This Week: House Energy and Commerce examines online manipulation and deception, DOT unveils AV 4.0, updated guidance for autonomous vehicles, two courts block California from enforcing AB 5 for truck drivers for motor carriers, FAA publishes proposed rule for remote identification of drones, DOT seeks to incentivize new AV design solutions for persons with disabilities, administration moves to limit AI exports and implement principles for AI regulations.

Week in Review

Senator Kelly Loeffler (R-GA) was sworn in on Monday to succeed former Senator Johnny Isakson (R-GA), who stepped down at the end of the year amid ongoing health issues. She will sit on the Agriculture, Health, Education, Labor, and Pensions (HELP), and Veterans Affairs Committees. Senator Jerry Moran (R-KS) succeeds Isakson as Chairman of the Veterans Affairs Committee and Senator Ben Sasse (R-NE) filled Isakson’s coveted spot on the Senate Finance Committee.

On Tuesday, the Senate Finance Committee held a vote on the United States-Mexico-Canada trade agreement (USMCA). The measure, which has already been approved by the House, passed 25-3, with Senators Pat Toomey (R-PA), Sheldon Whitehouse (D-RI), and Bill Cassidy (R-LA) voting against. Several other Senate committees will now mark up the agreement next week before it will go to the floor for a full Senate vote. USMCA will then need the President’s signature and Canada’s approval before it takes effect. Mexico has already ratified the agreement.

The Senate voted 88-5 on Tuesday to confirm Jovita Carranza to be Administrator of the Small Business Administration (SBA). Carranza is currently the US Treasurer and previously served in the Bush Administration as Deputy Administrator for the SBA from 2006 to 2009. During the 2016 election, Carranza was a member of the Trump campaign’s National Hispanic Advisory Council and will now become the top ranking Hispanic in the Trump Administration.

President Trump hosted Greek Prime Minister Kyriakos Mitsotakis at the White House on Tuesday. The two discussed Greece’s economic recovery, enhancing defense cooperation, and growing bilateral trade. In his remarks, Mitsotakis said, “we look forward to your positive support, we want US businesses to invest in Greece so that we can expand the economy at a rate so striking that people will really feel the difference.”

The US Trade Representative’s (USTR) Section 301 hearing on France’s digital services tax (DST) was abbreviated due to a snowy weather forecast. In the morning, groups such as the Computer and Communications Industry Association, which represents major U.S. tech leaders, called for tough measures, including tariffs, against France in retaliation for the country’s digital services tax. Other groups, including U.S. wine wholesalers and retailers, spoke out about the detrimental impact such retaliation would have on their businesses. The hearing continued on Wednesday with representatives from other sectors, including dairy, testifying.

The Department of Justice, US Patent and Trademark Office (USPTO), and National Institutes of Science and Technology (NIST) released a joint policy statement on Wednesday revising the government’s policy on standard-essential patents, asserting that patents used in essential technologies, such as 5G and Wi-Fi, will not be subject to different legal rules from other patented technologies.

The House voted on Wednesday to approve three bipartisan bills regarding 5G networks. The bills passed nearly unanimously and are designed to further engage the government in 5G policy and development both domestically abroad. On the international side, the Promoting United States International Leadership in 5G Act and the Promoting United States Wireless Leadership Act direct the Secretary of State and Assistant Secretary for Communications and Information to enhance America’s role in the international 5G standards-settings decisions. The Secure 5G and Beyond Act instructs the President to develop a strategy to protect America’s telecommunications systems and infrastructure and provide allies with the necessary support to do the same.

Looking Ahead

The Senate is continuing to move towards President Trump’s impeachment trial. Disagreements between Senate Majority Leader Mitch McConnell (R-KY) and Speaker of the House Nancy Pelosi (D-CA) have delayed the start of the trial; however, McConnell told Republican Senators on Tuesday that he has the votes to start an impeachment trial without witnesses, something Democrats have demanded. The Leader has said he will not take up any vote on USMCA or any other business until the trial has concluded.

The Senate Health, Education, Labor and Pensions (HELP) and Commerce, Science, and Transportation Committees have scheduled sessions to markup and vote on USMCA on January 15. These votes will follow the Senate Budget Committee’s January 14 hearing.

Secretary of the Treasury Steve Mnuchin will lead the Presidential Delegation to the World Economic Forum January 20-24 in Davos, Switzerland. Secretary of Commerce Wilbur Ross, Secretary of Transportation Elaine Chao, Secretary of Labor Eugene Scalia, and US Trade Representative Robert Lighthizer are among those attending.

The White House is expected to release its FY21 budget request on February 10. Although the language is not yet disclosed, many analysts have predicted the budget will ask for increased defense spending as the Trump Administration continues its competition and pressure campaigns against China, Iran, and Russia.

House Energy and Commerce Examines Online Manipulation and Deception

The Consumer Protection and Commerce Subcommittee of the House Energy and Commerce Committee held a hearing Wednesday regarding misinformation and deception on the internet. Witnesses included representatives of academic institutions as well as Facebook.

Many of the members’ questions directly targeted Facebook’s deep fake and advertising policies, which Chairman Schakowsky called “wholly inadequate;” however, representatives on both sides of the aisle also expressed broader concern at the level of disinformation and manipulation occurring online. Democrats largely advocated for increased government involvement, more oversight, and tighter regulations, whereas many Republicans were hesitant to allow the government to get involved in determining what counts as ‘the truth'. Outside of disinformation, members also used the opportunity to address other issues regarding online privacy and data collection. Notably, a number of representatives called for reform to Section 230, expressed concern over how algorithms can lead to discrimination, and advocated for increased American investment in machine learning and artificial intelligence.

DOT Unveils AV 4.0, Updated Guidance for Autonomous Vehicles

At the Consumer Electronics Show in Las Vegas, Transportation Secretary Elaine Chao unveiled the fourth iteration of the Department’s guidelines for autonomous vehicles (AVs), “Ensuring American Leadership in Automated Vehicle Technologies: Autonomous Vehicles 4.0,” or AV 4.0. The document was developed by the Department of Transportation and the White House National Science and Technology Council (NSTC), marking the first time the White House has taken a direct role in drafting the Department of Transportation’s AV guidance. AV 4.0 seeks to unify principles for AVs across 38 federal departments and agencies to offer guidance to state and local government agencies, technology experts, and industry stakeholders. Secretary Chao said AV 4.0 establishes three core principles: protecting users and communities, promoting efficient markets, and facilitating coordinated efforts. Chao noted “the takeaway from AV 4.0 is that the federal government is all in— for safer, better and more inclusive transportation, aided by automated driving systems.” AV 4.0 will be published in the Federal Register for public review and comment.

Two Courts Block Enforcement of AB 5 Against Truck Drivers

On December 31, a federal judge granted a temporary restraining order (TRO) to prevent California from enforcing AB 5 as it pertains to drivers for motor carriers just hours before the law went into effect on January 1, converting thousands of workers from independent contractors to employees. AB 5 codifies the Dynamex decision and employs a three-prong “ABC” test to determine whether or not an individual is an employee of or an independent contractor to a business. The case is one of several lawsuits that have been filed challenging the new law on federal and state constitutional grounds. In this case, the judge found that the law is likely preempted by federal law that prohibits state and local governments from regulating the price, route, or service of motor carriers. A preliminary injunction hearing is scheduled for January 13.

Today, a Los Angeles Superior Court held that Dynamex and AB 5 are preempted by Federal law as applied to motor carriers. The court agreed with the Federal court’s December 31 TRO decision as well as previous rulings holding Massachusetts’ ABC test preempted under Federal law as applied to motor carriers. The court found that Prong B essentially prohibits motor carriers from using independent contractors. The court’s order applies to three lawsuits filed in January 2018 by the LA City Attorney against three trucking companies.

Another pending suit filed by Uber and Postmates and two individuals asserting that the law is unconstitutional has not yet received a hearing. A federal judge denied a request for a temporary restraining order on behalf of freelance journalists and photographers, but scheduled a preliminary injunction hearing for March.

FAA Publishes Proposed Rule for Remote Identification of Drones

On December 26, the Federal Aviation Administration (FAA) unveiled a Notice of Proposed Rulemaking (NRPM) for remote identification of unmanned aircraft systems (UAS), a major development in the continued integration of drones into the national airspace. Comments are due by March 2, 2020.

The proposal requires all drones that are already required to register with the FAA - those weighing 0.55 lbs or more - to be remotely identifiable within three years of a final rule. The vast majority of UAS would fall into two categories: standard and limited remote ID. Standard remote ID UAS would be required to transmit identification and location information by both broadcast and network technologies. Limited remote ID UAS would only be required to transmit information via a network, but may only operate within the visual line of sight of the remote pilot (VLOS) and within 400 feet of the control station. UAS without remote ID would be confined to VLOS operations within an FAA-recognized area.

Importantly, the rulemaking, when final, should unlock additional rulemakings that will enable expanded commercial operations, such as those over people (OOP), at night, and beyond the visual line of sight (BVLOS). The FAA published a NPRM for OOP and nighttime operations in February 2019. Remote ID is also fundamental to the continued development and implementation of an unmanned traffic management (UTM) system.

In her keynote at CES on January 9, Secretary of Transportation Elaine Chao underscored the importance of remote identification, citing the recent example of mysterious drone sightings across Colorado and Nebraska.

DOT Seeks to Incentivize New AV Design Solutions for Persons with Disabilities

The Department of Transportation (DOT) published a Request for Information this week to inform a design challenge to incentivize development of new inclusive design solutions to enable access to automated vehicles (AVs) for persons with disabilities, including physical, sensory, and/or cognitive disabilities. In launching this new initiative, DOT notes that there is significant potential for AVs to improve mobility for persons with disabilities, but it is challenging to envision designs that will address a wide range of disabilities, as is the case with traditional passenger vehicles. DOT’s goal is to encourage such solutions as AVs - specifically Level 4 and 5 AVs - are developed so as to reduce the need for retrofitting post-production. DOT specifically solicits feedback on ways to structure a multi‐phase prize competition to best attract new design solutions to enhance AV accessibility. Responses are due by January 31, 2020.

DOT expects to award up to $5 million in two stages. Up to 15 developers will receive $100,000 for promising concepts in Stage I. Up to four of those winners will advance to Stage II and be eligible for a second reward of up to $2 million.

Administration Moves to Limit AI Exports and Implement Principles for AI Regulations

On January 6, the Commerce Department issued an interim final rule requiring that U.S. technology companies that build intelligence software for analyzing satellite imagery apply for a license before exporting their software to China and other countries. The restriction is the first to be applied under the Export Control Reform Act (ECRA) of 2018, which addresses the export of “emerging” and “foundational” technologies deemed “essential to the national security of the United States.” The measure is open for public comment until March 6, 2020.

Previous trade restrictions impacting artificial intelligence (AI) and US-China relations include an October 2019 ban preventing American firms from doing business with six Chinese companies that make software for facial recognition and voice transcription, as well as who manufacture surveillance equipment incorporating AI. The United States identified these six companies, along with several dozen additional Chinese firms, as playing a role in facilitating human rights abuses and creating a police state in China’s Xinjiang province.

In a follow up to President Donald Trump’s February 11, 2019 Executive Order on artificial intelligence, on January 7 the White House Office of Science and Technology Policy unveiled a set of ten principles to which federal agencies should be held accountable when regulating the private sector’s use of AI technology. The public will have 60 days to comment on OSTP’s draft version. The White House has indicated intent to limit regulatory overreach that could potentially stifle innovation in this area. At a time when other major international bodies like the Organization for Economic Cooperation and Development (OECD), G7, and the EU are considering more regulations for AI, OSTP encourages other nations to follow its lead.