The State of Vermont realized that Verizon and AT&T may be violating state consumer protection laws by handing over massive amounts of data to the federal government. Now their investigation into the privacy violations is being held up
by a lawsuit filed by the federal government accusing the state of overstepping its bounds.
The information that Verizon and AT&T made consumer records available to the federal government was reported widely upon earlier this year. In response to inquiries, the phone companies have made bland and ambiguous statements like this one released by AT&T for this story: "AT&T is fully committed to protecting our customers' privacy and we do not comment on matters of national security."
The federal lawsuit claims that Vermont's requesting information into what happened to the phone records of Vermont residents may be a threat to foreign intelligence gathering. The fact that Vermont is no longer considered to be "domestic" doubtless came as shocking news to the state's residents.
Ultimately, this battle will be fought out in state court, determining to a large extent how much power states have to protect the rights of their residents.