Emerging Technologies Washington Update

August 8, 2019

Pardon Our Dust

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This Week: Groups express concerns about tech task force transparency, new CRS report on 3D printing highlights potential areas of interest for Congress, federal agencies, and FTC examines video game loot boxes and microtransactions.

Week in Review

The House and Senate are in recess until the second week of September. Last Friday, the President signed the Bipartisan Budget Act into law, implementing a two-year budget deal that also suspends the debt limit until July 31, 2021. He also signed legislation waiving a prohibition that precluded Dan Elwell, who has been serving as the Acting Administrator of the Federal Aviation Administration (FAA) since January 2018, from staying on as Deputy Administrator once Steve Dickson is sworn in as Administrator because they are both former military officers. The Senate confirmed Dickson 52-40 on July 24 and he is set to be sworn in on August 12. The Senate also confirmed Michael Kratsios last Thursday to serve as the Trump Administration’s first US Chief Technology Officer and Associate Director of the White House Office of Science and Technology Policy (OSTP).

Last Friday, the President announced that he no longer plans to nominate Rep. John Ratcliffe (R-TX) to succeed former Senator Dan Coats as Director of National Intelligence (DNI). He has not yet announced a replacement. In the meantime, two more members of the Texas delegation – Reps. Will Hurd (R-TX) and Kenny Marchant (R-TX) – announced that they will not seek reelection in 2020.

On Wednesday, the President visited El Paso and Dayton to meet with communities victimized by recent mass shootings. The visit followed a letter from House Homeland Security Committee Chairman Bennie Thompson (D-MS) and Ranking Member Mike Rogers (R-AL) to the owner of 8chan calling on him to testify about the proliferation of extremist content on his site. The letter does not explicitly refer to the protections provided by Section 230 of the Communications Decency Act, but coincided with a letter from House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) to US Trade Representative Robert Lighthizer expressing concern with including a provision similar to Section 230 in the proposed US-Mexico-Canada trade agreement (USMCA). Pallone and Walden “take no view” in the letter as to whether or not the provision should be included, but ask Ambassador Lighthizer to consult with the Committee on this issue specifically as USMCA negotiations continue. Elsewhere, Rep. Ron Wright (R-TX) signed on last Friday to cosponsor Rep. Paul Gosar’s (R-AZ) Section 230 reform bill, H.R. 4027. For more on the Stop the Censorship Act, click here.

Reports this week also indicated that the White House is preparing an executive order directed at allegations of anti-conservative bias on social media platforms. The President said at last month’s White House summit on social media that the Administration would explore all avenues to combat the perceived bias. The executive order is understood to be in early draft stages and is not expected to be released imminently.

Looking Ahead

Tomorrow, the White House will host a roundtable on violent extremism with internet and technology companies. The House and Senate are in recess until the second week in September. Before adjourning last week, Majority Leader Mitch McConnell (R-KY) set up a number of confirmation votes for the first week the Senate is back in session, including Kelly Craft to be Ambassador to the United Nations and Dale Cabannis to be Director of the Office of Personnel Management, as well as nominees for senior positions at the Departments of Health and Human Services, Veterans Affairs, and Treasury. Soon thereafter, McConnell plans to bring the first FY20 appropriations bill to the floor. Senate Appropriations Committee Chairman Richard Shelby (R-AL) plans for the Committee to mark up the first package, which will likely include the Labor-Health and Human Services, Defense, and Energy-Water bills, the week of September 9.

House Speaker Nancy Pelosi (D-CA) will lead a congressional delegation of House Democrats to McAllen, Texas and Guatemala, El Salvador, and Honduras for meetings about border security, detention facilities, and asylum seekers.

Groups Express Concerns About Tech Task Force Transparency

Last Thursday, the Electronic Privacy Information Center (EPIC), Center for Digital Democracy, and Consumer Federation of America wrote to Senate Rules and Administration Committee Chairman Roy Blunt (R-MO) and Ranking Member Amy Klobuchar (D-MN) alleging that the new Senate Tech Task Force helmed by Senator Marsha Blackburn (R-TN) is violating Senate rules by meeting behind closed doors. The groups argue that the Task Force meetings should be open to the public with advanced notice and that transcripts should be made available. Further, they asked the Committee to investigate whether the private meetings violate the Senate Rules of Procedure.

According to the letter and a Blackburn spokesperson, the Task Force plans to continue to meet with stakeholders in private and the panel’s next meeting will focus on competition within the technology industry. Blackburn also briefed White House officials on the Task Force’s work to date last week before the Senate adjourned for the August recess.

New CRS Report on 3D Printing Highlights Potential Areas of Interest for Congress, Federal Agencies

The Congressional Research Service (CRS) published a new report last Friday on “3D Printing: Overview, Impacts, and the Federal Role.” The report notes that the economic and scientific potential of three-dimensional (3D) printing, sometimes called additive manufacturing, has peaked interest from private sector and federal government stakeholders alike. In recent years, the federal government has funded related research and development (R&D) activities through the National Science Foundation (NSF), Department of Defense (DOD), National Institutes of Health (NIH), and the National Aeronautics and Space Administration (NASA).

CRS suggests a number of issues for congressional consideration as 3D printing technology matures, including to what extent the federal government should continue to fund relevant R&D and education and training activities, including those under the auspices of the former National Additive Manufacturing Innovation Institute (NAMII) in Youngstown, Ohio, now known as America Makes. Further, Congress may consider whether federal acquisition strategies should be updated to include 3D-printed products and whether federal policies should be modified to appropriately address the availability of such products. CRS also suggests that there may be a federal role in developing industry standards for testing and certifying 3D-printed goods.

Some lawmakers have already offered legislation to mitigate concerns with the continued development of 3D printing technology, including the potential to manufacture firearms or similar devices. Senator Ed Markey (D-MA) and Rep. Ted Deutch (D-FL) introduced the 3D Printed Gun Safety Act this Congress alongside dozens of cosponsors. Rep. Virginia Foxx (R-NC) has also offered legislation to address intellectual property (IP) concerns related to 3D printing, specifically concerns that IP protections may inhibit the military from deploying 3D-printed parts.

FTC Examines Video Game Loot Boxes and Microtransactions

On Wednesday, the Federal Trade Commission (FTC) hosted a workshop on consumer issues related to video game microtransactions and “loot boxes,” in-game rewards individuals can buy while playing a video game. Loot boxes – typically purchased using either traditional currency or virtual currency earned within the game – are a growing revenue stream for game developers. Despite their increasing popularity, lawmakers, such as Senator Josh Hawley (R-MO), and advocates for consumers and children have raised concerns about loot box marketing, as well as whether minors are becoming addicted to these in-game purchases.

The day-long workshop included three panel discussions with representatives from video game trade associations, consumer advocacy groups, and academia, ranging from the Entertainment Software Association and International Game Developers Association to the National Council on Problem Gambling and Consumer Reports. Participants discussed the origins and evolution of loot boxes, research examining consumer behavior in relation to video games, and consumer awareness and education about in-game digital transactions.

During these discussions, Michael Warnecke, Tech Policy Chief Counsel for the Entertainment Software Association, argued that loot boxes enable “engaging, dynamic, and expansive virtual worlds” in games. Meanwhile, Renee Gittins, Executive Director of the International Game Developers Association, reiterated the Association’s call for an industry commitment to not market loot boxes to children, to clearly disclose the odds of different rewards when purchasing loot boxes, and to launch an education campaign that boosts awareness of the parental controls.