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Jon Fleischman

Legislators Should “Do No Harm” To California’s Technology Incubator, Corbett’s SB 242 Is A Terrible Idea

California is known in the world for a lot of amazing things.  One of them is that we are home to the incubator of amazing technological advances, centered in the Bay Area’s Silicon Valley.  With all of the financial challenges facing the Golden State, one would assume that, at a minimum, our state’s politicians would adopt a “do no harm” strategy when it comes to wanting to foster and encourage the entrepreneurialism and job creation coming out of California’s technology sector.  How does that saying go, “Methinks you presume too much…”

Bay Area State Senator Ellen Corbett has introduced Senate Bill 242 which threatens to disrupt the growing momentum behind social networks in here in California.  Technology writer Adam Theirer’s recent column for Forbes suggested that her bill may pit the State of California versus the Internet. In so doing, she has also created a huge opportunity for the opponents of her bill. California’s technology industry is depending on members of the Senate to help them defeat Senator Corbett’s bill. Legislators can show their support for California jobs and California technology by opposing this bill.

Opposing Ellen Corbett’s Senate Bill 242 makes good sense and good politics. If you’re a policymaker, it makes good sense to oppose new regulations that create barriers for job creation in a struggling economy.  And, if you’re a savvy legislator looking to accumulate political capital, there are two big incentives to oppose this bill.  One is that it makes sense for you to partner with, not collide with those creating new technologies that connect all of into online social networks.  The is the “all of us “ – your constituents, for better or worse, care a lot more about social networking sites continuing to thrive and make their experience better, than they want to hear about you, as a politician, trying to erect barriers.

Right now, an impressive coalition of California-based Internet companies including Google, Facebook, Yahoo, Match.com, and Twitter have joined together to publicly oppose SB 242.  If Silicon Valley was looking to put a starting five on the court, this is pretty close to the industry’s Dream Team.

And they are looking to level-headed members of the State Senate to help them defeat Senator Corbett’s bill.  So far they have found the Republicans in the State Senate to be noticeably unified against SB 242’s regulatory scheme.  Capitol Democrats, on the other hand, have been all over the map, with some voting for the bill, some voting against it, and a good many not voting at all!

Why do these companies oppose this bill? Because at its core, Senator Ellen Corbett’s SB 242 is a law that would crudely regulate how people interface with the Internet and social networks.

It would make “private” the default setting for new subscribers to a social network, which, of course, defeats the point of a social network.  These websites are built for people who voluntarily join them because they want to share experiences and information about themselves with social contacts, friends and family. It’s alarming when government regulation seeks to closely manage how consumers choose to voluntarily interact via a safe, reliable service.

When our government is pursuing new regulations that target the core functionality of a business, it also directly threatens that industry’s motivation to grow and create jobs in our state.  Those are Jobs that California cannot afford to lose.

SB 242 also ignores that social networks and Internet companies are already protecting users. They have spent valuable time and money to create personalized privacy protections that strike the right balance between utility and safety.  These protections allow subscribers to make their own choices about what information to share.

I think it is reasonable to assume that Silicon Valley “technologists” understand how to create good products while protecting their users much more effectively than the state government does.

In fact, California’s Internet companies do not just argue that their privacy protections are effective, they contend that there is no evidence to suggest otherwise – and recent research suggests that they are right.

According to a letter sent to Senator Ellen Corbett by the companies opposing the bill, The Pew Internet and Family Life Project found that a large majority of the users concerned with privacy issues have already updated their privacy controls.  SB 242 appears to be another classic example of a government solution in search of a problem.

I find tremendously irony in this Democrat-authored bill, and hopefully instructive irony to those in the tech industry, the leaders of whom tend to fall into the progressive category (recent news accounts on what attire Facebook founder Mark Zuckerberg wore to a recent, exclusive Silicon Valley reception with President Obama are fresh in my mind).  Why would a legislator introduce a bill that encourages opponents to fight on behalf of a popular – and traditionally liberal – industry when no clear problem exists?  There’s no good answer.

Opportunity knocks for forward-thinking politicos in the State Capitol.  This bill creates the type of disruption that will be an opportunity for some legislators in Sacramento to build new friendships in Silicon Valley, while also fighting for more job creation in California.

This terrible legislation came up for a vote last week in the State Senate and thankfully did not pass.  But it is likely to come back-up for reconsideration this week, and while I know that Republicans will continue to oppose SB 242, we’ll see if Democrats can manage to snatch defeat out of the jaws of victory.  There are way too many reasons for a rational person to oppose this bill.  Then again, how many rational Democrats are there in the legislature.  The debate and re-vote on this bill will give us a chance to find out…