There will be no shortage of problems, and no shortage of advance from Silicon Valley on them
In the past decade, Silicon Valley has surpassed Wall Street as the leading lobbyist spender, with five companies – Google, Facebook, Amazon, Microsoft, and Apple – putting down $49 million in 2015, compared to just under $20 million for the biggest Wall Street banks, according to Bloomberg News. That money is about evenly split between both parties, in fact, for the Google political action committee (PAC).
Additionally, the revolving corporate-government door is swinging hard as people transitioned between the Obama Administration and the private sector over his 8 years in office. This sometimes helps and sometimes hurts official Washington, though. The community expects access privileges, and to have its concerns heard from sympathetic figures who understand their work.
But the government, in turn, is sometimes seen to blindsides them when policymakers kill mergers, make requests of companies that would compromise their privacy guarantees to customers, or ask for quiet collaboration that could be embarrassing if uncovered. (As it so often is.)
With the U.S. election now over and the president-elect leading a transition team ahead of the January 2017 swearing-in, here are some of the outstanding issues coming up to their desk.
ICT was mostly for Clinton
Clinton dominated the Silicon Valley set this election cycle, though not to the same extent as Obama did in years past. (By the end of October, she’d received $7.7 million, versus less than half a million dollars for Trump.)
This was despite initial ambivalence in the sector about her policies. As noted by t-gaap.com, Clinton opposed lowering the repatriation tax on ICT companies’ profits, and was not in favor of cutting the corporate tax rate. (Though, she did offer tax breaks for startups.) Trump, though offering Apple more tax flexibility and a lower corporate tax rate, was more vocal throughout the election about penalizing companies who shifted manufacturing overseas and on imposing new tariffs.
That kind of talk did not earn him much support, though it could have been there. Indeed, Open Secrets data on electronics and communications companies’ contribution profiles to Republicans or Democrats shows some pro-GOP leanings. Microsoft, for instance is about evenly split, albeit favoring Democrats. And Cisco, Qualcomm, and Oracle all donate a lot more money to Republicans. (Marco Rubio, in fact, was the most favored Republican candidate at the start of the primaries.)
But then when one looks at Facebook, Apple, Google, and Amazon, the totals favor Democrats. Most top donors are reliably pro-Democratic. The most notable exception this cycle was Peter Thiel, co-founder of PayPal, who strongly backed Trump financially. Trump received far less money than even Mitt Romney did in 2012 from Silicon Valley, proof of the industry’s reluctance to embrace his candidacy.
Let’s make a deal
The president-elect will face several pressing issues Silicon Valley cares deeply about. Perhaps the biggest, money-wise at least, is the proposed AT&T and Time Warner merger. Donald Trump vowed to oppose the $85 million deal if elected. Clinton, though expressing skepticism of the deal, was much less forthright in her comments, saying, “I will expect the government to conduct a very thorough analysis before making a decision.”
The deal is important because consolidation is the norm for the US telecommunications sector, moving backs towards the kind of market structure last seen in the 1980s on the eve of the “old” AT&T’s breakup. Comcast and AT&T, of course, are looking forward to federal approval even though other media companies and service providers are not thrilled about the deal.
As DSL Reports has noted, the contrast between the two candidates poses a touch choice for industry executives who, as usually solid Republicans, were not comfortable with Trump’s politics but are more hesitant on Democrats due to the fact they tend to support net neutrality, oppose big mergers, and are more liberal on redefining technical standards to favor smaller players.
They have more faith they can reach a deal with Clinton, though, as her record shows a willingness to do that and not make radical departures from stated past positions. AT&T’s former top lobbyist, Jim Cicconi, endorsed her before retiring from the company, for instance, despite years of Republican political activism.
Her noncommittal response was, at least, broad enough they could hope for a deal. Interestingly, AT&T, according to Open Secrets, tends to favor Republicans over Democrats for contributions, 60-40. Time Warner, though, favors Democrats by a huge margin.
Truly, a bipartisan merging of the minds.
The next president will also be presented with a range of options for countering the new “information warfare” that took up so much time and attention this news cycle, whether in the form of allegedly state-sponsored hacks to steal emails or coordinated campaigns to access federal employee databases. The former will require a very delicate approach, and not simply because of how retaliatory cyber attacks could escalate to assaults on infrastructure just to send a message.
The more nebulous issue is how to counter fake news without harming the real news, and this effort will undoubtedly require changes to how content policing and advertising policies work, as these currently create perverse incentives to spread misinformation for fun and profit.
The candidates did not really engage with cyber security issues, beyond offering bromides of support to shutting down extremist sites, ramping up collection efforts online against terror suspects, and the encryption debate. With a panoply of terrorist threats, both domestic and staging from overseas, it is likely that the current administration’s policies with be maintained, and also expanded.
Including those that have led to a lot of daylight between ICT majors and federal agencies, such as building backdoors to systems that would subordinate users’ privacy to speed along investigations. It is unclear what, exactly, Trump’s plans were or are in this regard. Clinton’s, in contrast, reflected the consensus of several key critics of those measures, notably Apple’s Tim Cook.
Indeed, people working on ICT projects in the government might be leaned on to say less about their work, since even a trail of breadcrumbs on LinkedIn can lead to the naming of a secret project. The prospect of further compromised personnel files or proliferation of top secret hacking tools is a frightening one because the impact will not ultimately be measured in terms of little breaches but long-term penetration of institutions using that data, both biographical and technical.
Money, though, has never been very forthcoming for such unsexy security work. Nor political will in the form of high-profile appointees with tough mandates. There has not been any real indication this will change, or that the will is present to redress other vulnerabilities in national infrastructure, including the way we hold our democratic elections.
Lastly, in terms of human resources, the candidates different on an important but often overlooked aspect of the ICT sector: skilled worker visas to attract foreign talent. Trump’s policies would limit these, while Clinton sought an expansion of H-1B visas.
The impact of this policy decision will, especially, be felt for years to come and impact foreign companies and universities deeply, too.