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In These Chaotic Times, Democrats Need to Rethink Priorities

By Mike Montgomery

It was crunch time. With less than two hours to go before the U.S. Senate narrowly confirmed the controversial Betsy DeVos as the next secretary of education, a group of prominent Democratic senators huddled on Capitol Hill for a press conference about … something else.

What could have been more important? The so-called travel ban? President Donald Trump’s foreign policy agenda or the onslaught against federal environmental regulations?

No, they gathered to talk about the future of net neutrality and the concern that at some point in the future, the FCC might decide to alter its approach to governing the internet.

Don’t get me wrong: I fully support a free and open internet, but more fundamental issues must take precedence in these trying times, especially when a torrent of constituent feedback can permanently turn the tide on matters of national importance — where focusing on net neutrality today may mean a constituent decides not to weigh in on opposing Steve Bannon’s spot on the National Security Council.

As a parent and a progressive Democrat, I am disappointed to see vital energy and focus diverted from the DeVos vote. On Tuesday, the Senate confirmed the unqualified DeVos to run the department that serves 50 million students across more than 100,000 schools. Why was discussing something like net neutrality, on that day specifically, more important than discussing a contrasting progressive vision for the future of our public school system or supporting actual education voices?

That’s not to say that net neutrality isn’t important. It is and will remain so. But progressives who are also net neutrality proponents should be disappointed that any attention was deflected on an historic and consequential day to discuss what the FCC might do in the future regarding net neutrality.

DeVos was confirmed by the narrowest of margins – and perhaps if senators were focused on that issue and not net neutrality, perhaps there could have been at least one more last-gasp attempt to convince one additional Republican to vote against DeVos. Instead, they were preparing for a press conference that did not need to be held that day.

Unfortunately, what’s done is done. There is no reset button for anyone to push. DeVos is the secretary of education, and net neutrality is in place as firmly today as it was earlier this week.

Net neutrality deserves attention and protection — but it needs a thoughtful legislative conversation to codify an open internet, not press conferences and partisanship. For those who want to preserve the basic principles of net neutrality but are fearful that the FCC will abolish the Open Internet order, it’s time to take this fight to Congress. As we’ve said all along — only by cementing net neutrality into law can the government hope to create a stable environment for consumers and existing and future tech companies alike. We need bipartisan legislation that will remain immune to the whims of any particular administration and survive partisan politics.

Many people I know feel displaced and voiceless in today’s political environment. The last few weeks have shown that activists are finding new ways to express their points of view – but the firehose of issues is unrelenting and daunting. Health care, immigration, education, the Supreme Court, the environment – the list goes on. We all need to remind ourselves that there’s a proper time and place for important debates like net neutrality. Tuesday was not that day.

Mike Montgomery is executive director of CALinnovates, a nonpartisan coalition of tech companies, founders, funders and nonprofits determined to make the new economy a reality.

Originally published in Morning Consult

Let’s Stop Treating The Internet Like A Utility

By Kish Rajan

What do the iPhone, the “Internet of Things” and solar panels all have in common? They’re all fantastic technologies that make our lives better, and none of them were invented by utility companies.

They could have been. People consider phone companies to be utilities. Same with electric companies. But thanks to decades of heavy regulations, these sectors have had little to no incentive to innovate due to outdated laws and regulations that stifle rather than encourage investment and competition.

Those disrupters have been able to move quickly and build innovative new companies, thanks to the internet, which has arguably been the single largest engine for growth in this country since the auto industry.

It’s safe to say that the internet does not behave like a utility, but too often, it is treated as one. Until a few weeks ago, the same committee in the California Assembly that dealt with utilities also handled internet issues. The Utilities and Commerce Committee handled everything from ride-sharing issues to the transition to renewable energy. Last session it was overwhelmed by 140 bills.

Kudos to Assembly Speaker Anthony Rendon for spearheading a new alignment for that committee. It is now two different groups: the Communications and Conveyance Committee and the Utility and Energy Committee.

This new division more closely reflects the reality of the internet. It’s not a utility – it’s a technology.

It’s an important distinction.

The internet is often lumped in with utilities when it really shouldn’t be. Take the California Public Utilities Commission, for example. The PUC has oversight of California’s utilities – including the internet. Four years ago the Legislature concluded that the PUC was holding back the development of internet phone service. It moved oversight of that industry to the Legislature, and since then it has flourished.

Last year we were supportive of Assemblyman Mike Gatto’s efforts to disband the PUC (though his bill might have been a step too far). That bill ultimately failed, but it had the right idea. There are utilities and then there is technology, and the two shouldn’t be regulated in the same way.

That’s not to say that the Legislature should take a completely hands-off approach to the internet. We need regulations, but they need to be smart regulations that promote innovation, investment and competition.

Regulations should suit the demands of our technology-reliant world. They should promote broader access to fast internet, help close the shrinking digital divide and make sure our emergency systems are operating at the highest level of security and reliability.

The more we think about the internet as a utility, the more we’ll slow progress. And that’s not what anyone wants.

Kish Rajan is chief evangelist at CALinnovates and former director of Gov. Jerry Brown’s GOBiz initiative. He can be contacted at kish@CALinnovates.org. 

Originally published in the Sacramento Bee 

 

New Report Shows Californians Are More Connected Than Ever

California’s communications industry is currently in a period of astonishing growth, with the promise of an even brighter future to come. You might even call it a broadband boom. A recent study by Dr. David W. Sosa bears this out. Sosa is a principal at the Analysis Group, an economics consulting firm. His research shows that Californians are embracing the wireless lifestyle.

From 2008 through 2015, California’s total wireless subscriptions jumped by 9.5 million, or 29 percent. At the same time, broadband voice residential connections increased by 220 percent, or 4.9 million users. Meanwhile, legacy wireline users dropped by 36 percent. California’s embrace of broadband and wireless is helping keep the state at the center of the growing technology industry.

To read more about this topic, click here to read a recent op-ed by CALinnovates Chief Evangelist Kish Rajan.

CALinnovates Calls on Congress to Enact Bipartisan Net Neutrality Legislation

February 7, 2016

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

“To quote Yogi Berra, ‘It’s déjà vu all over again.’ Well into a decade of debate about Net Neutrality, it simply won’t go away. CALinnovates takes very little satisfaction in saying we saw this coming, but we’ve been calling for a Third Way that could affirmatively cement the tenets of Net Neutrality into law forever. Instead, Net Neutrality is apparently back on the table, perhaps having experienced a slightly longer shelf life than a ripe banana.

“By passing bipartisan Net Neutrality legislation, Congress can enshrine lasting laws into place that will remain immune to the whims of any particular administration and survive partisan politics. A regulatory roller coaster makes consumers and the business community queasy. Let’s settle this issue once and for all. The time is now.”

How To Build A Crowdsourced Company, From the Ground Up

By Mike Montgomery

We have all heard the traditional story. You have an idea and take it to an angel investor early on — or a venture capital firm after developing a prototype — to get funding. But this model has its drawbacks. Investors can make demands that a founder might not agree with. Many VCs are only interested in an exit, not building a sustainable company, and VC-backed companies often fall just as quickly as they rise.

What if there were a better way? Dirk Ahlborn, the CEO and co-founder of Hyperloop Transportation Technologies, thinks there is.

Back in 2012, Ahlborn was part of an online business incubator called JumpStartFund that harnessed the power of online communities. “If you think about it, you do everything online: your dry cleaning, your groceries, even finding love — but building businesses still very much happens offline,” he says. Ahlborn recognized the power of online crowdsourcing platforms like Kickstarter to bring people together, and he wanted to find the best way to harness the wisdom of passionate communities.

The opportunity arrived in the summer of 2013 when Elon Musk published a famous white paper proposing the hyperloop concept: massive magnetized tubes that could carry passengers at 700 mph from Los Angeles to San Francisco.

Ahlborn thought the project would be a perfect fit to show how a crowdsourcing business model would work and asked Musk for permission to put it on the JumpStartFund platform. Ahlborn invited anyone to participate as long as they were willing to work in exchange for stock options. After sifting through hundreds of applications, he enlisted the help of 100 engineers. Many of them had day jobs at places like Boeing, NASA, Google and Airbus.

Read the full article here.

Staying In A D.C. Hotel For Inauguration Weekend? Prepare To Be Gouged

By Mike Montgomery

This weekend will be a historically busy one for Washington D.C. Today, Donald Trump was sworn in as the 45th president of the United States in front of the U.S. Capitol, where his fans were out en masse to watch. Saturday, hundreds of thousands will flood the streets of the city to protest his presidency.

No matter which side of the fence they’re on, every D.C. visitor staying in a hotel had one thing in common: They all paid an insane amount for lodging.

We did some research into rooms this coming weekend and found that hotels are jacking up their prices by more than 800%. Book a room at the Fairmont in Georgetown earlier in January and you would have paid $190 per night for a room with a king bed. The weekend of the inauguration? That same room will cost you $1,600 per night (and you’ll have to book for at least three nights.)

Prices won’t be any better in Dupont Circle. A room at the Kimpton Carlyle Hotel, which would typically go for $99 per night, will cost you $899 per night the weekend of the inauguration.

It is a shame that these absurd rates put hotel rooms out of reach for most Americans who might want to either see democracy in action or protest the people who are soon to be running the country.

Read the full article here.

Hemant Taneja Asks: How Will We Balance A Future With Fewer Jobs And Longer Lifespans?

Venture capitalist Hemant Taneja sees a huge problem looming for America. Technology is increasingly taking over jobs that were once done by people. As this trend accelerates, there will be fewer and fewer people who need to work.

But at the same time, we are living a lot longer. And while ideas like a universal basic stipend might take care of paying all of those people who no longer have to work — what will they do with their days? Work gives our lives meaning as much as it fills our wallets. Are we destined to be sloths who simply consumer entertainment like the dystopian vision laid out in the movie Wall-E or the book Ready Player One?

Taneja thinks we can do better.

“Are we creating a world of technology that replaces human potential or are we unleashing human potential?” asked Taneja. “What do we want to be as a society?”

Taneja, a managing director at General Catalyst Partners, discussed these issue with CALinnovates Chief Evangelist Kish Rajan during an interview for the A Step Ahead podcast. Taneja believes that technology needs to work harder to include humans in the equation or risk cutting them out altogether. That means thinking about solutions to the unintended consequences of technology before we are faced with them as a society. Social platforms, he argued, should have seen the risk of something like fake news coming and gotten out in front of the problem in a responsible way.

“The right thing would be for the innovation sector to think about responsible innovation and for large tech platforms to handle their power with care and algorithmic accountability,” said Taneja.

If not, the government will eventually come in and impose regulations on the industry that could stifle innovation. Taneja believe that now is the time for Silicon Valley to take a hard look inward and decide how it can innovate more responsibly going forward.

Listen to the rest of the interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

CALinnovates Welcomes Call For Fresh Look at Online Consumer Privacy Rules

By Tim Sparapani

Innovators and startups welcome the news that policymakers are taking a fresh look at how to protect consumers’ privacy online.  While the headlines may try to spin this as just another partisan food fight, in truth it’s an incredibly important opportunity to restore balance and clarity to consumer privacy rules in the online ecosystem.

As we’ve said from the start, the privacy rules adopted late last year by the Wheeler FCC were clearly flawed and the ongoing jurisdictional tussle over privacy needs to be resolved for the benefit of consumers and companies alike. The Wheeler rules created an inconsistent, confusing patchwork, in which consumers’ private information on the internet would be protected differently depending on which servers and routers their data happened to be crossing. Yes, the exact same data would arbitrarily enjoy different levels of protection. 94% of consumers believe that all companies collecting their information online should face the same set of rules – and they’re right. The Wheeler rules break from the bipartisan FTC privacy framework that has seen the internet thrive and grow in other ways, introducing new friction and erecting confusing and unjustified new obstacles to even the most mundane uses of data any consumer would see as non-sensitive.  This kind of regulation is bad for consumers, bad for entrepreneurs, and bad for innovation.

In addition, a little known consequence of the Wheeler rules was that they jeopardized the United States’ privacy agreement with the European Union. The Privacy Shield is predicated in part on the United States having a single, lead consumer privacy agency, and the dilution of the FTC’s authority puts this agreement at risk.

We’re glad that policymakers at the FCC and in Congress will have an opportunity to review the rules again and, hopefully, correct these flaws.  A return to the FTC’s role as the lead privacy enforcer would allow innovators to do what they do best: innovate. In addition, a consistent set of rules would do well to assuage consumer advocates’ concern that gaps in enforcement would delay critical privacy actions when companies are ignoring or outright abusing their data responsibilities to their customers.

CALinnovates Lauds President Trump’s Appointment of Ajit Pai as New FCC Chairman

SAN FRANCISCO, January 23, 2017

“In our hyper-partisan country, we still need to be able to get things done. Ajit Pai understands this. He called it like he saw it during his previous term, and I look forward to him continuing to push the envelope as Chairman. To sum it up: Ajit is a hardworking ass kicker who understands the economic and policy concerns of the broad tech sector with an opportunity to unite the FCC in a bipartisan fashion after four years of sharply partisan rulemakings.” – Mike Montgomery, Executive Director

“Chairman Pai’s creativity and business expertise promise to help find a third way to solving our most pressing communication issues. CALinnovates congratulates Chairman Pai and looks forward to working with he and his team.” – Tim Sparapani, Senior Policy Fellow

Staying In A D.C. Hotel For Inauguration Weekend? Prepare To Be Gouged

By Mike Montgomery

This weekend will be a historically busy one for Washington D.C. Today, Donald Trump was sworn in as the 45th president of the United States in front of the U.S. Capitol, where his fans were out en masse to watch. Saturday, hundreds of thousands will flood the streets of the city to protest his presidency.

No matter which side of the fence they’re on, every D.C. visitor staying in a hotel had one thing in common: They all paid an insane amount for lodging.

We did some research into rooms this coming weekend and found that hotels are jacking up their prices by more than 800%. Book a room at the Fairmont in Georgetown earlier in January and you would have paid $190 per night for a room with a king bed. The weekend of the inauguration? That same room will cost you $1,600 per night (and you’ll have to book for at least three nights.)

Prices won’t be any better in Dupont Circle. A room at the Kimpton Carlyle Hotel, which would typically go for $99 per night, will cost you $899 per night the weekend of the inauguration.

It is a shame that these absurd rates put hotel rooms out of reach for most Americans who might want to either see democracy in action or protest the people who are soon to be running the country.

But it’s not a huge surprise. Hotels make a practice of price gouging whenever they can, only they call it “compression” pricing, a made-up term hotel owners use to gloss over the nasty but time-honored practice of fleecing consumers during high-traffic events. Hotels rely on the old supply versus demand argument to justify their behavior of charging unreasonable rates in the name of big corporations lining their coffers.

And while supply and demand is the guiding force of our economic system, it’s worth taking a deeper look at what the hotels are doing and question whether their extreme prices really make economic sense for the workers and the communities where those hotels operate. The people who work in those hotels (most of whom don’t even earn a living wage because the hotels and their lobbyists fight against even modest minimum wage increases) don’t bring in extra money when the hotel is booked to capacity with people paying $1,000 per night or more for a room. The surrounding community doesn’t get an economic boost outside of transit and occupancy taxes that don’t directly benefit local residents. Our research has found that 60 cents out of every dollar spent by people staying at hotels goes back to the corporate owners no matter how much the rooms cost.

While hotel owners might prefer their customers not think about those high prices in terms of price gouging, they’re happy to talk to their investors about the benefits of jacking up prices whenever possible. According to an article in The Wall Street Journal, Pebblebrook Hotel Trust CEO Jon Bortz was quoted as complaining to investors that home sharing platforms, like Home Away and VRBO, are making things hard for hotels.

The company’s ability to “price at maybe what the customer would describe as sort of gouging rates,” has diminished with the growth of home sharing, he told investors. “We’ve lost a lot of that ability at this point within the major markets where these events take place.”

There’s a lesson in that, though inauguration hotel rates show that the rise of home sharing hasn’t fully removed price gouging from the hotels owners’ quivers quite yet.

But the more home sharing there is in a city, the harder it is for hotels to justify price gouging. According to UBS leisure and lodging analyst Robin Farley, more home share listings has a direct effect on limiting the frequency of compression pricing at area hotels.

A bill in front of the D.C. City Council last year would have imposed new regulations on home sharing in the district but the bill died in committee. Hopefully this year the City Council will take a more informed view on home sharing and consider how, especially during large events like the ones coming at the end of this week, it would make sense for the nation’s capital to allow more visitors in instead of keeping them out due to price gouging.

While we may not know exactly what is in store over the next four years, it’s safe to assume that Washington, D.C. will remain a tourist magnet. The city should open its doors as wide as possible.

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