One of the challenges facing regulators around the world as they craft rules to govern the Internet of Things is that traditional industry silos that were the basis for past legislation may no longer apply. As part of the 2014 Winnik Forum, Hogan Lovells’ partners Michele Farquhar and Trey Hanbury joined two senior staff members from the U.S. House of Representatives Committee on Energy and Commerce (“Committee”)—David Redl, Counsel on the majority staff, and Shawn Chang, Senior Democratic Counsel—to discuss what a legislative solution to the issues raised by the Internet of Things might look like in the United States.
As Redl noted, in late 2013, Republican leaders in the House launched a comprehensive review of the Communications Act of 1934 (the “Act”), with the goal of updating the primary telecommunications law in the U.S. to better comport with the complicated contemporary telecom marketplace. (We discussed current efforts to reform the U.S. Communications Act in more detail in our recent article on Rewriting the U.S. Communications Act in the 21st Century.) The Act was last amended in 1996, well before the Internet of Things became a reality. In a series of white papers released during 2014, the Committee has sought comment on how to reshape the Act to address new challenges raised by enhanced connectivity. Chang added that the Democrats supported taking a comprehensive look at the Act and agreed that one of the challenges of drafting legislation to address the Internet of Things is that it implicates so many previously disparate industry sectors.
As an example of the difficulties facing legislators charged with drafting laws to govern a connected future, Redl explained that in his experience, lawmakers generally take one of two incompatible positions. Either they believe that “bits are bits,” and all broadband-delivered data should be regulated in the same way, or they remain advocates of sector-specific legislation and argue that data derived from an energy application, for example, should be treated like other energy data. The Internet of Things invokes so many different use cases that were never contemplated in the telephony world, Redl explained, that people are reading the Act and asking “how should we deal with this?”
Hanbury asked the panelists if the challenges posed by the Internet of Things were better handled through a legislative fix, or whether the Federal Communications Commission, as the primary U.S. telecommunications regulator, should take the lead. Redl replied that this was one of the questions that the Committee had teed up as part of its Communications Act reform efforts. The Committee is not done with its inquiry, Redl added, and observers should expect to see more white papers seeking comment on issues implicating the Internet of Things, including at least one white paper on video issues.
Farquhar noted that although the House had been working well together on telecommunications issues, the current U.S. Congress has been criticized for partisan in-fighting and lack of productivity. Chang said that communications is a field that generally does not lend itself to partisan politics. He expressed optimism that reforms to the Act impacting the Internet of Things could move forward regardless of the composition of the next Congress. Redl added that for all parties and every sector of the communications economy, spectrum “is going to be key,” to satisfy the needs of “a growing, data-hungry population.”
The U.S. Congress is not the only body that will be faced with legislative challenges raised by the Internet of Things. According to some estimates, there will be 50 billion connected devices worldwide by 2020. Countries around the world will be watching to see how the U.S. decides to act, and in particular whether the regulation of the Internet of Things might indirectly lead to increased regulatory power over the Internet itself.
Michele Farquhar, Hogan Lovells, Washington DC
Trey Hanbury, Hogan Lovells, Washington DC
Shawn Chang, Senior Democratic Counsel, U.S. House of Representatives Committee on Energy and Commerce
David Redl, Counsel, U.S. House of Representatives Committee on Energy and Commerce