Month: August 2020

Scott Marks | Government Affairs Manager | TIA

Starting August 13, 2020, members will no longer be able to both enter into contracts for service with the government and have in their operations what are called “covered telecommunications.” Member companies must begin now to certify that their internal processes do not contain any one of a multitude of malicious Chinese companies. This regulation comes from legislation that passed in 2018, H.R. 5515, the John S. McCain NDAA, specifically section 889 parts (A) and (B).

Part (A), while important, is not directly germane to the TIA membership base. This part has to do with procurement and acquisition. The head of a government agency may not move forward with any acquisition of services or technology that has “covered technology.”

Part (B) directly impacts our members, it can’t be stressed enough, if you are a member of TIA starting August 13th if you have use a covered service in your operations you will not be able to move freight for the government.

A covered telecommunication technology means the following: Any service and equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of those entities) and certain video surveillance products or telecommunications equipment services produced or provided by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of those entities).

Members must take the time, review internal procedures, and ensure they do not use one of the technologies in their office. A contractor may certify that it does not use covered equipment or services if its “reasonable inquiry” does not identify such use. A “reasonable inquiry” is one “designed to uncover any information in the entity’s possession about the identity of the producer or provider” of covered equipment or services used by the entity.

It is important to note, reasonable inquiry does not require an internal or third-party audit, it just means you must be able to show affirmatively that you took steps to uncover if the entity is in possession of covered telecommunications technology. This will be a deciding factor for contracts starting August 13, 2020.

The government agencies implementing this regulation have asked for broad feedback as they fine-tune the rule to be more business-friendly while still posturing the regulation as a national security tool. If you’re interested in providing feedback as to how this will impact your business, do not hesitate to reach out.

Like all legislative action, TIA Government Affairs will monitor, track, and respond in real-time. We work directly with our conferences and committees and the organization at large to ensure our members are up to speed.

To view our resource on this rule, click here

To view the rule in its entirety, click here

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If you have any questions, concerns, or want to learn more about TIA’s Advocacy efforts, please contact TIA Government Affairs at [email protected].

On Monday, August 10th, a Superior Court Judge in California ruled that drivers of Uber and Lyft must be classified as employees, essentially giving the companies ten days to make the necessary changes and abide with AB5. This was obviously a key blow to the company’s efforts to push back on the notorious AB5 Bill that become state law, a little over seven months ago, that attacks the independent contractor model. The companies have been arguing that they are technology companies rather than transportation companies and because of that, their drivers are not core to their platforms. The battle is far from over and will ultimately head to lengthy appeals process.

Because of the Superior Court Judge’s decision, Uber and Lyft have threatened to shut down their operations in the state of California completely. The main concern from the companies is the cost of doing business with their drivers and the impact to their business model that allows them to offer quick low-cost rides by maximizing the number of drivers on their platforms.

There was an unscientific survey done a few months ago that citied that 70% of the 734 respondents identifying themselves as drivers said they did not want to be classified as employees and enjoy the work of the “gig” business and working on their hours.

In the upcoming election in November there is a ballot measure Proposition 22 that will let the California people decide (at least for now) on the applicability of AB5 and if companies like Uber and Lyft should be required to classify their employees as employees rather than independent contractors. This could be a potential bailout for Uber and Lyft or another nail in their coffin, at least in California.

TIA Government Affairs will continue to monitor the AB5 issue and potential implications to our members who utilize independent sales agents in the state of California.

If you have any questions, please contact TIA Advocacy ([email protected]).