News Center

CALinnovates Welcomes Call For Fresh Look at Online Consumer Privacy Rules

By Tim Sparapani

Innovators and startups welcome the news that policymakers are taking a fresh look at how to protect consumers’ privacy online.  While the headlines may try to spin this as just another partisan food fight, in truth it’s an incredibly important opportunity to restore balance and clarity to consumer privacy rules in the online ecosystem.

As we’ve said from the start, the privacy rules adopted late last year by the Wheeler FCC were clearly flawed and the ongoing jurisdictional tussle over privacy needs to be resolved for the benefit of consumers and companies alike. The Wheeler rules created an inconsistent, confusing patchwork, in which consumers’ private information on the internet would be protected differently depending on which servers and routers their data happened to be crossing. Yes, the exact same data would arbitrarily enjoy different levels of protection. 94% of consumers believe that all companies collecting their information online should face the same set of rules – and they’re right. The Wheeler rules break from the bipartisan FTC privacy framework that has seen the internet thrive and grow in other ways, introducing new friction and erecting confusing and unjustified new obstacles to even the most mundane uses of data any consumer would see as non-sensitive.  This kind of regulation is bad for consumers, bad for entrepreneurs, and bad for innovation.

In addition, a little known consequence of the Wheeler rules was that they jeopardized the United States’ privacy agreement with the European Union. The Privacy Shield is predicated in part on the United States having a single, lead consumer privacy agency, and the dilution of the FTC’s authority puts this agreement at risk.

We’re glad that policymakers at the FCC and in Congress will have an opportunity to review the rules again and, hopefully, correct these flaws.  A return to the FTC’s role as the lead privacy enforcer would allow innovators to do what they do best: innovate. In addition, a consistent set of rules would do well to assuage consumer advocates’ concern that gaps in enforcement would delay critical privacy actions when companies are ignoring or outright abusing their data responsibilities to their customers.

CALinnovates Lauds President Trump’s Appointment of Ajit Pai as New FCC Chairman

SAN FRANCISCO, January 23, 2017

“In our hyper-partisan country, we still need to be able to get things done. Ajit Pai understands this. He called it like he saw it during his previous term, and I look forward to him continuing to push the envelope as Chairman. To sum it up: Ajit is a hardworking ass kicker who understands the economic and policy concerns of the broad tech sector with an opportunity to unite the FCC in a bipartisan fashion after four years of sharply partisan rulemakings.” – Mike Montgomery, Executive Director

“Chairman Pai’s creativity and business expertise promise to help find a third way to solving our most pressing communication issues. CALinnovates congratulates Chairman Pai and looks forward to working with he and his team.” – Tim Sparapani, Senior Policy Fellow

Staying In A D.C. Hotel For Inauguration Weekend? Prepare To Be Gouged

By Mike Montgomery

This weekend will be a historically busy one for Washington D.C. Today, Donald Trump was sworn in as the 45th president of the United States in front of the U.S. Capitol, where his fans were out en masse to watch. Saturday, hundreds of thousands will flood the streets of the city to protest his presidency.

No matter which side of the fence they’re on, every D.C. visitor staying in a hotel had one thing in common: They all paid an insane amount for lodging.

We did some research into rooms this coming weekend and found that hotels are jacking up their prices by more than 800%. Book a room at the Fairmont in Georgetown earlier in January and you would have paid $190 per night for a room with a king bed. The weekend of the inauguration? That same room will cost you $1,600 per night (and you’ll have to book for at least three nights.)

Prices won’t be any better in Dupont Circle. A room at the Kimpton Carlyle Hotel, which would typically go for $99 per night, will cost you $899 per night the weekend of the inauguration.

It is a shame that these absurd rates put hotel rooms out of reach for most Americans who might want to either see democracy in action or protest the people who are soon to be running the country.

But it’s not a huge surprise. Hotels make a practice of price gouging whenever they can, only they call it “compression” pricing, a made-up term hotel owners use to gloss over the nasty but time-honored practice of fleecing consumers during high-traffic events. Hotels rely on the old supply versus demand argument to justify their behavior of charging unreasonable rates in the name of big corporations lining their coffers.

And while supply and demand is the guiding force of our economic system, it’s worth taking a deeper look at what the hotels are doing and question whether their extreme prices really make economic sense for the workers and the communities where those hotels operate. The people who work in those hotels (most of whom don’t even earn a living wage because the hotels and their lobbyists fight against even modest minimum wage increases) don’t bring in extra money when the hotel is booked to capacity with people paying $1,000 per night or more for a room. The surrounding community doesn’t get an economic boost outside of transit and occupancy taxes that don’t directly benefit local residents. Our research has found that 60 cents out of every dollar spent by people staying at hotels goes back to the corporate owners no matter how much the rooms cost.

While hotel owners might prefer their customers not think about those high prices in terms of price gouging, they’re happy to talk to their investors about the benefits of jacking up prices whenever possible. According to an article in The Wall Street Journal, Pebblebrook Hotel Trust CEO Jon Bortz was quoted as complaining to investors that home sharing platforms, like Home Away and VRBO, are making things hard for hotels.

The company’s ability to “price at maybe what the customer would describe as sort of gouging rates,” has diminished with the growth of home sharing, he told investors. “We’ve lost a lot of that ability at this point within the major markets where these events take place.”

There’s a lesson in that, though inauguration hotel rates show that the rise of home sharing hasn’t fully removed price gouging from the hotels owners’ quivers quite yet.

But the more home sharing there is in a city, the harder it is for hotels to justify price gouging. According to UBS leisure and lodging analyst Robin Farley, more home share listings has a direct effect on limiting the frequency of compression pricing at area hotels.

A bill in front of the D.C. City Council last year would have imposed new regulations on home sharing in the district but the bill died in committee. Hopefully this year the City Council will take a more informed view on home sharing and consider how, especially during large events like the ones coming at the end of this week, it would make sense for the nation’s capital to allow more visitors in instead of keeping them out due to price gouging.

While we may not know exactly what is in store over the next four years, it’s safe to assume that Washington, D.C. will remain a tourist magnet. The city should open its doors as wide as possible.

In Cancer Fight, Artificial Intelligence Is A Smart Move For Everyone

By Mike Montgomery

Cancer, unfortunately, touches almost everyone. Like far too many, I’ve lost friends to this horrific disease. Luckily, there are a number of exciting technologies on the horizon that might help save lives.

For instance, right now, women depend on monthly home exams and annual mammograms to detect breast cancer. Soon, though, they may have another option. Cyrcadia Health, a cancer therapy startup, has developed a sensor-filled patch that can be inserted comfortably under a bra for daily wear. Connecting through the woman’s smartphone or PC, the patch uses machine-learning algorithms to track the woman’s breast tissue temperatures and analyze this data at the Cyrcadia lab. If it detects a change in pattern, the technology will quickly alert the woman — and her health-care provider — to schedule a follow-up with her doctor.

“This technology is fully automated in the cloud,” says Rob Royea, CEO of Cyrcadia. The patch, whose predicate is FDA cleared, is expected to hit the market next year and had a greater than 80% historical trial success rate in detecting tumors, even in dense breasts (which are typically tough to read in a mammogram).

Cancer therapy startups that use artificial intelligence (AI) algorithms are proliferating. While some parts of the tech industry are coming under fire for creating products and services that only help the wealthy (most people don’t really need things like on-demand liquor delivery), this is one area where technology is being used to help everyone.

Read the full article here.

After The Election, A Reckoning For Silicon Valley

By Kish Rajan

As the dust settles after the recent presidential election, many are asking themselves some hard questions. Will Donald Trump follow through on even his most terrifying campaign promises? What can we do to help the most vulnerable over the next four years? And why were voters so angry that they were willing to take a risk on a tweet-happy businessman with no record of helping anyone but himself?

The tech industry needs to add a question to this list: What role, if any, did we play and what can we do about it now?

Like it or not, technology played a big role in the election. Social media created two competing echo chambers that got louder and louder as we got closer to election day. Fake news stories spread faster than the real thing and both sides told themselves that they were about to win. Only one side was right and that side didn’t include the vast majority of people in tech.

The day after the election was full of online hang wringing and self-flagellation among the technorati. Venture capitalist Dave McClure got a standing ovation at the Web Summit conference when he angrily compared social media to talk radio calling it a “propaganda medium” and demanding tech entrepreneurs take action to make sure this does not happen again.

There’s no question that the people who created and run the biggest social media networks in the world have to do better. If fake news has the same appearance as real news that’s no longer giving people unfettered access to information — it’s making them susceptible to propaganda. When trolls are allowed to attack and harass people on Twitter, that’s no longer facilitating the free flow of opinions — it’s sitting by while vulnerable people are made to feel unsafe.

But the soul searching has to go even deeper than that. Technology has ushered in an era of incredible efficiency but there’s no value in pretending that efficiency doesn’t cost people their jobs.

While many on the coasts are finding their lives greatly improved through smartphones, apps and the platform economy, people at the lower end of the economic scale are seeing the wonders of technology pass them by, just out of their reach.

But here’s the thing — if there are any people in this country who can help make things better, it’s the people who call the tech industry home. I have no doubt that we can innovate our way out of a lot of problems we are now facing.

We need the next wave of technologists to start working on algorithmic accountability. On Facebook, for example, it shouldn’t be enough that a story is popular to get it more widely distributed. There has to be something in the algorithm that evaluates the source of that story.

On Twitter, algorithms should be able to quiet bullies before they become harassers.

Entrepreneurs need to think about how many jobs their company will create instead of simply about market cap or a founder’s net worth. As new companies grow they can open offices in places like Michigan and Iowa and spread job growth beyond hubs like San Francisco, New York and Austin.

Tech leaders need to find their way to the table to work with the new government. Donald Trump has said he will spend $1.5 trillion on infrastructure. That’s great. How can tech help and make that new infrastructure as modern as possible to provide highly-skilled jobs across this whole country? How do we train more people to be able to do these jobs? How can we make sure that the country’s digital infrastructure is being upgraded as well?

Finally, tech can work to promote and protect vulnerable populations by making better hiring decisions. The industry needs to look beyond white male Stanford grads and hire people who better reflect the diversity of America. Such a commitment will show that this community values and celebrates diversity and openness.

Companies can also continue to push for policies and priorities that the next administration might not share. Just because Trump may pull out of the Paris Accords doesn’t mean corporations should reduce their commitment to ending climate change. If Trump does end Obamacare companies should do everything they can to ensure that all of their employees (even contractors) are getting medical coverage. Actions like these can speak louder than words.

This is a difficult time but also an opportunity. As tech takes a hard look at where it’s been, I know we have the opportunity to do everything we can to make sure there’s a brighter future for everyone.

Tech Leaders Need To Push Trump On These Three Major Issues

By Kish Rajan

In the wake of the presidential election, Silicon Valley is in a deeply awkward position. Almost the entire tech industry backed Hillary Clinton, but Donald Trump is the one who is about to enter the Oval Office.

This may sting but tech leaders can’t just dismiss the new administration. For one thing, the federal government is a giant technology customer. In 2015 Hewlett-Packard, IBM and Dell brought in a combined $14 billion in revenue from government contracts.

The federal government also has the regulatory power to make the lives of tech executives easier or much, much harder. Many fear that we’re in for the latter. Trump has hinted at starting a trade war with China, which is both a cheap manufacturer and a giant customer for tech companies. Clamping down on immigration could stem the tide of bright foreign entrepreneurs who have helped build some of the biggest companies in Silicon Valley. And Trump has called net neutrality a “top-down power grab” so Title II may be reversed.

But there are still places where tech leaders might be able to influence the President-elect and his transition team in order to help the tech industry. Here are three things executives should push for in the upcoming meeting:

Universal Broadband

One of Trump’s biggest selling points was his promise to bring jobs back to the many communities that have been hurt by the slow death of manufacturing in this country. But short of a miracle, he’s not going to be able to bring back manufacturing jobs.

Instead, he should focus on bringing those communities into the modern age with increased access to fast, reliable broadband. By making sure that everyone has access to the internet, he’ll help people advance their education, apply for jobs online and even build new businesses. In this digital age, living without broadband is a serious hardship for anyone who wants to do better for themselves.

By creating incentives for private investment by broadband service providers to expand the footprint of their offerings, speed their networks and reach a point of saturation, the president-elect would go a long way in not only modernizing America, but also creating jobs in the process. The appetite for investment, backed by incentives to increase capex, would send a strong signal to America that communications and tech inclusivity is the path toward prosperity.

Infrastructure Improvement

During the campaign, Trump proposed a $1 trillion infrastructure-improvement plan to put people to work fixing the nation’s highways, bridges, tunnels and airports. Assuming he continues to cite this as a priority for his new administration, the tech industry should push to have a seat at this table. Instead of simply building roads and patching decaying infrastructure, we should build smart roads that have built-in sensors to track everything from traffic to whether a road needs immediate maintenance. Insights from big data can help improve traffic flow and adjust speed limits to ease congestion and increase safety.

And the digital infrastructure that is mostly invisible should be a part of that plan. Consumers favor modern networks that fuel their smartphones and mobile devices, as the reliance on the antiquated landline telephone networks diminishes by record amounts every quarter. By incentivizing private deployment and decreasing barriers to buildout, we also create a digital superhighway that will promote many new businesses not just in California, but in every part of the country. The administration should also champion the idea of “dig once” which would mandate that pipes for fiber optic cables be laid down any time there is a federally-funded highway project. This will eliminate the need for teams to dig and re-dig streets every time wires need to be upgraded, which is costly and inconvenient for drivers. It’s time to revive this dormant policy opportunity.

Develop the Workforce

If this country is going to get serious about creating more jobs, it needs to start at the education level. Too many people are entering the workforce without the skills they need to succeed in the digital age and a rapidly changing economy. Improving our education system by increasing the emphasis on STEM education would be a good start.

But Trump also needs to acknowledge that immigrants are building some of our biggest tech companies, which are also creating jobs. Elon Musk, whose Tesla cars and batteries are made in America, is from South Africa. Google employs 62,000 people in the U.S. alone. That company’s co-founder, Sergey Brin, was born in Russia, and its CEO, Sundar Pichai, was born in India. The startups founded by immigrants should remain U.S.-based. Curtailing immigration is a short-sighted solution, and the hope is that the tech industry can underscore this thought in a powerful way. Comprehensive immigration reform may be off the table, but that doesn’t mean that improvements cannot be made to the current system in order to continue the flow of bright engineers and innovators to the America.

While tech leaders are likely to have many concerns about the new administration, they need to pick their battles. By focusing on these three areas, they can appeal to Trump’s campaign promises, especially around creating new jobs, while helping to maintain the health of the whole tech industry.

Silicon Valley Rejected Trump. How Will The Industry Work With The New Administration?

Steve Westly moves easily between the worlds of technology and politics. The venture capitalist, who was an early investor in Tesla, served as state controller and chief financial officer of California between 2003 and 2007.

Now, like many in Silicon Valley, he is watching cautiously as President-elect Donald Trump forms his cabinet and starts to signal what his priorities will be over the next four years.

Despite Trump’s rhetoric during the campaign, when he railed against immigrants, called climate change a hoax and threatened to start a trade war with China, Westly believes that when it comes down to making real policy, Trump will back down on some of his most damaging rhetoric.

“I think Silicon Valley will fare just fine,” Westly told CALinnovates Chief Evangelist Kish Rajan. “Silicon Valley is getting bigger, not smaller. It is the tech center of the world, and I don’t think Trump wants to slow that growth for any reason.”

Immigrants have proven to be the secret sauce of Silicon Valley helping build companies that have created thousands of jobs. Renewable energy is quickly getting more affordable than coal and natural gas, and almost every economist agrees that a trade war with China would be a disaster.

But that doesn’t mean the Valley should be complacent. The economic dislocation that swept Trump into office is a growing problem.

“The 800-pound gorilla in the room is that new technology is coming,” says Westly. “But we have to get smarter about re-educating the American workforce. We have not done that nearly well enough in the past.”

Listen to the full interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

City Permitting Is Complicated. Technology Can Make It Easier.

When big companies build new office or commercial spaces, they have teams of lawyers and consultants who help them navigate the permitting process.

Small-business owners don’t have that same luxury, and city hall can often be a confusing place.

That’s where OpenCounter comes in. The tech company works with cities to make the permitting process easier and more tech friendly. They take the many rules and regulations a new business owner might need to understand and present them in an intuitive way through their online portal.

It’s an idea that more cities could use to help spur new business. In a conversation with CALinnovates Chief Evangelist Kish Rajan, OpenCounter co-founder Peter Koht pointed out that America is 49th in the world for ease of starting a businesses and 33rd for ease of construction permitting. These complications create real problems for new business owners.

“This is not a problem unique to California,” said Koht. “We need citizen-focused permitting.”

Koht and his co-founder, Joel Mahoney, approached the problem from a design point of view. The information that new businesses need is mostly already on a city’s website. OpenCounter uses algorithms and natural language to present that information in a way that more people can easily use.

Listen to the full interview below:

Like what you hear? Subscribe to A Step Ahead on iTunes.

Technology Can Help Heal This Divided Country

By Mike Montgomery

On Tuesday night, America was hit with an earthquake. It doesn’t matter whether you’re a Democrat or a Republican. What Tuesday showed is that we are a country that is even more deeply divided than many of us thought.

At the heart of that division is a schism between the haves and the have nots. People who feel they have been left behind by the government and the economy may not have been heard by pollsters but they made themselves heard loud and clear Tuesday when they voted for radical change at the top level of government.

While it may be an uncomfortable situation, those of us in the tech space need to talk about the role technology played in that divide.

Those of us living in the iPhone bubble may believe that things like online banking, video calls and streaming music are part of the everyday life of all Americans but that’s not true. We still live in a country that has a very real digital divide.

Studies from the Pew Research Center show that people who earn less money and are less educated also have less access to the internet. While 88% of adults earning more than $150,000 per year have broadband at home, only 45% of those earning under $30,000 a year have the same access. Ninety percent of people at the top income level have smartphones compared to 53% of those at the bottom.

As more and more of the services that people rely on move online, those at the bottom are truly being left behind. They have less access to things like employment websites, online education and new banking options. Without fast access to the internet they are increasingly isolated.

Then there’s the very real problem of job displacement. While technology has made many things easier in our lives, it’s also made a lot of jobs redundant. By 2020 robots will have replaced an estimated 5 million jobs, according to the World Economic Forum. Those people who feel that the jobs they once relied on are deserting their communities — they’re right.

But here’s the thing. I also believe that technology can help solve these problems. Knowing the benefits that come from more people having access to the internet we can put policies in place to close the digital divide. We need policies that encourage states to upgrade their infrastructures to bring broadband to everyone.

We need to accept the reality that the economy, and with it the future of work, is changing fundamentally and it’s not changing back. We can’t pretend that we’re headed for a resurgence of reliable factory jobs.

Instead, let’s enact policies that train people for the jobs of the future. Let’s have a minimum wage so that those in the growing service industry earn enough to take care of their families. And let’s seriously consider things like wage insurance so that when people move into jobs that have less consistent income, they can still count on steady earnings.

But let’s also make sure that at a state level, we don’t overcorrect and put so many regulations in place that we chill new businesses. If the economy is going to grow, we need to encourage our tech entrepreneurs to continue to come up with new ideas that are going to drive the economy of the future.

These ideas are not liberal or conservative, they’re common sense. They are ideas that people on both sides of the aisle can, and should, come together to support.

With the election behind us, it’s time for both sides to work together to heal the problems we saw so nakedly exposed on Tuesday night. Our future depends on it.

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