Category Archives: Economic Development

Elizabeth Warren Releases Plan to Rein in Big Tech, Giant Corporations

Sen. Elizabeth Warren, 2020 Democratic candidate for president at rally in Long Island City, NY © Karen Rubin/news-photos-features.com

Senator Elizabeth Warren (D-MA), a declared 2020 candidate for 2020 presidential nomination, came to Long Island City, where local activists rejected Amazon, to propose a plan to rein in big tech and other giant multi-national companies that use their economic power to stifle competition and intimidate government. Here is her proposal — Karen Rubin, News& Photo Features

Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation. 

I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules. And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor

That’s why my Administration will make big, structural changes to the tech sector to promote more competition—including breaking up Amazon, Facebook, and Google.

How the New Tech Monopolies Hurt Small Businesses and Innovation

America’s big tech companies provide valuable products but also wield enormous power over our digital lives. Nearly half of all e-commerce goes through Amazon. More than 70% of all Internet traffic goes through sites owned or operated by Google or Facebook. 

As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people. To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies. 

America’s big tech companies have achieved their level of dominance in part based on two strategies: 

  • Using Mergers to Limit Competition. Facebook has purchased potential competitors Instagram and WhatsApp. Amazon has used its immense market power to force smaller competitors like Diapers.com to sell at a discounted rate. Google has snapped up the mapping company Waze and the ad company DoubleClick. Rather than blocking these transactions for their negative long-term effects on competition and innovation, government regulators have waved them through.
     
  • Using Proprietary Marketplaces to Limit Competition. Many big tech companies own a marketplace – where buyers and sellers transact – while also participating on the marketplace. This can create a conflict of interest that undermines competition. Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp. 

Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector. Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012. 

With fewer competitors entering the market, the big tech companies do not have to compete as aggressively in key areas like protecting our privacy. And some of these companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business, and can act — in the words of Mark Zuckerberg — “more like a government than a traditional company.” 

We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy. 

Restoring Competition in the Tech Sector

America has a long tradition of breaking up companies when they have become too big and dominant — even if they are generally providing good service at a reasonable price. 

A century ago, in the Gilded Age, waves of mergers led to the creation of some of the biggest companies in American history — from Standard Oil and JPMorgan to the railroads and AT&T. In response to the rise of these “trusts,” Republican and Democratic reformers pushed for antitrust laws to break up these conglomerations of power to ensure competition.

But where the value of the company came from its network, reformers recognized that ownership of a network and participating on the network caused a conflict of interest. Instead of nationalizing these industries — as other countries did — Americans in the Progressive Era decided to ensure that these networks would not abuse their power by charging higher prices, offering worse quality, reducing innovation, and favoring some over others. We required a structural separation between the network and other businesses, and also demanded that the network offer fair and non-discriminatory service. 

In this tradition, my administration would restore competition to the tech sector by taking two major steps:

First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform

Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.

For smaller companies (those with annual global revenue of between $90 million and $25 billion), their platform utilities would be required to meet the same standard of fair, reasonable, and nondiscriminatory dealing with users, but would not be required to structurally separate from any participant on the platform.

To enforce these new requirements, federal regulators, State Attorneys General, or injured private parties would have the right to sue a platform utility to enjoin any conduct that violates these requirements, to disgorge any ill-gotten gains, and to be paid for losses and damages. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.

Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law. Therefore, Amazon Marketplace and Basics, and Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well. 

Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers. 

Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including: 

  • Amazon: Whole Foods; Zappos
     
  • Facebook: WhatsApp; Instagram
     
  • Google: Waze; Nest; DoubleClick
Sen. Elizabeth Warren, 2020 Democratic candidate for president at rally in Long Island City, NY © Karen Rubin/news-photos-features.com

Unwinding these mergers will promote healthy competition in the market — which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.   

Protecting the Future of the Internet

So what would the Internet look like after all these reforms?

Here’s what won’t change: You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.

Here’s what will change: Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business. Google couldn’t smother competitors by demoting their products on Google Search. Facebook would face real pressure from Instagram and WhatsApp to improve the user experience and protect our privacy. Tech entrepreneurs would have a fighting chance to compete against the tech giants. 

Of course, my proposals today won’t solve every problem we have with our big tech companies.

We must give people more control over how their personal information is collected, shared, and sold—and do it in a way that doesn’t lock in massive competitive advantages for the companies that already have a ton of our data.

We must help America’s content creators—from local newspapers and national magazines to comedians and musicians — keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook.

And we must ensure that Russia — or any other foreign power — can’t use Facebook or any other form of social media to influence our elections.

Those are each tough problems, but the benefit of taking these steps to promote competition is that it allows us to make some progress on each of these important issues too. More competition means more options for consumers and content creators, and more pressure on companies like Facebook to address the glaring problems with their businesses.

Healthy competition can solve a lot of problems. The steps I’m proposing today will allow existing big tech companies to keep offering customer-friendly services, while promoting competition, stimulating innovation in the tech sector, and ensuring that America continues to lead the world in producing cutting-edge tech companies. It’s how we protect the future of the Internet.

See: Warren Brings 2020 Campaign to Long Island City to Call for Breaking Up Big Tech, Corporate Giants

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© 2019 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email editor@news-photos-features.com. Blogging at www.dailykos.com/blogs/NewsPhotosFeatures.  ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin

New York State Strategy: Turn Long Island into Leader for Nascent Offshore Windpower Industry

Long Islanders advocate for offshore windpower outside of Long Island Power Authority offices. NYSERDA is investing millions of dollars to ease the way for private entities to develop a windpower industry on Long Island © Karen Rubin/news-photos-features.com

By Karen Rubin, News & Photo Features

Governor Andrew Cuomo sees the opportunity to create a new industry centered largely on Long Island to take advantage of the offshore windpower in an area of the Atlantic Ocean, considered “the Saudi Arabia of windpower.” In this, the state is acting much like other nations which jumpstart new industries by funding critical studies, research centers, workforce development. This is all to ease the way, lessen the risk and increase likelihood of success for the private companies which are expected to vie for leases from the federal Bureau of Ocean Energy Management (BOEM).

Cuomo has set a standard of the state generating 50% of its energy needs through renewable by 2030, and offshore wind, in addition to solar, hilltop windpower, hydroelectric and other sources (“all of the above”) are considered essential to meeting that goal, which Cuomo has proudly declared the most ambitious in the nation.

The New York State Department of Environmental Conservation just released proposed regulations to require all power plants in New York to meet new emissions limits for carbon dioxide (CO2), a potent greenhouse gas that contributes to climate change. The regulations, a first in the nation approach to regulating carbon emissions, will achieve the Governor’s goal to end the use of coal in New York State power plants by 2020.

Environmental groups including Sierra Club have long advocated offshore wind, especially as Long Island faces a crucial transition juncture of expanding or upgrading fossil-fuel based power plants to meet its energy needs, versus investing and transitioning to renewable energy.

The state is targeting acquiring 2,400 megawatts of energy from offshore wind – the equivalent of what is generated by the Indian Point Nuclear Power Plant – enough to power 1.2 million households. The associated industries that would develop to manufacture the wind turbines and platforms, construct ports and stage the equipment, install the turbines, operate and maintain the systems are expected to employ some 5,000 people in relatively high-paying jobs, and generate $6 billion for the region. What is more, over time, windpower will bring down the cost of electricity on Long Island, where high costs of energy are considered impediments to economic growth.

At the same time, the state has invested in new research programs at State Universities, including Stony Brook to address key issues such as storage batteries (for when the wind does not blow), and transmission.

The master plan, being unveiled in public hearings, has been developed over a period of years by New York State Energy Research and Development Authority (NYSERDA).

The strategy is to be the furthest along in order to be first in line to contract for the electricity, which could be sold to New Jersey and other regions, to reduce cost and risk to private entities which will bid for the rights to construct and operate the wind turbines. The state is not actually seeking to  be the winning bidder for the leases, but to be the customer for the power for those that do. And the state is also aware that other customers – New Jersey, as one example (though the former governor Chris Christie showed little interest, the new governor Phil Murphy is) – will also be bidding. But there is great confidence because of proximity and the sheer market size, that New York City and Long Island residents will be the beneficiary.  And there is so much energy potential from this area, there is “enough for all.” Indeed, NYSERDA is eyeing 3,200 MW of production from the sites it has targeted, of which it would contract for 2,400.

NYSERDA has conducted studies in 20 areas –literally every environmental, biologic, economic and engineering aspect – in order to  define every aspect of locating the best places to position turbines and cables, where to stage construction, where to manufacture the turbines and components, even where to invest in workforce development. All along the way, the agency has engaged stakeholders – from municipalities and environmentalists to labor unions to consumer advocates, to commercial fishing interests.

The state has allocated $15 million to spend on workforce development and infrastructure advancement (for example, building port facilities), and is allocating up to $5 million for multi-year research studies that will assist project developers with the data will be made available by NYSERDA in real time to public. For example, data on wind speeds particularly impact economics of projects and will improve the certainty of bids to state. 

“We are seeking to invest $20 million or more, kicking off in 2018, for research and development – component design, systems design, operational controls, monitoring systems, manufacturing processes,” said Doreen Harris, Director, Large Scale Renewables, NYSERDA.

To attract private investment in port infrastructure and manufacturing, the state is hoping to spotlight promising infrastructure investments (60 sites have been identified), helping jumpstart project development and “secure its status as the undisputed home for the emerging offshore wind industry in the US.”

Think of it: Long Island used to be the center for America’s aerospace industry. Now it can be a leader in a global offshore windpower industry. What is more, off shore windpower can also bring down Long Island’s historically high utility rates which are considered an impediment to business development and economic growth.

“We’ve established technical working groups to determine best use of funds – to insure new Yorkers well prepared to serve offshore wind industry and connected to the global Industry.” Indeed, offshore wind is brand new for the US, but has been in force in Europe for 25 years.

The United States projects will have the benefit of leap-frogging over earlier technology, with more efficient, productive, and less environmentally risky structures.

The state is estimating that the near-term incremental program cost would be less than 30 cents a month for a typical homeowner – the cost of windpower is front-loaded in the initial construction, as opposed to fossil-fuel generated energy which continues to get more expensive over time because it is a finite resource that is increasingly more difficult and costly to obtain and needs to be transported from further distances to users. Electricity generated from wind is already competitive with fossil-fuel generated power, but over time, as usage thresholds and technology improvements are reached, the costs will go down. And this does not even factor in the environmental  and public health benefits of transitioning from carbon-based fuel.

The only kicker is that while New York State is being pro-active, it is BOEM that ultimately controls the leases and is undertaking similar studies, so people are concerned this can be unnecessarily time-consuming and duplicative. And while BOEM under the Obama Administration was full-speed ahead and keen to develop offshore windpower, concern was raised after Interior Secretary Ryan Zinke declared the entire continental shelf open for drilling, and this prime windpower area used instead for drilling rigs or equally horrible Liquified Natural Gas (LNG) terminals such as the Port Ambrose that had been beaten back by Governor Cuomo.

But BOEM’s Energy Program Specialist Luke Feinberg, who attended NYSERDA’s May 8 public hearing in Melville expressed enthusiasm for offshore wind in this area (not to mention the area does not seem to have much potential for oil). BOEM presented a timetable that projects out two to five years before actual construction can begin; BOEM intends to hold its next lease auction no later than 2019.

BOEM is taking comments on the proposed “New York Bight” Call Area by May 29. Submit comments and view documents at boem.gov/New-York/

The New York Public Service Commission is now considering a number of options for the state to advance solicitations once the leases are awarded; send comments or view materials at http://documents.dps.ny.gov.

To get more information on the New York State Offshore Wind Master Plan visit nyserda.ny.gov/offshorewind.

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© 2018 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email editor@news-photos-features.com. Blogging at www.dailykos.com/blogs/NewsPhotosFeatures.  ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin