As some of the tech sector’s heaviest hitters prep for a meeting this week with president-elect Donald Trump, they need to make sure they get answers to critical questions about issues that could affect not only their businesses but the U.S. economy in general.
While the meeting has been called by Trump, the Silicon Valley executives should be prepared to set some of it themselves so they aren’t blindsided by policy shifts that can affect their success. Items of interest range from encryption to China policy.
Here are some of the issues important to Trump and that are important to the interests of technology vendors and service providers.
Where does Trump stand on encryption?
During the campaign Trump called for a boycott of Apple if it didn’t help the FBI break into the iPhone used by the terrorists who shot 36 people last year in San Bernardino, Calif., killing 22.
That’s the strongest hint that Trump would support weakening encryption in order to help stop crime, but how dedicated is he to making that law?
The issue is thorny, pitting privacy against security. On the one hand, strong encryption secures online transactions, data on hard drives, and sensitive corporate communications. On the other, it can enable secure and private communications among terrorists that law enforcement can’t penetrate.
Weakening encryption by whatever means makes all encrypted data and communication less secure. If vendors were forced to enable encryption backdoors, the fear is it would reduce the desirability of their products on the world market. Vendors in other countries not subject to such rules would have a superior product to sell.
Breakable encryption is a potentially powerful law enforcement tool that might stop terrorist plots in the planning stages. Rather than just knowing who is communicating with whom, it would reveal what they are saying.
With a Republican-backed Congress, it’s more likely that legislation about this issue could pass if Trump throws his weight behind it. And if it does, it will have vast implications not only for Silicon Valley businesses but also for all ecommerce and privacy in general.
Where does he stand on H-1B?
Trump says he wants to crack down on H-1B visas that let U.S. companies – tech companies in particular – hire foreign workers who have skills they need that U.S. workers don’t have. But Trump says some of this hiring is done because the workers can be had for lower wages than U.S. citizens.
It’s a complex and contentious issue, a solution for which has eluded congressional reformers who want to make it work more in favor of Americans. What Trump does via executive action and what he is able to bring about through his influence over Congress could have a big impact on tech companies.
If he makes it more difficult to find skilled workers and more expensive to hire eligible H-1B workers, that could change hiring strategies. It’s possible tech companies might move more jobs overseas where wages are lower, which would be the opposite of what Trump says he wants.
Any change will alter the behavior of high-tech businesses, and that could have an impact on the cost of products and the speed of product development. Ultimately it could affect the competitiveness of these companies, at least in the short term.
The tech leaders meeting with Trump need to get an answer so they can prepare for a new way of doing business, whatever it turns out to be, and avoid the damaging downsides.
How will Trump’s China policy affect sale of U.S. tech products and protection of U.S. intellectual property?
China has already fallen into Trump’s crosshairs on economic issues, notably manipulating the value of its currency, and it looks like he’s willing to go to the mat on other issues given that he is threatening to renege on the U.S. one-China policy that doesn’t acknowledge Taiwan as a sovereign state. He’s come out against China’s disregard for the intellectual property and copyrights of U.S. companies.
If Trump is successful, the results could be good for U.S. tech companies, which China has allegedly hacked in the past, whose intellectual property has been reverse engineered and whose software has been pirated.
But tech leaders need to hear how Trump will negotiate these outcomes because China’s response could hurt them. China could resume its ban on U.S. companies doing businesses with the Chinese government, as it did with Apple and Cisco in 2015. Given the size of the Chinese market, restrictions or even all-out bans on U.S. technology sales could have a huge impact on the bottom lines of tech companies.
They need to hear Trump’s explanation of how he plans to proceed and what safeguards he is considering to protect the interests of Silicon Valley businesses and those of every U.S. company that has come to rely on China as a major source of sales revenues.
Will he kill Net neutrality?
A 3-2 vote of the Federal Communications Commission this year prohibits service providers from blocking or throttling back traffic, and from offering high-priority service for a fee, but that could change with a single Trump appointee to the commission. Just a one-vote swing could undo the new rule.
This is important to the providers who are directly affected. Backbone providers would be able to charge more for priority service and to throttle best-effort service to make paying for priority service more palatable. That ability to charge more for faster internet might be attractive to some classes of service provider.
But Silicon Valley in the past, particularly investors and entrepreneurs, say tiered services will hamper innovation by making it more expensive for innovators to try out new technologies. Small scale experimentation of new concepts could become more expensive and therefore less likely to come about. The overall effect would be a dilution of fresh technologies.
Startups that are effective incubators for larger tech companies to buy up later could be fewer and offer less compelling solutions.
Another aspect of Net neutrality that could affect tech companies in the long-term is the power the FCC gave itself to push for expanding internet access into underserved markets such as rural areas and poorer communities. That could lessen the availability of educational benefits the internet affords these groups, and so affect the pool of skilled workers graduating from U.S. schools.
Silicon Valley needs to get a bead on what Trump’s thoughts are on Net neutrality so it can prep for the economic impacts its repeal could have.
Will he favor letting ISPs share or sell customer data?
An FCC ruling this fall blocks ISPs from gathering and selling data about their customers’ browsing history and use of applications. Both are valuable for marketers and represent a profit stream for providers but a privacy hole for consumers.
Trump has announced appointments to key government positions that indicate he opposes these protections.
Reversing them would directly affect service providers by opening up a revenue stream but at the expense of consumer privacy.
Trump’s stance on this could tip his hand on privacy in general, which has broad implications for individuals but also for businesses and other organizations and how they conduct their activities.
Silicon Valley execs should care because among them are entities that stand to gain or lose from a regulatory shift, but also because it will help paint a picture of the regulatory environment in which they will have to operate during the Trump administration.
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