Web 2.0 Summit program chair John Battelle moderated a public policy discussion with Art Brodsky, the communications director of Public Knowledge, Ebay's Tod Cohen and Amazon.com's Paul Misener.
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Transcript created by Casting Words.
ANNCR: Web 2.0 summit 2006 program chair John Batelle moderated a public policy discussion on how to influence Washington.
The panelists were Amazon's Paul Misener, Art Brodsky communications director of public knowledge and eBbay's Tod Cohen.
Here's how to win friends and influence people in Washington from the Web 2.0 Summit.
John Battelle: All right, from GoDaddy we're going to go into some conversations about policy, now I have run a lot of conferences and I have never had a policy discussion, so stay in your seats guys, all right.
The reason I didn't is I said well what are we going to talk about Government stuff, it's so boring, you know.
But it's really now time to get smart about this stuff if you care about the future of the businesses that you are running. So I want to bring up, you guys are back there, Tod Cohen who's a VP, well first it's Paul, Paul Meisner Amazon's Vice-President for global public policy, here's Art Brotsky who is a communications director of public knowledge and Tod Cohen who's VP and deputy general council of World Wide government relations for eBay. You guys have a seat.
John: These guys are responsible, at least two of them are responsible for very large platform companies who are now increasingly having a significant presence in Washington.
Art is an advocate for certain positions at public policy and what I want to ask first because the news just broke is: how do you guys respond to the news of the election, how has it changed your worlds?
Paul Misener: Well, Certainly it's disruptive.
John: Is your mike on?
Paul: Yeah I think we're on, certainly it's disruptive, but then you have to ask, well, is it really? One of the senators elected yesterday in the second term or rather the mid-term of the second term of the Bush administration, actually was first elected in the second term, mid-term election of President Eisenhower.
So maybe things haven't changed that dramatically, in fact the person who was going to be taking over the House commerce committee which, as you may know, is the committee in the House of Representatives most responsible for regulating the Internet.
He actually came to congress two years before Senator Byrd in 1955, so there has been some change but perhaps not as dramatic as is being portrayed.
Art Brodsky: Yeah, One of the themes that we've heard a lot throughout the last couple days is this idea of partnering with your competition, you heard it this morning, you heard it yesterday, how it's not unusual for someone to work with, someone to share API's and then over here you compete against them and that's the way it is in Washington.
There are a lot of issues on which we agree at public knowledge with a company like Verizon, on some things dealing with copyright issues, but we'll oppose them on net neutrality, and the other thing is, in a lot of our issues, it' not, not particularly partisan, it sort of splits out by which industry is, how can we say this politely, the controlling industry, the members philosophy, something like that, who's been bought by whom.
So it will certainly help with leadership to set the direction but after that you're sort of on your own still.
John: All right, just let me stop you guys, I come in to the green room back there and I say: what do you think you about the election? you guys are like: Woo Hoo! And I get you on stage and you guys are like: Well, you know. Come on, give me a Woo Hoo!
Tod Cohen: I will tell you the truth, I'm a partisan democrat and I was absolutely thrilled by the election results yesterday, It will be good for my company, it will be good for our industry, it will be great for the republic, so I think it is a good thing.
John: All right, now, tell me why?
Tod: OK, well, there's couple reasons why it will make a big difference.
On the big issue that all three of us have been working on, on network neutrality, the Democrats get it, and unfortunately for the last year the Republicans haven't gotten it and it has caused what we think will be a massive change in how we all do our business and so we think that having a Democratic House and Senate will make a big difference in at least stopping bad legislation from occurring.
Art: Right, but what we are talking about, and I agree with you, because we work on net neutrality but we also do other issues and digital copyright and in that case for example, the new chairman of the sub-committee on intellectual property is a guy named Howard Burnham from West Hollywood, who opposes a lot of the measures that we like that favor innovation and favor new devices and empowering consumers.
John: So that might make it harder.
John: More DRM less openness.
John: Yeah. You guys, I think, broadly could be considered lobbyists is that accurate?
John: Specifically? Proudly.
John: Right, Registered.
Art: I'm not.
John: You're Not?
Art: No I'm just a flack.
John: Let me ask you two fellows who are, they're registered, you register?
Tod: In certain places you register, I'm not registered.
John: But you have to have a license, like buying a gun?
Art: Yes, they have special cards.
Tod: More dangerous.
John: More Dangerous.
Paul: Yeah, this is more dangerous.
John: What, What do you do all day? What are lobbyists..
John: When I go to Washington all I hear is that the lobbyists are walking the halls.
Tod: There was a great show that Steven Soderbergh and George Clooney did on HBO called K-Street I believe. It lasted about six, six episodes, so one of my children asked: how come you're not on that show? you're a lobbyist Dad.
So I said because watching me do email all day and picking up the phone is really not that compelling of a television program but it is pretty much what we do.
Paul: They may speak differently, but advocating on behalf of the company and in the interest of them, is pretty much just communications, through speaking to people and building relationships with people.
Art: I think that's right, but there is a tendency I think for some of the folks on our industry to automatically assume everything that the more traditional established presences in Washington do.
I think it can be overdone. We are all carbon based lifeforms, so we are going to have to do some things that are similar to say what big oil and big tobacco do.
But we don't do it to the extent they do in a lot of respects one is for example, campaign giving, money is often a dirty subject in Washington, but it is true that individuals, members of Congress and those running for the executive branch positions have to raise money in order to serve.
So their business model is one of, I want to serve, I want to do the right thing, I want to be elected because that is the only way I can serve, and to be elected you have to raise money, so you have to recognize at some level if their business model, if we want to expect them to take the time to recognize our rather complex business models.
Paul: Could I just throw in, one of my favorite pieces of legislation, between 1988 and 1999 if you were a cable customer and you wanted to switch to satellite, by statute you had to wait ninety days you couldn't just switch. Why? Because when the 1988 cable law was written the cable guys got it in the act. No particular rational reason but lobbying influence did it.
And so what we are learning now is that everybody here and everybody in the tech sector have been learning the hard lessons, that there is a certain degree of freedom that you have, as long as you are not in the gun sights of the big guys.
But once you get in the gun sights of the big guys you'd better be ready to engage and whether it's through the one on one lobbying that Tod and Paul do, we do some of that, we also do email, get action alerts, get everybody to write in to their members and call their senators to try and stop bad things from happening or in the best of all worlds make good things happen.
So this isn't, this isn't an abstract thing, particularly when it comes to net neutrality, when you guys can write the best APIs in the world, and you can have the best applications built, but if I as an end consumer can't get it or it I as an end consumer am put at a disadvantage because of a network operator cable or telephone company, then you're going to lose.
John: Now, here's what I want to know, and I'm kind of the perfect foil for you guys because I'm basically ignorant when it comes to how this stuff works, so I get to ask really dumb questions which I'm good at.
Paul: And we find the dumb answers work just as well.
John: I can play a congressman, right? It's a series of tubes. Does anyone get that?
Paul: We started that. We did that.
John: Yeah, well, Ted Stevens.
Paul: Public knowledge, put it on the web.
John: You put it on the web?
Paul: Yes, we did.
John: Did it melt your servers? Oh no, you probably just used YouTube.
Paul: No. No. Before all the techno mix stuff happened, it was a simple little audio clip that we took off of the committee feed. We heard that and we thought, you know we should put that up. So we literally put up the mp3 file. I sent it out to my press lists. Brian Single from Wire picked it up and all of a sudden, kaboom.
John: Yeah, I got that as well on your press lists. I blogged it too and then it was on the Daily Show the next week which was kind of cool.
John: So, my question for you is, how are we doing? You talk about the big guys, right? You think about lobbyists and it's oil, tobacco, teleco, and now cable. Are we even in the same league as those guys in terms of influence in Washington?
Art: John, I'll take a first swipe at this. I think we're doing better than we deserve to. Part of the reason we're doing better than we deserve is because things have been relatively easy so far. I say that because in the first say five years of the Web, there was a very laissez-faire attitude from government. Just leave the Web alone. After the bubble burst, another five years was heavily pro-consumer regulatory issues arise, from attorneys general and those seeking to regulate on behalf of consumers.
But now what I think we're entering is the third phase of public policy on line, which is one in which we find ourselves pitted against other industries, ones who are much better funded and much better experienced. The telecommunications and cable industry and the network neutrality debate, the pharmaceutical industry and the patent reform debate. We're at a point now where we probably have to be a little bit more diligent and use more resources to get at these issues and make our voices heard.
John: When you say more resources, what you really mean is more money, right?
Art: Not necessarily. I think we can be a lot more efficient. We can't out golf them, we can't out junket them, and we can't out contribute them. We shouldn't try. But what we can do is spend a little more time on education. The tubes issue was one that was funny and everyone laughed. I have some sympathy for the senator, he has much more important things to deal with than net neutrality right? He's dealing with the war in Iraq and the economy and so forth. But at the same time that was the core issue in the network neutrality debate and that's why in some senses, it was deserving of ridicule, because the information that was clogging the pipes, the tubes, was not there unless the consumers had pulled it to them. This is a fundamental misunderstanding of how the Internet works. So, there's room for us to educate.
Now, in a lot of senses, we have to overcome the misinformation campaigns that are out there. He didn't make that stuff about the tubes. Someone told him that. Presumably it was somebody on the other side of the network neutrality debate. So we're actually battling not non-information but actually disinformation.
Paul: I think whether this audience realizes it or not, you've got a lot of political power here. Because one thing that really impresses members of Congress is innovation in small business. It's one thing from a huge telephone company or even a Google or a Yahoo to come in, now that they've attained status of big companies. But they always weren't big companies and a lot of you guys out here are with smaller companies that are doing really cool things. For you to come into Washington and sit down with a member of Congress or a Senator or their staff and say, "Look, we are the guys that are going to get snuffed out if bad things happen".
Perfect example of this is one of my favorite ones is Slingbox down in San Mateo. Our group just gave the Korkorian award a couple of weeks ago. They are a little technology that's totally disrupting the broadcasting model. We think it's fabulous. Jason and Blake have totally engaged in the policy process as much as defense against the broadcasters as anything, but because they realize that the innovators with good technology have a legitimate voice and they're dedicated to making it be heard which is fabulous.
John: Blake is actually going to be here tomorrow with NBC and we're going to have a conversation about that, so I'm looking forward to that.
Let's put net neutrality aside, not literally, but figuratively for a second here. What are one or two really big issues, that your company or your organization feels needs to be addressed in the coming year or two?
Tod: Patent reform. We're going to be dealing with patent reform.
John: Can you give us a primer on that?
Tod: The easiest way to think about this is, to a certain extent like the network neutrality debate, how much is there going to be attacks on innovation by ill-gotten patents that have been issued when business method patents were allowed in '97 or '87. We see it with Blackberry, what happened to Rim. We're also seeing it now that our friends at MTP, the patent holders, well, the heirs to the patent holder, sued Palm yesterday for the same patents that they held up against Blackberry. We have a chance this year in the next new congress to streamline the patent granting, to streamline the ridiculousness of the injunction status and also to stop what I call the Marshall Texas problem.
Marshall, Texas is in eastern Texas. The eastern district of Texas Federal Court had 150 new patent cases filed in the last three or four months, all in Marshall Texas. Why? Because they have a very fast track to do patent cases and they ruled in every case but one in favor of the patent holder. So we think that's a change.
John: Can you bring this issue to life a little bit? I'm still a little unclear why I care about patents. Because I'm thinking to myself if I make something cool, I want to patent it.
Tod: You're right. When you make something cool you want to patent it but you also don't want to have to deal with the other 1500 patents that are already there, that a Patent Troll's going to hold up against you.
John: A Patent Troll. We understand trolls. We have trolls in other parts of the business. So trolls I get. Can you explain why the pharmaceutical industry matters in this?
Paul: Yes, well the pharmaceutical industry has a radically different schedule than our industry does. They have very long development times and then very long times to recover the investments. As a result, they want to be able to stamp out any potential infringement very quickly, because they can't necessarily be made whole by damages. If a company is selling a product for let's say, 1/20th the price, that infringing generic manufacturer would never be able to have the money to repay the lost sales of the pharmaceutical company. So as a result, they have sought ways to shut down potential infringement almost at will.
In our business however, we have these very short leads over our competitors. We're all neck and neck trying to develop new technology and so-forth. If someone can come in from the outside, particularly someone who is not even in business, but is rather a law firm set up for this purpose and they can threaten to shut us down, say by causing us never to use a shopping-cart again - and this is what we got sued on a couple years back. What's Amazon without a shopping-cart? It's kind of important to us. And so, as a result, we have to deal with these people.
But they're lawyers; they're just a law firm: they're not a competitor. It would be one thing if eBay sued us on the shopping-cart, because they're in competition with us, and we may be taking sales away from them; and we could duke it out. But, if it's somebody who's not even practicing this intellectual property, it's a real problem. So we're trying to shut down these trolls and take away these outrageously high judgments that have this fiction that the trolls were even practicing. They seek not only a license fee or royalty, but also lost profits. How can they possibly have lost profits if they've not even tried to market and bring something to practice?
There's a couple ways we're trying to get at this; and I think there's probably enough momentum in this next Congress to get it done.
John: When you say "Patent trolls", we can name names.
Paul: Well, I mean -
Tod: Well, we have one at MarketExchange. That's the company that sued us for the "online-auction patents". And they did win a judgment.
John: This is a business model for some entrepreneurs, right?
Tod: Oh, yeah; absolutely.
John: all right. So, what I take away from that is that, basically, at the end of the day, we have the forces of the Internet industry, which actually - you have to deal battling with the forces of the pharmaceutical industry in order to have patent law that allows for innovation in this industry. Is that accurate?
John: That doesn't sound like a lot of fun.
Paul: It's not, because they're very good, very well funded, and they're very well -
John: Isn't it possible that these guys in Washington can figure out a way to let both things happen - that, if you're in the pharmaceutical industry and you have this long lead time, you have one set of protections - or is that just asking too much?
Paul: Well, I do - and I don't want to get too much into the minutiae, but there is a way, if, given their circumstance, where they're really concerned about the possibility that the potential infringer could never make whole the patentee with damages, maybe that could be a consideration in which a court grants an injunction of the practice.
For example, if we're sued by a troll, and we dispute the claim, we can always say "Look; we'll be able to pay it back. If we're wrong, and we lose in litigation, then we can make good with damages."
So consider the defendant, the person sued: if it is, in fact, a generic manufacturer and they really don't have the ability to repay, then that would be weighted more in favor of giving an injunction to the patentee.
John: All right. Now let's talk about some other issues. Art, what other issues come to mind that we should be aware of and maybe even active about?
Art: Two things that we're engaged in: one is an overall broadband policy. We talked a little bit about net neutrality, and we set that aside. But the bigger issue is one that came up briefly this morning: how the United States keeps falling in the ranks of broadband penetration; how most people don't have access to a real good, competitive choice; and how those that do have access to it are paying far too much for far too little. So we'd like to figure out how we can jumpstart that. If you travel just about any place in the world - one of my favorite billboards, in the London Tube, I saw in the spring: it was this little company called Be, which is offering 24 megs for 24. You can't approach that here.
The other is digital copyright. We want to make sure that it's still legal - that, if you want to put a CD on your iPod, you don't have to pay for it twice, you don't have to pay for a buffered copy in your laptop somewhere. And those are the kinds of things that always seem to come up.
John: There's somebody in Washington arguing that we should pay twice for those CDs?
John: And they're from -
Art: The Recording Industry Association of America.
John: Good. We have the chairman of EMI coming, and we can ask him all about that.
Art: Please, do.
John: What other issues are on eBay's docket, for example?
Tod: Privacy restrictions are going to come up again, especially with potential chairman Ed Markey, from Massachusetts: much more willingness to impose restrictions on the usage of data - extend data retention - and the issue that you should all care about is that it's going to be much more along the lines of private rights of action - you can be sued for privacy breaches, rather than dealing with it at the Federal Trade Commission or at state agencies.
We also think that there'll be another issue that comes up early in the next Congress, which is the - as Art said, the digital-copyright issues will always be there. We're going to see that also in the parents, as we said, and potentially in distant-state sales tax - the collection of taxes across state lines, applying that to the Internet and to all distances.
John: I want to ask you about privacy; I want to dig in to that. Everything we do on the Internet now, it seems, can be tracked. Not necessarily that it is; but an ISP, like Verizon or Comcast or Earthlink, if it cared to, could pretty much watch and track and store, and so, every single thing that we did on the Internet. We worry about search histories and data - at Amazon, for example - and all the information that's on Amazon and on eBay - but the fact is that all that information is available, at a deeper level, to an ISP.
There's been a lot of support in this room for open data, or the ability to take your data with you, or at least to have permissions and access and editing rights to data at the application level, as at Amazon or eBay. And you heard Mark ask Ross for the ability to pull his MySpace profile.
But, in Washington, when it comes to issues of privacy - we had a very big privacy spill earlier this year, when AOL released 690,000 search records. They erased the IP addresses, and they figured that was good enough. And then The New York Times went and looked at what everyone searched for and discovered - when people do vanity searches and stick their names in repeatedly, they figure that must be the person. There are ways to figure out who the people are. They found an old lady in Georgia, put her on the front page of The New York Times - and that caused quite a stir. Was that a conversation in Washington? And is this issue lurking in the background in Washington, waiting to break out, or are people kind of not worried about it?
Paul: It's ebbed and flowed during the past six or seven years. More recently, over the past two years, the issue has been more of citizen privacy versus the government, than consumer privacy versus commercial interests. With the change of Congress, it may come back to the fore - that consumer information privacy will be potentially more important, receive more scrutiny, in the new Congress.
I think that one of the things that this audience ought to care most about is something that the three of us, or at least Tod and I, have argued for, which is parity with all consumer information. It should not be the case that there be an Internet privacy rule that somehow a consumer would be more burdened if his or her consumer information, consumer data, were released or stolen from an Internet company as opposed to an offline company. So the rules ought to apply to Wal-Mart just as much as to Amazon.
John: You have to admit, though, that the Internet is a little different. The access, the ability to find patterns, to aggregate patterns, to use those patterns for good - as you do with a recommendation engine, for both your good as well as the good of the consumer -
Paul: Different; different. But think about your gas station credit card: that's a location device; they know where you are, where you travel, what time of day you travel. You walk into a brick and mortar store; they actually have a physical view of you in ways that just aren't possible on the web.
So there are differences, I grant you. The differences may or may not warrant a different treatment. When it comes to the release of consumer information or the sale of it somehow, a practice that Amazon does not engage in, it ought to be treated equally, if it's Wal-Mart or Amazon.
Art: What you have to remember is that this is an extension of marketing that has gone on for decades. If you look at the back of some of the trade publications for direct marketing associations if you want a list of left handed ten year old girls who have Barbies, you can find them. This segmentation has been going on for a long time. Granted, the data is in a different form but these are practices that are not new.
John: I think we worry; at least I do a little bit, that in the current national security crisis state that we find ourselves in, that the amount of data that are residing both on your company servers and at the deeper level, at the ISP level, might be abused. We absolutely love our government and want to trust it, right? We want to trust the people that run the government. Sometimes maybe that trust gets abused.
I asked Eric this question, I might as well ask you guys this question: Do you think Patriot and Patriot Two is good law? This is the law that allows for access to information from private corporations without the notification of the person whose information is being accessed for national security purposes. It pretty much re-wrote FISA as I understand it, which is a foreign intelligence act. So do you think that's good law?
Paul: No, we actually supported changes to that law to dramatically scale back the power of government. This is something that we didn't feel like we had to do absolutely but we felt like we had enough concern about the safety of our customer's information and the customers of other companies as well, not just ours. So we supported scaling back the government's power under the Patriot Act.
John: Well hopefully that will continue and maybe with a new congress we can see something there. The thing I worry about is fishing trips, like the DOJ search index fishing expedition, which was quite extensive. If you guys have questions, please come up to the microphones there, we've got a few minutes for questions if any of you have any, are there any questions out there? Someone on the right.
Pam Samuelson: Hi, I'm Pam Samuelson I teach at the University of California Berkeley.
John: Hi Pam.
Pam: Hi. I wanted to say a couple of words about patent reform, which can happen through the courts as well as through the legislature. Two of the issues that are most of concern to I think the information technology industries generally and also to the Internet industries are the injunctive relief issue that you raised but eBay actually won a wonderful case this year that actually the Supreme Court decided that courts did have discretion already to not issue injunctions and to consider things like trolls as a reason not to issue injunctions. This is particularly important because this is an issue on which the IT industry would never have won in congress because Farmer was so against it. So I think that is an important thing.
A second thing that the Supreme Court has as a really important patent reform issue is the KSR case about the standard for invention, the standard of non-obviousness. Again, this is something that many people in the IT industry wanted a higher standard before patents can issue and that's another one that I think we couldn't have gotten from the congress again because of opposition from other industries. But we may be able to get it through the Supreme Court.
I think the most important part of the patent reform agenda for small businesses is a lower cost way of challenging invalid patents or weak patents and that's the patent reform effort that I hope that your companies will be most active in promoting. That to me is the best way of getting rid of the really bad patents that are out there. And maybe I misunderstood you, but is eBay going after trying to get rid of business method patents? I think that would be a good idea but I have a feeling that is another thing that would be difficult to get through the legislative process.
John: Can someone educate me on what business method patents - oh, this is what Jay was doing at Priceline, business method patents.
Tod: Yeah, we're not going to get rid of business method patents. The closest analogy that has gone on has been the software debate in Europe and that's where there is no physical activity going on, it's just literally whether you can patent a business method. We are starting to see some.
There were a lot granted in the late 1980s when it was easy for the patent office to grant them because they weren't certain whether the courts would uphold them so it was easier to pass the buck along, and now that the buck has been passed along, the courts upheld them, we've got this bubble that happened of a lot of business method patents that are fairly obvious, that's why the KSR case that Pam mentioned is so important. We also think that it is a bubble and it will move through the system. Hopefully it won't take out too many companies in the meantime. I would like to fix the problem but to a certain extent it's even too much for us to take on.
John: Are there any other questions? Is there one coming up here? Go ahead.
Audience Member: Can you really influence legislation with email or do the senators treat it as spam?
Tod: That's a great question. The question was whether you can influence legislation by email. During the net neutrality debate earlier this year, eBay's Meg Whitman sent out emails to the point where we had 537,000 letters from eBay users to go to the congress, and we were told by about fifty percent of the members of Congress that they wouldn't accept any emails from outside their district. So we literally had to have physical letters printed and deliver them to the hill and go through the screening that every physical letter has to go through because of the anthrax scare. So it had to go to be irradiated out somewhere in Virginia.
But that made a difference having physical letters. So it's kind of silly but it's real names with real people and real places, and that half million letters from eBay users and then the million letters that were generated from Save-The-Net. They made a huge difference and I think it's something that everyone in the room that participated in that can be, I want to thank them for that. But it does make a difference to have your voices heard and it does to a certain extent reduce the need to spend a lot of money.
Paul: And just let me add that I think the value of email lobbying has diminished greatly over the past five or six years. It becomes ignored by staff. Once it was cool and now its just spam. So I think that the overall value had diminished. But the value that you guys can bring is the entrepreneurial value. Visit your member of Congress. I think that's more powerful than just about anything else, for you to appear in the district as a member of your district...
Art: Not necessarily in Washington but at home.
Paul: Right, to the district office, exactly right. And say, "Look, I've got this issue and I really care about this." They remember that more than a thousand emails.
Art Brodsky As much as we talk about technology it's the personal touch in the low-tech stuff, whether it's from us or the big lobbyists that really makes a difference.
John: Well I want to thank you guys for coming. We are out of time, and I appreciate it. Thank you for your work on behalf or our industry.
ANNCR: Paul Misener, Art Brodsky and Tod Cohen on How to Win Friends and Influence People in Washington from the Web 2.0 summit, 2006.
Daniel H. Steinberg is the editor for the new series of Mac Developer titles for the Pragmatic Programmers. He writes feature articles for Apple's ADC web site and is a regular contributor to Mac Devcenter. He has presented at Apple's Worldwide Developer Conference, MacWorld, MacHack and other Mac developer conferences.
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