💻 Tech: The Senate’s spectrum ideas

TECH LOOKAHEAD

Spectrum and AI get the Senate treatment

A16z is seizing the moment

The Stat: Trump’s China tariffs

THE TOP

Spectrum and AI get the Senate treatment

The House Republicans’ reconciliation plans for tech are on a collision course with the Senate.

The House Energy and Commerce Committee advanced its portion of reconciliation Wednesday. It included a reauthorization of the Federal Communications Commission’s spectrum auction authority while making more airwaves available for sale. It also included a 10-year moratorium on states enacting artificial intelligence laws.

But a couple of GOP senators have already said the spectrum portion will need to be changed significantly. There are also serious doubts over whether the AI provision can survive the Senate’s reconciliation rules.

These tech provisions would be a game changer for the telecom industry and the future of AI in the United States. There are a lot of powerful stakeholders in and outside of government paying close attention.

Reconciliation is a party-line process, and it’ll require near-unanimous agreement among congressional Republicans. They’re not there yet. We’ll find out this week if the House can even pass its bill.

We have some news on spectrum and AI, so let’s take a look.

Spectrum. We’re heading toward a real clash between GOP spectrum auction advocates and Pentagon allies.

Republican Sens. Mike Rounds (S.D.) and Deb Fischer (Neb.) are trying to shoot down the Energy and Commerce Committee’s spectrum proposal because it doesn’t explicitly protect the 7 GHz and 8 GHz bands that the two military hawks say the Defense Department needs.

The House plan would exclude the lower 3 GHz band that the military holds from auctions, but Fischer and Rounds don’t think that language is strong enough either.

They’ve found an interesting ally in Sen. Maria Cantwell (D-Wash.), who’s the top Democrat on the Senate Commerce panel. She’s also raising concerns about those military bands being auctioned and has also pointed to a potential downside for the Federal Aviation Administration.

It’s important to note that the frequencies between 3.1-3.45 GHz bands already have protections under federal law. Those frequencies can only be auctioned off with the approval of the defense secretary, under the Infrastructure Investment and Jobs Act.

Fischer was adamant she’d secure more explicit protections for lower 3 GHz, 7 GHz and 8 GHz in the forthcoming text.

“There’s no protection at all in the House bill,” she said. “We’re making sure that legislative language is available.”

When we asked if “available” meant it’d actually make it into the reconciliation bill, Fischer said it would, though she emphasized making the language available to the conference.

But Senate Commerce Committee Chair Ted Cruz (R-Texas) pushed back.

“I would not hold your breath on that,” Cruz told us.

We’ve learned Cruz doesn’t plan to include any exclusions in his spectrum proposal, not even the lower 3 GHz band, given existing protections under federal law.

Instead, Cruz said he plans on leaving the administration responsible for figuring out what bands can be auctioned off.

“Trust the interagency process to do the trade-offs between the various stakeholders,” Cruz said.

Cruz is also considering building a spectrum pipeline that’s bigger than what the House is proposing. The House Energy and Commerce Committee directed the administration to auction 600 megahertz of spectrum.

The White House wants at least 600 MHz, which is what the FCC Chair Brendan Carr and the wireless industry have been pushing. But several Senate Republicans want more than that, and Cruz is looking at ways to bump up that number.

We’ll note that the cable industry is also very interested in what happens with these spectrum auctions. They’ve raised concerns with the White House about what could happen to the frequencies they use.

AI. It’s increasingly unlikely that the AI moratorium will become law as part of reconciliation.

The House proposal would ban state laws and regulations that regulate AI for a decade.

But the AI moratorium faces tough circumstances in the Senate. We haven’t heard any Republican senators say they’re confident this crosses the finish line.

For starters, it already has some opponents. Sen. Josh Hawley (R-Mo.) told us he thinks it’s a “bad idea.”

But even proponents of this idea have doubts about its chances.

Cruz and Rounds, who both back the moratorium, said they’re not sure it complies with the Senate’s reconciliation rules.

Under the “Byrd Rule,” most provisions in the filibuster-proof bill must primarily affect revenue or spending levels.

The Energy and Commerce Committee tucked the AI moratorium into a $500 billion appropriation to the Commerce Department. The department is directed to use the money to renew old information systems with AI.

The House pitch for the Senate parliamentarian is that Commerce won’t be able to fulfill this spending direction if it’s bogged down by a patchwork of state AI laws.

Senate Democrats will certainly challenge that premise with the parliamentarian.

– Diego Areas Munhoz and Ben Brody

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ART OF ADVOCACY

A16z is seizing the moment

Another week, another big Washington hire by a16z.

This time, the venture capital firm, also known as Andreessen Horowitz, brought on Ben Napier, a former top aide to House Majority Leader Steve Scalise, as we scooped.

Napier’s move got us thinking about all the high-profile hiring a16z has done recently.

Last month, the VC firm brought on board Michael Reed, a onetime top staffer to former Speaker Nancy Pelosi, who more recently worked for House Minority Whip Katherine Clark.

In February, former House Financial Services Committee Chair Patrick McHenry (R-N.C.) became a senior advisor to a16z. Former McHenry aide Collin McCune is also the firm’s head of government affairs.

The month before McHenry? That was Josh Arnold, who was deputy chief of staff to Sen. Cynthia Lummis (R-Wyo.).

The trend began last year. In November, we broke the news that Matt Perault, a former director of public policy at Facebook, was joining a16z to focus on AI policy.

Perault began his stint the month after Matt Cronin, another Hill alum who’d also been the Director of National Cybersecurity at the White House, started his tenure.

That’s a pretty impressive stable of policy experts for a firm that only started lobbying in 2023. By the way, a16z spent $950,000 on lobbying that year, according to disclosures. That total frankly pales in comparison to Big Tech companies, although a16z boosted that spending to nearly $1.8 million in 2024.

Why the hiring spree? A16z founders Marc Andreessen and Ben Horowitz are not only two of the biggest figures in the sector, but Andreessen, in particular, went all in supporting President Donald Trump during the 2024 election. Each gave upward of $40 million to a variety of outside groups on both sides of the political spectrum during that election, according to OpenSecrets.org, which tracks campaign expenditures.

Of course, we’ve told you all about D.C.’s VC moment. Figures from the venture world have joined Trump’s administration — from Elon Musk and AI/crypto czar David Sacks to Vice President JD Vance. Vance also spoke at a16z’s capital confab back in March.

Trump is also interested in a lot of the same sectors that VC is investing in (and for which the venture world is hoping to ensure a smooth regulatory ride). Both Trump and VC World are eager to boost U.S. artificial intelligence, crypto and defense tech startups.

VC has also put its portfolio companies at the forefront of its advocacy, highlighting what’s increasingly called Little Tech.

What does a16z want? Plenty, especially on AI and crypto. An early policy paper from Perault, for instance, weighed in favorably on the idea of a 10-year moratorium on states regulating AI. That’s a pretty common view by both Big and Little Tech, and Perault was riffing on an existing congressional proposal.

Still, it’s notable that the policy is something Republicans in the House and Senate are now pursuing quite seriously, albeit in different vehicles.

The firm also proposed a whole series of policy prescriptions on crypto and has praised the idea of investments in AI infrastructure.

— Ben Brody

TECH TARIFFS

The Stat: Trump’s China tariffs

President Donald Trump’s temporary tariff reprieve on China was certainly welcomed by the tech industry, but the fundamentals haven’t changed much.

The 145% tariff Trump imposed on China up until backing off last week was essentially an “embargo,” as Treasury Secretary Scott Bessent said.

So going down to 30% is substantial progress for tech companies worried about rising costs. The “Magnificent Seven” tech stocks rallied following the announcement on May 12.

But 30% across-the-board tariffs is still pretty high. Concerns over rising costs in supply chains for data centers and the telecom industry remain.

The White House called the reduction a “China trade deal” and indicated it’s all part of the “art of the deal.” But Wall Street is keeping an eye on the long game.

“We believe this is just the start of the negotiations and they get closer to a 20% number,” said Dan Ives, global head of tech research at Wedbush Securities. “This is all a game of high stakes poker and the bigger deal is the focus.”

Prices going up: Despite the relief for most China tariffs, smartphones, laptops and other consumer electronics are also still under a 20% duty Trump imposed on Chinese goods because of fentanyl trafficking.

And China is not the only country tech companies care about. We haven’t seen deals yet with India, Taiwan or Vietnam. These nations produce thousands of products and are getting more tech business as companies try to get out of China.

But Trump is pressuring CEOs to move production out of those countries too. He said Thursday that he had “a little problem” with Tim Cook.

Trump wants the Apple CEO to move production of iPhones and its other products to the United States.

“We’re not interested in you building in India,” Trump said he told Cook.

– Diego Areas Munhoz

DOWNTOWN DOWNLOAD

Tech and defense registrations are climbing as we approach the time for the annual National Defense Authorization Act.

Onebrief, a software platform for the military, hired the CGCN group to lobby on tech issues affecting the defense industry.

A different software company, Primer.ai, brought on Jane Lee’s firm, INVOKE, to work on NDAA issues. Lee was a senior adviser to former Senate Majority Leader Mitch McConnell.

In the veterans space, Toggle AI hired the Bridge Advisory Group to advocate on the “evaluation of tools using artificial intelligence to determine the state of mind of veterans.”

Skysafe, which provides software to identify and track drones that may pose security threats, also hired Bridge Advisory. The firm will work to increase “awareness” of the company’s services.

Forge Battery partnered with Venn Strategies to advocate for Energy Department funding and Defense Department battery cell procurement.

Speaking of batteries, lithium battery maker ​Expion360 hired A10 Associates to work on tariff issues.

There were other hires in the broader tech world.

The Biotechnology Innovation Organization, which represents dozens of biotech companies, brought on HillNorth to advocate for issues affecting the industry. The firm was founded by Doug Schwartz, who has extensive experience on the Hill and in the George W. Bush administration.

Applied Optoelectronics, a designer and manufacturer of fiber optic network products, partnered with Banner Public Affairs. The firm will work on “policy issues related to transceivers.”

In another tariff hire, the giant ATM manufacturer Hyosung Americas brought on Monument Strategies to lobby on trade issues.

– Diego Areas Munhoz

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