The Politics of Technology

The Politics of Technology


A select group of lawmakers have an outsized influence on tech-related matters like privacy, national security and antitrust regulation, and their clout will help shape the fates of device makers and carriers in years to come.

Americans elect 535 people to write and amend federal laws, and a handful of those lawmakers focus on technology matters, either as part of a committee assignment or advocating on behalf of constituents. Their proposed policies and laws impact everything from privacy and anti-trust concerns, to national security and the role of regulations.

A few Congressional committees in particular enable members to develop specialized knowledge of the matters under their jurisdiction, like privacy and anti-trust concerns. While other committees consider technological issues, the House’s Privacy Caucus and the Senate’s Antitrust subcommittee promise to wield significant influence as issues like data tracking and carrier mergers and acquisitions continue to make headlines.

Other members of Congress, however, do not need to belong to committees to make their views on privacy and antitrust concerns heard, and have become formidable figures in the politics surrounding technology.

The Privacy Hawks

Name: Rep. Edward J. Markey (D., Mass.)

Key Initiatives: Co-chairman of the House Privacy Caucus, sponsored the Mobile Device Privacy Act, updated the Children’s Online Privacy Protection Act, investigated Amazon’s Silk Browser and Facebook’s cookie-tracking practices.

Name: Rep. Joe Barton (R., Texas)

Key Initiatives: Co-chairman of the House Privacy Caucus, investigated Facebook’s cookie-tracking, updated the Children’s Online Privacy Protection Act.

Reps. Markey and Barton sit on opposite sides of the aisle, but these lawmakers both take online privacy seriously, casting aside party lines to co-chair the House Privacy Caucus, keeping tabs on tech companies to ensure the privacy of U.S. citizens.

Markey and Barton scrutinize mobile privacy policies and most recently sent a letter voicing concerns about Google’s upcoming privacy policy shift. Along with public outcry over the changes, the representatives wanted answers from the company’s intended use of consumer data and their review could impact corporate policies.

Facebook’s CEO Mark Zuckerberg is also familiar with Markey and Barton. The lawmakers grilled Facebook execs over plans to share user information with third-party app developers, underscoring Congress’ plans to continue pressing on privacy concerns. The Zuckerberg grilling followed Barton and Markey’s campaign critiquing Facebook’s cookie-tracking practice, which allowed the social media giant to track users even after they logged out of the site. Barton and Markey took the additional step to ask the FTC to formally investigate this behavior; Facebook says it fixed the problem.

The Congressmen released letters from AT&T, Verizon, Sprint and T-Mobile about the companies’ data collection, use and storage. The carriers responded to concerns by outlining their privacy policies, which generally ask permission before tracking location, but all the major carriers claim no responsibility over data collection on third-party apps, an oversight that worries the Privacy Caucus.

And to show their attention to startups in addition to established firms, last summer the duo targeted Groupon for potentially exploitative privacy tactics.

Barton and Markey often present their concerns in joint letters and specifically focus on how companies use customer data for their own benefit. The representatives are likely to stay on Google’s privacy overhaul, and as Facebook readies its IPO and tries to compete with Apple and Google, Barton and Markey’s Privacy Caucus is sure to chime in if Facebook’s practices encroach on questionable privacy practices.

On the other hand, both representatives may have to juggle their committee responsibilities with maintaining their own jobs. The Texas and Massachusetts representatives face re-election in November 2012, both contending with challenges from redrawn district maps.

Antitrust Watchdogs

Name: Sen. Herb Kohl (D., Wisc.)

Key Initiatives: Chairman of Senate Antitrust subcommittee, ongoing antitrust investigation of Google, AT&T/T-Mobile merger.

Name: Sen. Mike Lee (R., Utah)

Key Initiatives: Ongoing antitrust investigation of Google, ranking member of Senate Antitrust subcommittee.

Kohl, as chairman of the Senate’s Antitrust subcommittee panel, oversees checks and balances of the most powerful companies in the nation. Lee is a member of the panel as well.

In efforts to make sure Google wasn’t unfairly stifling competitors, Kohl helped decipher antitrust allegations of Google in a Congressional hearing last year and said lawmakers would investigate to make sure Google’s rivals are “treated fairly,” supporting a further Federal Trade Commission investigation of the search engine giant.

Kohl also authored a letter to the Federal Communications Commission while it debated AT&T’s T-Mobile acquisition, saying the merger would harm competition and consumers and should be blocked.

“I have concluded that this acquisition, if permitted to proceed, would likely cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest and therefore should be blocked by your agencies,” said Kohl.

Like the committee chairman, Lee proves to be vocal in his role as ranking member of the Antitrust Subcommittee, joining the call for judiciary committees on Google’s antitrust investigation. The Texas senator joined Sen. Kohl in urging the company to send top leaders Eric Schmidt and Larry Page and hearing transcriptions show Lee did not shy from grilling Google on its free competition spirit.

“Google is in a position to determine who will succeed and who will fail on the Internet,” said Lee. “In the words of the head of the Google’s search ranking team, Google is the biggest kingmaker on Earth.”

Kohl joined the Senate in 1988 and is currently serving his fourth six-year term. Sen. Kohl officially announced in May 2011 that he will not be seeking re-election, so for the rest of 2012, Kohl’s name will likely pop up from time to time as investigations continue of allegations against Google.

For his part, Lee, who joined the Senate in 2010 and authored a separate letter to the DoJ and FCC about the proposed merger of AT&T and T-Mobile, could be the next appointee to fill Kohl’s committee spot if a majority of Republicans take the Senate.

A Sharp Eye on Data, Tracking and Privacy

Name: Sen. Al Franken (D., Minn.)

Key Initiatives: Mobile tracking privacy concerns, FCC approval of AT&T and T-Mobile merger, Congressional bill for defining 4G.

Other lawmakers made their impression on the tech world, not necessarily from a committee platform, but by advocating for the same issues that strike a chord with them or their constituents. Al Franken has been a vocal critic of growing privacy violations, emerging as an influential voice in mounting debate over what data devices track and who can access it.

Since being elected to the Senate in 2008, Sen. Franken continues to weigh in on a number of issues about how companies treat users — notably, he’s an advocate for control of mobile tracking, unabashedly going after the most powerful players.

Last summer, Franken introduced the Location Privacy Detection Act, which required mobile carriers to obtain user consent before sharing location data with third parties. Franken said while he was aware of the benefits data collection can offer, he still wanted to promote education and ensure certain user rights.

“Geolocation technology gives us incredible benefits, but the same information that allows emergency responders to locate us when we’re in trouble is not necessarily information all of us want to share with the rest of the world,” he said.

Franken even faced off with the Steve Jobs last year on the discovery Apple gather information iPhone and iPad users without their knowledge. In a letter sent directly to the groundbreaking CEO, Franken boldly asked why the data was stored unencrypted and said its existence “raises serious privacy concerns.”

The Minnesota senator continued to push the issue on app privacy, expanding his investigation to include Apple and Google about app developer’s privacy policies and leading the Congressional charge against Carrier IQ diagnostic software, which possibly violated privacy rights.

In addition to questioning tech leaders, Franken demonstrates a willingness to actively participate in major issues. For example, Franken also urged the FCC to block approval of AT&T’s T-Mobile acquisition in a 24-page letter, along with other federal lawmakers, and he helped craft a bill that would force carriers to clearly define 4G use and require the FCC to monitor service speed.

With a broad approach to regulatory concerns over operation of mobile companies and user treatment, Franken proves he is intent on ensuring consumer privacy and fair treatment from their mobile companies. In the coming years, Franken is likely to continue to follow these issues and push for bill passage in relation to privacy, an issue that shows no signs of going away as smartphones sweep the country’s consumers.

The Consummate Politician

Name: Sen., Harry Reid (D., Nev.), Senate Majority Leader

Key Initiatives: Spectrum/Debt Ceiling, Cyber-Attacks.

The Democratic leader of the Senate advocated for spectrum auctions as part of a plan to lower the debt ceiling in 2011, pleasing U.S. carriers like Verizon and AT&T as well as the FCC. Limited spectrum is a mounting concern for the communications industry as more technology goes wireless and Reid’s support seemed a friendly gesture, but not without political implications.

Spectrum auctions have potential to generate millions for the cash strapped government, but political infighting stalled Reid’s plan this summer. The congressional “super committee” reached political paralysis over multiple issues this fall, spectrum auctions were temporarily shelved and the legislation postponed.

Reid also worked on a bill to protect consumer data and regulate how the Department of Homeland Security uses and stores data as it scans for potential cyber-threats, annoying Republicans by setting ground rules for the government watchdog.

But Reid also proved he’s willing to stand against tech companies, joining a group of senators last spring to petition Apple, RIM and Google to remove apps that provided the locations of DUI checkpoints and speed traps.

“Giving drunk drivers a free tool to evade checkpoints, putting innocent families and children at risk, is a matter of public concern,” said the senators in their letter. “We hope that you will give our request to remove these applications from your store immediate consideration.”

Reid’s ongoing support of spectrum auctions, which could help carriers as they build new LTE networks and generate money for the government in a tough economy. The ongoing race for 4G technology among the top four U.S. wireless carriers likely means Reid will play a major role in the future, perhaps as a conduit between the federal government, regulators and the tech industry.

The Internet Cop

Name: Rep. Lamar Smith (R., Texas)

Key Initiatives: author of The Protecting Children from Internet Pornography Act and anti-piracy bill SOPA.

In addition to being a staunch supporter of the failed anti-piracy SOPA measure, aimed at ensuring copyright protection but assailed as too restrictive, Smith is now spearheading The Protecting Children from Internet Pornography Act, or H.R. 1981, which would require Internet providers to store and monitor personal information linked with IP addresses to help law enforcement track down child pornographers.

The bill sparked intense reaction, fueling the ongoing debate over how much online data the U.S. government should have access to. H.R. 1981′s opponents say such oversight paints every U.S. Internet user as guilty before committing a crime and they express concern over how to protect such vast amounts of stored personal data in the event of a cyber-security breach.

Republicans like Smith, however, feel harnessing the power of the Internet to monitor criminals benefits Americans more than harms them, empowering law enforcement with advanced new tools to catch deviants.

Smith’s dedication to advocate for the rights of government and police to access personal data from those suspected of committing a crime will likely continue and with recent cases over GPS tracking making their way to the Supreme Court, Smith’s name could very well be associated with those emerging issues.

The Cyber-Warrior

Name: Rep. Mike Rogers (R., Mich.), Chairman, House Permanent Select Committee on Intelligence

Key Initiatives: Reviewing Huawei and ZTE to figure out their possible connection to the Chinese government, backer of the Cyber-Intelligence Sharing and Protection Act of 2011.

Rep. Mike Rogers is building a name as the champion for cyber security, with a special focus on protecting the U.S. from threats to Internet security originating in China.

Rogers headed an investigation into Huawei and the ZTE Corp., companies suspected of espionage. The committee’s investigation pointed to the U.S. government’s increased attention on China’s potential economic spying.

“American businesses are under attack. Right now, countless hackers in China — many sponsored by the government — are actively trying to steal valuable intellectual property from U.S. Fortune 500 companies. Every day, China, Russia, Iran and others are blatantly stealing reams of information from U.S.-owned computers,” Rogers wrote in a Politico op-ed, highlighting his campaign to protect the U.S. from online foreign threats.

In addition to honing in on Chinese cyber-security threats, Rogers endorsed the Cyber Intelligence Sharing and Protection Act of 2011, which requires companies to give confidential information about potential security threats. This act helps the government hunt down hackers, but raises concerns about government surveillance.

Rogers firmly supports measures to stop hackers, including increased government surveillance. He is likely to support new legislation introduced expanding the government’s access to Internet user data.

The Consumer/Voter Advocate

Name: Sen. Richard Blumenthal (D., Conn.)

Key Initiatives: authored the Personal Data Protection and Breach Accountability Act of 2011 and supported efforts for carriers to more clearly define 4G.

Blumenthal routinely advocates for transparency and accountability from wireless carriers, sometimes blurring the line between typical political party stances if it means standing up for U.S. consumers.

Last fall, he and a group of Democratic senators proposed the “Next Generation Wireless Disclosure Act,” requiring U.S. carriers to disclose details about services and products marketed as “4G,” including guaranteed minimum data speeds. The term, a buzzword in the technology world, is often confusing to consumers and Blumenthal and his colleagues lobbied for clear definitions to better educate consumers. The bill also mandated the Federal Communications Commission to evaluate 4G service from the top 10 wireless carriers in the U.S.

Carriers didn’t take kindly to the possibility for increased regulation and worried more government oversight would slow the process of bringing new 4G technology to the public.

But Blumenthal advocated for the consumer, saying that as people “become more reliant on Internet capabilities from their mobile devices, it is essential that they have the most accurate and useful information about the products and plans they are purchasing.”

Blumenthal also presented the “Personal Data Protection and Breach Accountability Act of 2011,” intended to place the responsibility for better online data protection on companies that collect and store the data. The Senator criticized Sony for its handling of a security breach that compromised personal data more than 75 million customers, calling the hack the “poster child of why we need this law.”

The Connecticut senator is likely to surface when confused consumers need answers about technology, or when their rights are in danger of being compromised by big business. Blumenthal is supportive of the tech industry as a whole, however, and will likely advocate for increased understanding between corporations and the public.

Who’s Who of Technology

The technology industry has emerged as one of the top lobbying interests on Capitol Hill, with players like AT&T and Verizon spending big bucks to make their voices heard.

Innovations like Facebook and smartphones are becoming the norm as tech start-ups transform into mega corporations, sparking a number of bills on issues like online privacy, broadband spectrum, Internet piracy and matters of financial competition. These bills will affect the way device manufacturers, websites and mobile carriers do business — and they are willing to spend millions to influence how lawmakers settle these subjects.

Lobbyist spending means companies have a pipeline to politicians making decisions about bills that affect their industry. Companies are spending more than ever in D.C., undoubtedly fueled by debates over privacy, technology and patents.

In 2011, computer and Internet industries devoted more than $125 million, becoming the fifth-highest spending industry in lobbying that year, according to data from OpenSecrets.org. Telephone utilities spent around $707 million on lobbying since 1998, while services and equipment companies laid out about $663 million.

The subjects of recent bills merits the million-dollar price tags in the eyes of the industry because of the game-changing effect the issues could have on industry practices. In 2011, lawmakers introduced the SPECTRUM Act to legislate wireless spectrum while building a nationwide public safety communications network, encouraging effective broadband usage while reforming federal management policies. The Internet industry also lobbied hard against the high-profile SOPA and PIPA legislation, which would have blocked sites and limited Web resources, trying to quash online piracy.

Here’s a break down of heavy-spending players in the mobile and online sector, and the bills that entice them to shell out the cash:

AT&T

AT&T is in the top 20 of lobbying spenders since 1998, spending nearly $134 million since that time, and hitting just over $20 million in 2011. Over the years, AT&T has pushed for and against bills on Federal Communications Commission regulations, antitrust clauses, and issues related to its failed merger with T-Mobile last year, when the company sent dozens of extra lobbyists to Washington to campaign for its cause.

But AT&T’s all-time high was in 2006, when it wrote checks for close to $27 million in lobbying fees. The drop-off since then largely reflects the changing industry, since before 2006, subsidiary spending from the likes of Cingular and BellSouth gave AT&T lobbying efforts a boost, but now AT&T is spending millions out of its own pocketbook to fight for its best interests.

Verizon

Like AT&T, Verizon is one of the few technology-based companies that ranks as a top lobbyist, spending more than $164 million on lobbying efforts from 1998 to 2011. The mobile carrier has consistently spent more than $10 million on lobbying efforts since 2003, and more than $15 million since 2008, racking up a tab of around $15.5 million in lobbying fees last year.

With a growing LTE network and fierce competition on the mobile market, Verizon is sure to continue its spending efforts in Washington, which have included a number of reports on corporate tax reform. The first-place carrier also weighs in heavily on broadband allocation, like with the SPECTRUM ACT, and lobbying to secure state control for television licenses that would expand its cable opportunities.

Microsoft

As a longtime political player, Microsoft predates many of today’s technology start-ups just starting to make a mark. Microsoft spent at least $4 million annually on lobbying expenses as far back as 1998. The company hit an all-time high in 2004 with contributions nearing $9.5 million, before leveling off to around $7.3 million in 2011.

The company’s lobbying history shows it seeks to protect its technology-based interests as well as it corporate policies, giving reports on issues about employment for immigrants and personal data privacy, like with the Commercial Privacy Bill of Rights Act of 2011.

Google

In 2011, Google was the top lobbyist in the computer sector, spending nearly $9.7 million, or taking subsidiary Motorola into account, topping out at more than $11 million. That figure is nearly double spending in 2010′s more than $5 million, signaling Google’s focus on the effect Washington regulation could have on federal antitrust concerns.

Google didn’t enter the lobbying business until 2003, but it didn’t take long for the search-giant to become a top player. As the company continues to expand with Android and other online initiatives, it issued a number of reports on copyright patents and trademark issues. A fair share of lobbying spending focused on the financial side, like regulation of advertising and competition issues, and Google was also vocal in its opposition to the Do-Not-Track Online Act.

Apple

Apple has been around longer than many other tech companies, but it didn’t start spending more than $1 million annually on efforts until 2006, coinciding with the time frame between the iPod and iPhone release.

Last year, the company reached an all-time high with nearly $2.3 million on lobbying spending, focusing on tax, trade and patent and trademark issues, but the figure still pales in comparison to some of Apple’s tech counterparts.

Apple spent hundreds of thousands lobbying on the patent reform, an issue central to its legal strategies as it engages in patent battles with rivals. Apple lobbied on the Job Creation and Innovation Investment Act to give tax breaks on foreign earnings, which is pending in committee, showcasing the company’s activity on an issue that could affect its financials.

Yahoo

Yahoo made its mark early in the online boom during the dawn of the search engine, but failed to amass the same momentum as Google over the years. The company faded from relevancy in the tech development world, but it’s a different story in the legal, financial or governmental sectors, as Yahoo is still going strong on lobbying efforts.

Connected to its still-relevant service as an e-mail provider, Yahoo lobbies on many bills on user privacy and security, like the SAFE Data Act to require data protection, and an act to require federal disclosure of data breaches. The Web-based operation has spent more than $1.5 million on lobbying efforts since 2003, and spent an all-time high of nearly $2.5 million 2011.

Facebook

All eyes are closely watching Facebook’s political activity as the social network preps to become a publicly traded company. It even formed a political action committee in time for the 2012 election as part of a recent ramp-up to develop political connections. It wasn’t until 2009 that Facebook started to use its cash to wield influence over legislation on issues like protection of personal data, patent reform and the high-profile SOPA and PIPA bills.

Facebook spent almost $1.4 million in 2011. Though it’s a small figure compared to some of the social network’s older counterparts, it shows a concerted effort, as 2009 and 2010 lobbying spending combined equaled around $560,000.

As lawmakers weigh-in on the changing communications field, and competition in the tech industry increases, lobbyists can expect to see millions more coming from the likes of mobile carriers and social media giants to influence vital decisions, which could change the face of the industry for years to come.

Why Carriers Pony Up Millions

When it’s time for U.S. voters to elect new representatives, the mobile phone industry is willing to spend millions to lock in candidates who will represent their best interests.

A review of past election cycle donations at OpenSecrets.org shows an uptick in political contributions to candidates whose views are in sync with the mobile industry, which isn’t surprising considering the increasing amount of federal rules and regulations that affect these companies. As the industry comes under further regulation, carriers and phone makers are spending in the millions to ensure they have a voice among lawmakers.

Contributions from political action committees, or PACs, coming from the telecom and mobile sector already total nearly $1.3 million for the 2012 election cycle, with companies like T-Mobile, Sprint, Motorola and Qualcomm ranking as top donors. From a partisan view, donations are split fairly evenly between candidates, with 47 percent of funds going towards Democrats and 54 percent towards Republicans.

Contributions from telephone utilities — a category that includes AT&T and Verizon — are at a heftier $3.1 million and lean toward the right, with 61 percent of donating going towards Republican candidates.

More Regulation, More Millions Spent

A growth in campaign contributions over the last decade can be linked to increasing federal scrutiny on the industry’s operations. State and federal governments draft bills on topics central to mobile use like data privacy and GPS tracking.

Often the issues are local, like a San Francisco law on cell radiation that was ultimately delayed, but donations to local representatives secure communication between public and private sectors. As such issues come up for debate, companies will want to ensure strong ties to the lawmakers so they have a leg up on what could immediately affect their best interests.

Political ties and the access they offer are central to having a voice in future issues. For example, it helps a company to have a politician on its side when infrastructure issues come up in local communities. And in the coming years, spectrum allocation is sure to turn into a debate where carriers will want their voices in the conversation.

But the efforts to lock in lawmakers may not translate into help with regulators, especially as companies merge and the government cautiously assesses whether mergers are in the best interests of the market.

One such case is the failed AT&T and T-Mobile merger, especially given the former’s millions of dollars in candidate support. AT&T eventually withdrew its bid after a Federal Communications Commission report found the deal would harm competition and the job market, assessments made by appointed commissions rather than elected officials. And while the deal was under speculation, the FCC faced pressure from heads of other rival carriers like Sprint weighing in during Senate hearings, offsetting AT&T’s influence.

The Influence of PACs

If past totals are any indication, contributions could easily skyrocket in the run-up to the November elections. In 2010, the election season contributions from utilities topped $6.1 million, and those from the telecom sector totaled $2.6 million.

This year’s contributions could easily exceed past levels. Companies organize PACs to collect donations from their employees, spouses and supporters, which can then be donated to campaigns. Coming together in a PAC allows for higher maximum donations, $5,000 per person, and $5,000 contributions to a candidate committee per election, or $15,000 to a national party committee.

The system allows companies to amass thousands of dollars to shore up specific candidates and parties, adding up to millions of dollars in campaign contributions. Typically, the smaller telecom companies generally hovered in the $2-3 million range since 2000 per election cycle.

Utility company PAC donations hit a 14-year-high at $6.1 million in 2010. A whopping 73 percent of those donations came from AT&T and Verizon, contributing $3.2 million and $1.2 million, respectively, with an additional 20 companies and industry associations making up the rest.

AT&T is the largest donor in the telecommunications industry year after year, and one of the most active overall, with its PAC spending $4.9 million in the 2010 election cycle, proving how the tech industry is beginning to overtake traditional influences like labor and the financial sectors.

Despite the variable results, tech companies continue to sign checks and hand them over to candidates. It’s practically tradition; playing the campaign finance game has long been a way for American businesses to wield influence in Washington.

As the telecom sector continues to develop into a leading industry, and laws catch up to modern communication methods, companies succeeding in the mobile market will make their presence strongly felt.


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