The Internet World Storms Washington

May 29, 2012

US capitolThis Congress’s high-profile debate on legislation aimed at combating online piracy unleashed a flood of lobbying spending and maneuvering that brought to light the powerful forces of the Internet world.

Google, Yahoo, and many other Internet-related businesses achieved what some considered a hard earned — and high priced — coup against the powerful entertainment industry in swatting down the Stop Online Piracy Act.

But it has been more than the Internet and entertainment industry involved in fights on legislation related to online activities. The heightened role of the Internet in daily life for social, educational, business and even political purposes has led to a myriad of issues for legislators and policymakers.

And those issues have lured to Washington thousands of lobbyists working on behalf of businesses ranging from drug makers to energy and utility companies, from retailers and advertisers to aerospace companies and gambling groups. Police, firefighters, lawyers, Indian tribes and universities — and, of course, consumer groups and civil liberties groups — have been in the halls of Congress and executive agencies as well to talk about policies related to online activity.

Leslie Harris, president of the Center for Democracy and Technology, an advocacy group backed by several technology companies, acknowledged that the online piracy legislation caused “the first emergence of a broad-based Internet community” that included “not only tech giants and the users, but all the young innovators and investors.” The continued and expanding list of issues related to the Internet continues to broaden that community of organizations embroiled in legislative and regulatory battles.

These organizations and companies address a multitude of issues, and they form and reform varied coalitions depending on the topic. Just consider some of the issues:

  • online privacy
  • copyright/online enforcement of copyright
  • patent reform
  • online retail sales tax
  • social networking
  • online safety
  • cyber security
  • data storage
  • location tracking
  • online gambling
  • online advertising
  • broadband spectrum auctions

Other issues unfolding in both the legislative and executive branches include:

  • FCC discussions of tiered broadband pricing
  • intellectual property protections in the intellectual property rights chapter of the pending TransPacific Partnership trade agreement
  • potential restrictions on the use of facial recognition technology
  • a global treaty called the Anti-Counterfeiting Trade Agreement
  • the expansion of acceptable Web domain address endings, making it possible for addresses to end with phrases like .food, .sport or .bank (the nonprofit Internet Corporation for Assigned Names and Numbers is now accepting applications for new Web domain address endings). Advertisers and some lawmakers fear it would confuse consumers and force companies to defensively purchase domains related to their brands.
  • freedom of speech

Tracking the Money

The computer and Internet industry was the top spender on lobbying in 2011, reporting $125 million on lobby disclosure forms to keep tabs on an array of issues on Capitol Hill and the halls of the executive branch, but primarily copyright, patent reform and privacy, according to the Center for Responsive Politics. That topped the entertainment industry’s expenditures for 2011, which reported spending $122 million.

The high spending continues this year, with the computer and Internet industry reporting $32.7 million in lobbying expenditures during the first quarter, employing 900 lobbyists. That made it the sixth heaviest spender so far this year, according to CRP, far behind the top ranked pharmaceutical and health products industry, which spent nearly $70 million in the first quarter of 2012, according to the Center for Responsive Politics, with more than 1,211 lobbyists reporting.

Among the bills drug companies lobbied for was the Stop Online Piracy Act. John Clark, chief security officer of Pfizer Inc., told lawmakers that his company believed the measure could help its efforts to stop the sale of counterfeit pharmaceuticals over the Web. That was just one issue that Pfizer Inc. lobbied on, but the company reported more than $3.5 million in lobbying expenditures in the first quarter of 2012.

While it is impossible to determine how much any industry, organization or company spends on a particular issue, many of the organizations that list various online issues or bills on their lobbying disclosure forms are already big spenders in Washington. The corporation that spent the most in the first quarter was AT&T, reporting $7 million, second only to the U.S. Chamber of Commerce — and both have lobbied on a slew of Internet-related legislation.

Meanwhile, the defense aerospace industry spent more than $15.3 million in the first quarter of this year, reporting 318 clients. Boeing Co. alone reported more than $4.1 million lobbying on a number of issues, including those related to the broadband spectrum, cyber security/cyber command, the Cyber Intelligence Sharing and Protection Act of 2011 (CISPA); Strengthening and Enhancing Cybersecurity by Using Research, Education, Information and Technology (SECURE IT); Homeland Security, and the Cyber and Physical Infrastructure Protection Act of 2011.

The Association of National Advertisers spent $400,000 in the first quarter of this year, but reported nearly $2.4 million in lobbying expenditures in 2011. Among the issues it reported on its disclosure forms were the Commercial Privacy Bill of Rights Act of 2011, Do Not Track Online Act of 2011, and the Personal Data Privacy and Security Act of 2011.

The National Retail Federation spent $720,000 in the first quarter this year, but it is also operating a $10-million “Retail Means Jobs” multi-year campaign, which includes a 60-day “efairness” push focused on closing a loophole that allows some online retailers to avoid collecting sales taxes.

Reforming Coalitions

There are many other businesses and groups involved in such debates. Among the clients of lobbyists listed on lobbying disclosure forms are:

  • broadband Internet providers such as Comcast and Verizon
  • retailers
  • the movie industry
  • states and cities (like the Mississippi Economic Council and the Ohio Council of Retail
  • Merchants)
  • the Direct Marketing Association
  • civil liberties groups such as The Constitution Project and the American Civil Liberties Union
  • technology groups like the Center for Democracy and Technology
  • U.S. Chamber of Commerce
  • gambling groups, including poker groups and horse racing
  • Indian tribes
  • Fraternal Order of Police
  • International firefighters association
  • power companies
  • universities
  • American Association for Justice
  • the wireless communications industry

Various organizations and companies have banded together in what previously may have seemed unlikely coalitions. The International Association of Fire Fighters, along with the Fraternal Order of Police, supported the PROTECT-IP ACT, a Senate bill aimed at cracking down on rogue websites providing counterfeit goods or illegal copies of copyrighted digital content. Others that lobbied on the bill included the National Association of Chain Drug Stores, Lorillard Tobacco Company, theInternational Brotherhood of Teamsters, Human Rights First, Rosetta Stone, the Congressional Fire Services Institute, and the Association of Test Publishers — along with dozens and dozens of others.

The National President for the FOP, Chuck Canterbury, said the organization seeks to stop the sale of such items as counterfeit batteries, gloves, and brake pads. Even “counterfeit pharmaceuticals, tooth paste, and footwear put our seniors and our children at risk,” he said.

Lobbyists on CISPA, proposed legislation aimed at encouraging the federal government and technology companies to share Internet traffic information, included: the U.S. Chamber of Commerce, AT&T, Google, Boeing and Northrop Grumman, Edison Electric Institute and Duke Energy Corp., American Council of Life Insurers, United Services Automobile Association; Time Warner Cable Inc., MasterCard and American Express, insurance companies; the American Civil Liberties Union, the Sacramento Municipal Utility District; the American Library Association; Georgia Institute of Technology, Northeastern University and more.

Legislation on online retail taxes, such as the Marketplace Equity Act, has brought to the Hill such groups as Verizon, Wal-Mart, Best Buy; The American Federation of State, County and Municipal Employees, Americans for Tax Reform, the California State Assembly, several cities, and the National Association of College Stores.

The Automotive Aftermarket Industry Association, the U.S. Chamber of Commerce, News America Inc., MasterCard, and Viacom International Services Inc. sent lobbyists to the Hill to focus on the Combating Online Infringement and Counterfeits Act. Other lobbyists entered hearing rooms on online gaming legislation, including Poker Players Alliance, National Thoroughbred Racing Association, and the Muckleshoot Indian Tribe (Washington State).

Written by Christina L. Lyons, copyright 2012 CQ Press, an Imprint of SAGE Publications, Inc.