He does not expect that the fears of many critics of the repeal will come to fruition.
“We’ve always felt that his evaluation that it’s kind of a non-issue is the right evaluation,” Guite said.
Pai referenced VTel in an op-ed published in CNet Monday, noting that the company wrote him to say that the company is “quite optimistic” and the FCC’s leadership is a major factor in that optimism.
Other Vermont-based internet providers have also said they have no plans to change their services in the wake of the federal regulatory change. Waitsfield and Champlain Valley Telecom and Burlington Telecom have both said they will not change their services.
Meanwhile, there are many who continue to be concerned that the change in federal regulations will hurt Vermont consumers and businesses — though not in the near term.
James Porter of the Department of Public Service said the state agency has concerns about negative impacts of the federal regulation change, but is not braced for imminent changes
“We view the FCC’s repeal of net neutrality rules as a bad thing for consumers,” Porter said in a statement. “That said, I think it is unlikely that Vermonters will see any immediate changes to their internet service.”
The department is directed to be part of the group studying whether the state should take further action to regulate internet services. Porter said the department will look to comments from the public for guidance.
Ahead of the FCC’s decision in December, Vermont businesses raised concerns that the repeal of net neutrality could cripple their online work.
Commerce and Community Development Secretary Michael Schirling said the agency is concerned about the impact the change in regulation may have on Vermont businesses.
Businesses may see customers’ access to their content throttled while others who are willing to pay a premium have unfettered traffic.
“It’s a real fear, and it certainly is possible,” he said.
However, he said, the agency does not expect any impact on Vermont internet users right away.
If Vermonters notice adverse impacts, they could alert state government, he said.
“The hope is that folks will not revert to creating an uneven playing field as a result of this rollback,” Schirling said.
He said it would not make sense for internet providers to make major changes because there is a possibility that some version of the regulations could be reinstated.
Peter Welch
Rep. Peter Welch, D-Vt. File photo by Bob LoCicero/VTDigger
U.S. Senate Democrats and a handful of Republicans last month passed a legislative maneuver that would have blocked the FCC’s repeal of the regulations from taking effect. Both Sens. Patrick Leahy, D-Vt., and Bernie Sanders, I-Vt., backed the effort to keep the regulations in place.
However, the measure still required approval by the House to take effect.
Rep. Peter Welch, D-Vt., a sponsor of the resolution in the House, called on leadership to allow the measure to come to the floor Tuesday.