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<p>The protection of privacy on the

The protection of privacy on the Internet is vital.  Protection from identity theft, protection of deeply private information – this is important to us as citizens and as consumers.  And it is fundamental for allowing the Internet and the information economy to thrive.


And thrive they have.  Internet usage has increased nine hundred thousand percent since the Telecom Act of 1996, and to meet that demand, the broadband industry has invested $1.4 trillion dollars.


This growth occurred under the Federal Communication Commission’s (FCC) light regulatory treatment of the Internet as an information service, and under the careful eye of the Federal Trade Commission (FTC), which, with limited exceptions, was responsible for protecting consumer privacy on the Internet.


The FTC has brought over 500 cases protecting the privacy and security of consumer information, including cases where companies were alleged to have deceptively tracked consumers online, or to have shared private consumer data with unauthorized third parties.  The FTC has been the leader in protecting consumer privacy.


But with the FCC’s 2015 Open Internet Order, all of that changed.  Broadband Internet Access Service, or BIAS, was reclassified as a telecommunications service, which in turn meant the FTC lost its jurisdiction over the privacy policies of BIAS providers.


So now, after having forced the FTC off the field for broadband providers, the FCC has proposed a novel regulatory scheme for the newly reclassified providers.   


But the FCC’s rules would apply only to certain parts of the Internet, and that is a source of significant concern.  Both the Obama Administration and the FTC have endorsed a consistent privacy regime across the digital landscape.  Indeed, the FTC staff filed comments with the Commission stating:


“[T]he FCC’s proposed rules, if implemented, would impose a number of specific requirements on the provision of BIAS services that would not generally apply to other services that collect and use significant amounts of consumer data. This outcome is not optimal.”


For those of you not familiar with bureaucrat-speak, let me tell you, “this outcome is not optimal” is pretty strong stuff for one agency to say about another.


I share the FTC’s concern, and by an overwhelming majority, so do the American People.  Progressive Policy Institute polling shows that 94 percent of Internet users believe that “All companies collecting data online should follow the same consumer privacy rules so that consumers can be assured that their personal data is protected regardless of the company that collects or uses it.”  I am concerned that, at any particular time, consumers will not have reasonable certainty of what the rules are, and how their privacy decisions apply.  At home on wi-fi?  At home on a smart phone?  Using your smart phone on a friend’s wi-fi?  Using the Internet at a library?—each of these could have very different privacy implications for a consumer because of the FCC’s proposed piecemeal approach to privacy.


There are other problems for consumers as well. 


Will the Commission’s proposed rules make it more or less likely that BIAS providers will be able to provide better and more innovative services that could benefit consumers?  And of particular importance to our rural communities, how are small BIAS providers going to be able to comply with the Commission’s proposed regulations?  Most of the rural carriers in South Dakota have between 2,000 and 5,000 broadband subscribers.  How are they supposed to pay for the additional staff, software licenses, training, and other expenses that would be required to comply with the Commission’s proposed rules?


The FCC’s push for a separate regulatory scheme for BIAS providers is based in significant part on their claim that “ISPs are the most important and extensive conduits of consumer information and thus have access to very sensitive and very personal information.”  I am not so sure about that.  It appears that many companies that are not broadband providers have access to information about consumers that is more personal and more sensitive than much of what ISPs can access, yet those entities are not covered by the Commission’s proposal. 


Is the FCC, which is a novice when it comes to regulating Internet privacy, the right agency to protect us from identity theft and to protect our private information?  Do we want to have inconsistent privacy protections for consumers, with distinctions based upon how the Commission choses to classify services under the Communications Act, an Act that never envisioned the FCC dealing with online privacy or cybersecurity?  Would consumers and competition be better off with the FCC’s proposal? 


The witnesses we have before us represent a broad variety of backgrounds and are true experts on these issues.  I look forward to your answers to these and the other questions that you are asked here today.


Before we begin, I want to submit a few items to the record of today’s hearing.  I received two letters that I believe contribute greatly to this topic.  The first letter is signed by constitutional scholar Laurence Tribe and 13 other law professors, economists, and experts.  They support strong protections for consumers in the online space, but they have significant concerns with the FCC’s proposal.  Instead, they suggest the Commission “adopt rules modeled after the FTC’s longstanding and highly successful approach.” 


The second letter, signed by the heads of eight trade associations representing both the technology sector and the telecom industry, also argues for the FCC to harmonize its effort with the existing FTC framework, in order to minimize consumer confusion and provide flexibility for the marketplace to innovate. 


There is also a new paper published by Gerald Faulhaber [FALL-hay-burr], former chief economist at the FCC, and Hal Singer, a Senior Fellow at the George Washington School of Public Policy.  Their paper is titled “The Curious Absence of Economic Analysis at the Federal Communications Commission: An Agency in Search of a Mission.”  While it focuses primarily on the Commission’s failure to ground its recent regulations in economic reasoning, Faulhaber and Singer offer some valuable insight about the FCC’s privacy proposal, in particular noting the complete lack of any cost-benefit analysis by the Commission in this proceeding.


I will submit this paper for the record as well.

Kline Statement: Debate on Bills to Strengthen Higher Education

Education & the Workforce Committee - Mon, 07/11/2016 - 12:00am
This bill is one of several bipartisan reforms the House is considering today that will help strengthen higher education and put more Americans on a path to success.

A quality education is crucial to succeeding in today’s workforce. Unfortunately, our costly, bureaucratic, and outdated higher education system leaves too many Americans behind.

We all know the tough challenges that exist. College costs continue to rise. A dizzying maze of student aid programs discourages students from pursuing a degree or credential. Complex federal rules impede innovation and make it harder for students to pursue a degree more quickly and at less cost.

The net result is that it’s become harder and harder for Americans to realize the dream of a higher education. Without the skills and knowledge they need to succeed in the workforce, many men and women struggle to find good-paying jobs and earn a living to provide for their families.

Those who are fortunate enough to earn a degree are often saddled with student debt they can’t afford and unprepared to start their careers in an increasingly competitive and changing economy.

We have to do better. We have to open more doors to opportunity and help more Americans reach their full potential.

The bipartisan package of higher education reforms we’re considering is a positive step toward achieving that goal.

Together, these reforms will empower students and their parents to make informed decisions; simplify and improve the student aid process; enhance existing support for institutions serving minority students; and ensure strong accountability for taxpayer dollars.

We have more work to do to strengthen higher education, but today we are making important progress.

I want to thank my Republican and Democrat colleagues for putting their differences aside and working together to help more Americans pursue their dream of a college degree.


GSA Begins Search For New Commissioner to Lead Technology Transformation Service

GSA news releases - Mon, 07/11/2016 - 12:00am
Will help to build and develop new organization that is working to improve the public’s experience with government

Federal Circuit Decision Final Word on Jurisdiction for Hatch-Waxman Act Patent Suits?

WLF Legal Pulse - Fri, 07/08/2016 - 9:43am
On June 20, 2016, the US Court of Appeals for the Federal Circuit declined to rehear en banc a panel’s decision in Acorda Therapeutics v. Mylan Pharmaceuticals from this past March.  The panel in Acorda ruled that when a generic drug manufacturer files with the FDA an Abbreviated New Drug Application (ANDA) for approval to […]
Categories: Latest News

Thune Addresses FCC Leadership Failures

WASHINGTON - U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, addresses leadership failures at the Federal Communications Commission.

Mr. President, I rise today to speak about the importance of keeping independent agencies accountable to Congress and to the American people.

Congress created independent agencies to be places where expertise in complex areas of the nation’s economy informs policy making, within limits set by Congress.  One such congressional creation is the Federal Communications Commission. 

Congress conferred independence on the FCC so that it would be free from the normal control exercised by the President over the executive branch.  But in recent years, the FCC has behaved less as an independent commission accountable to Congress, and more as a de facto arm of the executive branch, wholly subservient to the President.

At the same time, the FCC has become more partisan than ever before, and an institution that has seized greater regulatory power while simultaneously shutting down bipartisan dialogue and compromise.

The recent rulemaking proceedings regarding Title II common carrier authority, the massively expanded E-rate and Lifeline programs, backwards-looking set-top box rules, and the agency’s power grab over privacy regulations have all been characterized by a lack of bipartisan compromise or respect for the limits of the authority delegated by Congress.

Much of the responsibility for this downward trajectory rests with the current FCC Chairman, Tom Wheeler.  For example, during Chairman Wheeler’s confirmation process, I asked him if he would commit to coming to Congress for more direction before attempting another iteration of net neutrality rules.  Mr. Wheeler unequivocally said that he would do so.  However, not only did Mr. Wheeler not come to Congress for more direction, at the behest of President Obama, he jammed through the most radical implementation of net neutrality rules ever—a power grab of stunning proportions—and he did so on a purely partisan vote.

The number of three-to-two party-line votes on Commission meeting items during Mr. Wheeler’s tenure are a clear indication of an FCC chairman who embraces partisanship over compromise.  In just the first year of his chairmanship, Mr. Wheeler forced through more items on party-line votes than the previous four chairs combined.

Chairman Wheeler speaks often of his belief in the importance of competition and market forces.  Hearing that, one might think he would exercise his agency’s powers with humility and a light touch in order to promote the incredible innovation of which our communications sector is capable.  Instead, Chairman Wheeler seems more focused on waging partisan battles and accumulating more power, while at the same time avoiding accountability to Congress and the American people.

I have come to the floor today to talk about the most recent example of Chairman Wheeler utilizing questionable legal authority, while simultaneously trying to dodge public accountability.  This example relates to the FCC’s rules about disclosure of nonpublic information.

The FCC’s own rules prohibit its employees from disclosing nonpublic information to anyone outside the Commission unless expressly authorized by the Commission or its rules.  Nonpublic information includes details of upcoming rulemakings or other actions that the commissioners are still negotiating.  These rules are intended to foster the Commission’s ability to have honest and fulsome negotiations among the commissioners and staff, and to prevent any special interests from gaining a particular advantage over other stakeholders.

Earlier this year, however, Commissioner Michael O’Rielly wrote a blog post expressing his concerns that Chairman Wheeler was instead using these rules to muzzle other commissioners.  Though Commissioner O’Rielly respected the Commission’s rules against disclosing details about upcoming rulemakings without authorization to the press or other stakeholders, he pointed out that Chairman Wheeler was freely disclosing nonpublic information whenever he wanted.

Commissioner O’Rielly was concerned that this allowed Chairman Wheeler to frame and influence the public’s understanding of upcoming issues to his advantage by selectively disclosing information that no other commissioner is allowed to discuss publicly.

Indeed, the chairman’s staff would later tell my staff that Commissioner O’Rielly would not be permitted to correct a factual error stated by Chairman Wheeler if doing so meant discussing nonpublic information.

As Chairman of the Commerce Committee, I sent a letter this March asking Chairman Wheeler to explain whether he discloses nonpublic information to outside groups and how the Commission authorizes his disclosures.  [Mr. President, I ask unanimous consent to enter the exchange of letters between myself and Mr. Wheeler on this issue into the record, and that these letters appear in the record at the conclusion of my remarks.]  In his response, Chairman Wheeler maintained that, as chairman, he can unilaterally authorize disclosures of nonpublic information whenever he wants, without any need for approval by the Commission, despite the clear prohibition against doing so in the Commission’s own rules.

The events surrounding the FCC’s March 31 Open Meeting are a striking example of how the selective leaking of nonpublic information can be used to distort an ongoing debate and turn an emerging bipartisan consensus into a partisan power grab. 

The Open Meeting agenda included an order expanding Lifeline, which is a program that has spent billions of ratepayer dollars in an effort to improve access to communications technology for low-income Americans.  While the goal of this program is important, unfortunately, it has been replete with rampant fraud for years, which the U.S. Government Accountability Office has recognized more than once.

A compromise on Lifeline between a Democratic commissioner and the two Republican commissioners was emerging.  This compromise would have included a spending cap to prevent the program from wasting ratepayer dollars.  It turns out, however, that Chairman Wheeler was not on board with this compromise.

On the morning of March 31st, Chairman Wheeler delayed the Open Meeting by several hours, a highly unusual move.  During the delay, Politico published a story about the emerging bipartisan compromise, citing “sources familiar with the negotiations.”  Disclosure of any information about ongoing negotiations right before an Open Meeting is a direct violation of the FCC’s “sunshine rules,” which protect commissioners’ deliberations. 

What happened next is exactly what you might expect.  The Politico story spurred outside political pressure against the emerging bipartisan compromise, which subsequently fell apart.  Ultimately, the Lifeline order moved forward on a three-to-two party line vote, without a cap or other bipartisan reforms, right in line with Chairman Wheeler’s preference.  Yet another three-to-two party-line vote forced by the chairman –thwarting a common sense, bipartisan compromise.

And just last week, 12 states, including my home state of South Dakota, sued the FCC in federal appellate court here in Washington, D.C., challenging the regulatory overreach of the FCC’s Lifeline order that came out of the March 31 Open Meeting. 

In April, I sent another letter asking Chairman Wheeler to explain the source of his claimed authority to disclose whatever nonpublic information he wants, whenever he wants.  I also asked a direct question: “did you, Chairman Wheeler, authorize the disclosure of nonpublic information to Politico on the morning of March 31st in advance of the Open Meeting?"

Chairman Wheeler responded that his position as chief executive of the Commission empowers him to do anything that streamlines the FCC’s work.  According to his interpretation, if the chairman decides on his own that releasing nonpublic information will make the FCC operate more efficiently, he can do it, even though the FCC’s rules explicitly prohibit the disclosure of nonpublic information.

I appreciate the role the chairman plays in the day-to-day management of the Commission, but this appears to be a specious attempt to exempt the chairman from a very clear rule.  Indeed, there is no record that the Commission ever intended for its chairman to be exempt when the agency adopted the rule twenty years ago, and the rule very clearly gives the Commission, not its chairman, the authority to disclose nonpublic information.

In responding to my April letter, Chairman Wheeler also ignored the question of whether he personally authorized the leak to Politico on the morning of the Open Meeting.  My staff followed up with Mr. Wheeler’s staff several times on this matter, and they have emphatically stated that Chairman Wheeler refuses to answer this question.

Everyone who cares about government accountability should pause to think about this, Mr. President: even though Chairman Wheeler claims he has the clear legal authority to leak whatever nonpublic information he wants, whenever he wants, he nevertheless has refused to answer this simple question about whether he indeed authorized the leak on the morning of March 31st.

Since Mr. Wheeler could have just said “no” if he did not actually authorize the leak of nonpublic information, that leaves only two possible conclusions:

  • One, Chairman Wheeler did authorize the leak, but is not confident in his roundabout interpretation of the rules and fears admitting to violating them, or
  • Two, Chairman Wheeler simply does not respect the legitimate role of Congressional oversight and believes that he is unaccountable to the American people.

I would also note, Mr. President, that while Chairman Wheeler refused to answer whether he authorized the disclosure, he sought to obfuscate and cast blame by stating that it was instead Republican Commissioner Ajit Pai who leaked nonpublic information in advance of the Open Meeting.  This shell game is unworthy of a chairman of an independent commission.

Indeed, Mr. Wheeler’s attempt to cast blame on another commissioner only adds emphasis to the overall point I’m making here.  Chairman Wheeler seeks to use the rule prohibiting the disclosure of nonpublic information as both a shield and a sword.  On the one hand, he claims that the rule prohibiting the disclosure of nonpublic information does not apply to him; on the other hand, he seeks to shut down criticism and debate from another commissioner by stating that the commissioner may have violated the rule prohibiting disclosure of nonpublic information.

The FCC’s nonpublic information rules were intended to facilitate and protect internal Commission deliberations.  Chairman Wheeler instead is using them to stifle or manipulate the other commissioners.

Fortunately, the FCC Office of Inspector General is now investigating what happened on March 31st.  The IG is looking into who disclosed the nonpublic information about ongoing negotiations among the commissioners, including any role Chairman Wheeler had in the leak to Politico.  I look forward to the IG’s findings, and expect that we will learn the answers to the questions I have posed to Chairman Wheeler, particularly the one question that he has refused to answer so far.

Taken alone, the Lifeline leak may seem to be just a minor transgression that can be chalked up to business as usual in Washington, D.C.  But in the case of current FCC leadership, it is just one example out of many that demonstrate a disregard for the limits Congress has placed on the agency’s authority.

The regulatory power grabs over Title II common carrier authority, and the FCC’s recent privacy rule are further evidence that Chairman Wheeler shares the Obama Administration’s propensity for legal overreach and the intentional circumvention of Congress.  In this environment, Congressional oversight is more important than ever as a critical check on bureaucratic power. 

Regardless of who sits at the helm of the Commission, such oversight must be pursued, and I am committed to ensuring that it does. 

Cruz Calls Hearing on Future of Space Under New Administration

The hearing will focus on the importance of ensuring consistency in policy to best leverage investments made in human space exploration. The hearing will also explore questions facing the agency related to the upcoming presidential transition

Thompson Statement: Markup of H.R. 5587, "Strengthening Career and Technical Education for the 21st Century Act"

Education & the Workforce Committee - Thu, 07/07/2016 - 10:05am
As co-chair of the Career and Technical Education Caucus and the sponsor of H.R. 5587, I am happy to have an opportunity today to discuss this bipartisan legislation.

It’s no secret that our country continues to face significant economic challenges, and it’s no surprise that many men and women are worried about their future and their family’s future. Just last week, a Gallup poll found that 54 percent—just 54 percent—of Americans believe today’s young people will live a better life than their parents.

As a father, I can say there is nothing a parent wants more for their children than a life that is better than their own. When you hear that only half of all Americans expect their children to have a brighter future than they did, it becomes clear that we need to do better. And we can do better—not just for our own kids but for the neighbor who can’t find a job, the friend from church who struggles to make ends meet, or the high school student who doesn’t believe he or she has what it takes to succeed.

With the Strengthening Career and Technical Education for the 21st Century Act, we have an opportunity today to advance reforms that will help these and many other Americans—especially young Americans—obtain the knowledge and skills they need to break the cycle of poverty and achieve a lifetime of success. The bill will modernize and improve current law to better reflect the challenges and realities facing students, workers, and employers.

The bill will empower state and local leaders by simplifying the application process for receiving federal funds and providing them more flexibility to use those resources to respond to changing education and economic needs. These reforms will help state leaders focus on preparing students for the workforce—not duplicative or overly prescriptive federal requirements—and enable them to determine the best way to do so.

Other reforms will help ensure career and technical education is providing students the skills they need to compete for in-demand jobs that exist in their local communities now and in the future. To accomplish that goal, the legislation promotes work-based learning and encourages stronger engagement with employers—both in developing and evaluating career and technical education.

To increase transparency and accountability, H.R. 5587 streamlines performance measures to ensure secondary and postsecondary programs deliver results, helping students graduate prepared to secure a good-paying job or further their education. The bill also includes measures to provide students, taxpayers, and state and local leaders the information they need to hold CTE programs accountable for delivering those results.

Finally, H. R. 5587 will reduce the federal role in career and technical education and limiting opportunities for the federal government to intervene in state and local decisions, and preventing political favoritism.

These reforms and others in this bipartisan bill will improve CTE for the many students who rely on it to help them pursue their dreams and accomplish their goals. And I’m confident they will also help more students do the same.

The substitute amendment I am offering makes a number of changes, including technical clarifications, to the underlying bill. Among them are changes to clarify eligibility requirements for postsecondary institutions and the innovation grants application process. Other changes will increase coordination between research and evaluation activities, improve professional development, and allow CTE funds to be used to support career and technical student organizations and to make instructional content widely available.

In closing, I’d like to thank Representative Clark and our colleagues on both sides of the aisle for the work they have done to move this bill forward. I urge all of my colleagues to support this important bipartisan legislation.

Kline Statement: Markup of H.R. 5587, "Strengthening Career and Technical Education for the 21st Century Act"

Education & the Workforce Committee - Thu, 07/07/2016 - 10:00am
The committee meets to consider H.R. 5587, the Strengthening Career and Technical Education for the 21st Century Act. Introduced by Representatives Glenn Thompson and Katherine Clark, this bipartisan bill will help more Americans—particularly younger Americans—compete and succeed in today’s workforce.

We are here because of inspiring individuals like Paul Tse. Paul is, in his own words, a proud graduate of a career and technical education program. These programs—created and run at the state and local levels—offer individuals the knowledge and hands-on training they need for a wide range of fields, from computer science and information technology to law enforcement and nursing. Successful CTE programs are often based on rigorous coursework and the workforce needs of local communities.

At a hearing the committee held in May, Paul testified how he struggled as a student in high school—poor attendance and lackluster grades. As his friends began making plans to go off to college, he remembered feeling embarrassed and helpless at the idea that he might be left behind. Then one day his life changed.

A family member suggested he look into a skilled trade as a possible career path. With the help of a guidance counselor, Paul enrolled in a CTE program at the Thomas Edison High School of Technology, located in Silver Spring, Maryland. His program focused on installing and maintaining heating, ventilation, and air conditioning systems. Soon after graduation, he received two offers to join local businesses as an apprentice.

In the span of a few years, Paul has been a student, apprentice, journeyman, and now, project manager. He has a promising, fulfilling career, and I might add, not a dime of student loan debt. Speaking of his experience as a CTE student, Paul said, “I am the American dream,” and he urged us to help ensure every child in America has the same opportunities he did.

I think all of us want to hear more stories like Paul’s, and that’s why this legislation is so important. In recent years, we have taken significant steps to help individuals receive the knowledge and skills they need to succeed. We modernized an outdated workforce development system and improved K-12 education, important achievements that will make a positive impact in the lives of many Americans.

Today we can build on those efforts and help further spread the promise of a quality education to more Americans. Indeed, many of the same principles that guided those efforts are also reflected in this bill: restoring control to state and local leaders; enhancing transparency and accountability for taxpayers; ensuring a limited federal role; and better aligning programs with in-demand jobs.

It’s because of these principles the bill includes reforms to ease administrative burdens and increase funding flexibility at the state and local levels; it’s why the legislation encourages stronger partnerships with local business leaders; it’s why the bill empowers state leaders to set clear measures of performance that serve the interests of students and taxpayers; and it’s why the legislation reins in the authority of the Secretary of Education and restricts the ability of the federal government to interfere in state and local decisions.

These reforms will help prepare students for today’s workforce, not the workforce that existed years ago. A great education is the great equalizer, but not every individual chooses the same path. For those who have a particular skill, talent, or passion, career and technical education is often the key that opens the door to a lifetime of success. That’s true for Paul Tse, and with this legislation, it can be true for many others as well.

I want to thank Representatives Thompson and Clarke for introducing a bipartisan bill that will improve career and technical education and help Americans compete and succeed in the workforce. I urge my colleagues to support the Strengthening Career and Technical Education for the 21st Century Act.

GSA Develops Unprecedented Government Platform to Manage Big Data

GSA news releases - Thu, 07/07/2016 - 12:00am
GSA receives one of six worldwide Red Hat 2016 Innovation Awards

Thune: Congress Sending Pro-Security Aviation Bill to President by July 15

Now is the time to advance the bicameral, pro-security aviation bill to keep Americans safe.

Thune Calls Hearing on FCC’s Proposal to Change Broadband Privacy Rules

The hearing will examine the Federal Communications Commission’s proposal to apply a new regime of privacy rules to broadband internet access providers.

Hearing on FAST Act’s Impact on Economy and Transportation

The hearing will explore stakeholder perspectives on implementation of the recently-enacted FAST Act and its role in improving our nation’s infrastructure, increasing safety, and enhancing economic growth.

House and Senate Leaders’ Joint Statement on FAA Extension Agreement

House and Senate leaders announce a bipartisan, bicameral agreement on a Federal Aviation Administration extension that will provide important safety, security, and time-sensitive improvements for the U.S. aviation system.

Committee Probes Foreign Cyber Attacks on U.S. Small Businesses

House Small Business Committee News - Wed, 07/06/2016 - 12:00am

Chabot: “Impacts both our national security and our economic security”

WASHINGTON – Leading cybersecurity experts warned members of the House Small Business Committee today that American small businesses are at great and growing risk of cyberattacks from foreign hackers. Today’s hearing was part of the Committee’s ongoing effort to spotlight the cyber security threats faced by America’s 28 million small businesses and develop solutions to combat the threat.

“Small business cyber security has been a top priority for our Committee throughout this Congress,” said House Small Business Committee Chairman Steve Chabot (R-OH). “In our previous hearings, we have heard stories from small business owners who have been the victims of cyber attacks. We have also heard dire warnings from cyber security experts about the new and varied cyber threats facing America’s 28 million small businesses.”

“Small businesses play an indispensable role in providing the federal government with products and services. They are integral links in the government supply chain but are often ill-equipped to combat against sophisticated foreign cyber attacks. This makes them a prime target for state sponsors of cyber terrorism who wish to undermine America’s commerce and security,” explained Chabot, who is also a senior member of the House Foreign Affairs Committee.

“This is an important dimension of the cyber security threat that impacts both our national security and our economic security and I believe it demands much more attention than it has received so far,”concluded Chairman Chabot.

You can read full testimony from today’s hearing here and view full video here.


“As we know from FBI Director Jim Comey’s statement yesterday, the FBI has recently “developed evidence that the security culture of the State Department in general, and with respect to use of unclassified e-mail systems in particular, was generally lacking in the kind of care for classified information found elsewhere in the government,” testified Jamil N. Jaffer, the Director of the Homeland and National Law Program at the George Mason University School of Law.

“This is troubling news indeed, given the important role that the State Department plays in our relations with other nations, the type of sensitive information it receives from our allies, and the critical nature of the negotiations it conducts on behalf our people,” added Jaffer, who also praised Chairman Chabot’s successful effort to include an amendment to a State Department Authorization measure thatrequires a cybersecurity investigation into the State Department’s possible use of equipment and services purchased from suppliers linked to key cyber threat nations.

“The potential use of such equipment and services by the U.S. government is a key issue for congressional oversight, particularly given the threat environment that our nation—in both the public and private sectors—faces from nation-state actors and their proxies,” stressed Jaffer. “The innovative small businesses that are key engines of job growth and investment in our economy… must confront the very real threats we face in cyberspace.”


“As small businesses increase their connectivity to the Internet, they face significant challenges and additional costs, not just in infrastructure and the ‘nuts and bolts’ of establishing businesses’ connectivity, but also security-related costs,” testified Nova Daly, a Senior Public Policy Advisor at Wiley Rein LLP and former Director of International Trade at the National Security Council (NSC). “Both domestic and foreign criminals, as well as foreign governments, have been known to exploit and are actively targeting internet based vulnerabilities in order to gain access to financial information, customer data, and intellectual property.”

“In fact, according to McAfee, the well-renown security company, if cybercrime was a country, its GDP would rank 27th in the world,” testified Justin Zeefe, the Co-founder and Chief Strategy Officer of the Nisos Group, a cybersecurity consulting firm. “How would we collectively react if we knew that the 27th largest economy was absolutely dedicated to attacking our value? What if they were overwhelmingly directing their actions against small businesses? In fact, both of these statements are accurate.”

“Symantec found in June 2015 that 75% of cyberattacks were directed at organizations with fewer than 2,500 employees – a dramatic increase from years prior. Not a week goes by that we don’t read of a major data breach in the paper, with mention of what the attackers stole, and often how they managed to gain access.” Zeefe added.


  • Today’s hearing comes after Chairman Chabot led several members of Congress in sending a letter to Secretary of State John Kerry and Secretary of Commerce Penny Pritzker about disturbing reports that Chinese telecommunications vendors may have been used to subvert U.S. sanctions against rogue regimes.
  • The Government Accountability Office (GAO) noted in a 2012 report that the FBI has determined that foreign state actors pose a serious cyber threat to the telecommunications supply chain.
  • The Office of the National Counter Intelligence Executive released a report in 2011 stating that tens of billions of dollars in trade secrets, intellectual property, and technology are being stolen each year from computer systems in the federal government, corporations, and academic institutions.They identified China and Russia as the two largest participants in cyber espionage.
  • According to a report from Verizon, 71 percent of cyber-attacks occurred in businesses with fewer than 100 employees in 2012.
  • Chairman Chabot has strongly supported key pieces of legislation aimed at improving cyber security for small businesses and the federal government this Congress including H.R. 5064, the Improving Small Business Cyber Security Act of 2016, and H.R. 1731, the National Cybersecurity Protection Advancement Act of 2015.


Foreign Cyber Threats: Small Business, Big Target

House Small Business Committee News - Wed, 07/06/2016 - 12:00am
Chairman Steve Chabot has scheduled a full committee hearing of the Committee on Small Business titled "Foreign Cyber Threats: Small Business, Big Target" The hearing is scheduled to begin at 2 PM on Wednesday, July 6, 2016 in Room 2360 of the Rayburn House Office Building. 

Hearing Materials
1. Hearing Notice
2. Witness List

Witness List

Data-Breach Class Actions Feel the Effects of “Spokeo v. Robins”

WLF Legal Pulse - Fri, 07/01/2016 - 3:11pm
By Jeryn Crabb, Judge K.K. Leggett Fellow at Washington Legal Foundation and a rising third-year student at Texas Tech University School of Law With Spokeo v. Robins the US Supreme Court clarified the requirements necessary for plaintiffs to establish standing in federal court.  Federal district courts are only beginning to explore those parameters, but the […]
Categories: Latest News

Pfizer False Claims Victory May Embolden Other Pharma Defendants

WLF Legal Pulse - Fri, 07/01/2016 - 12:35pm
By Todd Hobbs, Judge K.K. Leggett Fellow at Washington Legal Foundation and a rising third-year student at Texas Tech University School of Law   In May, the United States Court of Appeals for the Second Circuit upheld the dismissal of a qui tam lawsuit in U.S. ex rel. Polansky v. Pfizer, Inc.  Polansky, a former […]
Categories: Latest News

Ranking Member Bill Nelson Opening Statement

Thank you, Chairman Thune, for calling this markup. There are a few bills to note on the agenda today.  

I was very pleased to join with Chairman Thune in kicking off the bipartisan Innovation and Competitiveness working group, with Senators Gardner and Peters at the helm. The American Innovation and Competitiveness Act is a product of that working group and will promote and improve U.S. science, innovation, and STEM programs.   

The legislation we’re considering today authorizes a 4% increase for the National Science Foundation and the National Institute of Standards and Technology between FY 2017 and FY 2018. This increase is a reasonable and needed investment to ensure American competitiveness.  

The bill also does a number of other important things to advance science and U.S. innovation, including a reduction in administrative burdens on researchers and a commitment to grow the number of women and minorities in STEM fields.  

Senators Gardner and Peters should be commended for their fine work on this important legislation, and urge the full committee to support this bill.  

We are also taking up the Access for Sportfishing Act today, Senator Rubio and my legislation.  

Biscayne National Park is a treasured national park off the coast of Miami, Florida. Its waters provide visitors with opportunities to dive, snorkel, kayak, and fish.  

Unlike most national parks, Biscayne is almost entirely within state waters. The legislation that created the park recognizes the shared responsibility of the state and federal governments by delegating fishery management largely to the state.  

For years, fishery access decisions were made through a collaborative process. The bill before us today would reinforce the importance of that joint effort.  

This bill makes sure that the state of Florida and other stakeholders have a voice in the process—not a veto.  

More than four years ago, Senator Rubio and I urged the Park Service to be more inclusive of the recommendations from the state, recreational fishermen, and other stakeholders when revising fishery management regulations, such as the park’s general management plan.  

Unfortunately, the Park Service did not follow through, and now we are in a situation where their proposal is a drastic measure—a 10,000-acre no-fishing zone.  

This bill encourages the Park Service to consider less restrictive measures, such as seasonal closures, before using opting for an outright fishing ban.   

This bill strikes a careful balance for a very specific issue in South Florida.  

Today the committee will also consider two bills designed to make sure that our communications networks are reliable and resilient.   

Senator Klobuchar’s call completion bill will help guarantee that all telephone calls make it to their intended destination – something we all sometimes take for granted. 

And the SANDy Act from Senators Cantwell and Booker, of which I am a cosponsor, will help speed the restoration of communications networks after disasters - a very important issue for Floridians.  

We also have two nominations on the agenda today. I look forward to these nominees passing here today and moving through the Senate quickly, along with others that have been stuck on the floor.  

With that, Mr. Chairman, let’s get this markup underway.


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