With help from Leah Nylen, John Hendel and Nancy Scola
PROGRAMMING NOTE: Morning Tech will not publish on Monday, Jan. 18. We’ll be back on our normal schedule on Tuesday, Jan. 19. Please continue to follow Pro Technology.
Editor’s Note: Morning Tech is a free version of POLITICO Pro Technology’s morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
— A new call to action after the Capitol riot: IBM says freezing political donations in the wake of the violence in Washington isn’t enough — the federal government needs to revamp how it handles presidential transitions.
— Is Google’s Fitbit acquisition a done deal? Depends on who you ask. The tech giant said it has finalized the merger, even though the Justice Department has yet to sign off.
— Fixing the 5G chaos: The outgoing FCC chief says Congress may need to rethink how the U.S. governs the wireless airwaves.
GREETINGS AND WELCOME TO MORNING TECH, I’m your guest host Cristiano Lima. I’d like to take a moment today to highlight some of the incredible reporting my colleagues have done in recent weeks, at times risking their safety to bring you the news on the ground.
Got a news tip? Write to me at [email protected], and follow along on Twitter @viaCristiano. An event for our calendar? Send details to [email protected]. Anything else? Team info below. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.
IBM’S POST-INSURRECTION POLICY PLAN — Forget pausing political donations — tech giant IBM today is calling for industry and government alike to get behind policy changes to help prevent future political violence following last week’s insurrection at the Capitol. A slew of major corporations — including tech and telecom giants like Google, Facebook and Microsoft — have suspended those contributions as part of their response to the attack. But in a blog post out this morning, IBM executive Christopher Padilla wrote that the U.S. has to go far beyond “organizations temporarily withholding political money to take a stand.”
— Key context: IBM, Apple, Twitter and several other prominent tech companies either don’t have PACs or have dissolved them in recent years, a sign that some industry leaders think the cost of publicly backing political candidates outweighs the benefits.
— What IBM is proposing: Padilla is calling for Congress to codify a clearer set of rules and requirements around the presidential transition process, so it’s less reliant on “historical traditions and customs.” He’s also urging Congress and the incoming Biden administration to strengthen the Hatch Act, which limits civil servants from engaging in certain political activity, and to revamp how the federal government approaches vacancies. Padilla wrote that “shuffling political allies into acting leadership roles within federal agencies to evade accountability to Congress erodes trust in government and demoralizes federal workers.”
— On the tech front: Expect the tech giant going forward to take a more active role in the debate over Section 230, the tech industry’s legal liability shield, Padilla said. IBM will step up its advocacy in 2021 on both Section 230 and police reform, “which recent events make more urgent,” Padilla wrote. One proposal in particular IBM is backing: the bipartisan Platform Accountability and Consumer Transparency Act, S.4066 (116), which would puncture the immunity platforms have under that law and set new transparency requirements.
GOOGLE DARES DOJ TO SUE OVER FITBIT — The search giant said Thursday that it had finalized its deal to buy smartband maker Fitbit, even though U.S. antitrust prosecutors have yet to bless the merger. “We complied with the DOJ’s extensive review for the past 14 months, and the agreed upon waiting period expired without their objection,” Google spokesperson Julie Tarallo McAlister said. “We continue to be in touch with them and we’re committed to answering any additional questions.” In its own statement, the Justice Department said its Google-Fitbit review remains “ongoing” and that it “has not reached a final decision about whether to pursue an enforcement action.”
— How can that work? Antitrust experts say Google was within its rights to close the deal in the U.S. since its timing agreement with the Justice Department expired Wednesday. Companies almost never “close at risk,” though, since it’s the equivalent of daring prosecutors to sue. (Example A: a 2011 deal over chicken processing plants). Google, frustrated with the lengthy process on what it sees as a straight-forward deal, decided it was worth the risk, viewing the Trump DOJ as unlikely to bring a suit. By the time President-elect Joe Biden’s antitrust team is in place — a process that will take several months — the companies will be integrated and much harder to untangle if the new Democratic-led division were inclined to bring a case.
— Merger approvals: European authorities gave Google the green light in December. On Thursday night, Google got Japan’s approval — leaving just the U.S. and Australia. In December, Australia delayed its decision until March, in part because U.S. antitrust authorities had yet to weigh in. But merger notification in the island country is voluntary and it’s not unusual for companies to go ahead while review is still pending.
PAI: U.S. WIRELESS AIRWAVES GOVERNANCE ‘AN UNRULY MESS’ — Outgoing FCC Chair Ajit Pai used a speech Thursday to pose the question: Is it time for Congress to look at overhauling the bifurcated way the U.S. regulates the wireless airwaves, or as he put, “an unruly mess?” The U.S. has long been an “outlier” in this regard globally, the GOP chief noted, with the FCC overseeing commercial airwaves and the Commerce Department handling federally held spectrum.
— “The current structure doesn’t work,” Pai said at an event hosted by tech trade group ITI, suggesting that the FCC should be the sole regulator. “If the FCC ultimately holds the pen on all spectrum matters, perhaps agencies will stop throwing up roadblocks by default and will recognize that the best way to preserve their interests is to persuade the Commission with sound engineering and facts.”
— Pai noted the many interagency and Hill squabbles his leadership has found itself in as the agency looks to free up airwaves for 5G and Wi-Fi. He recommended that the Biden administration install a strong leader at Commerce’s National Telecommunications and Information Administration to keep agencies from “freelancing” on their own “parochial” airwave agendas. And the new Democratic-led FCC must “hold its ground,” he added, saying groups will likely try to use the change in power to undo FCC actions in recent fights over the 5.9 GHz, 6 GHz, L-band and C-band.
TECH QUOTE OF THE DAY – “Imagine historic investments in Research & Development to sharpen America’s innovative edge in markets where global leadership is up for grabs, markets like battery technology, artificial intelligence, biotechnology, and clean energy,” Biden said late Thursday in announcing his Covid-19 recovery plan.
— Tech industry reax: Biden’s remarks drew plaudits from industry leaders. His speech “set the right tone and priorities for the getting the country on track,” said Aaron Cooper, vice president of global policy at tech trade group BSA | The Software Alliance. Cooper highlighted the plan’s “significant investment in the Technology Modernization Fund.”
HOUSE E&C GOP ADDS FEISTY TECH COMBATANTS TO ROSTER — House Energy and Commerce Republicans on Thursday announced a slate of new additions to the panel, including several who are poised to use the perch to antagonize industry giants. Here’s a quick breakdown of the notable newcomers:
— Dan Crenshaw of Texas: The former Navy SEAL has railed against tech companies over accusations they “use their power to censor speech and amplify progressive agendas” and called for revamping Section 230 to address concerns over alleged bias. He’s been sharply critical of Chinese telecom giants like Huawei competing with the U.S. on 5G.
— Kelly Armstrong of North Dakota: A member of the House Judiciary antitrust subcommittee in the 116th Congress, Armstrong has supported tweaks to U.S. antitrust laws to address concerns about competition in the online marketplace. And he’s called for giving regulators who oversee the industry more resources and staffing. He’s also expressed concern about issues around data privacy and facial recognition.
— Debbie Lesko of Arizona: After a slew of tech companies pulled the conservative-friendly Parler app off their products, Lesko called it “Big Tech protecting their monopolies.” And she’s slammed the industry over the anti-conservative bias claims.
— Greg Pence of Indiana: The brother of Vice President Mike Pence, Greg Pence called boosting rural broadband investment a “major priority” of his for the panel.
— Other additions: John Curtis of Utah, Neal Dunn of Florida, John Joyce of Pennsylvania and Gary Palmer of Alabama.
LISTEN UP: ‘THE FUTURE THIS WEEK’ BY POLITICO’S NANCY SCOLA — Want an easy way to catch up on tech news via your smart speaker? Join Nancy as she gives you three- to five-minute recaps of this week’s tech news, plus fresh insights. This week: why some Trump critics are raising red flags on Twitter’s Trump ban.
— Not enough Nancy in your ears? She joins “Dispatch,” POLITICO’s daily podcast, to dive into the flurry of presidential deplatforming and what it means for the debate over ‘Big Tech.’
— TechNet announced two new members, Deloitte and Nova Credit, and that Verizon is returning as a member.
— “How Facebook and Twitter decided to take down Trump’s accounts,” via NBC News.
— “The alternate reality of fringe apps,” via NOW.
— “Online extremists are ignoring Trump’s call for calm,” via POLITICAL.
— “The local politics of Airbnb’s ban on D.C. rentals,” via Wired.
— “Apple’s app store removes social media platform Wimkin over calls to violence,” via WSJ.
— “They used to post selfies. Now they’re trying to reverse the election,” via NYT Opinion.
— “Amazon makes it too hard to cancel Prime, groups tell FTC,” via Bloomberg.
— “The fractured tech lobby’s uphill battles,” via Axios.
— “After barring Trump, Facebook and Twitter face scrutiny about inaction abroad,” via NOW.
— “Stripe bans Trump, but donations still come through,” via WSJ.
— “WeChat ban urged by U.S. gets skeptical review by appeals court,” via Bloomberg.
Tips, comments, suggestions? Send them along via email to our team: Bob King ([email protected], @bkingdc), Heidi Vogt ([email protected], @HeidiVogt), Nancy Scola ([email protected], @nancyscola), John Hendel ([email protected], @JohnHendel), Cristiano Lima ([email protected], @viaCristiano), Alexandra S. Levine ([email protected], @Ali_Lev), and Leah Nylen ([email protected], @leah_nylen).
