The GOP's Senate takeover could be a big deal for net neutrality and patent reform

The Senate's new Republican majority could mean significant change for how Congress regulates the high-tech economy.

Tech policy is unusual because (with the exception of net neutrality) the issues are not as polarized as they are with Obamacare or abortion. On issues like patent reform and online privacy, the Republican-controlled Congress could actually pass legislation that President Obama will be willing to sign.

To find out how GOP rule could change the tech policy landscape, I talked to three right-leaning policy experts. Here are the issues where they said the new Republican Senate will matter the most.

Network neutrality

FCC Chairman Tom Wheeler (Mark Wilson/Getty Images)

The issue: President Obama campaigned in favor of regulations to preserve a level playing field for different types of online content. The man he named to lead the Federal Communications Commission last year, Tom Wheeler, is hard at work on a new set of regulations to achieve that objective.

Why it matters: Network neutrality supporters say that discrimination by big ISPs could hamper online innovation. On the other hand, critics argue that network neutrality regulations would give the government too much power over the internet and discourage ISPs from investing in faster connectivity.

What the Republican Congress could do: Most Republicans in Congress have sided with net neutrality critics. So if Wheeler establishes strong net neutrality protections, he could face a backlash from Congress. But any direct attempt to overturn those regulations would likely to be stopped by President Obama's veto pen.

Still, Ryan Radia of the Competitive Enterprise Institute says there's a lot that Republicans can do to pressure Wheeler to take a more hands-off approach to the issue. Congressional committees can grill Wheeler and other FCC commissioners about their approach to the issue. And they also have the power of the purse: they can cut the FCC's funding, limiting the agency's ability to enforce the regulations and giving him an incentive to change course.

Berin Szoka, president of the libertarian group TechFreedom, argues that rather than provoke a direct confrontation with Democrats over net neutrality, Congress should focus on making it easier for companies to enter the broadband market, as Kansas City has done. He argues that these reforms could be paired with a compromise position on net neutrality that gives the FCC some authority to protect network neutrality, but not as much as Democrats favor.

Where Obama stands: President Obama is likely to veto any effort to directly overturn Wheeler's net neutrality regulations. But it might be harder for him to resist pressure the Republicans impose indirectly, for example by cutting the agency's funding.

Patent reform

Sen. Chuck Grassley (R-IA), left, is expected to replace Sen. Patrick Leahy (D-VT) as chairman of the Senate Judiciary Committee (Tom Williams/CQ Roll Call)

The issue: In recent years, we've seen an explosion of litigation from patent trolls, firms that produce no products of their own but grow rich by threatening other companies that accidentally infringe the trolls' broad patents. Some critics have also argued that the Patent Office has issued way too many low-quality patents, especially in the software industry.

Why it matters: Patent litigation imposes large costs on the American economy. One estimate based on 2011 data found that patent trolls cost the US economy $29 billion per year. Patent litigation — from trolls and industry incumbents alike — can be particularly burdensome for new, innovative companies that are not yet large enough to have their own patent lawyers on staff.

What the Republican Congress could do: The Republican-run House of Representatives passed a patent bill in 2013 that was focused on the problem of patent trolls. However, the Democratic leadership killed the bill after pressure from trial lawyers, who feared that its "loser-pays" provision could set a precedent for establishing a similar rule for other types of litigation.

The proposal is widely expected to come up again in 2015, and insiders believe the new Republican majority makes it more likely to pass. The man in line to chair the Senate Judiciary Committee, Chuck Grassley (R-IA), is a supporter of patent reform, as is another senior Republican on the Committee, John Cornyn (R-TX). Patent reform should also enjoy support from some Democrats, including Sen. Chuck Schumer (D-NY) and President Obama.

The patent bill approved by the House in 2013 focused on procedural reforms intended to discourage patent trolling. But Derek Khanna, a conservative activist who focuses on tech policy issues, hopes Republicans will be more ambitious this time around. "The fundamental issue is that there are a lot of patents of dubious quality — stupid patents," he says. He argues that Congress should make it easier to invalidate these low-quality patents.

Where Obama stands: The president and Republican reformers largely see eye-to-eye on this issue. The White House supported the legislation passed by the Republican House in 2013, and was lobbying for the Senate to pass similar legislation. So unless Congressional Republicans go out of their way to antagonize the trial lawyers, the president is likely to sign any patent reform Congress passes in 2015.

Online privacy

The issue: If the police want to read your mail or rifle through your filing cabinet, they need to get a warrant. But the same standard doesn't always apply to information such as email that we store online. Law enforcement has invoked a rule called the Third Party Doctrine to argue that they can obtain this information with a simple subpoena — with little or no judicial oversight.

Why it matters: Not only is privacy a fundamental right under our Constitution, but the lack of protections for privacy can be bad for business. The lower protections the law offers to online information makes privacy-conscious consumers and businesses less likely to store their data online. It can also harm the competitiveness of US businesses who compete with cloud storage providers based in other countries.

What the Republican Congress could do: Legislation to strengthen email privacy has enjoyed strong support from both parties in Congress. But a major sticking point has been regulatory agencies such as the Securities and Exchange Commission, which have argued that it would be too burdensome to require regulators to get warrants before they can obtain the emails of companies they are investigating. Yet both industry groups and civil liberties advocates have opposed giving regulatory agencies a broad exemption from the warrant requirement.

Radia argues that email privacy legislation has a better chance of passage under the new Republican Congress. "Ultimately Republicans tend to be more skeptical of regulatory agencies like the SEC than Democrats," Radia says.

Szoka argues that Republicans should pass legislation that also addresses location privacy. He notes that Rep. Jason Chaffetz (R-UT) has proposed legislation that would protect the privacy of Americans' location data.

Where Obama stands: The president hasn't taken a strong position on this issue. He might side with law enforcement and regulatory groups within his administration, who worry that stronger privacy protection could hamper investigations. But given the popularity of this issue, there's a good chance he'd sign off on a reasonable bill to beef up online privacy.

Government surveillance

The revelations of Ed Snowden have reshaped the debate over government surveillance. (The Guardian)

The issue: In 2013, whistleblower Ed Snowden revealed that the National Security Agency has been engaging in dragnet surveillance of Americans. Angry members of Congress drafted the USA Freedom Act, some versions of which would limit bulk collection of Americans phone calling records.

Why it matters: As with email privacy, this issue has both constitutional and economic implications. Not only is NSA surveillance of Americans potentially unconstitutional, but unchecked NSA surveillance makes it hard for online services in the US to attract customers overseas.

What the Republican Congress could do: The NSA has angered members of Congress in both parties, so it's not clear whether the switch of control will make legislation on government surveillance more or less likely. The Senate lost a key NSA critic, Sen. Mark Udall (D-CO), on Tuesday. On the other hand, Sen. Rand Paul (R-KY) is a strong NSA critic and he has developed ties to incoming Senate Majority Leader Mitch McConnell.

And Khanna argues that there's room for the Republican Congress to take a more confrontational stance on the issue than Democrats have. "We know data from the NSA is being shared with the IRS and the DEA," Khanna says. Khanna argues that Republicans, who have recently raised the alarm about IRS abuses, should find out exactly how broadly NSA data is being shared and used by other parts of the government.

Congress will almost certainly bring up the issue next year (if it doesn't deal with it in the remaining weeks of the current Congress) because a significant provision of the Patriot Act is scheduled to expire next June.

Where Obama stands: Obama has defended the NSA's domestic surveillance activities, but he has also acknowledged a need to rein in the NSA's phone records program. So it's likely that Obama could cut a deal with Republicans on this issue.

Copyright reform

Rep. Bob Goodlatte (R-VA) (Astrid Riecken/MCT via Getty Images)

The issue: Last year, Rep. Bob Goodlatte (R-VA), the chairman of the House Judiciary Committee, began a "comprehensive review" of copyright law, with an eye to eventually modernizing the rules.

Why it matters: Copyright law shapes a number of important industries, including movies, music, and software. The controversial Digital Millennium Copyright Act, for example, has limited competition in the market for digital media devices. It also has a big effect on our culture — our near-perpetual copyright terms, for example, have made it hard for people to access content from the mid-20th century.

What the Republican Congress could do: Don't hold your breath for legislation to happen any time soon — or for the changes to be very ambitious.

Radia says the only copyright reform idea that has received any significant attention in Congress lately is the fight over royalty rates paid to broadcast music over the airwaves and over the internet. That issue might get action in 2015. "Other than music, it's hard to see copyright reform at least until 2016," Radia says. "There are fewareas of reform where the consensus is sufficiently broad to make action imminent."

Where Obama stands: Copyright reform has not been a major focus for the Obama administration. The White House reaction would depend on the specifics of Goodlatte's reform package, but there's likely to be plenty of common ground on this issue.

Cybersecurity

The issue: As the internet has become an increasingly important part of the American economy, policymakers have become concerned about threats from hackers and online espionage. Some have suggested government regulation of computer systems that constitute "critical infrastructure." Others have argued that privacy laws should be loosened to ensure companies can freely share information about security threats with the government.

Why it matters: No one doubts that online security is important. But the necessity of legislation is hotly debated. A 2013 proposal called CISPA would have immunized companies that shared cyber-security information from liability under privacy laws. But critics argued that this could become a loophole that would eviscerate consumers' privacy protections.

What the Republican Congress could do: CISPA passed the Republican House in 2013, and Radia says Republican control of the Senate makes it more likely that Congress will pass information-sharing legislation in 2015. Given the GOP's hostility toward regulation, it seems unlikely that proposals to regulate "critical infrastructure" will get traction in 2015.

Where Obama stands: CISPA faced a veto threat from the White House in 2013. So if Republicans passed similar legislation in 2015, there's a good chance Obama would veto it.

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