December 2015

Moving to eliminate regulatory burdens that can stifle investment, while maintaining core protections for consumers and competition, the Federal Communications Commission voted to no longer enforce multiple dated rules governing legacy local phone companies, known as incumbent local exchange carriers, or ILECs. The FCC granted full or partial forbearance from most of the categories of rules covered by a petition for forbearance filed by U.S. Telecom, an industry trade association.

A number of these rules were pre-conditions to the ability of the former “Baby Bell” telephone companies to offer long distance telephone service, a process that was completed over a decade ago. With the long distance service market very different today than it was then, these rules generally no longer are necessary to protect consumers or competition. However, the FCC maintained rules still needed to ensure that consumers in rural areas and low income consumers have access to affordable phone service. And it preserved rules that continue to protect competition in the market for telecommunications services to businesses and other enterprises.

LifeLock will pay $100 million to settle Federal Trade Commission contempt charges that it violated the terms of a 2010 federal court order that requires the company to secure consumers’ personal information and prohibits the company from deceptive advertising. This is the largest monetary award obtained by the Commission in an order enforcement action. The FTC’s filing in the case alleged that LifeLock violated four components of the 2010 order. Under the terms of the settlement, LifeLock must deposit $100 million into the registry of the US District Court for the District of Arizona. Of that $100 million, $68 million may be used to redress fees paid to LifeLock by class action consumers who were allegedly injured by the same behavior alleged by the FTC. In addition to the settlement’s monetary provisions, recordkeeping provisions similar to those in the 2010 order have been extended to 13 years from the date of the original order.

“This settlement demonstrates the Commission’s commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data,” said FTC Chairwoman Edith Ramirez. “The fact that consumers paid Lifelock for help in protecting their sensitive personal information makes the charges in this case particularly troubling.”

The CBO scored the Digital Goods and Services Tax Fairness Act of 2015 (HR 1643), which would prohibit state and local governments from imposing taxes on the sale of some digital goods and services that are taxable under current law. CBO estimates that enacting HR 1643 would have no direct impact on the federal budget. Enacting HR 1643 would not affect direct spending or revenues; therefore pay-as-you-go procedures do not apply.

Enacting the bill also would not increase net direct spending or on-budget deficits in any of the four 10-year periods beginning in 2026. The prohibition on the ability of state and local governments to tax the sale of some digital goods and services would be an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the cost of complying with that mandate would far exceed the threshold established in UMRA for intergovernmental mandates ($77 million in 2015, adjusted annually for inflation). HR 1643 also would impose a private-sector mandate, as defined in UMRA, on sellers of digital goods and services by requiring them to maintain tax information on their customers. CBO estimates that the incremental cost to comply with the mandate would fall below the annual threshold for private-sector mandates established in UMRA ($154 million in 2015, adjusted annually for inflation).

Department of Homeland Security officials are insisting that they do sometimes look at the social media accounts of immigrants and travelers headed to the United States after several reports have suggested otherwise. Yet the searches are only occasional, officials acknowledged, and social media is not routinely included in screenings of visa applicants coming to the US.

The DHS policy is upsetting lawmakers on both sides of the aisle, who appear intent on making the searches mandatory. “It needs to not just be pilot programs. It needs to be a policy of our government to look at social media,” Rep Ted Lieu (D-CA) said in a House Oversight Committee hearing on Dec 16. Working with intelligence and law enforcement agencies, the department has already completed two small pilot programs incorporating social media, the head of US Citizenship and Immigration Services told lawmakers. Now it’s working on a third pilot program, which “is in the process of being applied to literally thousands of applicants for immigration benefits,” agency Director León Rodriguez said. “So any thought that the Department of Homeland Security has simply foregone the use of social media for the purposes of immigration screening is a mistaken thought,” he insisted. “We have not spoken about it in great detail because the fact is that the more we speak about it, the more those who use it will cease to use it, knowing that we will be examining the content.”