POLITICS

Republicans Could Be Gambling Silicon Valley's Support Over Net Neutrality

11/14/2014 04:17 pm ET | Updated Nov 16, 2014

Republicans are courting Silicon Valley, eager to make inroads with tech companies and the millennials who love them. The Silicon Valley ethos overlaps in tantalizing ways with the GOP agenda: Both are, to some extent, anti-regulation, pro-innovation, anti-union, and anti-tax. Meanwhile, brands like Instagram and Pinterest are deeply popular with a demographic that Republicans want on their side.

But tech insiders say that Republicans’ bombastic opposition to net neutrality is threatening that support, even as it wins the party political favor with the telecom and cable companies bankrolling their campaigns. This week, Republicans went head to head with President Barack Obama over net neutrality, highlighting the difficulties the party is likely to face as it seeks to maintain its existing bases of support while trying to win over traditionally left-leaning Silicon Valley companies.

“Republicans will want both tech and cable, and might have to choose between the two," said Marvin Ammori, an attorney for the tech industry who backs net neutrality.

At stake in the net neutrality debate is the future of the Internet. Net neutrality refers to the idea that all web traffic should be treated equally and impartially. Everyone claims to want the Internet free and open, but the debate is over how to develop and protect it. Tech entrepreneurs generally favor some regulation to protect their equal access to the web. But Internet service providers argue a free Internet can be attained through a less regulatory regime. Whether or not Republicans decide it's in their best political interests to go all in with the providers could determine the direction that Internet regulation takes in the months and years to come.

On Monday, Obama asked the Federal Communications Commission to reclassify the Internet as a public utility, like electricity, so that ISPs can't prioritize certain types of web traffic over others. The announcement was a shrewd political move, given that the president is losing support among millennials and progressives, even while the GOP works to win over Silicon Valley donors.

Republicans were quick to register their opposition to the president's request. On Wednesday, House and Senate Republicans wrote a letter to the agency arguing that Obama's plan “is beyond the scope of the FCC’s authority” and “would threaten the jobs and investments made possible by the broadband industry.” Sen. Ted Cruz (R-Texas) likened the plan to Obamacare.

But this opposition comes at a political cost for the GOP as it seeks to win favor with increasingly powerful tech companies, who generally support net neutrality. "This is a litmus test issue for Silicon Valley," Ammori noted.

Moreover, congressional Republicans' position seems to ignore the views of their own constituents. The University of Delaware's Center for Political Communication found in a poll this week that conservatives overwhelmingly oppose allowing Internet service providers to charge companies for faster service. (This is at the crux of the net neutrality debate, although telecom and cable companies continue to maintain they won’t do this.)

The GOP's opposition to Obama's plan isn’t particularly surprising, given Republicans' longstanding ties with telecom companies. Between January 2011 and June 2014, executives, employees, and political action committees affiliated with nine of the companies that oppose net neutrality, including Verizon, AT&T, and Cisco Systems (and excluding those companies' subsidiaries), gave $762,000 to the National Republican Congressional Committee and $733,915 to the National Republican Senatorial Committee. The same groups gave less than $500,000 each to the equivalent Democratic committees.

Some of the Republicans who criticized net neutrality most vocally this week have also collected big donations from the telecom industry. House Speaker John Boehner (R-Ohio) received $317,825 from these companies, while incoming Senate Majority Leader Mitch McConnell (R-Ky.) received $159,925. The five members of Congress who received the biggest donations from this group are all Republicans.

A tech company insider, who asked to remain anonymous because of sensitive political relationships, said that “tea party conservatism is supposedly grounded in free market principles like net neutrality. The problem is that the providers have flipped [those principles] by writing huge checks to their candidates and organizations.”

This of course, raises the question of what kind of free market congressional Republicans want to protect. If the goal is to give ISPs a deregulated free market, then it makes sense to oppose Obama's plan. But if net neutrality is interpreted as keeping access to the Internet as a whole unfettered, then there's a case to be made that Republicans are advocating against the free market ideal that they claim to support.

The National Cable and Telecommunications Association, which represents the telecom and cable industry, declined to comment on whether Republicans' opposition to Obama's plan is because of donations from major telecom companies.

Silicon Valley tech companies, which largely support net neutrality, have historically leaned towards Democrats. From January 2011 to June 2014, executives, employees, and political action committees affiliated with nine tech companies, including Google, Facebook, and Netflix, gave $481,788 to the Democratic Senatorial Campaign Committee and $366,043 to the Democratic Congressional Campaign Committee. The same group gave less than $324,000 each to the two Republican counterparts. Of the five members of Congress who received the highest contributions from these companies, four are Democrats.

But Republicans, especially potential presidential contenders, have been trying to warm up their relationships with these companies. Last year, Sen. Rand Paul (R-Ky.), who has remained quiet about the president's plan, visited the headquarters of Google, Facebook, and eBay, and this past summer, he reportedly met with Facebook CEO Mark Zuckerberg and PayPal cofounder Peter Thiel. In September, Paul announced that he was opening up an office in the Bay Area. Former Florida governor Jeb Bush and Wisconsin Gov. Scott Walker, both Republicans, gave taped remarks over the summer at a conference hosted by Lincoln Labs, an organization rallying conservatives in Silicon Valley.

And in an effort to show it was tech-friendly, in August the Republican National Committee touted Uber, the controversial ride-sharing service, for upholding free-market principles.

But net neutrality could hamper this effort, some tech experts claim. "It’s hard for Republicans like Paul and [House Majority Leader Kevin McCarthy] to be anti-net neutrality and seen as pro-tech,” said Ammori, the attorney.

Ed Black, president and CEO of the Computer & Communications Industry Association, said of the net neutrality debate, “It is frustrating that at a time when better ties are being created between the Internet industry and members of Congress in both parties, that there is such a disconnect on a issue which is of such importance to a dynamic, marketplace-oriented industry.”

Reed Galen, a Republican political strategist who worked on the presidential campaigns of George W. Bush and Sen. John McCain (R-Ariz.), said that in the long run, the Republican position on net neutrality won't hurt the party. “Republicans aren't exactly seen as cool," he said.

"To the extent that they are worried about the Twitters and the Tumblrs of the world, my guess is their concerns probably lie far more with the AT&Ts, Verizons, Comcasts and Googles of the world ... where they have a voice and a very popular platform," Galen continued.

But Julie Samuels, executive director and president of the board at Engine, which advocates for start-ups, said that the dilemma shouldn’t be underestimated. The GOP’s position “won’t help them with a lot of the younger, smaller tech companies,” she said, noting that those companies could be a lot bigger come 2016 and 2018.

She added, “The Republicans' hard-line stance on net neutrality is dangerous for the party.”

Paul Blumenthal contributed data reporting.

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