Vermont Lawmakers Pass Net Neutrality Procurement, Data Broker Privacy Bills

Vermont lawmakers adopted House-Senate conference reports Saturday for the net neutrality and privacy bills. SB-289, as amended by the conference, restricts government contracts to ISPs that certify with the state as net neutral, similar to Scott’s February executive order. The bill, which would take effect July 1, also orders the state attorney general to review ISPs’ network management practices and determine if they comply with the 2015 FCC rules, with findings to be disclosed on a public website. It would require the AG to file a report by Dec. 15 with recommendations, including if the state should make its own net neutrality regulations. Under the privacy bill (HB-764), Vermont would mandate security standards for data brokers and require them to report annually to the Vermont secretary of state.

"The State may exercise its traditional role in protecting consumers from potentially unfair and anticompetitive business practices,” said the compromise net neutrality bill. “The benefits of State measures designed to protect the ability of Vermonters to have unfettered access to the Internet far outweigh the benefits of allowing ISPs to manipulate Internet traffic for pecuniary gain.” Defending Vermont’s right to shape ISP policies with procurement, the bill said: “When acting as a market participant, the government enjoys unrestricted power to contract with whomever it deems appropriate and purchase only those goods or services it desires.”

The American Civil Liberties Union sees a “good chance” Scott will sign the net neutrality bill because it doesn’t create any new taxes or fees, which the governor vowed to oppose, said ACLU Vermont Policy Director Chloé White. “While we wish the bill would have gone further, we are pleased with it and hope the legislature will continue to look at this issue and keep Vermont’s internet open,” she emailed. “There are a lot of questions out there around what sort of steps states can actually take following the federal rollback on net neutrality rules,” said a Vermont Public Interest Research Group spokesman.

“Deciding who to do business with is something states clearly can do -- and ensuring that Vermont taxpayer dollars do not go to internet providers that might block, throttle or otherwise inhibit lawful content is an important step to take,” the spokesman said. Vermont PIRG supports the privacy bill as “a cautious, but critical attempt to give consumers more information about these third-party companies that are buying, collecting and selling individuals’ personal information,” he said: It won’t solve all problems, but “begins to bring some transparency and understanding to an industry that has operated opaquely for many years.”

The Software & Information Industry Association plans to seek veto of the privacy bill, emailed SIIA General Counsel Christopher Mohr. "It does nothing to actually protect Vermonters’ personal privacy while placing pointless burdens on businesses. Although the bill changed as it moved through the process, the legislation still has fatal First Amendment problems.” SIIA last month opposed the privacy bill as unconstitutional and burdensome to tech companies (see 1804100042). Comcast and USTelecom declined comment.

The California Senate has until June 1 to advance SB-822 to the Assembly, said a spokesman for sponsor state Sen. Scott Wiener (D). Monday, the Senate Appropriations Committee moved the bill to its "suspense file" for a final vote at the end of next week, the spokesman said. Appropriations is the last Senate committee OK needed to get to the floor after two others earlier advanced the bill (see 1804250003). The California Senate late January passed a different net neutrality bill by Senate leader Kevin de León (see 1801300025), but SB-460 hasn’t budged in the other chamber.

Committee Chair Ricardo Lara (D) asked about ISP claims that SB-822 goes beyond what the FCC required in 2015, including proposed zero-rating and interconnection requirements (see 1804170057). Wiener disagreed it does more. It’s a “strong and comprehensive” bill that responds to the FCC “obliterating” open internet protections, he said at the livestreamed hearing. AT&T, CTIA and California cable industry witnesses insisted SB-822 goes beyond 2015 rules and responds to unproven, theoretical problems. The bill is pre-empted, they said.

Washington state and Oregon enacted net neutrality bills earlier this year, with similar proposals in multiple other states. The FCC last week said its repeal of the 2015 net neutrality rules takes effect June 11 (see 1805100005).