”Net neutrality is too important to be left to the whims of whatever administration is in power. We want action on net neutrality: Congressional action. These important principles should be cemented by legislation.”
Mike Montgomery, Executive Director
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.
By Mike Montgomery
When Elon Musk announced that he plans to build the world’s biggest ion battery to power to South Australia, it was a sign that the state truly has made a stunning turnaround.
Things looked grim for South Australia back in 2013, when GM announced it would stop manufacturing cars in Australia as of fall 2017.
Adelaide, the biggest city in South Australia, had prospered after World War II as a manufacturing hub for automobiles, appliances and textiles. Local industry was protected by high tariff walls — as high as 54 percent for automobiles in the 1980s. In Adelaide, the largest employers were tied to the auto industry.
That shattering 2013 announcement was a wake-up call, according to Jay Weatherill, South Australia’s premier. “It was a signal moment for us,” he says. “It’s been the impetus for massive change.”
Weatherill decided to pin the state’s future on tech and innovation rather than go looking for a volume-based manufacturing industry to replace GM. In fact, he started looking to make South Australia the next Silicon Valley.
As more cities look to reinvent themselves in the wake of factories closing, Adelaide is an appealing model. The first step was a review of commercialization and venture capital investments in South Australia. The news wasn’t good. The state received less than 0.2% of the venture capital investment in Australia. The review also found that a lack of coordination between government departments and agencies hindered private investment opportunities.
The solution was to spend money to make money. Weatherill used state funds last year to establish a $38 million venture capital fund to promote innovation, attract new VC and encourage tech companies to move to South Australia. The state also committed money to support new businesses from conception to product development and early commercialization, and gave more money to the local university’s innovation incubator to underwrite initiatives in the advanced manufacturing and engineering spaces.
South Australia also has invested in promoting its agribusiness sector and developing private export markets in high-quality foods, particularly to serve the exploding middle class in Asia. “Our wine and food are attracting huge investment from overseas,” says Andrew Cullen, managing partner of Deloitte in South Australia.
Weatherill also hired American transplant Tom Hajdu as his “Chief Advisor on Innovation.” Hajdu — founder of both music production company tomandandy and Disrupter, a Los Angeles-based startup incubator — says the state needed to upgrade its infrastructure to attract new tech businesses and the jobs that come with them. He led the effort to make Adelaide the first international city to join the Smart Gigabit Communities Program, which in part requires members to install sensors throughout the city and develop applications to connect those sensors and the data they collect to the cloud. So-called “gig cities” also have high-speed internet that is up to 100 times faster than the national average. The SA government paid $3.5 million for the upgrades.
But the biggest sign that the economy has turned the corner came in May, when all of South Australia’s efforts to modernize paid off. The Australian government picked the state as the primary location for its new defense shipbuilding program. Australia committed $66 billion to build submarines, frigates and offshore patrol vessels for the Australian navy, and to upgrade and modernize Adelaide’s existing naval shipyard. The government also will open a school in Adelaide to train shipbuilding workers.
Building and maintaining the next-generation naval fleet is expected to bring in 5,000 high-skilled, high-tech jobs, as well as thousands of other jobs in associated industries. South Australia won the bid in part by focusing on how it has morphed from rust belt to 21st century city.
“South Australia is a next generation state,” says Hajdu. “It’s the center of the new digital economy.” If Elon Musk agrees, you know it must be true.
Mike Montgomery is the Executive Director at CALinnovates.
This piece was originally published on Forbes.
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.
CALinnovates’ Kish Rajan Talks About How SB 649 Will Help Keep California Competitive
A bill currently making its way through the state Senate would make it easier for California to move to a 5G network. But it has stoked blowback from local municipalities that fear giving up any control over where phone companies can place the small cell antennas necessary for making 5G a reality.
CALinnovate’s Chief Evangelist, Kish Rajan, went on AirTalk on KPCC to debate the merits of the bill. Right now, thanks to a hodgepodge of local regulations, it can take up to two years to approve a single small cell. That kind of bureaucratic slowdown will hamper California’s ability to upgrade its network at a time when other states are moving quickly towards a 5G future.
The bill will open the door for better phone service throughout the state and will provide the backbone for smart cities, more efficient agriculture and even self-driving cars.
By Kish Rajan
There’s almost nothing more depressing than the sight of a dying mall. If you’ve ever walked through one of these places, you know the sadness of the empty store fronts, the echoing atriums and the going out of business sales at the few remaining shops.
It’s enough to make anyone think that we’re witnessing the end of in-person shopping as we transition to online purchasing. But don’t let those sad malls fool you. Retail is far from dead — but it is evolving in ways that could benefit both shoppers and workers.
First, it’s worth noting that the death of brick and mortar shopping has been greatly exaggerated. E-commerce only accounts for 10% of retail overall. According to NPD, 95% of Americans shop at Wal-Mart while only 42% shop at Amazon. And those dying malls? They’re more a sign of overdevelopment than a harbinger of the obsolescence of retail. The number of malls in the U.S. grew more than twice as fast as the population between 1970 and 2015 according to research from Cowen & Co. What we’re seeing now is more of a rightsizing than a decline.
And many malls are reinventing themselves. Take the Westfield Mall outside of Los Angeles. Located in the heavily Asian San Gabriel Valley, it’s often almost impossible to find parking there on the weekends. Once a sleepy shopping center stocked with the usual suspects, the mall is now home to outposts of hot Asian retailers like SST&C out of Taiwan and Muji, a Japanese lifestyle store.
You see this kind of rethinking of retail everywhere you go. Online stores like Warby Parker and Modcloth are popping up in real life around the country. At the same time classic brick and mortar shops, like Nordstromand Best Buy, are using their physical stores to help drives sales online and vice versa.
This kind of creativity is exciting but it is just part of the overall evolution in retail. As more shopping moves online, it’s inevitable that we’ll see a change in the overall demand for different kinds of workers. Just look at Amazon Go, the online retailer’s latest foray into the real world. The Settle-based supermarket will work completely by automation. You just take what you need and leave and Amazon charges your account without requiring any human interaction at all. It’s a delight for shoppers but could dramatically reshape the number and types of jobs in future grocery stores.
As low-paid jobs fade, they’ll be replaced by higher-paying jobs in both physical and online retail. A recent study by the Progressive Policy Instituteshows that while retail saw a gain of 27,000 jobs last year, ecommerce jobs climbed by 97,000. Those ecommerce jobs pay an average $21.13 compared to an average $16.65 per hour in general retail.
But the trick will be moving displaced workers into better jobs that will pay more. It’s naïve to think that a laid-off cashier in a small town in Alabama can just pick up and move to a higher paying ecommerce job that might be located in Washington state.
In order for the new economy to benefit everyone, we have to make sure these new jobs are available to everyone. We can do that by ensuring technology jobs are spread throughout the country, not just concentrated in places like Silicon Valley and Boston. Smaller towns can become tech hubs. Just look at what’s happening in Augusta, Ga., where a group of entrepreneurs are building incubators and helping to create a tech-friendly environment.
We also need to laser focus on retraining workers. That means tech companies and government working together to come up with smart new ways to train people. One good example of this is TechHire Eastern Kentucky. Launched by Ankur Gopal, the CEO of Interapt out of Louisville, Ky., with support from the local government, the program trains people through class study and apprenticeships to move into tech jobs.
If we are to successfully move to the next phase of retail, which will be a mix of brick-and-mortar and ecommerce, we need to make sure there are new and better opportunities for workers. Those opportunities will come from creative new shops as well as good-paying tech and warehouse jobs. It’s a mix that will be good for customers, and good for employees.
Kish Rajan is Chief Evangelist at CALinnovates.
According to multiple reports, the White House has decided to nominate former FCC Commissioner Jessica Rosenworcel to return to the agency. We join a bipartisan chorus in declaring that it’s about time.
Should Rosenworcel’s appointment be confirmed by Congress, her return to the FCC will inject an even greater amount of wisdom and forward-thinking to this currently condensed policy-making body. As we noted when she was initially appointed to the FCC in 2012, and as Senate Minority Leader Chuck Schumer has correctly pointed out, Rosenworcel understands the rapidly changing nature of technology and the important role the tech sector plays in the innovation economy. Among the many issues Rosenworcel has championed that will return to the regulatory discussion include a vital continuation of the education and advocacy she continues to lead around the closing of the homework gap. The FCC and the nation will be well-served by her experience, expertise and intellect.
“Americans from Silicon Valley to the Hudson Valley will benefit greatly from Jessica Rosenworcel’s reappointment to the FCC. Welcome back, Commissioner Rosenworcel. You’ve been missed,” said Mike Montgomery, CALinnovates executive director.
By Kish Rajan
Walking down the streets of San Diego, it’s not immediately apparent that the city is at the center of a technological revolution in infrastructure. That’s because the technology, 3,200 sensors, is hidden inside the city’s new street lights. The sensors collect data that will help the city save $2.5 million on electricity each year, track air quality, and improve traffic flow and parking. They can even be of use to public-safety first responders.
San Diego’s smart lights are just part of the city’s push to rebuild its infrastructure. Last June, voters approved the Rebuild San Diego ballot initiative, which will provide up to $4 billion for infrastructure projects over the next 25 years.
Expect to see more local and state governments taking infrastructure problems into their own hands. Given the realities of politics in Washington, they know the folly of waiting for the federal government to step in and save the day. And it’s highly unlikely that any new infrastructure plan that did emerge from Washington would cover more than a fraction of the $4.6 trillion that the American Society of Civil Engineers (ASCE) estimates it would cost to fix everything — more than the federal government spends in a year.
ASCE’s latest report card gives America’s infrastructure an overall grade of D-plus. And no one knows better than those at the local level how our deteriorating infrastructure makes us less competitive globally, not to mention the safety concerns it raises for the people who use crumbling bridges, overpasses and tunnels every day or who drink water that might be contaminated by sewage overflows, just to name a few issues. They need to take a page from San Diego’s playbook and find creative ways to start solving infrastructure problems from the bottom up.
It’s already beginning to happen. South Bend, Ind., for example, is a sewer overflow city. Hundreds of billions of gallons of raw sewage overflow into local rivers and lakes every year. Aiming to improve the situation, the city, under Mayor Pete Buttigieg, has begun using a system called CSOnet, developed by a local company, that collects data from sensors inside the sewers so the city can redirect water to empty pipes and reduce the overflows.
In Multnomah County, Ore., more than a third of the commercial buildings use more energy than they should. But the Building Ready Multnomah initiative, started by former County Commissioner Jules Bailey, helps finance capital improvements that reduce energy consumption or generate energy. The organization leverages public and private resources for the loans and encourages participants to use the savings generated from becoming more energy efficient toward seismic upgrades to prepare for natural disasters.
And as some Western states struggle to build up their renewable-energy infrastructure, other states, including California, have excess renewable energy capacity. California state Sen. Bob Hertzberg has proposed the creation of a regional grid operator and energy exchange to make it easier for states to buy and sell energy to each other, which could reducing overall carbon dioxide emissions.
These efforts might seem small, but they can add up to a serious impact. With the continuing dysfunction in Washington, it may be years before we see a comprehensive federal infrastructure effort. But as these local leaders have shown, that doesn’t mean we can’t begin to improve our grade.
By Mike Montgomery
Getting a Rocky Mountain high may soon be legal in all 50 states, which means pot is fast on its way to becoming just another industry, albeit an exploding one. And as the marijuana industry comes aboveground, it’s opening a huge space for the usual disruptors — tech startups and data analytics firms.
Startups like Eaze in California began with medical marijuana, using technology to provide on-demand marijuana deliveries via an app. Eaze also provides data to help retailers predict supply and demand. MJ Freeway offers an agricultural tracking product that helps marijuana license holders manage their businesses and comply with regulations in Colorado. Both companies can be scaled up easily as more states come online with recreational use.
Dozens of other startups are devoted to finding ways to use technology to improve mundane tasks, including human resources, transportation, regulatory compliance, insurance and mobile payments.
On the analytics side, Cannabase is a Colorado-based wholesale market that treats marijuana just like any other commodity. It provides real-time market insights to wholesale growers and retailers, helping them anticipate market trends, price changes and volume fluctuations in both the medical and recreational markets. Cannabase also provides analytics to advertisers looking to market to growers and dispensaries. “Data-driven operations are the ones most likely to survive,” says Jennifer Beck, Cannabase co-founder.
Beck is talking about when marijuana is legalized across the U.S. Right now, it is still a Schedule 1 drug, regulated in the same manner as cocaine and heroin. But a trio of new bills proposed by members of the Congressional Cannabis Caucus in the House of Representatives brings federal legalization one step closer. The Regulate Marijuana Like Alcohol Act is self-explanatory, while the other bills pertain to pot-industry taxes and reforms to banking and research regulations.
Although it’s legal for recreational use in just a handful of states, marijuana already is the fastest-growing industry on the planet, according to Arcview Market Research’s 2017 report on the marijuana market. Sales hit $6.7 billion in 2016 — a 34 percent jump from the previous year. Arcview expects the legal marijuana market in North America to be nearly $23 billion by 2021 — all without federal legalization.
Those are the kinds of numbers that draw venture capital. The total amount of capital raised by cannabis companies in 2015-2016 was more than $2 billion, up 45 percent from the previous year, according to Arcview, which itself has invested $118 million in more than 145 companies.
Another cannabis VC company is Poseidon Asset Management, which has more than $15 million invested in technology firms like Headset and Wurk. Poseidon invests mostly in ancillaries — genetic research, biotech, agtech and, of course, data analytics. “The industry is evolving and that’s where technology companies come into play,” says Emily Paxhia, managing director of Poseidon Asset Management. “It’s being powered by people who are entrepreneurial in spirit and willing to participate when it’s still a little more high-risk.”
When legalization happens — and it will — companies with access to big data will have a big advantage in the multibillion-dollar market. As legalization spreads, prices will decline and the number of products will explode, making branding and marketing vital. Big data in particular is necessary to gain insight into the potential of the pot industry. “Data allows people to make informed decisions, track trends, merchandise products and advertise effectively,” Paxhia says. “From a regulatory standpoint, this is critical to demonstrate the evolution of the industry.”
Right now, the entire legal-marijuana industry is a somewhat unknown space, but soon it will be filled with unlimited data on sales, markets and consumer behavior. “The rest of the business and innovation world is infatuated with data, and there is no reason for cannabis to be the exception,” Paxhia says.