Platform Access

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.

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.

The Dangers of a Geofenced Internet

By Tim Sparapani

A big part of the appeal of the World Wide Web has always been the first two words — “world” and “wide.” The internet represents an almost utopian ideal of a place where people around the globe can come together to share new ideas, create new products and even argue.

But as a privacy advocate, I fear we are rapidly hurtling toward the worst of all future states for the internet: one in which your present location dictates how much online privacy or free speech you enjoy. The current trend of carving up the country, and the globe, into an inconsistent patchwork of privacy and online speech laws benefits few and leaves too many exposed.

I’m a frequent traveler to California, and Assemblymember Ed Chau’s bill to mandate baseline privacy protections for consumers’ data got me thinking about the sorry state of privacy rights and the mistaken direction we are headed. If you are lucky enough to live in a state like California that favors privacy rights, you know that the region also favors policies that support innovation and places few limits on speech online.

But, since most of the world doesn’t live in such a digital utopia as California, many are likely to live, work and spend most of their time in a place that provides, at best, only moderate protections, while limiting what people can see, read or say online.

In the U.S., my fellow privacy advocates are seeking local regulations in reaction to failures at the federal level to enact wise data privacy and online speech policies. But Asm. Chau’s well-intentioned pro-privacy proposal is, unfortunately, only a bandage. It saps energy for the enactment of strong, nationwide policies to protect the privacy of consumers’ data — something we should all favor.

If the bill is enacted, when I visit California the ISPs I’ll encounter will protect my data more rigidly than those I use when I visit family in Wisconsin or am at my home in Washington, D.C. That leaves me less protected everywhere else and gives Californians an inflated sense of security while potentially leaving them exposed when they leave the state. That makes little sense. While I applaud California’s tradition of progressive privacy leadership, I deplore the fact that we don’t have basic privacy nationwide. For example, last year New Mexico became the 48th state to enact basic consumer protections for data breaches that leak consumers’ private data. But what about the residents of Alabama and South Dakota, or all of us when we visit those states for business or pleasure?

The danger of well-intentioned efforts that impose policy restrictions on the structure and content of the internet is real. While these proposals are laudable, personal privacy rights shouldn’t change from state to state. When Californians move around the country for work, to visit family or for vacation, they shouldn’t limit their travel based on states where they can privately and safely transmit medical or financial information, for example.

The same principle should hold true for Californians’ ability to access content or speak online as they travel the world. Restrictions in places like Turkey, Saudi Arabia, China and even across the European Union mangle the internet and make a mockery of the phrase “World Wide Web.”

Don’t mistake my message — I’m not saying we should get rid of all regulations. Instead, wise policies for the internet age — the kind that made California a beacon of innovation — should favor national and global norms that protect data while encouraging free speech. Consumers shouldn’t be left to fend for themselves under the lowest common denominator of protections. Instead, meaningful privacy protections need to be baked into national law.

If anything, the legislation should include more rigorous, broader privacy protections. The legislation should apply to offline businesses as well, instead of singling out ISPs, as retailers routinely obtain similarly sensitive information. The legislation should mandate that an ISP continue protections for Californian customers no matter where they travel to when using the same ISP, so that privacy protections would follow Californians across state lines at least some of the time. It should explicitly prohibit ISPs from obtaining roughly equivalent information about their customers by buying it from other companies that have it.

Most importantly, we need to give the Federal Trade Commission and the Office of the Attorney General of California the resources they need to protect consumer privacy both off- and online. We need robust enforcement of existing privacy laws coupled with a push for strong, nationwide protections.

The real danger in the internet age is states and countries erecting barriers that turn the web into a series of fiefdoms with different rules.

California can lead by example by promoting regulations that are robust and nationwide or global. But by enacting well-intentioned limitations on privacy, it gives encouragement to other well-intentioned rules. It prevents U.S. companies from arguing that rules on the web should be universal. After all, the rules in China to limit Chinese people’s access to the internet in the name of promoting security are also well-intentioned. The same is true for calls from French and Belgian national security agencies to force back doors in encrypted software and to limit speech in the name of potentially preventing radicalization. These types of regulations are always justifiable, but they turn the World Wide Web into a broken map full of unknown consequences.

That’s a destination that none of us wants to visit.

Tim Sparapani is Senior Policy Fellow at CALinnovates, a non-partisan technology advocacy coalition of tech companies, founders, funders and nonprofits.

This Attempt to Protect Internet Users’ Privacy Should Get an Error Message: Guest Commentary

By Mike Montgomery

Sometimes a good idea can come with unintended consequences. Take. for example, Assembly Bill 375, which is working its way through the California Legislature in the last few weeks of the session.

The bill, introduced by Assemblymember Ed Chau, D-Monterey Park, is well intentioned. It aims to limit how internet service providers (also known as ISPs) can use people’s personal data. Consumers would have to give opt-in consent before the ISPs could anonymize their data and then use it to learn about trends in the marketplace or TV viewing patterns.

But here’s the problem. If the Chau bill passes, it sets different standards in California than it does in other states. And implementing a different set of rules for Californians won’t create better online privacy for consumers. If anything, it will give residents in California a false sense of security.

The rules the state Legislature is proposing only apply to ISPs. This piecemeal approach means a website or app that you use frequently or only once can still collect, share and sell your data. Those ads you see after searching for a pair of shoes or a vacation destination online? Well that information is still being tracked by sites and vendors that would not be impacted by this bill.

A patchwork of regulations creates confusion for consumers, 94 percent of whom say they want their online data subject to a consistent set of privacy rules that apply to all reaches of the internet, according to data submitted to the Federal Communications Commission (FCC).

Inconsistent rules create confusion for consumers as well as entrepreneurs building internet companies in California and elsewhere. The startup community, which provides immense value to our state, would prefer to focus on consistent regulations when building and growing their platforms, not whether or not they are abiding by regulations that change from state to state.

That’s why CALinnovates continues to call for a single, federal policy to protect internet privacy across the country with one set of rules for innovators to follow and consumers to understand.

There is some good news, though. Not only does the Federal Trade Commission (FTC) still have oversight of privacy rules, but Californians are already protected by our “Little FTC Act,” which allows California’s attorney general to enforce federal privacy regulations. Additionally, there are numerous federal laws protecting sensitive consumer information around things like children’s data as well as financial and health-care information.

By enacting this legislation, California also risks its position as a progressive policy leader by setting restrictions on internet companies that don’t exist in other states. The law sends a message that our state is more interested in passing laws opposing the current presidential administration than in passing laws that protect consumers and create conditions for an ongoing virtuous cycle of investment, competition and job creation.

Privacy is essential. That’s why it needs to be tackled in a comprehensive manner by Congress. We need consistent regulations around privacy that apply to everyone, and across the entire internet ecosystem, no matter what state they live in or what their business model says about data collection and use.

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 LA Daily News.

Day of Action Should Not Just Be One Day

By Mike Montgomery

As many know, today is a day of action on net neutrality. For everyone who believes in the principle of net neutrality, however, we shouldn’t reserve just one day. That’s because for nearly a decade a cloud of uncertainty has hung over the future of net neutrality. It is time for that uncertainty to end but it will take a sustained effort, not just one day of protest to fix this. For too long the fate of net neutrality has been subject to whomever sits in the White House and nominates the FCC chairperson.

As we have been saying since 2014, we need to translate today’s day of action into a sustained effort to get Congress to write into law the principles of net neutrality, which are foundational in the digital age. That will protect entrepreneurs and provide a level playing field. This isn’t a new approach for CALinnovates as it is for many engaged in the debate. We have said for 3 years that legislation is not only important, but that it is vital. As one of the first voices to argue for legislation to codify these important principles in stone, we didn’t push the easy button and accept temporary regulations.

We know there are some who don’t see it that way. They would rather rail at the FCC for once again reversing its position. But what good does that do? If a Republican is in charge, the FCC sees net neutrality implementation one way; if a Democrat is in charge, the FCC sees implementation another way. Either way the other party raises campaign funds arguing that when they are in charge next they will switch things up. Meanwhile, consumers and entrepreneurs lack certainty that legislation would provide about fair, clear rules of the internet road.

This back and forth is the worst of all worlds because it creates uncertainty: for consumers, for entrepreneurs and for the infrastructure providers. Here’s what we know: the current FCC is going to go in a different direction when it comes to net neutrality. Whether you agree with that — and there are a lot of technologists and policymakers on both sides of the issue — that’s the political reality. So where do we go from here?

CALinnovates has long sought a third-way on net neutrality — one that ensures it is a guiding principle but doesn’t lock into place provisions that freeze future innovation. A lot of the focus has been on the FCC’s use of

Title II of the Communications Act of 1934. And it’s not just CALinnovates that is concerned with Title II — a large group of Internet pioneers have raised serious concerns (the list of these tech leaders is below).

Here’s what one leader, John Perry Barlow — the co-founder of the Electronic Freedom Foundation — wrote: “Telecom regulations give a lot of leverage to organizations whether governmental or corporate to close down the right to know. My long experience says as soon as you give government the authority to impose regulations on the Internet you are doing something to frustrate the right to know. People tend to presume on theoretical grounds a little right minded regulation will help people build beneficial architectures and organizations. I do not think there is anything to support that theory. Every time I have seen any sort of regulation of the Internet the results have been mayhem. Declaring the Internet and the telephone network to be the same thing is like declaring a Buick and a symphony to be the same thing because they both make noise.”

The problem with Title II is that although it does, in theory, ensure that all data is treated equally and that companies can’t carve out fast lanes, it also opens the door to the internet being frozen into a time capsule that discourages network modernization, which supports the next wave of innovation and increased competition among providers. The digital world moves at the speed of light. To slow growth to the speed of bureaucracy would have serious negative effects on the tech industry that is continually transforming.

When others were calling for regulations, we argued for legislation. We were ahead of the curve while others engaged in the food fight that defines the net neutrality debate. Now, though, we are glad others are finally echoing what we’ve been saying since 2014. Bipartisan legislation would end for once and for all the endless cycle of FCC rule-making, litigation by those who oppose it, more FCC rule-making, repeal of FCC rule-making, protests, more protests and counter-protests. Our position hasn’t made us popular with those who profit from protest, but it has been the right thing to do the whole time. Today, we reiterate our call for Congress to enact commonsense legislation that put flexible but important principles into law that protect consumers and give some direction to entrepreneurs.

If net neutrality is as important as we all say it is, it should be the law of the land, not a political hot potato resting on the third rail of American tech policy for another decade.

Tech leaders concerned about Title II regulation of the Internet :

1. John Perry Barlow, lyricist, activitist, and co-founder EFF

2. Gordon Bell, researcher emeritus, Microsoft

3. Mark Cuban, founder, AXS TV & Owner, Dallas Mavericks

4. Tim Draper, co-founder, Draper Fisher Jurvetson

5. Tom Evslin, founder & former, CEO ITXC

6. Dave Farber, Professor Emeritus, CMU & Board Member ISOC and EFF

7. Toby Farrand, VP Engineering, Ooma

8. David Frankel, founder ZipDX, Jetstream, & HD voice pioneer

9. Martin Geddes, former BT Strategy Director

10. Charlie Giancarlo, Sr Advisor, Silver Lake & former Chief Development Officer, Cisco

11. George Gilder, futurist and author

12. John Gilmore, activist and co-founder EFF

13. Bryan Martin, Chairman and CTO, 8×8

14. Doug Humphrey, co-founder Digex, Cidera & first east coast ISP

15. Joe McMillen, founder Complex Drive & lead developer first carrier grade VoIP gateway

16. Scott McNealy, co-founder SUN Microsystems

17. Bob Metcalfe, Professor, University of Texas & co-founder 3Com, inventor of Ethernet

18. Andrew Odlyzko, Professor, University of Minnesota

19. Ray Ozzie, creator of Lotus Notes & former CTO Microsoft

20. Jeff Pulver, cofounder, Vonage & Zula

21. Sandra Rivera, VP Data Center Group and GM Network Platforms (leads SDN/5G initiatives)

22. Michael Robertson, CEO, MP3.com

23. Les Vadasz, former EVP, Intel

Mike Montgomery is Executive Director at CALinnovates.

WannaCry or WannaFixIt? Time for Action on Data Security

By Tim Sparapani

As we’ve seen from the latest round of WannaCry ransomware attacks, no one is safe from these viruses that have locked up the data of more than 200,000 users in at least 150 countries. When desperate consumers and businesses are hit, they often end up paying to get access to their data, which puts a tangible price on their hassle and inconvenience and makes it clear that safeguards that block attacks are essential.

But we should never waste a good crisis. This attack presents a chance to redouble efforts to stomp out botnets, which take over people’s computers and spread viruses.

There is no legislative silver bullet for cybersecurity. The U.S. Senate can take concrete action by swiftly passing the Modernizing Government Technology Act, which the House passed in May. Federal agencies can begin implementing the president’s executive order on cybersecurity. And, we should codify the Vulnerabilities Equities Process. Yet if government officials pour time and money into “solutions” targeting outdated issues, the public may remain as ill-prepared for the next botnet or malware attack as the last. Clearer thinking by policymakers about cybercrime is critical for improving how consumers and businesses prepare for the next hit.

First, it’s necessary to broaden the scope of concern about the damage these attacks cause. For the last 20 years, online security discussions have focused solely on data breaches and identity theft. But, any introductory textbook on information security will tell you that it’s essential to focus on integrity and availability of the data as well. Before WannaCry, the Mirai botnet attack unleashed billions of phony requests to a few websites, shutting them, and the services that rely on them, down. These attacks show that hackers can use brute force to shut down government services, cripple businesses and hurt consumers. But making users’ data unavailable can do almost as much damage as stealing it. Future attacks that merely alter data — thus undermining faith in the accuracy of things like bank or personal health records — can have similarly devastating effects and cost billions in losses.

It’s a mistake to believe that we can protect the public if the culprits are tracked down and arrested. Cybercrime is lucrative, and the tools of the trade are increasingly sophisticated and readily available. Fewer than 1 percent of all cybercriminals are arrested because it is so hard for law enforcement agencies to find them. Most cybercriminals attack from countries that lack the laws and tools needed to convict them. New technological interventions will be necessary.

Now consider how cybercrime can change and evolve. Spam, for example, is a much smaller problem now than it was 10 years ago. That’s partially because a few of the worst spammers were arrested. It’s also because tech companies competed to come up with technologies to keep their customers’ inboxes free from offers from Nigerian princes or bogus online pharmacies. When companies compete over security, the public wins and crime decreases. Government policies that encourage this kind of innovation and competition would benefit consumers.

WannaCry also showed that more user education does not dramatically reduce the incidence of ransomware, data theft and other cyberattacks. Most people know that patching is important. But it’s still not being implemented at scale, partially because everyone has their own devices, and those devices are increasingly connected to the internet. Instead of relying on users to upgrade their security, the tech industry should automate patching to keep our computers, phones and Internet of Things devices protected.

Fixating on establishing industry standards for proper consumer and corporate “cyberhygiene” is a distraction that may slow down cybersecurity innovation. Standards — when agreement can be reached, which is rare — typically take many years to develop, and this results in internet users relying on outdated software and hardware. Flexible approaches like the National Institute of Standards and Technology cybersecurity framework that raise questions but don’t dictate specific solutions are better.

Fortunately, there are more and more powerful technologies that can help defeat problems like ransomware and botnet attacks — but we’ll have to adopt new thinking on cyberattacks if we are to put them to use. The most important technology is cloud-based services, which can be used for storing and encrypting data, for blocking cyberattacks and for providing applications ranging from social media to specialized business services. Too many people are still reluctant to move their data off their premises, and in some cases they are even prohibited by law from doing so. But, a two-person dental office cannot do a better job of protecting its data and networks than a cloud company with leading-edge technology and best-in-class engineers dedicated to ensuring their systems are secure.

Finally, tech companies can become a first line of defense, particularly if the U.S. government shares any software vulnerabilities it discovers. The president and Congress should work together to codify the Vulnerabilities Equities Process so that national security and law enforcement agencies can provide tech companies with the sort of insights that can help them close gaps before malicious actors exploit them. Our national economic security depends on this. We should enact legislation that favors disclosure of vulnerabilities to U.S. tech companies, and the recently introduced Protecting our Ability to Counter Hacking Act has helped start that conversation.

Artificial intelligence, machine learning and big data are other effective tools for preventing or responding to attacks. But these new solutions will not be adopted if governments and businesses don’t understand that much of the old thinking about cyberthreats and cybercrime has to be reconsidered in light of emerging threats.

Tim Sparapani is a data privacy law and policy expert serving as senior policy fellow with CALinnovates and principal at SPQR Strategies.

This piece was originally published on Morning Consult.

Mike Montgomery: Title II And Common Carriers: How The FCC Can Save Net Neutrality And Still Ruin the Internet

By Mike Montgomery

Prolonged discussions of Federal Communications Commission regulations are typically about as stimulating as a fistful of Ambien — except when it comes to net neutrality.

With the FCC poised to issue new rules governing how Internet service providers manage and price the traffic that flows through their networks, Americans woke up and spoke up so loudly that they crashed the agency’s website last month. The million-plus comments from concerned citizens were the most the FCC has ever received during a proposed rule’s public comment period — and just a few hundred thousand shy of the number of complaints that poured in after Janet Jackson’s infamous “wardrobe malfunction.” When we’re comparing tech regulations to Super Bowl nipple slips, you know we’re in a different kind of debate.

You probably haven’t had a chance to read all 1,067,779 comments. Neither have I. But most support an outcome preserving the wide-open Internet that birthed our current era of innovation, transformation and disruption. The question now is how to achieve this.

The debate so far has been oversimplified: Are you for net neutrality or against it? That reductive framing may lead us to embrace a solution that doesn’t solve the problem.

From where I sit at CALinnovates, representing tech companies dependent on the open Internet to survive, this debate is incredibly important. Disruptors like ride-share platform Sidecar and conference-call service Speek shouldn’t be forced to bid against deep-pocketed giants — or anyone, for that matter — for their share of bandwidth. Nor should they be forced to adapt to regulations that would suppress new ideas or hamstring the entrepreneurs who hatch them.

They, along with countless other startups and aspiring innovators, agree: We need an outcome that preserves the openness of the Internet.

Unfortunately, it’s not so simple. Let me explain. The leading proposal in Washington to achieve that goal is to reclassify broadband providers as “telecommunications services.” This would allow the FCC to regulate providers using authority granted it under Title II of the Communications Act of 1934.

As you have undoubtedly noticed, the Communications Act of 1934 was passed in 1934. That means the FCC is gathering input as it considers adopting the same legislative framework for the Internet that existed back when “wireless” meant the hand crank on your grandparents’ AM radio.

Title II turned our nation’s telephone system — a single network operated by a single company, Ma Bell — into a highly regulated utility, just like water and electric companies. While they helped protect consumers from the excesses of a corporate monopoly, Title II’s restraints hardly made that phone network an innovative one.

Ask your parents: Under Title II, innovation in telecom meant being able to buy a different color of the same phone chosen by the monopoly at a price set by the government. This same law can’t accommodate today’s sprawling, bustling, magically fragmented Internet, a miracle of technology unimaginable in 1934 — or even in 1996, when the act was updated for the “modern” era.

By turning the Internet into a utility, we’ll bleed tech innovation with a thousand paper cuts. Would we even know what an iPhone is if Steve Jobs had to run his pricing models past the FCC? Would Twitter be fomenting revolution if Jack Dorsey needed to check with regulators about what kind of data can be shared online and by whom?

It sounds far-fetched, but that’s how it would work. Under Section 214 of Title II, common carriers have to ask for approval before discontinuing nonperforming platforms or launching new ones.

Shoehorning Internet companies into Title II and treating them as common carriers won’t just slow Silicon Valley down to Beltway-at-rush-hour speed; it will also render impossible a great many things that have become part of our daily routines, like using on-demand services from location-based smartphone apps.

Under Section 222 of Title II, companies have a duty to protect the confidentiality of customers’ proprietary network information. Sounds benign, right? Well, it means wireless location data could no longer be shared with Internet companies for mapping or advertising. Location-based companies would be limited by, in the regulators’ lyrical stylings, the “use or disclosure” of “call location information concerning the user of a commercial mobile service.” In plain English, that means companies like dating service Tinder, car navigation service Waze and ride-sharer Uber could soon become relics of the past. At the least, they would have far higher hurdles and costs in launching and attracting investment capital.

The big losers in all this would very likely be startups and the consumers they seek to serve. For large, established digital companies, these new regulations would probably just be an inconvenience. For startups that don’t have the resources to fight Title II classification, or the in-house legal teams to interpret the new requirements, the rule changes would be a death knell.

Before we trade the devil we know for the devil our grandparents knew, we should pause to ask ourselves whether legally defining the Internet as a utility will keep it both open and innovative — or act as a drag on creativity and growth.

I’m pro-net neutrality, but anti-1934-style strangulation. Where does that leave me? According to the approaches under consideration, I may soon be a man without a country. Good thing the Internet, at least for now, doesn’t require a passport.

Mike Montgomery is the Executive Director of CALinnovates,

This piece was originally published in The Huffington Post.

Mike Montgomery: New Report by Faulhaber, Singer, And Urschel Shows That In Tech-Driven Economy, FCC Needs To Step Up

By Mike Montgomery

It’s clear that technology is a key driver of prosperity in today’s modernizing economy. Trillions of dollars in economic activity flow through the networks which make up the internet, making America’s digital economy the envy of the world. Networks are redefining the services people consume and the income people derive. For example, according to a Pew survey, 72 percent of Americans have used a sharing or on-demand service.

That’s why the Federal Communications Commission has never been more important. From last year’s Net Neutrality rules to current proceedings about set-top boxes, internet privacy and business services, FCC rules are shaping the future of the internet – and the broader economy that it fuels. Whether you agree or disagree with these regulations, everyone agrees they will have a profound impact.

That is why it’s so disconcerting to see the FCC disconnected from the economic impact of its decisions. In a report he published in July, the FCC’s very own former chief economist, Gerald Faulhaber, Ph.D., along with economists Dr. Hal Singer and Augustus Urschel, raised alarms about the agency’s dangerous turn away from economic analysis in its decision making.

In the report, Dr. Faulhaber, Dr. Singer, and Urschel ask: Why do the U.S. Department of Labor, the U.S. Environmental Protection Agency and the Consumer Financial Protection Bureau all conduct stringent cost-benefit analyses on their decisions while the FCC does not?

The FCC has simply become too important to the economy for it to fail to explore the economic impact of its decisions. For example, numerous economists warned the FCC that its decision to impose so-called Title II regulations on internet service providers, which treats today’s advanced broadband access in the same way as telephone services from generations ago, will have a negative impact on investment and innovation while not solving the issue we all want addressed: how to ensure that internet traffic is treated fairly across networks, regardless of where it comes from. Yet, when issuing its Open Internet Order, the FCC conducted no economic analysis of the impact its proposed rules would have on consumers, innovation or investment.

How is that possible?

The problems continue. The FCC is currently facing a major backlash from Congress, Hollywood and many innovators for its proposed new technology standards for set-top boxes.

Economists and legal analysts, including Harvard’s Laurence Tribe, are protesting a new FCC proposal to apply stifling “opt in” rules for internet privacy – distorting the market by creating arbitrary and inconsistent requirements for the same data when it is used by different companies and precluding companies from even the most mundane communications with their customers.

The agency is even considering abandoning years of economic precedent on whether and how markets should be regulated to impose rate regulations in business services where competition is thriving.

How the country utilizes spectrum is another issue where the FCC seems intent on picking winners and losers instead of maximizing the economic value of this public resource. In other words, once again, economics is taking a back seat to some other agenda.

If the FCC had undertaken rigorous economic analysis and evaluated the costs and benefits of these proposals it could have avoided these controversies and worked toward genuine consensus on pro-consumer, pro-innovation policies. That is what we should expect from a government agency that is supposed to be a subject-matter expert.

Traditionally, responsibility for managing the economy fell to the White House, the Treasury Department and the Federal Reserve — all economically expert operations. But the FCC is now elbowing its way into this mix by flexing jurisdiction over the internet and much more. But as the saying goes, with great power comes great responsibility.

So what can be done? If the White House isn’t prepared to insist the FCC factor economic impact into its decisions, it will be up to Congress.

Lawmakers have many tools at their disposal. Oversight hearings can shine a light on how the FCC makes its decisions. Congress can ask the Government Accountability Office to investigate how the FCC factors economics into its decisions – or fails to. And, of course, if Congress thinks the FCC has made decisions based on faulty or no economic reasoning, it can pass legislation to overturn faulty rules.

Hopefully the FCC will take stock of the criticism from people – like Faulhaber– who know it best, and make changes that will help the agency take the economic impact of its decisions into account.

After all, if the FCC wants to sit at the “adult table” when it comes to deciding our economic future, the very least we can expect them to do is their homework. According to Dr. Faulhaber and others, the agency hasn’t earned that seat just yet.

Mike Montgomery is executive director of CALinnovates, a San Francisco-based technology advocacy coalition.

This piece was originally published in Morning Consult.

Page 1 of 1512345...10...Last »