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Silicon Valley startups discover power of political lobbying

Martyn Williams | Dec. 4, 2014
They might be masters of innovation in some areas, but startups like Airbnb, Uber, Sidecar and Fitbit are finding that when it comes to Washington, D.C., the old ways are the best.

Aereo, the New York company that wants to stream over-the-air TV to computer screens, revamped its efforts in D.C. after broadcasters, cable operators and others managed to convince the Supreme Court that its business model should be illegal.

Aereo had already spent $820,000 over two and a half years to pay a lobbying company, and a few months after the Supreme Court ruling it filed papers to begin lobbying activity itself. Less than two weeks later, it was sitting down with former FCC Chairman Tom Wheeler to discuss regulation of Internet video services. The company recently laid off most of its employees, but still hopes to convince regulators that it should be legal.

The need to lobby is often greatest in industries that have strong, established players. Ride-sharing companies are going up against taxi companies, for example, and media streaming companies are taking on broadcasters, cable companies and the recording industry.

These competitors often have deep roots in Washington, are well funded and don't like the disruption the Internet has brought.

"They want to keep the status quo," said LaPira. "If they are successful, they want to keep it that way."

It's difficult to directly compare the amount of money spent by either side, in part because established companies often lobby on a wide range of issues, but the newer players are usually out-spent.

In entertainment, for example, Netflix spent $1.3 million on federal lobbying last year, while the National Cable and Telecommunications Association spent $20 million. Comcast, Time Warner and a host of entertainment and broadcasting companies spent many millions more.

 

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