With help from John Hendel, Steven Overly and Doug Palmer
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— Reaching the end: Democrats say they could be close to a framework for their massive social spending package. Some senators told MT this week they hope the tech provisions will remain.
— Meh: Tech trade groups welcomed the administration’s progress on getting rid of other countries’ digital services taxes, but it wasn’t quite the victory they were hoping for.
— First in MT: House Republicans are requesting an update from the FCC on its rural broadband efforts.
IT’S FRIDAY, OCT. 22. WELCOME TO MORNING TECH. I’m your host, Benjamin Din. I have no comment on this, except that sometimes lawmakers want to have fun, too. (Also, please let me know what a hot beef sundae is.)
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WHAT DOWNSIZING DEMOCRATS’ SPENDING BILL COULD MEAN FOR TECH — As Democrats attempt to shrink their social spending plan by hundreds of billions of dollars in order to reach consensus between moderates and progressives, the fate of several of its tech provisions hangs in the balance.
House Democrats included a boatload of tech and telecom cash in the original $3.5 trillion version of their spending package, which the party is planning to pass without GOP support under a process called reconciliation. The version that cleared House Energy and Commerce last month would set aside $1 billion to create an expansive FTC privacy bureau, $10 billion to upgrade the nation’s 911 calling system and $4 billion to bolster the FCC’s Emergency Connectivity Fund, aimed at subsidizing digital connectivity for students and library patrons.
— Price tag: The overall price will likely fall to around $2 trillion (or perhaps lower), given the protests of moderate Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, whose votes will be vital for passage. President Joe Biden himself is deep in the negotiating trenches this week to figure out which parts of the bill will stay, shrink or be cut entirely. To that end, Democratic leaders are debating whether to invest the smaller total sum in fewer priorities or retain more of the bill’s original provisions and simply shrink how much cash each one would receive.
— As for those tech provisions: “They’re all still there, in the mix,” Senate Commerce Chair Maria Cantwell (D-Wash.) told John this week when asked about that trio of planned tech investments. (Her committee has held multiple hearings related to that would-be FTC privacy bureau in recent weeks.)
Broadband investment, in particular, is one priority some Democrats are intent on keeping in the bill. “We’re going to be fighting to [hold] those provisions in place,” Sen. Ben Ray Luján (D-N.M.) told John. “We’ll keep a watchful eye as the conversations continue to the end of the week. But these matter, and they’ll make a difference in people’s lives.”
And Sen. Chris Van Hollen (D-Md.) stressed he hopes the social spending plan delivers “more continuity and permanence” to the Emergency Connectivity Fund, which was initially created as a pandemic relief emergency subsidy.
— Clock ticking: Democratic leaders are trying to lock down a framework by week’s end and still hope to move this measure and the Senate-passed bipartisan infrastructure bill in tandem.
TECH SHRUGS AS USTR MAKES HEADWAY ON DIGITAL TAXES — The tech industry offered a tepid response for the Biden administration’s announcement on Thursday that it had reached agreements with five European countries to rescind their unilateral taxes on major American tech companies — taxes the U.S. had labeled as discriminatory.
— What they worked out: In exchange for each of those countries — France, Austria, Italy, Spain and the U.K. — dropping their digital services taxes, the Office of the U.S. Trade Representative said it would scrap its plans to impose retaliatory tariffs against them. The agreement followed a deal the U.S. struck earlier this month with more than 130 other countries and jurisdictions on a new global tax regime.
The five European countries’ individual digital services taxes are expected to remain in place while the global tax treaty is ratified. However, the money that U.S. companies pay as a result of those taxes will be credited toward future tax payments.
— Industry response: Although they welcomed the news, tech trade groups that represent industry giants like Google, Amazon, Facebook and Apple argued that the Biden administration should have pushed trading partners to eliminate their digital services taxes immediately. Matt Schruers, CEO of the Computer and Communications Industry Association, said “the most appropriate action would be an immediate withdrawal of these discriminatory unilateral measures in exchange for terminating the trade investigations.”
Jason Oxman, president and CEO of the Information Technology Industry Council, urged Biden to keep pressure on countries to “urgently and fully withdraw” their taxes.
— Works in progress: Two other countries with digital taxes that hit U.S. tech companies, Turkey and India, could still be hit with retaliatory tariffs unless they essentially agree to what the five European countries did, USTR indicated. Both have signed on to the global tax pact, which raises the possibility that the Biden administration could reach similar transitional agreements with them.
THIRD JUDGE’S THE CHARM? — Judge Haywood Gilliam recused himself on Thursday from Trump’s suit to force Google-owned YouTube to restore the former president’s account and invalidate Section 230 of the Communications Decency Act, the tech industry’s broad liability shield law. Gilliam is the second judge to step back from the case, following Judge Susan Illston’s recusal on Wednesday. The case is being heard in the Northern District of California, after a Florida judge dismissed Trump’s objections to moving the suit close to Google’s home base in Silicon Valley.
BIG SPENDERS — Tech and telecom companies were among the top 20 spenders for the third quarter of 2021, according to a ranking of lobbying expenditures compiled by our colleagues at POLITICO Influence. Facebook was No. 5 at $5.1 million, with Amazon right behind it with $4.7 million. NCTA — The Internet & Television Association ranked 15th, spending $3.3 million, and Comcast was 18th, with $3.1 million.
MT EXCLUSIVE: GOP SEEKS RURAL BROADBAND UPDATE FROM FCC — House Oversight Republicans are calling on acting FCC Chair Jessica Rosenworcel to share more information on the agency’s rural broadband efforts, especially amid a pandemic that they say has highlighted educational and economic disparities in those regions.
“Lack of competition and overreporting of access data has led to poor customer service and communities being left decades behind the rest of the country,” they wrote in a letter sent Thursday night, requesting a staff-level briefing by next week.
— Getting into specifics: The lawmakers criticized the FCC policy that counts an entire census block as “covered” by an internet service provider, so long as the provider offers service to at least one household in the area. That, combined with the FCC’s reliance on self-reported data, has inflated broadband access numbers, “particularly for rural America,” they said.
— What they want to know: Republicans on the committee sent 10 questions to Rosenworcel, with answers due by Nov. 4. Among the topics: the FCC’s enforcement actions, why the agency uses its census block policy and what it was doing to promote competition in rural areas. They also requested the FCC’s timeline for updated broadband maps and asked whether it still viewed a 25 Mbps download speed as an acceptable threshold for high-speed broadband. (Not all agencies that oversee broadband efforts, including USDA, agree on that number, and Democrats have called for the download speed floor to be higher.)
FIRST IN MT: TECH INDUSTRY GROUPS URGE BIDEN TO FILL OUT FCC — The Chamber of Progress and CCIA are calling on Biden to act quickly in nominating a fifth commissioner to the agency. The lack of a Democratic majority has kept the FCC from acting on progressive priorities — including some desired by tech companies, such as the restoration of net neutrality rules.
“In order to achieve the Administration’s goal of greater connectivity and preserving an open Internet, a fifth commissioner is needed to break the partisan gridlock among current commissioners,” they wrote in a letter sent today. “Furthermore, lowering broadband prices and making the telecom industry more competitive, as you laid out in your broadband agenda, requires a fully functional FCC.”
CR Wooters has been promoted to head of federal affairs at Uber. He was previously director of federal public affairs. … Former Sen. Blanche Lincoln (D-Ark.), who runs the Lincoln Policy Group, has been named co-chair of the 21st Century Privacy Coalition, which represents ISPs and their trade associations to push back on proposed changes to privacy and data security laws. … Margot Preuss has been named CEO of Cornea, a tech startup dealing with natural disaster management. … Monica Garcia is now managing director for comms at Stand Up America. She most recently was comms director for Luján.
Fintech firm BlueVine has joined the Financial Technology Association.
Accountable Tech is launching Main Street Against Big Tech, a project aimed at highlighting the impacts of major tech companies on small business owners.
SPOTTED on the CTA Innovation House rooftop Thursday night celebrating the one-year anniversary of the Facebook Oversight Board: Rep. Bob Latta (R-Ohio); CTA’s Michael Petricone; Aspen Institute’s Vivian Schiller; NTIA’s Jaisha Wray; Katie Harbarth; Aerica Banks; Engine’s Kate Tummarello; NVIDIA’s Anima Anandkumar; the Wilson Center’s Meg King; NetChoice’s Jennifer Huddleston; Stand Together’s Taylor Barkley; and Jamie Susskind, tech policy adviser for Sen. Marsha Blackburn (R-Tenn.). Representing the Oversight Board: members Julie Owono, John Samples, Suzanne Nossel; trustee Kristina Arriaga; and Board Trust chair Paul Haaga Jr.
SPOTTED at Hook Hall on Wednesday night for Tech Prom: Tim Wu and Joshua Geltzer from the White House; rumored FCC nominee Gigi Sohn; Avery Gardiner, chief antitrust counsel for Sen. Amy Klobuchar (D-Minn.); Didier Barjon, tech and telecom staffer for Senate Majority Leader Chuck Schumer; and FTC nominee Alvaro Bedoya.
Seeing double: “How Many Users Does Facebook Have? The Company Struggles to Figure It Out,” WSJ reports.
Changing direction: China’s tech companies are adjusting to Beijing’s “common prosperity” demands, Bloomberg reports.
That’s different: “China-linked disinformation campaign blames Covid on Maine lobsters,” via NBC News.
ICYMI: Officials working on a Privacy Shield replacement are floating a new possibility: avoiding Congress altogether. Our Mark Scott has more for Pros.
Big bucks: “Huawei paid Tony Podesta $500,000 to lobby White House,” CNBC reports.
Techlash: The tech giants are urging for a “national research cloud,” but critics say that would just give more power to those companies. NBC News has more.
Not sure why: “Twitter’s own research shows that it’s a megaphone for the right. But it’s complicated.” More from Protocol.
That was fast: “Trump’s new social network Truth Social already defaced by pranksters,” via WaPo.
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HAVE A GREAT WEEKEND!