Archive for Politics

RB | June 13, 2011
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Tech Regulatory Capture

Regulatory capture occurs when governmental bodies created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can encourage large firms to exploit the public.

Former Sen. Chris Dodd Named MPAA Chief

MPAAChristopher Dodd, the former five-term Democratic senator from Connecticut is the head of the Motion Picture Association of America. He sat on the Foreign Relations Committee, headed the Banking Committee, and co-authored the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, he attempted to filibuster the legislation that immunized telecom companies from lawsuits over the Bush administration’s warrantless wiretapping program.

As head of the MPAA, he’s likely to be a little less friendly to the average netizen. The MPAA has lobbied hard for the controversial Anti-Counterfeiting Trade Agreement.

It has pushed for the government to shutter websites suspected of hosting infringing material, and is responsible for using the American legal system to sue U.S.-based torrent search engines out of existence. A case against Canadian-based Isohunt is pending.

Facebook Prepares to Add Friends in Washington

FacebookDemocrat Sheryl Sandberg, the former Clinton administration official is chief operating officer for Facebook. Ms. Sandberg, is the company’s No. 2 official behind co-founder and chief executive, Mark Zuckerberg.

Republican Ted Ullyot, a former clerk for Supreme Court Justice Antonin Scalia is the social networker’s general counsel. Mr. Ullyot, was a White House lawyer and chief of staff for Alberto Gonzales, when he was attorney general in the George W. Bush administration. Facebook  told the Los Angeles Times that Mr. Ullyot “has extremely strong connections with the Republican Party, and we think that’s a good thing.”

Facebook Adds to Its Public Policy Staff

FacebookFacebook increased its Republican credentials by adding Catherine Martin, who is the site’s first director of public policy. Previously, Ms. Martin worked for President George W. Bush, serving as deputy assistant to the president and deputy communications director for policy and planning.

Facebook May Hire Robert Gibbs, Former Obama Aide

FacebookFacebook is in talks to hire Robert Gibbs, President Obama’s former White House press secretary, for a senior role in helping to manage the company’s communications, people briefed on the negotiations told the New York Times.

Mr. Gibbs, who left the White House in February after two years on the job, had planned to help set up President Obama’s re-election campaign before taking a private sector job, these people said. A job for Mr. Gibbs at Facebook could be worth millions of dollars. While details of his potential compensation package have yet to be discussed, people briefed on the talks said that he would receive a cash salary as well as shares ahead of the initial offering. Some investors have valued Facebook  at more than $60 billion and could be the largest offering in history. Mr. Gibbs and a spokesman for Facebook declined to comment.

Facebook Woos Washington

Facebook The Daily Beast points out that Facebook, Mark Zuckerberg’s company has 600 million members, making it about twice as big as the United States. The Daily Beast says that Facebook needs to get as cozy as it canwith the U.S. Government and Barack Obama. This company is gathering more personal information about more people than any other company ever, even more than Google. Suddenly it is dawning on everyone, including members of Congress, just how much power Facebook is amassing.

Co to counter the trend Facebook has hired two more former government officials.

  • Elliot Schrage, worked at the Council on Foreign Relations and Google before joining Facebook.. Mr. Schrage, a lawyer by training, serves as Facebook’s head of global communications and public affairs.
  • Chris Hughes, a Facebook co-founder, ran Obama’s 2008 social-networking operation via a website called My.BarackObama.com.

Guess Who Just Paid $35,000 For A Steak Dinner With Obama?

YelpAfter President Obama’s love-in speech video at Facebook, another group of tech luminaries get a meeting with POTUS. The steak dinner at the home of Salesforce.com CEO Marc Beniof cost $35,000-a-plate. According to the Business Insider other Silicon Valley big-shots in attendance included:

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RB | May 18, 2011
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Tech Regulatory Capture

Regulatory capture occurs when governmental bodies created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can encourage large firms to exploit the public.

Sunlight: Congress’ Revolving Door to Telecom, Cable Firms

GreedAccording to a 2010 Washington Post article, broadband providers including Comcast, Time Warner Cable, AT&T and Verizon Communications have amassed armies of former government officials to lobby against net neutrality and other regulations at the Federal Communications Commission, according to a report by the Sunlight Foundation. The nonprofit public interest organization said those firms hired 276 former government officials, including 18 former members of Congress, to fight against rules that would require them to treat all Web sites and content equally on their networks.

AT&T (T) has hired Republican and Democrats from the US House and Senate to lobby for them including:

  • Jim Davis former Democratic congressman from Florida;
  • Trent Lott former Republican senator from Mississippi;
  • Vic Fazio former Democratic representative from California;
  • John Breaux former Republican senator from Louisiana;
  • J.C. Watts former Republican representative from Oklahoma;

Comcast (CMCSA) has also hired former politicians like:

Verizon (VZ) hired Republican representative Jack Fields from Texas.

The cable industry trade group National Cable & Telecommunications Association, hired Chip Pickering, a former Republican congressman from Mississippi.

The US Telecom Association, the Broadband Association hired Al Wynn former Democratic representative from Maryland.

Revolution LLC.

Ron Klain is General Counsel of former AOL CEO Steve Case’s Revolution LLC. Prior to joining Mr. Case’s firm Mr. Klain has extensive public service, most recently as a senior White House aide to President Obama, and Chief of Staff to Vice President Biden. He has also served as Chief of Staff or Staff Director for Vice President Al Gore, Attorney General Janet Reno, the Senate Democratic Leadership Committee, and the Senate Judiciary Committee. Mr. Klain was also Associate Counsel to President Clinton, and a law clerk to Supreme Court Justice Byron White. He has served as a top debate preparation advisor to Presidents Obama and Clinton, and Democratic Presidential nominees Al Gore and John Kerry.

State Department’s Katie Stanton Moves to Twitter

TwitterTwitter has captured Katie Stanton, a special adviser at the State Department and former White House staffer. She is heading to Twitter to work on international business strategy according to the Washington Post.  Ms. Stanton tweeted her move to the social information platform’s San Francisco’s office. The Post says Ms. Stanton will be a vice president driving Twitter’s international business strategy and operations. Ms. Stanton previously worked at Google as a product manager for the search engine’s finance application.

She joined the White House as the director of citizen participation after working on new media strategies for President Obama’s election campaign. Stanton moved to the State Department last year, working with Alec Ross, senior adviser for innovation, on how to use social media tools and technology for diplomatic goals.

Facebook Hires White House Adviser as New VP

Facebook AppScout reported that Facebook has captured an economic adviser to President Obama to serve as its new vice president of global public policy.  Marne Levine is the special assistant to the president for economic policy and chief of staff for the National Economic Council at the White House.

“With over 70 percent of our users living outside the United States, her unique mix of government and Internet industry experience will be invaluable to help Facebook address some of the most interesting questions at the intersection of technology and public policy,” Elliot Schrage, vice president of global communications at Facebook, said in a statement.

Arnold Schwarzenegger

Maria - Can I get into politics too?

Levine will work out of Facebook’s D.C. office where she will oversee and coordinate interactions with governments and non-governmental organizations, Facebook said. She will also help to build Facebook policy teams in Asia, the Americas, and Europe.

According to the article Ms, Levine helped launch an online peer-to-peer payment platform, and helped manage its privacy and compliance issues which is probably why Facebook hired her so she can lobby her former boss on privacy and banking issues.

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RB | March 7, 2011
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Tech Titans Talk Tax Cuts with POTUS

Fortune is reporting that a group of tech, pharmaceutical and energy giants are lobbying for a tax cut that would allow them to bring home the estimated $1 trillion they’ve got parked overseas at a steeply discounted rate. Fortune’s sources say that Apple (AAPL), Cisco (CSCO) and Oracle (ORCL)  are among the major players looking to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%, instead of the 35% they face now.

Multinationals prevailed on Congress to approve a one-year tax holiday once before, as part of a jobs package in 2004. Back then, the companies argued the relief would help them boost economic growth, because they’d plow their repatriated money into research, investment, and hiring. And while plenty of outfits benefited from the break — 843 corporations made use of the holiday, bringing back a total of $362 billion, according to the IRS — the broader economic benefits were dubious.

The Treasury Department wrote rules trying to make sure that the recovered cash was in fact invested back into the companies. But money is fungible. Although the rules expressly prohibited using the funds for dividend payments or stock buybacks, later analysis has shown participants sent most of it to shareholders anyway. One study cited by Fortune from the National Bureau of Economic Research, found that for every dollar of repatriated cash, companies bumped up shareholder payouts between 60 and 92 cents.

“A tax holiday would bring a substantial amount of cash back to the United States and paying that out to shareholders is good for the economy,” said study co-author Kristin Forbes, an economics professor at MIT’s Sloan School of Management and a member of then-President George W. Bush’s council of economic advisers told Fortune. “But if you’re a politician claiming this will create a lot of jobs or new investment, it isn’t supported by the data.”

In order to sell the deal, Cisco CEO John Chambers and Oracle president Safra Catz argued in an October editorial in the Wall Street Journal that a second holiday would help put Americans back to work. But they don’t promise that companies would drive all of their repatriated money directly into job-creating investments. They acknowledge that companies might pass the money along to shareholders again. But Mr. Chambers and Ms. Catz argue on top of direct investments, the tax cut holiday would spur a new stimulus by boosting markets, thereby increasing consumer confidence. And they say the tax revenue itself could fund $50 billion worth of credits to encourage new hiring — a sum only possible in the unlikely event companies decide to bring home the entirety of their overseas reserves.

Obama tech- dinner toastPresident Obama’s recent dinner with a the Silicon Valley’s tech titans was a star-studded event according to TechCrunch. Invitee included Facebook CEO Mark Zuckerberg, Apple CEO Steve Jobs, Yahoo (YHOO) CEO Carol Bartz, Cisco’s CEO John Chambers, Twitter CEO Dick Costolo, Oracle CEO Larry Ellison, Netflix (NFLX) CEO Reed Hastings, Genentech Chairman Art Levinson; Google (GOOG) CEO Eric Schmidt; former state controller and venture capitalist Steve Westly Doerr, and Stanford University President John Hennessy. The event was held at Kleiner Perkins partner John Doerr’s home.

After the dinner, White House press secretary Jay Carney said the group talked about ways to invest in innovation and how to increase jobs in the private sector. He said Mr. Obama also discussed proposals to invest in research and development and his goal of doubling exports in five years.

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I don’t think its unreasonable to assume that what POTUS calls, “increase jobs in the private sector” would mean a “tax cut holiday” for the tech titans.

It should be no surprise that the Tech Titans who supped with POTUS were big political contributors and supporters of the tax cut holiday. What happened to “Yes We Can”?

Diner AttendeeRoleFirmTotal individual political contributions since 2008Total 2010 firm lobbyingTax holiday supporter
Carol Bartz
President and CEO
Yahoo Inc.$5,000$2.2 million
John Chambers
Chairman and CEO Cisco Systems Inc.
$17,200$2 millionYes
Dick Costolo CEO
Twitter Inc.
John DoerrPartnerKleiner Perkins Caufield & Byers
$3,000$200,000
Larry EllisonCo-Founder and CEO

Oracle Corp.$50,000$4.9 millionYes
Reed Hastings
CEO Netflix Inc.
$44,800$130,000
John Hennessy

PresidentStanford University$4,800$370,000
Steve JobsChairman and CEO Apple Inc.
$1.6 millionYes
Art Levinson
Chairman and former CEOGenentech Inc.
$250$443,500
Marissa MayerVP
Google $5.2 million
Eric SchmidtChairman and CEO
Google Inc.$72,300$5.2 million
Steve Westly
Managing Partner and FounderThe Westly Group$99,000
Mark ZuckerbergFounder and CEOFacebook Inc.$500$351,000
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RB | January 21, 2011
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Wireless Spends Big Bucks to Lobby Congress

Politicans CTIA, the Wireless Association, CTIA is the wireless industry’s largest trade group spent $2.4 million in the third quarter of 2010 to lobby federal officials. Bloomberg cites a quarterly disclosure report filed with the U.S House of Representatives.  This marks a new high in CTIA lobbying spending. CTIA spent $2 million spent in the second quarter and $1.3 million that it spent on lobbying in the third quarter of last year, reports Bloomberg.

CTIA Wireless AssocationBloomberg says the trade association lobbied Washington on:

  • More radio spectrum for wireless Internet services
  • The FCC’s recently adopted “network neutrality” rules, which prohibit broadband providers from interfering with Internet traffic traveling over their systems, as well as the
  • The FCC’s legal framework for regulating broadband
  • “Bill shock” rules, which would require wireless companies to alert subscribers before they run out of minutes, hit data usage or text messaging caps or start racking up international roaming charges.
  • The CTIA which represents wireless carriers, like AT&T, Verizon Wireless, Sprint Nextel and T-Mobile, says it now generates annual revenues of $155.8 billion.

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Not only is the wireless industry lobbying group, CTIA spending millions every year to the buy influence legislation, the wireless companies are the leaders in lobbying spending. I wrote about AT&T and Verizon (VZ) both spending over $3 million on lobbying in 2010 here. I wrote about AT&T’s (T) long tradition of spreading its money around to buy influence legislation here. The rational business use of this money says that these firms are getting more benefit by lobbying lawmakers then investing it in their networks, paying a dividend or putting the money in the bank, but are the best decisions for the rest of us?

Who do you think the politicians are really looking out for?

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RB | January 8, 2011
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Paul Allen Internet Tax Collector?

Microsoft co-founder Paul Allen has reloaded in his attempt to sue the world for patent infringement. Allen’s Interval Licensing filed an amended patent infringement suit against most of the leading online tech companies. The first try (which I wrote about here) was tossed out by the judge because it failed to point out exactly how each firm stole Allen’s ideas.

Interval’s amended, 35-page filing (PDF) claims that Apple (AAPL), Google (GOOG), Facebook, and eight other online companies use Allen’s patents whenever they use a browser for navigating through information, managing a user’s peripheral attention while using a device, and alerting users to items of current interest. The filing claims that features as Apple’s Dashboard software, the notifications interface in Google’s Android operating system and Netflix’s (NFLX) viewing suggestions are infringing on Interval patents. It asks for unspecified damages from those companies as well as an injunction on them shipping any products with the allegedly infringing features.

It looks like Google’s Android operating system is directly targeted by the lawsuit including its notification system for texts, Google Voice messages, e-mails, and other alerts displays information “to a user of a mobile device in an unobtrusive manner that occupies the peripheral attention of the user.” As before,the suit doesn’t target Microsoft (MSFT) or Amazon (AMZN) (which pays rent to Allen’s Vulcan Real Estate), even though both companies’ products would seem to infringe on the same patents.

Rob Pegoraro at the Washington Post writes:

the Interval claims continue to be insultingly generic. For instance, an allegation that AOL and Gmail’s spam-filtering software infringes on an Interval patent because it is “based at least in part on a comparison between the new email and other emails that have been received.” (Sure: Like nobody ever thought to make such a statistical comparison until Interval came along.) Later, it contends that when Netflix “generates a display of related content items” after “a user views a particular content item,” that infringes on an Interval patent too. (Right, because the concept of a store or a catalog suggesting a related item to a shopper didn’t exist until Interval scientists had a brainstorming session.)

Mr.Pegoraro continues:

Interval’s patents are junk. They describe general concepts that should have been obvious to anybody of ordinary skill in this field in the mid 1990s–and for which it shouldn’t be difficult to find “prior art” showing that other people had thought of the same thing years before. Had the U.S. Patent and Trademark Office provided the “high quality” examination of patent applications it promises, it’s hard to see how these patents would have been granted in the first place.

Mr. Pegoraro also cites PaidContent.org’s Joe Mullin in a commentary (emphasis in the original):

If patent claims on such basic ideas are found to be valid, there are surely hundreds of other potential defendants that could be sued by Interval Licensing. Paul Allen would be essentially a tax collector for the internet.

The firms named in the suite are:

Do you believe the U.S. Patent Office is still useful?

Does Paul Allen deserves to collect a tax from every Internet user?

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