The 463: Inside Tech

Intel Insiders Talk Change

I recently wrote about Intel's new policy lead in DC, Peter Cleveland. He joins Intel general counsel Bruce Sewell in an interview with the National Journal's Winter Casey and talk about Intel's current state of policy play, the eternal trade association merger question and what to expect post-election. Some excerpts....

Q: It doesn't seem like any of the tech industry's policy desires -- such as the push for more H1-B visas for skilled workers, the research and development tax credit, trade authority, or broadband access -- are going to be a high priority in either a John McCain or Obama administration. Do you agree?

Sewell: Nothing is going to happen for the first -- I don't know how long -- while people sort out the financial crisis. We are going to be mired in this for some period of time when the new administration, whomever it is, takes over. Getting things on the agenda is going to be a challenge.... If you accept the picture you have just painted for us, there are two things you can do. We can take our marbles, go back to California, stick our head in the sand and hope that everything is going to be all right someday, or we can try to make a bigger investment -- both in terms of time, money, resources -- in telling the story.

Q: As companies are looking to tighten up financially in this weakening economy, will more technology associations merge? And will trade associations lower their fees?

Cleveland: You have heard about talks between [the American Electronics Association] and [the Information Technology Association of America] -- I am not sure where they stand. [The Information Technology Industry Council] has just put a big person in place. I would expect these types of discussions to continue given the overlap between TechNet, CEO Technology Council, and ITAA and AEA and ITI -- there are a lot of acronyms out there -- and Intel is involved in a lot of these trade associations.

Sewell: I think it is different for each trade association. I think we have already seen trade associations that are willing to negotiate in their fees at this point and are willing to say, "We would like to keep you on board, but if you want to drop to a lower membership level that's OK." So there is more ability to negotiate, there's more flexibility in fees, but I don't think there is a common policy across the trade associations to either drop their fees or to change the way in which they charge the fees.... There is consolidation in the tech industry, so not surprisingly there will be consolidation in tech associations. I think it is likely to be the case that we will see some consolidation.

Q: Are you funding anything in Washington to support new growth areas for Intel?

Cleveland: Because the playing field here is going to change a little bit, we want to be able to pounce in terms of adjustments in what happens in the House, Senate and the new administration. John McCain might have a different view on immigration, something that's more moderate than his Republican Party counterparts, as is the case with Obama and his innovation agenda as well.

There is going to be a change in the players. And the fact that, let's say hypothetically Democrats prevailed and there was a Democratic administration. You won't have had that since '92 -- 16 years -- that might cause some adjustments in some of the issues that we cite. You have to be ready.

Big Changes Afoot

While rumor has it that the economy may not be doing so hot, for the time being, at least, plenty of good people continue to get good jobs in our little happy niche.

The big inside baseball gossip item of the week was that Dean Garfield, the MPAA's chief strategic officer, grabbed the Information Technology Industry Council (ITI) top gig. Garfield is replacing the well-respected Rhett Dawson, who helped make ITI a strong DC lobbying force for the industry.

Andrew Noyes asks Garfield the obvious question:

Q: What do you say to those who question a content industry executive's appointment to a leadership post at a high-tech trade group?

A: I spend lot of time being creative and one thing I know is that in a time of change, the old rules don’t always work and the old alliances don’t always work. They remain valuable but you have to work hard at building new relationships. Sure, we may have had our policy differences on various issues but I've tried to instill a belief in being pragmatic and not making it personal. As time goes on, trust that my interest will be consistent with stakeholders at ITI.

Also announced this week, was the big move from Senator Diane Feinstein's top aide Peter Cleveland to Intel as their new VP of global public policy. Politico notes:

A 17-year Hill veteran, Cleveland has worked for the Democratic senator from California for four years, two as legislative director and two as chief of staff.

He’ll be joining a company working to raise its Washington profile.

Since May, Intel has been running an inside-the-Beltway ad campaign, highlighting its $40 billion investment in stateside capital and research and development projects. The company has also been touting the fact that it manufacturers three-fourths of its chips domestically even though it earns 80 percent of its revenue outside the country.

Joining Cleveland in the DC office is former FTC chair Deborah Majoras' Chief of Staff Brian Huseman. I got to know Brian when he was at the FCC and was always impressed by his boss's tech savvyness. I'm sure some credit should go to Brian. He is also a nice guy that I like even more because he acknowledged that this little blog tipped him to the fact that Intel might be hiring.

Last but absolutely not least is the move by Jamie Hedlund from Yahoo! to the Consumer Electronics Association as their new VP of regulatory affairs responsible for all things FCC. Jamie is a great guy who will be very successful at CEA. We at 463 wish him well in his new gig.

Congrats all.

(photo by subliculous)

The ITAA/AeA Thing

To little surprise, the ITAA and AeA yesterday singled that they are in merger talks.

To my mild surprise, this intent got a pretty decent pick-up by the media yesterday. The LA Times, WSJ, and even Valleywag wrote about it online. So did Washington Technology, ComputerWorld and other usual suspects.

The "Alphabet Soup" tech trade group problem has been a recurring theme on these pages. See here and here for two posts that provide history and opinions from 2005 and 2007, respectively. Looking back on those posts hits me in two ways. One is that beyond what Phil Bond has been able to do at ITAA in creating some first steps toward consolidation not much has changed since that 2005 post (and not much had changed well before that). And, two, wow, I was writing this thing in 2005?

Of course, the media's attention yesterday was on the most obvious need of streamlining tech's voice to policymakers so we can be more effective in the rule making and regulatory process. And, of course, this merger would be a helpful step in this process.

However, I can't help but focus on the "company dues" part of this quote from AeA's CEO as quoted in the ComputerWorld piece:

"Christopher Hansen, president and CEO of the AeA (formerly known as the American Electronics Association), said tech companies have been 'a little frustrated' with the duplication. Tech firms 'have to pay dues to too many organizations and realize that their voice has become diluted,' he said."

Let's be realistic. Companies of all stripes (not just tech firms) are self-motivated creatures when they join associations. The first priority is "what can I get out of this to help my company." Certainly attaining policy goals are essential. But, perhaps it is also giving a CEO a bigger platform; maybe it's PR opportunities; it could be access to other companies and new customers; and, lots of times its focused on getting air cover from a bigger group so you don't have to talk about a sensitive, but important, subject yourself. All of this is the first level of motivation.

The next more sophisticated level is centered around control. If a company (or a select few companies) have tacit control over what seems to be a much bigger group then they have every motivation to make sure that this group, the control and benefits derived from it live on.

Yes, companies want to have a positive impact on public policy that benefits the industry as a whole but they want to make sure that this goal is attained on their specific terms. Human nature.

Therefore, if a group gets too big, diffused or unfocused, then a member company chances of realizing the goals in those first set of motivations lessens and it has very little chance of gaining any control (subtle or not).

This is where the that mention of dues comes into play.

Companies can only justify so many memberships to associations. Therefore, my bet is that it will the bottom-line budget factor that will have the greatest impact on taking letters out of the tech association alphabet soup then secondary policy motivations. Of course, this will have secondary impact that will impact the diffusion issue.

Also remember that when talking about ITAA and AeA, we are dealing with two groups that do a hell of a lot more than the "lobbying" than the media know them almost exclusively for. In reading the joint release on this announcement, the following non-lobbying functions are prominently mentioned:

• business and capital development
• business services
• elite networking
• market forecasting
• standards development
• research
• procurement policy

Certainly, merging and optimizing these functions could carry just as much value or more than the more publicly prominent "lobbying" integration.

Thus, ITAA + AeA = good. And, Phil Bond deserves more kudos for his public leadership on the issue. But there is a lot more to this than lobbying efficacy.

(photo by lottery monkey)

From Attack Dog to Music Blog

Former (current?) Hillary Clinton communications director Howard Wolfson has a new blog.

He is using it as an unabashed platform for promoting his music likes. (As opposed to the more abashed me).

BTW, Howard, if you like Grizzly Bear, check out this Girl Talk remix. And, you also have a kindred blogger spirit in the venture capitalist Fred Wilson.

Newt's Valley Guy

David Kralick works for Newt Gingrich in Silicon Valley and attracts strange artificial lighting wherever he goes. (photo by Chistina Koci Hernandez for The Washington Post)

The Post has a piece today about Newt Gingrich's emissary to Silicon Valley. It's written by a Bay Area native with an engaging, evocative style and doesn't spare many clichés about life and work between San Jose and South of Market. (Neither apparently does the Post's photo editors. See above).

The lede:

Here, he's from another planet. Here in Silicon Valley, David Kralik is, let's face it, some strange import. That's why he's attracting such buzz one recent afternoon inside Buck's, the legendary eatery, while lunching on a pulled-pork sandwich.

Jamis MacNiven, Buck's owner, plops himself down and blurts out: "So you're the guy that works for Newt the Snoot!"

Yep, that's Kralik. A lifelong Republican in the land of liberal Democrats. Who relocated from uptight, Brooks Brothers Washington. And works for Newt Gingrich.

Bucks really needs to be taken out of the Let's Go Silicon Valley Guide for Media. And, OMG a Republican in Silicon Valley! Get me my binoculars, ma!

But, there are good amounts of interesting anecdotes in the piece -- especially centered around how to apply tech to solve big government problems....

...Says Peter Leyden, the former editor of Wired magazine who heads the New Politics Institute, a think tank focusing on technology's impact on Washington: "There's an emerging sense that both worlds need each other. Think of it this way: The scale of the problems that the world faces -- globalization, global warming, global terrorism -- can't be solved without these two hubs cooperating with each other."
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Kralik knows all of this full well. On a recent six-hour flight from Washington to the Valley, he drafted a three-column chart. "The world that works." "The world that fails." "Making government from a world that fails to a world that works."

Kralik puts the U.S. Census Bureau in the world-that-fails column. After spending more than $150 million on handheld computers to count everyone in the country, the Census Bureau announced a few weeks ago that it will scrap that program and hire 600,000 temporary workers and go back to the same way that it's counted people since 1790: with paper and pen.

"You've got to be kidding me, right?" says an incredulous Kralik. "Why can't we get together the brightest minds at Google, at Apple, at whatever companies here in the Valley, and figure out a more high-tech way of counting our citizens?"

Intel Begins Big New DC Push

From RollCall today...

Intel Corp., one of the country’s largest and best-known high-tech manufacturing outfits, today is launching an effort to refurbish its brand on Capitol Hill. The two-pronged campaign involves a major inside-the-Beltway advertising push and, ultimately, a transformation of its operation here with a new chief lobbyist.

Another big tech company doubling down in DC. This helpfully supports my ramblings from yesterday.

(Subscription needed to see the full article).

(photo by ricky romero)

Dem FCC Chair Guessing Game

The good and connected Brooks Boliek at the Hollywood Reporter makes some educated guesses on who the next FCC Chair would be if either Senators Clinton or Obama are elected president.

For Clinton, Boliek hears that...

Susan Ness is the name bandied about among the tele-cognesceti. Ness, a former commissioner, has strong ties to the Clintons. She was a fundraiser and former campaign worker for President Clinton and has continued in that role actively campaigning for the senator. She has been named a "Hill Raiser" for raising more than $100,000 for Clinton and has been active in her campaign.

As for Obama...

...his campaign and Senate staffs are dotted with people who have close ties to the FCC. Connecting those dots, however, is Julius Genachowski, a former aide to Hundt and Kennard and a close friend of Obama's since they attended Harvard Law School....

Aside from commission experience, Genachowski was an executive at Barry Diller's IAC/InterActiveCorp. and a managing director at digital media specialist Rock Creek Ventures and is a special adviser to the private-equity group General Atlantic. (Ed note: Genachowski was Obama's representative at this year's Congressional Internet Caucus conference.)

"He got a lot of people interested in him early on," said Blair Levin, an analyst with Stifel Nicolaus who was a top adviser to Hundt. "There are a lot of people there that would be terrific choices, just as there are in the other campaigns."

Levin has also been mentioned as a possibility, but he dodged the question when asked if he wanted the job.

Boliek also mentions: Obama policy director Karen Kornbluh, who also worked at the commission under Hundt and Kennard; Don Gipps, an FCC veteran who was former Vice President Al Gore's domestic policy adviser and is now a top executive at Level 3; and, Larry Stcikling, a former chief of the FCC Common Carrier Bureau and an Obama campaign worker.

Facebook is About to Get Much More Policy Oriented

You may have seen today that Facebook hired Google executive Sheryl Sandberg to be the social network's COO.

There is notable relevance to this move in these tech policy parts. First, in the press release announcing the move, Facebook noted that she would be in charge of "public policy". This isn't some empty throw-on responsibility for Sandberg. It's safe to predict that it won't be long before Chief Privacy Officer Chris Kelly has some extra help and we're not writing about the company making a single hire in DC.

First off, before she was at Google, she was Chief of Staff to the U.S. Treasury Secretary under President Bill Clinton. She carried this DC experience to Google where she was one of the few executives there openly and actively involved in politics. For example, she is a big supporter of Hillary Clinton and has frequently served as host to policy makers on their visits to the Googleplex.

Sandberg should be able to serve as a forceful voice for policy engagement at Facebook. She's certainly seen the movie before at Google.

Sandberg will also likely carry over a philanthropic bent to her new job. She was instrumental in starting Google's foundation and rolls in the Davos-elite circles. (You can envision Bono getting a Facebook page soon).

I'm Losing My Edge

The opening lyrics to LCD Soundsystem's "Losing My Edge" (above) are:

Yeah, I'm losing my edge.
I'm losing my edge.
The kids are coming up from behind.
I'm losing my edge....
...But I was there.

This is how I feel when reading the new-ish Capitol Valley blog. It's written by two guys. One in the Bay Area. On in DC. The DC guy is almost three years out of college.

Anyway, they have the time and energy to power off 13 posts in the last few days (versus zero here). Most were tech policy related. They are semi-live blogging the FCC hearing today.

And, while I can't say that I fully agree with the tenor of many of the posts there (or some of the purported facts), it's good to have idealistic and over-the-top energetic company in this tech policy blog land.

They are also providing content that I either can't or won't. I've been involved with tech policy since 1996. This means that I know a lot and a lot of people. But, it also means that I am insider, for better or worse, and, therefore, am not going to cut my nose off to spite my face by writing either about scoops that I have access to or opinions that could damage relationships.

On the other hand, the Capitol Valley guys feel free to take Facebook to task for "ignoring Washington at its peril."

The kids are coming up from behind.
I'm losing my edge....
...But I was there.

Silicon Square; Dogs and Cats Living Together

The Post's Jeff Birnbaum today uncovers that the leading tech companies have clustered their DC offices around one small park downtown:

(Franklin Square) -- which is bounded by 13th, 14th, K and I streets NW -- boasts the capital's highest concentration of tech lobbying offices.

One industry wag has dubbed it Silicon Square as a result.

The large office buildings around the tree-heavy park contain a who's who of the tech world. Residents include Microsoft, Dell, Sun Microsystems, eBay and IBM. Just a block away are Hewlett-Packard, Kodak, Oracle, Sony and, in brand new offices, Apple and Google.

Why Franklin Square? I have no idea. Birnbaum guesses that it the proximity to ITI. Perhaps. It might also be that it is an area that had good, fairly priced space as tech firms started looking for space from 1998 and on.

Yet, it should be for this reason... In my best Cliff Clavin voice, it is a little known (yet prescient fact) that:

The Franklin School, completed in 1868 and designed by Adolph Cluss, is a focal point of the square. The school was a model of advanced design in its day and the scene of Alexander Graham Bell's first wireless message. On June 3, 1880, Bell sent a message over a beam of light to a window in a building at 1325 L Street, NW.

463's DC office, btw, is on the old-school corridor of K Street.