Tech's power shifts as Obama fades to Trump
BY ALI BRELAND AND DAVID MCCABE - 01/01/17 06:00 AM EST 1,227
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Silicon Valley’s influence and power in Washington has grown in the Obama years.
The question is whether that growth will be curtailed with Donald Trump’s election.
Internet companies have stormed onto D.C.’s lobbying scene, opening up in-house shops and hiring established lobbyists to gain influence.
Google, Amazon and Facebook increased their spending on Washington lobbyists over the last eight years and are closing the gap overall with the telecommunications industry, an older power in the capital.
In 2008, the top three internet lobbying spenders spent over $26 million less than the the top three telecom equivalents. Though fourth quarter spending hasn’t been released yet, it’s not likely that gap will close.
This has given the companies a bigger seat at the table, and more influence behind the scenes.
“The reality is that if you’re not explaining yourself to policy makers, you’re not going to have the policies in place that allow innovation to flourish,” said the Internet Association’s Noah Theran. His organization represents Google, Twitter and Amazon.
Telecom and cable corporations who had previously held the alpha role in lobbying have taken notice.
“There’s definitely tension between Silicon Valley and the old power structures,” said a communications industry insider. “I think there’s a feeling — a legitimate feeling that this administration and the FCC bend over backwards for Google in particular.”
The tension wasn’t always present. Silicon Valley at one point had famously dismissed Washington, D.C., assessing that it could be the new capital of change in the U.S.
That attitude shifted as the tech industry saw a greater need to work with Washington. A touchstone was the Justice Department antitrust suit against Microsoft.
After having to appeal an initial order to break into two separate business, Microsoft quickly learned that it needed to have a Washington, D.C. presence if it wanted to preemptively ease regulatory problems later on.
“Any new industry goes through the growing pains of how and when and why to engage with policy makers and the rapid growth of the internet industry is no different,” said Theran.
Trump’s presidency may change how the battles play out for the next four to eight years, however.
Trump has had a rockier relationship with some tech companies, including Apple. He at one point during the campaign suggested a boycott of the company’s products over its encrypted phone.
The president-elect expressed frustration that Apple did not want to create a backdoor that would allow the FBI to access one of the attacker’s phones.
The dispute became rallying point on encryption for tech companies — Apple rivals, Microsoft and Google voiced support for the Cupertino, Calif. based company’s decision to not aid the FBI.
Despite this fault-line, Apple CEO Tim Cook, Google CEO Larry Page and Microsoft CEO Satya Nadella were at the president-elect’s meeting with other major tech leaders in mid-December. In the meeting Trump extended an olive branch to some of the companies he had previously battled with.
"There's nobody like you in the world," Trump toold the tech executives in the meeting. "There's nobody like the people in this room. And anything we can do to help this go along, and we're going to be there for you."
Several of Trump's children, along with his son in law, Jared Kushner, were in the meeting, which included tech leaders like Facebook COO Sheryl Sandberg, IBM CEO Ginni Rometty and Amazon CEO Jeff Bezos.
Obama’s relationship with tech and internet companies has been more consistent.
The president was in step on many issues with tech companies, including net neutrality, cable set top boxes and broadband privacy. His stances on these measures have irked telecom interests.
“Everybody is amazed by Google’s sort of cozy relationship with the White House,” said one communications industry insider who asked to remain anonymous. “They don’t even try to hide it.”
Telecom companies who previously only battled consumer and advocacy groups at the FCC, now have to face internet companies with White House influence, pushing their agenda as well.
They also see a greater White House influence over the Federal Communication Commission.
“The influence over the White House over the FCC is greater now than it used to be,” said one longtime industry insider.
Because the FCC can pass regulations easier than Congress can move legislation, it’s an attractive spot for companies to achieve their goals. That’s made the FCC the battleground for fights over net neutrality, broadband privacy rules and set top box regulations.
During the Obama years, those fights generally kept internet companies happy and telecom, cable and broadband companies less than pleased.
Even though Silicon Valley’s relationship with Trump has been thawing, the president-elect’s transition appointments suggest that internet companies won’t have the same benefits they did in the Obama years.
That means telecom, broadband and cable companies may be on the upswing.
Trump appointed a trio of experts from the American Enterprise Institute (AEI) to his FCC landing team: Roslyn Layton, Jeffrey Eisenach and Mark Jamison. All of them have railed against FCC proposals backed by FCC Chairman Tom Wheeler.
Republicans will also have a majority on the FCC and Commissioner Ajit Pai, who many expect to take over as chairman when Wheeler steps down in January, has opposed the Obama-era measures as well.
Tech’s old guard is ready to take advantage of what could be a more favorable political climate.
AT&T and Verizon, the two major wireless carriers in the United States, spent roughly $16 million and $11 million on federal lobbying last year, respectively. Comcast spent more than $15.5 million in Washington in 2015.
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