Two witnesses are on the phone. We may actually get a little time in between. But our first witness is Chad Marlowe. And he's advocate to see a policy council for the ACLU. And these are in no particular order. It's one we could get people. And the ACLU came to us and asked to talk. We can just switch over now. Yes, Mr. Marlowe. Hello, Mr. Marlowe, can you hear me? I'm her. OK, I'm Ann Cummings. And you're with the Senate Finance Committee. And there is a roomful of people here. And we are just starting our discussion about net neutrality and the recent federal changes and what they might mean to the states and what powers the states might have. So I don't know in what area you wish to address us, but the floor is yours. Thank you. Well, thank you, Chairperson Cummings. And I'm going to send it down.  My name is Chad Marlowe. And I'm the advocate for the Policy Council of the Americans of the Liberty Union. And I wanted to thank you some soon for the opportunity to testify before your committee today. Information and communication are the lifeblood of democracy. When they are permitted to flow freely, our democracy grows and discriminates. When they are blocked or inhibited, our democracy slowly dies. The FCC's December 2017 decision to grant internet service providers, or ISPs, the ability to decide what content is permitted to operate on the information superhighway to HOV lanes, what information is relegated to the flow lane, and what information is prohibited from even accessing the on ramp presents a significant threat to the freedom of all Americans and certainly to the people of Vermont. Arguments by the FCC that the end of net neutrality will foster greater internet freedoms and innovation are not only patently false, they are absurd. The threats posed by the end of net neutrality are not hypothetical. In the absence of net neutrality in the United States and elsewhere, we have seen content slowed and blocked based upon the political views and business interests of ISP companies. For example, AT&T censored a live pro-jam concert stream in response to criticisms of President George W. Bush by the band lead singer Eddie Vedder. Verizon blocked text messages from the pro-choice advocacy group NAROW because Verizon deemed them to be controversial. TELUS, a Canadian telecom company, blocked the website of a union with which it was engaged in a labor dispute. AT&T limited its customers' use of FaceTime to coerce them into buying more expensive data plans. And AT&T's Sprink T-Mobile and Verizon all blocked mobile wallet applications like Google Wallet that competed with their own mobile wallet application. The internet provides methods of discovering and communicating information that were inconceivable a few generations ago, but today are central and indispensable to how Vermonters learn about their world and communicate their ideas with family, friends, and even strangers. The idea that ISP companies are now empowered to decide what information and ideas on the internet receive preferential or disfavor treatment has outraged Americans from coast to coast. Should the Vermont legislature take action to protect that neutrality, it would join at least 25 other states that have already either introduced or on the verge of introducing net neutrality bills. In addition, the governors of Montana and New York have already issued executive orders to preserve net neutrality. While the approach has taken me very, the common theme of these bills and orders is allowed pronouncing from states that the FCC's elimination of net neutrality is unacceptable. As many of you know, the Vermont House of Representatives has already introduced net neutrality legislation. The approach to that bill, H680 takes to protecting net neutrality is particularly logical. When an action of the federal government places the freedoms of Vermonters at risk, the state should respond in any and every way that it can, and H680 certainly does that. It makes net neutrality a condition of complying with the Vermont Consumer Protection Law. It makes net neutrality a condition of broadband pole attachment and line extension. It makes net neutrality a condition of using wireless communication facilities on state-owned buildings, structures, land, highways, and rights of way. It makes net neutrality a condition of receiving a certificate of public good from the Public Utility Commission. And it makes net neutrality a condition of ISP's procuring state contracts for broadband internet access. For that reason, the ACLU strongly supports the adoption of H680. Although the FCC is asserting that states are now preemptive from acting to preserve net neutrality, the truth is there is no consensus amongst attorneys on that point. The fact that nearly half the states are pursuing efforts to save net neutrality certainly speaks for that. Preemption is simply a matter the courts will have to decide on an approach by approach basis. Such uncertainty should not preclude this state from adopting net neutrality legislation. To the contrary, the only way to find out if the state of Vermont has the ability to protect net neutrality for its citizens, residents, and visitors is to adopt a net neutrality law. Of equal importance by adopting a net neutrality law regardless of the ultimate judicial outcome, Vermont will join the national courts of states that are loudly and clearly announcing that they find a rollback of net neutrality to be inaccessible, that net neutrality should be restored by the FCC, but if it is not, states like Vermont will not sit idly by to the detriment of their people. By adopting a net neutrality law this state will take up the fight to protect internet freedom within its borders and in so doing will pose a very direct question to the FCC, Congress, and internet service providers like AT&T CONCAC and Yes Verizon when it comes to Vermont's unequivocal support for net neutrality. Can you hear me now? Thank you for this opportunity to testify I would be happy to answer any questions that you may have. Okay, thank you. Committee Questions We have none. Thank you very much. My pleasure. Thank you for having me. Thank you. What I'm looking for, we have until two o'clock when we're going to get Mr. Feld on the line. He's next. It can get you. See if you can get him a little early and if not I was going to see if somebody could come up to Mr. Storrow. Would you like your I've got Maria and I know she's got about an inch thick pieces of technicality she's going to walk us through so do you want to come on up and yeah, sure. Good afternoon committee. My name is Charles Storrow. I'm with the FBI and Public Affairs and I'm testifying this afternoon on behalf of AT&T. Thank you for the opportunity to provide this testimony. AT&T supports a free and open internet but objected to the legal basis used by the FCC in 2015 to impose net neutrality rules on internet service providers like AT&T. At the outset I want to make distinction between managing traffic on the network on a non discriminatory basis or for other legitimate purposes such as giving priority to first responders as part of the first net system and a non net neutral internet i.e. paid prioritization and let me explain that a little bit any internet network is going to have a finite capacity in terms of the amount of data that it can handle. The company does take steps sometimes to manage that because it only has so much capacity and the previous witnesses reference to throttling or activity regarding FaceTime was exactly such a thing if those of you don't know FaceTime is a video conferencing kind of service it's very data intensive. If that's done on a non discriminatory basis in other words you're not favoring one particular content provider over another but you're applying it equally then that is network management. Net neutrality or net non neutrality on the other hand is the idea that and it's really I guess encapsulated in the concept of so called paid prioritization that a company like AT&T would have a business arrangement with a particular say e-commerce retailer that their website would load faster than others that's non net neutrality that would be not being neutral so there's an important distinction to keep in mind in that regard the first net is this public safety broadband communications that were under the terms of that the company if there's an emergency they will give priority to the traffic generated by first responders which they will know because of the technology in the phones so that they can get through and it may result in ordinary users not being able to get through but I would submit that that's a legitimate purpose since the inception of the internet in the early 1990s AT&T has operated its network in a neutral fashion and is committed to continuing to do so not only is the company committed to net neutrality as a matter of principle but the marketplace demands it if AT&T did paid prioritization there would be a lot of screaming and there would be a competitor who would say we don't do that and we would lose customers so the marketplace will impose discipline but AT&T beyond that believes in the concept in principle the December 2017 FCC action repealing the 2015 rules restored the situation to that which existed in the early 1990s to 2015 which is to treat internet service providers as providing information service and this is a classification under the telecom laws as opposed to being treated as a common carrier and that treatment was the result of the 2015 FCC ruling basically been long time classification of internet service providers as an information service the FCC in 2015 on its own volition reclassified internet service providers as a common carrier that's the rub for us right there is treating us as a common carrier again from the early 1990s up until that reclassification as a common carrier internet service providers were treated as providers of information service and they in fact operated their networks in a neutral fashion well basically the change got made because in the absence of classifying us as a common carrier the FCC didn't have the legal authority to impose the net neutrality rules so in other words if we're information there's a separate sort of regulatory scheme or regulatory touch that's applied to information service providers and it's a lighter touch versus a common carrier which is a heavier touch it would treat us like a regulated public utility but for them to make that change I assume that somebody felt they needed they used a heavier touch was something that was in the wind I don't know if you know but I do know well it was this concept that none of the internet service providers dreamed of my understanding was a professor who said jeez these internet service providers could become non neutral and they could do paid prioritization so we ought to pass a law against that and so everybody said yeah let's do that and so the FCC in 2015 responded that there wasn't any instance other than distinguishing from network management that that would happen there's been no instances of paid prioritization so that's the thing there's no experience it was a theoretical concern you know it's in theory could happen the company doesn't plan on doing that and as I said the market would punish it if it did and that's you know evidenced by the fact that for 15 odd years there wasn't any non you know content providers were treated equally in a non discriminatory fashion and so it's frustrating for the company because they're basically being caught up in a controversy that they didn't do anything to cause but they didn't like the legal basis for doing that now the the issue needs to be solved by congress it is a major policy issue that should be not be determined by a federal agency depending on who the president is because it is a national issue it should not be addressed by the states on a piece meal basis the specific rules are administratively unworkable unmanageable and technically infeasible ATT supports federal legislation to permanently protect an open internet and has urged congress to act and in fact yesterday the company had published in major newspapers a full page open letter from the chairman and CEO of the company asking congress to act and that's where it should be resolved and so we would respectfully urge that the committee not take any action on the issue and there's no non neutrality occurring there's no intent to be non neutral and let the congress address it I'm wondering Mr. Starr, would you mind to the ACLU's testimony about what happened with AT&T as it relates to you know the George W. Bush reference the FaceTime as well as the wallet applications and we don't have it right here if you need it I heard the previous witness speak to that and I have a one pager on the FaceTime situation that I could open up and you know it's more than you'd want to sit here listening to me read I guess I'm wondering are these accurate? The FaceTime issue was a matter of network management it wasn't non net neutrality and I can it's a technical thing it basically comes back to the fact that AT&T was the first national carrier and had for a while exclusive rights to sell the iPhone when the iPhone came out people started buying them the company got clobbered the amount of data going over its network went up to like 5000% the network was not adequate for that they got caught with their you know with their pants down on that one because they sold a product that resulted in usage on their network that they weren't ready to handle so the FaceTime is an aspect of that they've been pouring you know they pour 20 to 30 billion dollars a year into their network they're the I think for at least quite a few periods of time the single largest investor in the American economy the capital expenditure AT&T has done a lot of that investment is geared towards expanding coverage footprint but a lot of it goes to just reinforcing the existing network because the more traffic going over the network you have to densify the network to have even if you're in an area of coverage you've got to have more capacity the equipment's gone from 2G, 3G 4G now we're up to 4G LTE so they've they've turned the corner on all of that the FaceTime issue was an aspect of that as much as I can give you right now with short of reading the censoring of Pearl Jam that's news to me and I was just texting my contact did we censor Pearl Jam and it's news to me but we don't have a paid prioritization thing where particular websites get favored we own Direct TV which provides a lot of content we don't favor that content over other content they're trying to buy Time Warner the cable channels CNN all of that they won't favor that content over CBS and as you'll read from Mr. Stevenson's letter they're committed to that they just need a federal solution and it should be resolved not at the FCC level and respectfully not at the state level thank you I think one of the things is there are no dates on the ACID and all of the allegations which makes it impossible to know if they happened under the old you know the three 2015 or post 2015 so I think I heard the gentlemen say George Bush was president the Pearl Jam the FaceTime I think I heard him say 2007 but like I said I could be wrong alright I said Senator Suarez and then Senator Alliance and Senator Polina okay they have to cut this short so you say you objected to the legal basis do you object to the policy basis no that's the thing we agree to the idea of a legal requirement to be net neutral but we don't want to be treated as a common carrier in order for that to be accomplished so Congress should pass a net neutrality bill that doesn't make us a common carrier but requires us to be net neutral and we would urge the committee to assembly to pass a resolution urging Congress to do that so in the interim if we did something in this regard the impact of it from a policy perspective wouldn't be objectionable to you I guess I have to concede that yes that's right now there's some in the house bill they've got all these requirements that if you want to put up a cell tower if you want to attach cable to poles and all of these things and net neutral that's kind of cutting your nose off despite yourself because don't we want cell towers and extension of cable and all that but I understand if you play by the rules of being net neutral then there wouldn't be any issue there but we don't want a lot of different state rules around the senator and there are significant preemption issues that I'm not pushing or arguing here but we want to hear from council it doesn't sound like if we did anything from AT&T's perspective that the policy we're trying to implement would be objectionable but there may be companies out there that would take advantage of this interim period where there is no net neutrality that may have a different opinion than you so we have to protect against all companies not just the honorable AT&T you'll hear from all the other I think you'll hear from all the other relevant telecom providers and they will all basically say the same thing and I'm not aware of any start up out there that's going to say hey let's go out being net, non-net neutral but again we don't want it to do it on a state by state basis it needs a federal solution and that's where we come from on that point I think I'm good I think I'm good but this you support AT&T supports the consumer bill of rights and what would happen if that were put into statute we'd have to see exactly and I don't know exactly what the details are if Vermont adopted exactly what AT&T is proposing Connors to do you know on one level that wouldn't be bad but again we don't want state by state activity on this regarding there's no urgency to the situation because if AT&T tomorrow became non-net neutral in the face of where I passed out an open letter from the companies president saying we're not going to do that there would be you know justifiable outrage so there isn't a crisis at least as far as AT&T's behavior is concerned you mentioned that the market demands that you don't have to pay prioritization right now because others would jump in and be a problem for AT&T but I guess the concern is that if one company does pay prioritization then another company will be looking at this kind of wild west atmosphere where everybody's going down the road taking away that neutrality and people are trying to become more competitive in the marketplace well if I was for the sake of discussion the leadership of T-Mobile I would carve out a little niche T-Mobile has brought intensive price competition to the wireless market I don't know if you've noticed that but prices have gone down because T-Mobile has been very aggressive in pricing in gaining customers from us I have no idea that I don't speak for T-Mobile but there's enough players out there that if they all did it somebody would say we don't manage if we don't and the market would punish those who are non-neutral in favor of those who are and in theory could they all be that way and present a wall I suppose but it wouldn't somebody would say it's like the gas stations wouldn't drop my price two cents from the guy down the road to keep up with that there would be a lot of active competitive market in wireless it's very competitive a company would do that at their peril Mr. Bell, hello yes, hello welcome to the Senate Finance Committee we are here and we have a room full of interested people and we just ask you to introduce yourself for the record and this is all recorded and so then the floor is yours thank you very much my name is Harold Feld I am Senior Vice President of Public Knowledge Public Knowledge is a nonprofit digital rights advocacy organization based in Washington, E.C. I thank you very much for the opportunity to test about today we should begin by observing that contrary to what you may have heard recently until December 15, 2017 we have always had a principle of non-discrimination it's true we did not call it negative reality until 2002 because we didn't have to in the beginning all of these were flags of communication they traveled over the telephone lines and they were subject to the non-discrimination requirement of title 2 telecommunications noncommunications this was embedded in the first in the N to N principle which became one of the cornerstones of the design of the internet protocol the paper published in 1981 by three of the computer scientists or considered to be founders or fathers of the internet who will filter, read and clerk who in this paper of the N to N principle explained that for the communication platform to be successful it should be the case that the network in the middle does not make judgment or distinction among the traffic that is passed from one end user to another end user this is why it was called the N to N principle the idea is that you have the person on one end you have the other person on the other end and what is in the middle is simply there to pass the information along from the one to the other at the control of either end and that the network in the middle should not interpose itself even after we reclassified broad-table motives, broad-band service as an information service and then subsequently in 2005 we classified all wire line services, cable and DSL as an information service we still maintained an important principle of non-discrimination and STC oversight of the broad-band network in 2005 as part of the wire line framework the STC also adopted something called the internet policy state which guaranteed to all internet subscribers that they had a right to access all legal content on the internet to use all services that do not harm the network and to connect any device which does not harm the network essentially taking this N to N principle and applying it even as an information service to broad-band why did we not limit ourselves to that? two reasons one, we began to have problems with broad-band providers doing precisely what they claim they have never done or they will never do, blocking the grading track the most important incident of this which came the most notoriety early on in 2008 was the contacts blocking the peer-to-peer applications that led to an attempt to enforce the internet policy statement in 2010 the DC circuit ruled that the STC could not enforce the policy statement under the authority that it had cited at the time which was something called insular authority the STC then proceeded to enact a new rule this time relying upon the authority in section 706 of the the Public Communications Act of 1996 now codified of 13 U.S.C. 1301 02, 03 and 04 again the court struck these these rules down in 2014 although it preserved some of the transparency requirements with the observation that the STC could not impose true neutrality upon a network what we call common carriage unless that network was a public communications the STC according to the DC circuit therefore had a choice it could either allow for discrimination by networks or it could reclassify broadband as a title to telecommunication service those were the options that were available to the STC I will add during 2014 from 2014 January 2014 when the court decision was made until 2015 when the reclassification and new rules were announced we had one of the largest widespread problems of net neutrality which is shocking to me that people continue to gloss over this if it never happens folks may recall that the major broadband providers Comcast, Charter, Verizon and AT&T all proceeded to congest the traffic from Netflix impacting not merely the Netflix traffic but all other traffic effectively in some cases reducing broadband connectivity at peak hours to less than 0.5 megabits per second download until Netflix agreed to pay an additional interconnection fee somehow we are likely to believe that not only that will never happen again but it will somehow did not happen in the first place but it is vitally important to remember that the reason why we why we shifted to title 2 and to such explicit rules of neutrality for broadband was to prevent what John Oliver famously described as cable and I cannot complete the sentence because I am testifying before this all goes about it but I do urge folks who have forgotten this to simply go online while you still can download these sorts of things easily and look for the Vinnie John Oliver 2014 Net Neutrality video to remind everyone that in fact what we saw the moment it was possible to do so were cable operators seeking to impose new charges upon potential competitors raising the cost of competitors without regard to the impact of this on their subscribers or to the network as a whole there is much here that I could discuss but let me focus on four specific areas of great concern the cost to consumers the cost to innovation and competition the cost to democracy and the cost of digital redlining in the absence of enforceable net neutrality rules first let me discuss the cost to consumers one is the fear that we will face new charges for new services it is unlikely that internet that broadband providers will seek to charge new fees for the fees that we receive now in the short term it will be much easier going forward in the long term and indeed we saw an example of this in 2012 when AP&T attempted to limit the application's base time on its phones to only the highest available subscription tier our organization public knowledge along with pre-press filed a net neutrality complaint with the FPC the rules as they existed at that time and the matter was settled and AP&T was required to base its base time across all of its mobile service contracts I have no difficulty imagining that as we move to things like 4K video that broadband providers will charge new fees for what are essentially these services we've seen this not only as I said with base time but this is in fact the model of the cable industry for the primary providers of broadband I will ask anyone here who has seen their cable bill to look at for example the digital charge we have long since passed the conversion from standard definition television to digital television and yet cable operators continue to charge for the privilege of receiving digital which is in fact the only transmission service cable operators incur a fee an expense rather to downgrade the high definition digital broadcast to standard definition if you don't pay because the business model of cable is to extract fees wherever they can technically you can attach a cable mode up but anyone who has tried to do this with certain providers understand that that is hard to do and again fees are charged for these connecting services we should not in the least doubt that in the absence of enforceable net neutrality role we will continue to see charges for such things as home network connectivity 4k video or other news services as they become available will only become available at the cost of an additional charge now let me discuss the cost of innovation one of the most famous quotes with regard to the birth of the internet came in 1964 when an early innovator attempted to develop a packet switch network sought permission from AT&T to do so because at that time before the FCC opened the network in the computer proceedings the AT&T through his care think of control what traffic went over its network the response from AT&T was damn if we let you build a competitor over our own network that has been the essential response of every network operator to every potential competitor when they are capable of doing so at the cost of innovation again we look to the cable experience and we can see that cable operators have essentially built their entire business on taking the innovations of others packaging it and then selling it back to you at a higher price that was they took broadcast television and charged us use that as the basis of their service to charge us for what used to be free they we used to be able to purchase things like video recorders that plug directly into the television set once we converted to digital the analog hole was closed and we now all have to rent the set top boxes and pay an additional DVR fee for things that 15 years ago we used to be able to do for ourselves and charge for ourselves and all of this has been at the cost of innovation DVR technology which has hardly advanced since it was introduced back in the late 90s and early old and became subject entirely to control of the cable network to point to wireless before that neutrality in 2007 Tim Wu wrote an important paper called wireless Carterphone Carterphone refers to the FCC decision in 1968 which required the telephone network to allow anyone to attach any device that does not harm the network to the network in which he documented all of the at that time innovations that were available on mobile phones in Europe which were not being made available to consumers in the United States because the wireless network providers simply refused to allow potential competing services on their networks again we have no reason to believe that this will not be the case and every reason to believe that this will be the case without that neutrality the imposition of additional charges on the hemp to impose additional charges on that place through congestion of links in 2014 during the period of time when the rules were struck down by the circumference but additionally if the past is prologued we can expect to see similar efforts made now that net neutrality has been removed but while this is a cost to innovation and a cost of competition to services that are provided by the broadband network provider there is also a broader competition in the general economy this is the large versus small problem right now any business that can actually get online and transmit you know and have a customer download their service or their video advertisements or whatever it is is able to experience the same experience whether they are accessing a national company or a local company there is a reason why the national association of independent real service has been a long term supporter of net neutrality and an opponent to the effort to repeal these rules let us assume that we have simply paid prioritization on the other side national to take just a simple example national realtors can afford to pay for prioritization of things like 4k video to provide guidance tours of all of these of their properties and can afford to do so on a national basis local realtors simply cannot there is no way a local realtor who is attempting to offer video of properties in Vermont from somebody in Vermont or even dare I suggest across the border in New Hampshire and Massachusetts I'm from Boston originally so I understand what a trip that is who are looking for these properties they will experience in this world of prioritization slow, non-loadable video from local businesses attempting to to compete with large national chains which will be able to afford the prioritization finally let me talk now about cost to democracy and what I call digital redlining everyone who has been elected to office understands the problem of campaign finance and the need for campaign finance resources what drives up the cost of running for office is the need to advertise the need to advertise over the public airways which although we have a form of neutrality for at least for federal candidates in the communications act allows essentially for prioritization in the sense that you can charge more for prime time advertising to run for office advertising only to people who are watching at 4am it is much cheaper than if you are trying to run for office to people who watch during prime time hours but also far less effective and so as we have seen this has had not only an ongoing impact on the cost of campaigns but as a consequence has made it increasingly difficult for independent candidates for those who have issues that they wish to notify the public who are not running for office all of which driven by this non simply by increasing cost of what is effectively prioritization of time on the airways until now the internet has been an oasis of democracy in the sense that once I'm on other people can see what I am putting out there can read what I am reading without these additional charges I'm not going to pretend that money doesn't matter obviously a well funded candidate capable of producing a high quality video is certainly more likely to be successful in transmitting their message than somebody like myself sitting in front of the camera for a YouTube video but the fact is that for the first time since we entered the age of the electronic media it wasn't possible for those without enormous resources to compete on a level playing field for those who had far more significant resources net neutrality and the absence of net neutrality rather is repeal and the allowance of paid prioritization even if that paid prioritization is allowed on an equal basis that is to say I make the same cost of prioritization available to anybody you know deprived us of what has been a very increasingly important avenue for democratic discourse and a means of circumventing the bottlenecks that are caused by the high cost of advertising political speech finally I will touch on what I call digital redlining paid prioritization assumes that people actually want to reach you the problems as we all know from our daily lives is some subscribers some customers are considered to be more valuable than others sometimes this rests on stereotypes with regard to race or gender and potential spending or pocket money other times it is simply an economic analysis of who are worth advertising to not worth advertising to but in any event we all know from our daily life experiences that we do not experience the real world in the same and equal way that those of us who have more means those of us who do not come from traditional marginalized communities are offered a far greater of a services and are advertised to far more easily than those who are not until now the internet has not worked that way with the repeal of net neutrality we will see the same state advertisers will wish to prioritize their content and their services on the basis of who can afford to pay and who are the desirable customers this is just economic it is unfortunate new world which we are creating over time and we can expect the experience that people will have online to be markedly different not because they lack access to an internet provider themselves but because those who are others who are online whether they are commercial services whether they are advertisers whoever they may be simply do not consider these people to be as profitable as worthwhile to reach as those in more desirable demographics for whom they will pay to prioritize content delivered to them few for this opportunity to testify I believe there is one point that I should address in light of the last witness which is as I have observed we have had a principle of net neutrality and end to end built into the network since it began the argument that network neutrality somehow interfered with the ability to manage networks is simply demonstrably false it has been untrue since 2018 it has never interfered with the ability to manage networks all of the rules include very clear exceptions for reasonable network management the limitations include a limitation on any device attachment of any device network attachment of any service on the network so the argument that well we couldn't shut down a roll camera spewing out traffic because we are not allowed to we wouldn't be allowed to interfere is simply false defect and a deliberate misleading reading of the law as it was previously written and to which frankly we should return so I see for this opportunity to testify and I invite your questions this time I am wondering do we have written testimony from you unfortunately I was only contacted about this within the last day and a half I asked if written testimony was required I was told it was not required and I regret that I have not had the opportunity to prepare a written testimony if you could email that to Cheryl our assistant who contacted you we will put that up online on our all the committee submissions if you can't that's fine but I think you had a lot to say and I think it would be helpful if the committee could read it and have some time to digest it because you gave us a lot of information I'll do what I can I think it will be work for work since I get rather than from a written speech but I'll do what I can thank you I think there are no other questions oh you have a question sorry not to ask questions I don't know the answers to I suppose on the center floor I'll have to ask questions which I learned he wants you to identify yourself my name is Michael Sorak and I'm a senator in Shibin County and in 2015 when the FCC decided that these companies the ISPs were a part of telecommunication I'm guessing there might have been some litigation after that you are quite right and it is worth noting that the ISPs appealed this decision to the federal court of appeals for the DC circuit the FCC was the decision was upheld in June of 2016 the DC circuit has subsequently rejected the petition hearing en banc the petitions for certiori remain pending as the Supreme Court as these things went their way rather slowly but the FCC's decision has indeed been upheld by court of law and I frankly in doubtful that the Supreme Court would be interested in hearing this so prior witness from AT&T said they didn't like the legal basis for the decision but as of now it's been upheld by the court of appeals that's correct and what the telecommunications somebody has said is that they specifically do not like Title II of the communications act of 1934 now this is a very important point for Curie first of all does the DC circuit make clear in rejecting the FCC's 2014 rules you either classify broadband as a Title II service or you couldn't have net neutrality the reason for that is that the communications act contains a provision of which says a common carrier may only be regulated as a common carrier to the extent that it offers a common carrier service meaning that if services that are offered that are not common carrier service those cannot be regulated as if they were a common carrier service excuse me I'm going to forgive me for cutting you off but because I asked the question but you have a lot of witnesses here and I think we're getting into the weeds a little bit of legal theory so you can add it to your written testimony we do have several handouts that are on our hand so any if I may just be for a minute to make one point one further point about Title II the primary reason that the telecommunications company has objected to it is because Title II is designed to ensure in the words of the communications act that all Americans have access on affordable rates to telecommunications services these ISPs are Title II precisely for the reason that we need it thank you okay thank you very much maybe I'm going to go to Jeffrey Austin next if that's all right and then we'll have all the visiting testimony and then we have the Department of Public Service and Maria Royal that are the house staff or the state staff and then good afternoon Jeff Austin from Fairpoint Communications and the Director of Government Relations and External Affairs thank you for letting me testify, I appreciate the time there's a lot obviously to think about through whether we're talking internet privacy certainly net neutrality I've been in a couple other sessions when there's been testimony or discussion about H-289 and I've had some background in the company I've been with the company 24 years with engineering, with sales engineering and network designs and I thought if I can with your permission I'd like to take this back a little bit and just talk a little bit more about the internet what is it, how does it work how does an ISP interact what is our responsibility and how do things actually work how does your browser work how do cookies work just on a high level there's a lot to it and there's a lot of communication that happens and I thought this might be helpful for the committee I know it will be helpful for the chair so I will I'll start with just basic internet, ISPs stop me anytime if you have any questions about this so the idea just to make a couple easy analogies when it comes to an ISP internet service provider this is the last mile we connect to the worldwide web the internet, which is a worldwide collection of interconnected computer networks that use a certain protocol which regulate the rules and the language that speaks to get you from point A to point B to break that down we use DSL service to your house you have a modem that's connected to your computers that modem is connected to our network that network is very similar to the interstate system that connects people, physically connects people and gets people from point A to point B that's our responsibility is when you virtually want to go somewhere you type in an address www.amazon.com and it's our responsibility to get you there so you have that virtual meeting it's similar to AOT's responsibility on the interstate to make sure you have clear access from point A to point B to get you to and I think their previous witness mentioned this is an A to B transaction we as an ISP are in the middle of that to get you to that A to B transaction so ultimately those roads in Vermont if I want to go to Swanson House of Pizza where I'm from, get pizza travel from South Burlington on the road that's my interaction to get from point A to point B similar if I was going on www.amazon.com to Swanson House of Pizza if I wanted to go out of the state very similar to the bridge going in Lebanon to New Hampshire that bridge is a network to network interface in the virtual world we have connectivity to different companies and different carriers to get you because Amazon is in Vermont Amazon's servers and all of their network resides somewhere else so that yes in the cloud so that physical bridge in Lebanon is the AOT's connection to hand you off to the New Hampshire agency of transportation and virtual connection to get you to the rest of the world we have our network that network work is limited within the scope of New Hampshire and Vermont we have connectivity in 24 states but there's an internet gateway that you connect to that connects you to the companies that connect to the rest of the world so that's ultimately that responsibility of whether it's AOT getting you there safely or your internet service provider so and again that's just a very high level kind of analogy on some of that responsibility now there's your computer, your tablet, your cell phone whatever you happen to be using your laptop those are all the devices that you're interfacing with to get to the world like web just as you know if you're going to hopping in your car and you're going to just want to have some pizza ultimately we know that there's a lot of consumer responsibility when you go on any website when you travel anywhere you should know where you're going who you're dealing with and how to protect yourself in those kind of situations so it's heavy on consumer responsibility but it's also still a relationship between one consumer and let's say a business because that's a lot of that even if it's Facebook, Amazon so when you're really talking about that relationship I do go to Swanson Elsa Pizza and I drive there and I get a pizza and they overcharge me that's not a responsibility of the person of the root that you took to get there same thing as if you go to Amazon and they overcharge you for something that's you and Amazon doing commerce basically and anything that happens you guys would deal with it on a point to point basis and that ISP again is that middle person getting you from point to point B now that doesn't mean that there's not a security over there well before I kind of get into security in order to figure out kind of what's secure how you secure it or what you can pass what you have to pass to make the internet work the internet works on transport connection protocol and internet protocol that's how the internet works protocols that are I'm not going to say regulated but you have several different groups of folks who are involved in creating these protocols and making sure when you're looking to go somewhere virtually like Amazon that you have the language correct through your computer then through the routing system and then through your physical connection that is connected to your ISP then we transport that information over small packets so basically you're going to you're shopping then you buy a sweater on Amazon your computer is taking that information and it's putting it into packets those packets go to your internet connection and ride over that internet connection to Amazon where that packet is deconstructed and your data is in there now those packets are very very small so when you're typing and you're ordering something your social security number whatever you want to put on there all of that is separated into different packets and those packets can take completely different ways around the world and then not around the world let's say around the country to be more realistic to get there one packet with some of that data is going to go from router 1, 2, 3, 4 right to Amazon the other one is going to go to 8, 12, 14 right to Amazon and then it's going to go to the network to get to the shortest path that packet includes your IP address your destination and your source IP address because it's based on IP addresses your IP address is like your telephone number that's basically it identifies you you go through domain name servers domain name servers are like the telephone books that says this IP belongs to this domain name that everything talks to each other is with IP addresses so when you're talking about privacy that IP address over the ISP network to the network to network connection through the routers that get to your end location you have your IP address source destination where it came from, where it's going all the routers have routing tables and they just go through a series of okay where are you coming from where are you going ultimately back ultimately to Amazon and ultimately the way the transport protocol works it verifies that you have all the right pieces because like I said all those packets could go in all different directions to ultimately get put back together in the right order you can imagine that doesn't happen all the time so the way that the whole network works is it says hey I didn't get this one you know there's five pieces of info I didn't get number four resend it that connection is working you have a session initiated it resends the information so just wanted to kind of review a little bit of that there's a lot more firewalls when you're talking about ISP security we have a large network now we have a lot of users we want to make sure that that interstate is clear so people can get from point A to point B get there accurately and that we're obviously protecting the information with firewalls and we don't there's things called denial of service attacks people are always trying to get into into your computers you guys have heard of hacking hacking spam malware spyware there's so many software applications out there where people are ultimately trying the viruses trying to get into your computer to try to get information antivirus protection shutting off your modem protection personal security over your computers obviously it's a big deal when you're talking about going on the internet so it's just a little bit about when you're talking internet privacy there's a lot of privacy if I'm going to subscribe to a security service and that security service goes over my internet I have to be confident the person I'm subscribing with the person I'm subscribing that security service with is somebody who's going to protect my data they're the ones who have my credit card information they're the ones who have my name my address and whatever other information that's necessary to order the service and to build the service so that's there's a lot more I have a lot of stuff written here just about how that traffic goes and the security and again those IP addresses are in every packet because that IP address is related to your is related to your location at home when you're talking about residential most of our customers are residential services those customers use dynamic IP addresses which means every time you turn your modem on you get a different IP address there's companies larger companies more corporate want static IPs because static IPs let them use their IP address and their network with the same IP all the time and it just helps them manage their network a lot easier for our purposes when we go on the internet and browse we don't care what our IP address is so it can change every single time so there's no distinguishable identification regarding your IP address because like you said it's dynamic it can change any time one thing just for your purposes it's not a bad idea to shut off your modem or whatever it is every once in a while just to shut things down because if your modem's working and your cell phone is on and your tablet's on there's data going through those all the time if somebody's out there and they're trying to hack into the system if your modem's on and your tablet's on there's still stuff that's going on in the background so it just has a security part of it that's just something that's helpful if you have your antivirus if your equipment is upgraded that's really helpful to protect yourself when you're not online but when you still are online and I know that can be confusing but again there's still data circling all over this equipment even though you're not on there taping www.amazon.com one thing that I thought might be helpful there's internet browsers you have mozilla firefox you have google chrome you have internet explorer you have on apple safari a lot of people use browsers to get to where they want to go your email, maybe your home page whatever it may be when you're on the internet and you go to a certain internet website this kind of gets into that idea that how do people know what your browsing habits are how do people know what you're looking at there's internet cookies and that are so basically an internet cookie is a small file that gets put on your hard drive through your browser when you go to a website that file may, there's no personal information on that file it's basically browsing habits you went to this website you looked at this sweater, you looked at these pair of shoes and then that's what you have on that browser the browser's help those cookies help when you go to amazon again that you could be signed in automatically if you go back to amazon after you shut your computer off and you see things that are still in your cart that's because the cookies said hey by the way I know who this person is and they have some stuff in their cart so there's a lot of stuff when it comes to that again going back to your computer and the security you can disable cookies you can disable third party cookies which is when you go to amazon there might be people advertising on amazon and those people may also put those files on your computer to figure out what you're doing to advertise this is a big business internet advertising of information they don't need to know your personal information they don't need to know who you are but when they're looking at you they know exactly so that data's going back and forth constantly when you're talking about the internet there's a lot of responsibilities to make sure that data flows back and forth again when you're talking about cookies there's no customer data in those cookies it's not your name or address or telephone number this is just what do you do when you're on the internet there's also something interesting that every device you have every device you have here has a MAC address a MAC address is a specific identifier for your devices even if you change your IP address every day on your internet the MAC address is embedded in the packets that you send in that source IP address in your destination IP address so as we're trying to keep that interstate open and trying to keep all that data going through one of the things it's impossible to open every one of those packets and verify where it's going is there any bad intent going back to the interstate kind of equation it would be like having like 40,000 seat troopers on the interstate stopping every vehicle and just searching it and making sure that there's no you know the idea is to keep the data flowing have our firewalls in place our security in place to make sure that data is going back and forth in a standard using the right language and it's working properly so there's a lot to that there's a lot to cookies there's a lot to and again I'm just focusing on just internet security at this point but there's just a lot of data out there when it comes to CP and I customer network proprietary information we use we collect just like every customer if somebody wants to subscribe to our service name address phone number we use it for billing purposes and we share that information for other carriers and through them that gets built for us but the customer proprietary network information that's not your internet you know like I said that's really your browser is kind of figuring out where you're going what you're doing and with the websites and the way that the cookies work that's kind of how people figure out what your internet browsing you know history is basically but on CP and I as an ISP we don't know where you're going you know we're not tracking every packet or information of what you have in that you bought a sweater or you sent your social security number to TurboTax or whatever it happens to be a lot of those websites when you get to the point of putting billing information in it they're using security software they're using security protocols like secure socket layer you'll see a little like lock in the bottom right that says oh hey I'm CP you mean I'm secure you know you're over a secure session between you know with that company and when you put in your credit card number you should have a high sense of comfort that information is going over a secure connection but there's also you know there's also a responsibility I'll just give you one anecdote I get an email from Bank of America the other day and I clicked on there was a link I clicked on it and it brought me to the Bank of America's homepage I have no idea where that email came from but when I click on it it says Bank of America the URL says Bank of America that still it was not Bank of America's website I could have put all my information in there and sent it but it wasn't for Bank of America it was a spam email it's a wonderful and dangerous place all at the same time like I said I know there's been a lot of discussion I just wanted to kind of take it back a little bit and just talk a little bit about the internet and the general browsing and kind of how that works and hope that it will be helpful in the discussions of internet privacy and I just wanted to see if there's anything else that I wanted to put on like I said we don't this information the ISPs it's not we're not in business to share that information to market it to advertise that is a presence of the worldwide web and a lot of folks there's a lot of internet advertising companies that focus on that advertising of your history of your browser history but not something that that the ISPs are taking and selling we still have pages of CP and I requirements regarding security that we don't share our information we don't sell it we don't market it regarding your phone and your information and your browsing tendencies with the internet we're just taking the information you type it in we send it along in a very way we're not behind the cookies we didn't create them they've been around a long time and if you guys are here if you're in a browser you can go to the settings you might have to go to advanced settings and in there is embedded enable or block not a bad idea and you can block cookies if you wanted to if you do block cookies the only thing that happens is if you do go to Amazon you may not see what you have in your shopping cart the last time you went just more and some sites require cookies to be I know I've been instructed to turn them on yes thank you thank you I'm watching the clock and I'm trying to avoid information overload here I think the networks are getting a little clays there you are I'm trying to decide if it's how long are you have you got a presentation are you just here because we asked you to be here are you want to know what we want to know probably more the latter I don't have a presentation just discuss the issues generally I'm happy to come back if you do so committee of thinking we're scheduled to take a break between three and four Maria if we take a 15 minute break will that can that work for you can that work for you so we're we're in overload at this point probably could use just a few minutes to decompress and let everything set in and then so committee be back at three and we'll get this one out I got it what Maria did you know I don't think I'm awkward I guess I don't know you'll see an extra I don't use this it's probably a lot it's probably a lot yeah I actually I don't I don't know here we go Michael yeah you gotta pay more that's why you gotta pay Michael because that way it's it's it's it's it's it's it's rather than just the usual yeah all right true microphone stand up set off emergency back okay Maria okay I'll try Maria Royal legislative council and I did try to distill a lot of complicated information into just some key points but cover pretty broad scope of information so I'll just tell you in advance what's covered in here and we can go at whatever pace you want we don't have to get into the details of a good reference point for you as you hear things so I start by just going over some of the terminology who the key players are in the internet ecosystem I go over the federal and state regulatory landscape a little bit so you're aware of that context talk about some of the key provisions of the overarching federal communications law in 1934 as well as some of the changes that came about in 1996 and then a little bit more detail about net neutrality it's kind of early incarnation and then the different attempts to regulating what's happening there leading up to the most recent border by the FCC and then probably significantly for your purposes what all of this means for the states and what kind of authority if any you have to legislate in the area of net neutrality and then I have one more slide on privacy because I know we've also talked about internet privacy and I don't know where the community would like to go so that's there's like I said a lot here but it might be more of a reference point that you can use as you're considering this issue so I like things in nice thoughts this looks like something I can get at great I'm still working on the things I heard today so we'll just start with the terminology and you're familiar with these terms so I'm not going to read them in detail but just so again we understand who we're talking about broadband internet access service D I A S that is the service that's being regulated or deregulating deregulated by the FCC so when we talk about net neutrality we talk about that internet service and to what extent it's managed the service is offered by the internet service provider the ISPs they can be wired or wireless they provide the connection to the internet it's the transmission line so these are the poles of wires providers these are the wires or wireless this is how you connect to the internet it's the transmission line the data flows right so there's some examples here just against kind of keep it real the providers in Vermont Comcast Charter Verizon AT&T EC Fiber Huznet satellite provider all of those entities are the internet providers in Vermont so then there's reference to what are called edge providers these are the people that provide the content the software, the applications over the internet there should be your streaming services like Netflix or Hulu social network programs like Facebook, web browsers like Google YouTube all of the content providers so you have the transmission line and then you have the entities that are doing business or providing information those are the edge providers something that they're offering on the internet and then of course the end users are the customers people like you and I who use the internet for various purposes and then I included data broker that's sort of beyond the scope of where we're going but just because it's a term that also comes up in the connection particularly with privacy data brokers do not have a connection direct connection with end users personal information and they sell it for marketing purposes so you've heard Chris Curtis and Senator Sorokin talk about the data broker privacy report that was just recently submitted they are also now based on the legislative charge working on a privacy report that's specific to internet service providers so they did the first half and now they're working on privacy related to the bias piece and that's due December 18 or December this year so that pretty much when people talk about the internet ecosystem these are the primary providers that you're referencing so in terms of regulation and the major regulatory entities at the federal level the FCC primarily is the entity that regulates all communications in our state communications it was founded in 1934 under the communications act regulates things radio, television phone industries etc to the center common carriers the FTC the federal trade commission has a much broader scope of regulating business practices it's not limited to you know specific communications entities for example in fact it's specifically not allowed to regulate common carriers that's left to the FCC communications commission but it does have broader authority to regulate business practices particularly unfair competitive, deceptive it's very much like the authority that the attorney general has under the consumer protection act so if you think of it in those terms so if you go to the next page you'll see I put consumer protection act it's kind of the distinction between consumer protection issues on the one hand economic regulations on the other although it's not always a clear distinction but in terms of this entity that regulates communications or telecommunication services as you all know public utility commission I don't think we have to go over some of the references and their use at this point so as I mentioned the overarching federal law that's kind of controlling what's happening right now to the great extent is the communications act of 1934 yes I have a quick question about the Sherman act and monopolistic practices so is that would that be suppose our attorney general were going to act against the internet the provider service in this state for monopolistic practices I'm thinking of Montbell years ago would that have conceptually could that have started at a state level or does it have to be a federal I think my understanding is it could start at a state level but this would provide a state remedy for alleged antitrust issues if it's a big enough company it might be removed by the federal courts but that's complimentary authority at the state level we can enforce the same basic evidences that the SEC can there may be other jurisdictional issues but the authority is there so just briefly about the communications act of 1934 because there really has been a big shift in the policy and I think it's important to understand where this all started the regulation of communications so this law created the FCC and charged it with overseeing and regulating interstate communications at the time there was a very kind of monopolistic sanctioned monopolistic approach to telecommunications you had the local phone companies like you still have today although it's being deregulated you have the phone companies they have a service territory they're the monopoly provider but the states can regulate the prices to ensure that they reflect a competitive price and the services so that was pretty much the market back then when the original law was enacted at the congressional level and significantly most of the communications at the time were interstate so states actually had a much more a greater interest and investment in regulating the local markets local phone service yeah could be state regulated interstate an interstate interstate defense that was the long distance and that stayed the same that has not changed trying to make a distinction between what is interstate and what is interstate has become much more complicated with the different technologies but we'll talk about that a little bit so one more thing this is very basic on the next page about the communications references to the various titles the original act was divided into titles so you'll hear about title one when we talk about information services should be regulated under title one which is more there isn't as much authority for the FCC over information services under title one it reflects more of a light touch what's called the light touch regulatory approach as opposed to when you see references to title two they're talking about the FCC's common carrier regulations much more utility style regulations over the phone companies basically and then of course the other titles which are also relevant here title six pertains to the cable companies title three to the radio which includes the cellular companies so that's just a shot of why the references to those titles and what they mean so then significantly and obviously there's a lot in between but in terms of the major first overhaul of federal law and policy came about in 1996 with the telecommunications act at that time and that was the act that amended the communications act and really did it in a way to promote competition and begin the process of deregulating the industry not just the phone industry but also at that time we now had these advanced telecommunication services or enhanced services which then became known as information services which is what we're talking about today internet access is it an information service which congress specifically at this time thought should be left to flourish and grow in a competitive market and not have any regulation or is it a telecommunication service where there's still some utility style regulation so this was kind of the beginning of the deregulation and of the convergence of communications with computer computerized technology and that's you'll see as the two converge the regulatory authority gets a little bit more complicated so I kind of already talked about it on the next page that I'm going to the difference between the two classifications the major classifications under the federal law the title one and the title two and again it's significant because how you classify a service will trigger the scope of regulatory authority that the FCC and the states have over that service and I just put down here a quote from 2014 is the advent of the internet the commission has confronted the questions of whether and how it should regulate this communications network it has been an ongoing highly contentious debate I'll just leave it at that and you'll see where to get a sense of that from where we are now Is there any in or out depending on how you define a service within the FCC that I could cover you I'm not sure Well the whole decision to move that now by the new commission to say they're covered by the FTC is there any remaining jurisdiction? That's an excellent question and I think not everyone agrees on what has the FCC actually retained if the jurisdiction is pretty much going to the FTC what is their scope of their authority and I'm not sure if that's clear yet in the order they talk about retaining the authority to remove barriers to market entry so if there are internet providers that want to enter the market and if there are state barriers potentially they have the authority to preempt those state measures but it's kind of unchartered territory so I so in terms of the shifts in policy I think it's helpful to just think in terms of what the major factors are that influence the decisions that are being made one obviously the market with all of the growth in telecommunications we've seen several things we've seen consolidation a lot of mergers and acquisitions companies buying up infrastructure and that becomes relevant because that may impact the consumers ability to have choices in different providers so there may have been many providers in a region but as companies grow by smaller companies just in terms of the infrastructure your options become limited as a consumer and then also in the sense of vertical integration where access internet providers are buying or being bought by content providers so now they're not only giving me the access but they want to sell you a streaming service or a news service that's creating some of the conflict of interest some people are concerned about that that's a little too much control that their companies might be gatekeepers and might influence the traffic and where you go that's open for debate companies say no they're not going to do that that's bad for their bottom line but that's the for example that would be Comcast's acquisition of NBC and I yeah I can't really talk about what the practices are and what they've done absolutely but that's actually already the concern is there you own one news service and there's three others you might be tempted if you have to make a network slow down to allow things to go through to favor one over the other and there's certainly I might want to put up a road block on that interstate to the exit to Swanton if I wanted you to go to the under hill pizzeria I think that's the concern for the people if you did that you'd be really lost I know I would right? and my daughter is being really mad because I'm sure she goes to the Swanton pizzeria can't get there from there can't get there who loves a laundry all pizzerias so those are some of the market factors and then obviously the technology evolving rapidly in terms of its capabilities and its functions which is related to the best factor of the usage what we use it for not just checking the weather obviously it's become integrated into our lives which is why people are concerned obviously about having access to the service so then more specifically net neutrality what is net neutrality this is kind of the simplest most basic statement that I found net neutrality is the principle that the company that connects you to the internet does not get to control what you do on the internet and in terms of the practices that the FCC and now states have thought about to ensure that there is no management of your use things like blocking and the FCC's open internet or these are all things that were in the original and the second open internet order no blocking you can't block websites or applications, software that an end user wants to access no throttling throttling what we talked about is slowing down the utility service prioritization the fax lanes, the slow lanes charging edge providers more to get their information to the consumers and then there's kind of a general, it's been called a general standard of internet conduct there should be no unreasonable interference with or just, I don't think disadvantageing is a word but it was in a hurry so that end users or edge providers use of the internet and then also disclosure requirements these standards are set by so these standards are standards of the FCC in its open internet order that's now being repealed set that's kind of important and they're all subject to you heard Mr. Starrow talking about reasonable management practices so there's always going to be some you know managing the traffic, the question is is it being done for an anti competitive business purpose or is it a legitimate network management so that's kind of going to be the tension there so in terms of the history of net neutrality these again are just some highlights somebody no means an expert but I do think it helps in terms of understanding the context there is much longer history than I realized basically going back all the way to the 1970s when you had were what were then called enhanced services on the network electronic data processing services that were used over the phone lines so that could be things like voice mail services and even in these early stages of the development of those services the FCC had what was basically the precursor to net neutrality which was open access the phone company that owns the phone line cannot keep enhanced services off of their line to they can't discriminate so if they offer their own services they also have to allow competitors that want to offer services over the phone lines so I think I pretty much summarized that the world wide web vented in 1989 in the early 90s was when commercial internet was launched so significantly in terms of regulation this is what's known as the dial up error because this is the way of accessing the internet was through a dial up service so you used your one through your local phone company you made a local call to a local server that could have been owned by AOL or whomever that then connected you to a computer which connected you to the internet so at this time when people talk about the information service the dial up service was not regulated that's somewhat true but not really because the common carriers that owned the phone line were regulated have been regulated as common carriers does that make sense okay so I think that's significant because if you for example were in Vermont and you didn't have a phone line and you didn't want to have a phone line but you learned about this new dial up service and you wanted internet you could call your phone company it's the same line the DSL line and ask them to bring service to your house and because they're the carrier of last resort common carriers they have obligations to bring service to your house you could technically have them bring you internet service in that manner so that was then but then of course this all changes with broadband when you have the bundling of your internet your broadband and your phone into one service and they're all the same yeah so then you're not reliant on the phone company or the phone company's regulation doesn't really apply because now you're talking about other providers whether it's cable or other fiber companies or the cellular companies now so the dial up merit of broadband error then you heard I can't remember his name a gentleman who spoke earlier about the kind of the earliest incarnation of net neutrality was in 2005 the internet policy statement was kind of one of the initial attempts to clearly specify what practices should or should not happen in terms of traffic on the internet there were four guiding principles in that internet policy statement consumers have the right to access and use the lawful content applications and devices that's three of their choice online and do so in an internet ecosystem defined by competitive markets so there was still this push towards competition and growing but at the same time trying to ensure that there are some protections of those who use or want to use the service for their own information order sell products over the internet as was also mentioned when the FCC tried to enforce this against Comcast the courts struck down their authority they tried to use what's called their ancillary authority because internet access was considered an information service they didn't you don't have enough regulatory authority to make this kind of a requirement on the providers so that was significant because it started the whole process of well what kind of authority the FCC need to regulate internet traffic so that's when you had the second attempt by the FCC which was in 2010 the first open internet order at that time they tried not to rely on their ancillary authority but there's a specific provision in federal law section 707 which is to argue whether it's a grant of authority or not the current FCC absolutely says it's not a grant of regulatory authority the courts have disagreed with that in any event it wasn't sufficient because and you heard about this earlier the courts said what you're trying to do FCC with these net neutrality rules is basically akin to common carriage requirements and you can't impose common carriage utility style requirements on an information service by definition it's not permitted to do that under the federal law which is why the first order was predominantly struck down there were some surviving provisions and that's why the FCC came back reclassified broadband as a telecommunication service that used all of its authority under Title II to the extent it wanted to it doesn't have to impose all of the requirements price regulation whatever but it could choose but certainly it gave it much greater teeth so you can see now where this is going and that that order was upheld by the DC team there was an appeal to hear the case en banc with the whole panel of circuit court justices that was denied and then just recently I believe ATT and others are appealing that decision to the U.S. Supreme Court and we don't know if they're going to accept jurisdiction but that's going on now that original 2015 order is pending and that 2015 order I tell communication services what resulted in having to move to the FTC no we're not even there yet that's what's a little bit even more complicated so that's when they reclassified broadband from an information service to a telecom service asserted jurisdiction to impose net neutrality provisions upheld by the court just recently appealed to the Supreme Court but in the meantime change of administration and then you have oh it is on the final stage the most recent order the restoring internet freedom order which is now reclassifying broadband as an information service okay so there's still a court case out there to decide whether under as a telecom service the original order but irrespective of that there's now an effort to repeal that order because it's no longer a telecom service it's an information service in which case there's no authority whatsoever for the 2015 order and that order is issued under the new administration so does that make the Supreme Court case move? Not necessarily because I'm guessing the concern is this 2017 order is going to be challenged did the FCC have authority to reclassify you probably read like I have some of the concerns legally was it an arbitrary and capricious decision based on the record for making the reclassification who knows if the court were to strike the 2017 order we would revert to the 2015 so I'm guessing that ATT and others don't want to they have a limited period of time in which to appeal a decision they can't really wait to see what happens so they've appealed it the court has not accepted jurisdiction no not yet and it is possible if the 2000 I mean I'm not that familiar with the litigation process but if the 2017 order is litigated as well it's conceivable that they could consolidate the two and make a decision when does the 2017 order directly go to effect right so I'm not certain there are a couple of requirements there's not an effective date in the act so technically it's immediate but there are administrative requirements it needs to be published in the Federal Register which it may have been I'm not sure it needs to be reviewed by the Office of Budget Management I'm not sure if I'm getting that right it's more administrative but it needs to happen and it's not really clear when that's going to happen it couldn't happen in a month it could be several months those are things that were decided internally 2017 order has been challenged are we part of the challenge you're saying a lot yes so the attorney generals in several states are challenging the order I don't know if it's actually right for trial now I think the petition has been filed but I'm not sure if it was they wanted to make sure they got it in on time whether it was technically right for trial I don't know I'll try to find out more details so in that petition the attorney generals are challenging the FCC's 2017 order primarily under the Administrative Procedures Act citing irregularities in process you know that there were fraudulent comments posted from people who didn't actually comment when they were going through the medicine comment period at one point the system was shut down under a cyber attack and people couldn't access it but then there's concern about what else happened with the comments also under the APA you can assert an argument that the agency's decision was arbitrary and capricious not supported by the record which is what they filed in that comment process you know and this can be argued both ways legally but so those are pretty much the grounds I believe of the the AG mostly it's procedural but it also does get to the substance as well to some extent and then in terms of the preemption I think there might be a procedural challenge I'm getting a little bit ahead of myself but to the preemption provision as well procedurally because that was not in the original notice of proposed rules so people didn't comment on it there's concern that that's in violation of the federal APA it was put in at the very end of the process and that that's insufficient opportunity for people to comment on the preemption issue so there is a chance that it will be challenged on those grounds and then of course if then otherwise it would be a matter of states enacting legislation that's then challenged and litigated through that avenue so good exciting there is quite a I do so I don't need to go too much into detail because we already covered some of this you know what's in that the FCC restoring internet freedom order again they reclassified broadband as an information service they did preserve the transparency rule to a great extent which is the disclosure requirement that was in the original 2010 order I talked about earlier that they reaffirm that they have authority to remove any barriers to market entry providers that want to get into the broadband market and then they pretty much have said the FTC the Federal Trade Commission is the new the enforcement agency with respect to unfair anti competitive deceptive business practices so that's that's where you get into some confusion Senator Sorokin was raising earlier so what does that actually mean and if the FTC it's now within their jurisdiction that goes to the heart of the preemption argument because on the one hand the communications commission is saying states you cannot enact any net neutrality laws but if they don't have jurisdiction anymore is it really do they have jurisdiction to tell the states they cannot clearly Congress can preempt state laws but it's not clear at all at the regulatory level whether the FTC have the authority to preempt state laws does the 1996 telecommunications act say anything about preemption or speak to that issue? it does in different context there is one on terms of preemption states are not allowed to impose barriers to market entry so what kind of gets to the FCC can remove barriers the states are prohibited from imposing conditions that might impede a company's entry into a market I think that's the one in other in other situations for example with privacy when the communications commission took over regulation of the internet as a telecom service they were privacy aspects was no longer controlled by the trade commission that's when they did the privacy rules right so under those rules though they made statements such as we're not preempting state authority states can act more protected legislation as long as it's consistent with the federal rules so I mentioned that only as an example for the most part the preemption is if it's inconsistent with the federal policy otherwise states do have some authority in some areas there's so much there that covers so many different aspects that I'd have to look at each one individually but those are kind of the big issues so how are you how do you feel that you would play again I'm going to there isn't that much I'll go pretty quickly you're hitting on all of the big issues and you can see this is a very unsettled area of law to say the least a lot of questions right at the same time we're re-regulating the service is becoming more essential so do we regulate it or do we just let the market take care of any potential problems that's for people smarter than I and more invested as stakeholders to debate so the only other thing and these were even referenced so I don't even think we need to go through them in terms of what various state proposals might be and they're all susceptible to a preemption challenge more or less and they're kind of written here with most susceptible to least susceptible at order let me ask a question if I can and that's just regarding jurisdiction and the whole issue of interstate commerce as to what we could classify as an ISP or provider that's a Vermont provider and I saw some of the provisions that you have listed here and one of the companies that you mentioned for example is HughesNet now HughesNet is a satellite provider minus Danny is they don't have anything here in Vermont they're a national provider and so my question is would they be roped into a Vermont law that provides for net neutrality particularly if the same satellite signal that they're sending is going to people in multiple states they don't have any jurisdiction here other than to send perhaps a bill to a Vermont consumer and that Vermont consumer could be in Florida at the time they make the transaction you know I think this is probably the trickiest jurisdictional issue not just with satellite but with broadband in general and I think if the state didn't have regulatory authority it would be because they are providing service to a Vermont or lots of businesses are not located in Vermont where they sell their services in the stream of commerce that end up in Vermont and the Vermont legislature says we require our products to meet these standards and sometimes they have to divide even if the product is not made here it's not manufactured or grown but it's in the stream of commerce it ends up in Vermont the issue is you know is it shipped here with a physical product is perhaps relatively easy to define but with a product that's a virtual product that you don't really know whether it's been delivered in Vermont or not well they're sending you a bill but you still may you for example the Vermont who spends his or her winter in Florida is getting a product in Florida all they're getting in Vermont is a bill true but they wouldn't be using the Vermont service anymore they'd be using a different service in Florida well if it was with HughesNet they'd be using the same service wouldn't they but they advertise themselves as a national single point of service and I'll just mention that because although there's one of those now the future of broadband is probably through wireless providers that are not geographically fixed but they can still throttle it have fast lanes, slow lanes they can do all those things that interfere with access I'm not saying whether that's good or bad I'm just saying that you know do we have a jurisdiction problem in terms of the kind of laws that we're talking about imposing here that's question one and the other question I have I know in the limited amount of time is requested in your presentation thus far that there is a significant potential for litigation regardless of what we do or at least if we in effect did something in terms of enacting the state law and I would like to explore just a little bit as to what our exposure is and how much that's going to cost us potentially I wouldn't be able to answer that the Attorney General's office could speak more to that issue I will just say one thing on your point because the jurisdictional issue you're right it is huge which gives me a little bit of pause to say well wait there might actually be more of a hook there was a case that had to do with voice over internet voice service right and for the reasons you just said I think this was in Minnesota the court held that the Public Utility Commission in Minnesota did not have jurisdiction over the voice service because people don't know where the call was beginning where it was ending this was all done over broadband so in one sense that could be the end of the conversation and maybe cause the issue however in the opinion the court said we recognize that our decision is temporal in nature because companies all companies are developing the capacity for geolocation and for phone services whether it's VoIP or the internet or any other service in fact the degree which I'm not totally up to speed on is required to be able to have some location accuracy for 911 purposes so I'm not an engineer I have no idea how complicated it is but presumably to some extent maybe not enough jurisdiction there's some capacity to know where calls are actually coming from at all times at the same time there's also a movement to give consumers the power to limit what ISPs and others can know about them and their activities in order to protect their privacy yep okay I'm trying to figure I know we asked you to fill a statement that would do probably the least nothing like the house there's been a couple of gubernatorial actions just to put us on and I didn't know if we wanted to do that or Clay do you have anything to add to the discussion at this point anything we're not hearing we should hear or anything I incorrectly stated no I think Marine did a very good job assisting with stating the law I think from our position we're very much in favor of that neutrality as principals we would encourage you to exercise caution and take time to think about these issues the law is as Maria pointed out very unsettled at this point there are challenges to the restoring internet freedom order their their Congress may act Congress really should act you just said the word Congress act we have state laws coming out our bills and state houses all across the country and there is this open issue of preemption and to what extent actions or what direction this body chooses to go in whether that's preempted and how that would play out so that's more or less what I was going to speak to I'd love to come back and talk more with you about this issue but those are our general thoughts at this point I know some people are very interested in making this statement or maybe the most conservative statement we can about what Vermont will do and I think that's what you drafted so I looked it over there so I drafted something a model now for what is Montana and New York I've done so far which is basically making that neutrality it's a condition of obtaining state contracts for internet service government contracts I think it's within our jurisdiction to say who we will Vermont contractor pretty much I think that there is a law-standing tradition that when the state is acting like a consumer just like other consumers in the market it can make similar choices and decide what kind of service in front of them and so that's what this proposal attempts to do in law just briefly I can tell you it allows or asks the secretary of administration to develop a process where internet providers can certify that they're in compliance with net neutrality standards that's subsection A subsection B are the actual standards that need to be met and they reflect all the kind of principles and standards we talked earlier, no blocking, no throttling no pay prioritization no no interfering unreasonably and disclosure requirements and that pretty much takes us all the way to page 3 the secretary can waive their prohibition on pay prioritization I can't come up with examples but there's been some that there may be legitimate reasons for allowing pay prioritization and if it's in the public interest the secretary could waive that requirement and then the last section would first responders be an example uh that's paid I don't know if it's paid either I think that they don't need to pay for that service and then D is just the definitions they're all similar to ones that we've discussed and so that sets out the process and the standards section 2 on page 4 is basically a requirement that that condition of the combined net neutrality is part of the bulletin 3.5 is their procurement contract section 3 pertains to the agency of digital services and the executive branch with any of their contracts section 4 any contracts for the legislative branch same requirement and then finally page 6 section 5 these would be for any internet contracts within the judicial branch and I will say that there's the judicial branch doesn't always like being told what to do and they have a legitimate point in terms of separation of powers but sometimes it's an issue, sometimes it's not an issue depends what the but I just wanted to flag that that's true alright committee that's it


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