Lobbying

As the probes of Russian interference in the 2016 presidential election turn to the role of social-media giants, Facebook is looking to boost its influence in Washington amid talk of potential federal regulation. The Menlo Park (CA) company has invested more than $8.4 million this year on its 36-member federal lobbying team—putting it on track to spend more on federal lobbying than in any previous year.

The company recently added Republican-led Hamilton Place Strategies and other communications strategists to its team and posted an ad seeking a crisis communications specialist. The tech giant also held several focus-group sessions last week hosted by Quadrant Strategies, a Democratic-led research firm. People familiar with the sessions said public relations professionals and other Washington insiders were among the attendees. Facebook was soliciting advice as to how best to respond to the Russia ad controversy—and how to communicate with Republicans in particular, apparently.

For years, the country’s biggest technology companies have been virtually untouchable in Washington. The public adored the companies’ new devices, educators embraced their tools and politicians extolled their contributions to the economy. Even traditionally powerful voices, like media and telecom businesses, found little success in criticizing the technology industry. But now, as lawmakers look into how Russia used Google, Facebook and Twitter to influence the 2016 presidential election, many critics see a rare opening — and are lining up to take their shots.

The action is nascent, but gaining momentum fast. Lawmakers are pushing for regulations for technology companies for the first time in years, encouraged along by big tech’s broad assortment of rivals. For several weeks, a group of companies including smaller tech companies and entertainment and retail businesses has informally begun regular meetings and conference calls to compare notes about Google, Facebook and Amazon and to find a way to join in a stronger opposition force. But even as they sense an opportunity today, the rivals say that challenging the internet companies remains a daunting task. They doubt they can put a dent into the online ad duopoly of Facebook and Google. It will also be difficult, they say, to restrain Amazon’s fast movement into new markets, given the company’s willingness to lose money to gain a foothold.

The day after President Donald Trump ordered a ban on travelers from seven majority Muslim countries, Mamoon Hamid was rallying a response from Silicon Valley. The Pakistan-born venture capitalist held a private dinner that night in San Francisco (CA), where he pitched other investors, entrepreneurs and technology executives on a coalition that could challenge the Trump administration’s most controversial policies in court.

The goal was to solicit funding for the Institute for Constitutional Advocacy and Protection. The group offers a legal swat team of sorts “to protect people at a moment of great instability and peril,” said Hamid, the chairman. He had been planning the white-linen event with attendees from Facebook Inc., Google and other tech companies for months, but the immigration ban offered newfound urgency.

A freshman Michigan state representative introduced a sweeping bill last week that would ban any city and town in the state from using public funds to provide municipal broadband service — publicly owned internet infrastructure. A review of state campaign finance and lobbying records found that the representative’s campaign was heavily financed by telecommunications companies and trade associations. She also dined with trade association lobbyists in the months leading up to introducing the bill.

MI state Rep Michele Hoitenga, who is chair of the Michigan House's Communications and Technology Committee, introduced the bill, HB 5099, on October 12. The bill says that a city or town “shall not use any federal, state, or local funds or loans to pay for the cost of providing qualified internet service,” effectively banning municipal broadband outright. Campaign finance records show that two of her largest campaign contributors are AT&T Michigan and the Telecommunications Association of Michigan (TAM): AT&T gave her campaign $1,500 while TAM provided her with $3,500 — large amounts for a first term state representative. The Michigan Cable Telecommunications Association — a separate entity from TAM — gave Hoitenga’s campaign $1,000.

The tech giants are too big. They’re getting bigger. We can stop them. But in all likelihood, we won’t.

The history of American business is one of repeated cycles of unfettered, sometimes catastrophic growth followed by periods of reflection and regulation. In previous eras of suffocating corporate dominance over our lives — when industrialists gained an economic stranglehold through railroads and vast oil and steel concerns, or when rampant financial speculation sent the nation into economic paroxysms — Americans turned to their government for a fix. For nearly two decades, under Republican and Democratic presidents, most tech giants have been spared from much legislation, regulation and indeed much government scrutiny of any kind.

When a California state legislator proposed new broadband privacy rules that would mirror the federal rules previously killed by Congress, broadband industry lobbyists got to work. The lobbyists were successful in convincing the state legislature to let the bill die without passage in Sept, leaving Internet users without stronger rules protecting the privacy of their Web browsing histories.

The week of Oct 23, the Electronic Frontier Foundation (EFF) released documents that lobbyists distributed to lawmakers before the vote. The EFF described one as "an anonymous and fact-free document the industry put directly into the hands of state senators to stall the bill" and the other as "a second document that attempted to play off fears emerging from the recent Charlottesville attack by white supremacists." The California bill, introduced by Assembly-member Ed Chau (D-Monterey Park), was modeled on now-defunct Federal Communications Commission rules and would have required Internet service providers to obtain customers' permission before they use, share, or sell the customers' Web browsing and application usage histories.

In Fort Collins (CO)—a town of about 150,000 north of Denver—Big Telecom has contributed more than $200,000 to a campaign opposing a ballot measure to simply consider a city-run broadband network. It's the latest example of how far Big Telecom is willing to go to prevent communities from building their own internet and competing with the status quo.

"It's been wild," said Glen Akins, a Fort Collins advocate for municipal broadband. "We're overwhelmed by the amount of money the opposition is spending." When the residents of Fort Collins vote on November 7 they'll have a couple of ballot measures to consider, including one on city-run internet. If that measure is approved, Fort Collins will be able to change the city charter to allow it to run a municipal broadband utility. This doesn't mean it will happen for sure, and the city still hasn't finalized what that utility would look like, but it opens the door to further discussions.

Facebook, Google and Amazon bolstered their lobbying spending in the past three months as Washington has taken a closer look at the market power of some of America's biggest tech companies. Facebook spent $2.85 million lobbying the federal government in the third quarter, up 41 percent from the same period in 2016, according to disclosure reports made public Oct 20. Part of that amount was dedicated to lobbying officials in Congress and the White House on “online advertising, content and platform transparency efforts.”

The lobbying comes as the social network, along with Google and Twitter, faces a new bipartisan push on Capitol Hill that would force Internet companies to disclose more information about political ads sold and distributed on their platforms. Google’s X lab, the company's testing ground for its most ambitious projects, is now hiring its first outside lobbyists, too. Of any corporation in or out of the tech industry, Google spent the second-highest amount. AT&T topped everyone, at $4.43 million.

Google and Facebook are looking to make an early imprint on legislation being drafted in the House and Senate that would force them and other online networks to disclose information about the buyers of political ads. Lobbyists from the Silicon Valley behemoths have met with the staffs of Sens Mark Warner (D-VA) and Amy Klobuchar (D-MN) and Rep. Derek Kilmer (D-WA), all of whom are drawing up bills that would impose new regulations on the industry. The Senate bill is expected to be formally introduced next week.

It is not clear when the House legislation, which has not been previously reported, will be introduced. The companies are keen to show steps they've taken to police themselves when it comes to monitoring and disclosing the ads on their sites, efforts that could be used to fend off heavy-handed regulation as investigations into Russian interference in the election bring unprecedented scrutiny on their businesses.

Companies like Facebook, Google, and Amazon dominate their markets, and have deep pockets and armies of lobbyists. That, combined with historical precedent, gridlock in Congress, and the Donald Trump White House’s aversion to regulation in general, means passing new laws or rules to rein them is going to be a tough battle, some government and industry veterans say.

As the internet and tech industry in the US has grown in the past two decades, not only has federal rule-making not kept pace, but the government hasn’t adapted to oversee it. In recent years, tech companies from Airbnb to Uber to Google have poured money into lobbying in Washington DC and now have sizable in-house and outside teams that regularly meet with Congress, fund think tanks, and try to influence how lawmakers, federal employees, and the general public see the industry. The industry’s total lobbying spending jumped from $1.2 million in 1998 to $59.2 million in 2016, and it’s on pace to meet or beat that amount in 2017.