Category Archives: News Center

Los Angeles Times – Readers React: Yesterday’s taxi and hotel laws don’t work for today’s Uber and Airbnb

To the Editor: Dave Rochlin’s op-ed article on the sharing economy misses the mark. (“When ‘innovation’ means rule-breaking,” op-ed, July 27)

Rochlin ridiculously compares the sharing economy to the drug trade, saying both are “gray markets” that form when there is an unmet need within regulated industries. The sharing economy is bringing desperately needed jobs and innovation to regulated markets while serving consumers’ needs. It’s not a dangerous underground market.

Rochlin insists that regulations need not stifle innovation, but that’s exactly what we’ve seen in the taxi and hotel industries. Uber and Airbnb are dragging these industries into the modern world and bringing economic opportunity along with them.

Of course we need regulations, but those regulations need to be smart and modern. Regulating new companies under laws that were written for bygone eras is old-school thinking that will limit society and the economy. Sharing-economy companies are exposing the need for modernizing government. This is the way change happens.

Mike Montgomery, Pacific Palisades

Read original letter here.

The End Of Record Labels

Artists are starting to realize that the real enemy isn’t streaming companies,
it’s record labels.

By Mike Montgomery, Executive Director CALinnovates

When Taylor Swift won her brief battle against Apple Music in June, she was hailed as the savior of music. Thanks to Swift, artists will now be paid royalties during Apple’s three-month trial period of its new streaming music service.

But that will hardly save music. Artists are increasingly up in arms about the paltry paydays they are collecting from streaming music. Back in the day, a band could earn $2 for every CD sold. Today, artists are lucky to get a fraction of a cent for each stream.
Most of the music world’s anger has so far been directed at streaming companies. From the outside, it’s easy to see why. It looks like tech companies are bringing in millions and handing very little of it over to the people who create the music that makes these companies possible in the first place.

But a closer look shows that’s not exactly the case. Streaming companies hand out (on average) 70% of all revenue to rights holders. Spotify has distributed more than $2 billion in royalties. According to Spotify, as of June 2013 it was paying out $425,000 per month for an average global hit album and $145,000 per month for a Spotify Top 10 album. And while Apple, which won’t have a free option after the trial period, will pay $7 of every $10 monthly subscription fee to the music industry, it’s an open question as to how much of that revenue the artists will actually see.

It’s starting to become clear that the money isn’t getting log jammed at the streaming sites; it’s getting log jammed at the record companies. The recent massive Sony hack revealed that the record labels are receiving tens, if not hundreds, of millions from Spotify. A leaked version of Sony’s contract shows that Spotify paid Sony $42.5 million in advances for the rights to Sony’s music catalogue, and a ‘most favored nation’ clause gives Sony the opportunity to earn millions more. Spotify also gave Sony an additional $9 million in ad inventory that it could use or sell at a profit. But how much of those millions make it to the artists?

Read the full article here.

Net Neutrality: a Response to Representative Anna Eshoo

By Mike Montgomery, Executive Director of CALinnovates

Representative Anna Eshoo (D-Palo Alto) got it right when she wrote about the importance of Net Neutrality to the next generation in an op-ed published in the San Francisco Chronicle.

Millennials already live their lives online. If business or the government makes it more difficult for those young people to have clear access to all parts of the Internet, it will only further isolate them from the processes of government. Already, as Eshoo points out, roughly half of Millennials don’t identify with any political party. Take away Net Neutrality and it sends the strong message that government doesn’t share Millennials’ priorities. That would only push the next generation father away.

And while I agree with Rep. Eshoo’s assessment that an Internet without fast lanes is essential to the future, she is missing a critical point about the future of the open Internet.

Read the full article here.

Forbes: How the Tools of Venture Capital are Revolutionizing Food

By: Mike Montgomery

What we eat is changing dramatically. Grocery stores devote aisles to organic merchandise, farmers’ markets spill into the streets and restaurants list the producers that supply their menus. People have become suspicious of Big Food, a catchall term that has come to mean anything processed or fake.

There’s also a growing desire for transparency from consumers. People want to know what they’re putting in their bodies, which drives health and fitness entrepreneurs like Melissa Fox to launch their own companies in response. Fox’s M-Jo Life meal replacement products contain only plant-based, vegan and non-GMO ingredients. Products such as these are part of a group of food startups that have elevated recipes to a higher order, or what Fox calls “ingredient curation” lacking from many mass-marketed products.

Big Food is trying to keep up with the times. General Mills has vowed to remove all artificial colors and flavors from its cereals by 2017. McDonald’s is selling fewer sodas with its Happy Meals. And many big companies are just flat out buying health. General Mills spent $820 million to purchase Annie’s and Campbell’s spent $1.56 billion on Bolthouse Farms.

Read the full article here.

Former Director of California’s GO Biz, Former Director of Policy at Facebook Join CALinnovates

SAN FRANCISCO, June 29, 2015 /PRNewswire-USNewswire/ — CALinnovates executive director Mike Montgomery announced today that Kish Rajan and Tim Sparapani have joined the organization as chief evangelist and senior policy fellow, respectively. Representing companies across the Golden State, CALinnovates advocates for businesses that are improving industries and expanding economic opportunities for Californians through innovative technologies.

Building on expansive experience in California technology and public policy, Rajan serves as CALinnovates’ chief evangelist, leading the organization’s statewide business and economic development programs. Most recently, Rajan served as director of the CaliforniaGovernor’s Office of Business and Economic Development (GO Biz.) under Governor Jerry Brown. As a public advocate, he shaped the state’s economic development efforts, working with policy makers, business leaders and communities to advance economic growth and a positive business climate in California. Previously, Rajan was elected city council member for the City of Walnut Creek in the Bay Area.

“Innovation is the new heartbeat of our economy.  As California asserts its global leadership, we want this boom to create opportunity for every Californian,” Rajan said. “At CALinnovates we are developing a robust work plan to increase public awareness and shape policy discussions about the imperative to build a more modern economy that can benefit all.”

A prominent privacy advocate, Sparapani joins CALinnovates as a champion of consumers at the federal level, and will serve as senior policy fellow. A self-described “tech optimist”, Sparapani has helped innovators and entrepreneurs navigate the world of D.C., state and international regulation for over a decade, first as director of public policy at Facebook, then as vice president of law, policy and government affairs at the Application Developers Alliance. Sparapani formerly served as senior legislative counsel for the American Civil Liberties Union.

“The bridge between California technology and Washington policy has never been more important than it is today,” said Sparapani. “The tech community’s ingenuity and disruptions echo through Capitol Hill. It is important that regulations power innovation while providing certainty and competition and ensure consumer protection and choice.”

“Kish and Tim are well-regarded thought leaders in technology policy matters and bring immense knowledge and experience to CALinnovates,” said Montgomery. “In having colleagues with their expertise on both coasts, CALinnovates will continue to expand its tech advocacy and leadership on behalf of innovators and entrepreneurs at every level of government.”

Located in San Francisco, CALinnovates is a non-profit tech advocacy coalition working with innovative companies across the Golden State that are improving industries and expanding economic opportunities across the nation.

Forbes: Why Civic Tech Is The Next Big Thing

By: Mike Montgomery

As recently as ten years ago, government was seen as the black plague of the tech world. Bureaucracies move slowly. Governments have limited resources. Convincing municipalities to spend money on anything can be a Herculean task. Venture capitalists recommended entrepreneurs stick to the private sector where budgets are looser and there’s a more diverse customer base.

 That’s beginning to change. Civic tech is now a hot space for tech investments. Governments are waking up to the need to bring their technology into the 21st century. It’s no longer good enough to have documents hidden in hundreds of filing cabinets and reports printed out on dot-matrix printers. Citizens are increasingly demanding transparency from their elected officials and too often, governments have no way to provide a clear window into how or why taxpayer money is being spent.

Read the full article here.

So Far Net Neutrality Hasn’t Broken The Internet

Shares of Verizon — the future home of this publication — a company viscerally opposed to net neutrality, are down a fraction in a down market. Investors, it seems, aren’t pricing much downside into net neutrality in the immediate aftermath of its enaction.

There is a certain irony to the Verizon point. Verizon brought the last suit against net neutrality that led to the new rules. Title II is in no small way due to the actions of that ISP.

Legal challenges to net neutrality are on a fast track and should be wrapped up, perhaps, by the end of 2015. The key aspect to an accelerated court schedule is that the market needs certainty on the matter. If the FCC’s rules are overturned, things change. If the agency succeeds in court, things don’t change.

Following the FCC’s victory to put down a stay of its rules, Wheeler said that the decision “give[s] broadband providers the certainty and economic incentive to build fast and competitive broadband networks.” ISPs would rather have it another way.

Aside from legal threats, another potentiality looms for net neutrality: A new administration’s FCC changing the rules. That fact adds another wrinkle to the current presidential election cycle — who wins will be able to either maintain, or shape, net neutrality policy in a different direction.

Congressional action, of course, remains a possibility.

Mike Montgomery of CALinnovates, a technology interest group, told TechCrunch that if the party in the White House changes, things could rapidly shift:

A Republican President will surely make the appointment of a new FCC Chairman a priority, and that new Chairman would likely take a sledgehammer to the Open Internet Order as her or his first order of business. […] The new President’s appointment of a new FCC Chairman will shift the balance of power at the Commission, turning a 3-2 Democratic majority into a Democratic minority, thus providing the votes to either completely overturn the imposition of Title II or drastic forbearance, leading to a theoretical ‘wild west’ that would lack any clear rules of the road, which would create a nightmare scenario for consumers, startups and the greater business community, and investors.

Montgomery said that if the net neutrality rules lose in court, it could lead to “a situation where fast lanes, blocking, and throttling will be squarely back on the table.”

In short, here we are, as expected. Welcome back to net neutrality.

CALinnovates’ Statement on DC Court’s Denial of Title II Stay

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

“This is the first of what will be many court decisions with regard to Title II and Net Neutrality. Unfortunately, these decisions will take several years and leave a great deal of uncertainty in their wake – uncertainty that will hinder innovation, business planning and ultimately the growth of the Internet and the future of the new economy.

“Today’s legal decision changes nothing about the policy imperative, which is why it is essential for Congress to take action in a bipartisan fashion to settle the issue around Net Neutrality once and for all in a way that moves beyond Title II and takes a 21st-century approach to technology policy.”

The 2016 Net Neutrality Time Bomb

(Special to Medium)

No matter who wins the next presidential election, Net Neutrality isn’t secure without legislation.

Elections aren’t always a good thing (I know that sounds un-American but hear me out…)

Elections are the bedrock of our democracy and one of the many things that make this country great. If an elected leader isn’t cutting it, the voters have the opportunity to kick him or her out of office every few years. That’s powerful stuff.

But when it comes to Net Neutrality, the very nature of elections puts the Internet at risk. Thanks to recent action by the Federal Communications Commission (FCC), Net Neutrality is now the province of the FCC.

On January 20, 2016, the nation’s new President will be inaugurated and he (or she) will appoint a new FCC Chairman to replace current Chairman Tom Wheeler. That person will have an outsized influence on the future of Net Neutrality and he (or she) may decide not to enforce the current rules or to change them all together. Everything is riding on the next President’s feeling about Net Neutrality. Although the campaign season is just getting started, we’re already getting a look at who the likely candidates will be and where they stand on Internet freedom.

Read the full article here: https://medium.com/@calinnovates/the-2016-net-neutrality-time-bomb-6bac50e0b7ab

Congress Must Act if DOJ’s Actions Harm Viability of Music Streaming

Special to Roll Call:

By Mike Montgomery

The Senate Judiciary Committee recently held what should be considered an historic hearing to discuss the competitive landscape surrounding music licensing; not just the age old fight about how to divide the royalties, but to examine whether competition in the music space is healthy enough to allow new entrants — such as Pandora and iHeart — to continue to innovate and delight consumers.

In his opening statement, Sen. Patrick J. Leahy, D-Vt., said the committee needs to work toward ensuring fair compensation for artists while also ensuring that new music streaming companies can thrive. And that brought to the fore the 65-year-old antitrust consent decrees that dictate how music license rights are handled in the U.S.

Leahy’s goal isn’t ambitious — it’s logical. But it won’t be met if music labels and the organizations that represent songwriters and publishers get their way, because any modification of the consent decrees would threaten the existence of companies such as Spotify.

Read more: http://blogs.rollcall.com/beltway-insiders/congress-must-act-dojs-actions-harm-viability-music-streaming-commentary/?dcz=