Category Archives: Blog

NERA: Effect of Title II on Investment Incentives “Worse Than We Thought”

When the FCC released it’s Net Neutrality Order last week, it cited a White Paper commissioned by CALinnovates and drafted by NERA.  The authors of NERA’s White Paper issued a response.  What follows is the conclusion, with a link to the full response, below:

We stand behind the basic results of NERA’s White Paper and find that, if anything, the Order has actually made us more worried about the state of competition and innovation than we were before seeing it, assuming it manages to pass its initial, and inevitable, court challenges. Although the Order is quite long, the actual new rules are very short, reflecting the difficulties that nomenclature and case-by-case analysis will bring. Further, the Order tries to describe the new rules as “light-handed,” ignoring the incentives of aggrieved parties to achieve through FCC litigation what they could not achieve in open competition. As a result, innovation is shackled with new costs that could kill, or at least severely hamper, further development of the Internet ecosystem.

Click here to read NERA’s full response

Business Insider: Uber and Lyft fail to convince judges their employees are ‘independent contractors’

Here are the two most pertinent quotes from the story, both coming from California District Judge Vince Chhabria:

“The jury in this case will be handed a square peg and asked to choose between two round holes.”

“California’s outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide.”

Read more: http://www.businessinsider.com/uber-and-lyft-fail-to-convince-judges-their-employees-are-independent-contractors-2015-3#ixzz3UIFTYbVy

CALinnovates Statement Regarding FCC Release Of Open Internet Order

The following can be attributed to Executive Director Mike Montgomery

“The inevitable happened today – the FCC’s website broke as it tried to release its 400-page ‘Open Internet’ order, two weeks after the agency voted to approve utility-style regulation of the Internet. Who saw that coming?  Errors aside, today marks the beginning of yet another chapter of the ongoing and seemingly never-ending net neutrality debate. Now that the actual document is finally here, the partisan feud about the agency’s lack of transparency on an issue dealing precisely with openness and transparency might finally be put to pasture.  In the coming days, speed-readers will have their moment in the sun as the nation scrambles to comprehend the 400-page Order and its effect on the Internet ecosystem.

We hope this new stage of transparency and openness will be applied long-term, but the FCC vote will likely prove the wrong vehicle as litigation and future FCCs loom.  Today, CALinnovates calls upon our nation’s federally elected officials to prove the naysayers wrong – bipartisan legislation isn’t just a pipe dream. It’s a necessity.”

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US can’t have it both ways on Internet

From a March 6, 2015 op-ed in The Hill by Executive Director Mike Montgomery

The United States’ policy schizophrenia regarding the Internet was on full display last week in Washington. On one day, the Commerce Department explained to a Senate committee why it’s important for the U.S. government to take a hands-off approach to the Internet as a reason why it’s ending its ties to ICANN. And on the very next day, the Federal Communications Commission explained why it’s important to take a hands-on approach to the Internet by imposing net neutrality rules.

Meanwhile, other governments must be smirking at us.

Read the full article here 

LA Times: Bill proposing tougher regulation for Uber and Lyft back on the table

 

From a March 5, 2015 article in the LA Times.

“Regulation of ride-hailing companies such as Uber, Lyft and Sidecar is making a comeback in the California Legislature this session.

Assemblyman Adrin Nazarian (D-Sherman Oaks) introduced a bill that would require all drivers working for ride-hailing companies to register their cars as ride-hailing vehicles with the California Public Utilities Commission and display decals identifying them as such.”

Mike Montgomery, executive director of technology advocacy group CALinnovates, which counts Uber and Sidecar among its partners, described the introduction of AB 24 as “outrageous” and “blatantly uncompetitive.”

Read the full article here.

TechCrunch: Zombie Ridesharing Bill Comes Back To Life In California

From a March 5, 2015 article posted on TechCrunch:

“A bill designed to regulate ridesharing companies in California is back. State Assemblymember Adrin Nazarian has submitted a bill aimed at placing new rules on companies like Uber and Lyft. Assembly Bill 24, however, is incredibly similar to Assembly Bill 612, which failed in committee in 2014. Nazarian notes in a release on the bill that 24 is “similar” to 612, which is understatement.”

“Others weighed in along similar lines. CALinnovates, a group that works to connect technology firms with the “slower moving […] public policy communities in Sacramento and Washington, DC,” said the following:”

It is outrageous that any legislative energy will be spent on this new bill, a practical carbon copy of Assembly Bill 612, a bill that didn’t even make it out of committee last year. […]

Nazarian’s bill is a blatantly anti-competitive example of regulatory capture at its very worst that will only serve to pile on bureaucratic redundancy and red tape while choking innovation.

Read the full article here.

CALinnovates Statement on Federal Communications Commission Vote on Open Internet

The following quote can be attributed to Mike Montgomery, Executive Director, CALinnovates:

“The loud sound coming from Washington today is resounding cheers from the lawyers, lobbyists and fundraising groups that will gain from today’s FCC ruling for years to come. There will be a rush to the courtroom, which will take years to sort out.

Congress must step in and provide a solution that affirms the principles of net neutrality but does so with modern legislation that reflects 21st Century technology. The next billion we spend should be on innovation, not lawsuits.”

LINK:  http://www.prnewswire.com/news-releases/calinnovates-statement-on-federal-communications-commission-vote-on-open-internet-300042154.html 

Why Facebook Is Still The Best Place For Small Business To Advertise

It might not be the hippest platform but it gets the job done

by Mike Montgomery

A University of Austin undergrad recently took to Medium to explain how his generation really views social networks. Unsurprisingly, Instagram and Snapchat are the places young consumers are most likely to hang out. Twitter is a bit of a mystery. Tumblr is a secret society everyone is in. LinkedIn is something they have to do and Pinterest is for artsy women.

Facebook is dead to them.

Well not completely dead. In the next breath, writer Andrew Watts admits that everyone has a Facebook account because while Facebook can be weird and annoying, “if you don’t have Facebook, that’s even more weird and annoying.”

So what’s a small business supposed to do with this breakdown? Everyone wants to reach the young demographic but Snapchat is reportedly asking $750,000 for an ad that disappears as soon as the viewer has seen it. That’s out of reach for pretty much every small and medium sized company.

Businesses know they need to be marketing on social media. But the range of sites and the sheer volume of available data can be overwhelming for a company that may only have a few employees and a tiny marketing budget.

I turned to Michael Perry, the founder of Kit*, to help walk me through the different options. Full disclosure, Perry’s company is a member of CALinnovates, the tech advocacy group where I serve as executive director. Kit acts as a digital marketing assistant helping small businesses place ads on different social networks.

Facebook

According to Perry, Facebook is still far and away to best place for small businesses to advertise. Just look at Watt’s breakdown of the teen view of social networks. They might find Facebook annoying but everyone is on there.

“Their giant size is the biggest pro to advertising on Facebook,” says Perry. “Their targeting is better than anyone else.”

For less than $100 Facebook gives small business owners the opportunity to target a demographic as specific as women 25–40 who are moms, live in San Francisco and like yoga. Ads show up in Facebook’s mobile stream as well as online and give users a way to directly interact with the company.

Theo Yedinsky, one of the founders of the social media services company Social Stream Consulting, said that when his wife set up an exercise studio in Brooklyn, they immediately turned to Facebook for advertising. A new client special offer quickly paid for the price of the ad and most importantly, got people in the door to try out the studio.

“Facebook is the biggest and most important platform,” says Yedinsky. “You get a lot of bang for your buck.”

The downside of Facebook, according to Perry, is that the fire hose of data can be overwhelming for many small business owners.

“You can get into a very nasty spider web if you don’t know what you’re doing,” says Perry. “It’s easy to go too specific or too broad.”

Twitter

The social networking site is finally starting to become a force in advertising. According to the company’s latest earnings report, demand for ads is outstripping supply. For the fourth quarter, promoted tweets were up 130% helping boost revenue 97% to $479 million.

But for the most part, the site still mystifies small business owners. Perry says he’s trying to figure out the best way to use Twitter but one thing the site is clearly very good for is giving business owners a chance to talk directly to their customers and to listen to them.

“You can build a brand around having a conversation and that’s free to do,” says Perry. “There’s a lot of emphasis on that for right now.”

Pinterest

Perry calls Pinterest the golden nugget of social networking.

“I can’t stress how many people are interested in Pinterest ads,” says Perry, because Pinterest users are already in the buying mood when they click on the site. The company is only now starting to roll out promoted pins, which will be the Pinterest equivalent of ads. Right now only companies invited to use the beta can create promoted pins but the program is expected to roll out soon.

The big question is how much promoted pins will cost.

“We assume it will be impression based but it could be pay per click,” says Perry. “We just don’t know yet.”

Snapchat

The hottest player in social media today offers crazy engagement and an age demographic to die for but Perry says the price is just way too high for anyone whose brand isnt’ huge.

Instagram

The Facebook owned photo-sharing site is a good place to build a brand but not a great place for small businesses to try and buy ads. Ad space on the platform is limited and pricey right now. According to this article from Ad Age, a month-long ad campaign on Instagram can cost as much as $1 million. That keeps small business owners out of the sandbox but Perry expects they’ll eventually be asked to play as supply goes up and prices come down

As important as social networks are, they shouldn’t be the only arrow in a small business’ quiver. Social media expert Chase Norlin, who now runs the labor force training organization Transmosis*, says it’s important to try lots of different kinds of ad platforms, including Yelp, AdRoll, and Google, and see which mix performs best.

“Social media is valuable not because the user is so engaged but because of the targeting and automation that goes on there,” says Norlin. “It’s really all about the data that exists behind the scenes.”

*CALinnovates members

Mike Montgomery is executive director of CALinnovates, a coalition advocating on behalf of California’s tech community.

 

 

Read the article as first published on Medium

 

The FCC Should Look To The Future, Not The Past, On Internet Regulation

FCC Chairman Tom Wheeler’s explanation of why he will propose regulating the Internet under Title II is full of references to the past. Perhaps that makes sense considering his proposal would regulate the Internet under the 80-year-old Telecommunications Act. But his words speak volumes about his misunderstanding of how best to balance an open Internet with 21st Century regs.

A large part of Chairman Wheeler’s argument rests on his own experience in the 1980s when he was president of a startup called NABU. The young company offered high-speed Internet service (at the time, 1.5 megabits per second) over cable television lines.

But NABU was thoroughly demolished by AOL. Wheeler claims that the sole reason AOL’s slower service won out over NABU was because AOL founder Steve Case was able to offer AOL over the open phone lines while NABU had to ask each cable company for permission to use their lines. Open vs. closed … an open and shut case.

But the real history of NABU is more nuanced than that. According to Scott Wallsten at the Technology  Policy Institute, NABU users not only had to pay a fee for the service, they also had to buy or lease a $299 NABU computer. But NABU couldn’t offer enough content to induce people to pay that kind of money.

Also the technology wasn’t quite there yet. According to Wallsten:

Cable TV systems were not built to handle much upstream traffic—an issue they still face today. Upgrading the cable infrastructure for two-way communication required significant investment.

The timing just wasn’t right for NABU and that had more to do with innovation than with regulation.  AOL out-innovated NABU.

We need our leaders to be looking forward, not back. By the time this gets litigated, President Obama and Chairman Wheeler will be out of office, and we have no idea how future leaders will apply these new rules. Wheeler’s post shows the need for legislation that modernizes our technology laws instead of trying to regulate a constantly evolving technology using outdated ideas.  As such, it’s time for Congress to step up and work together on a bipartisan basis to craft (and pass) legislation that will remove the uncertainty that comes from electoral musical chairs, because we’re looking at very different regulatory framework if, for example, Jeb Bush rather than Hillary Clinton becomes the next President of our great nation.

CALinnovates Responds to FCC Chairman’s Net Neutrality Op-Ed

Today, FCC Chairman Tom Wheeler outlined the regulatory path he intends to take to achieve net neutrality.  The following statement can be attributed to CALinnovates executive director Mike Montgomery:
“CALinnovates remains concerned about the application of utility-style regulation of the Internet – regulation that won’t even explicitly ban paid prioritization. What we need more than anything is to have bipartisan and bicameral legislation that affirmatively protects the Internet from throttling, blocking, and paid prioritization that won’t be subject to the political whims of future Presidents and FCC Chairmen.  
“It’s been almost 20 years since Congress has provided guidance on important technology policy matters such as this, and it’s high time for a bipartisan, Congressional effort to address net neutrality.  Congressional action will affirmatively protect everyone operating in the Internet ecosystem. Unfortunately, when the FCC votes to reclassify, it will simply mark the beginning of another long Washington process that won’t end anytime soon.”