A little while ago, I covered the news that Jessica Rosenworcel had been nominated to fill the vacant Democratic slot at the FCC, and posited that a Republican nomination must be coming soon so as to preserve the Republican advantage on the Commission. It now seems as though Brendan Carr, currently acting as general counsel at the FCC and a key ally to Chairman Ajit Pai, will take that last slot. Given the controversy around net neutrality, that majority is critical to making the changes Pai has proposed, and on the basis that both these nominees are likely to be pushed through together, things should work out fine for the Trump administration. As I said while commenting on the Rosenworcel nomination, telecoms policy is one of the few areas where the Trump administration has been able to move quickly without either Congressional or legal barriers, so it will be keen to keep the agenda moving forward quickly. Update: the nomination was confirmed later in the day.
The Trump administration is holding the first meetings of its American Technology Council, led by Trump son-in-law and advisor Jared Kushner, later this month. Despite the recent contretemps between the tech industry and the administration, it appears most of the largest companies will still send senior leaders to the meetings, including CEOs or chairmen in many cases. Apple, Amazon, Alphabet, Microsoft, IBM, Oracle, Intel, Cisco, and others will all send at least one senior representative to the meetings. That’s a sign of the realism that still prevails at these companies despite broad opposition within their ranks to any kind of collaboration with the government. These companies still have policy objectives the government can and likely will help with, and disengaging entirely over those issues where there’s disagreement isn’t likely either to drive meaningfully different policies in those areas or achieve their broader goals. But that will make for some uncomfortable times for these leaders, most of whom looked pretty awkward at the first pre-inauguration meetings with Trump and his team. And these companies will face continued criticism from within Silicon Valley and elsewhere for their perceived compliance with the administration regardless.
This has been in the offing for weeks, with lots of reporting since Ajit Pai took over as FCC Chair about his intentions to dismantle net neutrality regulations, but today it finally become official with a speech by Pai outlining his proposed approach. For now, all that will happen is that the FCC will tomorrow publish a Notice of Proposed Rulemaking outlining plans to reclassify broadband services as Title I, and inviting public comment. The significance of that is that the 2015 reclassification of broadband as Title II was what enabled the agency to pass net neutrality rules which stood up in court, so reversing that decision would also remove the net neutrality regulations. What Pai didn’t do in his speech today was outline how net neutrality rules, which he says he broadly supports, would be enforced going forward, though reporting has suggested he favors handing enforcement to the FTC with providers drawing up voluntary codes of conduct. The providers themselves, meanwhile, have been piping up in praise of the proposal while reiterating their commitment to a version of net neutrality they can live with: not blocking or degrading competing traffic. Once again, how you feel about all this depends on what you think net neutrality should mean: if you agree with that basic definition from the providers, things should be fine, but if you think it should also mean no paid prioritization, no zero rating, and so on, then you’ll have a problem with how this plays out. Pai’s fundamental argument here is that the providers were largely self-regulating before the rules, and that they will be again. The counterargument is that the threat of rules was enough to keep the carriers in line without them, and with rules eliminated and no immediate prospect of their reintroduction, carriers would be emboldened to push the limits in a way they weren’t in 2015. Also, as I argued a few weeks back, though the proposal released tomorrow will be up for public comment, I wouldn’t expect it to change much in the face of even very strong negative feedback.
Alibaba is launching a program to help US businesses sell to Chinese consumers through its website. It’ll hold a conference in June at which it will offer training on all the ins and outs of doing business both through Alibaba specifically and in China generally, and all this is by way of fulfilling a promise CEO Jack Ma made to Donald Trump back in January. The US currently has a massive trade imbalance with China – exports from the US in 2015 were $161.6 billion, while imports were $497.8 billion – so rectifying that balance is a key priority for the US administration. But much of the current export volume to China is in categories that would be a poor fit for a platform like Alibaba – soybeans come top, both consumer and commercial vehicles are also major contributors, and much of the rest is made up by other commercial and industrial products. The US sells very few small consumer goods of the kind well suited to a platform like Alibaba, so any contribution made by Alibaba to reducing the trade deficit is going to be far more symbolic than material. In addition, the complexity of selling into China, where foreign-owned businesses are severely limited, will make it a fairly unappealing proposition for most US-based businesses relative to selling into the massive market on their own doorstep. I suspect this will be just another example of a Chinese tech company struggling to bring its model to the US (just as almost all US tech companies struggle going the other way).
via USA Today
Silicon Valley is (quietly) beginning to fight the Trump administration’s net neutrality plan (but probably won’t succeed) (Apr 12, 2017)
This was somewhat inevitable given the earlier fight about net neutrality, but it appears tech companies are starting to make their views known on FCC chair Ajit Pai’s plans to roll back net neutrality regulations and hand oversight to the FTC instead. So far, though, none of them are saying anything publicly, and I’m skeptical that we’ll see the same vocal fight over this as we did last time around on the part of the big companies. More to the point, I suspect even if we do it won’t make much difference. When Tom Wheeler came to the FCC many doubted that he would be tough on the ISPs he had previously represented as head of a cable lobbying group, and so he was particularly sensitive to criticisms of his policy along those lines. He also, of course, represented a Democratic administration which favored net neutrality rules. Pai, on the other hand, is a familiar figure with well-known views on net neutrality, who was in turn appointed by a president who backs his agenda. As such, even though Wheeler strengthened his stance on net neutrality as a result of public pressure, I can’t see Pai caving in the same way. We might see a slight moderation of the approach, and perhaps a slowdown in the transition to ensure the FTC is ready to pick up the gavel, but I can’t see any substantive change to the plan occurring because of opposition from big tech companies. Meanwhile, of course, this sets up yet another potential fight between the tech industry and the Trump administration, which may be another reason they choose to stay fairly quiet, given all the fronts on which they’re fighting.
The Trump administration no longer wants Twitter to reveal the owner of an anti-Trump account – Recode (Apr 7, 2017)
Just a quick update on yesterday’s item about the USCIS’s fight with Twitter over revealing who was behind an account critical of the administration. It appears the administration has now backed off and so the lawsuit Twitter filed has been ended as well. What I’d love to know is why – whether calmer heads prevailed and someone in the government realized this was a fight it couldn’t win, or something else happened. Either way, what would have been a big test for Twitter and the administration now won’t be.
A new front has just opened up in the war between the Trump administration and the tech industry: Twitter is suing the government after it attempted to compel Twitter to reveal the identity of the people behind the @Alt_USCIS Twitter account. That account is allegedly maintained by employees of the US Citizenship and Immigration Service and has been highly critical of the Trump administration and its policies on immigration. In and of itself, that seems like no legal justification at all for unmasking the account’s owners, and that’s why Twitter is pushing back on free speech grounds. But the legal hook here may be that the account is using the name of the agency in its Twitter handle, and as such might just possibly be in contravention of trademark or copyright law, or anti-impersonation regulations. Regardless of the reasoning, this sets up yet another fight between the tech industry and the administration, though in fairness Twitter had resisted some earlier attempts by the Obama administration to get at the people behind accounts as well. It’s also an important test of one of the key tenets of Twitter’s value proposition as a free speech platform.
FCC and FTC Heads Outline Policy on Internet Privacy (Apr 5, 2017)
In an op-ed in the Post this morning, the chair of the FCC and acting chair of the FTC write up their views on the internet privacy debate that’s been roaring in online tech publications over the last few weeks. As I’ve said previously (and discussed in depth in last week’s News Roundup podcast), the reaction on this topic has been overblown, and understanding poor, though the major players on the other side haven’t really helped themselves. The major ISPs only began communicating on the topic after the congressional vote was over, and only now are the FCC and FTC chairs communicating clearly about the issue. But the reality is that this issue of internet privacy can only really be resolved by new regulation from the FTC, which will end up once again having responsibility for online privacy as it did until 2015.
This is a great summary of a critical element in the disconnect between the Trump administration and the tech industry. Through Trump has Peter Thiel in a liaison role and recently appointed Matt Lira to an advisory role around innovation, he has left largely unfilled the traditional home of science and technology policy-making within the White House, the Office of Science and Technology Policy. The article argues that this, in turn, has made it very difficult for the tech industry to make its voice heard inside the White House on issues such as the executive orders on immigration, which was the first major point of friction between the two. The contrast between the Obama and Trump administrations here couldn’t be more clear, and the big question is whether the current situation will change in time or whether this disconnect will continue.
Airbnb, Lyft, and 56 other tech companies file brief opposing Trump’s revised travel ban – The Verge (Mar 15, 2017)
Lots of big tech companies and some smaller ones filed an amicus brief opposing the original Trump executive orders on immigration back in January. This time around, it looks like it’s almost exclusively the smaller companies doing the same with the revised order issued this month – Alphabet, Amazon, Apple, Microsoft, and lots of other large companies are missing this time. I haven’t yet seen comment from any of these companies as to why, and it may simply be either a matter of timing, but it’s interesting to see this shift after the opposition to the order was so high profile the first time around. That could signify that the companies are in fact not opposed to this version of the order, or it could simply be a sign that they’re choosing to pick their battles and, having made their broad objections known earlier, are now lying low.
via The Verge
This didn’t get a ton of coverage on Wednesday, but it’s one of the first concrete statements we’ve seen from a major tech manufacturer that it is considering building new infrastructure in the US – all other reporting on this topic has either been unconfirmed by the company or has turned out to be something announced earlier. Samsung is fascinating in this context – unlike Apple and Amazon, it was never singled out for criticism during the campaign, and of course Trump himself uses a Samsung smartphone. But the company nevertheless seems keen to curry favor by building capacity in the US.