[00:00:00] Tom Garrison: Hi, and welcome to the Cyber Security Inside podcast. I’m your host, Tom Garrison. And with me as always is my cohost Camille Morhardt on this rainy Oregon fall day.
[00:00:11] Camille Morhardt: It feels more like winter. I can’t believe it’s not officially winter yet.
[00:00:14] Tom Garrison: I know, you know, I felt so guilty today. I had a short break during lunch, I quickly ate and I went to my dog Chester and said, “all right, buddy, let’s go out for a walk.” And I got his collar and his leash on and we walked out the door only to have it raining. And you see this dog, who’s like, “you’re kidding. You’re not taking me on a walk today?” So I still in the rain, walked him a few hundred yards and turned around and came back and he at the end looked at me like, “Are you serious? Is that all we’re doing today?”
[00:00:48] Camille Morhardt: He’s a water dog. Right? He doesn’t care.
[00:00:50] Tom Garrison: No, he does not care. He would, if I could just run him in the backyard and jump him in the river, he would be just fine. But, uh, anyway, so not to talk too much about the weather today. How about our topic, which is, I think, fascinating. We’re diving into really the details of legislation that’s currently–well, actually part of it’s already been signed and some of it’s imminently going to be signed, we hope. And that is the Infrastructure Bill, just passed by the US Congress and signed by the President Biden and what’s in it. What are the implications from a technology infrastructure standpoint, as well as cyber security. And then also we’re going to jump in to a bit more detail on the CHIPS Act. And I thought it was really, really good meaty conversation.
[00:01:38] Camille Morhardt: I’ve really liked this, a follow on to, to the earlier conversation that we had with Ollie Whitehouse, right? In this conversation with Jason Oxman, we’d dive in really into those intricacies of the Infrastructure Bill. It’s like, he knows every last detail about it and where all of the allocations are and really gets into, you know, what are the implications for cyber security specifically, in addition to improving digital inclusion over the coming years. So it was a great conversation.
[00:02:09] Tom Garrison: Yeah, and I know, at least for me, I had heard about, you know, the sort of amounts of spending that are included, but I hadn’t really heard the breakouts and there’s a lot of money to be had in these bills and to understand the implications, I thought, it was really interesting.
[00:02:26] Camille Morhardt: Yeah. It’s fascinating to talk with somebody who knows that level of detail.
[00:02:30] Tom Garrison: So why don’t we jump right into it? Camille, what do you say?
[00:02:32] Camille Morhardt: Yeah, let’s listen.
[00:02:40] Tom Garrison: Our guest today is Jason Oxman. He is President and CEO of Information Technology Industry council. ITI is the global trade association for the technology industry founded in 1916. That’s interesting. Uh, Jason is the global trade association’s leader and technology and public policy expert. So welcome to the podcast, Jason.
[00:03:04] Jason Oxman: Well, Tom, thanks so much. It’s great to be with you. I’m excited to have the opportunity I’m looking forward to our conversation very much.
[00:03:11] Tom Garrison: Yeah. So the, the, the industry association was formed in 1916. Like, I, I, I just got to believe that the issues they were dealing back then are just slightly different than what we’re dealing with today.
[00:03:22] Jason Oxman: Uh, a lot of them were different. And of course the technology industry is very different, as well. We were founded as the Business Appliance Manufacturers Association. So in a way, a lot of what our members do today making and deploying technology solutions for businesses and for consumers. Uh, it’s the same thing they were doing in 1916.
Uh, fun fact: two of our founding members are still with us today, 105 years later. One of them is IBM and the other used to be known as National Cash Register when it was first founded, uh, now known as NCR.
[00:03:56] Tom Garrison: No kidding. You know, uh, at first I thought you were telling me that some of the people were the same and I’m thinking, well, math doesn’t really work there. But can you just spend maybe a minute or two and talk about what does ITI do today? We we’ve had some conversations in the podcast previously about things like the CHIPS Act and so forth. And so I think just setting it in context.
[00:04:22] Jason Oxman: So ITI as a trade association represents 80 of the world’s most innovative technology companies. We’re a global organization. So we have 57 professionals on four continents that are very focused on really one thing and that is promoting innovation. And we do that by interacting with government officials around the world on behalf of our member companies and helping advance sound public policies that promote innovation.
Our definition of the technology industry, if you will, it’s actually very broad. So it includes companies that make components or technology like semiconductors and parts and other things that go into technology devices. It also includes companies that operate networks, financial services, networks, social networks, business networks, and software networks.
It also includes companies that offer the devices that we all use. The ones we carry around in our pockets, things that are on our desks and ones allow us to work from home and learn from home.
[00:05:23] Tom Garrison: So what are some of the hot topics are or things that are on the minds of your member companies. Where you’re trying obviously, to engage policy makers and so forth regulators. What’s on the top of the list now, or maybe the top couple items that people are looking at?
[00:05:42] Jason Oxman: Well, there’s a joke in Washington that every week is Infrastructure Week. This week that we’re having this conversation just happens to be Infrastructure Week for real, because we’re very focused on a recently enacted into law broadband infrastructure measure as part of the infrastructure bill, a very bipartisan bill that passes all the way through both the House and the Senate and President Biden recently signed into law. It’s focused on broadband and broadband infrastructure law has over $40 billion will be invested in improving broadband and equity and access across the country.
So it’s investment in broadband in underserved and in unserved areas, investment to schools and libraries, health centers, public safety facilities, community housing projects. So a huge investment in broadband. That’s important to the entire tech sector because broadband enables really everything the tech industry does. So infrastructure, investment, digital infrastructure, that’s a huge focus and probably the biggest issue that’s going on right now.
[00:06:48] Camille Morhardt: Is there anything particularly different about digital infrastructure that’s gone into this bill or legislation from prior infrastructure bills or actions, even if they weren’t legislated?
[00:07:00] Jason Oxman: That’s a great question because obviously the government has for decades, uh, if not more than a century of, and focused on investing in infrastructure of some form. The government, uh, used to grant a monopoly to the local telephone companies in the country and help them invest in wiring the country. It was telegraph before that. So there you’re absolutely right. There has been a lot of infrastructure investment, historically. What’s different here is the investment is really focused on broadband, not any particular type of broadband, uh, but just making sure that everybody has access to fast speed.
But there are also elements of the, uh, infrastructure law, like the Digital Equity Act program. That’s about a $3 billion program that’s focused on promoting adoption and digital inclusion in underserved areas. There’s an investment focus on connectivity, making sure that people who can’t afford broadband, uh, can get help from the government because broadband is not a luxury anymore. It’s a necessity.
There’s a middle mile network program in here for unserved areas that’s really focused on electric grid connections. There’s tribal connectivity in here about $2 billion to provide funding for Native Americans in Alaska and Hawaii and elsewhere for digital inclusion. There’s $2 billion focused on rural utility services. So a lot of money there. And then the final thing I’ll note is that there is cyber security funding in this law, as well. So, uh, over a billion dollars to make sure that these networks are secure. So that we not just deploy broadband networks that can be accessed by criminals. So a lot of good stuff in there.
[00:08:39] Tom Garrison: Yeah. I was going to try to bridge us over to cyber security here. And you did it for me. So in this ginormous infrastructure bill, there is a realization around cyber security. I guess, for the listeners of this podcast, what should they expect to see either from a security standpoint or from, I would say the more traditional, uh, technology users that are out there, not on the fringes, but the technology users. What, what should they expect to see as a result of this infrastructure package?
[00:09:16] Jason Oxman: Yeah, the infrastructure package and the cyber security provisions in particular are addressing really headline issues. And we hear about them all the time. These ransomware attacks that are, uh, focused on, uh, US businesses–trying to extort money from them, they get their networks to keep running it. We also hear about it in the context of national security, because a lot of these cyber attacks and these ransomware attacks are actually coming from foreign actors that in many cases are either tacitly state sponsored or, uh, ignored by the, uh, the states and foreign governments that allow these criminals to operate within their borders.
So a couple of things that I think are really interesting in the infrastructure law, cyber security provision. One is funding for the Office of the National Cyber Director. We’ve actually never had a uniform, federal government approach to cyber security. It’s been handled within individual agencies. And, uh, recently Congress created the position of the Office of the National Cyber Director, but it didn’t fund. Which is not particularly helpful. So the bill actually has $21 million for the first fiscal year funding for the national cyber director.
Second thing is something called a Cyber Response and Recovery Fund. This is $100 million that’s fits within ?CYSO?, which is the arm of the Dept. of Homeland Security, uh, that looks at cyber security. So it establishes this fund to help federal and state and local governments get reimbursement for these attacks and also get technical assistance for cyber assistance.
The third thing I’ll mention is a grant program, a billion dollar grant program that provides money to state and local governments to address cyber security risks. And ITI is actually working on helping implementation. So some really good provisions and equally, if not more importantly, some funding for these cyber security measures.
[00:11:06] Tom Garrison: So Jason, one of the interesting elements of what you just mentioned was this billion dollars for state and local governments to spend money on securing their infrastructure, which means obviously as citizens, we all benefit from that. But also, you know, the, the technology ecosystem will now have these perspective customers in the government agencies looking for hardening of their infrastructure, which is, I mean, that’s a sizeable chunk of money.
[00:11:35] Jason Oxman: It is a lot of money. It’s not nearly enough, unfortunately, but it’s a, it’s a good start given that there was no program like this before. Yeah, we’re very focused in helping state and local governments and municipalities, uh, secure their infrastructure because those are logical attacks for cyber criminals, as well. In fact, uh, ITI has a substantial public sector business run by the former CIO of the FBI Gordon Bitko, who has been on our team for a couple of years and has built out a capability for us to help provide advice and counsel to government entities on how to secure their networks.
And, uh, the federal government taking this on as part of the Infrastructure Bill is a good reminder that infrastructure is roads and bridges and waterways and utilities, but it’s also broadband and digital networks and systems. And in the same way that we need to invest in and are now investing to make sure that roads and bridges and tunnels don’t fall down or collapse, the digital equivalent of that infrastructure falling down and collapsing is a cyber attack. And it’s good that we’re making investments there, as well.
[00:12:43] Tom Garrison: Yeah, no. I mean, really just, just to think about it visually the broadband connection to the home is the mechanism for transporting services now–services from the citizens to the government or vice versa. We live in a world right now where you have to be connected; if you’re not connected, you’re at a huge disadvantage. Um, so it makes sense.
[00:13:05] Camille Morhardt: So I have a question on this. Are there provisions in that cyber security portion for privacy or studying privacy or looking into that or guarantee, you know, having some sort of a, I know I can’t probably use the word guarantee, but how are we considering that as part of infrastructure?
[00:13:24] Jason Oxman: Well, that actually hearkens back to Tom’s earlier question about our policy priorities. We don’t have a federal privacy law. So Camille, the short answer to your question is no. This is not a federal privacy law. We need one quite desperately. In fact, it’s somewhat unusual the United States doesn’t have a federal privacy law. The European Union has something we’re all familiar with called GDPR. GDPR is the equivalent of a federal privacy law across Europe. All 27 members of the European Union are required by the GDPR law to protect the privacy of their citizens. We don’t have that equivalent here.
It would be terrific if Congress would move forward on a federal privacy law, we have some states have done it. Um, but of course, a patchwork of 50 different privacy laws is less than ideal, particularly for the technology industry, which obviously doesn’t deploy products on a state-by-state basis. So no privacy law here in the infrastructure bill that was passed, but we still need one.
[00:14:26] Tom Garrison: So we talked a little bit about the infrastructure bill up to this point. And I know that also working its way through congresses, the CHIPS Act. And we’ve mentioned it in various podcasts already, but I think it’d be great to have you level set everyone. Like what is in the CHIPS Act?
[00:14:45] Jason Oxman: So the CHIPS Act is another huge legislative priority for us at ITI. It’s enormously important for the semiconductor industry, but it’s even more important for the customers in the semiconductor industry. You can not open a newspaper and not hear about the semiconductor shortage that’s impacting every aspect of every manufacturer of every product in the country. Uh, I think the latest thing I saw was that, uh, you know, Chevy pickup trucks are not gonna have heated seats because they can’t find enough semiconductors.
Now, there are a lot of reasons why there’s a semiconductor shortage, and we need to think of this, uh, solution, not in the short-term way, but in a long-term way. And that’s what the CHIPS Act is about. The CHIPS Act is legislation that is designed to advance semiconductor manufacturing in the United States.
So it’s a $52 billion piece of legislation that would implement two principal programs. One is an allocation of a little bit under $50 billion to what’s called a Chips for America Fund. So this is funding that the Commerce Department would implement to provide an incentive to semiconductor manufacturers, internationally headquartered or headquartered in the US to build chip manufacturing plants in the US. It’s not going to cover all the costs of building those plants, not by far, but it’s an incentive to say, “let’s get those plants built here in the US; let’s get us manufacturing capability of semiconductors built up.” So that’s, uh, about $49.5 billion dollars.
The rest of the money about $2 billion is for a Chips for America Defense Fund, which is focused on R&D, testing and evaluation, workforce development and other kind of related activities in coordination between the private sector and federal agencies to support the needs of the Defense Department and the intelligence community to ensure we have semiconductors and support that critical mission.
So really the CHIPS Act is enormously important. Uh, you mentioned, uh, Tom, that it was not included in this infrastructure bill. However, there have been very recent conversations on Capitol Hill about how to move this forward. As a procedural matter, there was conversation about including the CHIPS Act in the what’s called the NDAA. It’s the annual defense appropriations act. It’s one of the only things that Congress does guaranteed every year; it funds the Defense Department. So there’s conversation about including it there, which would have been great. Still would be great.
But the latest conversation, the latest intelligence that we have is that the Senate and the House are going to move to conversations, coordination, if you will, between the two bodies on moving the NDAA forward and also moving the CHIPS Act forward, and optimistic that we can get this done by the end of the year.
[00:17:39] Camille Morhardt: Is there a specific goal, like percent of chips in the world manufactured by or in the United States? or some sort of an absolute quantity that the government is asking?
[00:17:51] Jason Oxman: Yeah. So, uh, that’s a great question, Camille, and we know the numbers have been moving in the wrong direction. Uh, the US is responsible for a little bit, under 13% of global manufacturing of semiconductors today; that number has fallen by more than half in the last 30 years–which again is moving us in the long direction. So the legislation doesn’t call for a specific percentage, uh, to your question, but it is looking to get the US back to where it has been, even though it was decades ago where the US has manufacturing closer to a quarter or a third of the world’s semiconductors, or hopefully even more at some point.
[00:18:30] Tom Garrison: Is there any sort of a stipulation within the, uh, funding for semiconductor facilities for the breakout, meaning some of that money has been allocated for leading edge manufacturing for logic–like what Intel, as an example does; and there’s going to be another bucket for memory type devices or other types of manufacturing of semiconductors. Is, is there that kind of an idea or is it basically just a big allocation of dollars?
[00:18:58] Jason Oxman: Yeah, it’s interesting you mentioned that. The focus of the legislation is actually the other way around. There is a small amount, about $2 billion that’s reserved for what I’ll call legacy chip production–legacy chips that may not be the most cutting edge, but that are used by the military and other critical industries. So that’s actually the allocation. It’s a small percentage, but still a percentage to focus on legacy chips.
And I think the hope is without, because of course this is not the role of government, uh, without specifying how many nanometers the chip should be to qualify for funding, I think the idea is because most of the money is allocated for programs focused on next generation investment and next generation chips. So to your question, not specifying it with the exception of a particular investment level in legacy chips, but making sure that the money is available for advanced technology. And also, I should have noted this before. There’s also money allocated for packaging manufacturing and other R&D programs under the National Semiconductor Technology Center.
But this will be implemented by the Commerce Department, which has a semiconductor incentive and R&D program already authorized under the NDAA last year. Um, and the Commerce Department will set the rules, but you know, we’ve already seen some great announcements, you know, Arizona is about to see an explosion in, uh, in manufacturing capability for the semiconductor industry. We want to see more of it, but, uh, we’ll definitely see investments made in facilities that have already been announced.
[00:20:34] Camille Morhardt: I have kind of a related question, which, which it seems like you’re answering a little bit of, but, um, we interviewed a former Congressman Will Hurd a little while ago, and he was talking about among other things, the Artificial Intelligence kind of push, and the race the United States is in with other countries.
And I’m just wondering, obviously some other countries have very focused investments in specific verticals. I don’t know if you can call artificial intelligence and vertical. To be fair, it’s probably much more of a horizontal, but is there any kind of encouragement or expectation you talk about leading edge innovation, but are there certain areas that government is trying to push or encourage the United States to innovate in?
[00:21:19] Jason Oxman: Yeah, I think quantum computing is one area that the US is very focused on. AI is certainly an area of investment for US Government has focused on as well. There’s a cross-agency AI initiative in the Biden Administration focused on making sure that investment in AI happens here in the US. Quantum computing is another one I’ve mentioned.
And you mentioned the international focus, and I should have noted this as well. You know, the CHIPS Act is a US initiative, obviously and is going to focus on investment in the US. And the US is in competition with a lot of other countries around the world that want to invest in these kinds of next generation technology programs. Europe is discussing, uh, doing this as well. And, and Intel has announced a $7 billion expansion in, uh, bringing manufacturing capability into the EU as well. So, this competition is great. Uh, you know, every country wants to host these manufacturing capabilities and get these next generation projects moving forward.
But again, AI, as it is enormously important. It is, is the future of a lot of technology. And obviously the semiconductor manufacturing is crucial to the computing power that will drive AI. I don’t know that out of this program there will be a specific focus on any outcome-oriented use of the technologies that are manufactured like AI or quantum. But I know it is something that for competitiveness reasons, the US should be very focused on.
[00:22:43] Tom Garrison: So just to follow up a little bit on, on that, Jason, that you mentioned about Europe as an example. And you also mentioned earlier around privacy and GDPR and how they have those policies. So are you expecting to see similar types of legislation that occurs in European Union as an example?
[00:23:04] Jason Oxman: Yeah, absolutely. So earlier this year–actually just a couple of months ago–the European Commission announced a new legislative proposal. It’s actually called the European CHIPS Act. I suspect they’ll come up with a better name for it, so it doesn’t appear derivative, but it’s very focused on increasing the resilience of the semiconductor supply chain in Europe, also working on boosting research in the field.
The EU has also been working on freeing individual member states to provide incentives for manufacturing capability to happen in Europe, as well. And there’s a newly formed group called the US-EU Public Trading Technology Council, which has as part of its mandate–this is a body of government officials from the EU and the US that coordinate on technology policy issues have 10 working groups. One of the working groups is focused on issues related to manufacturing incentives to make sure that there’s a coordination between the two.
I think EU officials quite frankly, are worried that the U S is ahead of them and they want to make sure to adopt measures that inspire, uh, manufacturing to take place in Europe as well. And my response to that is “do it.”
[00:24:11] Tom Garrison: Just to build on that then, what are you seeing or what do you expect to see in Asia?
[00:24:17] Jason Oxman: So, uh, Asia, obviously a lot of manufacturing takes place in Asia. There’s a lot of manufacturing in Taiwan, for example. China has a lot of manufacturing capabilities. The interesting thing about China is, the Chinese government has a long history of subsidizing its own homegrown companies, endeavoring to compete against the US and European and other international companies as well. It’s actually interesting, the semiconductor industry is one area that China has not done quite as well as another areas in competing against other non-Chinese companies. But there’s a lot of competition and a lot of keen interest in China in stepping up that investment.
Camille Morhardt: What do you see on the horizon in terms of legislation or pressures or challenges coming that you know, now that we have infrastructure and CHIPS Act kind of moving through what’s next?
[00:25:25] Jason Oxman: You know, we move, as you noted from passage to implementation on the infrastructure law. And that implementation is going to be enormously complicated, a lot of projects to get funded. And our member companies at ITI are very focused on helping address the digital divide by deploying broadband, to unserved and underserved Americans of which there are tens of millions. So a lot of people to reach with a combination of wireless and wireline services. On the wireless side, there are interesting new technologies and the Open RAN, the 5G deployment obviously is underway and that’s going to power a lot of new computing and reach a lot of, uh, unserved Americans with broadband. So we’ll be working on implementation of the infrastructure act.
On the CHIPS Act, we need to move it across the finish line, get it to the president’s desk. The good news is the president has already said that he supports the CHIPS Act, so we know he supports it moving through Congress. Congress doesn’t move as quickly as we might like sometimes, but, uh, looking forward to getting that done and then getting that money out the door to encourage manufacturing of semiconductors here in the US.
Now we also have a lot of tax issues to deal with on the international stage that we’re focused on. We need to get that privacy work done a lot of data issues, uh, that we’re working on. It’s not going to be a slow policy year in 2022 by any stretch
[00:26:52] Tom Garrison: But before we let you go, we have one last segment that we do that we call Fun Facts. And I know that you have one and rumored to be two fun facts that you’d like to share.
[00:27:05] Jason Oxman: I am a big fan of voluntary industry standards. And we don’t think about how voluntary industry standards really impact our lives. But during the pandemic, I have no doubt that everyone who’s working from home or has kids learning from home has become intimately familiar with USB. And USB is the way in which we connect our webcams to our monitors, monitors, to our keyboards, our keyboards, to our laptops, to other devices that we use, to our speakers.
I don’t think a lot of people know that Intel is responsible for USB. Everybody thinks about Intel Inside, and we know that something’s going on inside our devices that makes them work. But the USB port on the outside is actually the responsibility of an Intel scientist who published the USB standard in 1996 and is a reason we can connect all these devices around us together. So that was my fun fact, Intel and USB.
[00:27:59] Camille Morhardt: You telling me we’ve only been doing this since ‘96?
[00:28:04] Tom Garrison: Yeah, USB we have. But I, you know, interestingly enough, I worked for years very closely with that, uh, with that engineer. Very, very sharp, smart guy. Great, great guy. Uh, so Camille, oh actually that was your first one.
Jason, what is your second one? Cause that was a great fun fact. So you get the, the opportunity to go for a number.
[00:28:25] Jason Oxman: I appreciate that. And that is that the, uh, the Food and Drug Administration requires those little stickers that are placed on produce that you get at the, that have the, uh, the barcode and the, uh, the number on them. Um, you know, at the supermarket, those stickers are required to be edible.
[00:28:43] Tom Garrison: I’ve heard this one. Yeah.
[00:28:43] Camille Morhardt: That’s really good news. Cause I’ve eaten probably quite a few of those stickers.
[00:28:47] Jason Oxman: No, I think we all have
[00:28:50] Tom Garrison: Very good. All right, Camille, what’s your fun fact today?
[00:28:54] Camille Morhardt: Okay, so in, in the spirit of the ecosystem, I was looking at some of the planet’s ecosystem and I have discovered that there’s mycelium, that connects trees. And in particular fir trees with alders, which are deciduous trees, which have larger flat leaves; they actually connect through these things that aren’t roots, but it’s kind of like, fungal network that connects underground the trees. And they actually transport nutrients back and forth between the species, depending on which species–it’ll happen up to two times a year–depending on which species is able to capture the most energy given say when the deciduous tree doesn’t have leaves, then the fir tree will, will transfer energy toward the alder. But then the alder, when it can photosynthesize in the summer will transfer nutrients back to the fir tree.
[00:29:51] Tom Garrison: That is very cool. Very cool. So my fun fact relates back to some research I was doing with previous one around volcanoes, and I found some really interesting ones, but I was going to share one today and that is that rubies and sapphires–the gems–are actually the same mineral; it’s called corundum. And what differentiates them is that corundum that has iron stain will actually make the, the mineral red, hence a ruby while traces of chromium or titanium will stain the mineral blue. And that’s when you get a sapphire. So I thought that was pretty interesting.
But with that, we will close out this episode. So, Jason, thanks again for spending time with us today. Uh, I, that was really great to understand what’s in the infrastructure bill, also some insights into the CHIPS Act and just, uh, you know, understanding what kind of influencing we’re doing in the industry is great to hear.
[00:31:02] Jason Oxman: Thanks, Tom. Thanks Camille.