Policy

Washington's tech issues provide lobbyists an opening

Fifteen years after "a series of tubes," Congress knows it's still struggling with tech, and the industry's lobbyists are filling the gap more than ever.

Facebook CEO Mark Zuckerberg appears on a screen behind a lawmaker's empty chair as he testifies remotely during Senate hearing.

Facebook CEO Mark Zuckerberg testifies remotely during the Senate hearing in January.

Photo: Bill Clark/Getty Images

In 2006, late Alaska Sen. Ted Stevens, who was then chairing the committee that oversees tech policy, famously compared the web to "a series of tubes" during a debate over net neutrality. Stevens suggested the internet could get hopelessly clogged with information, and appeared to refer to an email as "an internet." Late-night derision ensued, cementing the view that lawmakers are too out of touch to be in charge of an industry defined by constant innovation and disruption.

In that year, the lobbyists from AT&T, Comcast and other telecom companies whose point Stevens was mangling were Washington's main tech lobbyists. Google, Amazon and Apple among them spent less than $3.5 million that year to influence federal policy. Two-year-old Facebook was still six years away from going public and hadn't even gotten in on the game. Speed forward to 2020, and those four giants spent nearly $54 million on lobbying, with Facebook alone responsible for nearly $20 million — likely none of which counts the companies' legal bills.

The reasons for this spending surge are as varied as the threats the companies face and the opportunities they hope to seize, but one of them is the quest to take advantage of lawmakers' ignorance, or busyness, to advance their company's agenda.

"They certainly have technical expertise that we do not on the outside," Jane Chung, big tech accountability advocate at consumer group Public Citizen, who recently authored a report on big tech's lobbying, said of the companies. "They use that expertise selectively and choose to highlight areas of the technology that benefit whatever narrative they are peddling at the moment."

Ask lobbyists about their strategy, and most of the time, they'll say it's to "educate lawmakers about the issue." While it's true Congress does need outside experts to inform lawmaking, that's usually K Street speak for telling Congress that a particular bill will destroy a beloved product, or that a narrower legal definition would be much more accurate when it would also be much easier for a company to deal with. Lobbyists routinely plant questions for rivals at hearings, suggest bill text and seek exemptions to get out of regulation, much of it under the guise of helping Congress craft better policy.

Lobbying goes on in every industry, far beyond tech. But the quickly-evolving, detailed nitty-gritty of the tech sector makes it ripe for outside influence, particularly when Congress is desperate to figure out something to do on privacy, competition, content moderation and more. Big topics — including autonomous vehicles, artificial intelligence, space exploration and cryptocurrency — are just on the horizon.

And there is apparently plenty of education that still needs to be done. Just since the 2018 Cambridge Analytica hearings, long after the "series of tubes" speech, lawmakers have used precious hearing time to ask Mark Zuckerberg how he makes his money if Facebook is free, to suggest WhatsApp sends emails, to wonder if Google intervenes in individual searches, to question CEOs about companies they don't even run or to simply ask the same questions their colleagues asked an hour earlier.

'Brain drain'

In some ways, the knowledge gap seems an outgrowth of Congress's culture. Senate Majority Leader Chuck Schumer famously still uses a flip phone, and he's not alone. Lawmakers are far more likely in hearings to refer to their kids' or grandkids' internet usage than to ask about the cloud. The challenge of defining complicated concepts such as digital platforms, AI or data sale — even for experts — has famously slowed down legislation and regulation, sometimes by years. According to a 2017 survey of senior congressional staff, just 15% said they were very satisfied with the knowledge, skills and abilities of the staff around them, and only 6% said they were very satisfied with the tech infrastructure.

Many lobbyists claim that they bring genuine knowledge that Congress and the executive branch lacks, either because elected officials have more political than technical expertise or because government salaries aren't too attractive to potential staffers with tech experience.

At the end of April, House Majority Leader Steny Hoyer and Democratic Caucus Chair Hakeem Jeffries called for a 20% boost to House salaries and expenses, lamenting "brain drain and accelerated staff-turnover [that] impact our ability to effectively serve the American people."

Zach Graves, who has studied Washington's technological expertise as head of policy at the Lincoln Network, said "the historic arc of congressional staff capacity has been pretty strongly downward."

"Your top tech antitrust lawyer is going to be able to make a lot more money working for Facebook or Google than working on the House Judiciary Committee," Graves said. He and others did, however, praise the sophistication of the panel's recent probe of competition by Facebook, Google, Apple and Amazon, despite the competition subcommittee's Democrats only having four lawyers and one technologist on staff.

Into that void step the very lobbyists, company officials, trade groups, astroturf campaigns, industry-allied researchers and others who choose to work for the companies. Congress, executive agencies and even law enforcement all get the "let us enlighten you" treatment. Enterprise companies urge that privacy laws should focus on the most sensitive data and leave the average productivity app more or less alone, for instance, while social media platforms will do everything they can to exempt ad targeting from regulation. (In the senior staff survey, access to quality, non-partisan expertise was another sore spot, with less than a quarter of staff very satisfied.)

Sometimes these lobbyists even head into government or campaigns, as when a former Apple lobbyist, Cynthia Hogan, helped Joe Biden search for a vice president. The companies have not been shy about bringing on board those with ties to the administration either. Most recently, for example, Amazon hired Ricchetti Inc., which is run by the brother of top Biden adviser Steve Ricchetti.

"When I was in the business, we thought we were doing the Lord's work," Steve Billet, a professor at George Washington University and former government affairs official at AT&T, told Protocol, noting that lawmakers' legal staffers may be responsible for a wide range of issues of national importance.

Staffers "cover everything from pharmaceuticals to telecommunications to energy," Billet said. "They really don't have a lot of time to become a real expert in any one of them."

He added that lobbyists have "an enormous advantage" in the face of that knowledge gap, but said that he always tried to be honest with staffers about what other lobbyists would say, and the strengths and weaknesses of their arguments, if only to ensure staffers would continue to come to him.

Sending feedback

There's little doubt that lawmakers have put together completely illiterate bills in the past that could benefit from even self-interested lobbying, and that additional spin is unnecessary to convince many lawmakers to avoid whacking American businesses too hard. Consumer groups lobby too, and plenty of lawmakers listen to their pleas to ignore everything the big companies say.

Staff, often on their own time, have also tried to catch up, and members of Congress and agency officials have become regular visitors to conferences where they can mix with Silicon Valley types. There are pockets of great expertise on the Hill, with some lawmakers and committee staff having delved into the issues as they became more prominent, Chung and Graves both noted. Much of the companies' Washington spending also goes to political donations and the hiring of those who are influential with lawmakers rather than technologists.

Still, government officials concede that they're frequently scrambling to get up to speed on new topics, and they rely on the very industries that would be most affected to tell them when laws and regulations go too far. The lawmakers will release draft texts to get responses from "stakeholders and industry," inviting lobbyists to present their views. Many efforts to boost in-house technological fluency have failed, such as a 2019 attempt to revive the old Office of Technology Assessment. Lobbyists, for better or worse, are a key part of the legislative bargaining process, so long as lawmakers continue to be stumped by tech.

And it seems that the government will, indeed, continue to be stumped. In April, during video testimony by acting Federal Trade Commission Chair Rebecca Slaughter, her feed broke up, prompting members of the House panel holding the hearing to suggest she was muted, using device data, "just holding really still" or having broadband issues. (Indeed, it turned out to be ethernet trouble.)

The teleconference glitch was standard fare for the pandemic, but once she was back, Slaughter got a question from another lawmaker, who, after apparently forgetting to unmute himself, urged her to commit to incorporating economic analysis into any rulemaking.

"Absolutely," Slaughter said. "Input from the subject matter experts has always been and will always be a very important part of the commission's work."

LA is a growing tech hub. But not everyone may fit.

LA has a housing crisis similar to Silicon Valley’s. And single-family-zoning laws are mostly to blame.

As the number of tech companies in the region grows, so does the number of tech workers, whose high salaries put them at an advantage in both LA's renting and buying markets.

Photo: Nat Rubio-Licht/Protocol

LA’s tech scene is on the rise. The number of unicorn companies in Los Angeles is growing, and the city has become the third-largest startup ecosystem nationally behind the Bay Area and New York with more than 4,000 VC-backed startups in industries ranging from aerospace to creators. As the number of tech companies in the region grows, so does the number of tech workers. The city is quickly becoming more and more like Silicon Valley — a new startup and a dozen tech workers on every corner and companies like Google, Netflix, and Twitter setting up offices there.

But with growth comes growing pains. Los Angeles, especially the burgeoning Silicon Beach area — which includes Santa Monica, Venice, and Marina del Rey — shares something in common with its namesake Silicon Valley: a severe lack of housing.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

While there remains debate among economists about whether we are officially in a full-blown recession, the signs are certainly there. Like most executives right now, the outlook concerns me.

In any case, businesses aren’t waiting for the official pronouncement. They’re already bracing for impact as U.S. inflation and interest rates soar. Inflation peaked at 9.1% in June 2022 — the highest increase since November 1981 — and the Federal Reserve is targeting an interest rate of 3% by the end of this year.

Keep Reading Show less
Nancy Sansom

Nancy Sansom is the Chief Marketing Officer for Versapay, the leader in Collaborative AR. In this role, she leads marketing, demand generation, product marketing, partner marketing, events, brand, content marketing and communications. She has more than 20 years of experience running successful product and marketing organizations in high-growth software companies focused on HCM and financial technology. Prior to joining Versapay, Nancy served on the senior leadership teams at PlanSource, Benefitfocus and PeopleMatter.

Policy

SFPD can now surveil a private camera network funded by Ripple chair

The San Francisco Board of Supervisors approved a policy that the ACLU and EFF argue will further criminalize marginalized groups.

SFPD will be able to temporarily tap into private surveillance networks in certain circumstances.

Photo: Justin Sullivan/Getty Images

Ripple chairman and co-founder Chris Larsen has been funding a network of security cameras throughout San Francisco for a decade. Now, the city has given its police department the green light to monitor the feeds from those cameras — and any other private surveillance devices in the city — in real time, whether or not a crime has been committed.

This week, San Francisco’s Board of Supervisors approved a controversial plan to allow SFPD to temporarily tap into private surveillance networks during life-threatening emergencies, large events, and in the course of criminal investigations, including investigations of misdemeanors. The decision came despite fervent opposition from groups, including the ACLU of Northern California and the Electronic Frontier Foundation, which say the police department’s new authority will be misused against protesters and marginalized groups in a city that has been a bastion for both.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Enterprise

These two AWS vets think they can finally solve enterprise blockchain

Vendia, founded by Tim Wagner and Shruthi Rao, wants to help companies build real-time, decentralized data applications. Its product allows enterprises to more easily share code and data across clouds, regions, companies, accounts, and technology stacks.

“We have this thesis here: Cloud was always the missing ingredient in blockchain, and Vendia added it in,” Wagner (right) told Protocol of his and Shruthi Rao's company.

Photo: Vendia

The promise of an enterprise blockchain was not lost on CIOs — the idea that a database or an API could keep corporate data consistent with their business partners, be it their upstream supply chains, downstream logistics, or financial partners.

But while it was one of the most anticipated and hyped technologies in recent memory, blockchain also has been one of the most failed technologies in terms of enterprise pilots and implementations, according to Vendia CEO Tim Wagner.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Fintech

Kraken's CEO got tired of being in finance

Jesse Powell tells Protocol the bureaucratic obligations of running a financial services business contributed to his decision to step back from his role as CEO of one of the world’s largest crypto exchanges.

Photo: David Paul Morris/Bloomberg via Getty Images

Kraken is going through a major leadership change after what has been a tough year for the crypto powerhouse, and for departing CEO Jesse Powell.

The crypto market is still struggling to recover from a major crash, although Kraken appears to have navigated the crisis better than other rivals. Despite his exchange’s apparent success, Powell found himself in the hot seat over allegations published in The New York Times that he made insensitive comments on gender and race that sparked heated conversations within the company.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Latest Stories
Bulletins