With help from Emily Birnbaum, John Hendel and Leah Nylen
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— Budget watch: President Joe Biden’s long-anticipated budget proposal will be released today. Here’s what we’re most interested in.
— Broadband talks: Senators who huddled with Vice President Kamala Harris on broadband say they’re still working on a deal.
— Motion failed: Major tech companies are spending a lot of time batting down shareholder proposals on contentious social issues.
IT’S FRIDAY! MORNING TECH IS READY FOR THE LONG WEEKEND. I’m your host, Benjamin Din. Fun fact: My phone autocorrected someone’s name to “Gary,” which led me down a rabbit hole to this GIF of Gary from Spongebob. (And by rabbit hole, I mean a five-second search on GIPHY.) Hope that made you smile!
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BREAKING OVERNIGHT: 11TH-HOUR CHAOS ENGULFS THE SENATE — A last-minute bipartisan deal to pass Senate Majority Leader Chuck Schumer’s legislative package targeting China’s influence was derailed by a group of GOP senators led by Ron Johnson of Wisconsin. (The Senate adjourned shortly before 3 a.m. and will be back at 9 a.m.)
THE TECH PERSPECTIVE ON BIDEN’S BUDGET — As with all presidential budget requests, Biden’s proposal out today is a wish list; it will almost certainly differ substantially from what Congress ultimately approves, but it’ll give us a lot to chew on nonetheless. Here are MT’s top tabs for the budget rollout:
— What we know: Biden’s $1.5 trillion discretionary budget from April had investments in R&D, IT modernization and broadband. Two notable figures were $500 million for the Technology Modernization Fund, as well as a $750 million reserve fund for agency IT upgrades. It also requested $916 million for research at the National Institute of Standards and Technology and money for broadband at the National Telecommunications and Information Administration and USDA.
Biden’s proposal today will also incorporate his $2.3 trillion infrastructure proposal and $1.8 trillion plan focused on education and families, so we’ll also watch for extra details about the administration’s approach to expanding broadband access.
— What we’re looking at: We haven’t had appropriations hearings with the acting heads of the FCC and the FTC, so the budget proposal will give us a first look at what they anticipate for their agencies. We also want to know how much the administration wants to allocate for the Justice Department’s antitrust division, given all the scrutiny on major tech companies. Last year, the Trump administration requested more than $20 million increase, a sign it was gearing up for more antitrust litigation.
Also noteworthy: how much Biden requests for supply chain security, Matthew Cornelius, director of the Alliance for Digital Innovation and a former OMB staffer, told MT. The Trump administration’s Commerce Department took on a much more aggressive role in securing the supply chain, and Cornelius said it wasn’t clear whether Biden’s Commerce Department would continue to do so or if that would fall to another department, like Homeland Security. Commerce Secretary Gina Raimondo did tell House appropriators earlier this month that she wanted an office to monitor supply chain vulnerabilities.
LAWMAKERS, WHITE HOUSE RECKON WITH BROADBAND STICKING POINTS — A day after Harris held a discussion about broadband with members of Congress, key lawmakers told John they came away heartened — despite worsening odds that the parties will be able to bridge their differences about the administration’s infrastructure ambitions. Democrats may eventually end up ramming through their next infrastructure bill via reconciliation, without trying to get any GOP votes. But for now, the lawmakers said, it looks like there could still be room for compromise on broadband.
“I actually thought it was constructive,” Sen. Dan Sullivan (R-Alaska) said of the Wednesday meeting. “The core theme from my perspective that I was emphasizing was you have to get the truly unserved [areas]. … There was a lot of consensus on that.” That’s a more positive spin than what House Energy and Commerce Republicans offered.
The contentious topic of broadband speeds came up, according to Sen. Mark Warner (D-Va.). Policymakers “need to make sure that the broadband we deliver is going to be high enough speed that it can actually meet the needs of our community,” he said. “The idea that you’re going to create a second class of citizens giving them speeds that can’t even meet today’s technology needs would be a dreadful mistake.”
Sen. Ben Ray Luján (D-N.M.) said meeting attendees discussed the importance of “redundant, resilient, secure” internet networks and broadband pricing — a potentially divisive issue, given GOP fears about regulating broadband rates (Biden has said he wants to force down high internet prices, though his plan doesn’t say how he’d do it). “There was not one person in the room that did not talk about the importance of affordability and what it’s going to take for us to get there,” said Luján, adding that Harris emphasized that investments in broadband infrastructure would help boost U.S. competitiveness.
— The White House and Senate Republicans are seemingly aligned around $65 billion for broadband if they reach a deal, which Republicans again floated in their latest counteroffer Thursday (Democrats originally wanted $100 billion). But debates about thorny underlying issues, such as the administration’s proposed emphasis on municipal broadband and demands for greater transparency on monthly internet bills, still loom large. Asked whether the White House would compromise, Senate Commerce ranking member and GOP negotiator Roger Wicker of Mississippi said, “There’s discussion about that.”
TECH BOARDS DEFEAT SHAREHOLDER PROPOSALS — The boards of Facebook and Amazon this week defeated proposals from shareholder activists hoping to hold the companies accountable on topics like disinformation, civil rights and surveillance reform. Next week, Alphabet is widely expected to defeat proposals on whistleblower protections and government censorship. And it’s still not known if Twitter defeated a proposal Thursday to include a member with human or civil rights experience on its board, though it’s unlikely to pass.
Those losses are a stark tech-world contrast to the successful campaign by activist investors in Exxon to win seats on that company’s board and for Chevron’s investors to order it to reduce greenhouse gas emissions.
— What’s different about tech: Why do these kinds of proposals face defeat every year? The answer lies with the voting structure of the boards of Facebook, Alphabet and Amazon, which give a ton of power to their larger-than-life founders and leaders. Facebook CEO Mark Zuckerberg and Alphabet’s Larry Page and Sergey Brin have majority voting control of their respective boards, enabling them to defeat any proposal they don’t like outright. Jeff Bezos has a 14 percent stake in Amazon — not a majority, but enough to give him a lot of sway.
— How to succeed in business: The tech activists pushing reforms knew they would likely fail. But they use different metrics to determine success. Michael Conner, executive director of Open MIC, which helped organize the proposals, said he’s watching how many votes were cast for particular proposals in next week’s filings. “Those results will tell you a lot about what independent shareholders are thinking,” he said.
The activist investors say the context is different this year. Proposals at Alphabet for the first time received backing from ISS, the leading proxy advisory firm. “What’s really different this year is the … activism that workers, civil rights groups, the Black Lives Matter movement, have been doing to raise awareness about the impact of these companies on society,” said Mary Beth Gallagher, executive director of Investor Advocates for Social Justice.
ON THE DOCKET: PRIVACY AND COMPETITION — Facebook will defend itself in federal court today against Israeli advertising startup BrandTotal, which says the social media company is trying to kill its business under the guise of protecting user privacy, Leah reports for Pros.
— Why we’re watching: “The case involves the tricky intersection of antitrust and privacy, an area that courts, antitrust agencies and lawmakers are grappling with as they seek to protect consumer privacy online without imposing restrictions that hamper smaller players in the market,” Leah writes. “If Facebook loses the case, the social network and other tech giants could face limits on their ability to restrict rivals from their platforms and valuable data.”
FCC VOTES TO PAUSE TRUMP-ERA AIRWAVES SHIFT — In a 3-1 vote unveiled Thursday, FCC commissioners froze the implementation of an airwaves order approved last fall, which had reallocated some 4.9 GHz spectrum used by public safety for commercial use. Acting FCC Chair Jessica Rosenworcel has said staying the order would allow the commission to find better uses for the spectrum “at national scale.”
— GOP Commissioner Brendan Carr, the sole dissenter, expressed “disappointment” but said in a statement he hopes to quickly reallocate the airwaves.
Michael Kratsios joins Scale AI as managing director and head of strategy. He was the Trump administration’s U.S. CTO. … Shawn Bice joins Splunk as president of products and technology. He previously worked at Amazon Web Services and Microsoft. … Edward Hill is joining ViacomCBS as VP of government relations. He previously was VP of federal public affairs at McGuireWoods Consulting. … Nick Maynard is the new CEO at US Ignite. Nancy Jemison will be chief financial officer, and Mari Silbey will be program director for the Platforms for Advanced Wireless Research program. … WarnerMedia CEO Jason Kilar says he’s staying put at least through 2021.
And from our pals at POLITICO Influence: Law firm Taft Stettinius & Hollister is building out a lobbying practice, Taft Advisors. Facebook is one of its clients. … Qualcomm has hired the Tiber Creek Group to lobby on tax issues. … Danny Marti will be the head of global policy at Chinese tech giant Tencent. He is an Obama administration alum.
Taking stock: Apple and Google worked together on virus-tracing apps. They weren’t very successful, NYT reports.
Cause and effect: Facebook lifted its ban on claims that Covid is manmade. But could that spark anti-Asian hate? WaPo dives in.
Fake news: “Bogus fact-checking site amplified by dozens of Indian embassies on social media.” More from the Atlantic Council’s Digital Forensic Research Lab.
App vigilantes gone wild: Crime app Citizen launched a manhunt on the wrong person. Here’s how it all went down, via Vice’s Motherboard.
Marching on: Women suing Google over gender pay disparity won class-action status, Bloomberg reports.
Welcome to 1984: That dystopian future could come as soon as 2024, if more isn’t done to regulate artificial intelligence, Microsoft President Brad Smith warns. More from Daily Mail. (For more on AI, check out POLITICO Europe’s AI Summit on Monday.)
Paging the president: A group of tech accountability advocates are calling on Biden to stop incorporating language mirroring Section 230 in trade agreements.
100/100: A bipartisan and bicameral group of lawmakers asked Treasury Secretary Janet Yellen to rethink the standard for broadband speeds.
Tips, comments, suggestions? Send them along via email to our team: Bob King ([email protected]), Heidi Vogt ([email protected]), John Hendel ([email protected]), Cristiano Lima ([email protected]), Alexandra S. Levine ([email protected]), Leah Nylen ([email protected]), Emily Birnbaum ([email protected]), and Benjamin Din ([email protected]). Got an event for our calendar? Send details to [email protected]. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.
HAVE A WELL-DESERVED LONG WEEKEND!