One Year Later, Unlocking Your Phone Is Still A Crime


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Editor’s note: Derek Khanna is a technology policy consultant and columnist. He previously worked for the House Republican Study Committee where he authored their report on copyright reform. Hespearheaded the national campaign on cellphone unlocking that resulted in proposed legislation to legalize unlocking your phoneDerek regularly writes for The Atlantic, National Review and Forbes. Follow him on Twitter @DerekKhanna.

A year ago a ruling went into effect by the Librarian of Congress that made it a crime to unlock your cellphone (changing the settings on the phone to be able to be used on a different phone carrier). When that ruling went into effect, there was public outcry across the technology community that such a basic technology was now illegal to use.

Thousands of Americans became potential criminals for exerting their basic property rights by plugging their phones into their computers and running a simple computer program. The resale market for phones began to dry up and websites allowing unlocking shut down to avoid liability or stopped servicing US phones:

Khanna-unlocking phone 1

It was a clear case of crony capitalism on behalf of some of the largest companies with the largest lobbying shops in Washington, D.C. (Though it should be noted that over 100 wireless carriers, including T-Mobile and Sprint, were always against the ruling). Many big companies use their lobbying might to go after their competitors – that’s not particularly uncommon – but the phone companies are perhaps unique in also going directly after their own consumers.

The resulting public outcry, perhaps the largest online response since SOPA/PIPA, led the White House, FCC and Members of Congress to condemn the ruling by the Librarian of Congress and to support cellphone unlocking. One year later, despite an overwhelming consensus in favor of unlocking, unlocking your phone, without permission from your carrier, is still a crime. It’s difficult to find another issue that has such overwhelming and bipartisan support, and it’s difficult to understand why Congress still refuses to act.

Today, legislation is sitting in Congress to fix this problem that they have chosen not to vote upon.

A year ago the Atlantic published my piece The Most Ridiculous Law of 2013: It is Now a Crime to Unlock Your Phone. Many people were repulsed by this misuse of governmental power. Within the next month, a White House petition, created by Sina Khanifar, on this issue reached over 114,000 signatures, the first time a White House “We the People” petition has received over 100,000 signatures. As a response to the petition, the White House came out in full support of cellphone unlocking which cascaded into support from the FCC, Members of Congress and outside groups. Our campaign on cellphone unlocking resulted in multiple pieces of legislation being introduced with bicameral and bipartisan support.

Today, we, advocates of unlocking, have been unable to find anyone on or off Capitol Hill against fixing cellphone unlocking. This even includes the very organization that lobbied to make unlocking illegal: the Wireless Association (CTIA) fought to make unlocking illegal, and now, given the public backlash, claims publicly that they support legislation for unlocking (to effectively reverse their lobbying efforts). In a recent debate with Ben Sheffner (MPAA VP), he seemed to imply that even the MPAA, the organization that had been most involved in writing the underlying statute, would be supportive of efforts to solve this problem.

The verdict is in:

  1. Consumers like the freedom to unlock their devices and bring them to another carrier.
  2. The non-dominant phone companies, over 100 of them, like being able to compete with one another and encourage consumers to unlock their devices and bring them to their service (see T-Mobile advertising for consumers to unlock their phones).
  3. The market benefits from the competition that unlocking provides.

The stakes are the very future of the mobile market which is estimated to be a $341.4 billion market in 2015.

Legislation

How should Congress fix the problem? FCC Commissioner Ajit Pai’s explanation is on the solution is perhaps the most eloquent:

“Let’s go back to the free market. . . [allow consumers] to take their mobile devices from one carrier to another without fear [and] those who help consumers unlock their phones [shouldn’t] be prosecuted either. . . These fixes should be permanent, so that consumers [and] developers don’t have to worry about the law shifting on a whim.”

Congressman Bob Goodlatte (R-VA), H.R. 1123, has introduced one piece of legislation which is a stop-gate measure to reverse the decision of the Library of Congress temporarily and then allow for the Librarian to rule on this issue all over again. But, many organizations and supporters of the campaign on unlocking have argued that this legislation is insufficient as it would provide serious uncertainty to the market – in two years unlocking would likely be illegal all over again. Venture capitalists have discussed how they will not invest in such an uncertain market (included in my written testimony).

Many advocates have argued: if everyone now agrees that unlocking should be lawful – then should it not be lawful permanently?

Fixing this problem requires permanent legislation and ensuring that those developing the software and tools for unlocking are also free to do so (see my written testimony and comments to the Commerce Department on this issue). For these reasons, few outside organizations and experts consider H.R. 1123 to be a whole solution to the problem.

However, H.R. 1123 has passed the House Judiciary Committee and could be voted upon by the House under a suspension of the rules in short order – and Congress should do so immediately despite the legislation’s shortcomings (a stop-gate is better than the status quo).

Alternative legislation has been introduced by Reps. Zoe Lofgren (D-CA), Anna Eshoo (D-CA), Jared Polis (D-CO) and Thomas Massie (R-KY), H.R. 1892, which would legalize technologies like cellphone unlocking permanently but would also legalize other technologies without infringing purposes, such as jail breaking (rooting) of devices. This legislation has received widespread endorsements from activists, technology experts and think-tanks including R Street, FreedomWorks, Generation Opportunity, Cascade Policy Institute, Harbour League, Let Freedom Ring, Public Knowledge and Electronic Freedom Foundation.

As the House Judiciary Committee is having a series of hearings on reforming copyright law, Congress should have a hearing on this legislation without delay – thus far none have been announced. This is the only legislation that permanently addresses the problem at hand and provides certainty to the market.

Trans-Pacific Partnership Treaty

Unfortunately, while the White House has claimed to support cell phone unlocking, the U.S. Trade Representative is currently negotiating for a major international trade agreement which could make any permanent fix on unlocking impossible. The Trans Pacific Partnership Treaty, being secretly negotiated by 400 industry representatives, affects 40 percent of U.S. imports and exports and includes 12 countries.

While the treaty has been shrouded in extreme secrecy (as a Congressional staffer I couldn’t read the treaty) from leaked versions of the treaty we know that the US has been negotiating for a version of the TPP which would make any permanent solution on cellphone unlocking impossible. If the TPP treaty is signed and ratified, with the current language still intact, it would make permanently fixing cellphone unlocking impossible.

This seems like a classic example of policy laundering – companies were losing this argument with the public and with Congress so now they are secretly inserting an anti-free market provision in a free trade agreement.

Federal Communications Commission

At the same time, the Federal Communications Commission (FCC) has not waited for Congress to act. The FCC exerted significant pressure upon the phone companies: “Enough time has passed, and it is now time for the industry to act voluntarily or for the FCC to regulate.”

As of December 12, the major phone companies agreed to allow their consumers to unlock their devices. While this development was terrific news for consumers and a massive step forward, it still kept the technology itself illegal. This means that if a consumer chooses to unlock his or her own device without permission, let’s say when they travel abroad, it is still a felony punishable by five years in prison. Which is why this unilateral decision by companies needs to be coupled with Congressional action to solve the underlying problem that Congress created.

Further, some of the unilateral agreements that the phone companies agreed to may be more bark than bite. In the Wireless Association’s letter they claim that they already have “competitive and robust unlocking policies,” which was a similar claim that they made in 2012. That claim was shown to be untrue by the Commerce Department when they investigated consumer’s ability to unlock their phones. If phone companies say that they will allow consumers to unlock, but then create burdens to make it effectively impossible as they have done in the past, then consumers are the ones who lose.

Khanna-unlocking phone 2Therefore, given the demonstrated duplicity of these companies, consumers must have the ability to use this technology with or without their permission. If consumers own the property, they should be able to use the property as they see fit.

And there is other reason for concern. Businesses offering smartphone trade-in programs like Gazelle, the nation’s leading consumer electronics trade-in site, have found that purchasers of phones, acquired from customers that are eligible for unlocking, are being denied access to unlocking by carriers, even though the same phones are routinely unlocked when taken as a trade-in by those same carriers. The voluntary agreement with the FCC does not clearly address this circumstance.

The Wall Street Journal has reported that this has been devastating to the independent resale market for eligible phones. As can be seen from this graphic in the Wall Street Journal (right), the lack of availability of unlocking has had a serious impact upon the resale market.

A free market will empower a thriving phone resale market. It’s time to remove the legal and regulatory barriers.

Conclusion

So today, one year after the Librarian of Congress’s ruling, Congress needs to act quickly. It’s been a year, it’s time to have its first real hearing on this issue and invite a number of different voices to express their perspectives. Since H.R. 1892 is the only legislation that has received wide support, it therefore deserves a real hearing.

As the House Judiciary Committee is evaluating how to bring copyright into the 21st century they should investigate, how do old copyright policies affect technologies? Specifically: Why is unlocking your phone a copyright issue to begin with? And, should we continue to delegate decisions on what technologies to ban to the Librarian of Congress?

Image by Flickr user David Kirkham under CC BY-ND 2.0 license

http://techcrunch.com/2014/02/08/one-year-later-unlocking-your-phone-is-still-a-crime/

Advertisers Need To Have A Device Agnostic, Not ‘Mobile’ Vision With The Internet


The internet is a distribution and communications infrastructure. Websites, social networks, apps, search, etc., are all software that sits on top of the infrastructure (Facebook, Google search, retail stores, mobile apps, etc.).

It is not the only distribution platform in our world — there are three others. Print media, broadcast television, and radio. The role of distribution platforms in a society is to ultimately distribute information in an emergency. The remaining usage generally is for casual, consumer use.

The internet is also not the only communications platform. The landline telephone (which is called ‘PSTN’) and cellular (‘mobile’) platform are also in the mix. The purpose of communications platforms in a society is to enable people to talk to (communicate) with other people in the event of an emergency. Otherwise, like distribution platforms, it is widely used for casual, consumer use.

Of all the platforms in the market, only radio and internet combine distribution and communications in a single environment, albeit radio doing so relatively crudely. Radio can also only deliver one form of information distribution. The internet platform can do far more. It can do everything that the other platforms (including radio) can do, and do so at less cost with greater reach and wider margins.

This is why the internet was invented, and why it is here.

The platform is also ‘device agnostic’ which means that it does not require any one set, or particular, device or object to access it or use.

This is all important to understand about the internet. First, because the internet is ultimately an infrastructure it will be ruled and driven by the same truisms that have sustained and remained in platform business since the advent of the printing press. Second, because it combines multiple platform functions into a single environment it means that multiple businesses (and all of their models, processes, etc.) will exist within the environment.

Last, because it is ‘device agnostic’ it means the future is not about ‘mobile’ or ‘tablets’ or any one device or function because in reality, the internet will be in everything. Fixed devices (things you can’t move), mobile objects, including airplanes and cars, not just handhelds and readers, and all kinds of other things.

Advertisers need to envision this world and prepare for it versus ‘mobile’ or ‘tablets.’ Failing to do so will mean a likely reposition and need to adapt all over again. Not to mention the potential to miss great opportunity for reaching people through the many (many) things that will ultimately be used by consumers to connect to the internet.

‘Mobile’ advertising will more than likely solely be centric around the information distribution to mobile objects, not the communications functionality of smart phones. That’s because communications services on any platform are not widely acceptive of advertising models — it is why carriers and services to date have used value added service instead.

Which is another element to advertising in a multi-function platform. Not every business or function will offer advertisers a place to play. Recognizing where advertising model is — and isn’t — operational on the internet will become increasingly more defined in the coming years. Advertisers would be wise to recognize this and work to adapt to it (versus any set device or function) instead.

Rather than trying to crack the code on mobile advertising, understand how people use mobile phones to access information and take a position there. Recognize that communications services (such as texting) has never been monetized by ad revenue for a reason, despite that many have tried. Present and future efforts to do so won’t likely work (or work long range).

Instead of envisioning a future of smart phones and tablets, understand that the internet will be in everything — appliances, cars, toys, watches, airplanes, cars, homes, buildings. That is where advertisers need to think about strategy and position today because in the coming years it’ll be the exact world they’ll be in.

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Time to say goodbye to the unemployment rate


This week, as it does every month, the Bureau of Labor Statistics published its monthly employment report. As I wrote in The Wall Street Journal, we pay inordinate attention to this national number at considerable collective expense. While the statistic still has some value, it is time to stop focusing so relentlessly on the number and grapple instead with the complicated tapestry of employment today.

It isn’t just that the number is a statistical creation that involves both substantial estimation and frequent adjustments. It is that, and indeed, it is one national indicator that is subject to particularly dramatic revisions – none of which get the attention that the initial release does. If it’s reported in one month that businesses added 150,000 jobs to payrolls, that becomes a talking point. When the same number is revised down to 75,000 or up to 200,000 a month later (as often happens), it is a footnote. There’s yet to be a headline saying, “Jobs Picture Quite Different Than What We Said Last Month Because of Revisions.”

The unemployment rate is a recent invention designed for limited purposes, yet it has come to assume totemic status in a way that makes it almost impossible to have a cogent discussion of labor in the United States (or anywhere else in the world that keeps similar numbers) and design meaningful public and private responses to our challenges.

During the 2012 presidential campaign, it was widely trumpeted that no president had ever won re-election with an unemployment rate higher than 7.2%. That was said so often and by so many it was taken as a truism. Yet Barack Obama was returned to the Oval Office with the rate at 7.9%. Had some deep historical pattern been broken? Was his victory some deep anomaly? No.

Technically, the statement is true. But it is based on the flimsiest of foundations. There was no official unemployment rate until the late 1940s. The U.S. government only seriously began to define unemployment and measure it because of the Great Depression. As the crisis hit suddenly in 1929, the Hoover administration had no way to know just how bad things were. The result of these early efforts was to show that the disruption of the Depression was substantially worse than suspected, which then gave Franklin Roosevelt a powerful tool for victory in 1932. Hoover, a devotee of scientific management of government, was hoist on his own statistical petard.

It took more than a decade for methods to be refined, for sample sets to be introduced and survey methods improved. It also took years to decide what, precisely, was meant by unemployment, leading to the definition that still stands – namely, you are looking for work and cant find it, rather than simply not having a job that pays a wage. Not until the 1950s, in fact, did the BLS make any fanfare of its monthly numbers, and not until well after that did any media or politicians pay much attention to what these reports said.

So in framing the election of 2012 as hinging on the unemployment, almost everyone appears to have forgotten the following: at most, there have been sixteen elections when there even was an unemployment rate, from 1948 through 2012. In that period, only five presidents were re-elected, while two (Jimmy Carter and George H.W. Bush) lost their bid for a second term.

The statement that “no president has been re-elected with an unemployment rate of 7.2%,” therefore, should have been, “In the seven instances that we know of, no president has been re-elected with an unemployment rate of 7.2%.” To say the least, that would have lacked a certain punch.

But it would have the virtue of being true and thereby exposed the grand illusion of the unemployment rate and indeed of all of our leading statistics and indicators. We treat them as absolute markers, and reliable guides to our world. They are not. They are numbers that we invented remarkably recently and that then assumed a place of importance in shaping our sense of the world out of proportion to what they can and do measure.

A thousand years from now, if we are still keeping these numbers (doubtful), we will have more than enough data and patterns to make definitive statements about probabilities, correlations and possible causations. With less than fifty years of data, we are nowhere near that. The same could be said of establishing some relationship between jobs say and government spending. The great fallacy of the American Recovery Act of 2009 (better known as the stimulus bill) was that you could calculate precisely how much spending you’d need to produce 3.5 million jobs. The belief that $787 billion was the right number came from the formulas based on the limited amount of data over a few decades. Maybe there will come a time where we can calculate the right amount of spending. For now, we just don’t have enough information to make such conclusions, yet we do and do so in ever more aspects of our lives, from government to businesses to individuals.

Not only is there insufficient data to make sweeping conclusions, but there is also a major issue with the idea that there is a national unemployment rate at all. There isn’t. There is no one unemployment rate that encapsulates the national picture. If you are a college-educated woman, you unemployment rate is less than 4%. If you are an African-American male with a high school degree or less, the rate is well into the mid-20s. If you live in Oklahoma or North Dakota or other places in the shale oil belt, there has been no unemployment crisis in the past five years and that rate has consistently stayed below 5%. If you live in the areas hit hardest by the bursting of the housing bubble – Central California, Greater Phoenix, Las Vegas, vast swaths of Florida – or the areas decimated by the shifting sands of the auto industry, the unemployment rate has frequently been above 10%

There is, therefore, no unemployment rate, at least not as currently understood. There are multiple rates, by race, by gender, by geography and above all by educational attainment. When people talk of an unemployment crisis, it would be more accurate to speak of an education crisis or a crisis of men whose skills are mismatched to the jobs of today. It would be more accurate to speak of a jobs crisis in specific regions of the country, or for specific industries such as heavy industry. Yet, we maintain the collective fiction that one simple average accurately captures a multiplicity of realities.

By pretending that there is a meaningful rate, we then adopt policies that are bound to fail. Take the Federal Reserve. In the 1970s, Congress amended the mandate of the Fed to include achieving “maximum employment.” But if there is no unemployment problem per se in Tulsa or among college-educated women, then keeping interest rates low does them no particular good. On the flip side, if African-American males without a college degree are at a severe skills disadvantage along with any lingering racial barriers, then it’s hard to see how a zero interest rate policy is going to move that particular needle.

Bill Gates has been banging his virtual drum that in truth, there is no unemployment crisis; there is an education gap and a skills gap that then manifests itself as an employment problem. There are also those regional divisions, and there is yet another challenge posed by the informational technologies that Gates helped unleashed, which make factory labor and assorted other jobs irrelevant. Hence why you can have a manufacturing output revival without a manufacturing jobs revival. Robotics and just-in-time factory floors render much of the manufacturing labor force unnecessary.

Policies to address the problems of employment would have to be freed of the national fiction of an unemployment rate. The result would be targeted approaches. The politics of that are thorny. Congress is especially bad at allocating resources selectively, except in the case of natural disasters. Crafting legislation that privileged Detroit, Phoenix, central Florida, upstate New York, and so would find hard going.

But such targeted crafted legislation would be far more efficient and cost effective. Spending tens of billions of dollars a year on unemployment benefits is perhaps the least effective way to deal with the problems. It has a “let’s throw money at the problem and hope it goes away” tone to it, and relies entirely on the belief that once this thing called the economy gets humming again, employment will just materialize. Given the changes in labor and skills, that is, at best, unlikely.

The unemployment rate fixation represents an obstacle. It stands in the way of creative and innovative approaches, ones that involve government and ones that don’t. It locks us into a collective fiction that employment is a national problem with national solutions. The first step toward more dynamic approaches would be to wean ourselves from the unemployment rate. Time to say goodbye, and to plunge into the wealth of infabout the world we actually live in and not the one that this number, and so many others, say that we do.

Zachary Karabel is the author of The Leading Indicators: A Short History of the Numbers That Rule Our World (just published by Simon & Schuster), from which this essay is adapted). He is also Head of Global Strategy at Envestnet. A shorter, similar version of this article first appeared in the Wall Street Journal (February 8, 2014).

Graphic: Jakee Zaccor / LinkedIn Pulse

Posted by:Zachary Karabell

The 3 Pillars of Building Great Products


Do you know what it takes to build great products?

Are you so confident in your approach that you know that your product will be a success?

I’m not.

I’m often filled with doubt.

Even when things are going well, I wake up at night worried that it’s all going to come crashing down tomorrow.

I worry that my product is just a fad. A trend that will be a bygone tomorrow.

I worry that people will figure out I have no idea what I’m doing.

That none of us do.

A couple of years ago I decided to do something about this worry.

I started to ask myself the question I opened with.

Do you know what it takes to build great products?

I still don’t have the answer. But I’m starting to get some clarity around my answer.

Great products require a clear vision, sound decision making, and the right team.

I’ve packed a lot into that one sentence. Let’s break it down.

Start With A Clear Vision

It’s easy to assume people know what you are thinking.

In fact, the illusion of transparency is a bias that leads us to overestimate how well others perceive how we are feeling or what we are thinking.

As a product leader, you hold a lot in your head. You know what you are building and why.

But do you communicate this to others?

Most great products require more than one person to make them happen. If you aren’t communicating where you are going and why, you might not get there.

This is where a clear vision can help.

What do I mean by vision?

It’s includes your mission statement, your vision for the future, and so much more.

Your vision defines who you are, who you will be in the future, and your current view of how you’ll get there.

It should:

  • Differentiate you from competitors, claiming a position in the market.
  • Define who you serve and why.
  • Speculate on how you will make money, even if it’s down the road.
  • Define what success looks like.

Your vision lives and evolves.

It needs to be present in your day-to-day work.

It provides the guardrails for your exploration.

Your vision is the big picture, strategic direction that keeps you focused.

All great products need a strong vision.

Design Thoughtful Processes to Support Sound Decision Making

You know what happens. You know where you want to go, but it’s not where you end up going.

Instead, you get caught up fighting fires. You sit in meetings. You tackle bugs.

You do all the urgent things that come up each and every day. And the important things that help you realize your vision keep getting pushed off.

How do you keep this from happening?

How do you create the space for the important things and build the discipline to push back on the urgent things that just don’t matter?

So much of what it takes to build great products comes down to the day-to-day execution.

How do you set appropriate goals that keep you focused on where you want to go?

Where do good ideas come from?

Will you recognize good ideas when they crop up?

How do you know what to user test, which A/B test to runs, what prototypes to build?

Who prioritizes what to build and when?

What metrics do you focus on? Why?

How often do you look at them?

Is there a method to your madness? Or are you making ad-hoc decisions as you go?

Thanks to Kahneman and Tversky, we know that we aren’t great at making decisions in the moment.

Designing thoughtful processes ensures that you are executing on your vision each and every day.

Build And Develop The Right Team

Armed with a clear vision and a thoughtful approach to day-to-day decisions, you are standing on firmer ground.

But don’t stop there.

You need to ask yourself, do we have the right team to build this product?

This might sound like a harsh question.

I’m not suggesting you fire your team and start over (unless there’s reason for that).

But you should be asking the following questions.

Do we have an unfair advantage?

Is there something that uniquely positions us (as opposed to the other smart, hardworking teams out there) to solve this problem better than anyone else?

Do we have the requisite core competencies to build great products?

Do we have deep expertise in the areas that are critical to our product’s success?

Do we have the right team design? Do we have enough diversity to foster creativity? And enough overlap that we are able to effectively work together?

Are you developing each of these aspects of your team so that as your product grows your team grows with it?

These are all important questions. When tech companies take off, they grow fast. Are you doing what you need to be doing to make sure your team is prepared?

All Three Pillars Are Critical

A strong founder, CEO, product leader needs to focus on all three.

Without a clear vision, you’ll build whatever your customers ask for and end up with either a frankenstein product or no clear value proposition.

If you ignore process design, you’ll make ad hoc decisions and run the risk of overcommitting to bad ideas.

If you ignore team design and development, your product will quickly out grow you. Or you’ll lean toward what you are good at rather than what you should do.

Are you focusing on all three pillars?

This post was written by Teresa Torres, a product executive, consultant, and coach. She draws from psychology, behavioral economics, organizational design, and learning theory to explore what it takes to build great products. You can read more of her writing at Product Talk.

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2M Passwords For Facebook, Twitter And Others Stolen In Massive Data Breach


http://readwrite.com/2013/12/04/passwords-hacked-stolen-pony-botnet#awesm=~ovje9kD7JvzDQJ

First Adobe, now this. Here’s your monthly warning to use keep your passwords strong—and unique.

December 04, 2013 now

Have a Google, Facebook, Twitter, LinkedIn, or Yahoo account? If so, you might want to change your password, stat.

According to cybersecurity firm Trustwave, hackers using a nasty piece of work called the Pony Botnet Controller have stolen usernames and passwords for nearly two million accounts. The firm determined that a malicious keylogger installed on users’ computers was to blame.

Researchers at Trustwave said this massive data breach has been going on for a month, but they only discovered and publicized their findings Tuesday, CNN reports. Facebook, LinkedIn and Twitter told CNN that they’ve notified affected users and reset their passwords; Google declined to comment, and Yahoo didn’t provide a response to CNN.

http://readwrite.com/2013/12/04/passwords-hacked-stolen-pony-botnet#awesm=~ovje9kD7JvzDQJ

If You Didn’t Get Intro’d To LinkedIn’s Intro, It’s Too Late Now


February 7, 2014 Social

LinkedIn is killing its Intro service—a function designed to display your contacts’ LinkedIn profiles directly in Apple Mail messages. LinkedIn launched Intro last fall, not even four months ago; the company gave no explanation for its demise.

Though Intro is shutting down, people will still be able to use Rapportive, an email service that displays correspondents’ contact information on Gmail and which powered the Intro service.

http://readwrite.com/2014/02/07/linkedin-intro-shutdown#awesm=~ovjdrndxCGscYg

One Silicon Valley, Under Libertarian Hero Senator Rand Paul


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Internet-savvy Tea Party activists have shoved the once small-government fringes of the Republican party into the spotlight, with Libertarian-leaning Sen. Rand Paul a leading figure.

At the State of the Net Conference, I spoke with this new leader in the Republican party, asking about what life would be like for innovators if he and his small-government brethren continue their rise to power.

I kept it deliberately philosophical to understand how Paul will view issues in the future. Here are a few take-aways.

Science Funding, If You Can Find It

“The real explosion of the Internet was the lack of control,” argues Paul, in response to my question about if the Internet’s origins in military labs proves that government is essential to American innovation.

Paul maintains that we shouldn’t overestimate the need for government to support Silicon Valley. But, he’s a fan of federal-funded science and technology, just so long as it doesn’t add to the country’s trillion-dollar-sized debt. “I’d rather spend the money on R&D if there’s not a marketplace for that,” he says.

Paul is admirably consistent here; scientists freaked out over one of his early budget proposals to slash R&D funding, but calmed down after he brokered a deal with Democrats that would slightly increase funds for higher education and research (by finding other programs to cut, of course).

Civil Liberties Galore And No Killing Of Hackers

Paul infamously said that whistleblower Edward Snowden and intelligence director James Clapper should share the same jail cell (Clapper for lying to Congress). I pressed Paul on how he would treat information activists.

“There do have to be some rules and there are some problems with disclosing secrets and people could die,” he warns. But, security hawks “are calling for the death penalty” for Edward Snowden, “and I think that’s inappropriate.”

Paul wouldn’t commit to what punishment people like Snowden should receive. He is, however, suing the federal government to stop the National Security Agency’s bulk collection of Internet and phone data. It’s no shocker that under Libertarian leadership, national defense would be dramatically cut back and civil liberties would take center stage.

Allowing Companies To Do Good, Stockholders Be Damned

Paul thinks that Silicon Valley should have more leeway to invest in socially beneficial products. “There is a sense, particularly in young people, they still want to make money, they want to do things that are successful, but they’re socially conscious.”

Paul says he’s supportive of legislation to give legal immunity to B-corps, (Benefit Corporations), which would allow for-profit companies to invest in sustainable products, even if it wasn’t the best way to optimize shareholder value. Stockholders “can always leave your company if they don’t like what you’re doing, but [business owners] should be able to do things, even if they’re not the least expensive thing, because you think this is good for the environment.”

Federalism For Everyone!

It’s a caricature of libertarianism to believe that it’s only about slashing the government into the smallest possible slice of its former self. “Federalism is that you devolve power, and the power is not all in Washington, it’s in different places,” Paul tells me, when asked about the future of small-government conservatism.

Under a federalist government, San Francisco could allow a drone to airdrop you a piping hot taco, while New York City could choose to outlaw Amazon’s new army of delivery drones. Silicon Valley has always had a separatist itch; a libertarian might give them more room to experiment.

Though, in practice, Paul (and other libertarians) have valued no government over decentralized rule. Paul opposed the law that would allow states to collect Internet sales tax, which would have effectively hiked up everyone’s pajama-clad Christmas shopping splurge about 7%.

Federalism is a nice theory for now, but it’s unclear how it could impact the Valley.

Patents…Pretty Much The Same

Does Paul see patents as a legalized monopoly? In a word, no. “There are libertarians that have written that you shouldn’t have any patents–the market will just sort it out,” he said. “I think there ought to be protection for intellectual property.”

Recent attempts in Congress have tried to change intellectual property law, especially around patent “trolls” and for software, but there’s no bills with serious traction. Either way, this doesn’t appear to be of serious interest to leading Paul and his ilk.

Unions A No-No

We’ve often noted that tech companies rank as the “best” companies to work for, despite having no labor union. Unions have a rough-and-tumble relationship with innovation, largely because technology destroys jobs. Would Paul give beleaguered unions a helping hand, or does he think they’re past their prime?

“I’m not opposed to the small guy organizing to have leverage against the big guy,” he explains. But, unions have gone overboard, he says. “Labor Unions had their heyday, it was in trying to get rid of really horrific working conditions,” he continues, “I don’t think they really have a place in the high-tech industry.”

Yes, Libertarians Are Getting More Powerful

The right-wing traditionalists of the Republican party are getting thumped by tech-savvy libertarians. Tea Party founder Mark Meckler once explained to me how individualistic principles make libertarians so powerful on the net, “Because folks who participate tend to be so individualistic, what started to happen is, without anybody telling them, they immediately started to spawn hundreds and then ultimately thousands and then millions of web pages dedicated to tea party activity.”

Paul, whose father is an Internet political celebrity and former long-serving member of the House of Representatives, sees the same thing happening with his own base of support, “I think there’s a huge bunch of people who are a part of a leave-me-alone-coalition,” he explains.

Though Silicon Valley leaders overwhelmingly support President Obama, Paul argues the political tides could change in his favor. His argument is worth quoting in full:

“When I’ve been out and visited Google or Facebook, when you go in, there’s an atmosphere of not of structure, there’s an atmosphere of, you know, not being able to go five steps without having food, or a nap, or play ping pong. It’s less rigidity and more openness. I think people are attracted to that; it’s sort of a libertarian sense, ‘as long as I’m not hurting someone else, let me do what I want to do.”

My 2 Bitcoins

Before I praise Paul, let me first note that I am not a fan of libertarianism. I find it an unrealistic social philosophy. Our personal success is inextricably linked to the lives of our neighbors and the rest of the world. If they suffer, we suffer. If they do well, we do well.

That said, this modern strain of libertarianism is growing on me. Our government is terribly inept. The refusal of the White House to partner with the tech sector on the failed launch of the health insurance website, healthcare.gov, shows that we need a radical rethinking of government.

So, as long as Paul and his ilk don’t recreate some Hunger Games-style version of ruthless capitalism that leaves the downtrodden without a safety net, and provides ample funding for education and research, perhaps our country could use a government diet.

There is still much more we need to know, but the direction is promising. Watch the full interview below.

Image: Photo by Gage Skidmore under a CC by-SA 2.0 license, composite with a Shutterstock image

http://techcrunch.com/2014/02/08/one-silicon-valley-under-libertarian-hero-senator-rand-paul/