The State Capitol building in Montpelier, Vermont. Photo: Shutterstock

Multiple internet service and cable providers are seeking an enjoinment of Vermont legislation they say bars them from obtaining state contracts if they fail to meet state-level net neutrality laws. The lawsuit comes from the same group that filed a suit against California's state attorney general for alleged net neutrality overreach. 

On Oct. 18, a coalition of associations—the American Cable Association; the Wireless Association; the Internet & Television Association; the New England Cable & Telecommunications Association; and USTelecom—filed a lawsuit in the U.S. District Court for the District of Vermont seeking to enjoin Vermont's Executive Order No. 2-18 and Senate Bill 289.

The associations claim the state legislation imposes prohibited regulations when ISPs attempt to bid on state contracts.

Executive Order No. 2-18 was imposed by Vermont Gov. Phil Scott and provides that “'all state agency contracts with internet service providers shall include net neutrality protections, and specifically state that internet service providers shall not engage in blocking, throttling or paid prioritization, using language substantially similar to the 2015 order that the FCC repealed in the 2018 order,” according to the complaint.

Vermont's SB 289 also imposes net neutrality requirements on ISPs as a condition of obtaining Vermont state contracts, the associations said in their 39-page complaint.

The associations claim that the Federal Communications Commission's Restoring Internet Freedom Order and the federal Communications Act of 1934 pre-empt state or local measures akin to Vermont's executive order and SB 289. The Restoring Internet Freedom Order, which went into effect in June, lifts many regulations set in 2015 prohibiting ISPs from loading certain sites faster than others and blocking or slowing loading speeds of content.

Earlier this month, the plaintiffs filed a similar challenge to California's new net neutrality law, which seeks to prohibit ISPs from blocking or slowing content. In late September, just hours after California's governor signed the legislation into law, the U.S. Department of Justice sued the state of California to enjoin the legislation.

Marc Martin, Perkins Coie partner and chair of its communications industry practice group, said either suit brought by the ISPs has a chance of succeeding. 

Vermont's law has a narrow scope, Martin said, because it focuses on the government negotiating. “As a purchaser, they will basically insist on terms that the service isn't restricted,” Martin said.

On the other hand, California's law, he added, is more broad and applies to all consumers in California using the internet.

Martin noted that if the ISPs aren't victorious in their current cases, they may change their strategy and go after other state laws they see as imposing net neutrality regulations. 

Indeed, the Vermont and California suits list verbatim “harmful 'patchwork'” state regulations in Washington, Oregon and Hawaii, and executive orders establishing state-specific net neutrality obligations in Montana, New Jersey, New York and Rhode Island.

Counsel for the associations includes Kellogg, Hansen, Todd, Figel & Frederick; MoloLamken; and Latham & Watkins, which is identical to the counsel used in the California case. The association also listed Burlington, Vermont-based firm Paul Frank + Collins as local counsel for the Vermont suit.

The suit listed Scott; Secretary of Administration Susanne R. Young; Vermont Agency of Digital Services secretary and chief information officer John Quinn; and Vermont Department of Public Service Commissioner June Tierney as defendants.

Attempts for comment from the association's counsel and the governor's office were not answered by press time.