The technology sector had a rough year in Washington. In the face of growing political spending, increasing economic might and stumbling government agencies, tech got nearly nothing it wanted in 2014.
NSA reform died, as did copyright reform, and patent reform. Immigration reform? Kaput. And the recent election axed important politicians who were allied with the tech industry on certain issues. It was a dismal calendar cycle.
Technology is ascendant in many ways. Its leading firms have cash reserves in the tens of billions. Three of the four most valuable companies in the United States are tech firms. Growing tech companies are going public, and venture capital money is flowing into the sector by the acre-foot.
TechCrunch has noted in the past that just as politics is going tech, tech is going political. That has never been more true than today. Before we jump into a new year, a new Congress, and a new Senate majority, let’s spin our wheels backwards and take a look at just what tech didn’t get this year.
Throwing Good Money After Nothing
The recurring news that technology companies are spending increasing sums of dollars on their political operations is now something of a dull trope; oAdd Embedf course they are. But it is worth noting the scale at play here.
Campaign spending was near record highs for tech firms in the 2014 election cycle. Google spent more than $1.6 million in the 2014 campaign cycle and Microsoft gave more than $2.5 million in 2014 campaign contributions.
Other forms of money were at play, of course, with two technology-financed groups causing as much ruckus as they could. The Mark Zuckerberg-funded FWD.us program managed to flame out after spending $540,000 in 2014, just on outside lobbying firms. In total, the group is estimated to have spent tens of millions in support of a comprehensive immigration bill.* Its leader, Joe Green, was sacked. The project was an embarrassing, and very public failure.
MayDay PAC, another tech-money-backed effort to have some sway in the capitol managed to rival the implosion of FWD.us for profligacy. After a very public campaign to raise money, including paeans for donations from leading technology-focused venture capitalists, it managed to lose burn through $10.6 million. And it lost 6 out of 8 races it backed.
The Dismal Scorecard
To highlight the excellent, progressive, and legislatively competent 2014, let’s dig through the key issues that technology companies worry about, and often actively work on. And on which they got nothing done.
When the Senate passed an immigration bill with the support of tech in June of 2013, hopes were high that change could come to the policies that companies say inhibit their ability to hire and retain top talent. Despite fourteen Republicans crossing the aisle to pass the bill in the Senate, it was blocked by the Republican-controlled House. President Obama responded after the recent midterms by taking extensive executive actions on immigration, but the tech lobby said these reforms did not go far enough.
In a meager appeasement to those calling for high skilled immigration reform, the White House laid out plans that would help those who already have H-1B visas. People with these temporary high-skilled visas can now change jobs more easily, and their spouses have more access to employment authorization. A nice addition, certainly, but hardly enough in the eyes of tech, and there is little on the horizon.
Meaningful Reform Of The Country’s Mass Surveillance State
At the start of 2014, NSA surveillance reform seemed inevitable. Presidential review boards investigated the efficacy of the agency’s spying programs, and Congressional committees grilled top officials on the most controversial program, the collection of Americans’ bulk telephone metadata under Section 215 of the PATRIOT Act.
President Barack Obama called for an effective end to the program by June 2015 in a speech, calling on Congress to pass legislation that would reform the agency’s practices. The tech sector began to lose hope for comprehensive reform in the summer when the House passed a watered down surveillance reform bill.
In the lame duck Congressional session following the midterms, a stronger measure was introduced in the Senate but was narrowly blocked by a procedural vote. Due to sunset provisions on parts of the Patriot Act — law on which much surveillance is based — reform is sure to be an issue that reappears early in the next Congress.
But given the new political lay of the land in 2015, any measure would likely be toothless in comparison to the failed bill.
Tech Allies Falter In The Midterms
In a tight race against Republican challenger Cory Gardner, Democratic senator from Colorado and privacy advocate Mark Udall lost his bid for reelection. Udall’s loss was lumped together with a wave of Democratic incumbents who lost their seats amidst low public opinion of the Obama administration.
In Udall’s loss, Democrats did not lose just yet another blue seat, but a leader and important voice on NSA surveillance reform — one who said Edward Snowden should be allowed to return to the U.S. and supported measures that would curtail the oversteps of the PATRIOT Act. Given that other members of our Congress have variously said that Snowden arrested, charged with murder, and the like, his positions were pleasant outliers.
Also, Udall told Obama to “let the experiment unfold” when Colorado became the first state to legalize weed. Given that technology executives are noted for their affinity for the drug, it was again a tech-friendly comment. (For further evidence on that point, TechCrunch recommends the reader spends a day around a large technology office in San Francisco.)
Udall wasn’t the only candidate that tech wanted to win, who didn’t. Years before John Oliver brought the idea of an open Internet to his HBO show, Tim Wu coined the term “net neutrality” to explain that the Internet should be a fair and free space where all content is equal. But even after the wave of publicity stemming late night comedy shows caused more people submitted comments about net neutrality than any other issue in FCC history, Wu lost in his primary challenge for the New York lieutenant governor’s race.
Patent Reform: Operation No
Despite bipartisan support, Congress failed to bring patent reform legislation to the floor. Sen. Patrick Leahy, who led Congress in its attempt at NSA surveillance reform, abruptly dropped a bill that would have curbed patent trolls shortly before it went to a committee vote. Patent reform advanced slightly in the courts, with one ruling prohibiting patent trolls from “fee shifting.”
What was odd about the loss was how small the final distance seemed between the warring parties. In April, it appeared that a bill would be introduced after just one more delay, and that there was “broad bipartisan agreement in principle,” according to Leahy. But by May, the law was dead. After six tries to bring the legislation up for a vote, Congress surrendered to itself.
Here’s the key quote: ” Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal,” said the Senator. Well, then.
Microsoft And Ireland v. United States Government
Microsoft decided to challenge a domestic search warrant, served by the United States government, demanding the company turn over client data stored in an Irish data center. It isn’t clear if the person in question is a United States citizen or not, but the struggle has highlighted the growing complexity of domestic and international law in the cloud era.
The United States government has a simple position: Microsoft is a United States-based company, and therefore its warrant is legal, regardless of where the data might be housed. Microsoft, which operates in a number of countries through subsidiaries, and is spending billions to build out a global network of data centers, disagrees.
There is law in place like the Mutual Legal Assistance Treaty (MLAT), to facilitate sticky legal situations like this that cross borders. The United States government finds that law, in this case, unnecessary.
At risk is the following: If the United States government can command access to user data stored anywhere, in any data center around the world that a company based in the US owns, then no international user data is safe from quick access by the US government. Or, put another way, any US company that offers cloud based services to a global client base would not be able to protect its global client base from simple snooping by its own government.
Customers might go elsewhere. The technology industry — not to mention Ireland — has lined up behind Microsoft. But the company managed to lose in court a number of times this year. It isn’t clear if Microsoft can win at all.
If it can’t, as it failed to do in 2014, the cloud industry will be knocked back a few pegs. And since this cloud thing is quite the big deal, that would be a material headwind for all large tech companies that are making cloud plays, which is to say all of them.
Net Neutrality Goes From Bad, To Pretty Bad, To Maybe Better, To ‘Eh, 2015’
Net neutrality, the regulatory structure that supported an open Internet in which all content was equal, suffered a difficult setback in early 2014, when the FCC lost to Verizon in court. That loss ended the net neutrality regulations that had previously been in place.
The FCC put together a new net neutrality proposal, hoping to at once re-institute open Internet rules, and also better ground them in the law, ensuring that they would not fall down yet again. Enter the struggle.
In its first proposal, FCC Chairman Tom Wheeler recommended that net neutrality rules allow for, in some capacity, “paid prioritization,” a concept that became known as Internet “fast lanes.” It was a controversial proposal.
Instead of having the FCC create, and vote into place stern net neutrality proposals that would ban paid prioritization this year, the FCC has been forced to punt into 2015, and fast lanes themselves remain a potential plank. Many in tech and the White House support rules that would ensure that the Internet is classified as a utility. ISPs are vehemently opposed to the idea. Who will get more of that they want in 2015 is an open question.
But it seems these threats to the private sector are doing little to prompt Congress to act. They seem to be DGAFing just as much as the people who didn’t change their passwords after Heartbleed. Extensive media coverage of these hacks should have set the scene for legislative action, but instead the Senate did not even vote on a cybersecurity measure introduced by Sen. Dianne Feinstein.
Did Anything Go Right?
If there is any bright spot in this dismal year for tech policy, it’s the public’s response to net neutrality. Although we’re still in the thick of the debate, the outpouring of public concern about the openness of the Internet showed the very best of the influence tech can have on the Hill. It’s significant to note the power of lobbying the American people to get involved, not just throwing dollars at the politicians and their campaigns.
We also almost had enough support for meaningful surveillance reform. More than half of U.S. senators voted to bring the Senate measure to the floor, but still fell short of the 60 votes needed to achieve debate on the bill. This loss can without a doubt be chalked up to Washington’s gridlock. Earlier in the year with the threat of ISIS less defined and public outcry over the Snowden revelations still strong, the measure likely would have passed, but by December it lost its steam.
2015, Or Can The Backwards Riff Play Forwards?
The question before the technology industry will be whether the combination of a new Congress, a new Senate majority, and a non-election year can unite for real progress. There is some obvious tension in play. Tech companies are broadly in favor of net neutrality, for example. The majority in the next Congress in both chambers, for example, is not.
Immigration reform could be a sticking point as well. Tech firms want more H-1B visas. Lots more. The incoming Senate gods, however, are slightly more nativist than your average techie. The list goes on, especially when it comes to mass surveillance — an increasingly fractious global security climate may not help tech’s case.
Despite the uncertainty of an election year, tech had a chance to make real inroads on surveillance and immigration that it missed in 2014. These issues won’t go away in 2015, but some of the Democratic majority that would have been more favorable to tech on these policies will.
With their own bully pulpits, and all the money you could dream of, you would think that tech would be better at politics.
*Note: This post was updated to clarify the amount Fwd.us spent in 2014.