Congressional Outlook

For April and May, the Senate will focus on Presidential nominations. Votes to reverse the FCC’s December repeal of the Net Neutrality order and potential budgetary rescission items also look likely.

Facebook CEO Mark Zuckerberg also came before congressional committees for the first time to answer questions on the privacy of Facebook’s users regarding recent data breaches.

Privacy/Data Breach/Encryption

Concerns about the complexity of Terms of Service, the tracking of users, management of data, and lack of notifications around breaches were all expressed during Zuckerberg’s Senate hearing. The tone of the questions asked by Republicans and Democrats reflected a shift in the perception of the technology industry and indicated openness to regulation on these issues. Legislation later raised:

• Honesty in Ads Act (Klobuchar (D-MN))
• Consent Act (Blumenthal (D-CT), Markey (D-MA))
• My DATA Act (Blumenthal)
• 72-hour notification to users when personal data misused (Klobuchar)
• Potential legislation on making data a privacy right or require affirmative opt-in before user data shared. (Young (R-IN))

A renewed congressional effort on encryption legislation may be underway led by the Justice Department and Senate Judiciary Chairman Grassley (R-IA) and Ranking Member Senator Feinstein (D-CA) staff. Feinstein has advocated for encryption backdoors for law enforcement in the past. The i2Coalition strongly opposes legislation creating encryption backdoors.

Intermediary Liability

In March, after much back-and-forth over its language, the House and Senate passed the anti-sex-trafficking bill, SESTA/FOSTA (H.R. 1865 (115)). FOSTA was significantly improved during House Judiciary Committee consideration. However, in a procedural move, the bill was combined with its substantially different Senate counterpart, SESTA, to create a bill that was different than the bill considered by the House Judiciary committee. The President signed the combined bill into law. The legislation amended Section 230 of the Communications Decency Act to hold websites accountable for knowingly facilitating sex trafficking. While we took no position on this bill, we believe that it represents a troubling erosion of Section 230. Our statement on this matter is here. We plan to work with victims rights organizations to help them reach their goal of minimal impact on Section 230 of the Communications Decency Act.

Net Neutrality

At least six states have introduced Net Neutrality legislation. In Washington state, the Democratic governor recently signed net neutrality rules into law. The Governors of other states, including HI, NJ, NY, MT, and VT, have signed executive orders related to net neutrality issues.

Meanwhile, lawsuits have been filed in the DC and 9th circuit courts by opponents of the FCC’s December rollback of the Open Internet Order. On March 8th, the US Judicial Panel on Multidistrict Litigation randomly selected California’s 9th Circuit Court of Appeals to hear the litigation. Consideration in the 9th Circuit could boost the odds of a successful challenge, although the Supreme Court may have the last word on this fight.

Senator Markey (D-MA) announced earlier this year that he is close to having the 51 votes needed to roll back the FCC’s recent decision to repeal the Open Internet Order. In January, Democrats announced they had secured the required 30 signatures to trigger the Congressional Review Act, a procedure that allows floor consideration of recently issued federal agency rules. The CRA only requires a simple majority to repeal a federal rule. A vote on this could be scheduled this spring. The i2Coalition supports legislation triggering the Congressional Review Act.

There are at least three bills working outside of the CRA tackling net neutrality issues:

• Senate Commerce Chairman Thune (R-SD), Ranking Member Nelson (D-FL) and Senator Schatz (D-HI) are working on a bill that codifies open internet principles. Thune says he is hopeful that after the CRA, more Democrats will come to the table for a legislative solution.
• In early March Senator John Kennedy (R-LA) introduced the Open Internet Preservation Act (S.2510) to the Senate while Representative Marsha Blackburn (R-TN), introduced the Act’s House counterpart (H.R. 4682). Kennedy’s office says stops internet service providers from blocking or slowing down content. It does leave the door open for charging for faster speeds (prioritization). Democrats oppose the bill. Some Internet companies have raised concerns. In the past, we have opposed a number of provisions, such as a prohibition on state net neutrality laws, that are present in the bill.
• The Democratic bill, H.R.4585, Save Net Neutrality Act of 2017, prevents the Federal Communications Commission (FCC) from using the Notice of Proposed Rulemaking it published on May 18, 2017, to roll back the FCC’s original Open Internet Order.

Patent Reform

United States Patent Trademark Office Director Lancu testified before the Senate Judiciary Committee. We expect Senators to raise patent reform questions, including the Director’s plans for the Patent Trial and Appeal Board.

Trade

NAFTA trade negotiations continue. Round 7 ended March 12. The Trump Administration is pushing to reach a deal on NAFTA by the end of May. The Administration has not softened its position on rules however that automakers would need to meet to qualify for zero tariffs under NAFTA.

This week also brought hearings in the Senate and House on the Trump administration’s trade policies, where concerns were expressed about the effects of tariffs on the economy and jobs.

Additionally, the tech industry has weighed in on using caution on any potential trade war with China, fearing restrictions on American companies to the Chinese market, mandatory sharing of intellectual property, and restrictions on VPN use.