Issues

Net Neutrality Redux: Americans Want Certainty; See Tech Giants and ISPs in Similar Light

Sixty-Two Percent of Americans Are Either Unsure or Believe Tech Companies and ISPs Are about the Same When It Comes to Protecting Privacy

San Francisco, CA, December 11, 2017 – After more than a decade of squabbling over so-called Net Neutrality rules, Americans want the issue settled once and for all to create certainty, according to a new survey by technology advocacy group CALinnovates.

Sixty-one percent of Americans, for example, report that creating regulatory certainty is important for the future of the internet and innovation.

But underlying that desire to settle the issue, according to the survey, is a growing sense that the technology companies driving the net neutrality debate aren’t different from their internet service provider opponents. The survey of 1,116 Americans found that:

  • Only slightly more than 1 in 3 Americans saw a difference between tech companies such as Google and Facebook and ISPs such as Verizon when it came to protecting their privacy. In fact, 62 percent reported that they are about the same or are not sure.
  • When it came to which companies they are more likely to trust, ISPs such as AT&T, Verizon and Comcast (20%) were slightly ahead of tech companies such as Google, Facebook and Twitter (18%). Overall, 50 percent of Americans said they trust or distrust them about equally.
  • And when it came to which of the sectors had the most to gain from net neutrality, it was again even. Sixteen percent of Americans thought tech companies because they want to maintain access as cheaply as possible, while the same amount said ISPs because they don’t want rules imposed on them.

“Americans intuitively understand that this never-ending game of policy pingpong over net neutrality must come to an end so consumers and the tech ecosystem can move on and focus fully on making magic,” said Mike Montgomery, Executive Director of CALinnovates. “With yet another FCC vote ahead, it’s time to bring this to a conclusion so we can get on with the business of innovating and delivering services consumers want.”

What the survey data reflects is the issues’ complexity and Americans’ struggle to understand its impact. Nearly the same number of Americans said they don’t understand the issue (45 percent) as said they do (48 percent).

But even if many don’t completely grasp net neutrality , they are looking for leadership from Washington to sort it out once and for all. And whatever happens, 82 percent of Americans want the FCC, which is slated to vote on net neutrality rules shortly, to be transparent about the proposed rule changes in advance of a vote.

The CALinnovates survey of 1,116 Americans was conducted from Nov. 27-Nov. 30 and has a margin of error of +/- 3 percent.

ABOUT CALINNOVATES

CALinnovates is a non-partisan technology advocacy coalition of tech companies, founders, funders and nonprofits.

Congress Must Answer the Call for Net Neutrality

A statement from CALinnovates Executive Director Mike Montgomery:

“Hopefully this puts to rest the FCC’s recurring role in this decade-plus long tragicomedy and forces Congress to deliver a lasting solution that will provide innovators and consumers the clarity, certainty and protections they require to navigate the digital era in which we live.

“In releasing the white copy rules for public review three weeks before the Commission’s vote, Chairman Pai has removed a lingering opaqueness that has obscured the openness the public deserves. Such transparency is far overdue at the 83-year-old FCC.

“Americans overwhelmingly favor a permanent law over regulations that can be changed from administration to administration. The power – and responsibility – to make those rules sits unquestionably on the shoulders of Congress. Despite ongoing Congressional gridlock, legislators must answer today’s call to develop clear, bipartisan rules that guarantee bright line protections.”

The Personal Enterprise Economy Lets Us All Be Entrepreneurs

By Kish Rajan

Imagine setting out to be a wedding photographer or a dog trainer as little as 10 years ago. These kinds of jobs required enormous effort to get off the ground. Often people working as sole proprietors had to not only be great at their jobs, they had to be marketers and book keepers as well. It was enough of a barrier to keep plenty of people in unfulfilling, and often low paying, jobs.

Today that’s changing. Platforms like Thumbtack give these kinds of professionals a digital space where they can easily start their businesses. Thumbtack brings the customer leads to the pros and then facilitates payments handling both the marketing and the book keeping.

That means that people who might have previously been afraid to follow their dreams can now start their own businesses. People in dead-end jobs can find ways to forge their own path.

Technological advances have enabled people to turn their passions into their livelihoods by making it easier to connect with customers. Now, benefits, licensing and other necessities of doing business need to follow suit.

Postmates is having a similar effect in the restaurant industry.

A decade ago, starting a small bakery or restaurant was an almost insane endeavor. Margins at food businesses are notoriously thin and while the right location can get you plenty of foot traffic, it can also cost more than many budding entrepreneurs can afford.

With Postmates, a small, out of the way restaurant has as much of a chance to thrive as one in a better location. As long as a Postmates driver can get there, the restaurant can attract online diners who want food delivered to their homes.

We hear a lot about how automation is hurting jobs but we hear a lot less about how technology is helping people who are building businesses in the service industry. This is a regular topic of discussion between the tech industry and members of the California Legislative Technology and Innovation Caucus.

The truth is that the nature of work has been changing for many years—long before companies like Uber and Airbnb came along. While layoffs were once a big problem for people who worked in manufacturing, today more people are quitting than getting fired. While politicians might bluster about returning to a mid-century economy, workers on the ground are quickly adjusting to the new reality.

What are often called gig economy companies are making up the difference. I prefer to call this sector the personal enterprise economy because what it’s really doing is giving everyone, no matter what your skill, a new way to build a business.

On Thumbtack, for example, two-thirds of the professionals on the platform work full time. That means these aren’t people scrambling to make ends meet from a second job. They are entrepreneurs who have built their own businesses often doing what they love. The service is available in all but one county in the United States making it a truly democratizing force.

These new technology platforms are giving people new ways to work and creating new opportunities. To pretend they are actually the forces destroying jobs is misread the tea leaves.

But we can do more to help people in this new economy succeed.

As we move into the future of work, government and businesses need to think about how to help workers succeed in the new economy. Benefits need to be decoupled from corporations. Licensing should not be tied to a specific small municipality. Professionals should be able to easily ply their trade across country lines. And training and retraining need to become high priority.

We are just at the beginning of this conversation but it’s crucial that we continue talking—and listening to new perspectives. That’s why tomorrow, CALinnovates, along with TechNet, Senator Cannella and Assemblymember Gray, is hosting the inaugural Valley to Valley Forum at UC Merced.

If You Build It … 5G Networks Will Make Life Better

By Kish Rajan

U.S. consumers like to think we have the best of everything when it comes to the internet — didn’t we build it?

But we are lagging far behind other countries when it comes to building 5G networks. China just this month set a new industry record when it exceeded a throughput of 19 Gbps in 5G trials, on the way to a nationwide rollout of 5G by 2020.

5G-based technologies can have a vast impact on mobile connectivity in densely-populated areas and on the Internet of Things. Mobile data traffic worldwide is almost 800 million times higher than 15 years ago. By 2020, more than 50 billion devices and 212 billion sensors will be connected to network services.

Right now, China is on the cutting edge of 5G technology. Why aren’t we seeing the same in the U.S.? While several states are flirting with 5G networks, there’s no policy — and seemingly no interest — in getting one up and running nationwide.

And yet 5G can unlock enormous economic growth, help grow new businesses and jobs, improve transportation, save energy and greatly improve our infrastructure. According to an Accenture report, IoT improvements have the potential to create $160 billion in benefits and savings. Then there’s the economic boost of just building 5G networks. Accenture predicts that 5G could result in $275 billion in investments, creating 3 million new jobs nationally and growing GDP by $500 billion.

But nothing will happen unless we encourage the growth of 5G networks and eliminate outdated regulations. 5G requires 10 to 100 times more small cell antennas than a 4G network. Many municipalities are resisting them with long wait times for permits, unreasonable fees and conflicting regulations.

These small cells, about the size of a briefcase, typically are installed on utility poles. They have less range than a typical tower, but serve more users faster. They are easier and cheaper to install than large cell towers, and rely on density to provide fast data service. A college football stadium, for example, needs 40 to 60 of them to provide full coverage.

Virginia has made the most progress with new rules that make building a 5G network easier. Small cell antennas now are allowed statewide on lamp posts and utility poles. California, Florida, Texas, Minnesota, Arizona, Colorado, Indiana and Iowa are all looking at similar bills. Washington State is considering a bill that would streamline permitting and cap fees as a way to lay the groundwork for 5G networks there.

We also need national standards for using unlicensed spectrum to ensure a high quality of service and low interference. Broadband spectrum unlicensed by the FCC can be used by wireless operators as a relief valve for data traffic to speed up clogged pipes.

But for now, patchwork local regulations and the lack of a concerted, consistent national effort to build 5G networks mean U.S. consumers will be stuck with an outdated technology while we struggle to improve phone service and the backbone for smart cities, more efficient agriculture and even self-driving cars.

 

Protecting Consumer Health And Safety In The 21st Century Economy

By Kish Rajan

As the Legislature hurries to complete its final month of work for the year, the Capitol is humming with activity as legislators present and vote on hundreds of bills, advancing them to the governor’s desk. In the case of each bill, the Legislature and the Governor’s responsibility is the same: To carefully consider its policy merits and its long-term impacts on regular Californians, our economy and our state’s future.

This is particularly true when it comes to issues relating to new, innovative business models that had yet to even be conceived when our state’s existing legal and regulatory structures were put in place. As our economy has evolved, the Legislature has had to carefully consider the best ways to update our laws in a way that supports innovation, continues to protect Californians and maintains a coherent regulatory process.

We’ve seen these issues arise across many industries, from cyberbullying to ride sharing to home sharing. And although each industry is different, one thing has been clear across all of them: developing the right policy and regulatory framework for these new business models takes careful consideration and a thoughtful approach that engages a wide range of stakeholders, examines both intended and unintended consequences and ultimately yields a holistic approach that modernizes the law for the industry as it stands today and provides flexibility for the industry as it continues to evolve.

Now, as new business models emerge in the food, beverage and alcohol industries, it’s no surprise that the Assembly and Senate have considered a number of bills relating to consumer and public safety in these arenas over the course of this legislative session. For example:

  • AB 626 requires Californians who sell salads, hot meals and other prepared food made in their own home to report details about what and when they are preparing and selling this food.
  • AB 836 allows the California Department of Public Health to grant exceptions to certain food safety laws for specialty vending machines like juice distribution systems that dispense raw, cold-pressed juice directly to consumers.
  • AB 1461 creates new food handler card requirements for companies that offer subscription-based food packages and adds a new layer of local regulation, in addition to existing state and federal food safety regulations.
  • SB 254 creates new Department of Alcoholic Beverage Control requirements for online and app-based companies that deliver alcoholic beverages, above and beyond requirements already in place for traditional delivery companies.

Each of these bills deals with consumer safety in vastly different ways – whereas some loosen food safety laws for companies that deliver directly to customers, many layer on more, often duplicative regulations that don’t actually make customers any safer. Whereas some expand the role of state regulators in addressing consumer safety, others expand the role of local regulators, blurring the lines between regulatory agencies and who should actually be responsible for – or is even capable of – ensuring Californians’ safety in that particular industry.

Given the speed at which our economy is evolving and the ways in which new business models are changing how companies serve their customers, it’s no surprise that some of these very issues are on the agenda for the California Conference of Directors of Environmental Health’s upcoming annual conference on “Protecting Environmental Health in a Rapidly Changing Society.” It’s a testament to the fact that even regulators themselves have more work to do to better understand the issues at hand and determine the right way to approach consumer safety in, well, a rapidly changing society. And it’s a reminder that our state is only at the beginning of this conversation – so it makes little sense for the Legislature to pre-empt those conversations, especially when the bills being debated deal with these issues in such a haphazard, sometimes contradictory way.

Across California, innovative companies are rethinking how to move within and between cities, how to deliver products and services more quickly and efficiently, and even how to shop for groceries and enjoy a home-cooked meal. This kind of outside-the-box thinking has defined California for decades and made us the epicenter of innovation, and it’s critically important that we approach these questions about consumer safety in a holistic way that protects Californians without squashing that spirit of innovation.

By taking a step back on some of these bills, the Legislature, Governor Brown and all stakeholders can foster the robust discussion California needs to ensure our health and safety laws truly protect consumers; encourage growth, investment and competition; and result in Californians having more choice and access to the benefits of new technology both now and in the future.

This piece originally ran in Fox & Hounds

End The Policy Pingpong, Cement Net Neutrality Into Law

By Mike Montgomery

Like any reality show that hinges on ginning up new drama for its captivated viewers, the debate over net neutrality, now more than a decade old, is fueled by manufactured conflict.

Since 2005, here’s the scorecard: three attempts by the Federal Communications Commission (FCC) to implement net neutrality rules, two reversals, endless litigation and a whole lot of outrage by interest groups and think tanks on all sides of the issue that rely on perpetual conflict to fundraise.

That outrage has worked, inspiring more than 20 million net neutrality comments since 2014 — more than have been submitted about any issue in FCC history.

 

This endless loop is not doing most stakeholders any good; not the small businesses that net neutrality is designed to protect from being relegated to slow lanes, nor the consumers who want the new services and ever-increasing internet speeds that innovation and investment create.

Americans seem to understand this: According to a new survey, Americans overwhelmingly favor a permanent law over regulations that can be changed from administration to administration. Indeed, 74 percent of Americans said they would support net neutrality legislation that enabled them to use the internet free from government or corporate censorship, while creating rules that ensure a level playing field.

It’s time to end the slowest game of policy pingpong before it drags into another decade. It is high time for Congress to finally step up — after multiple decades of hibernation — and pass affirmative, bipartisan legislation that makes net neutrality the law of the land. That is something that CALinnovates has proposed for three years now; we are gratified that others are finally jumping on the bandwagon.

Unfortunately, many still balk. They would rather decry what the FCC is doing in reconsidering the Open Internet Order or rail against “government control.” In an ironic move, the “Day of Action” really highlighted the inaction we are stuck with — yet another round of public protests and bluster against the inevitable FCC reconsideration of the Open Internet Order instead of real action to demand that Congress enshrine net neutrality into law.

Let’s call that what it is: faux outrage. There is an opportunity — right now — to settle net neutrality once and for all with legislation that would ensure that whoever is in the White House and in charge of the FCC won’t rewrite the rules. Neither side is likely to get 100 percent of their demands, but there’s clear agreement over the core 95 percent that should be cemented into law.

Such legislation must guarantee clear rules that prohibit blocking and throttling and guarantee transparency. In short, there should be no discrimination whatsoever. Legislation should ensure that no “fast lanes” for preferred content are allowed to develop through paid prioritization, with few exceptions, such as free data. Free data (aka zero rating) and other offerings that don’t count against data caps must demonstrate how they provide consumer benefits and encourage, rather than stifle, competition.

Such legislation is likely to garner wide support, especially among younger voters. The recent survey revealed a surprising nuance about younger voters’ stance on internet governance. Contrary to previous understanding about millennials’ views on internet issues, the survey found these Americans are the most likely to think the internet is over-regulated. In fact, 18- to 29-year-olds were nearly twice as likely to favor congressional action over FCC oversight.

If Congress were to enact bipartisan legislation, the principles of an open internet would be the law — and the net neutrality reality show would be cancelled prior to season 13. Is there another option? Sure. Partisans could wait for the next Democratic president to appoint an FCC chair. At the earliest, that’s in 2021. Can the country go that long without net neutrality?

We can’t, and shouldn’t have to wait for inevitable swings in partisan control to settle this for the benefit of all sides. Congress must wake from its two-decade slumber regarding internet policy to take the decision away from the FCC and cement net neutrality once and for all.

As a strong supporter of the principles of net neutrality, CALinnovates believes Congress can muster such courage. Now it is time to see if interest groups representing all positions in this debate will set aside their faux outrage long enough to put their heads where their hearts are.

Mike Montgomery is the executive director of CALinnovates, a coalition of tech companies, founders, funders and nonprofits that aims to educate policymakers, elected officials and regulators on the virtues of the 21st-century digital economy and raise the issues of importance to the technology community at the local, state and federal levels of public policy.

This piece was originally published in The Hill.

CALinnovates Statement on “Morally Repugnant” Ad from the Hotel Association of New York City

SAN FRANCISCOAug. 1, 2017 /PRNewswire-USNewswire/ — In response to an advertisement paid for by the Hotel Association of New York City, technology advocacy organization CALinnovates issued the following statement:

“It is morally repugnant to suggest an Airbnb connection to terrorism, just as it would be to tie the hotel industry to 9/11 simply because those terrorists stayed in hotels as they prepped for the attack. Let’s keep the debate between the hotel and home sharing industries to the merits, and not stoop so low as to exploit fears over terrorism.” – Mike Montgomery, Executive Director of CALinnovates

ABOUT CALINNOVATES
CALinnovates is a non-partisan technology advocacy coalition of tech companies, founders, funders and nonprofits.

This statement was originally released on PR Newswire.

Time for California to build a 5G network

By Kish Rajan

Here in California, we like to think of ourselves as being on the cutting-edge of all things technology. After all, California is home to Silicon Valley and we are the birthplace of companies like Google, Apple and Tesla.

But in one crucial area, we are at a high risk of falling behind. States like Virginia, Florida and Texas could all have state-wide 5G networks before California does.

And that’s a problem because 5G has the potential to unlock enormous economic growth, help grow new businesses and jobs, improve transportation, save energy, and greatly improve our infrastructure.

Right now, most mobile devices work on a 4G network where signals are bounced off of large cell phone towers than can a mile or more apart. This works fine. But as anyone who’s ever lost coverage or waited with growing frustration for a video to download knows, we need to upgrade these systems to keep pace with the growing demand.

4G has the potential to hit maximum speeds of 1 Gbps, but because of interference from buildings, it rarely hits those speeds. A 5G network has the potential to move data 10 times faster. Yes, that’s going to be good for consumers who want to enjoy quick downloads, but it’s so much more than that. 5G will power the infrastructure necessary to make our cities smarter.

According to a report from Accenture, new 5G-based technologies will enable intelligent transportation and energy systems – easing traffic gridlock and improving the performance of the electrical grid. These improvements alone have the potential to create $160 billion in benefits and savings. We’re already seeing the possibilities for this kind of technology in San Diego with sensors in street lights collecting data that will track air quality and improve traffic flow and parking helping the city save $2.5 million per year. Imagine that kind of innovation on a state-wide scale.

Then there’s the economic benefits of building out the network itself. Accenture predicts that 5G could result in $275 billion in investments, creating 3 million new jobs nationally and growing GDP by $500 billion.

But we’re not going to see any of that potential come to fruition if we constrain the emergence of 5G by subjecting it to the old approach to 4G regulations.

Right now, it can take up to two years to approve a permit for a cell-phone tower. But a 5G network requires 10 to 100 times more small cell antennas than a 4G network. And then different municipalities have different requirements for cell-phone antenna permits.

These old regulations make it almost impossible to build out a vibrant 5G network that could benefit everyone in our state.

That’s why states like Virginia have put new rules in place to make it easier and faster to build a 5G network. Governor Terry McAuliffe just signed a bill that creates a state-wide permit to place cell antennas on lamp posts and utility poles. Florida, Texas, Minnesota, Arizona, Colorado, Indiana and Iowa are all looking at similar bills.

It’s time for California to catch up.

We have our own 5G bill making its way through the state Legislature. SB 649 will lay the ground work for a 5G network. It’s crucial that it moves quickly through the legislative process and that Gov. Jerry Brown signs it in to law. The longer we wait, the further we fall behind.

California has never taken a back seat to any other state when it comes to innovation. We must not start now. Let’s unleash our full potential and remind the country and the world what we’re made of.

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.

This piece was originally published in the Monterey Herald.

Edibles Are The Next Big Thing For Pot Entrepreneurs

By Mike Montgomery

As more states legalize cannabis for recreational use, edibles will become a huge market for entrepreneurs. In California alone, consumers gobbled up more than $180 million worth of marijuana-infused food and drinks last year, 10% of the state’s cannabis sales, according to Arcview Market Research.

And it’s not just California that’s seeing a growing edibles market. Sales of pot-infused treats increased 121% last year in Washington state, where recreational marijuana is legal, according to cannabis analytics firm Headset Inc. And since Colorado first allowed recreational marijuana use, sales tripled from $17 million in the first quarter of 2014 to $53 million in the third quarter of 2016.

The reason for the explosive growth is that as the pot market expands, it’s starting to reach people who don’t want to smoke. Overall the smoking rate among adults is down from 20.6% in 2009 to 16.8% in 2014. Edibles provide a discrete, smoke-free experience. And since they can command higher prices, edibles often account for 25 to 60% of a dispensary’s profits.

That makes edibles an appealing slice of the pot pie, which was worth an estimated $7.2 billion in 2016, and is projected to grow up to 25% annually.

Edibles today are mostly candies, from dosed gummy bears to lollipops, where taste is an afterthought. And usually people are buying those edibles in windowless dispensaries where it can still feel very much making an illicit transaction.

Matt Fosburg, founder of Ez THC, believes that’s poised to change and that there will soon be a market for high-end cannabis candy. With a background in retail design and candy making, Fosburg wants to bring the trappings of high-end retail — quality, consistency and a great in-store experience — to the world of marijuana treats.

He believes that focusing on taste and quality will give him a competitive edge in the edibles market. While most producers melt down mass-produced chocolate to make their candy, Fosburg says he’s the first one working on an edible bar from scratch.

The process is way more labor intensive — it requires sourcing and roasting cacao beans, grinding chocolate for three to four days, then carefully tempering and molding it into bars with just the right ratio of cannabis. But Fosburg believes it’s worth the effort.

“As much as the business for edibles is coined a gold rush, it’s going to be highly competitive,” he says. “And it’s not a get-rich-quick scheme. You better come to the market with a competitive product.”

Fosburg currently sells two bars in California dispensaries. One is milk chocolate with Tahitian vanilla beans. The other, dark chocolate with Maldon sea salt, took first place in its category in a recent Edibles Magazine contest.

“There’s no doubt in my mind that I make great chocolate,” Fosburg says. “But winning the award gave me credibility.”

That’s going to be crucial going forward because at $15 each, an Ez THC bar costs 20% more than a typical competitor’s bar infused with the same amount of marijuana.

But just as we’ve seen markets for food like heirloom tomatoes and artisanal pickles, Fosburg believes there will be consumers who prefer a gourmet product.

“From the beans we buy, to the THC distillate we source, every component of our bar is of the highest quality,” Fosburg says. “This is not your everyday machine-manufactured bar, but rather truly handmade.”

Based in California, Fosburg can only sell his bars through medical marijuana dispensaries right now. That will change next year when California’s Proposition 64, the Adult Use of Marijuana Act (AUMA), goes into full effect. At that point, it will be legal for entrepreneurs to open brick-and-mortar stores outside of dispensaries as long as they obtain the necessary city and state licenses.

Fosburg is working with his mentor, Richard Altuna, on creating a new kind of retail experience. Altuna, an award-winning architect who has worked with Patagonia, Restoration Hardware and The Gap, has known Fosburg since he was a kid and has complete faith in the entrepreneur. But while he’s happy to help with design, Altuna has never sampled the product.

“I’m the guy who runs out of the room when anybody starts lighting up,” he says.

Their inspiration is top chocolate makers, like Jacques Torres in New York and Dandelion Chocolate in San Francisco, that have mixed-use facilities with open kitchens where customers can see the chocolate being made.

“An open-air kitchen creates transparency and authenticity in a kitchen,” says Fosburg. “I think this will really connect with today’s consumers, especially millennials.”

Even before he opens the store, Fosburg is connecting with customers of all ages through social media. The law prohibits selling marijuana online, so his digital strategy is all about marketing.

He also plans to start advertising on the popular website weedmaps.com, where customers will eventually be able to find the product and have it delivered to their homes by a courier who can take an in-person payment.

Entrepreneurs like Fosburg will go a long way toward legitimizing the cannabis industry and helping it grow into a big business.

“I want to do this to help the cannabis industry be normalized and not have this reefer madness thing they’ve been dealing with,” says Fosburg. “But if I stop having fun, or if there’s no more value in it, I’m on to the next thing. That’s the entrepreneur in me.”

Mike Montgomery is executive director of CALinnovates, a non-partisan technology advocacy coalition of tech companies, founders, funders and nonprofits.

This piece was originally published in Forbes.

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