Plurus Strategies Weekly Update on Reconciliation, Voting Rights, FY22 Appropriations, and Other Activity in Washington
Hope you’re doing well and welcome to the new year! Please find Plurus Strategies’ first weekly telecom update of 2022. Additionally, we look forward to welcoming our colleague Georgette back from her maternity leave on January 10th.
Voting Rights
Before the Senate picks up BBB in earnest, the chamber will consider the John Lewis Voting Rights Act (S. 4) and the Freedom to Vote Act (S. 2747). These bills would make several major changes for elections, including making election day a federal holiday, and are a top priority for several Democratic Senators, such as Raphael Warnock who is up for re-election in the fall. Majority Leader Chuck Schumer is using the January 6 observances as a launch pad for messaging, and he circulated a Dear Colleague this week outlining the timing of Senate consideration. He expects there to be consideration including a vote the week of January 17 to align with Martin Luther King Jr. Day. However, there are several logistical hurdles. These bills face opposition from the Republicans although some have offered support for specific aspects of voting rights. As such, the legislation requires Senate Democrats to either abolish the filibuster or carve out voting rights from it. This requires the support from all 50 Democrats. We have heard that it is not only Senators Joe Manchin and Kyrsten Sinema who are hesitant to going down this path, as there are some Democratic Senators are hesitant to support this option. We've heard that the Senate will spend the rest of the month focusing on voting rights before shifting to appropriations in February, and Plurus will continue to monitor if and how voting rights poisons the well to accomplish much else this year.
Build Back Better
While any progress on Build Back Better fizzled out at the end of December, Leader Schumer announced earlier in the week that the Senate will vote on the ambitious social spending package early this year, but no timeline has been provided. The way we see it is that it is anyone’s guess as to what happens with BBB moving forward. As far as which provisions will remain in the package, we’ve heard that Senate Democrats are generally in support of what the House included on the FTC’s new privacy bureau, antitrust enforcement, broadband investment, Next Generation 911, and FTC civil penalty authority. We heard from one Senate source that while there is support for NG911, there is the feeling that the $470 million the House included is just a fraction of what is needed at the end of the day. It was also this source’s impression that Senator Cantwell seems most interested in providing adequate resource to the FTC while Senator Markey is more interested in providing distance learning resources as the omicron variant continues to send more and more students back online to virtual learning.
However, there are some who believe that there is still a chance for President Biden and Democratic congressional leaders to find some sort of agreement moving forward, potentially focusing on a handful of policy initiatives including climate change, effects of COVID, and health care. With it being a midterm election year, Senate Democrats have the incentive to move something along quickly as their House counterparts are not pleased that such a big tax-and-spend package was passed only to see it stall in the upper chamber.
Nominations
Between December 17 and 18, the Senate was able to strike a deal to allow dozens of President Biden’s ambassador picks as well as other judicial and executive branch nominees to unanimously confirmed by the chamber despite pushback from several Republicans including Senators Ted Cruz, Josh Hawley, and Marco Rubio. Demonstrating that confirmations will be a top priority in the Senate this year, President Biden has begun the process of resubmitting paperwork to potentially renominate upwards of 100 individuals, including 18 before the Senate Commerce Committee.
Democrats are preparing to take another crack at confirming President Biden’s top telecom nominees for positions at the FCC, FTC, and NTIA following considerable GOP pushback last year. Of the three telecom nominees, Davidson is the most likely to be confirmed this year. He successful cleared the Senate Commerce Committee by voice vote late last year with only a handful of Republicans voting against him. Since Senator Rick Scott continues to impose a blockade of Commerce Department nominees over unrelated supply chain issues, Davidson may require a formal roll call vote on the Senate floor once leadership is able to find the time but he likely has enough votes.
Bedoya like Sohn faces GOP criticism over past partisan tweets and is unlikely to win the same bipartisan support as Davidson. In fact, the committee was deadlocked along party lines in December when it voted on him. While there is a chance he could still advance to the floor with unified Democratic support, Democrats would need to find the time for three roll call votes which could be difficult. Additionally, we heard from the Hill that Bedoya is working to see if he can secure one or two anti-tech Republicans for a floor vote. It is the thinking that Bedoya would complement Lina Khan at the FTC in that he is more focused on privacy and anti-surveillance issues.
According to one telecom staffer, Senator Wicker and several Republicans are expected to push for Sohn to recuse herself from her current broadcaster involvement which could potentially lead to others calling for her to recuse herself from net neutrality, for example which could lead to the feeling that it doesn’t make sense for her to be on the Commission. Sohn has yet to receive a Senate Commerce vote and it is honestly unclear whether there is enough Democratic support for her to advance. Senate Commerce Chair Maria Cantwell initially sought to advance her nomination but has since stated that committee members wanted more time. On Wednesday, Senator Jacky Rosen announced her support for Sohn’s nomination despite her previous reservations about retransmission consent. Sohn has also won support from Senators Gary Peters and Jon Tester as well as three former FCC public safety chiefs from the Obama administration who could potentially tip the scale in her favor. At the end of the day, Senator Krysten Sinema is still the wildcard that could make or break the confirmation allowing the FCC to escape from its current partisan deadlock under Chair Jessica Rosenworcel who continues to push for progressive policies.
USICA
While attempts to attach Leader Schumer’s China package to the NDAA were thwarted, USICA is not forgotten by any means. While Senate Democrats and Republicans banded together in June to pass a version of the bill, the House has taken a more piecemeal approach to the bill and advanced its components in different committees in an attempt to alter portions of the original Senate bill. As a reminder, the House passed a pair of science related bills (the NSF for the Future Act and the DOE Science for the Future Act). If Speaker Pelosi is unable to persuade her caucus to move the existing legislation along, the Senate could follow the House’s lead by approving components of the bill one by one delaying the process even further. We anticipate that the two chambers will continue to work together to address key national security issues such as the semiconductor shortage.
Appropriations
There are three potential resolutions to the ongoing FY22 appropriations discussions: a government shutdown, a year-long continuing resolution, or an omnibus package. While President Biden signed the FY2022 NDAA into law just before the new year, lawmakers must still strike a deal to fund the government for the rest of the fiscal year in order for the $25 billion increase in defense spending becomes a reality. We’re hearing that the House Appropriations Committee is close to allocating the $740 billion for the Pentagon which would match the funding level President Biden signed last week. Leaders from both the House and Senate Appropriations Committees are continuing to work to strike deals to fund other federal agencies for the rest of the fiscal year as the government is currently operating under temporary funding which is set to run out in mid-February.
Given the expected political blowback, neither party is keen to have the government shut down, and we’re of the belief that the defense funding at $25 billion above the President's request as well as the impending retirement of Chairman Leahy and Ranking Member Shelby will provide extra motivation before the February 18 expiration of the CR to work out one final omnibus.
Looking ahead, it is becoming more and more likely that the FY2023 President's budget request will not be submitted to Congress by the February 7 deadline. The current hold up is twofold: first, the White House must work with OMB to decide the overall spending levels and second, congressional appropriations are still working to set the FY2022 budget toplines which must be done for deciding an FY2023 number.
Antitrust
Assistant Attorney General for Antitrust Jonathan Kanter has formally started his new position at DOJ despite not having his “front office” of deputies and staffers in place over disagreements that his staff picks are not diverse enough. The White House appears to be opposed to filling roles piecemeal, instead wanting to OK the entire slate at once. At the moment, Kanter has appointed Doha Mekki as his acting principal deputy. Mekki has spent seven years at DOJ, most recently helming the agency’s initiative to combat no-hire pacts and wage-fixing among companies. Additional top contenders include Sally Hubbard, a former antitrust official for New York State; Michael Kades, a longtime FTC staffer; and Sarah Oxenham Allen, the current chair of the antitrust task force at the National Association of Attorneys General.
5G
AT&T and Verizon were the first carriers schedule to launch their tranche of the C-band airwaves won at an FCC auction last year. However, the aviation industry has continued to warn that the rollout of 5G could seriously impact US air travel. Transportation Secretary Pete Buttigieg and the FCC proposed that the companies take more extensive mitigation measures for the first six months of the year to avoid any potential interference with aviation instruments, following what France has required. Chair of the House Transportation and Infrastructure Committee Peter DeFazio released a statement supporting efforts of Airlines for America including filing an emergency petition to stay 5G deployment which was originally scheduled for January 5 around some designated airports. In a compromise, both companies agreed to a two week delay but it is unclear whether that will be enough time to address regulatory and industry concerns. Going forward the hope is that there were lessons learned about the rollout and that things will go smoother in 2023 when more companies are set to deploy their C-band.
Privacy
Privacy concerns continue to be on lawmakers’ minds as more hearings are being scheduled. Specifically, we picked up from one staffer that Democrats on Senate Commerce feel that a comprehensive privacy bill would be great, but it is more likely that issues related to kids’ privacy online are poised to be addressed before a larger privacy package. While there is the desire to see more bipartisan tech bills marked up in Senate Commerce, we have heard that House Energy and Commerce is blocking all bipartisan tech bills, allowing only partisan bills to move forward which does not necessarily bode well for accomplishing anything in the next few weeks, if not months.
Political Tidbits
The November midterm elections are a looming shadow over upcoming legislative activity, with Democrats hopeful to prove they can govern effectively and Republicans eager to retake one or both chambers. Historically, midterms following one-party rule have been difficult for the majority, and many politicos are anticipating a similar result. One potential wildcard is the currently ongoing Congressional redistricting, with Dave Wasserman of The Cook Political Report writing that the House is on track to have a map slightly more favorable to Democrats than in past decades. Additionally, Reps. Brenda Lawrence and Bobby Rush are the latest Democrats to announce that they are not seeking election this year bringing the total number of House Democrats retiring to 25. Finally, former Democratic Majority Leader Harry Reid will lay in state at the Capitol Rotunda on January 12.
Despite early assurances from economists that inflation would be a transitory phenomenon, increased prices have stuck around longer than many anticipated. The Federal Reserve has indicated that it will be taking a number of steps – e.g., increasing interest rates, expediting the tapering of their asset-purchases, etc. – in an effort to combat inflation and ensure that it’s not a long-term economic feature.