March 2018 Legislative Update: The Omnibus Appropriations Bill, SESTA-FOSTA, and competing Net Neutrality legislation

Congressional Outlook

Congress was focused on passing an Omnibus appropriations bill by March 23rd to keep the government running through the rest of the FY18 fiscal year which ends September 30, 2018. Senate leaders also completed floor action on proposed changes to the Dodd-Frank banking law.

Intermediary Liability

After much back-and-forth over its language, the Senate passed an 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. This bill was passed by the House and ultimately by the Senate. 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 of the Communications Decency Act. Our statement on this matter is here.

Net Neutrality

At least six states have introduced Net Neutrality legislation. In Washington state, the Democratic governor recently signed net neutrality rules into law. 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. Last week the US Judicial Panel on Multidistrict Litigation randomly selected California’s 9th Circuit Court of Appeals to hear the litigation.

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.

Trade

NAFTA trade negotiations continue. Round 7 ended March 12. Economists are predicting the talks will continue into 2019. However, they don’t rule out a withdrawal, based on President Trump’s positions. At the end of this round, no progress has been made on the most divisive technology issues including copyright fair use and intermediary liability.

Privacy

The Clarifying Lawful Overseas Use of Data or CLOUD Act (S.2383 and H.R. 4943), was included in the omnibus spending package sent to President Trump on March 23rd. The CLOUD Act would establish procedures and reduce conflicts regarding international jurisdiction of data requested in law enforcement cases. Unfortunately, the version of the CLOUD Act did not include the Email Privacy Act (H.R. 387). Passage of the Email Privacy Act has been a long-term goal of the i2Coalition.