[Infowarrior] - Obama Is From Google, McCain Is From AT&T on Digital-Age Rules

[Richard Forno]

http://www.bloomberg.com/apps/news?pid=20601087&sid=alsJ22j5BQS0&refer=home


Obama Is From Google, McCain Is From AT&T on Digital-Age Rules

By Christopher Stern

July 14 (Bloomberg) -- A Barack Obama presidency would bode well for  
Google Inc. A John McCain victory would be good for AT&T Inc.

That's because the two senators approach regulation in the information  
age from fundamentally different perspectives.

Obama, who clinched the Democratic nomination with an Internet-savvy  
campaign, wants the government to take an active role in wielding the  
Web as a weapon against poverty and rural isolation, an approach that  
could benefit Google.

McCain sees the Internet mainly as a business and trusts market forces  
to foster innovation for society's benefit. It's the same tack he has  
taken in Congress, advocating a hands-off approach to telephone- 
industry mergers that created the new AT&T.

``McCain is a traditional, market-oriented conservative, and Obama is  
more comfortable with government intervention in the marketplace to  
promote competition,'' says Andrew Jay Schwartzman, president of the  
Media Access Project, a public- interest law firm in Washington.

That same philosophical divide -- Obama favoring rules aimed at curing  
society's ills, McCain seeing government as more hindrance than help  
-- is borne out on other Information Age fronts, ranging from media  
mergers to the digitization of medical records.

Their differences also are reflected in their personal use of  
technology: Obama, 46, is often seen pecking away at his Blackberry.  
McCain, 71, jokingly describes himself as computer ``illiterate.''

Blacks, Hispanics

Obama last year criticized the Federal Communications Commission for  
smoothing the process for media companies to combine. He said the  
FCC's ruling would make it harder for blacks and Hispanics to become  
owners and co-sponsored Senate legislation seeking to block the  
decision.

McCain often has complained that the commission slows down proposed  
mergers. In 2003, he voted against a similar bill that would have  
tightened media-ownership rules. He also introduced a measure to limit  
the commission's authority to review telecommunications takeovers.

Before he was a presidential candidate, Obama co-sponsored legislation  
that would bar cable and telephone companies, including San Antonio- 
based AT&T, from using ownership of Internet connections to sell  
owners of sites such as Yahoo! Inc. premium service on their network.

Without such ``network-neutrality rules'' -- which ensure that  
networks can't be used to give preferential treatment to one company  
over another -- Obama says the free flow of information on the  
Internet is threatened.

Micromanagement

The companies argue that they should be able to charge different  
customers differently to justify their investments to build and  
maintain their networks. McCain has criticized government intervention  
as premature and potential micromanagement.

Obama has proposed a new position of chief technology officer for the  
federal government. The Illinois Democrat outlined other items on what  
he called his ``Innovation Agenda'' during a talk with Google  
employees in November.

They include a plan to use about $5 billion in subsidies to provide  
rural and low-income households with high-speed Internet access. He  
says the money would come from a decades-old program that now pays for  
regular voice service for those same homes.

Every American should have broadband access, ``no matter where you  
live or how much money you have,'' Obama said at Google's Mountain  
View, California, headquarters.

Such a shift in subsidies would directly boost Google and other  
Internet-service companies by increasing their potential pool of  
customers.

`Grossly Inefficient'

McCain is a longtime critic of the telephone subsidy, which he has  
called a ``breeding ground for waste, corruption and grossly  
inefficient spending.'' The Arizona Republican told a Kentucky  
audience in April that the government should identify areas where  
``the market truly is not working'' and provide companies with  
incentives such as tax breaks to serve them.

The candidates' different views are a reflection of the people who  
surround them.

McCain's campaign manager, Rick Davis, is a former lobbyist whose  
clients included BellSouth Corp. and SBC Communications Inc. before  
they became part of AT&T, as well as Verizon Communications Inc.  
Charlie Black, a senior McCain adviser, is another former lobbyist and  
had AT&T as a client.

McCain also is being counseled on policy issues by Michael Powell, a  
former FCC chairman who led the agency's efforts to deregulate local  
telephone companies.

Philosophically Opposed

Powell says that even though McCain is philosophically opposed to  
government intervention in the market, he has often taken stands  
against corporate interests.

``He is by no means easily labeled pro-corporate, having taken strong  
positions in favor of protecting consumers,'' Powell says. He points  
to McCain's support of the ``Do Not Call'' registry, which allows  
consumers to block telemarketing calls, and tax incentives that help  
minorities and women buy TV and radio stations.

One of Obama's advisers is Andrew McLaughlin, Google's director of  
public policy and government affairs. In 2007, McLaughlin was a  
registered lobbyist for Google. Obama also gets advice from two former  
FCC chairmen, Reed Hundt and William Kennard, who served during  
President Bill Clinton's administration.

Kennard is now a managing director of the Carlyle Group and works on  
the Washington-based private-equity company's telecom and media-buyout  
fund. He says Obama's technology policy picks up on the Clinton  
administration's goal of using the Internet to expand educational and  
economic opportunities.

`Vexing' Problems

Obama ``fundamentally believes that you can't craft a policy about  
technology and innovation without linking it to how we are going to  
solve other vexing social problems,'' Kennard said last month at a  
forum in Washington on media and technology issues facing the next  
president.

He points to Obama's proposal that the federal government digitize  
hundreds of millions of individual medical records. Kennard says the  
project ultimately would save taxpayers billions of dollars in health- 
care costs by reducing paperwork and increasing safety.

McCain wants private industry, not the federal government, to cover  
the cost of converting medical records to digital form. John Kneuer, a  
former Bush administration official who now advises McCain on  
technology issues, says the senator wants the government to leave  
private industry alone so the marketplace can solve problems.

`Disincentives'

``Be careful where you tread, so you don't do anything that is going  
to create disincentives or barriers to the kind of investment and  
innovation and expansion of these technologies,'' Kneuer said at the  
same forum.

Kennard says there may be some short-term pain for large  
telecommunications companies under an Obama administration. In the  
long term, they'll benefit because unfettered consolidation ``is  
probably not good for anyone.''

After almost eight years of a generally favorable regulatory  
environment, the telecom industry would face significant change with  
an Obama administration, says the Media Access Project's Schwartzman.

``They are right to be anxious,'' he says.

To contact the reporter on this story: Christopher Stern in Washington  
at cstern3 at bloomberg.net.