Category Archives: Economy & Jobs
by Mike Montgomery
Will the Bay Area’s tech royalty back a big boost to the minimum wage in San Francisco? They should. And they will — once they see the numbers.
Let me explain. Until recently, the region’s tech stars have been able to portray themselves as the antithesis of the Wall Street folks, New Yorkers who tricked widows and orphans into taking out mortgages they couldn’t afford. Those were the greedy guys. And the bitter dysfunction in Washington, D.C.? That’s a town run by partisan ideologues.
San Francisco, meanwhile, is packed with entrepreneurs and engineers — problem-solving do-gooders who definitely pay attention to the numbers.
Read more in The San Francisco Examiner
Prolonged discussions of Federal Communications Commission regulations are typically about as stimulating as a fistful of Ambien — except when it comes to net neutrality.
With the FCC poised to issue new rules governing how Internet service providers manage and price the traffic that flows through their networks, Americans woke up and spoke up so loudly that they crashed the agency’s website last month. The million-plus comments from concerned citizens were the most the FCC has ever received during a proposed rule’s public comment period — and just a few hundred thousand shy of the number of complaints that poured in after Janet Jackson’s infamous “wardrobe malfunction.” When we’re comparing tech regulations to Super Bowl nipple slips, you know we’re in a different kind of debate.
You probably haven’t had a chance to read all 1,067,779 comments. Neither have I. But most support an outcome preserving the wide-open Internet that birthed our current era of innovation, transformation and disruption. The question now is how to achieve this.
The debate so far has been oversimplified: Are you for net neutrality or against it? That reductive framing may lead us to embrace a solution that doesn’t solve the problem.
From where I sit at CALinnovates, representing tech companies dependent on the open Internet to survive, this debate is incredibly important. Disruptors like ride-share platform Sidecar and conference-call service Speek shouldn’t be forced to bid against deep-pocketed giants — or anyone, for that matter — for their share of bandwidth. Nor should they be forced to adapt to regulations that would suppress new ideas or hamstring the entrepreneurs who hatch them.
They, along with countless other startups and aspiring innovators, agree: We need an outcome that preserves the openness of the Internet.
Unfortunately, it’s not so simple. Let me explain. The leading proposal in Washington to achieve that goal is to reclassify broadband providers as “telecommunications services.” This would allow the FCC to regulate providers using authority granted it under Title II of the Communications Act of 1934.
As you have undoubtedly noticed, the Communications Act of 1934 was passed in 1934. That means the FCC is gathering input as it considers adopting the same legislative framework for the Internet that existed back when “wireless” meant the hand crank on your grandparents’ AM radio.
Title II turned our nation’s telephone system — a single network operated by a single company, Ma Bell — into a highly regulated utility, just like water and electric companies. While they helped protect consumers from the excesses of a corporate monopoly, Title II’s restraints hardly made that phone network an innovative one.
Ask your parents: Under Title II, innovation in telecom meant being able to buy a different color of the same phone chosen by the monopoly at a price set by the government. This same law can’t accommodate today’s sprawling, bustling, magically fragmented Internet, a miracle of technology unimaginable in 1934 — or even in 1996, when the act was updated for the “modern” era.
By turning the Internet into a utility, we’ll bleed tech innovation with a thousand paper cuts. Would we even know what an iPhone is if Steve Jobs had to run his pricing models past the FCC? Would Twitter be fomenting revolution if Jack Dorsey needed to check with regulators about what kind of data can be shared online and by whom?
It sounds far-fetched, but that’s how it would work. Under Section 214 of Title II, common carriers have to ask for approval before discontinuing nonperforming platforms or launching new ones.
Shoehorning Internet companies into Title II won’t just slow Silicon Valley down to Beltway-at-rush-hour speed; it will also render impossible a great many things that have become part of our daily routines, like using on-demand services from location-based smartphone apps.
Under Section 222 of Title II, companies have a duty to protect the confidentiality of customers’ proprietary network information. Sounds benign, right? Well, it means wireless location data could no longer be shared with Internet companies for mapping or advertising. Location-based companies would be limited by, in the regulators’ lyrical stylings, the “use or disclosure” of “call location information concerning the user of a commercial mobile service.” In plain English, that means companies like dating service Tinder, car navigation service Waze and ride-sharer Uber could soon become relics of the past. At the least, they would have far higher hurdles and costs in launching and attracting investment capital.
The big losers in all this would very likely be startups and the consumers they seek to serve. For large, established digital companies, these new regulations would probably just be an inconvenience. For startups that don’t have the resources to fight Title II classification, or the in-house legal teams to interpret the new requirements, the rule changes would be a death knell.
Before we trade the devil we know for the devil our grandparents knew, we should pause to ask ourselves whether legally defining the Internet as a utility will keep it both open and innovative — or act as a drag on creativity and growth.
I’m pro-net neutrality, but anti-1934-style strangulation. Where does that leave me? According to the approaches under consideration, I may soon be a man without a country. Good thing the Internet, at least for now, doesn’t require a passport.
Mike Montgomery is the executive director of CALinnovates, a San Francisco-based non-profit advocacy concern whose members include high-tech companies, political and thought leaders, and entrepreneurs.
This piece originally ran in The Huffington Post
I like the Internet.
Cat Vids ← It brings us cat videos.
And baby photos. And memes.
It also brings education to the masses, health care to the hard to reach, and drives California’s economic engine.
The Internet does all these things (and more!) because it is an open platform. The principles of “Net Neutrality” (NN) and the open Internet are bedrock beliefs for innovative companies in California and around the country who are delivering the innovations and applications that power our lives.
More than a decade after NN was defined, it’s back on the front burner with everyone from talk show satirists to dog walkers discussing the importance of keeping the Internet open. The issues around NN are not new. The Federal Communications Commission (“FCC”) has been struggling to create a legal framework to preserve and protect these core principles of openness for a long time, and I applaud FCC Commissioner Tom Wheeler’s recent efforts to craft a sensible solution.
I’m convinced that a common sense solution exists, while at the same time hopeful that we’ll make sure there’s water in the pool before we dive in headfirst. I say that because I’m a little concerned about the desire by some to impose 1930s style telephone regulations on the Internet.
These old rules, also known as Title II, if you’re wondering, refer to a section of the Telecommunications Act that Congress first passed in 1934 to regulate telephone service. Not surprisingly, things are dramatically different now than they were 80 years ago, so when you take regulations drafted in the era of the rotary phone and apply them to the era of the smartphone, one has to wonder if this is a square-peg, round-hole solution.
Applying these old telephone regulations would essentially treat the Internet like a utility such as water or electricity. But when is the last time you saw innovation in your water pipe? “
If the Internet had been regulated like water or gas, I highly doubt we would have seen the advent of things like Google Fiber or connected cars,” said Jack Crawford, general partner at Velocity Venture Capital.
Eighty years ago, do you know what went through your water pipe? Water. And I bet that is what will go through it in 80 years. But do you want to guess what will flow through our broadband networks in 80 years? Do you want to guess the bandwidth requirements, the necessary speeds, or the possible services that future networks will need to support? I asked Crawford to answer the same question in the event that broadband is treated as a utility. His response:
“I don’t have a crystal ball, but in 80 years I think regulated broadband would look a lot like it does today. Let’s not veer down that path.”
Over the last three years, I have had the pleasure to work with the FCC, the CPUC, and officials at every level of government to ensure that California’s startups have a voice in the regulatory process. We may not always agree, but these governmental decision makers are working hard to create and enforce rules that will protect consumers, incentivize investment, and grow our economy. It’s the trifecta we all want.
It’s a poorly kept secret, but government moves slower than startups. And the FCC is no different. In order to make a decision on an Internet Service, it’s a 30 day comment period followed by a 30 day reply comment period — and that’s before any ruling by the Commission can even take place. Not exactly the speed of innovation. According to Avetta’s Lloyd Marino, a process such as this would have a chilling effect on innovation.
“In this business, we’re iterating on the fly, A/B testing different features and changing pricing models frequently. I don’t have the time to wait patiently for the conclusion of a regulatory process that I frankly don’t understand and can’t afford.”
As with any heavy regulatory hammer, Title II will be felt by nearly every part of the Internet ecosystem because it will regulate Internet services.That potentially means any company in the business of transporting information from one corner of the Internet to another could be regulated under these rules. That could include the likes of Netflix, Amazon, Twitter, even Snapchat — heavy-hitters who rely on the free flow of data to meet the needs of their customers.
For startups especially, extreme regulation could easily become Armageddon. Since under the rule the FCC will have the same regulatory oversight over Internet services as it does basic telephone service. That means it will approve, or not approve, any changes in Internet service, pricing, terms, conditions, and infrastructure. “Without the freedom for people to innovate without government oversight — what’s known as “permissionless innovation” — it’s doubtful the Internet would be where it is today,” said Yo Yoshida, Founder & CEO of Appallicious, a San Francisco-based civic startup operating in the open government space.
Furthermore, this might also require the payment of regulatory fees. Any company deemed to be providing a “telecommunication service” would theoretically have to contribute to the Universal Service Fund (“USF”). Who picks up this 17% tab? Probably us — consumers. Adding lines of fees and taxes to our Internet bills isn’t on my Christmas list.
In answer to these very real concerns, some supporters of reclassification state the FCC could forebear (grant exceptions) on certain parts of Title II. This, they say, would keep innovation moving. But what this perspective underestimates is the uncertainty this will inject into the sector, the onslaught of litigation such an approach would create, and the institutionalization of distinct classes of the Internet — where some companies can innovate freely and others are left to seek permission every step of the way.
In a statement by Chairman Wheeler following a recent hearing, he said, “There is ONE Internet. Not a fast internet, not a slow internet; ONE Internet.” I could not agree more with that statement. In fact, back in 2012 I wrote an op-ed about the dangers of two Internets. The United Nations was engaged in a treaty process that had the potential to create two Internets through a misguided regulatory process favored by countries such as China, Iran and Russia, and I posited that we must vigilantly fight to preserve one open Internet for all across the world.
I feel the same way nearly 18 months later and echo the words of Chairman Wheeler. We need to protect the open Internet. Saying the Internet is of great benefit and utility is like saying water is wet. It’s a universal truth.
I am delighted to see a robust conversation developing around how to best preserve what makes the Internet great. I just hope we don’t leap into a regulatory framework without really understanding what it means. We can all agree that keeping the Internet open is vital and I’m confident we’ll arrive at a practical solution in time, but we need a modern regulatory approach for modern times — not the porting of a one-size-fits all old-school solution to modern-day challenges.
Mike Montgomery is executive director of CALinnovates, a coalition advocating on behalf of California’s tech community.
This article was originally published on Medium
Larry Downes and Paul Nunes, authors of the seminal book Big Bang Disruption, which details how to strategically navigate our digital world, wrote that every industry is ripe for disruption, even an industry that is currently disrupting another industry. For example: ridesharing.
Ridesharing has caught fire in the U.S. Want to catch a ride in an open seat in someone’s private vehicle? It’s as simple as tapping your smartphone app.
Competition is alive and well in the rideshare industry. In alphabetical order, the three dominant players in the game are Lyft, Sidecar and UberX. Each differentiates itself in its own unique way. I frequently use all three services.
Read the full article on Daily Kos
Encourages new FCC Chairman and Commissioner to tackle spectrum auctions and IP Trials
SAN FRANCISCO, Oct. 30, 2013 – CALinnovates today issued the following statements in light of the unanimous Senate approval of Tom Wheeler to be Chairman of the Federal Communications Commission (FCC) and Michael O’Rielly for FCC Commissioner.
Executive Director Mike Montgomery said:
I’m delighted that Tom Wheeler has finally been confirmed as FCC Chairman. He’s a well-regarded tech veteran who takes the wheel at a critical time for the Commission. His experience will no doubt serve him well. I also look forward to seeing the many talents of Commissioner Michael O’Rielly in action in his new position.
With California’s economy increasingly dependent upon the tech industry, I hope Wheeler and O’Rielly will apply new energy and focus on two critical issues: The transition to next-generation high-speed broadband networks, and freeing up more airwaves via open spectrum auctions that allow all carriers to bid equally and without restriction. Both of these issues are essential to the ongoing health of our economy — not just in California, but nationwide. Quick work is vital if we are going to keep the app economy thriving.
Barbara O’Connor, Ph.D., a CALinnovates Advisory Board Member, Emeritus Professor on Communication at California State University, Sacramento and an Officer and Director of the California Emerging Technology Fund, says Wheeler is an expert at working with all government agencies to shape a coherent administration policy:
My experience in working with Tom Wheeler is that he is skilled at consensus-driven policymaking by working with all interested parties. Chairman Wheeler has the opportunity to tackle great challenges, including expanded access to high-speed broadband. Our country is fortunate to have him at the helm of the FCC.
CALinnovates Advisory Board Member Josh Becker, CEO of Lex Machina, applauds the Senate for approving the appointment of Wheeler:
Silicon Valley and the entire California technology community welcome the confirmation of Mr. Wheeler as Chairman of the FCC. This is an important first step in moving the commission forward on a variety of issues that will ultimately lead to greater innovation and increased opportunities for all Americans.
CALinnovates serves as a bridge between the thriving and fast paced technology communities based in California and the slower moving but equally important public policy communities in Sacramento and Washington, D.C. Our members include C-level executives, political leaders, entrepreneurs, techies and California consumers interested in keeping up with the latest in public policy and innovation.
Silicon Valley gets the majority of California’s tech ink, but according to an encouraging new report from the Progressive Policy Institute, the tech sector is benefiting the entire state as a whole.
According to PPI economist Michael Mandel, California has added jobs at a quicker pace than the rest of the country. Great news, to be sure, but when PPI breaks down the types of tech sector jobs and the areas of the state where employment is booming, things get interesting.
When drilled down to jobs centered around computers and mathematics, the Central Valley has seen the biggest increase in demand over the past year. For media and communications jobs, the Southern Border and Southern California are experiencing a boom. And in web development, it’s the Central Coast and Central Valley (again) that are leading the charge.
None of this means Silicon Valley is on the decline — far from it. But it does show that the tech sector continues to be a major force in the California economy from north to south and all the points in between, and it’s exciting to see another Washington, D.C. stakeholder take note.
CALinnovates and California-Based Tech Groups Ask FCC to Speed Modernization of Nation’s Communications Networks
|For Immediate Release
Wednesday, January 30, 2013
|Contact: Mike Montgomery
For Los Angeles to develop and expand its high-tech industry, the city must change its public perception, a new report commissioned by Mayor Antonio Villaraigosa says.
The Los Angeles Mayor’s Council on Innovation and Industry, formed by the mayor last March, released its 24-page report on Wednesday listing ways the city can work with the high-tech industry to develop it further in L.A.
$14 Billion Additional Investment in Broadband Networks Means Big Things for Consumers and Innovators
|For Immediate Release
Tuesday, November 13, 2012
|Contact: Mike Montgomery
$14 Billion Additional Investment in Broadband Networks Means Big Things for Consumers and Innovators
CALinnovates’ new infographic says evolving consumer behavior demands private sector investment to expand communications infrastructure and support tech innovation
SAN FRANCISCO – California’s economic recovery will be bolstered by a recent announcement that AT&T plans to invest an additional $14 billion to expand and enhance its wired and wireless Internet Protocol (IP) broadband networks. For Californians looking for expanded access to the benefits of the Internet, this development signals great optimism for the future of communications, according to CALinnovates, a San Francisco-based high-tech advocacy group.
According to their 3-year investment plan, 300 million people will be covered by AT&T 4G LTE by the end of 2014, and millions more will have access to next-generation wireline IP broadband networks. CALinnovates Executive Director Mike Montgomery stated, “Connecting virtually everyone in the U.S. with high-speed Internet is a long stride in the right direction toward meeting the goal of President Obama’s National Broadband Plan. And we know that high-speed Internet connections, both wired and wireless, create the kind of jobs we urgently need right now.”
“Consumers, entrepreneurs and people everywhere are clamoring for more connectivity and faster speeds. It takes this kind of multi-billion dollar private sector investment to give people the high-speed connections they want and need,” said Montgomery. “Investment is the linchpin to staying ahead of the massive growth in consumer demand for speed, data capacity and devices and apps that are now central to our lives.”
A new CALinnovates infographic on its website documents how consumers are driving the market that is revolutionizing communications and creating skyrocketing demand for new technology that can handle more data than ever before. In describing the infographic, Montgomery said, “Consumers today want to be connected everywhere in every way possible. But, we can’t take for granted the robust high-speed networks that are necessary to carry the innovations that are driving the economy and improving our lives. Those networks require mega investments to keep them growing and improving.”
“Continued investment to build the communications infrastructure of the future is what will keep the U.S. and Silicon Valley ahead of the innovation curve,” he said.