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Legislation for computing professionals to watch in 2018

Two pending court cases and three pieces of legislation might affect the cloud or the IoT. Best be prepared.

Companies using the Internet of Things, the cloud, or other IT-as-a-service offerings should keep an eye on Washington in the coming months.

Anyone working with the IoT or cloud computing may feel the impact of a handful of policy decisions that could be resolved in late 2017 or early 2018. Based on a couple of court cases and actions by the U.S. Congress and Federal Communications Commission, it may become more difficult for companies to use the cloud or the IoT. 

We’ve already talked about the FCC’s move to repeal its net neutrality regulations and the effort in Congress to extend an expiring foreign surveillance law. Both of those policy decisions could influence cloud computing and the IoT, as could legislation that requires IoT vendors that serve government clients to build in security.

But more legislation is underway—at least, if some vested interests get their way.

One caveat: Congress has been largely dysfunctional in recent months. While tech-related legislation is sometimes bipartisan, it’s been difficult for Congress to act on anything but must-do bills. In addition, legislation becomes even more difficult to pass after the first few months of an election year, so don’t expect many major bills to pass after next March or April 2018.

Here’s a look at two pending court cases and three pieces of legislation that could affect the cloud or the IoT.

Warrants for data stored overseas in the cloud

For nearly four years, Microsoft has fought a U.S. Department of Justice warrant for a customer’s data stored on a data center in Ireland. The company argued that the DOJ doesn’t have the authority to reach into data stored on servers in other countries, just as other countries shouldn’t have the authority to serve warrants on data stored in the United States.

The DOJ argued that Microsoft has access to the targeted customers’ data from within the United States. If law enforcement agencies cannot gain access to criminal suspects’ data stored overseas by U.S. companies, then cloud providers and users could hide data from police by moving it to servers outside the country, the DOJ has suggested.

If the DOJ eventually wins the case, Microsoft’s fear, which is shared by other cloud providers, is that it will open up foreign servers to U.S. law enforcement warrants. Plus, it could open up data stored in the United States to demands from other countries.

A New York judge issued the warrant in the case, involving drug trafficking, back in December 2013, and after Microsoft appealed the decision, the U.S. Court of Appeals for the Second Circuit ruled against the DOJ. The DOJ then appealed the case to the Supreme Court, and the high court agreed to hear the case during its 2017-2018 term.

Sex traffickers and cloud users

A casual observer might not see a connection between congressional efforts to fight sex trafficking and cloud-based services. But if the Stop Enabling Sex Traffickers Act (SESTA) bill passes, it could open up cloud providers and users to civil lawsuits.

SESTA, introduced by Ohio Republican Sen. Rob Portman in August, is an attempt to crack down on sex trafficking and prostitution services that are advertised online. The legislation would make it illegal to assist or support sex trafficking, either knowingly or with reckless disregard.

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Portman has focused in particular on, a free classifieds site sometimes used to advertise prostitution. Courts have repeatedly ruled that Backpage is not accountable for the ads placed on its website, Portman has noted.

The bill would weaken the Section 230 safe harbor in the Communications Decency Act (CDA), which immunizes online services from civil liability for the actions of their users. The bill, awaiting action in a Senate committee, would exclude federal and state enforcement of sex trafficking laws from the immunity.

“When Congress enacted [the CDA], I do not believe it intended to shield anyone from responsibility for serious federal crimes, much less sex trafficking,” Portman said in September. “I believe the goal was to protect website operators who were acting in good faith—and that made sense — who lacked knowledge that third parties were posting harmful or illegal content on their sites.”

Many tech advocates oppose the bill, however, saying it would open up websites and cloud providers to new civil lawsuits under the weakened Section 230.

The bill would have an “enormous” impact for any IT-as-a-service provider that hosts content or provides infrastructure, said the Computer and Communications Industry Association, a trade group.

SESTA would “threaten” online gathering places, the Electronic Frontier Foundation said in a blog post. The bill “would shift more blame for users’ speech to the web platforms themselves,” the EFF said. “Under SESTA, web communities would likely become much more restrictive in how they patrol and monitor users’ contributions.”

Especially vulnerable would be websites and companies that operate on small budgets but still “play a crucial role in modern life,” the EFF added.

FCC deregulates business data connections

For more than a decade, some business and consumer advocates have pushed for the FCC to cap prices charged by providers of business data services (BDS), the dedicated Internet connectivity used by many businesses and nonprofits and by mobile and IoT carriers to connect wireless towers to the wider Internet.

In the U.S., the market for business data services, including low-bandwidth services called special access, is largely dominated by AT&T and Verizon. BDS generates an estimated $45 billion-plus in revenue each year for AT&T, Verizon, and other providers, and critics of the companies say a lack of competition has created artificially high rates.

After years of inaction, the FCC moved in the last months of President Barack Obama’s administration to cap and, in some cases, cut the prices charged for the widely used services. But the FCC canceled a vote scheduled for last November under pressure from congressional Republicans.

Under President Donald Trump, a Republican majority took over the FCC, and in April, the majority voted to go in the opposite direction and deregulate much of the BDS market.

The FCC’s goal of creating “perfect” competition in the BDS market didn’t work, FCC Chairman Ajit Pai said then. "For a time, the FCC drank deep of heavy-handed economic regulation of the BDS market," he said in April. "Price regulation... is seductive, but in reality, price regulation threatens competition and investment. Regulators will always struggle to set the right price."

Some advocates predicted that after the deregulation, broadband prices for businesses that still depend on sub-50 Mbps data lines could rise 25 percent or more.

But the FCC’s April vote to deregulate BDS isn’t the end of this issue. Several organizations have filed lawsuits challenging the FCC’s action. Some telecoms argue the deregulation didn’t go far enough; others argue the agency went too far. Those cases are consolidated in the U.S. Court of Appeals for the Eighth Circuit.

Meanwhile, consumer advocates Public Knowledge and the Consumer Federation of America filed a brief in the case, arguing the deregulation runs contrary to information collected by the FCC.

The FCC “has adopted a novel theory, unsupported by the record, that deregulation of the BDS market is preferable to regulation, regardless of the facts before it,” the groups wrote.

New spectrum for the IoT, 5G

Two bills would open up wireless spectrum to be potentially used by IoT networks and devices.

In January, Sen. John Thune introduced the Mobile Now Act, a bill to free up 500 MHz of spectrum held by federal agencies for private sector use by 2020. The legislation is a “gateway to faster and more extensive wireless coverage that empowers more Americans to use technologies requiring a connection to the Internet,” said Thune, a South Dakota Republican, when introducing the bill.

One of Thune’s goals is to make spectrum available for upcoming 5G mobile services, but additional spectrum would also be available for IoT networks, even if they don’t need super-fast 5G connections. The bill passed the Senate in August and now awaits action in the House of Representatives.

Meanwhile, in August, Sen. Maggie Hassan (D-N.H.) and Sen. Cory Gardner (R-Colo.) introduced the AIRWAVES Act, which would move federal spectrum to commercial and unlicensed uses. The bill would use a portion of the spectrum auction proceeds to fund wireless infrastructure in rural areas. It awaits action in a Senate committee.

New legislation: Lessons for leaders

  • A bill in the U.S. Congress could open up cloud providers and users to new civil lawsuits in an effort to stop sex trafficking.
  • The Supreme Court will examine whether cloud providers must comply with U.S. warrants for subscriber information when that data is held on overseas servers.
  • Two bills in the U.S. Congress would open up new spectrum for the IoT and 5G mobile service.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.