It’s easy to point to the coming FCC’s vote as another indication Silicon Valley’s time has come in Washington. But here’s the reality: The industry has already arrived, and in a major way. Tech companies such as Google, Netflix and Facebook have amassed tremendous political power in recent years, with lobbying budgets to match.
Now that power is evolving. Not content with simply settling into Washington, tech companies are increasingly clashing with more established interests. At the same time, their expanded role in policy battles is also revealing how “Silicon Valley” — a buzzword once used as Washington shorthand for all technology firms — is hardly as monolithic as the term implies.
Tech firms such as Twitter, Netflix, Etsy and Mozilla sought to have the FCC impose the toughest new regulations on Internet providers. Other companies typically associated with Silicon Valley were more discreet. Facebook and Google — which is setting up its own Internet service called Google Fiber — largely stayed out of the fight, allowing industry trade groups to speak on their behalf. Meanwhile, hardware-oriented tech firms, including Intel and IBM, actively opposed efforts to regulate Internet providers.
“People today still use ‘Silicon Valley,’ they use ‘Internet’ and ‘tech’ as interchangeable, synonymous terms, but really, tech is very broad,” said a technology lobbyist, who spoke on condition of anonymity to speak freely about the matter. “I think a lot of people do think of tech as a monolithic thing, but more and more, if you look at Internet companies, they are diverging from tech.”
Despite any differences in their positions, technology firms were still able to convince the FCC to abandon a light-touch approach on “net neutrality” in favor of stronger regulations on Internet providers.
This reversal, which played out over the past months, stunned officials from the broadband industry, many of whom believed they had a strong case for the light-touch approach. Even after President Obama weighed in on the matter in November and called for “the strongest possible rules” on net neutrality, Internet providers were still confident the FCC would come around to their views, said a senior telecom industry lawyer.
Net neutrality isn’t the only successful attempt by Internet companies to force concessions from incumbent interests, including others in the wider tech industry.
In 2012, Google, Wikipedia and other online services led a charge against two Hollywood-backed congressional bills, SOPA and PIPA. The bills were aimed at thwarting online piracy, but critics argued it would also lead to the stifling of online speech. After a massive public protest that included the symbolic blacking-out of the tech companies' homepages, lawmakers quickly abandoned the legislation. The surprising turnaround was a blow to the Motion Picture Association of America, a major proponent of the bills.
Internet companies were also at the forefront of efforts to talk more openly about government requests for customer data, including by the National Security Agency. Firms like Facebook and Apple urged a presidential review panel to recommend changes to the NSA’s programs. It was later revealed that Yahoo had fiercely resisted ever allowing the NSA to seize user communications. The pressure encouraged Obama to reform the nation's surveillance apparatus, though the companies are still largely dissatisfied with the proposed changes.
Last year, tech executives convinced the White House to back down on its rumored pick to lead the U.S. Patent and Trademark Office -- Phil Johnson, the head of intellectual property for Johnson & Johnson. Within weeks, Obama announced that he would be nominating Michelle Lee, a former Google executive.
But it's at the FCC where Internet companies have seen some of their most recent successes. Not only did they manage to sway the agency on key provisions of its net neutrality proposal, but they also stand to benefit from several other recent decisions by the agency over the future of the Internet. One revises the minimum definition of broadband speeds by more than six times the previous standard; the new baseline could be used by the FCC to justify further intervention into the affairs of Internet providers.
Another has the FCC poised to act on behalf of cities that wish to build their own Internet service. In a separate vote Thursday, the FCC is expected to rule against state laws in Tennessee and North Carolina that are designed to block the development of public broadband. Proponents of the move argue that it would spark greater competition among Internet providers, driving prices down and enhancing consumer access to digital applications such as those from Google, Facebook and Twitter.
Obama’s tenure in particular has seen a flood of tech-friendly activity. He campaigned in 2008 on net neutrality. In 2011, he dined with Facebook’s Mark Zuckerberg, Apple’s Steve Jobs and Google’s Eric Schmidt. Beyond nominating Lee for the patent office, the Obama tapped Twitter lawyer Nicole Wong in 2013 to be his top privacy adviser. He emphasized the value of opening up government data and online petitions.
It’s no surprise then, that Obama felt strongly about the FCC’s net neutrality proceeding and sided with Internet companies that have grown so popular with the public, and so influential in Washington.
“I think cable’s getting crushed,” said BTIG analyst Richard Greenfield, “by technology companies who have a positive and direct relationship with consumers.”