Morning Consult

Roles of FTC, FCC Are Front and Center in Privacy Debate

The Federal Communications Commission’s proposed privacy rules for Internet service providers have ruffled the feathers in the tech industry since the agency passed the proposal in March. A key question as the agency moves forward to a final rule will be how the FCC’s entrance into privacy rules would interfere (or coexist) with the regime currently enforced by the Federal Trade Commission.

The details will come into focus in the coming weeks, as FCC Chairman Tom Wheeler wants to finalize the proposal by the end of 2016. “It’s a turf war. Let’s be honest. It’s a turf war,” said Tim Sparapani, senior policy counsel at CALinnovates, a technology advocacy coalition. “We really need a do-over.” Sparapani was speaking at a privacy briefing Tuesday sponsored by CALinnovates. Just hours earlier in the same building on Capitol Hill, all three commissioners of the FTC testified before the Senate Commerce Committee. They offered a lukewarm endorsement of the FCC’s privacy endeavors. “In our initial bipartisan comment to the FCC, we were very supportive of their proposed rule in this area,” FTC Commissioner Terrell McSweeny said at the hearing. “We do believe that like the FTC, the FCC shares our goals of transparency, consumer choice, and security and that they have an important role to play in protecting consumer privacy.” Sparapani said the FCC is only confusing matters. “As communications services continue to evolve, and these kinds of companies begin to merge more and more across traditional silos of industry, none of this is going to make any sense,” he said.

ICANN -- A Regulator in Need of Antitrust Oversight

[Commentary] The pending transition of the Internet Corporation for Assigned Names and Numbers (ICANN) away from US government oversight has involved in-depth discussion about how to maintain an open Internet free from government control. What has received considerably less attention in these discussions is how ICANN has performed while under US oversight—especially as a regulator. This lack of attention can partly be attributed to ICANN’s insistence that, as its president Göran Marby said at a Senate hearing recently, “ICANN is not a regulator.” Perhaps not officially, but what ICANN actually does is indistinguishable from a regulatory agency.

ICANN, however, is a regulator with a difference. It is not a government agency, but rather a private-sector corporation that is and will continue to be subject to US antitrust laws whether or not its tie to the US government ends. The presence of antitrust oversight is a good thing. So, as the clock winds down on ICANN’s contractual relationship with the US government, it is important to ask how well ICANN is performing its regulatory functions. Using the standard criterion for regulation—promoting competition and consumer welfare—it would appear that the US antitrust agencies could provide ICANN some beneficial oversight.

[Thomas M. Lenard is a senior fellow and president emeritus at the Technology Policy Institute. Lawrence J. White is professor of economics at the NYU Stern School of Business.]

Rosenworcel Nomination Caught Up in End-Game Chess Match

A tangled mess of two stalled telecommunication bills and the pending nomination of a well-liked tech regulator won’t be resolved until a lame-duck session of Congress, if at all, a top Senate Republican said. At issue is the confirmation of Commissioner Jessica Rosenworcel of the Federal Communications Commission, a Democrat, for a second term at the agency. If the Senate doesn’t vote before the end of 2016, she’s out. Her term will be up, and there will be no way to extend her tenure, even though she is highly regarded by both Republicans and Democrats.

The standoff over Rosenworcel in the Senate, with several Republican objections to her nomination, has also tied up a bill to strengthen spectrum allocation and a long-overdue measure to reauthorize the FCC. “I don’t think this happens before Nov 8th, but I think when we get back in a lame-duck, I hope that we can bust some things loose and perhaps one of those will be the nomination,” Senate Commerce Committee Chairman John Thune (R-SD) said after a lengthy oversight hearing on the FCC. Democratic lawmaekrs say that in Dec 2014, then-Minority Leader Mitch McConnell (R-KY), promised Senate Democrats that if they voted to confirm Republican FCC Commissioner Michael O’Rielly, the GOP would move swiftly to confirm Rosenworcel at the start of the 114th Congress in January 2015. That’s also when McConnell became majority leader. The Senate Commerce Committee approved her renomination in December, but the floor vote to confirm Rosenworcel has yet to come because of a few GOP objections. Senate Minority Leader Harry Reid (D-NV), has blocked two telecom measures reported out of Senate Commerce, both with strong bipartisan support, in retaliation for McConnell’s unwillingness to force the nomination through. Chairman Thune suggested recently that if FCC Chairman Tom Wheeler were to step down following the November elections, it could help free up Rosenworcel’s confirmation vote.

The GOP’s Plan to Keep Control of Internet Naming

Senate Commerce Committee Chairman John Thune (R-SD) said he “expects” language that would halt the transition of an Internet governing body away from US government control to make it into the upcoming continuing resolution (CR) to fund the federal government. “Right now they’re trying to work out what that would look like, what would be effective in terms of putting the brakes on this,” he said. “I don’t think that anybody feels that we’re ready yet for that transition to take place, and so the question is how do you make that happen?”

Chairman Thune said that he expects the planned transition of the Internet Assigned Numbers Authority to be one of several issues that could push negotiations with Democratic Sens over the CR into next week. Meanwhile, the squabble over whether the US should follow through on the transition heated up Sept 13 as a report from the Government Accountability Office found that the upcoming transfer of power wouldn’t violate constitutional law.

House Communications Subcommittee Advances Two Telecom Bills

House Communications Subcommittee approved two measures: one aimed at improving call reliability in rural areas and another that would make it illegal for anyone outside the country to fake their caller identification information when texting someone inside the US. The subcommittee advanced both bills by voice vote. The measures now await consideration by the full committee. The rural call reliability legislation (HR 2566), advanced after the panel approved a substitute amendment that brought the bill in line with a similar measure in the Senate (S 827). The House bill would require intermediate providers to register with the Federal Communications Commission, which in turn would create standards aimed at ensuring better phone call quality in rural areas. The substitute amendment was adopted in an effort to give the bill a better chance at becoming law, according to Subcommittee Chairman Greg Walden (R-OR). “In addition to improving the substance of this bill, this amendment will also bring our legislation in line with the language of the bill currently making its way through the Senate,” Chairman Walden said at the markup. “It is a priority that we get this legislation passed into law, and by mirroring the text of the Senate that they’ve adopted coming out of committee, we’ve very much increased our odds that this will happen.” The Senate Commerce Committee in June advanced the version sponsored by Sen. Amy Klobuchar (D-MN). That measure awaits action from the full Senate.

The second bill (HR 2669) would make it illegal for individuals or entities abroad to send text messages with fraudulent caller identification information to someone in the US. Currently, it’s illegal only for text messages that originate in the US.

Rep Greg Walden Wants to Chair House Commerce Committee

National Republican Congressional Committee Chairman Greg Walden (R-OR) would like to be the next chairman of the House Commerce Committee if the GOP maintains its House majority in the next Congress.

Rep John Shimkus (R-IL), who has seniority on the panel over Rep Walden, has also indicated interest in seeking the position. “I would very much like to chair the Energy and Commerce Committee. I’m not alone.” He also said he’s now focused on his work with the House GOP’s campaign arm to ensure “that we have gavels” in 2017. Rep Walden currently chairs the Commerce Committee’s Communications and Technology Subcommittee.

Chairman Thune Hints at One Way to ‘Free Up’ FCC Commissioner Rosenworcel Nomination

Senate Commerce Committee Chairman John Thune (R-SD) suggested that the political tug-of-war over the confirmation of Commissioner Jessica Rosenworcel of the Federal Communications Commission could be smoothed over if FCC Chairman Tom Wheeler agrees to step down at the end of President Barack Obama’s term. “I suspect that nominees and unfinished legislation probably get freed up when we get past the election,” Chairman Thune said. “I think that would help, probably in a lot of ways, free up the Rosenworcel nomination,” said Chairman Thune, referring to a scenario in which Chairman Wheeler would promise to voluntarily leave the FCC when President Obama leaves the White House in January.

Chairman Wheeler’s term is set to expire in 2018. “As you know, I’ve asked that question in hearings, and he’s been very evasive in responding to it,” Chairman Thune said. The South Dakota Republican asked Chairman Wheeler at a March hearing if he would step down at the end of President Obama’s term. Leaders of the FCC have traditionally stepped down before their terms end to allow the new president to nominate a new agency head. “It’s a ways off,” Chairman Wheeler said at the March hearing. “I understand precedent. I understand expectations. I also understand that 10 or 11 months is a long time. So it’s probably not the wisest thing in the world to do to make some kind of ironclad commitment.” Chairman Wheeler is set to testify the week of Sept 12 at a Senate Commerce Committee hearing featuring all five FCC commissioners. He’s expected to face tough questions yet again about his post-election plans.

Chairman Wheeler Promises FCC Vote on Business Data Services in 2016

Federal Communications Commission Chairman Tom Wheeler said his agency will vote on new rules on business data services “by the end of the year.” “Action on this issue is a long time coming, but that time has arrived,” Chairman Wheeler told an audience at the National Cable and Telecommunications Association’s annual convention in Las Vegas (NV).

An FCC proposal aiming to revamp the business data services (BDS) market, also known as “special access,” was adopted by the agency in April. The proposed rule would impose price caps on the bulk data connections that telecommunication companies provide to businesses, particularly in markets deemed uncompetitive. “In many areas, competition in the supply of backhaul remains limited,” Chairman Wheeler said. “And that can translate into higher costs for wireless networks, higher prices for consumers, and an adverse impact on competition.” He said the FCC’s proposal will “encourage innovation and investment” while “ensuring that lack of competition in some places cannot be used to hold 5G hostage.” Chairman Wheeler said the commission’s proposal is “supported by the nation’s leading wireless carriers, save one.”

Sen Cruz Schedules Hearing to Examine Internet Governance Transition

Sen Ted Cruz (R-TX) scheduled a hearing for the week of Sept 12 to discuss the US government’s plan to transition its control of the Internet domain’s naming system to a private nonprofit organization. Sen Cruz, who’s helping lead GOP opposition to the scheduled Oct 1 handoff, will chair a Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts hearing on Sept 14 to “investigate the possible dangers” of ceding control of the governing body, according to a release from his office.

The National Telecommunications and Information Administration, an agency housed in the Commerce Department, has held a contract to run the Internet Assigned Numbers Authority for 18 years. NTIA said in August that it will move forward on its plan to hand over control of IANA to a private group of global stakeholders on Oct 1 “barring any significant impediment.” IANA governs the domain names used by Internet service providers to traffic data worldwide. The movement to transition IANA away from Commerce Department control has been two years in the making, with many experts in the Internet community saying it will promote transparency and prevent any one government from having excessive influence over the Internet. However, several GOP lawmakers have been vehemently against the transition. Sen Cruz has previously called the transition plan “an extraordinary threat to our freedom” that “will empower countries like Russia, like China, like Iran to censor speech on the Internet.”

House Oversight Chairman Previews New Report on Federal ‘Stingrays’

House Committee on Oversight and Government Reform Chairman Jason Chaffetz (R-UT) said that his panel will soon issue a report on the federal government’s use of simulated cell phone towers, also known as “stingrays.” “You’d be shocked — shocked — at what your federal government is doing to gather your personal information,” Chairman Chaffetz told an audience at the American Enterprise Institute. Chairman Chaffetz was at AEI to discuss his committee’s latest report on a series of wide-ranging cyberattacks against the Office of Personnel Management from 2012 to 2015, which saw the personal information of 22.1 million Americans with ties to the federal government stolen by hackers. The probe found that the hacks occurred because of OPM leaders’ repeated failures to heed inspector general warnings that its cybersecurity infrastructure was lacking. The committee report also found that OPM leaders failed to implement basic, required security controls and deploy high tech anti-hacking tools once it became evident that hackers had penetrated their databases.

Chairman Chaffetz said that his committee’s upcoming report on the federal collection of personal information through “stingrays” has even more outrageous findings. “They can’t keep it secure. That’s the point,” he said. “I don’t trust them, they’re not doing the basics, and they want to collect more data.”