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Capitol Hill Casts Eager Eye Toward Silicon Alley
Washington has always looked to New York as the banking and financial powerhouse that houses some of the largest corporations in the world as well as the center of everyone's pension fund, the New York Stock Exchange. It also has been a top source of fundraising for Republicans and Democrats and the politics of executives of the city's companies are well known to those on Capitol Hill.
But a new industry, without political ties, has been sprouting up in New York right under most politicians' feet. The Internet had enabled the growth of dozens of small online music, advertising, marketing and publishing companies, in a region called Silicon Alley, around the Soho district that flourished with the booming stock market. And as they grew, some started to reach out to politicians.
"The New York high-tech community is definitely a player," said Democratic Senatorial Campaign Committee spokesman David DiMartino. "I can't give specifics on contributions, but I know that we treat them the same as Silicon Valley, as far as considering them a resource."
And then DoubleClick pushed Silicon Alley into the spotlight. Earlier this spring, New York-based DoubleClick, the nation's largest and best-known Internet advertising company, became the poster child for many in Washington who want to regulate privacy on the Internet. DoubleClick's plan to link its anonymous online data with personally identifiable shopping information may have seemed like a better way to target advertising, but it motivated vigilant privacy activists to call members of Congress and protest.
It also was the first time that many congressional members and lobbyists realized there were technology companies in New York. Eventually, because of pressure from regulators and privacy activists, DoubleClick retreated on its linking strategy.
"In a couple instances in the past, when I'd talk about high-tech in New York, people would kind of chuckle and say that Silicon Alley doesn't really exist," said Eric Schmeltzer, spokesman for Rep. Jerrold Nadler, D-NY, who represents the Silicon Alley section of New York City. "DoubleClick really has put Silicon Alley in the limelight."
For those who sat up and took notice, DoubleClick's troubles highlighted an up and coming group of companies that represent the most hotly contested business interest in politics today — the high-tech industry.
"I think everyone here is sort of salivating over Silicon Alley," said a senior Senate Democrat leadership staff member. "They are trying to figure out how to get in on the action."
Indeed, the party's campaign committees are focusing on Silicon Alley. The Democratic Senatorial Campaign Committee (DSCC) is organizing a fundraising strategy targeting the high-tech companies in New York and the National Republican Campaign Committee has organized a trip for House Republican leaders to talk to Silicon Alley executives on May 15.
"We're really excited to get to know more high-tech companies," said an NRCC staff member.
Rep. Rick Lazio, R-NY, a potential New York Senatorial candidate is also pulling together a trip with DoubleClick for a group of House Republicans to meet with New York high-tech CEOs. In addition, TechNet, Silicon Valley's primary lobbying and fundraising group, also is planning to open a branch in Silicon Alley this year.
Many likened the Alley to where Silicon Valley was just several years ago — newly wealthy and just realizing the importance of Washington to their business and marketing models.
"I think they are in the same state now as Silicon Valley was five years ago…There are now a number of companies in New York that have matured enough that they have the time and resources focus on public policy," said Rep. Cal Dooley, D-CA, who as co-chair of the New Democrat Network, traveled in late March to New York to meet with a number of Silicon Alley executives through the newly formed Silicon Alley Political Action Network. The Network is a group of companies, led by govWorks.com CEO Kaleil Tuzman, that are starting to get active on national high-tech issues.
Dooley stressed that money is not the primary reason why Washington is interested in Silicon Alley. He and others who have started to get to know Silicon Alley say that the technology executives can add a valuable voice to the public debate over high-tech policy concerns. Since high-tech issues exploded on Capitol Hill, America Online, Microsoft and Silicon Valley companies have led the bulk of arguments for increasing H-1B visa levels for foreign workers to relieve the growing skilled labor crunch, passing legislation that would open up China to more high-tech trade and beefing up intellectual property protections online.
"The more organization there is, the more pressure points you can put on elected officials from a variety of regions and backgrounds, the better it is for the high-tech community as a whole," said Tim Hugo, director of CapNet, the DC region's lobbying group. "I think everyone is real pleased at the developing organization in New York."
The importance of Washington certainly has hit home with DoubleClick. The company hired Josh Isay, former chief of staff for Sen. Charles Schumer, D-NY, in January, just prior to the company's privacy crisis. Isay is now spending a great deal of his time in DC countering the privacy fears raised by consumer activists. But when he has time, he is lobbying on the issues he says Silicon Alley shares with the rest of the nation's high-tech industry, H-1B Visas increases, Internet taxes and expanding high-speed Internet access.
"Silicon Alley is recognizing that there is great value in having elected officials in Washington see New York as a high-tech leader," Isay said. "For too long, when you asked what Washington thinks of the Internet and high-tech, they think of Silicon Valley and Austin and Northern Virginia and they don’t think of New York City. I think it's very important that perception change."
 | - by Bara Vaida |
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