Overnight Regulation: Government watchdog to probe fake net neutrality comments | California, greens sue over fracking rule | EU fines Qualcomm $1.2B over payments to Apple

by Nathaniel Weixel - 01/24/18 6:47 PM ET

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Wednesday night in Washington, the House is on recess, and the Senate is looking to wrap up its week tomorrow.

THE BIG STORY

The Government Accountability Office (GAO) has agreed to take up an investigation into fake comments being filed to the Federal Communications Commission (FCC) regarding its plan to roll back net neutrality rules.

The GAO’s decision to probe the comments comes after a request from Democratic Reps. Gregory Meeks (N.Y.), Elijah Cummings (Md.) and Frank Pallone Jr. (N.J.) asking it to review the matter.

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What’s the issue here? During the FCC comment period ahead of December’s rule change, several studies found that large amounts of net neutrality comments, mostly in support of scrapping the regulations, were actually filed under fake identities or fraudulently under the identities of people who said they didn’t file comments or who were dead.

What did FCC do about that? Basically, nothing. In the final version of FCC Chairman Ajit Pai’s plan to get rid of the rules, the agency said that such public comments “in no way impeded the Commission’s ability to identify or respond to material issues in the record.”

Read more from Lydia Wheeler here.

ON TAP FOR THURSDAY:

The Senate Banking Committee holds a hearing on reforming the Committee on Foreign Investment in the United States.

The Senate Health, Education, Labor and Pensions Committee holds a hearing on reauthorizing the Higher Education Act.

REG ROUNDUP

Environment: California’s attorney general and a coalition of environmental groups are challenging the Trump administration’s repeal of a rule that set standards for hydraulic fracturing for oil and natural gas on federal land.

Xavier Becerra (D), a frequent litigant against Trump, announced a lawsuit Wednesday, saying the Interior Department’s Bureau of Land Management (BLM) violated the law when it repealed the rule last month.

“They didn’t follow the law. They didn’t let the law or the facts get in their way in their zeal to repeal what was a commonsense measure. And so California was left with no choice but to take them to court,” Becerra told reporters before filing the lawsuit in the U.S. District Court for the Northern District of California.

A coalition of environmental groups also filed their own lawsuit against the rule in the same court on Wednesday, the first day cases could be filed.

Timothy Cama has the rest here

Health care: Three groups opposed to the drastic changes in Kentucky’s Medicaid program are leading a lawsuit filed Wednesday against the Trump administration’s approval of a state waiver.

The litigation challenges a waiver the Centers for Medicare and Medicaid Services (CMS) recently approved in Kentucky allowing the state to institute first-of-its-kind changes to the Medicaid program, including work requirements, arguing the measures are inconsistent with the purpose of the program.

Fifteen Kentuckians joined in the class action lawsuit filed in the U.S. District Court for the District of Columbia. Three major groups are representing them — the National Health Law Program (NHeLP), Kentucky Equal Justice Center and the Southern Poverty Law Center.

Read the rest of the story from Rachel Roubein here.

Health care: Thousands of Medicaid recipients in Mississippi would be required to work to be eligible for the program if the Trump administration approves a controversial state waiver request that recently opened for public comment.

The proposal is likely to set off a firestorm of criticism from Democrats and health advocates, who argue that work requirements, combined with Mississippi’s strict Medicaid eligibility requirements, will result in thousands of people losing their coverage.

The five-year waiver request from Republican Gov. Phil Bryant seeks to require nondisabled adults, including low-income parents and caretakers, to participate in at least 20 hours per week of “workforce training.”

Read the story here.

Tech: New York Gov. Andrew Cuomo (D) signed an executive order protecting net neutrality in New York on Wednesday, making it the second state to issue such a rule after the Federal Communications Commission’s (FCC) decision to repeal the open internet regulations late last year.
The order directs New York’s government not to enter into contracts with internet service providers unless the providers abide by net neutrality rules, which require they treat all web traffic equally.
“The FCC’s dangerous ruling goes against the core values of our democracy, and New York will do everything in our power to protect net neutrality and the free exchange of ideas,” Cuomo said in a statement.

Julia Manchester has more here.

Tech: The European Union on Wednesday fined chipmaker Qualcomm $1.2 billion for paying Apple not to purchase components from its competitors.

Margrethe Vestager, the EU’s competition commissioner, said the arrangement gave Qualcomm dominance in the market for LTE baseband chips.

“Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals,” Vestager said in a statement. “These payments were not just reductions in price — they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads.”

Qualcomm has already promised to appeal the decision.

Harper Neidig has the story.

Environment: A group of scientists is suing the Environmental Protection Agency (EPA) for blocking scientists who receive agency funding from serving on the EPA’s advisory boards.

The nonprofit Protect Democracy, representing the Union of Concerned Scientists, filed a lawsuit against the Trump administration on Tuesday, claiming the policy violates the Federal Advisory Committee Act and “is an attack on science itself.”

The Union of Concerned Scientists slammed the policy as a way “to make it easier for Pruitt to delay, rollback, or dismantle the EPA regulations that are designed to protect clean air, water, and public health.”

Jacqueline Thomsen has more here.

Criminal justice: Momentum is building under the Trump administration for criminal justice reform.

The path forward, however, is looking a little different than it has in the past.

Previous efforts to reform the justice system have focused on cutting prison time for convicted felons. But those taking part in the current discussions say the focus has shifted to preventing ex-convicts from returning to jail, suggesting this approach has the best chance of winning approval from both Congress and the White House.

A source familiar with the talks between the White House and GOP members of Congress said a bipartisan prison-reform bill offered by Rep. Doug Collins (R-Ga.) is expected to be marked up in the House Judiciary Committee before the first quarter ends in April.

Lydia Wheeler has more here.

Finance: The Consumer Financial Protection Bureau (CFPB) on Wednesday published a request for comment on the subpoena process it uses to investigate companies that appear to have violated federal law.

The CFPB is asking for suggestions for and complaints about its civil investigative demands (CID) system, through which the bureau has scored documents, testimony and other information relevant to bureau enforcement probes.

Acting CFPB Director Mick Mulvaney announced last week that the bureau would begin soliciting comments on the processes and procedures it uses to regulate and oversee the economy. Wednesday’s request is the formal start of the process.

Sylvan Lane has more here.

Tech: AT&T is calling on Congress to pass a net neutrality law that would cover not only internet service providers but also platforms like Facebook and Google.

The telecom giant took out full-page ads in major newspapers like The New York Times and The Washington Post on Wednesday calling for an “internet bill of rights.”

“Legislation would not only ensure consumers’ rights are protected, but it would provide consistent rules of the road for all internet companies across all websites, content, devices and applications,” AT&T CEO Randall Stephenson wrote in the ad.

AT&T has been an outspoken champion of the Federal Communications Commission’s (FCC) decision last month to repeal its 2015 net neutrality rules, which prevented internet providers from discriminating against web content or from creating internet fast lanes.

Harper Neidig has more here.

Courts: A civil rights organization is suing Motel 6 for its cooperation with federal immigration authorities by providing guest lists to immigration agents.

The Mexican American Legal Defense and Educational Fund filed the lawsuit in U.S. District Court for the District of Arizona this week.

The suit, filed on behalf of several guests, alleges that Motel 6 employees provided Immigrations and Customs Enforcement (ICE) agents with guest lists and accuses the hotel chain of violating state and federal laws that prevent discrimination on the basis of national origin and unreasonable search and seizure.

Brandon Carter has the rest here.

Techn: Burger King is blasting the Federal Communications Commission’s (FCC) decision to scrap net neutrality rules in a new ad released Wednesday, using its signature sandwich to do it.

The fast food chain posted a video illustrating what it would be like if its restaurants implemented a policy of “Whopper neutrality,” in which customers had to pay more to receive their burger faster.

Customers ordering Whoppers were given the option to pay for various MBPS — “Making Burgers Per Second” — rates. The slowest rate cost only $4.99, but came with a long wait time. Customers who wanted a Whopper as fast as possible were charged $25.99.

Max Greenwood writes more here.

FROM THE HILL’S OPINION PAGE:

EPA’s budget has been devastated for decades: Here’s the math

Trump’s regulatory rollbacks could cut current safety laws and injure workers

Marijuana legalization is succeeding and other states should follow Vermont’s example

ELSEWHERE IN THE NEWS:

Trump’s FDIC nominee promises relief for small banks (The Wall Street Journal)

Got ID? Korea tightens noose on anonymous cryptocurrency trading (The Wall Street Journal)

Disney won’t have same problem with regulators as Fox did (The Wall Street Journal)

Bitcoin ETF hype meets regulatory reality in race to be first (Bloomberg)

Drug maker Santhera’s stock dives after regulatory setback (Reuters)

Facebook on charm offensive amid new EU regulation (Reuters)