Post-Election Analysis 2020: Technology & Communications
Technology and communications policy likely will change in significant ways under President-elect Biden, who must work with a divided Congress. The Trump Administration's regulatory agenda reflects 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 did 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' progressive policy goals suggest the administration and FCC leadership will take a different approach.
This contrast likely will be on display early in 2021 in domestic regulatory policy, particularly with respect to regulation of broadband internet services. President-elect Biden's major policy priorities and the Democratic National Committee's convention planks reveal a significant departure from the current administration's policies. For instance, the president-elect committed to reverse the FCC's current net neutrality regulations and return to the policies adopted during the Obama Administration. The Biden-Sanders Unity Task Force recommendations included provisions that suggest a Democratic-led FCC likely will take a more aggressive posture towards state efforts that would prevent municipal governments from building broadband networks. Those policies—and other potential FCC proposals seeking to reverse current administration policies—will represent a turn to the left and likely engender partisan fights on Capitol Hill.
Similarly, President-elect Biden's victory should amplify existing energy within the Democratic-led House to aggressively address emerging technology issues with a nexus to civil rights and workforce issues. This development will mark a contrast from the previous two years. The Trump Administration focused on enhancing research and development funding for emerging technologies such as artificial intelligence, automation, and quantum computing with a focus on innovation and reducing regulatory roadblocks. The president-elect likely will direct his administration to re-examine the government's position on these issues, while addressing civil rights and workforce issues that the Trump Administration did not address through regulation. These policy changes could pose regulatory challenges at the federal level for gig economy stakeholders who rely on emerging industries including, but not limited to, facial recognition and artificial intelligence.
International communications security policy may not materially change in 2021. 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 reflects President Trump's focus on international supply chain security and reduction of untrusted communications providers' influence in the wireless ecosystem. But the president-elect's methodologies for executing that policy goal likely will depart from the current administration. While President Trump often relied on executive authority and the White House bully pulpit to secure international technology objectives, President-elect Biden pledged during his campaign to work closely with allies to address international supply chain risks. For that reason, a reliance on multilateral initiatives likely will guide the Biden Administration's policymaking in 2021.
Aside from policy, the president-elect will face immediate challenges securing Senate confirmation for political appointees to run agencies and departments responsible for executing executive technology policies. It is not unheard of for a new president to take power without allies of the same party in control of the Senate. However, the circumstances confronting President-elect Biden will almost certainly require his administration to address clearly defined policy contrasts with Republican leaders to secure confirmations for new commissioners at the FCC, the Department of Commerce, and other agencies.
President-elect Biden's victory should lead to an early push at the FCC to restore the Obama Administration's net neutrality policies, which Mr. Biden endorsed during the campaign and continue to enjoy strong Democratic support in Congress. In the 2015 Open Internet Order, the FCC subjected broadband providers 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.
Democratic House leaders will likely take a similar approach by seeking 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 cleared the House on a 232-190 vote that was almost strictly divided on party lines. That legislation failed to advance in the Senate, and, unless Democratic leaders are open to making changes to address Republican concerns, there is very little chance the legislation will arrive at the president-elect's desk. House Democratic leaders may be reluctant to make concessions, however, with a Democratic appointee chairing the FCC, particularly since Democratic technology leaders previously criticized Republican-drafted net neutrality legislation as insufficient.
Broadband access will be a top priority in 2021, especially with increased online activity during the COVID-19 pandemic bringing the digital divide to the forefront. In the past, Republicans and Democrats disagreed about the most effective way of incentivizing broadband deployment. Whereas Republicans favor removing and streamlining regulatory burdens on private sector deployments, Democrats call for significant federal investments in broadband infrastructure. Now, Republicans appear more open to federal investment in broadband considering the digital divide issues brought to light during the pandemic.
Early opportunities to address broadband deployment could arise through the annual appropriations process or in potential legislation providing COVID-19 relief, particularly if Congress does not pass relief legislation before the end of 2020. House Democrats made broadband access a top priority in the last Congress as part of their April 2020 release of the House Democratic Plan to Connect All Americans to Affordable Broadband Internet, which would invest $100 billion to build high-speed broadband infrastructure in unserved and underserved communities. House Majority Whip Jim Clyburn (D-SC) and Senate Broadband Caucus Co-Chair Amy Klobuchar (D-MN) introduced the Accessible, Affordable Internet for All Act (H.R. 7302/S. 4131) based on the House Democratic plan. This legislation is likely to serve as a starting point for conversations on broadband access in the 117th Congress. House Democrats included many of the concepts from this package in their infrastructure package, which passed the House in July but stalled prior to the election. Congress also may adopt the Digital Equity Act (H.R. 4486/S. 1167) to create a federal grant program to promote digital equity and build capacity for state-led efforts to increase broadband adoption, as President-elect Biden included it as part of his campaign platform.
Republican members of Congress and Senators representing rural areas also will continue to prioritize investments in rural broadband. For instance, legislation such as Senate Commerce Committee Chairman Roger Wicker's (R-MS) Accelerating Broadband Connectivity (ABC) Act (H.R. 7359/S. 4201), which would expedite rural broadband deployment by creating a fund to incentivize winning bidders of the Rural Digital Opportunity Fund auction to complete their buildout obligations on a shorter timeline, may advance.
Bipartisan momentum is growing for 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. Republican and Democratic leaders in Congress approach the issue with different motivations. However, Section 230 reform represents one of the few major communications policy issues where leaders in both chambers of Congress and the president-elect agree that changes are necessary.
President-elect Biden's support for Section 230 reform likely will set an early tone for the debate. Early in his campaign, Mr. Biden called on Congress to repeal Section 230, citing concerns regarding online platforms' alleged failure to respond adequately to the spread of political disinformation, hate speech, and extremism. The president-elect will find willing allies at the highest levels of Congress who are eager to amend or revoke the law. These allies either share his views, believe that platforms engage in inappropriate political censorship, or harbor sector-specific or systemic concerns.
Congressional efforts to revise the law may occur against the backdrop of a controversial proceeding at the FCC concerning regulations to clarify the meaning of Section 230. On October 15, 2020, FCC Chairman Ajit Pai announced the FCC will move forward with a rulemaking responding to a petition filed by the Department of Commerce in connection with President Trump's May 28, 2020 Executive Order on Preventing Online Censorship. Chairman Pai did not reveal when the FCC will formally propose regulations. FCC action to initiate the rulemaking could occur before President-elect Biden's inauguration. However, that will only be possible if Chairman Pai can secure a majority vote to propose regulation, which could depend on whether the Senate has already confirmed Nathan Simington to serve on the FCC.
Should the FCC fail to propose regulations before President-elect Biden's inauguration, new Democratic leadership at the FCC likely will forego further action on the petition despite President-elect Biden's concerns with Section 230. The current Democratic members of the FCC do not support FCC regulation, citing concerns regarding the Commission's authority under Section 230. The next chair of the Commission likely will share this view, which is consistent with statements made by representatives of the president-elect during the campaign.
In this case, Congress likely will take the lead on Section 230 reform issues. President-elect Biden's support for reform aligns with views expressed 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. While these leaders may not agree on why or how to change the law, their collective displeasure with Section 230 revisions could build pressure to reform the statute in the next Congress.
A starting point for revisions to Section 230 might be the EARN IT Act (S. 3398), a bipartisan bill that 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 potential starting points include the PACT Act (S. 4066), a bipartisan bill focused on moderation transparency, and the See Something, Say Something Act (S. 4758), a bipartisan bill that would require platforms to report illegal activity to benefit from 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.
Policymaker interest in online privacy legislation will likely remain strong under the Biden Administration and in the 117th Congress, particularly considering lingering issues following implementation of the European Union's (EU) General Data Protection Regulation (GDPR), the EU Court of Justice's July ruling to invalidate the EU-US Privacy Shield, and the implementation of the California Consumer Privacy Act (CCPA) earlier this year. Many states followed California's lead and attempted to pass state-level privacy laws. In response, numerous stakeholders have 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 in the coming months.
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.
The discussions around privacy legislation in the House in the 116th Congress were bipartisan but did not proceed beyond a bipartisan draft bill from the House Energy and Commerce Committee staff at the end of 2019. In the Senate, Democrats and Republicans introduced separate bills addressing online consumer privacy. 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 their privacy, and which federal and state agencies should enforce the law.
As states consider privacy legislation, there will be additional pressure on Congress to pass a national privacy standard, particularly during a period of piqued consumer interest in online privacy issues as Americans navigate the coronavirus pandemic. Both parties, however, must navigate the complex issue in a bipartisan manner if they want to pass a bill out of the Senate. Democratic lawmakers are already reticent to encroach on state laws unless the federal law's consumer protections go beyond or at least match what is in the CCPA, and there is no reason why that position will change in the 117th Congress. This provides Democratic lawmakers leverage in negotiations with Republican Senate leaders.
Supply Chain Security and International Issues
Supply chain security and international technology issues likely will not materially change 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 stand-alone 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), becoming law.
The president-elect appears to generally share the Trump Administration's views in this area, although his administration likely will take a different approach that stresses multinational cooperation and diplomatic engagement.
President-elect Biden offered few details regarding his view of the current administration's export control and related policies designed to reduce the influence of untrusted, state-sponsored communications providers in the international wireless community. However, the president-elect's track record suggests he may be willing to support existing policies while potentially expanding funding opportunities to enhance competitiveness of trusted 5G network equipment providers and supporting 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 congressional leaders on a bipartisan basis.
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 indicated his interest in looking at these issues during his presidency.
The Biden-Sanders Unity Task Force recommended giving antitrust regulators additional powers, authorities, and budget 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 that were 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 Biden will also likely continue working on the antitrust action against Google 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 explains that 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 action asks the court to enter structural relief as needed to cure any anticompetitive harm and to enjoin Google from engaging in anticompetitive practices. Eleven states joined the action, all with Republican attorneys general, including Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas. States that chose not to join the DOJ litigation may soon file separate litigation focused on a broader range of Google's business.
The Biden Administration likely will work closely with the House to increase oversight. 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 tech companies such as Alphabet, Amazon, Apple, and Facebook have: (1) captured control over key channels of distribution; (2) have come to function as gatekeepers; and (3) have 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 imposition of structural separations, nondiscrimination requirements, presumptive prohibitions against certain mergers, interoperability and data portability, and amendments to the key antitrust statutes (Section 7 of the Clayton Act and Section 2 of the Sherman Act). The report also recommends Congress clarify that antitrust enforcement standards should 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 in the future.
The Republican-held Senate likely is to be more reticent about antitrust reform than the House, with divisions within the GOP caucus. Sen. Lindsey Graham (R-SC), who chairs the Senate Judiciary Committee, previously expressed concern about the market share of Google and Facebook in digital advertising. Other GOP members of the Senate Judiciary Committee, such as Sens. Ted Cruz (R-TX), Marsha Blackburn (R-TN), and John Neely Kennedy (R-LA), echoed similar concerns over some tech companies' size, market power, market capitalization, and potential anticompetitive conduct. On the other hand, Sen. Mike Lee (R-UT), who chairs the Subcommittee on Antitrust, Competition Policy and Consumer Rights, stated Congress should leave antitrust enforcement to the antitrust agencies because it requires a highly technical inquiry that does not lend to easy generalizations or blanket condemnations.
Despite that division, Republican reactions to the House Judiciary Committee's competition report suggest room for compromise on some of the committee's recommendations. Partisan tensions are inevitable if House Democratic leaders seek to pass a comprehensive bill, but 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) the 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.
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 (DOT) 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.
The administration is more likely to drive AV policy momentum than the divided Congress. Congress attempted to craft bipartisan AV legislation several times over the past four years, starting with the SELF DRIVE Act (H.R. 3388) and the AV START Act (S. 1885) in the 115th Congress, and most recently with a bipartisan and bicameral effort staff draft published before the coronavirus pandemic. None of these efforts crossed the finish line despite significant bipartisan efforts.
The 117th Congress will likely make another bipartisan push to pass legislation with the election in the rearview mirror, though a bipartisan breakthrough will require Republican compromise on key legacy issues with the House and executive branch under Democratic control. Increasingly, House Democrats are focused on acute vehicle safety and technology. For instance, Democratic Energy and Commerce Committee 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). These bills and other measures ultimately landed in the INVEST in America Act (H.R. 2). House Republican leaders, meanwhile, re-introduced the SELF DRIVE Act at the close of the pre-election legislative session in an effort to emphasize GOP commitment to AV legislation progress. These two approaches are not at cross-purposes. However, the contrast suggests a partisan gulf still remains on major issues like preemption and private rights of action that previously derailed a 2018 push to pass AV legislation. In the meantime, the Biden Administration's DOT likely will use existing authority to set AV safety regulations but in a more prescriptive manner that departs from the Trump Administration's current approach.
In addition, President-elect Biden committed to invest significant resources to "reinvent the American transportation system from the factory line to the electric vehicle charging station." To that end, he pledged to: (1) make public investments necessary to deploy 500,000 electric vehicle (EV) charging stations; (2) convert all 500,000 US school buses to zero-emission vehicles by 2030; and (3) to work with Congress to enact direct-consumer rebates for clean vehicles to achieve a net-zero transportation emissions future.
Bipartisan support for investments in EV infrastructure and EV light-duty deployment already exists to some measure in the Senate. For example, the America's Transportation Infrastructure Act (S. 2302) unanimously advanced through the Senate Environment and Public Works Committee (EPW) and included a multi-year $1 billion grant program to stimulate private-sector development of charging and alternative fueling infrastructure on Alternative Fuel Corridors, which are designated stretches of major transportation corridors. The House-passed INVEST in America Act went even further by adopting a larger corridor program for alternative fuels technology, along with additional consumer and commercial incentives for EV infrastructure and light duty vehicle deployment. While the America's Transportation Infrastructure Act does not include other EV-friendly elements contained in the INVEST in America Act, such as a provision enhancing an existing tax credit for consumer and commercial adoption of alternative fuel technology, any forthcoming surface transportation reauthorization legislation will likely include some provisions intended to spur EV deployment.
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. With a divided Congress, legislation addressing the more controversial policies likely will not advance. House Democratic leaders, however, will continue to focus on exploring whether there are inherent biases in the algorithms used to operate many of these technologies that may lead to discrimination. This in turn will influence Biden Administration policies, which various agencies may implement without interference from Congress.
For example, the protests against police brutality earlier this year 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 the potential implications of the use of emerging technologies, President-elect Biden and members of Congress from both parties have exhibited an interest in investing in job opportunities related to 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 the artificial intelligence space, with the goal of increasing job opportunities and economic development. While this level of investment would represent a substantial increase in current federal programs, Republicans in Congress largely support efforts to enhance federal investment in research and development, and the Trump Administration announced a program to infuse $1 billion into advanced industries of the future in August. Combined, these factors could create conditions for bipartisan collaboration in 2021.
Existing congressional efforts also could find new life in the Biden Administration. Vice President-elect Harris, for example, introduced the 21st Century SKILLS Act (S. 1911), which focuses on workforce development initiatives to help American workers adjust to and enter emerging technology industries. While Vice President-elect Harris's bill does not have Republican support, these ideas could inform regulatory and policy initiatives throughout the executive branch.
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© Arnold & Porter Kaye Scholer LLP 2020 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.