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Tech CEOs talk cyber at the White House – Politico

With help from John Hendel, Eric Geller and Leah Nylen

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— Cyber day: Prominent tech CEOs are going to the White House today, as the administration pushes for stronger private-sector involvement to address the nation’s cybersecurity challenges.

— MT exclusive: As the tech industry’s power players have grown ever more dominant, they’ve been spending bigger sums on federal lobbying, according to new research from the American Economic Liberties Project.

— Anxious for broadband: The demand for a $288 million broadband funding program has far outpaced the supply, suggesting there will be massive demand for additional broadband spending fueled by the coming infrastructure deal.

IT’S WEDNESDAY, AUG. 25. WELCOME TO MORNING TECH. I’m your host, Benjamin Din. I’ve been looking for a solid pair of headphones. Do you have any recommendations?

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TECH CEOS HEAD TO THE WHITE HOUSE — President Joe Biden will host 26 corporate and education leaders this afternoon for a meeting on critical infrastructure security and cyber workforce development, as part of the administration’s push for the private sector to do more to fend off threats ranging from ransomware hacks to cyber espionage.

— The attendees: The meeting will feature many of the top CEOs in tech: Amazon’s Andy Jassy, Apple’s Tim Cook, Google’s Sundar Pichai, IBM’s Arvind Krishna and Microsoft’s Satya Nadella. Chief executives from the finance, energy and water, insurance and education sectors will also attend.

— The commitments: Administration officials have urged critical infrastructure operators to deploy better monitoring technology so they can quickly detect intrusions, telling them, “Don’t be the next Colonial,” a senior administration official told reporters on Tuesday. Expect some announcements on this front, along with updates on cybersecurity education.

— The themes: Officials will stress that technology, especially in critical infrastructure, needs to be “secure by design,” putting the security burden on companies rather than customers. That means using solutions like automatic patching, according to the senior administration official. The recent scourge of ransomware attacks prompted the meeting and will be front and center, but officials plan to focus on the root causes, not specific incidents.

— The agenda: After an initial meeting with Biden, the group will divide into three breakout sessions. Tech and insurance leaders will meet with Commerce Secretary Gina Raimondo and Isabel Guzman, administrator of the Small Business Administration, to discuss ways to build “enduring cybersecurity.” Participants will reconvene for a concluding discussion led by National Cyber Director Chris Inglis and Anne Neuberger, the deputy national security adviser for cyber and emerging technology.

— Left unclear: The senior administration official declined to say whether the White House would use the meeting to encourage companies to embrace regulations, such as a proposed cyber incident reporting mandate that’s been gaining steam on Capitol Hill.

CORPORATE POWER LEADS TO MAJOR LOBBYING, REPORT FINDS — New research out today by the American Economic Liberties Project, an anti-monopoly group, shows a strong correlation between lobbying dollars and industry concentration: As the number of tech companies has shrunk over the years, the amount of money they’ve spent to influence the government has risen.

By how much? Since 1998, internet companies have spent the equivalent of nearly half a billion dollars on federal lobbying, when adjusted for inflation. A significant chunk — nearly $80 million — of that was spent in 2020 alone, the report found.

Study author Reed Showalter said he first got the idea to research this link while a law student working as a research assistant to Columbia Law School professor Tim Wu — now a top White House competition adviser. Showalter, now of Kanter Law Group, the law firm started by Justice Department antitrust nominee Jonathan Kanter, said the study seeks to quantify some of the broader harms monopolies can cause, aside from their effects on consumer prices.

“Antitrust and anti-monopoly policy aren’t purely related to economic benefits,” he said. “It could also be a good governance” tool.

— The view from tech: The biggest U.S. tech companies attribute their success to their ability to provide consumers with products and services they want. Attempts to break up these giants, such as recent efforts in the House, would harm consumers by stifling innovation, they argue.

JUST HOW DESPERATE ARE COMMUNITIES FOR INTERNET HELP? — Hundreds of applications seeking a cumulative $2.5 billion in broadband help recently flooded the Commerce Department, per an announcement Tuesday. That’s a strong indicator of how much these areas will depend on the pending broadband funds in the infrastructure package.

— Demand outstrips supply: More than 230 communities across 49 states and U.S. territories are seeking their slice of one of the lesser-known pandemic relief funds that Congress created in December, the $288 million Broadband Infrastructure Program, which took grant applications through Aug. 17. The amount these applicants requested totaled more than eight times what Congress had granted to the program, which is administered by the National Telecommunications and Information Administration.

This surge of interest indicates pandemic-rattled communities are putting broadband connectivity front and center as part of their recovery plans. And that could have big implications for how state and local officials tap other available pandemic relief funds such as the $65 billion for broadband written into the bipartisan Senate infrastructure package.

“The intense demand for this program across the country demonstrates the widespread need for better broadband connectivity in unserved communities,” Raimondo said in a statement.

— Speaking of infrastructure: The package cleared a key hurdle late Tuesday afternoon, when House Speaker Nancy Pelosi clinched a deal with moderate Democrats who had threatened to block it. The lower chamber’s vote on the infrastructure bill is expected by Sept. 27, as POLITICO’s Heather Caygle, Sarah Ferris, Nicholas Wu and Anthony Adragna report.

— Divvying up the funds: The Commerce Department cautioned the high volume of applications for its Broadband Infrastructure Program will mean “highly competitive” vetting of grant applicants. Priority will go to cost-effectiveness, those proposing to serve the greatest number of households in an eligible area and targeting rural areas and those providing internet speeds of at least 100 Megabits per second download and 20 upload (much faster than the FCC minimum definition of broadband, which is 25/3 Mbps).

FACIAL RECOGNITION TECH BACK IN THE SPOTLIGHT — Ten out of 24 federal agencies surveyed by the Government Accountability Office said they plan to expand their use of facial recognition technology through 2023, according to a GAO report released Tuesday, even as human rights advocates and some lawmakers call for greater restrictions on federal use of this powerful tech.

— What’s it for? The most common use for facial recognition technology last year by federal agencies was for digital access or cybersecurity, such as using the tech to unlock an agency smartphone. (Sixteen of the 18 agencies that reported using it said they allowed the practice.) Six said they used it to help identify leads in criminal investigations, and five said it was for physical security, such as identifying people trying to enter a building.

CRYPTO TAX SETBAX — Cryptocurrency lobbyists are looking at potential legislative vehicles this fall to help roll back digital currency tax rules, POLITICO’s Kellie Mejdrich reports. Both Republican and Democratic lawmakers had called for changes to the tax proposal, which they and lobbyists say would harm technological innovation by requiring firms like cryptocurrency to report transaction information to the Internal Revenue Service. But Pelosi’s deal Tuesday with moderates precludes any amendments to the language now in the infrastructure bill. Lobbyists are considering instead passing standalone legislation or attaching a provision to House Democrats’ $3.5 billion partisan spending package.

— New lobbyists: Amid the frenzy over the proposal, the Crypto Council for Innovation, which was formed in April by the crypto exchange Coinbase, Fidelity, Square and Paradigm, enlisted the help of Brownstein Hyatt Farber Schreck, one of K Street’s top-earning lobbying shops, according to disclosures shared with POLITICO Influence. The team: Marc Lampkin, the managing director of Brownstein’s D.C. office; Norman Brownstein; Travis Norton, a former aide to Sen. Tim Scott (R-S.C.) and the Senate Banking Committee; Al Mottur, a former Senate Commerce aide; Brian McGuire, a former Treasury official and Mitch McConnell staffer; and Elizabeth Maier, a former Jon Kyl staffer.

MT CORRECTION — Due to an editing error, Monday’s edition of MT misstated aspects of Epic’s filing against Google.

Margaret Mitchell is joining artificial intelligence startup Hugging Face, Bloomberg reports. Mitchell was fired in February as co-head of Google’s Ethical AI research group, a team that has had high-profile departures in recent months.

Verizon is waiving charges for calls to Afghanistan through Sept. 6.

Bad blood: Female entrepreneurs face hurdles in unwarranted comparisons to Elizabeth Holmes, even as the long disgraced founder of Theranos prepares to go to trial, NYT reports. For more on how health tech investing has changed post-Theranos, check out this edition of POLITICO’s Future Pulse.

Follow the data: “About four-in-ten Americans say social media is an important way of following COVID-19 vaccine news,” according to Pew Research.

Company chatter: Google employees don’t have a legal right to protest who the company chooses as its clients, an attorney for the company said. Bloomberg has more.

Content woes: “TikTok study finds white supremacists, racists spew hate in videos,” via USA TODAY.

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