Post-Election Analysis 2020: Technology & Communications
*Updated January 6, 2021
* * * * *
Watch our Technology & Communications webinar.
Read Ahead: Net Neutrality | Content Moderation | Broadband Access | Competition Issues | Online Privacy | Supply Chain Security, Cybersecurity, and International Issues | Vehicle Technology | Emerging Technologies
President-elect Biden's victory will lead to a dramatic shift in technology and communications policy. The Trump Administration's regulatory agenda reflected President Trump's preference for a light-touch regulatory approach, exemplified by the President's executive order requiring agencies to eliminate two regulations before adopting a new one. While this directive does not necessarily bind independent agencies, the light-touch ideology underlying the order reflected the current FCC leadership's approach to domestic regulatory policy. President-elect Biden and Democratic leaders will be less hesitant to use regulation and other tools of government to attack a range of social problems.
This contrast likely will be on display in 2021 on broadband and net neutrality policy. During the campaign, Mr. Biden committed to reversing the current FCC's deregulatory approach to net neutrality and returning to the policies adopted during the Obama Administration. The FCC will likely follow his lead once a third Democrat is nominated and confirmed. The new FCC leadership may also try to undermine state efforts to prevent municipal governments from building broadband networks, but it is unlikely to return to the flat-out ban on such state efforts that the Sixth Circuit struck down in 2016. Finally, President-elect Biden called for universal broadband during his campaign through a $300 billion research and development fund to stimulate development of 5G wireless technology and artificial intelligence. This investment would require congressional authorization and likely will show up in the President-elect's first budget request or earlier in the event that Democratic leaders push for an expanded COVID-19 relief package that builds on the broadband investments made in H.R. 133. That legislation included $7 billion to stimulate consumer access, deployment, and adoption of broadband internet access.
Similarly, Mr. Biden's victory should amplify existing energy within a Democratic-led Congress to confront concerns about emerging technologies with a nexus to civil rights and workforce issues, such as facial recognition. This is a priority for Democratic congressional leaders, who were unable to advance legislation in the 116th Congress. Even if legislation does not advance, the President-elect will be able to address these challenges through executive actions.
International communications security policy may not materially change in the new Congress. During the campaign, President-elect Biden pledged to promote US leadership in 5G wireless technology to ensure American leadership in the global transition to fifth and future generation wireless technologies. This focus aligns with the Trump Administration's 5G strategy and is consistent with the outgoing administration's emphasis on international supply chain security and reducing the influence of untrusted technology providers in the wireless ecosystem. In contrast to the Trump Administration's unilateral approach to statecraft, however, the Biden Administration likely will rely on multilateral initiatives to guide the policymaking in this area.
Congressional activity in each of these major policy areas may depend on the status of the Senate's filibuster rules in the new Congress. If the new Democratic majority in the Senate ends the legislative filibuster, Republicans likely will not be able to insist on compromises before Congress can send legislation to President-elect Biden's desk. For example, Democrats could pass legislation to codify the Obama-era net neutrality regulations. That process could repeat on other issues where current Senate rules prevent highly partisan legislation from advancing beyond the House.
The Democratic victory should lead to regulatory and legislative efforts to resurrect the Obama Administration's net neutrality policies, which continue to enjoy strong Democratic support in Congress and were endorsed by President-elect Biden during the campaign. In the 2015 Open Internet Order, the FCC subjected broadband to common carrier regulation under Title II of the Communications Act and forbade broadband providers from engaging in blocking, throttling, paid prioritization, and other unreasonable interference with internet usage by end users and edge providers. The FCC reversed course in the 2018 Restoring Internet Freedom Order, rejecting common carrier regulation in favor of market-based policies and eliminating most of the Obama-era rules.
The new leadership at the FCC likely will start a proceeding to reinstate common carrier regulation of broadband providers. In addition, Democratic congressional leaders likely will seek to enshrine net neutrality principles into law to preempt any future FCC effort to rescind those rules. The House will almost certainly pass legislation modeled on the Save the Internet Act of 2019 (H.R. 1644/S. 682), which passed the House 232-190, almost strictly on party lines. The legislation failed to advance in the Senate, but that could change in the 117th Congress due to the Democratic majority, especially if the Senate eliminates the legislative filibuster. Even if the filibuster survives, a compromise bill that includes net neutrality protections is possible but unlikely due to partisan animosity over this issue in recent years.
Bipartisan momentum likely will continue growing in Congress to revise Section 230 of the Communications Decency Act, which shields online platform providers from civil liability related to content moderation decisions made in good faith. Members introduced a range of bills in the 116th Congress seeking to amend Section 230 either comprehensively or to address specific concerns. In addition, the Senate Commerce Committee voted unanimously in October 2020 to force the heads of Facebook, Twitter, and Google to testify on their content moderation practices, which both parties view as crucial for transparency and accountability. This drumbeat of activity carried forward after the November elections as well. It factored heavily in a Senate Judiciary Committee hearing on content moderation practices in addition to the Senate's swift confirmation of Nathan Simington to serve as the newest member of the FCC. It even motivated President Trump to veto the bipartisan FY 2021 National Defense Reauthorization Act—which in turn led Congress to override the President's veto for the first and only time during Trump's term. In short, Section 230 reform momentum shows no sign of slowing down in 2021.
President-elect Biden's support for Section 230 reform will likely set an early tone for the debate. Early in his campaign, Mr. Biden called on Congress to revoke Section 230, citing concerns regarding online platforms' alleged failure to respond adequately to the spread of political disinformation, hate speech, and extremism. He will find willing allies at the highest levels in Congress, who are eager to amend or revoke the law because they either share his views, believe platforms engage in inappropriate political censorship, or harbor sector-specific or systemic concerns. Those efforts are expected to continue in the 117th Congress, although modest revisions to the statute may be more likely than significant changes or even outright repeal.
On the other hand, FCC action to interpret Section 230 should not be a factor, despite a lingering petition for rulemaking filed by the Department of Commerce in connection with President Trump's May 28, 2020 Executive Order on Preventing Online Censorship. FCC Chairman Ajit Pai announced on October 15, 2020 that the FCC would move forward with a rulemaking responding to a petition. There is no clear path to this outcome, however, since the FCC will not consider a Section 230 item at the next open meeting on January 13, 2021, and the current Democratic commissioners contend that Congress—not the FCC—is the most appropriate venue to address concerns with the law. A third Democratic commissioner will likely adopt a similar position despite Mr. Biden's concerns with Section 230.
Instead, Congress will likely take the lead on Section 230 reform. Mr. Biden's support for reform is shared by Speaker of the House Nancy Pelosi (D-CA), House Energy and Commerce Committee leaders, and conservative lawmakers who claim social media platforms are biased against them. With Democrats in control of Congress, reform efforts are likely to focus on the spread of disinformation, hate speech, and extremism. But given Democrats' narrow control in the Senate, Democratic leaders may choose to consider narrow bipartisan reform efforts instead. These efforts may include the EARN IT Act (S. 3398), which passed out of the Senate Judiciary Committee in July 2020 and would require websites to actively fight child exploitation or risk losing Section 230 protections. Other bills of interest that may receive consideration include the PACT Act (S. 4066), which is focused on moderation transparency, and the See Something, Say Something Act (S. 4758), which would require platforms to report illegal activity to rely on Section 230's legal liability shield.
One potential complication stems from the United States-Mexico-Canada (USMCA) trade agreement, which included online liability provisions consistent with Section 230. While the inclusion of this provision in the USMCA does not make reform efforts impossible, changing the underlying US law does increase the risk of Canada or Mexico bringing trade disputes and imposing tariffs against the United States on this basis.
Broadband access will continue to be a top priority for Congress and the White House in 2021, especially with the COVID-19 pandemic bringing the digital divide into stark relief. In the past, Democrats and Republicans disagreed about the most effective way to incentivize broadband deployment, with Republicans favoring removing and streamlining regulatory burdens on private sector deployments while Democrats have called for significant federal investments in broadband infrastructure. Democratic control of the legislative and executive branches should lead to a green light for more federal investment, which many Republicans may support as well.
At the end of 2020, Congress passed an omnibus appropriations and COVID-19 relief package with a $7 billion investment in broadband deployment programs, including the establishment of the Emergency Broadband Benefit Program to reimburse broadband internet service providers for connecting needy households during the public health emergency. That package also included a new Broadband Infrastructure Program that will provide competitive grants to covered partnerships for deployment of fixed broadband infrastructure in unserved communities.
These investments set the stage for the 117th Congress to consider additional opportunities to address broadband access and deployment, particularly as Congress may consider an infrastructure bill next year that could include additional broadband funding. House Democrats included several concepts from House Majority Whip Jim Clyburn (D-SC) and Senate Broadband Caucus Co-Chair Amy Klobuchar's (D-MN) bill—the Accessible, Affordable Internet for All Act (H.R. 7302/S. 4131)—in their infrastructure package last Congress, but the bill stalled prior to the election. That bill may serve as the starting point for conversations about additional investments, along with the Digital Equity Act (H.R. 4486/S. 1167). The latter bill, which President-elect Biden included as part of his campaign platform, would create a federal grant program to promote digital equity and build capacity for state-led efforts to increase broadband adoption.
Competition policy and enforcement scrutiny focused on the technology industry will be a priority issue for Democratic congressional leaders and the Biden Administration in the 117th Congress. President-elect Biden has not gone as far as some progressives in the Democratic Party who have called for "breaking up Big Tech," but he indicated his interest in looking into these issues during his presidency.
The Biden-Sanders Unity Task Force recommended strengthening antitrust laws by providing regulators additional authorities and budgetary resources to conduct a thorough review of mergers and acquisitions approved during the Trump Administration. This review could possibly extend to transactions that predate the Trump Administration, especially since the Federal Trade Commission (FTC) already commenced a review of prior transactions of Alphabet, Amazon, Apple, Facebook, and Microsoft consummated between January 2010 and December 2019. The goal would be to assess whether they have created highly concentrated markets, harmed employees, exacerbated racial inequality, raised prices, or reduced competition and, if so, to assign appropriate remedies. As a last resort, the Task Force recommended directing regulators to consider breaking up corporations that use their market power for anticompetitive activities.
The Department of Justice (DOJ) under President-elect Biden will also likely continue working on the antitrust action against Google that was filed during the previous administration. The action alleges violations of Section 2 of the Sherman Act by maintaining monopolies in the general search services, search advertising, and general search text advertising markets and by using its monopolistic powers to foreclose rivals and protect its monopolies. The complaint claims Google perpetuated its monopolies by using exclusionary agreements and other anticompetitive conduct such as excluding general search services rivals from effective distribution channels and inhibiting innovation in new products that could serve as alternatives. The complaint asks the court to enter structural relief as needed to cure any anticompetitive harm and to enjoin Google from engaging in anticompetitive practices. Fourteen states have joined the action to date, including Arkansas, California, Florida, Georgia, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, South Carolina, Texas, and Wisconsin. Following the DOJ's action in October, a bipartisan coalition of 38 state attorneys general also filed a separate antitrust lawsuit against Google in December.
Similarly, the FTC under President-elect Biden will likely move forward with the antitrust action against Facebook that it filed during the previous administration. The complaint alleges that Facebook is illegally maintaining its personal social networking monopoly through various anticompetitive acts, which include strategic acquisitions of up-and-coming rivals such as Instagram and WhatsApp to eliminate competitive threats and imposition of anticompetitive conditions on software developers. The complaint claims that Facebook's conduct harms competition, leaves consumers with fewer social networking alternatives, and deprives advertisers of the benefits of competition. The FTC is seeking a permanent injunction that could, among other remedies, require divestitures of assets such as Instagram and WhatsApp, prohibit Facebook from imposing anticompetitive conditions on software developers, and require Facebook to seek prior notice and approval for future transactions.
The Biden Administration likely will work closely with the House and Senate to increase oversight of the industry. The House Judiciary Committee's recently completed competition inquiry, led by Subcommittee on Antitrust, Commercial and Administrative Law Chairman David Cicilline (D-RI), suggests the direction this might take. In the majority report released at the conclusion of the inquiry, the subcommittee found evidence of monopolization and monopoly power in the tech industry, arguing that tech companies such as Alphabet, Amazon, Apple, and Facebook have: (1) captured control over key channels of distribution; (2) come to function as gatekeepers; and (3) acquired hundreds of companies in the last ten years, in some cases to neutralize a competitive threat or to maintain and expand dominance. The majority report recommends overhauling the antitrust laws, including imposing structural separations, nondiscrimination requirements, presumptive prohibitions against certain mergers in the future, interoperability and data portability, amendments to Section 7 of the Clayton Act, and amendments to Section 2 of the Sherman Act. The report also recommends Congress clarify that the antitrust enforcement standards focus not only on consumer welfare but also on advancing protections for workers, entrepreneurs, independent businesses, open markets, a fair economy, and democratic ideals. Finally, the report recommends increasing the budgets of the FTC and DOJ Antitrust Division to ensure robust enforcement.
With majorities in both chambers of Congress, Democratic leaders may have the ability to develop and pass legislation addressing the committee's recommendations. Partisan tensions are inevitable if Democratic leaders seek to pass a comprehensive bill that covers them all. However, the structure for bipartisan support appears to exist for at least a narrow set of reforms. Four Republican Committee members expressed support for legislation addressing the committee's recommendations on: (1) interoperability and data portability; (2) presumption of anticompetitive behavior in certain transactions; and (3) expansion of the consumer welfare standard used in antitrust analysis to incorporate potential innovation and forward-looking competition.
Regardless of progress on legislation, however, aggressive congressional oversight of the major technology platforms is almost certain to continue, whether through formal investigations, hearings, letters to CEOs, criticism on social media, or other means. This scrutiny likely will apply to major proposed transactions and could also influence the way the Senate approaches certain nominations, including for the head of DOJ's Antitrust Division and the third Democrat on the FTC.
Policymaker interest in online privacy legislation will likely remain strong under the Biden Administration and in the 117th Congress, particularly considering lingering issues following: (1) implementation of the European Union's (EU) General Data Protection Regulation (GDPR); (2) the EU Court of Justice's July 2020 ruling to invalidate the EU-US Privacy Shield; (3) the implementation of the California Consumer Privacy Act (CCPA); and (4) the adoption of the California Consumer Privacy Rights Act (CPRA) earlier this year. Many states followed California's lead and attempted to pass state-level privacy laws. In response, numerous stakeholders called for a federal privacy law because it will be easier to comply with a single federal standard than a patchwork of state laws. Industry requests could intensify in 2021 if more states take California's lead.
While President-elect Biden has not been particularly vocal on privacy, he said the US should have standards like what Europe implemented with the GDPR. Additionally, the 2020 Democratic Party platform also supported stronger national privacy standards. Democratic congressional leaders on both sides of the Capitol largely align with this approach.
Congressional privacy developments were largely incremental in the 116th Congress. Leaders in both chambers engaged in bipartisan negotiations in 2019, but ultimately those conversations did not proceed beyond a bipartisan draft bill from the House Energy and Commerce Committee staff at the end of 2019, and introduction of separate partisan proposals in the Senate. While the parties have common ground on certain key issues, including consumer rights around how companies can use and share data, some partisan divisions remain entrenched. The major sticking points include whether the federal law should preempt state laws, if the law should provide consumers with a private right of action to sue companies that violate the legislation, and which federal and state agencies should enforce the law.
Democratic tech policy leaders will be negotiating from a position of strength, despite narrow margins in the House and Senate, but doing so against the backdrop of the new California laws. Democratic lawmakers are already reticent to encroach on state laws unless the federal law's consumer protections go beyond or at least match what California law provides. There is no reason to believe that position will change in the 117th Congress.
Moving forward, progress will depend on lawmakers' interest in resolving these longstanding disagreements. Republican leaders may need to consider whether it is worth pursuing a national standard that does not preempt state and local government regulation or foreclose private litigation. On the other hand, they may look to alternative proposals to avoid these longstanding sticking points. For instance, the Brookings Institution published a report in June 2020, Bridging the Gaps: A path forward to federal privacy legislation, suggesting lawmakers consider a tailored preemption approach, which would designate certain issues (such as civil rights, data breach, and public safety) as appropriate for state regulation while preempting state regulation of the collection, processing, or transferring of online data. The report similarly calls for a tiered approach to private rights of action which draws inspiration from CCPA and the Telephone Consumer Protection Act.
Supply Chain Security, Cybersecurity, and International Issues
Supply chain security and international technology issues will remain a bipartisan priority in the 117th Congress. Generally, Republican and Democratic policymakers are committed to reducing the international influence of untrusted wireless network infrastructure providers on the world stage. They similarly support policies to strengthen the US industrial base to meet the needs for fifth and future generation wireless networks. These shared objectives resulted in bipartisan legislative accomplishments in the 116th Congress through annual defense authorization and appropriations bills and adopting standalone supply chain security bills, such as the Secure 5G and Beyond Act (P.L. 116-129) and the Secure and Trusted Communications Networks Act of 2019 (P.L. 116-124).
President-elect Biden will also stress multinational cooperation and diplomatic engagement on these issues more than his predecessor did. He also may seek to expand funding to enhance the competitiveness of trusted 5G network equipment providers. For instance, the Biden Administration is likely to support burgeoning private sector efforts, driven most notably by the Open Radio Access Networks (O-RAN) Alliance, to foster global standards for open network development. In this respect, President-elect Biden's goals will likely align with those of congressional leaders from both parties.
Finally, cybersecurity will continue to be a significant policy priority particularly in light of the December 13, 2020 announcement that operatives with links to the Russian government successfully breached federal agency and private firm networks through vulnerabilities in the SolarWinds platform. Congress included a number of cyber policy reforms as part of the FY 2021 National Defense Authorization Act following recommendations made by the bipartisan Cyberspace Solarium Commission. The NDAA did not include all of the Commission's recommendations, however, and the recent SolarWinds breach could motivate Congress and the incoming administration to take additional actions. President-elect Biden responded to news of the SolarWinds breach that cybersecurity will be a "top priority" in his administration, and congressional cyber leaders responded in a similarly forceful way. A bipartisan congressional and regulatory response to the breach is therefore likely.
The incoming administration's vehicle technology and infrastructure policies likely will depart from that of the Trump Administration. For example, while radical changes in autonomous vehicle (AV) policy under the Biden Administration are unlikely, Department of Transportation officials under President-elect Biden may be more willing to entertain standards-driven, prescriptive safety regulations where necessary. By contrast, the Trump Administration's AV policy framework reflected President Trump's focus on eliminating outdated or unnecessary regulation wherever possible to stimulate innovation and to limit new regulation to "performance-based and non-prescriptive" rules.
Congress may provide the incoming administration a wide berth to make these policy changes, and an ongoing bipartisan effort to develop AV safety legislation likely will continue. However, without Republican control over the executive branch or the Senate, industry stakeholders may confront a less hospitable environment for pursuing legislation that preempts state and local regulations. Furthermore, during the 116th Congress, House Democratic leaders backed a series of bills that would prescribe mandatory safety standards, such as the SAFE TO DRIVE Act (H.R. 2416), the Vision Zero Act (H.R. 4819), the 21st Century Smart Cars Act (H.R. 6284), and other measures that ultimately landed in the INVEST in America Act (H.R. 2), the House Democrats' signature infrastructure proposal in the second session. This approach suggests congressional Democrats may attempt to legislate more prescriptive standards for the Department of Transportation. However, given their narrow majority in the Senate, proposals likely will still need to garner at least some Republican support, especially if Democrats choose not to eliminate the legislative filibuster.
In the executive branch, President-elect Biden committed on the campaign trail to invest significant resources to "reinvent the American transportation system from the factory line to the electric vehicle (EV) charging station." To that end, he pledged to: (1) increase federal procurement of American-made, American-sourced clean vehicles for federal, state, tribal, postal, and local fleets to help accelerate the domestic production of clean vehicles and components; (2) make public investments necessary to deploy 500,000 electric vehicle charging stations; (3) accelerate research on battery technology and support the development of the EV domestic supply chain; (4) convert all 500,000 US school buses to zero-emission vehicles by 2030; and (5) work with Congress to enact direct-consumer rebates for clean vehicles to achieve a net-zero transportation emissions future. While some of these proposals will require congressional action, President-elect Biden can make inroads using executive action for items such as directing federal procurement and establishing greenhouse gas emission standards for light- and medium-duty vehicles, which may help transition the transportation sector toward electrification.
These policy objectives align with the goals of the incoming Congress, as reflected in the INVEST in America Act, which sought to authorize: (1) a four-year, $1.7 billion grant program supported by the Highway Trust Fund to stimulate private sector development of EV charging stations and similar EV technology; (2) a multi-year rebate program to stimulate residential and commercial charging stations deployment; and (3) a provision enhancing an existing tax credit for consumer and commercial adoption of alternative fuel technology. Many of those components enjoy bipartisan Senate support, and with Democratic control over the legislative process in both chambers, forthcoming surface transportation reauthorization legislation could pass with some or all these provisions included.
The Biden Administration's policy priorities related to emerging technology issues will be a marked departure from the Trump Administration's largely hands-off approach towards regulating artificial intelligence, facial recognition software, blockchain, and quantum computing. During the past two years, Democrats in Congress proposed legislation addressing many of these issues, but with Democratic control of the Senate, there is a chance some of this legislation advances to the President's desk. At the very least, the Biden Administration is likely to use existing budgetary, regulatory, and enforcement discretion to exert a heavier influence over the development and deployment of these technologies.
For example, the protests against police brutality last summer highlighted issues related to police use of facial recognition software and led to a bicameral bill, the Facial Recognition and Biometric Technology Moratorium Act (S. 4084/H.R. 7356), from several progressive Democrats. The legislation would ban the use of facial recognition technologies by federal agencies. Presumably, the Biden Administration would be able to advance those ideas through executive policy regardless of legislative process. Additionally, during the past year, Vice President-elect Harris also voiced concerns regarding racial and gender bias in emerging technologies, such as artificial intelligence, on several occasions. Her previous work on these issues could influence the Biden Administration's agenda, especially if conversations on potential biases continue to be tied to police reform and racial inequities.
Beyond concerns over the use of emerging technologies, President-elect Biden and members of Congress from both parties have exhibited an interest in job opportunities from the development of emerging technologies. Mr. Biden's campaign platform included plans to invest $300 billion in research and development and breakthrough technologies, including in artificial intelligence. Vice President-elect Harris introduced legislation with similar goals, including the 21st Century SKILLS Act (S. 1911), which seeks to create an American workforce equipped to employ these technologies. While Vice President-elect Harris's bill does not have Republican support, several Democrats and Republicans worked together in the 116th Congress to draft similar legislation, which we expect will continue in the 117th Congress.
* * *
To help our clients navigate the impact of the 2020 Election, we have created a Post-Election Analysis Center covering a wide range of topics. Please visit the Center to learn more and to subscribe for future client Advisories and notice of upcoming webinars.
© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.