Senate Minority Leader Chuck Schumer, D-N.Y., and other lawmakers continued opposition through Wednesday to President Donald Trump's push to reconsider recently applied Department of Commerce sanctions against ZTE. Commerce announced in April a seven-year ban on U.S. companies selling telecom software and equipment to the Chinese telecom gearmaker (see 1804170018). The latest round of opposition followed reports ZTE signed off on a preliminary deal on alternative conditions to replace the ban. It would require the Chinese telecom equipment maker pay a $1 billion fine, put an additional $400 million in escrow to cover future violations of U.S. sanctions, replace its management team and allow U.S. inspectors free access to its sites to ensure equipment made by U.S. companies is being used as claimed. If true, Trump “has put China, not the United States, first,” Schumer said. “By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China. Congress should move in a bipartisan fashion to block this deal.” Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., called the reported deal “a huge mistake. ZTE poses a threat to our national security. ... It’s the unanimous conclusion of our intelligence community.” Sen. Marco Rubio, R-Fla., tweeted it would mean China is “on the verge of winning again. They mock us by appointing someone from another sanctioned company as the supposed 'watchdog' over #ZTE & we respond by helping ZTE stay in business.” Rep. Anna Eshoo, D-Calif., wrote Secretary of Commerce Wilbur Ross urging him to keep the ban. “Your number-one responsibility and mine is contained in our Oath of Office: to ‘protect and defend’ our citizens from enemies external and internal,” Eshoo said. “We cannot make deals with foreign entities with a history of compromising our telecommunications sector when it presents a clear and direct challenge to our national security.” Members of both parties have been pushing for legislation aimed at limiting Trump's ability to weaken the ban (see 1805220057, 1805230058, 1805240064 and 1805250059).

Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., are seeking information from the e-commerce industry on counterfeit goods, they said Wednesday. The legislators wrote to undisclosed rights holder trade associations, online retailers, shipping companies and payment processors in Wednesday letters. “As part of our ongoing work, we write today to request information from your company on the types of activities you participate in, facilitate, or otherwise have knowledge of to help us better inform American consumers of the dangers of counterfeit goods as well as to curtail the illegal sale of counterfeits through e-commerce sites,” Hatch and Wyden wrote. "We hope to learn more about your organization’s experience with counterfeit goods and to collect information on ways in which organizations can better protect consumers from such goods in the future. The information we receive will be used to help inform a public report.” The committee held a March hearing on intellectual property rights and e-commerce (see 1803070009).

House Judiciary Antitrust Subcommittee ranking member David Cicilline, D-R.I., confirmed Sunday that more than 60 fellow House members signed his letter to the Office of Government Ethics seeking an investigation into President Donald Trump's push to reconsider recently applied Department of Commerce sanctions against ZTE. Commerce announced in April a seven-year ban on U.S. companies selling telecom software and equipment to the Chinese telecom gearmaker (see 1804170018). Cicilline began circulating the letter last week, while members of both parties were pushing for legislation aimed at limiting Trump's ability to weaken the ban (see 1805220057, 1805230058, 1805240064 and 1805250059). Trump didn’t explicitly confirm his administration reached a deal with the China on ZTE. in a Friday tweet. but said he would let the company “reopen with high level security guarantees, change of management and board, [and] must purchase U.S. parts and pay a $1.3 Billion fine.” Senate Foreign Relations Committee ranking member Bob Menendez, D-N.J., sent a letter Friday to Secretary of Commerce Wilbur Ross urging him to make decisions on enforcing the ban “independent of political pressure from the White House over unrelated trade or business matters, which threatens to undermine our national security and commitment to the rule of law.”

Congress should move forward with legislation to limit President Donald Trump's ability to lift or otherwise weaken a Department of Commerce-imposed seven-year ban on U.S. companies selling telecom software and equipment to ZTE, Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Marco Rubio, R-Fla., said separately Friday. The push followed reports the Trump administration had reached a tentative deal with the Chinese government. The White House didn't comment at our deadline on reports administration officials briefed top Hill lawmakers. The deal would involve Commerce lifting its full ban in exchange for ZTE's agreement to pay a substantial fine, install an American-staffed compliance unit within the Chinese telecom equipment maker and substantially change the firm's management. Trump and Secretary of Commerce Wilbur Ross noted all three stipulations in comments last week (see 1805220057 and 1805240064). “If the administration goes through with this reported deal,” Trump “would be helping make China great again,” Schumer tweeted. It “would be a huge victory for President Xi [Jinping], and a dramatic retreat” by Trump. “Both parties in Congress should come together to stop this deal in its tracks,” Schumer said. Rubio, who was already publicly critical of attempts to rescind the ZTE ban (see 1805230058), tweeted the plan “is a great deal … for #ZTE & China.” The Chinese government “crushes U.S. companies with no mercy & they use these telecom companies to spy & steal from us,” Rubio said. “Many hoped this time would be different. Now congress will need to act.” The House-passed version of the FY 2019 National Defense Authorization Act (HR-5515) and Senate Armed Services Committee-cleared version of the bill contain ZTE-related provisions. Senate Armed Service's NDAA legislation includes the Banking Committee-cleared Foreign Investment Risk Review Modernization Act (S-2098), which would bar Trump from changing the Commerce ban on U.S. sales to ZTE sans certification to Congress that the company complied with U.S. laws. Trump faced criticism over ZTE last week (see 1805140062, 1805150068 and 1805160061).

CTA CEO Gary Shapiro applauded the House for passing the Email Privacy Act (HR-387) Thursday, saying the bill extends the same privacy protections as afforded physical mail to online communication. The lower chamber passed the bill by voice vote as an amendment to the National Defense Authorization Act. “This vote is a clear, bipartisan sign that it’s time for federal law to recognize the realities of today’s data storage,” Shapiro said. “We now urge the Senate to advance this important legislation.”

The country that first develops practical quantum computing “will have a tremendous advantage over its foreign peers,” House Digital Commerce Subcommittee Chairman Bob Latta, R-Ohio, said Friday during a hearing. Ranking member Frank Pallone, D-N.J., said China plans to build a $10 billion national lab by 2020, and the EU plans to invest 2 billion euros (about $2.35 billion) over the next decade.

Internet Association CEO Michael Beckerman is willing to testify before Congress on behalf of Silicon Valley executives. He wrote House Commerce Committee Chairman Greg Walden, R-Ore., who asked tech executives to appear before the committee to continue the dialogue started by Facebook CEO Mark Zuckerberg (see 1805150053). Beckerman’s Tuesday letter defended the internet as a force for good and warned against a rush to regulation: “Static solutions in the form of regulations, based on a snapshot in time, are unlikely to withstand the stress of changed circumstances.” IA membership includes Facebook, Google, Twitter, Amazon and Netflix -- companies that Walden called on.

Silicon Valley executives should testify before the House Commerce Committee and continue the discussion started with Facebook CEO Mark Zuckerberg on Capitol Hill (see 1804100054 and 1804110065), said Chairman Greg Walden, R-Ore.. In an opinion article Monday in the San Francisco Chronicle, Walden said lawmakers want to learn more about Google’s advertising model, Twitter’s algorithms, Apple’s data collection methods, Amazon’s impact on the retail industry, Netflix’s content prioritization practices and YouTube’s content moderation efforts.

The House Communications Subcommittee set a May 16 hearing on telecom issues' impact on U.S. national security and companies' global competitiveness, as expected (see 1804190059). The session is to begin at 10 a.m. in 2123 Rayburn. It follows an April House Digital Commerce Subcommittee hearing on the Committee on Foreign Investment in the United States, the broad executive branch group that reviews the national security implications of foreign takeovers of U.S.-located companies of all types, and proposed legislation to update the CFIUS review process (see 1804260029). The House Communications hearing will “examine the convergence of a number” of the subcommittee's priorities, “including expanding broadband access, promoting competition in both wireline and wireless markets, and protecting our telecommunications infrastructure from national security threats,” the House Commerce Committee said. “As we continue our work to close the digital divide and lead the race to 5G, we must be prepared to prevent and mitigate threats from those seeking to diminish America’s standing in the world,” said House Communications Chairman Marsha Blackburn, R-Tenn. Lawmakers have said Trump administration officials' repeated citations of the national security implications of maintaining U.S. leadership in 5G innovation are a sign Congress needs to act on broader telecom policy issues that would help sustain that dominance (see 1803210019).

The Senate Internet Subcommittee scheduled a hearing at 2:30 p.m. Tuesday in 253 Russell on how mobile applications “are disrupting traditional business models and evolving” in sophistication for consumers and business.