Senate Commerce Committee Highlights Important Issues Facing the FCC and FTC

On Wednesday, the Senate Commerce Committee held a hearing on the nominations of Jessica Rosenworcel to lead the Federal Communications Commission (FCC) and Alvaro Bedoya to serve as a Commissioner at the Federal Trade Commission (FTC). Both of these agencies hold massive implications for taxpayers and the development of future technologies. As the nomination process progresses, there are important issues on the horizon for these agencies.

Thankfully, the Senate Commerce Committee held a separate hearing for Jessica Rosenworcel and delayed the hearing for the much more controversial Gigi Sohn. As several Senators have lamented, in many ways the nomination of Rosenworcel to Chair the FCC seemed long overdue. Rosenworcel’s term at the FCC was set to expire at the end of the year, and while some Democrats wanted to rush through the nominations of both Sohn and Rosenworcel on artificially quick deadlines, the Senate appropriately separated these nominees. Despite there being a 2-2 split at the FCC, Commissioners have been able to work in a bipartisan manner on important issues, illustrating why Rosenworcel enjoys bipartisan support in the Senate.

Several Senators asked relevant questions of Rosenworcel on the future of the Universal Service Fund, broadband maps, and the digital divide. However, in the context of this confirmation hearing, one of the most pressing questions for taxpayers centers around the potential return of net neutrality. In July, President Biden issued an executive order calling for the return of onerous Title II net neutrality regulations. Originally implemented under the Obama administration, these regulations, designed for telephone monopolies of the 1930s were repealed under former FCC Chair Ajit Pai’s Restoring Internet Freedom Order (RIFO). Despite hyperbolic predictions about the “end of the internet as we know it” failing to materialize, net neutrality advocates are hoping Rosenworcel and Sohn will answer President Biden’s call to reinstate these heavy-handed regulations.

As Senator Roger Wicker (R-MS) aptly points out, under the light-touch regulations private sector investment increased. When he pressed Rosenworcel on specific examples of consumers being harmed by the repeal of net neutrality regulations, Rosenworcel dodged the question, simply saying she supported net neutrality and the FCC needed more oversight on broadband. However, Title II net neutrality regulations are far more onerous than simply “oversight,” including opening the door for rate regulations.

Senator John Thune (R-SD) pointed out that it has been over four years since RIFO, and in that time American’s internet usage has increased. Robust investment by the private sector helped meet this increased demand; meanwhile, our European counterparts were forced to ask Netflix and YouTube to reduce the quality of service to consumers. Earlier this month, Senator Thune led a letter with his Republican colleagues to the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack, correctly stating that, “any effort to impose unnecessary ‘net neutrality’ restrictions would be dangerous to our nation’s dynamic broadband economy and threaten future investments in broadband infrastructure.” Instead of reimposing failed and unnecessary regulations, the FCC should continue to work in a bipartisan manner to solve pressing problems for taxpayers.

Alvaro Bedoya was nominated to fill the vacancy at the FTC left by Rohit Chopra, who was recently confirmed as Director of the Consumer Financial Protection Bureau. There are no shortages of concerning issues at the FTC. Most recently, reports surfaced that former Commissioner Chopra cast 20 votes on his last day at the agency, and these votes are yet to be disclosed and could pave the way for more aggressive and partisan action. There has also been a startling lack of transparency at the agency, and the two Republican Commissioners have pointed out that, “the majority’s closed-door process starkly contrasts with the transparency previously employed by the FTC.”

However, given Bedoya’s background in privacy, there is an important opportunity for both the FTC and Congress to work together to ensure consumers’ data is protected. In September, Democrats’ reconciliation bill included $1 billion in funding for the FTC to set up a new bureau dedicated to data security and privacy. The latest version of the bill cut this number to $500 million, which is still a large sum considering the annual budget for the FTC is roughly $300 million. While the FTC would be the correct agency to enforce data privacy standards, it is Congress’ role to craft this standard.

Elected officials, accountable to their constituents, should work to create a federal data privacy standard. The patchwork state-by-state approach creates confusion and unpredictability for the private sector, especially small businesses. Outsourcing this important issue to the FTC may be politically expedient, but it would not be in the best interest of taxpayers. The rules created by the FTC could be subject to change under a new regime, creating unpredictably for consumers and businesses. Similarly, as the current FTC has shown a startling lack of transparency, it is entirely possible the rules could be created without input from stakeholders, like privacy advocates, academics, and small businesses. Creating a federal data privacy standard is likely going to be complex, time consuming, and contentious, but it has become increasingly necessary. It’s Congress’ responsibility to take the lead here, and whether a privacy expert is confirmed to the FTC doesn’t change this.

Overall, these two nominees would serve important roles at both the FCC and FTC, if confirmed. The supposed necessity of Title II regulations rested on a hypothetical of what ISPs could do, but after RIFO reinstated the light-touch approach, these predictions proved to be overblown. As Senator Thune pointed out, the back and forth between Title I and Title II regulations is unsustainable and something the FCC should avoid. Similarly, if Bedoya is confirmed, it should still fall on Congress to craft a reasonable data privacy standard. Accountability and transparency are going to be critical in creating a standard that protects consumers without following Europe’s heavy-handed approach, and those qualities have been lacking under Lina Khan’s FTC. There are big issues facing these agencies, and it’s welcome to see Senators conducting their due diligence in ensuring taxpayers remain at the forefront of the conversation.