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Privacy Must Be A High Priority For The Next President

By: Tim Sparapani

CALinnovates, a tech advocacy organization where I am senior policy counsel, recently sponsored a survey of 806 Americans on questions of trust concerning the presidential candidates. Assuming the race comes down to Hillary Clintonand Trump, they wanted to know whom voters trust more.

One question particularly caught my eye. It asked: “Which of these candidates do you trust more to manage the delicate balance between privacy and national security?” Almost half of all respondents (48%) said they trusted Clinton more, while 27% chose Trump.

This is going to be a big issue for the next president, but it’s about more than just who is more trustworthy. We must get the right data policies in place. That cannot happen if we focus on the wrong goals.

The notion that there is a zero-sum game going on between privacy and national security is, and always has been, the wrong way to look at the issue. Privacy and national security actually don’t need to be balanced, they need to be optimized — and by optimizing privacy you optimize security. It may sound counterintuitive, but strengthening national security does not depend on limiting personal privacy. We need strong privacy rules in order to enhance national security.

Read the full article here.

Why Now Is A Good Time To Start A Business

By: Mike Montgomery

Entrepreneur Wayne Jackson has survived his fair share of bad markets.

In 2001, just after the Internet bubble popped, he helped start network-security company Sourcefire. Despite the difficult economic climate, he managed to raise $56.5 million in funding and took the company public in 2007. Cisco later bought Sourcefire for $2.7 billion. In 2010 Jackson took over at Sonatype, another security company, which launched in 2008 just as the economy was collapsing. Today the company is doing just fine. It recently raised $30 million in a financing round led by Goldman Sachs.

“I argued then and I’d argue now, quality ideas are going to be appealing to investors regardless of the market climate,” says Jackson.

Those words should come as some comfort to entrepreneurs who are looking at the current economic landscape and feeling a little anxious. The stock market has been on a nauseating roller-coaster ride that has left many investors shaken.

And while a public offering is years away for anyone starting a business today, that uncertainty trickles down. In the fourth quarter of 2015, venture capital deals dropped from $38.7 billion to $27.2 billion, according to CB Insights. In the third quarter there were 24 unicorns (companies worth over $1 billion) born. In the fourth quarter, only 12 companies hit that milestone.

Read the full article here.

‘Music mafia’ is at it again

By: Mike Montgomery

When the Copyright Royalty Board issued its rate increases last winter, it seemed like the battle over reasonable royalty rates for music was finally settled. But the music labels were furious because they were banking on extracting far more from yet-to-be-profitable digital music services, so they could enjoy even higher margins at the rest of the industry’s expense.

Undeterred, the publishing arms of these foreign-owned behemoths, already raking in record revenues from streaming services, now want to leverage their monopoly control over musical works to extract higher royalty payments to further enrich themselves instead of the songwriters they represent. But they’ve run into an obstacle: their collection goons, ASCAP and BMI (aka the performance rights organizations, or PROs) are limited by federal antitrust consent decrees.

And that’s a good thing. The Department of Justice originally sued ASCAP and BMI – which together control use of approximately 90 percent of all music – for collusive, anticompetitive behavior more than 70 years ago. Today, the consent decrees are the only obstacles keeping these cartels from throttling the growth of innovative music platforms.

And yet the music mafia is begging the DoJ to bless the very kind of collusive behavior that landed them in antitrust court in the first place; behavior that the consent decrees safeguard against.

Today, when a digital music service (or anything else that plays music) negotiates a license with the PROs, they get the full use of the song even if ASCAP or BMI controls less than the full ownership stake in that song. In other words, any partial owner of a song can license the entire work (they just need to share revenues proportionally with other owners). This is known as “100 percent licensing,” and is a bedrock of the current blanket licenses.

Read the full article here.

The Trump Trust Gap

By: Mike Montgomery

There is no question that Donald Trump is driving the narrative for the 2016 presidential election, with every other candidate relegated to co-stars. Trump’s challenge is whether along the way he burns so many bridges that he’s unelectable.

Whatever the strategy, fundamental to a candidate’s success is getting the voters to trust you. So, is Trump trusted? A new survey says no.

By sizable margins, voters say that in a hypothetical race between Hillary Clinton and Donald Trump, they trust Clinton more. And that is bad news for our country. We need candidates who are trusted and inspired. Trump’s bombastic ways are burning bridges, and while Americans trust Clinton more, she has her own trust issues partially fueled by the ongoing controversy over her State Department emails.

My tech advocacy organization, CALInnovates, sponsored a poll by Vrge Analytics of 806 Americans. We asked them to decide, in a hypothetical election between Trump and Clinton, who they trusted more on specific issues.

As a non-partisan group, offering an endorsement isn’t our aim here. We hope to eventually see concrete proposals from candidates from both major parties outlining how they intend to spur innovation and support entrepreneurship and the new economy in the U.S. if elected. The person who sits in the Oval Office not to sets the agenda but can push policies that can help or hurt entrepreneurs.

On the question of overall trust, 47% of respondents said they trust Clinton more while only 27% trust Trump more. Women were more likely to trust Clinton than Trump but while 34% of male respondents chose Trump, 40% chose Clinton.

Read the full article here.

Donald Trump Has Work to Do to Gain Americans’ Trust as Would-Be GOP Nominee, According to New CALinnovates Survey

SAN FRANCISCOMarch 9, 2016 /PRNewswire-USNewswire/ — Donald Trump’s bombastic ways have pushed him to the precipice of seizing the GOP nomination for president, but Americans don’t trust him to do almost anything – from managing the economy to picking a Supreme Court nominee to handling the dispute between the FBI and Apple over an iPhone of a shooter in a mass killing with terrorist implications, according to a new survey commissioned by tech advocacy group CALinnovates.

“As Americans start to focus on the presidential election, the winner will make critical decisions about the future of the sharing economy, national security and technology and privacy,” said Mike Montgomery, Executive Director of CALinnovates. “CALinnovates isn’t in the business of political endorsements, but we are anxious to learn more about the plans candidates – whomever the nominees may ultimately be – have for ensuring American leadership on innovation and entrepreneurship.”

When a Vrge Analytics survey of 806 Americans pitted Donald Trump against Hillary Clinton in a hypothetical presidential race, the results weren’t pretty for the blustery businessman:

Read the full article here.

Taking Vitamins Goes High-Tech

By: Mike Montgomery

When you think of highly personalized, tech-oriented health care, you tend to think of the type-A Silicon Valley personalities who obsess over life hacks. But the ideal first patients for Vitagene, a startup that customizes supplement packages, turned out to be an unexpected group: weight-loss-surgery patients. The surgery makes it necessary for patients to take a medically required list of nutrients, which means they are the perfect group to test the idea that by marrying science and technology, dietary supplements can move past the hype and into the realm of solid science.

Supplements are a $32 billion per year market that is increasingly popular with entrepreneurs. Eric Ryan, the founder of Method cleaning products, has turned his eye to supplements with his new company, Olly. In December, venture capital firm Andreessen Horowitz announced a $2 million seed investment in Nootrobox — a supplement company that markets its pills in attractive little glass bottles labeled “Rise,” “Sprint” and “Yawn.”

Vitagene, a San Francisco-based startup founded two years ago, is the latest guest at this party. The company began working with bariatric surgeons in November, gathering blood tests, genetic profiles and detailed lifestyle and diet assessments from post-surgery patients. Each beta patient now gets a monthly shipment of vitamins and supplements tailored to their own body makeup. Vitagene frequently tweaks the mix as more data comes in from the patient’s doctor. Eventually the company hopes to expand its service to other types of patients and to consumers more broadly.

Read the full article here.

Is It A Match? When Companies Marry, Align Data Opportunities With Consumers Expectations

By: Tim Sparapani

It is time to rethink the concept of consent and to change data privacy law to better align corporate data practices with consumers’ expectations. We should increase the flexibility to innovate for companies that directly interact with consumers while restricting the chances that companies with no relationship with consumers have to misuse consumers’ data.

Recently, I’ve read articles speculating about why the Match Group, which runs online dating services including Match.com and Tinder, would purchase the Princeton Review, a leading student test prep service. Princeton Review has been unprofitable according to those articles. Why would an online dating company buy a test prep company? Perhaps the Match Group knows how to turn money losing test prep companies around or maybe they want to use or sell Princeton Review’s customer data to create new niche dating services. If the latter is true, this unexpected use of sensitive data would confuse, frustrate or anger most customers. When I used Princeton Review to prep for my law school entrance exam neither my girlfriend nor I would have expected that I’d be offered dating services along with new test taking skills. I would never have consented to this unexpected, third party use of my data.

This got me thinking that it is high time we rethought data privacy laws to benefit consumers in two ways by focusing on consumers’ consent. Ideally, consumers should both be free to choose exciting and unexpected innovations derived from their personal data provided by companies they know and trust, and reduced downside by lessened privacy risks posed by unknown companies accessing their personal data. Legislators should empower consumers both to consent to sharing their data for more opportunities they choose and restrict or denying access to corporations they do not know would access that data.

Read the full article here.

The FBI Is Overstepping Its Boundaries With Apple

By: Tim Sparapani

The Apple-FBI saga playing out in a very public way is a classic case of overreach by a law enforcement agency. The FBI is putting extraordinary (and unprecedented) pressure on Apple following the horrific San Bernadino shootings. The U.S. government has filed a motion in court to compel Apple to re-engineer its operating system so that the FCC can investigate whether the shooter used his iPhone to communicate or plan with other potential co-conspirators.

Forcing Apple to crack open its own code might appeal to some people clamoring for a quick fix for the ever-increasing threat of terrorism in our country. Unfortunately, there are no quick fixes and the government’s move is an extraordinary threat to civil liberty. It also won’t solve the larger problem. A backdoor won’t stop terrorism, but it will weaken smartphone security systems with no likelihood of any real public benefit. The public, and policymakers, should support Apple’s public resistance to the FBI’s pressure tactics. The FBI’s proposal is dangerous for at least these four reasons:

It Won’t Stop Terrorism

The FBI wants Apple to build a post-incident forensic investigation tool to unpack what may have happened. But that will not actually deter or prevent terrorism. Terrorists will simply switch to using encrypted phones from other countries.

It Will Open Security Loopholes

If the government is allowed to force Apple to provide a backdoor to its operating system, it will weaken security for all U.S. consumers on a go-forward basis This will not force committed terrorists to think twice, but instead could make Apple’s operating system vulnerable to the hacking of consumer data on a large scale given the way this story is playing out publicly as the hacking community will be awaiting the court decision with baited breath.

Read the full article here.

Utilities panel has too much on its plate

By: Kish Rajan

Assemblyman Mike Gatto is taking a bold step with his proposed constitutional amendment to obliterate the California Public Utilities Commission. Such a drastic action may not pass into law, but it kick-starts a critical conversation about the agency’s future.

Gatto cites concerns about the PUC’s handling of a string of problems related to energy utilities, including the San Onofre nuclear plant shutdown and the San Bruno gas line explosion. The commission is also deeply engaged in overseeing California’s massive shift away from fossil fuels to renewable energy.

If regulating the energy industry wasn’t enough of a chore, utilities are not the only sector under the PUC’s purview. The commission has divisions overseeing railroads, light rail and transit; taxis and ride-share services; and water and sewer systems.

And its jurisdiction over telecommunications is largely overlooked. As the center of the innovation economy, California relies heavily upon strong telecommunications infrastructure. But the commission is failing to keep pace with the fast-changing industry, holding back critical investments to providing more and better technology to more Californians, particularly low-income citizens on the other side of the digital divide.

According to the Milken Institute, San Jose and San Francisco are the best-performing cities in the nation for job growth, wage gains and technological advancement. While that is laudable, what is the PUC’s plan to extend that prosperity beyond the Bay Area and into every region across California?

The pathway to greater prosperity is through innovation and investment. That is driven by consumer demand supported by forward-looking thinking, rather than outdated regulatory mandates.

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