Tech’s Eyes Turn Now to Obama, Dems

Barack Obama and the U.S. presidential election
Source: Reuters

Barack Obama soared to victory in the U.S. presidential election Tuesday night with a promise of change. But with the new administration not taking office until Jan. 20, the tech industry has some time to weigh the election’s outcome — and the chances that if change does come, it’ll be in its favor.

Net neutrality, patent reform and HB-1 visas have long been pegged as key issues the industry wants to see addressed on Capitol Hill.

But with the financial collapse occurring during the middle of the campaign, it became clear very quickly that the industry also had larger, more immediate problems to worry about — problems it’ll be looking to the next president and the next Congress, now with a wider Democratic majority, to tackle.

“Our audience is interested in more than the next hot Web startup,” said John Battelle, program chair for the upcoming Web 2.0 Summit in San Francisco. Battelle said the tech confab had its latest agenda shaped by the larger issues now dominating the industry’s concerns.

“If we had not expanded our agenda to include some of the world’s most pressing problems like energy, sustainability, the health industry and the financial crisis, we wouldn’t have been able to sell out again,” he said.

Pointing to the iPhone and other tech gadgets, industry analyst Tim Bajarin said there’s no lack of innovative new products, but consumers need to have money and feel more secure about their finances and the economy to keep purchasing them.

“The new administration has to get the economy humming again so people start buying,” said Bajarin, president of Creative Strategies.

[cob:Special_Report]The hope is there might be synergies between the steps the tech industry wants taken to solve its perennial problems — changes in immigration and broadband policies, for instance — and the efforts of finding solutions to the larger issues, like the economy and energy self-sufficiency.

Many see tech’s efforts to have its perennial issues addressed remaining just as critical under a Democratic administration as it had been under GOP leadership. For Intel (NASDAQ: INTC), those issues are extending the R&D tax credit, reforming patent laws, and changing the way that H-1B visas are granted.

“It doesn’t make much difference what the administration is, because what’s important today will be
important tomorrow,” Chuck Mulloy, an Intel spokesperson, told

For many industry insiders, however, addressing the sector’s key wants has taken on a new priority, since they believe doing so could help rebuild the economy and make the nation more competitive.

“It’s more important than ever that the new Congress and president consider how to improve the short-term and long-term prospects for the U.S. economy and competitiveness in the world economy,” Microsoft spokesperson Ginny Terzano said in an e-mail sent to

“The U.S. election and the work of the incoming administration and the new Congress will be one of the most important in generations, playing a vital role in setting the right course for U.S. competitiveness, education, workforce readiness and trade,” Terzano added.

Page 2: Action on immigration

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More visas, please

With the economy being the first order of business for a new administration and Congress, there may be a greater likelihood for getting discussion about visa expansion for tech workers back on the front burner.

That’s the hope of Robert Hoffman, vice president for government and public affairs at Oracle and co-chair of Compete America, an advocacy group that works on behalf of corporations, educators, research institutions and trade associations to lobby for immigration reform. The aim is to ensure that more foreign-born people with science, technology and research skills can stay in the United States.

No matter how the election turned, the issue of expanding H-1B visas will still be key to improving the economy with innovation — which can only come when we allow more foreign-born skills to stay in the U.S., he told

“Right now, over half of the master degrees [recipients] that are awarded at the nation’s top universities in sciences, technology and engineering are foreign-born,” Hoffman said. But because of a shortage of available visa slots to award these tech skills to fill jobs in the U.S., many have to leave.

The group he co-chairs is at the forefront of calling for an expansion of the H-1B visa program from the current cap at 65,000 to 115,000, with incremental increases or decreases that reflect worker demand.

“We need an immigration policy that affords us the best opportunity to allow the very best talent stay here and contribute to the economic growth of our country,” he said.

Hoffman added that, right now, what appeals to the best and brightest from around the world is our higher education system. “What further attracts them is the opportunity to take their talents into the U.S. economy, with all the benefits that come with that: quality of life, and patents and copyright laws that reward innovation.”

The concern, as on so other immigration reform issues, is that jobs would be lost to U.S. citizens. Opponents of expanding the visa caps for tech workers think that it’s a ploy by major tech companies to pay less for tech talent by hiring foreign-born workers.

Still, his group thinks both Democrats and Republicans will get behind the effort as have tech luminaries like Andy Grove, the Hungarian-born founder of Intel (NASDAQ: INTC) who lobbies hard for awarding permanent green cards so that the best candidates for innovation and technology jobs can stay in the country.

[cob:In_Focus]The issue has been contentious during past sessions of Congress, however. In 2007, for example, the U.S. Senate voted to increase H-1B visa fees for employers from $3,500 to $5,000 per application, to fund scholarships in science and technology fields for U.S. students. Sen. Obama was among those voting in favor of the measure, which Compete America decried as likely to “accelerate outsourcing and undermine U.S. economic growth.”

Yet during his presidential run, Obama went on-record as supporting a temporary increase in H-1B visas, while his former opponent, John McCain, supported raising and lowering the caps as needed.

Hoffman believes that the jobs need to be filled in the U.S. for the national economy to grow and innovate — either with foreign-born or native-born talent. But right now, there’s a shortage at home, he said.

He pointed out that the Canadian government is currently trying to recruit this country’s current visa holders to move north for available technology jobs there and gain permanent residency .

The Canadian government “recognizes the economic development benefits of doing this. They’ve seen what happened in Silicon Valley, in the Route 128 corridor of Massachusetts, in Northern Virginia,” Hoffman added. “We’re hoping the next Congress will think about these issues. They will have a huge impact on our ability to innovate our way into a stronger economy.”

Page 3: National broadband and spectrum policy

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New looks at broadband

Other areas in which many in the online industry hope to see change — and toward which the Obama camp has signaled the newly elected president may be favorably inclined — are net neutrality, broadband deployment and broadband competition.

Art Brodsky, communications director for Public Knowledge, a public interest advocacy organization based in Washington D.C., said he believes that whoever controls the reins of power in Washington should focus on those issues as key to the national good.

“We want to ensure a non-discriminatory Internet,” Brodsky said. “We want to make sure that broadband gets deployed in areas that either don’t have it or are underserved, and when it does get deployed, that consumers have a reasonable choice of providers.”

He said that Republicans have traditionally had a “hands-off attitude” toward these issues. “Conversely, Democrats may want a fresh look at how to reinvigorate the broadband market and reintroduce competition,” he added, noting that Obama has come out in favor of a free and open Internet.

[cob:Pull_Quote]Chris Murray, legislative counsel for Consumer’s Union, the nonprofit publisher of Consumer Reports, wants the Obama administration to help make broadband more affordable by passing new laws that encourage competition.

“The answer can’t be more subsidies, more federal teats,” he said. “We need to fix competition policy, and stop running federal agencies like in-house counsel for the monopolists they’re supposed to regulate.”

Obama has his work cut out for him, according to Andrew Rasiej, founder of Personal Democracy Forum, a conference and Web site that tracks how technology is influencing politics.

“As a whole, this election is a transitionary one where we pass from the business models and the culture of the 20th century industrial age to the 21st century mindset,” Rasiej said. “Therefore, a whole range of issues need to be addressed.”

For Rasiej, those include taking an aggressive stance on widening broadband connectivity.

“Clearly, developing a new economy based on 21st century models will require broadband to be ubiquitously and inexpensively distributed,” he said. “And the potential for wireless technologies to create efficiencies in the delivery of services and information … without having to spend a huge amount on infrastructure, will start to point to an open, wireless public spectrum.”

“That would shepherd in a new age of innovation,” he added.

Craigslist founder Craig Newmark, an outspoken Obama supporter, also said he recommends that the government promote universal broadband access, “so everyone can participate in the evolving economy and democracy.”

But David Henderson, an economist with the Hoover Institution, a conservative think tank based in Palo Alto, Calif., said the best thing the new administration can do to help competition is get out of the way.

He thinks phone and cable companies should be able to charge more for greater usage. Otherwise, it creates a tragedy of the commons, where no one pays for the resources they’re consuming. “You get clogs and congestion and less incentive to produce more broadband because they can’t charge for it,” he said.

Henderson isn’t impressed with either the Democrats or the Republicans on the issue, having watched members of both parties support federal intervention of one kind or another.

“I think they’re both going to be bad on this because they are both central planners,” he said. “They both have this incredible trust of government to do the right thing.”

Page 4: Energy policy and Sarbanes-Oxley

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Energized energy policy

Adam Kovacevich, senior manager of global communications and public affairs for search giant Google, agreed that a change of administrations doesn’t necessarily change the industry’s priorities in Washington. High on Google’s list are visas, patent reform and the R&D tax credit.

Perhaps not quite so obvious is developing a comprehensive energy policy — partly due to Google’s huge investments in energy-consuming mega datacenters.

“I think we’ll be very active in energy policy [regarding] efficiency and smarter electrical grids — improving electrical infrastructure,” Kovacevich told

Energy policy has been an important area of focus throughout the election cycle. Elizabeth Moeller, head of public policy practice for law firm Pillsbury Winthrop Shaw Pittman, said the elections may result in important opportunities for clean technology, not only by stimulating additional market demand but also by creating opportunities for federal funding.

Moeller said she believes an Obama administration would take action to stimulate development of new energy sources. She cited the Illinois senator’s proposal to spend $150 billion on clean energy research and development during the next 10 years.

At the same time, she said climate change regulation at the state and federal levels will be a key driver for the demand for clean tech companies, as government oversight of coal-burning power plants, refineries and manufacturing facilities increases.

“Industry leaders and policymakers will have extraordinary interest in developing technology which limits or eliminates greenhouse gas emissions, while also finding new ways to assist existing coal plants with the challenge of post-combustion carbon recycling,” she said.

Tackling Sarbanes-Oxley

With the Republicans looking at serious losses in both houses of Congress in addition to the loss of the White House, the GOP still has issues it would like to see addressed — and that includes tech issues.

“It’s going to be tough, no question,” said David Kralik, director of Internet strategy for American Solutions, a group founded by Newt Gingrich, the former speaker of the House. As a 527 group, American Solutions can’t lobby Congress — it can only go straight to the electorate.

Kralik said he sees several issues with a likely majority support among Democrats, Republicans and Independents — increasing the cap on H-1B visas, making an R&D tax credit permanent, and reforming or repealing Sarbanes-Oxley.

“These are issues that have a huge majority of support among common sense Americans and they are issues that are killing the Silicon Valley,” he told “We’re not talking about huge bailouts, just simple commonsense changes. It gives companies in uncertain times some certainty.”

[cob:Special_Report]With the GOP’s losses on Tuesday, however, some of those changes may be even longer shots. The people complaining about Sarbanes-Oxley most often are CEOs, and the U.S. may not be especially eager to listen after a banking meltdown that was accompanied by massive golden parachutes.

Neither party has made tech issues a major concern, Kralik said, but he said thinks the one that does embrace a tech agenda will be the party that’s vindicated on fixing the economy.

“You don’t see the tech industry shed 10,000 jobs in one day,” he said. “It’s not going to warrant their attention because it’s not viewed as a crisis. But there is a slow degrading of our technology. When in the last six months you have one IPO [VMware], you gotta think that something is wrong. But that doesn’t make news.”

Page 5: The telcos, content owners and open-government advocates want their say

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Satisfying the telcos and content owners

Despite the change in administration, other business groups also see an opportunity for pressing ahead with their agendas. Mike McCurry and Mark McKinnon, the co-chairs of industry group Arts+Labs — a recently formed coalition of stakeholders in the digital media and content delivery businesses — said they are also aiming to see a tech policy emerge that would ensure that the Internet remains viable for business and entertainment.

“We look forward to working with the new administration to ensure that the Internet remains a vibrant town center where consumers can safely choose from a vast array of digital products, entertainment and services,” McCurry and McKinnon said in an e-mail to

Arts+Labs, whose membership includes Viacom, NBC Universal, the Songwriters Guild of America (SGA), AT&T, Cisco and Microsoft, debuted in September with the aim of tackling issues hurting their members’ ability to do business online.

Thus far, their specific goals have included improving trust in Internet services and commerce, curbing online piracy and ensuring network vendors are allowed to manage their networks as they see fit — the latter of which may bring the group into open conflict with proponents of net neutrality. (So far, the group has not taken an official position on the subject.)

“Regardless of the outcome of this election, the nation’s objectives for the Internet remain the same,” they said. “Consumers must be protected from Net pollution, such as spam, malware, viruses and illegal file trafficking. The rights of artists and innovators to manage their work and earn fair compensation must be respected. The next administration also should seek an environment that spurs the development and delivery of innovative, creative content over fast, safe, and reliable networks.”

Tech as reformer

In addition to addressing laws, Kralik said the government should look to technology to make it operate better. One of those concerns is how to reform government services. He believes cloud computing can help.

“Cloud computing is revolutionizing a lot of the computer industry,” he said. “It’s making data more secure, cutting costs and eliminating software. But members of Congress are reluctant to embrace it because their data has to be locked up in their own datacenter.”

Right now, the data in that datacenter cannot be subpoenaed by the FBI because of the separation of powers rules. If it was elsewhere, like in the cloud, it could be potentially open to subpoena.

“We can pass a simple rule that members can use cloud computing and not be subject to subpoena,” Kralik said. “This would save millions of millions of dollars and allow the government to function like a business. We need government to start operating and thinking like a business would.”

Kralik’s not alone in seeing areas in which Internet technology can help government. Craigslist’s Newmark told that he believes the next administration must strive to make the government more accountable and transparent to the public.

He said a priority should be ensuring that all information on government activities, particularly regarding the role of money in politics, should be made available to the public online — except information that genuinely impacts national security.

Best-laid plans

While the tech industry seeks to push through a wide variety of changes in hopes of seeing some action, Bajarin warns that its plans could change quickly, even if President-elect Obama has taken an industry-friendly stance on a number of those issues.

“When Bush came in in 2000, the tech industry was excited,” he told “Bush came out of the Austin area, had the support of Michael Dell and others, and the tech agenda got off to a good start. Then 9/11 happened and tech took a backseat to security and other issues that jumped to the head of the line. So you just don’t know what will happen.”

Stuart Johnston, Erin Joyce, David Miller, David Needle, Andy Patrizio and Christopher Saunders contributed to this report.

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