112th Congress: New Line-Up, New Players - New Priorities?

(Blogmeister’s Note: FHH Telecom Law welcomes back guest commentator Catherine McCullough. This month she provides her perspective on the impact recent committee appointments are likely to have on communications issues in the 112th Congress. Catherine is a principal in Meadowbrook Strategic Government Relations, LLC and a specialist in Congressional relations.)

January is over, and the House and Senate Committees that oversee telecom issues have officially organized – issuing full lists of members, deciding on the rules by which the committees will work, and dividing up the budgets between Democrats and Republicans (thus setting the tone for how well the parties will work together in the 112th Congress).

So what will the legislative priorities of these committees be? The two themes of love and money – constituent votes and budget issues – that we identified in an earlier post still dominate. However, now that we know who all of the players are, including the subcommittee chairs, we can take these policymakers’ legislative pasts into account, and perhaps identify which specific bills we should see introduced in the coming months.

The biggest changes from last Congress are on the House side, where the agenda will be determined by Commerce Committee Chairman Fred Upton (R-MI-6th) and the Chair and Vice-Chair of the Subcommittee on Communications, Technology and the Internet Greg Walden (R-OR-2nd) and Lee Terry (R-NE-2nd). The new Chair of Commerce’s Subcommittee on Oversight and Investigations, Cliff Stearns (R-FL-6th) will have a strong impact on the Committee’s telecom policy too, since he served as the Communications Subcommittee’s Ranking Member last Congress.

Chairman Upton enjoys a reputation as solid, pro-business Congressman who is reasonable to deal with. He has chosen to hire former Ranking Member Joe Barton’s (R-TX-6th) well-respected telecom aide, Neil Fried, as his Chief Counsel for telecom matters which gives his staff bench the depth and institutional memory critical for real legislative negotiations.

Upton jumped into the telecom policy fray early when he co-issued a strongly worded release – along with Reps. Walden and Terry – denouncing the FCC’s rules on net neutrality. His communications on that front tend to focus, directly or otherwise, on the agency’s process (or lack thereof), especially the lack of transparency in its decision-making.

Look for this concern about FCC process to color much of the Committee’s telecom work this year. Complaints about the agency’s lack of responsiveness are common, and Committee Republicans consider a lack of orderly process an impediment to investment and a barrier to job growth. In addition to the consumer and budget-related issues discussed in an earlier column, specific FCC reform legislation could be introduced this year. If so, it could resemble H.R. 2183, a bill introduced by Reps. Barton and Stearns in the last Congress. That bill called for a modified “shot clock” – deadlines by which the FCC would have to issue decisions – and statutorily-required processes for the issuance of FCC decisions.

On the Senate side, where Chairman Rockefeller (D-WV) still reigns, work has begun on spectrum allocation. As predicted, this issue is a top priority because Congress can use auction proceeds to pay down the debt or pay for other funding priorities. Rockefeller’s bill, which was introduced with no support from fellow Republicans, would set aside the D-block for public safety use (thus removing it from the pool of auctionable spectrum) and would give the FCC incentive auction authority.

It is the opening shot in the debate over spectrum allocation policy, which is sure to move more quickly than usual through Congress given the strong incentives for all involved to come to a common understanding. Look for Communications Subcommittee Chair Walden to have a strong hand in the negotiations here on the House side. His background as an owner and operator of radio stations makes him a natural ally for the National Association of Broadcasters (NAB) and its efforts to get its members to give up as little spectrum as possible for as much as possible.

The cast of characters is now set: let the play begin!

A Lobbyist's Look At Telecom In The Next Congress

Love and money are likely to be the keys to the game. 

[Blogmeister’s Note: CommLawBlog welcomes back Catherine McCullough, who provides us with the following insight into the upcoming Congressional session. Catherine, who has guest-blogged for us previously, is a principal in Meadowbrook Strategic Government Relations, LLC and is a specialist in Congressional relations.]

Welcome to the 112th Congress. Notice anything missing? Like a third of the House Energy and Commerce Dems? Or a Congressional mandate on net neutrality? Or Chairman Boucher? Me too. So let’s take a few minutes to figure out what it all means.

Let’s start with the larger picture. This year’s midterms have put Members on notice that voters are not afraid to fire them. And each party is looking to 2012 to capture complete control of both houses of Congress and the White House.

So in the upcoming Congress look for Members to be feverishly competing for two things: love and money. Love in the form of votes (from an unusually angry electorate, eager to hold officials accountable). And money in the form of, well, money, i.e., the ability to spend government funds on their preferred projects (without, of course, looking fiscally irresponsible).

As we shall see, both love and money can be found in telecom policy. So it’s likely that telecom issues will get considerable attention from Congressional leadership, including precious “floor time” for debate. Here is how I see the 112th playing out.

In the quest for the love of the voters, among the most effective strategies an elected official can employ is legislative attention to consumer issues. Sure, foreign policy and national security and all kinds of other Big Issues are important. But to focus on consumers is to demonstrate that you’re thinking of them – and what better way is there to get them to think of you the next time they happen to be in a voting booth?

Interestingly, when the House and Senate are split between parties – as they will be in the coming term – consumer issues are even more likely to come to the fore. In that situation, neither side has the votes to ramrod controversial bills through. So there is a natural tendency for the majority party in each chamber to focus on legislation that will win that party the voter’s love. Happily, there is a similar tendency for the minority party in each chamber to go along with the majority, because to do otherwise would appear to be obstructionist. And when consumer interests are on the table, obstructionism is a definite voter turn-off.

So, in the world of telecom, issues such as online privacy are likely to be some of the first to be considered. Look for the draft bill floated by Rep. Boucher earlier this year to serve as a starting point. In order to pass a Republican House, the final legislation may not be what consumer groups wish, but in the end I believe there will be a bipartisan White House signing ceremony where all parties will take credit for protecting the privacy of their beloved voters.

(Fair bet: the signing ceremony will take place during the second year of the 112th Congress, possibly in the late Spring, before Members go home to star in their local Memorial Day and Fourth of July parades and start their campaigns.)

As to the less romantic but far more practical question of money, telecom policy is one of the few places it can be found. How? Think spectrum auctions. By providing for the sale of spectrum controlled by the government, Congress can generate revenue that can be used either to (a) “offset” any spending priorities Members might push for or (b) pay down debt.

While a large portion of valuable spectrum has already been dealt off in previous auctions, this term Congress could (if the FCC, the wireless industry and a number of others get their way) promote the sale of a big chunk of spectrum currently used for TV broadcasting. 

Some initial steps in that direction have already been taken in the last several months in both the House and the Senate.  But if TV spectrum is ultimately auctioned, one of the most politically sticky problems will be how the auction proceeds are to be split.  Right now, politicians on both sides of the aisle, whether in the Administration or in Congress, are unusually motivated to make sure that that problem gets resolved quickly.  That’s because, once the manner of splitting the revenue has been set (even if only approximately), they will be able to calculate how much the government can expect to recoup from any such auction.  The auction-related bills which have already been dropped would let the FCC take the first cut at coming up with a revenue-sharing plan – but Congress will be keeping a careful eye on the FCC’s approach and will likely be poised to step in with its own formulation if the FCC’s is not to Congress’s liking.

Therefore, look for an unusually high amount of government cooperation – between parties, between the House and Senate, and between Congress and the Administration – when it comes to creating a formula during the next year.

Reform of the Universal Service Fund (USF) is an issue that represents both love and money for Congress. While some may view USF reform as a wonky issue of marketplace structure, it can still be sold to the voting public as a consumer issue because reform could lead to lower bills. (The Democratic-led Senate Commerce Committee’s focus on consumer issues could bolster support for this theme.) In addition, USF reform can also appeal to the pragmatic interest in “money” by generating real savings through the elimination of waste and fraud.

Again, look for the work Representative Boucher and his staff did in the 111th Congress to have some influence in the 112th. The Boucher/Terry bill introduced in July 2010 likely should serve as a starting point for future debate on the issue. In fact, much work to be done in the 112th Congress will be influenced by the work of the 111th, even though the ranks of House Energy and Commerce Democrats were so thinned by the election.

Telecom policy is somewhat unusual in Congress.  Commerce Committee leadership from both parties work together in a reasonably cooperative, collegial way – which is not the case in many other Committees.  Having worked as a Counsel on the Senate Commerce Committee, I can attest to the consistent efforts of the Chairmen and Ranking Members and the staffs to resolve differences and come up with bills that provide the FCC and its regulated industries clear guidance.  From my observation, changes in leadership and Committee makeup have less effect on the development of telecom legislation than they do in other areas. 

That being said, there will be changes in the House and Senate Commerce Committees.  The changes on the Senate side will be small: the Chair and Ranking members will not change.  Because the number of Senate Republicans has increased (and, logically, the number of Senate Democrats had decrease), the Republican-Democrat balance on the committees (known as the “ratio”) will likely shift slightly – there will probably be one more Republican slot on the committee.

On the House side, changes will be stark.  Representative Barton is waging a campaign to keep his seat as top Republican on the Energy and Commerce Committee. However, he is subject to an internal “term limit” of sorts:  Republican conference rules prohibit a Member from holding a committee leadership slot for more than three terms. Since Barton has maxed out his tenure under that rule, he is seeking a waiver. His argument: during a part of his tenure the Republicans were in the minority, so he should be given a chance to head up the committee while it has majority power.

If Barton does not get his waiver, the seat will likely go to Rep. Stearns (R-FL-6th), the current head of the telecom subcommittee, Rep. Upton (R-MI-6th), or Rep. Shimkus (R-IL-19th). If Stearns leaves telecom to head up the full committee, it is possible that Rep. Walden (R-OR-2nd) will take the chair of the telecom subcommittee. Walden has a background in radio broadcasting and has expressed interest in the position.

On the Dem side of the House, Rep. Bobby Rush (D-IL-1st) is campaigning to head the telecom subcommittee now that Rep Markey (D-MA-7th) has declined to take back that subcommittee position. Also said to be interested in the plum position are Rep. Eshoo (D-CA-14th) and Rep. Doyle (D-PA-14th). We should know who will win these leadership posts after Thanksgiving; each conference is scheduled to vote on their leadership shortly.

Certainly the development of telecom policy is being watched closely by the Obama Administration. Less than 24 hours after polls closed across the country on election night and results began to be known, FCC leadership was summoned to a meeting at the White House. In my view, this underscores the Administration’s keen understanding of the role telecom policy plays in buoying our economy – and an understanding of how the new Congress’ pursuit of love and money is likely to impact the White House’s own chances to be re-elected 2012.

Congressional Update: Online Consumer Privacy Laws In The Works

[Blogmeister’s Note: CommLawBlog.com welcomes guest blogger Catherine McCullough, principal of Meadowbrook Strategic Government Relations, a D.C. lobbying firm. We are pleased that Catherine has agreed to share with our readers some insight into communications-related issues pending before Congress.]

Does your business gather data about your audience – especially online? If you are thinking of engaging in behavioral advertising – widely considered the future of the industry – you should know about two new pieces of legislation in Congress that would affect the way you gather, store, and utilize the consumer data that advertisers so desire. 

Yes, the long-anticipated online consumer privacy laws are coming.

Congress has repeatedly considered new consumer privacy bills for much of the last decade. But only since the 111th Congress began have all political elements necessary for passage existed at the same time: Democratic control of both houses of Congress; a supportive White House; and a new Chairman of the Senate Commerce Committee who is not afraid to make his voice heard on consumer protection. 

And thanks to a new technology on the scene, there is an additional element essential to all political dramas: a bad guy. Public, meet your new enemy: Deep Packet Inspection.

(At the risk of getting too technical: Deep Packet Inspection is the process by which Internet service providers can probe around in the contents of data packets passing through their systems.  When a file – whether it’s a web page, or an email, or a video, or whatever – is sent from Point A to Point B on the Internet, it first gets organized into “packets” which are then sent on their way to their common destination.  Those packets don’t necessarily all travel the same path through the myriad interlinked computer systems which comprise the Internet.  For purposes of getting them all to the same place, the intervening systems need to know only the intended destination and a few other factoids relating to routing.  The particular contents of the packets ordinarily do not come into play in the transmission.  Deep Packet Inspection, however, permits detailed analysis of those contents, thus affording inquiring minds access to information which would ordinarily be thought to be private.)

There is concern that this technology is too much of a temptation for those who gather and utilize consumer data. But the bills being written don’t restrict themselves to dealing only with this “extreme” type of tracking. They apply to most companies that store and use data. Here is how the legislation breaks down:

Two online privacy bills are now in different stages of development in the House. The first is being written by Rep. Rick Boucher (D-VA-9th), Chairman of the Energy and Commerce Subcommittee on Communications, Technology and the Internet, one of two House subcommittees with jurisdiction over the issue.  Boucher reportedly is working with his Republican counterpart, Cliff Stearns (R-FL-6th), on language that would: (a) allow Internet sites routinely to collect benign information from consumers unless the consumers affirmatively “opt-out” of such collection; but (b) prohibit the collection of sensitive personal information unless the consumer expressly agreed to such collection by affirmatively “opting-in”. The objective of this approach seems to be to force people to jump through hoops before releasing tracking rights to their sensitive information, because it takes more effort to opt-in than out. In theory, people will therefore make informed choices about who collects the sensitive details of their lives and how they use that information. (But how do we define sensitive, you ask? We’ll have to wait until the bill is introduced to see.)

The second bill has been introduced by Rep. Bobby Rush (D-IL-1st), Chairman of Energy and Commerce’s Subcommittee on Commerce, Trade and Consumer Protection – the other House subcommittee of jurisdiction. Rush’s bill, H.R. 2221, would require the Federal Trade Commission (FTC) to promulgate regulations to secure computerized data containing personal information.   (See the subcommittee hearing on the bill here.) It would be no surprise if the two subcommittees’ bills were to be merged into one piece of legislation regulating online privacy.

If an online privacy bill passes the House, the torch will be passed to the Senate, where Senate Commerce Committee Chairman Rockefeller has made no secret of his consumer-oriented focus. On the one hand, Senator Rockefeller acknowledges the reliance of the news industry on new technology. On the other hand, his Committee position makes him responsible for drafting a law restricting how media profit from the same advertising that supports their news-gathering operations. It is unclear how Senator Rockefeller and others of like mind will resolve this tension. 

While the bills will determine the principles of privacy policy, Congress will likely rely on the executive branch to determine important detail. The FCC is already shaping the online landscape as it writes its National Broadband Plan and takes its public stand on “network neutrality.” The Federal Trade Commission is deeply involved in behavioral advertising and is beginning to share its thoughts with the FCC as well.  Whether involved in writing online privacy law or executing and enforcing online privacy regulations, all government entities involved are now deciding how they will allow much-needed innovative online-related business to flourish while keeping consumer trust.