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Jul 25, 2019

Emerging Technologies Washington Update

This Week: Greg Guice speaks on Data Privacy and Antitrust Panel, DOJ announces review of dominant technology companies, OSTP Director briefs House Appropriators on White House technology policy, Energy and Commerce Committee discusses proposed legislation to make cars safer, Senate Committees hold hearings on cannabis banking, hemp legalization as Nadler, Harris introduce bicameral legislation to decriminalize marijuana, bipartisan group of Senators reintroduces AIRWAVES Act.

Week in Review

On Monday evening, the White House and congressional leaders announced a two-year budget deal that also suspends the debt limit until July 31, 2021. The Bipartisan Budget Agreement Act increases FY20 non-defense spending by $24.5 billion to $621.5 billion with an extra $2.5 billion adjustment for the census. It also increases FY20 defense spending by $19.5 billion to $666.5 billion with $8 billion in non-defense spending and $71.5 billion in defense spending set aside in the Overseas Contingency Operations (OCO) account. For FY21, non-defense spending would increase to $626.5 billion and defense spending to $671.5 billion. The House is scheduled to pass the bill later today, with the Senate to follow suit next week.

The Senate continued to process nominations this week, including voting 90-8 on Tuesday to confirm Mark Esper as Secretary of Defense and 52-40 on Wednesday to confirm Steve Dickson as Administrator of the Federal Aviation Administration (FAA). The Senate also voted 97-2 on Tuesday to reauthorize the 9/11 Victims Compensation Fund, sending it to the President for his signature.

The Senate Judiciary Antitrust Subcommittee cancelled a Tuesday oversight hearing during which the panel was scheduled to hear from Federal Trade Commission (FTC) Chairman Joe Simons and Assistant Attorney General Makan Delrahim. It has been rescheduled for September 17. On Wednesday, the Senate Commerce Committee advanced a slew of bills, including S. 893, the Secure 5G and Beyond Act, S. 1625, the United States 5G Leadership Act, and S. 1822, the Broadband Deployment Accuracy and Technological Availability (DATA) Act. The panel also heard from several executive branch nominees, including Michael Kratsios, the President’s nominee for US Chief Technology Officer and Associate Director of the Office of Science and Technology Policy.

Last Thursday night, Senator Duckworth (D-IL) signed on as the first Democrat to cosponsor S. 1116, Senator Blackburn’s (R-TN) Balancing the Rights of Web Surfers Equally and Responsibly (BROWSER) Act. At the same time, Ranking Member Feinstein (D-CA) confirmed that she will co-chair the new Senate Judiciary tech task force with Blackburn.

While much of the focus in the House this week was on Robert Mueller’s testimony before the Judiciary and Intelligence Committees, the House also passed H.R. 397, the Rehabilitation for Multiemployer Pensions Act, and H.R. 3239, the Humanitarian Standards for Individuals in Customs and Border Protection Custody Act. Lawmakers also passed a number of bills under suspension of the rules, including H.R. 3409, a two-year Coast Guard reauthorization and H.R. 3375, the Stopping Bad Robocalls Act. The Senate recently passed its own legislation aimed at curbing abusive robocalls, the TRACED Act, and lawmakers will now look to reconcile the differences between the two bills.

On Wednesday, Rep. Bobby Rush (D-IL) introduced H.R. 3900, the House companion to a bill Senators Josh Hawley (R-MO) and Ed Markey (D-MA) introduced earlier this year to update the Children’s Online Privacy Protection Act (COPPA). The FTC also recently announced that it will hold a workshop in October to discuss whether or not technological advances and new business practices warrant updates to its COPPA Rule.

Today, the House Energy and Commerce Committee held a members’ day hearing during which lawmakers testified on issues of particular importance to them and their districts. Rep. Ed Case (D-HI) requested that the Committee formally review Section 230 of the Communications Decency Act, specifically as it pertains to short-term rental marketplaces.

Last Thursday evening, President Trump announced his intention to nominate Eugene Scalia to be next the Secretary of Labor. Secretary Alex Acosta resigned effective last Friday. On Monday, Trump hosted Pakistan Prime Minister Imran Khan at the White House and announced that he will host Australian Prime Minister Morrison for a state visit on September 20. He also hosted CEOs from a number of technology companies to discuss trade negotiations with China.

The Federal Aviation Administration (FAA) formally announced this week that it is extending to August 19 the deadline for comments on its notice of proposed rulemaking to update the commercial space launch licensing process. The deadline had previously been extended from April 15 to June 14.

Looking Ahead

The House begins its summer recess next week, with the Senate set to be in session one more week before lawmakers return home. Both chambers are scheduled to return to Washington the second week of September.

Next week, the Senate will vote on the budget deal and to confirm the President’s nominees for Deputy Secretary of Defense and Ambassador to the United Nations, as well as a package of district court nominees.

With a two-year budget deal expected to soon be in place, Senate Appropriations Committee Chairman Richard Shelby (R-AL) said this week that he will set spending levels for the 12 FY20 appropriations bills during the August recess so that subcommittees can start marking up legislation when lawmakers return to Washington. Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) will also move to bring S. 1895, the Lower Health Care Costs Act, to the floor.

Greg Guice Speaks on Data Privacy and Antitrust Panel

Today, MWC senior vice president Greg Guice participated in a FiscalNote panel at the American Bar Association on data privacy and antitrust during a National Advocacy Day lunch and learn discussion around the current state of public policy for the tech industry and how influential the 2020 election cycle will be in its evolution.

DOJ Announces Review of Dominant Technology Companies

On Tuesday, the Department of Justice (DOJ) announced the Antitrust Division will review the business practices of dominant online platforms to determine how these entities maintain market power and whether anticompetitive tactics are involved. In a press release, DOJ noted that regulators will incorporate into their review concerns that consumers, businesses, and other industry stakeholders have expressed regarding social media, search, and retail sites. “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Assistant Attorney General for Antitrust Makan Delrahim stated. DOJ pledged to respond appropriately if regulators discover legal misconduct.

The DOJ announcement comes in the wake of several investigations into specific technology companies, one of which concluded yesterday. The Federal Trade Commission announced on Wednesday that it reached a settlement with Facebook, Inc. whereby the company will pay a record-breaking $5 billion fine for failing to manage consumers’ online privacy in relation to the Cambridge Analytica case. The Commission also imposed mandatory requirements on the company in an effort to enhance user privacy and ensure responsible corporate conduct. The same day, the Securities and Exchange Commission also imposed a $100 million fine on Facebook related to the Cambridge Analytica case.

In response to the investigations and settlement agreements, several lawmakers on Capitol Hill reiterated the need to enact federal data privacy legislation to promote broader industry reforms. Senate Commerce Committee Chairman Wicker (R-MS) stated on Wednesday that “without a robust, comprehensive federal privacy law covering data collectors and consumers, bad actors will be able to continue to abuse data in the online marketplace.” Although the August recess looms ahead, we can expect policymakers to continue to prioritize scrutinizing the technology industry when they return in September.

OSTP Director Briefs House Appropriators on White House Technology Policy

Dr. Kelvin Droegemeier, Director of the White House Office of Science and Technology Policy (OSTP), testified on Wednesday before the House Appropriations Subcommittee on Commerce, Science, and Justice (CJS). Subcommittee members questioned Dr. Droegemeier on a range of topics, including the Administration’s support for 5G deployment, artificial intelligence (AI) research and development, commercial satellite integration, and investments in STEM education.

Throughout his testimony, the OSTP Director underscored the importance of investing in STEM research, as well as expanding the STEM workforce to include minorities and Americans from all educational backgrounds. Rep. Brenda Lawrence (D-MI) later raised concerns about developing ethical standards for artificial intelligence. Dr. Droegemeier assured lawmakers that there is significant research going into developing ethical AI to mitigate potential bias that may otherwise negatively impact vulnerable communities.

In response to a line of questioning from Subcommittee Ranking Member Robert Aderholt (R-AL) regarding reported infighting between the Department of Commerce and the Federal Communication Commission (FCC) over the use of spectrum in the 24 GHz band for 5G deployment, Dr. Droegemeier explained that OSTP is working closely with the two agencies to reach a compromise in the near-term. Commerce Department officials have raised concerns in recent weeks with potential interference from 5G systems operating in the 24 GHz band with National Oceanic and Atmospheric Administration (NOAA) weather prediction and forecasting satellites.

Energy and Commerce Committee Discusses Proposed Legislation to Make Cars Safer

The House Energy and Commerce Subcommittee on Consumer Protection and Commerce met Wednesday for a legislative hearing to discuss a number of proposed bills to make cars safer. The discussion focused on three key issues: accidental carbon monoxide inhalation deaths due to keyless cars, accidental heat stroke deaths in hot cars, and impaired driving. Clear, bipartisan goals of reducing the number of vehicle-related fatalities and keeping up with rapidly evolving technologies emerged.

The legislation discussed was H.R. 3593, the Hot Cars Act of 2019, H.R. 3145, the Protecting Americans from the Risks of Keyless Ignition Technology (PARK IT) Act, as well as two impaired driving bills. All of the bills on the agenda received strong support from Committee members and witnesses.

There was also discussion around autonomous vehicles. Rep. Bob Latta (R-OH) suggested automatic vehicles or self-driving cars as a solution to impaired driving. Responsibility.org Director Dr. Benjamin Nordstrom agreed that self-driving cars will have a dramatic impact on accidents caused by impaired driving, but stated that this development will come in the future. Rep. Jerry McNerney (D-CA) expressed concerns around the cybersecurity implications of autonomous vehicles, citing a 2015 case in which a vehicle was hacked and taken over. He asked what should be done to prevent vehicle hacking and to protect roadway users. Cathy Chase, President, Advocates for Highway and Auto Safety, responded that proactive Congressional action would be beneficial.

Senate Committees Hold Hearings on Cannabis Banking, Hemp Legalization as Nadler, Harris Introduce Bicameral Legislation to Decriminalize Marijuana

On Tuesday, the Senate Banking, Housing, and Urban Development Committee held a hearing on “Challenges for Cannabis and Banking: Outside Perspectives.” Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR), the lead sponsors of S. 1200, the Secure And Fair Enforcement (SAFE) Banking Act, were among those who testified. Gardner and Merkley argued that their legislation will resolve the current conflict between state and federal law that is indisputably causing a public safety problem as the cash-only industry is susceptible to violent robberies, money laundering, and tax evasion. The second panel of private sector witnesses, including representatives of the banking industry, largely agreed and several Committee members, including Senators Cortez Masto (D-NV) and Warner (D-VA), voiced support for the legislation. Other issues raised during the hearing included 2014 FinCEN guidelines, marijuana abuse, and Section 280E reform.

Coinciding with the hearing, Senator Bob Menendez (D-NJ), a senior member of the Committee, introduced a bill Monday to create a safe harbor for insurers engaging in the business of insurance in connection with a cannabis-related business. House Judiciary Committee Chairman Jerrold Nadler (D-NY) and Democratic presidential candidate Senator Kamala Harris (D-CA) also introduced comprehensive marijuana reform legislation on Tuesday. The Marijuana Opportunity Reinvestment and Expungement Act would decriminalize marijuana at the federal level, require federal courts to expunge prior convictions, and authorizes a 5% sales tax on marijuana and marijuana products to create an Opportunity Trust Fund that will fund three grant programs, among other provisions.

This morning, the Senate Agriculture Committee convened a hearing on “Hemp Production and the 2018 Farm Bill,” legislation that directed the US Department of Agriculture (USDA) to issue regulations and guidance to implement a program for the commercial production of hemp in the United States equitable to other agricultural commodities. Previously, federal law did not differentiate hemp, which cannot contain more than 0.3 percent of THC, from other cannabis plants that are illegal under federal law.

Bipartisan Group of Senators Reintroduces AIRWAVES Act

To help ensure that the pipeline for available spectrum is sufficient for the United States to compete in the 5G race, Senators Cory Gardner (R-CO), Maggie Hassan (D-NH), Marco Rubio (R-FL.), Catherine Cortez Masto (D-NV), Shelley Moore Capito (R-WV), and Tammy Baldwin (D-WI.) reintroduced the Advancing Innovation and Reinvigorating Widespread Access to Viable Electromagnetic Spectrum (AIRWAVES) Act. The bill would provide licensed and unlicensed spectrum opportunities across a range of spectrum bands. Additionally, it would divert ten percent of proceeds from auctions conducted pursuant to the legislation to the deployment of wireless broadband infrastructure in unserved and underserved areas throughout rural communities.

A House companion has not yet been reintroduced; former Rep. Leonard Lance (R-NJ) spearheaded the bill in the last Congress with 54 bipartisan cosponsors.


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