TECH & CYBER BRIEFING: Schakowsky Progresses on Section 230 Bill

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Rep. Jan Schakowsky (D-Ill.) is moving forward with drafting legislation to limit tech’s broad liability shield by giving the Federal Trade Commission authority to pursue companies that allow third-party users to post content that violates the platform’s terms of service.

Schakowsky, chairman of the House Energy and Commerce Consumer Protection Subcommittee, expects to have a bill ready in March that would restrict the tech industry’s liability shield, derived from Section 230 of the Communications Decency Act, according to an interview yesterday with Bloomberg Government. She first announced her intentions to revamp the liability shield at a tech policy summit in late January.

Schakowsky joins other lawmakers targeting Section 230, including Rep. David Cicilline (D-R.I.), chairman of the House Judiciary’s antitrust subcommittee, who announced earlier this week that he wants to limit the shield for online platforms that publish “demonstrably false” political ads. Sens. Lindsey Graham (R-S.C.) and Richard Blumenthal (D-Conn.) also are working on legislation that would allow individuals to sue tech companies violating child exploitation and sexual abuse statutes.

Schakowsky’s bill would ensure the FTC has authority to enforce the terms of service of platforms over third party content providers, holding platforms liable when third-party content providers break the platform’s terms of service.

An online platform’s terms of service are the legal agreements between a service provider and a person using that service.

Empowering the FTC to enforce a platform’s terms of service on content like political speech or online abuse would allow for more accountability of platforms that fail to enforce the terms themselves, a staffer who asked to not be identified by name said during the interview with Schakowsky.

Schakowsky said that some tech platforms have a different perception of what is legal and illegal in the physical versus digital world. “We’ve had testimony as to why should they should be so different,” she said. “Probably Facebook will make an argument about why it’s so different, but I think normal consumers would expect to be equally protected in the digital world.”

She is also concerned about false advertisements on platforms like Facebook, and is considering holding tech companies accountable for this third-party content as well. “I am very concerned about how far one can go in paid political advertising where Facebook will take no responsibility for anything that is said in a paid political ad,” she said.

Rep. Kathy Castor (D-Fla.) is cosponsoring the bill with Schakowsky. Castor recently introduced a bill to update the Children’s Online Privacy Protection Act.

Privacy Bill Update: Schakowsky said staff have received more than 100 comments from industry, trade and consumer groups to the committee’s privacy draft bill released in December. She wants to hold a hearing at some point and said finalizing the bill by the year’s end is a “real goal.”

Schakowsky and Subcommittee ranking member Cathy McMorris-Rodgers (R-Wash.) are still hashing out the two remaining contentious points: whether to allow consumers the right to sue over privacy violations, known as a private right of action, and whether to allow the federal bill to preempt existing state privacy laws, including California’s law that went into effect in January.

“What we’ve said about both is that it’s not entirely black or white: either you have preemption or you have a private right of action,” shes said. “Defining the spaces that allow for more activity is something we want to do. We’re not just saying take it or leave it; all or nothing.”

“I’m not sure how close we can get; we want to explore the options,” she said.

Facebook, U.K., E.U. Meetings: Schakowsky met this week with Nick Clegg, Facebook’s head of global policy and communications, to discuss her privacy and Section 230 legislation. “They want to reserve their shield, that was definitely an issue,” she said.

Clegg also came to offer assistance on Schakowsky’s privacy legislation, something Facebook has been calling for on a national level, she said.

“I think in large part he came to say, ‘We know you are writing the bill. We’re the big player. We want to be in touch. We want to help. We want to be involved,’” she said. “It was sort of like we want to deal with you, but you need to deal with us, too.”

A Facebook spokesman confirmed the meeting and reiterated Facebook CEO Mark Zuckerberg’s call for a privacy bill.

Schakowsky also met with officials from the U.K.’s Department for Digital, Culture, Media and Sport, which is also working on a privacy bill this year. They discussed their parallel efforts, and how to define harm online, she said.

Additionally, she met with officials from the European Union’s Committee on Civil Liberties, Justice and Home Affairs, where they discussed efforts underway in Europe to strengthen enforcement of their privacy law, the General Data Protection Regulation, or GDPR.

Letter to Lighthizer: Schakowsky sent a letter to U.S. Trade Representative Robert Lighthizer yesterday stressing that any provisions similar to Section 230 liability protections should not be included in any future trade agreements. She joins House Energy and Commerce Committee leadership in opposing the provision in future trade agreements. A Section 230-like provision was included in the U.S. Mexico Canada Trade agreement.

Intelsat Still Burdened With Debt Even if FCC Boosts Payout

Satellite provider Intelsat SA will still face a steep pile of debt even if it wins bigger payouts for giving up spectrum in a vote today by U.S. regulators that want the frequencies for fast 5G mobile networks.

The Federal Communications Commission is scheduled to vote on Chairman Ajit Pai’s plan to pay satellite providers as much as $9.7 billion for leaving the airwaves, with 50% of that, or $4.85 billion, potentially going to Intelsat.

Luxembourg-based Intelsat in a filing asked for 60% or more of the pot. Fellow satellite provider SES SA, which also would give up airwaves, in a filing said it should get as much as Intelsat, compared with 41% as proposed by the FCC.

Intelsat’s finances “may remain stressed even with a large relocation payment” because core portions of its business are deteriorating, Stephen Flynn, a Bloomberg Intelligence analyst, said in a Feb. 27 note. Earnings may decline next year, as some customers flee and others renew contracts at lower rates, Flynn said.

The satellite companies are seeking to give up part of the airwaves they use to beam TV and radio programs to stations, and to continue serving customers on frequencies they retain. Read more from Todd Shields.

Bloomberg QuickTake: How Race to 5G in U.S. Hit Speed Bump Called C-Band

Happening on the Hill

Senate Clears ‘Rip and Replace’ Huawei Bill: The Senate passed by voice vote a bill that would authorize the FCC to help companies “rip and replace” any Huawei and ZTE telecommunications equipment. The bill (H.R. 4998) was passed by the House in December and now goes to President Donald Trump. It would direct the FCC to provide subsidies to telecom companies to replace equipment from federally banned companies, which include Chinese companies Huawei and ZTE. For more, read the BGOV Bill Summary by Michael Smallberg.

Thune Bill Seeks to Build 5G Workforce: Sen. John Thune (R-S.D.) introduced his Telecommunications Skilled Workforce Act yesterday aiming to address the shortage of workforce that is needed to build out the next generation of wireless communications technology. His bill has bipartisan cosponsorship from Sens. Jerry Moran (R-Kan.), Jon Tester (D-Mont.) and Gary Peters (D-Mich.). The bill would establish an interagency working group led by the Department of Labor that would consult with the FCC and other federal and non-federal stakeholders to develop recommendations to address the workforce for 5G deployment.

Senate Judiciary Copyright, Digital Privacy Hearing: The Senate Judiciary Committee announced it’s holding on March 10 hearing titled “Copyright Law in Foreign Jurisdictions: How are other countries handling digital privacy?” It will feature testimony from law professors as well as officials from the Motion Picture Association, Millennium Films and the Computer & Communications Industry Association.

Lofgren, Davidson Call for FISA Bill Markup: Rep. Zoe Lofgren (D-Calif.) and Warren Davidson (R-Ohio) wrote to House Judiciary Committee Chairman Jerry Nadler (D-N.Y.) yesterday calling for him to mark up their bipartisan bill (H.R. 5675). The bill seeks to strengthen oversight to prevent government abuse of surveillance. It also seeks to prohibit the collection of geolocation and web browsing data by intelligence agencies. They are calling for the markup after Nadler postponed Wednesday’s scheduled markup of legislation to reauthorize the Federal Intelligence Surveillance Act.

Industry and Regulation

FCC Said to Ready $200 Million Privacy Fine Against Carriers: The FCC plans to propose a total of $200 million in fines against Verizon, AT&T, T-Mobile, and Sprint for illegally disclosing their subscribers’ real-time location data, according to two sources familiar with the matter. The FCC is expected to announce the proposed penalties against the four national U.S. wireless carriers today, said the sources, who spoke on the condition of anonymity. Chairman Pai, in a Jan. 31 letter to lawmakers, said the FCC had completed an “extensive investigation” and “concluded that one or more wireless carriers apparently violated federal law.” Read more from Jon Reid.

Senate Reaction: Sen. Ron Wyden (D-Ore.) criticized FCC’s reported fine, saying in a statement, “Based on today’s news reports, it seems clear Chairman Pai has failed to protect American consumers at every stage of the game – this issue only came to light after my office and dedicated journalists discovered how wireless companies shared Americans’ locations willy nilly. He only investigated after public pressure mounted. And now his response is a set of comically inadequate fines that won’t stop phone companies from abusing Americans’ privacy the next time they can make a quick buck.”

DOJ Rebuked Google Over Document Delay in Probe: Google delayed turning over documents and evidence to government investigators in antitrust probe, the Justice Department wrote in a letter sent to company Monday, the Washington Post reports. Google engaged in unacceptable delays after being ordered in October to turn over evidence, the DOJ said in a letter, signed by Associate Deputy Attorney General Ryan A. Shores.

Facebook Halts EU Election Reminders Amid Privacy Concerns:Facebook halted its election-day reminder feature in Europe amid concerns raised by its lead privacy watchdog in the European Union. The social network confirmed that the tool, designed to boost voter turnout, “will not be activated during any EU elections” until it addresses potential issues about how users’ information may be handled, Ireland’s data protection commission said in a statement on its website yesterday.

The U.S. tech giant has for several years been reminding voters to head to the polls on election days around the world. But even that seemingly non-partisan prompt has raised questions in Europe as regulators have grown increasingly skeptical of the technology giant. There have been questions about what data Facebook collects and whether it adequately informs its users about its data collection efforts. There have also been questions about the political influence of Facebook’s nudge to voters. Read more from Stephanie Bodoni and Eric Newcomer.

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To contact the reporters on this story: Rebecca Kern in Washington at rkern@bgov.com; Giuseppe Macri in Washington at gmacri@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Brandon Lee at blee@bgov.com

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