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Watthead: In defense of big government

June 3, 2009

I’m on vacation this week, making my first trip to Israel where I’m visiting my aunt, a pioneer of the Kibbutzim movement. But I can’t shake off my Internet addiction, alas, and so I came across this response from Jesse Jenkins, AKA Watthead, to one of my blogposts last week bemoaning the Obama’s administration’s ever-increasing intervention in the economy. (See Uh-Oh: Obama’s Battery Gold Rush. Jesse responded at The Energy Collective, where the two of us blog.) Jesse, who works for the Breakthough Institute (and not the Breakthrough Collaborative as I said last week), believes that significantly more R&D spending from the government will be required to speed up the clean energy revolution. He’s thought a lot about this, and he’s also looked carefully at  the Waxman-Markey climate legislation now making its way through Congress, so I thought I would post his response here, with some minor edits. It’s well worth a look, and for those of you who care about energy policy, be sure to check out the links provided by Jesse.

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I’ve spent the past two weeks digging deep into the Waxman-Markey ACES climate bill, peering beneath rocks and shining my flashlight into its dark recess to figure out what it will and will not do.  You can find that analysis at the Breakthrough Institute site here, and I highly recommend you take a look so you can get an accurate picture of what this “light touch-high impact” carbon pricing policy will actually accomplish.

The short answer: not very much at all.

The carbon price the bill will implement is likely to be between $12-20 per ton for the first decade-plus, according to the EPA analysis of the bill.  That’s about 12 to 20 cents per gallon of gasoline, which on the low end is about as much difference as you can find between different gas stations on two sides side of town, and on the high end is lost in the noise of seasonal variation in gas prices.  If you have little faith in the power of government, then I challenge you to explain how that kind of meager price signal is going to shift private investment and dramatically transform the $1.5 trillion combined U.S. energy and transportation markets.  Please, tell me a convincing story about how that might work, because after spending two weeks reading the Waxman-Markey bill, I could use some more uplifting news.

The reason the CO2 price will remain so low is because the bill allows up to 2 billion tons of offsets (up to 1.5 billion which may be sources from overseas) to be used in lieu of cutting emissions here in supposedly ‘capped’ sectors.  That’s enough to legally permit U.S. emissions to continue to grow at business as usual rates through 2030. So Waxman-Markey gives us no real “cap” on carbon and no significant price on carbon.  Forgive me for looking for other ways to directly spur the transformative clean energy innovation we need — ways you may consider unfortunate degrees of “government intervention.”  Given what’s at stake after all…

Also, as a kind of test to consider: many European nations have had gas taxes for decades that implement an effective carbon price in the hundreds of dollars a ton range ($2-5/gallon tax = roughly $200-500 per ton of CO2 equivalent carbon price!).  So with such a powerful signal for private investors to develop alternative fuel vehicles, why haven’t firms in Europe invented and commercialized electric cars?  Why isn’t everyone in Denmark driving EVs, one might ask?

The answer is because that’s not really how innovation works.  Price signals alone do not spur adequate innovation.  There’s a multitude of market failures at work, especially in the energy innovation sphere.  I have a paper coming out in about two weeks which I’ll share with my readers and the The Energy Collective community that spells out a lot of these market failures (prelude: knowledge spillovers, very high capital barriers and non-differentiated commodities are three big barriers to sufficient private sector innovation investments).  These are the kinds of market failures, which when combined with clear public imperatives for change, simply demand more active government engagement with innovation and industry than we all may find ideal.

For now, I’ll again challenge the typical assertions that private entrepreneurialism and investment (and the proper price signals) are all that’s required to spur transformative innovation by pointing you to my publication, “Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation” [PDF] for examples of how active federal government engagement and investment paved the way for so many of the technologies we now take for granted, including microchips, personal computing, the Internet, commerical aviation and jet engines, gas combustion turbines, nuclear power, wind power, solar power, etc.  Take a look and see why I’m not as skeptical of the role of government as you are.

Finally, as a (mostly) side note, since you cite Tesla Motors targeting luxury car markets with their electric Roadster as a reason they should not receive federal incentives: the reason Tesla is starting with a $100k electric luxury car is because new technologies are routinely more expensive at their launch.  If there isn’t a market for early adopters, the technology will never reach the economies of scale and spur the learning by doing (and continued innovation) that drops the price and improves the performance of the technology over time.  Think flat screen TVs or cell phones: the first ones are far more expensive than most can afford.  But now these technologies have reached economies of scale that drove dramatic price reductions and the technologies are affordable and (because of that) ubiquitous.

Tesla is looking to use luxury buyers – who routinely pay more for the cool new thing – to drive those initial economies of scale. They plan to produce the Roadster on a scale of 1,000s and at a cost of $100k.  Their next model will use the same (and now cheaper) components and batteries at a larger scale and will be a luxury sedan selling for around $60k and at a scale of 10s of thousands.  They then plan to produce a $35-40k sedan at a scale of 100ks per year, if all goes well.  That’s just smart.  Please don’t use that as a reason not to incentivize their technology’s development with public investment.  If the government were willing to directly purchase batteries and serve as the early adopter themselves — as we did for microchips, radios, radar, lasers, early computers, and jet engines — we could bring this emerging technology to scale and down in price much more rapidly and pave the way for the kind of dramatic private sector innovation that occurred AFTER the government purchasing (and loss-leading) dropped these technologies in price.  In short: we should be seeing far more direct public investment in the technologies to enable electrified transportation, not less.

Marc, I challenge you to wrestle with the history of innovation in a real honest way, and look for the role of government engagement in these technologies.  The energy innovation imperative is simply too critical to leave to well-established (but quite inaccurate) myths about the infallibility of private sector innovation and the supposed ineptitude of any government engagement in the market.  If the financial crisis taught us anything, I’d hope it was that we should revisit those myths with a pretty damned critical eye, eh my friend?

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Wal-Mart CEO has a problem with gays

May 4, 2009

Mike Duke, who has been chief executive of Wal-Mart Stores for just three months, is getting a lot of attention in the blogosphere. It’s not the kind of attention a new CEO wants.

“Shameful, bigoted and discriminatory” is the headline over one blog post about Duke.

Why? Because, it turns out, Duke signed a petition last year that put an initiative known as Act 1 on the ballot in his home state of Arkansas. The controversial initiative says that only married couples may become adoptive or foster parents in the state, closing the door for same-sex couples. It passed in November with 57 percent of the vote.

Mr, Duke, what on earth were you thinking?

Needless to say, this is unwelcome news for Wal-Mart, the world’s biggest retailer, and it’s especially hurtful to the company’s gay employees. Wal-Mart has struggled in recent years to figure out how to deal with LGBT (lesbian, gay, bisexual and transgender) issues. It supported an employee group called Wal-Mart Pride, which triggered a backlash, which subsequently caused the company to pull back its support for national gay-rights group. (See my 2007 FORTUNE.com column headlined Wal-Mart shuns gay groups.) More broadly, Wal-Mart has worked hard and for the most part effectively to position itself as a good corporate citizen as it tries to expand from its rural roots into urban, liberal areas. This will be a setback.

News that Duke had signed the petition caught the company flat-footed. When I asked a Wal-Mart spokesman for a comment, I got this response and no more:

I can confirm that Mr. Duke did sign the petition. Also, Wal-Mart did not take a position on the ballot initiative.

I learned from a source inside Wal-Mart that Duke was going to meet with the Wal-Mart Pride group to talk about the issue. (Note to Wal-Mart employees—feel free to let me know how that meeting went by email at marc.gunther@gmail.com.) A gay employee told me that he hopes that this incident will be a catalyst for positive change.
The story of how Duke’s name came to light—you can see a photocopy of the petition sheet (PDF) here—is the latest illustration of how digital media is exposing corporate and individual behavior.

Last week, a gay rights group i called KnowThyNeighbor.org posted online the names of the 83,000 Arkansas citizens who signed the petition, in a searchable database. The petitions are public records.

KnowThyNeighbor.org had previously published names of more than 500,000 people who signed anti-gay petitions in Massachusetts and Florida. In a press release about the Arkansas outing (my word), Tom Lang, the group’s director, says:

These petition signers need to stand behind their signatures and be responsible for this dehumanizing attack on the gay community. It’s disgraceful that they have chosen to exercise their prejudice at the expense of children who are now being denied access to loving adoptive and foster parents.

Lang urges family members, friends, co-workers and customers of those who signed the petition to confront them:

These conversations can be uncomfortable for both parties but they are desperately needed.  The more that gays and lesbians talk about the importance of their relationships and their love for their children, the faster stereotypes break down and both sides begin to realize how much they have in common.

Two days later, a reader identified as Concerned Arkansas Citizen posted a comment:

One VERY prominent person in Arkansas that has signed the petition is Michael Duke of Rogers, AR. He is the new CEO of Walmart Stores, Inc. He should explain himself.

By Monday, gay and liberal bloggers like Queerty and Daily Kos were running with the story and gettings lots of comments. Who says bloggers never dig up news?

For what it’s worth, Wal-Mart got a 40% rating in 2008 on the Corporate Equality Index published by the Human Rights Campaign, the nation’s biggest LGBT advocacy group. Target, a rival, got a 100% rating and Costco got a 93% rating.

Ellen Kahn, Director of the Human Rights Campaign’s Family Project, sent me this comment by email:

When Mike Duke voted in favor of ACT 1…he essentially closed the door to a hopeful future for the hundreds of children in Arkansas’s foster care system…Duke should think about the real lives of these kids and show some compassion.

Duke’s defenders including Jerry Cox, director of the Arkansas Family Council, who called it an invasion of privacy to publicize the names of citizens who are exercising their right to petition the government, according to the Arkansas Times. What’s more, he wrote, many voters will sign any petition based upon “one simple principle: that the people, whenever possible, have the right to vote on issues that could directly impact their lives.”

I’m not persuaded. Duke chose to sign a petition, which is a public document, so how has his privacy been invaded? What’s more, if you believe, as I do, that equality for LGBT people under the law is a civil rights issue, then there’s no reason to put it up to a popular vote.

At the very least, Duke’s decision to sign the petition reflects poor judgment. As a senior executive of Wal-Mart, he should have known that supporting a controversial measure widely seen as anti-gay could boomerang. (The Arkansas Democrat and Gazette called Act 1 “just another exercise in stirring up bad feelings.”) Duke has alienated LGBT customers and their allies, as well many of his own employees.

And if Duke figured that no one would ever know, well, that wasn’t very smart either. Several years ago, the writers Don Tapscott and David Ticoll wrote a book about transparency in business aptly called The Naked Corporation. There are few secrets these days in corporate America. CEOs (and future CEOs) need to pay close attention to how they behave—on and off the job.

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Creative destruction & me

April 30, 2009

During one of my morning runs this week, I was listening to the Slate Culture Gabfest on my iPod shuffle, where Stephen Metcalf, Dana Stevens and Julia Turner were having a lively conversation about Twitter, when it struck me: This is a digital media moment to remember.

I’m a big fan of podcasts. I enjoy Slate’s Political Gabfest as well as the Culture Gabfest, This American Life, the occasional Fresh Air and Frank Deford’s sports commentaries. One of my favorites is Sea Change Radio, which covers environmental and social issues from a liberal perspective. Bill Baue and Francesca Rheannon do a great job, and I’d say that even if I were not interviewed on the latest edition of the show, about green jobs. I’ve also learned a lot from EconTalk, a weekly in-depth podcast about economics, usually reflecting free market ideas, hosted by Russ Roberts. (Russ is also the author of The Invisible Heart: An Economic Romance, a surprisingly entertaining novel about a libertarian teacher of high school economics who is smitten with a liberal English instructor.)

Why am I telling you all this? Because, although I’m as unhappy as anyone about the terrible things happening to the newspaper and magazine businesses these days, what’s often overlooked in all the laments for the decline of print journalism is the other side of the story: the explosion of ideas and (less so) information in the digital media. Just this week, Portfolio magazine closed and the Baltimore Sun laid off nearly a third of its staff. But barely a day goes by when I don’t discover a new and worthwhile blog. Twitter and Facebook point me to news stories and commentary that I would otherwise have missed. A growing number of college courses by great teachers are being put online. And of course thanks to Google, we all have access to more information at our fingertips than we have ever had before. I can barely remember life before Google.

For me, this is personal, of course. I spent more than 30 years as a writer of print journalism—newspaper and magazine stories and books. Now more of my time is spent producing digital media–not just stories and columns but podcasts and Tweets as well.  Much as I love magazine journalism (and I’m about to get to work on a story for FORTUNE), I must say that I have come to enjoy the immediacy of blogging, the feedback that I get from writing for Greenbiz.com and The Energy Collective, the chance to contribute to a fine publication like Slate. Like most people, I’m also spending more time consuming digital content and less time with print.

The economist Josephy Shumpeter called this “creative destruction,” and it is both creative and destructive–as well as fascinating and a little scary to watch as it unfolds. For the second time in a week or so, I’m going end with by quoting Joni Mitchell: “Don’t it always seem to go that you don’t know what you’ve got till it’s gone?”

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The Low Carb(on) Diet

March 19, 2009

You’ve probably heard of the Atkins diet, the South Beach diet and the Best Life diet. Now it’s time to consider Low Carbon Diet. It’s good for the planet, and good for your health, your waistline and your bottom line. What’s not to like?

While the impacts of agriculture and food production on global warming are complex, the Low Carbon Diet is pretty simple. You eat less beef and cheese. You throw away less food. And you try, when possible, to eat locally grown food.

This would be of no more than passing interest, except for one thing: a food service company called Bon Appetit, which operates more than 400 cafeterias in 28 states, is putting the Low Carbon Diet into practice, and it seems to be affecting the way thousands of Americans eat.

Two years ago, Bon Appetit, which operates cafeterias for Target, Cisco, eBay, MIT, Wheaton and Oberlin Colleges, among others, launched the Low Carbon Diet on Earth Day. For a day, it served no hamburgers for lunch.

More important, the company set a goal of reducing beef consumption by 10%. A year later, every site had reduced beef consumption by at least that much, and the system as a whole cut it back by 23%.

“It’s time to become accustomed to thinking of meat and cheese as ‘special food’ rather than simply as lunch and dinner,” says Helene York, the architect of the Law Carbon Diet and the director of strategic initiatives at Bon Appetit. York also runs the Bon Appetit Foundation, where her job, in part, is to spread the word about the connections between diet and global warming.

By some accounts, the food system accounts for as much as one-third of global greenhouse gas production. Some of my favorite writers—Michael Pollan, Mark Bittman, Peter Singer and, long before any of them, Frances Moore Lappe —have written eloquently about how we eat can change the world. Food has become a big environmental issue in the blogosphere. (See the Ethicurean, Sam Fromartz’s ChewsWise and Tom Philpott’s Victual Reality columns at Grist.) These conversations will shape individual behavior. But only when big companies like Whole Foods, McDonald’s and Wal-Mart get into the game will change come at the scale we need. That’s what got me interested in Bon Appetit.

Founded by a couple of chefs and based in San Francisco, Bon Appetit a division of a $20-billion-a-year public-traded British food company called Compass PLC. The company, whose slogan is “food services for sustainable future,” employs more than 500 chefs, many classically trained, who prepare meals from scratch when possible. Bon Appettit began a “farm-to-fork” initiative encouraging chefs to buy locally back in 1999, it rolled out a sustainable seafood program in 2002 (after winning the food service contract at the Monterey Bay Aquarium) and it made a national commitment to buy cage-free eggs in 2005.

York, who is in her late 40s, found her job at Bon Appetit on Craigslist. A Yale MBA, she had worked at Aetna and Citigroup, then managed a Jewish theater troupe before getting into the food business. She launched the Low Carbon Diet in 2007, with a goal of curbing the company’s greenhouse gas emissions by 25% over three years.

You can check out the diet at www.eatlowcarbon.org. It’s instructive, if not comprehensive or precise. You can see, for example, that a chicken and cheese burrito has more than three times the global warming impact of chicken noodle soup, or that a breakfast of toast and jam will warm the planet less that a bowl of cold cereal and milk.

More interesting than the diet itself is how Bon Appetit persuades its customers to change their habits. “You lead with flavor, and I don’t say that lightly,” York told me. For example: a chef named Chip Griffin, who runs a Cisco Systems café in Boxborough, Mass., created what he called “the best-tasting turkey burger in Massachusetts” for Earth Day last year. He worked at the grill station himself, touting his healthier choice. Afterwards, hamburgers went back on the menu, but the turkey burger has outsold them ever since.

This year, Bon Appetit has pledged to eliminate all air-freighted seafood, reduce tropical fruit consumption by 50 percent and reduce cheese and meat consumption by 25 percent (from the 2007 baseline). The company has also begun to measure all of the food that it throws away because when food is disposed of in landfills, it decomposes and emits methane, a potent greenhouse gas. Where feasible, Bon Appetit has set up composting programs or looked for ways to get its food scraps back to farmers who feed them to pigs and chickens.

“We’re looking at food scraps as a resource, rather than as waste,” York says.

These are solid steps, but as you dig into the environmental impact of food, things get complicated in a hurry. Measuring the carbon footprint of the food on your plate is an inexact science. Is it better to buy local or buy organic? Are farmed shellfish sustainable—or not?

No ordinary person can be expected to sort out all those choices, but they matter. Which is why we need more companies like Bon Appetit to guide us.

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Blogging for fun and profit

March 4, 2009

This blog began as an experiment on August 10, 2006. Soon it grew into a habit. Now – some 341 postings and too many words to count later — it has become a (small) business, I’m pleased to say.

I liked blogging from the get-go. I felt liberated from the constraints of space (always a problem, even when writing magazine-length stories for FORTUNE), freed to speak in my own voice (i.e., no editors), and able to publish immediately. The audience for this blog has always been small, but it has also become global, drawing readers from more than 30 countries, at last count. When I write about economic development in Rwanda or the Indian wind-power firm Suzlon, readers in those places find me, thanks, I suppose, to the magic of Google. This blog also has connected me to readers in a way that was never possible in the print world. It has not generated as many comments as I’d hoped it would, but it brings me a fair amount of feedback via email.

In the last few days, I have signed contracts with two websites that will carry the blog, as they have been doing for a while. The first is GreenBiz.com, which is led by Joel Makower and Pete May, and the second is The Energy Collective, a site founded by Robin Carey and Jerry Bowles. They’re well worth checking out.

I’ll be a senior writer at GreenBiz.com, which has established itself as the premiere website for business people looking for ways to make their companies more sustainable and profitable. I’m excited about working with GreenBiz.com for many reasons but a big one is the opportunity to work with Joel who, as many of you know, has been thinking, writing, speaking and consulting about business and sustainability for more than 20 years, long before the topic became chic. The AP described Joel as “the guru of green business,” and his smart and readable book, Strategies for the Green Economy, has been praised by such thinkers as architect Bill McDonough and William K. Reilly, the former EPA administrator. Joel is chairman and Pete May is the CEO of Greener World Media, whose online properties include GreenerBuildings.com, ClimateBiz.com, GreenerDesign.com, and GreenerComputing.com, as well as GreenBiz.com.

Besides blogging, I’ll be providing exclusive content to GreenBiz—a monthly podcast with leading thinkers and doers around the topic of business and sustainability. I’m also going to help Pete and Joel with events like their Greener By Design conference, which this year will be held in San Francisco on May 19-20.

The Energy Collective has a different focus and business model. It aggregates the work of leading bloggers who write about energy policy and technology, rather than hiring a staff of editors and writers. Bloggers like me have signed up with Energy Collective because it gives us access to a broader audience, and Energy Collective gets lots of ideas and words at a low cost. I’ve agreed to be one of four members of the group’s ‘Bloggers Board.’ The others three are “WattHead” Jesse Jenkins, of the Breakthrough Institute; nuclear expert Dan Yurman; and economics Professor John Whitehead, whose site is called Environmental Economics, of Appalachian State University.

“Our goal with The Energy Collective,” Robin says, “is to create a vibrant, back-and-forth discussion between the smartest people in the world about energy and the environment, and in so doing, find new solutions and common ground.”

At Energy Collective, I’ll help recruit other bloggers to the platform, provide regular comments and host webinars for the company. I’ll also do some exclusive podcasts for the site. I’m looking forward to working with Robin, who I met for the first time early this year in Abu Dhabi, of all places, because she is a world-class expert in social media. She and Jerry also started a popular blog aggregation site called Social Media Today, and so I am counting on them to guide me through the worlds of Facebook, Twitter, YouTube and the like.

Beside blogging, I am speaking, writing and consulting, organizing next months’ Brainstorm Green conference for FORTUNE, and generally staying a lot busier than I expected to be when I left the staff of the magazine at the end of last year. I will soon let you know about another new-media venture that I’ll be devoting lots of time to in 2009.

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Some promising news about the news

November 2, 2008

As the most exciting presidential campaign of my lifetime comes to an end, the newspaper industry is in its worst slump ever. My FORTUNE colleague Richard Siklos has a great column about the industry’s woes at fortune.com, including this recap of recent headlines:

Gannett, the country’s largest newspaper company, plans to lay off 10%, or 3,000, of its newspaper staffers; the century-year-old Christian Science Monitor will cease publishing in print; the Newark Star-Ledger will cut its newsroom by 40%; the Los Angeles Times and Orange County Register will proceed with their umpteenth rounds of layoffs.

Magazines aren’t immune. In the midst of the worst financial crisis since the Depression, business magazines (including FORTUNE) are cutting back. But things are far, far worse for newspapers, including their share prices. Again, quoting Richard:

McClatchy (MNI) is down 85%, Lee Enterprises (LEE) is down 82%, Gannett is down 76%, and the New York Times (NYT) is off 52% – and off nearly 80% over five years.

I don’t ordinarily wrote or blog about the news media (been there, done that) but last week, as all this dour news was unfolding, I found some reasons for optimism. I met over coffee with Keith Hammonds, who used to be a top-flight magazine writer for Fast Company and Business Week. Keith is now looking for ways to rescue and reinvent journalism through his work with Ashoka, a nonprofit group that supports social entrepreneurs. (Ashoka defines social entrepreneurs as “men and women with system changing solutions for the world’s most urgent social problems.”) Of course, the decline of print journalism isn’t as urgent a problem as, say, global poverty, climate change or AIDS but all those problems will, arguably, be harder to solve in the absence of a free, independent and vigorous press.

As Keith put it, when we talked about the cutbacks in the newsrooms of the Newark Star Ledger and the Trenton Times: “Who’s going to connect the people of New Jersey with their government in a meaningful way?” I recently saw a couple of issues of the newly slimmed-down Hartford Courant, a place where I worked for nine years, and a newspaper that once took great pride in its exhaustive (albeit often exhausting) coverage of state and local government; today’s version is a shadow of its former self.

So what is to be done? “If you believe that traditional media is in crisis,” Keith says. “there’s a tremendous opportunity to identify and support the entrepreneurs who are creating the new models and strategies for whatever it is that comes next.” That is the purpose of the program he now leads, which is called the Ashoka News and Knowledge Fellows. (It’s funded by the Knight Foundation, the creation of the late, lamented Knight-Ridder chain, another former employer of mine.)

“What are the new ideas, models and strategies that will better connect people to information?” asks Keith.

So far—he’s only been at Ashoka since January—Keith has identified nine fellows, who will get three-year grants, as well as advice from Ashoka and the chance to interact with one other. (One advisor to the group is Jimmy Wales, the founder of Wikipedia.) These new media pioneers are widely scattered, in the U.S., Germany, the Czech Republic, Venezuela, Sri Lanka, Nepal, Pakistan and Senegal. Most but not all are working in digital media.

One example: a website at www.newstrust.net led by an entrepreneur named Fabrice Florin. Its goal is to identify and promote high-quality journalism from all across the Internet, both from the mainstream and independent media, by turning to a community of thousands of news reviewers. “This is a way to establish credibility and connections with trustworthy sources,” Keith says.

Another: Ouestaf.com, which, as best as I can tell with my college French, offers a collection of news stories from independent sources across West Africa. Because there are far more mobile phone owners than computer owners in West Africa, the founder of this project, Tidiane Sy, hopes to develop a news services that would be available to cell phones.

Keith joined Ashoka after 25 years in traditional journalism, most recently at Fast Company. He’s got a Harvard MBA as well as experience with nonprofits; he co-founded a relief food distribution network in Namibia in the 1980s. He tells me he’s energized by his new gig.

“The last six years in the print world were very painful,” Keith says, “as we tried to figure out how to wrestle our old model into some new form that would allow us to be relevant to people, to be valuable, to connect readers to information. It was pretty grim.”

By contrast, the entrepreneurs that Ashoka is supporting are energetic and optimistic. “They are powerful personalities. They have ideas that click. They are smart. To talk to them is to reacquaint yourself with hope, and the sense of purpose that drove many of us journalists into the field in the first place.”

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Talkin’ ‘Bout ReGeneration

September 11, 2008

So Dell, which is getting more gung-ho about the environment all the time, has built an elaborate  website called Regeneration.org, all about saving the planet. I can’t quite figure out what Dell is hoping to accomplish, to be honest–there’s no clear explanation on the site–or even how a company got an “.org” address. The most striking thing about the site is a cool (if kind of pointless) wall of graffiti where you can write an answer to the question “What Does Green Mean to You?” and see it show up on an interactive, ever-changing display, so long as you agree to register for the site.

Anyway, there’s a blog on the site, videos, “green” tips, inspirational stories and the like. Dell says, rather grandly: “The ReGeneration is a global movement—a group of people committed to sustaining the world’s natural environment.” Well, maybe, but if there is, it is unlikely to be managed by Dell, or any other company.

I tell you all this not to promote Dell but to promote myself!  One of my favorite corporate PR people, Bryant Hilton of Dell, recently interviewed me for the site and posted my comments on the blog. For whatever it’s worth…

This blog, meanwhile, has been quiet lately because I’ve been immersed in a major story for FORTUNE that should be out by early next week. It’s not part of my usual beat. Instead, a profile of a man who has been on the front page of every newspaper in the world this week. Stay tuned….

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AT&T, not cool

August 17, 2007

Not being “in the demo,” as they say in the media biz, I didn’t hear about AT&T’s censorship of the rock band Pearl Jam until a friend in the social investing world told me about it. If you were not paying attention to the Lollapalooza music festival staged recently in Chicago, you probably didn’t hear about it either. But a whole lot of people have heard about it, and that’s a problem for AT&T.

The facts, as I understand them, are these: AT&T runs a website called Blue Room that offers live music from music festivals, streaming music, movie trailers, sports videos and video game reviews. I can’t tell what the business purpose is, but I suspect that Blue Room is, at least in part, an effort to imbue some coolness to the AT&T brand. As you may know, the phone companies have been trying for more than a decade to get into the entertainment business, with what can be charitably described as mixed results. When I covered media, I occasionally interviewed telecom executives and let’s just say that they are about as charismatic, entrepreurial and show biz-savvy as you’d expect lifelong employees of a regulated utility to be.

In any case, during Lollapalooza, Pearl Jam singer Eddie Vedder altered the lyrics of a Pink Floyd song “Another Brick in the Wall” (now that’s my demo) to say, “George Bush! Leave This World Alone.” This was evidently too much for the delicate sensitivities of the gatekeepers of AT&T’s Blue Room, and so they blocked it out. Also cut out was a line that said, “George Bush! Find yourself another home.” This is the kind of thing that Democratic presidential candidates say on the stump every day. Fortunately, they need not seek approval first from AT&T.

Pearl Jam’s fans noticed the deletions, of course, and contacted the band, which said on its website, “AT&T’s action strikes at the heart of the public’s concerns over the power that corporations have when it comes to determining what the public sees and hears through communications media.” You can read more about the band’s reaction at MTV News.

This is where the story gets interesting.

AT&T first tried to duck responsibility. They attributed the editing to a “subcontractor” and said “this was not a censorship issue—it was a mistake that is completely against our policy.”

The company also said that the content monitor who removed the anti-Bush comments was there only to deal with profanity—until a group called the Future of Music Coalition pointed out that at least 20 incidents of profanity were not edited from the webcast.

Later, AT&T told Variety that “It’s not our intent to edit political comments in webcasts…unfortunately it has happened in the past in the handful of cases.” Gee, if it’s not their intent, why has it happened? Can’t they run their our website?

Well, the blogosphere has gone nuts over this. Some people checked out the campaign contributions of AT&T’s chairman Randall Stephenson and found he was a big supporter of President Bush. (Ah, that explains everything…) Others used the brouhaha to argue for an idea called “net neutrality” that would limit the ability of AT&T and other Internet service providers to control what flows through the Internet to their customers. AT&T and other ISPs say they would never use their power as gatekeepers to interfere with content—a claim that has considerably less credibility today than it did a couple of weeks ago.

A group called OpenMIC and its executive director Michael Connor said in a press release that:

…since its founding Pearl Jam has reportedly sold more than 60 million records worldwide and is fortunate to be able to demand that AT&T make available an unedited version of the band’s performance on the web.

“Think of all the musical artists and other content providers that don’t have the reputation and resources of Pearl Jam. How will we ever know if the gatekeepers at telecom companies have decided they don’t meet some arbitrary standard of what’s worth broadcasting on the web?” asked Connor.

When the controversy caught the attention of Trillium Asset Management, a socially responsible investment firm with $1 billion under management, including more than 200,000 shares of T, the firm asked AT&T to investigate. Steve Lippman, vice president of social research at Trillium, who brought the issue to my attention, wrote:

As citizens we are alarmed whenever the free marketplace of ideas is impeded by political censorship. As shareholders we are most concerned about the impact such controversy can have on AT&T’s reputation among consumers and its good standing in regulatory and legislative communities.

What’s that they say at AT&T? “Your World. Delivered.”

Well, sort of.

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Transparency? Not at Fidelity or Hearst

June 11, 2007

Hearst and Fidelity Investments don’t get it, to use an overworked expression. They don’t understand that today even private companies have to be transparent about their operations if they want the public’s trust.

Instead, these two companies are models of opacity.

I’ve written about both before. Fidelity’s been the target of an aggressive, sustained divestment campaign, designed to get the mutual fund giant to sell its holdings in PetroChina and Sinopec, two Chinese oil companies doing business in Sudan and thereby helping to finance the genocide in Darfur. Fidelity recently sold some holdings in PetroChina, but it has not explained why, nor has the company responded in a meaningful way to its critics.

So Fidelity is under fire again, this time in connection with its sponsorship of presidential debates last week on CNN. As The Washington Post reported, Fidelity’s role led Eric Cohen, chairman of Fidelity Out of Sudan, to ask the candidates — several of whom have promised to divest their personal finances of Sudan-related holdings — to refuse political contributions from companies with such holdings and to decline invitations to events sponsored by firms like Fidelity.

As Susan Morgan, a campaign spokeswoman, told me by email:

Since Fidelity has made no statement or commitment regarding divestment from PetroChina and Sinopec, investors entrusting their money to Fidelity mutual funds continue to risk inadvertently investing in these companies helping to fund the genocide in Darfur.

Interestingly, CNN refused to run an commercial from the divestment campaign critical of Fidelity. That’s not going to stop the debate over Fidelity’s role from being aired. For those of you who haven’t followed the divestment campaign, there’s an excellent overview here.

Memo to Fidelity: This issue isn’t going away.

As for Hearst, I blogged at great length several months ago about the company’s almost comical unwillingness to disclose where it gets the paper that “O The Oprah Magazine” is printed on. How much is recycled? How much comes from forests that are being harvested in sustainable ways? Other magazine companies will answer these questions. Hearst won’t.

The blogpost got a fair amount of attention around the Internet, and today (to my delight!) it found its way into The New York Times, as part of an article about Rolling Stone’s pledge to print on environmentally preferable paper. But Andrew Adam Newman, the freelancer who wrote The Times story, had no more success than I did in getting a straight answer out of Hearst:

Asked by The New York Times whether Hearst was using recycled pulp in its magazines, Andrea Faville, a spokeswoman for Hearst, e-mailed what she called “a backgrounder on Hearst’s green efforts.” It said the company is “using more than 15 percent of post-consumer recycled fiber content across its portfolio of publications.”

But is any of that recycled fiber going into magazines, or instead into the company’s dozens of newspapers and trade publications? “Right now, we don’t have any info for you beyond what is in the backgrounder,” Ms. Faville responded by e-mail.

Hearst, which publishes Esquire, Cosmopolitan and Seventeen as well as Oprah’s mag, resides in one of New York’s greenest buildings. But the company has yet to figure out that you cannot be selectively green. To be an environmental leader, you have to be consistent–and you have to be open about your practices.

Memo to Hearst: This issue isn’t going away.

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Look Great Naked in a Water-Saving Shower

March 5, 2007

Did the headline grab you? It’s the winner of a headline-writing contest that my fellow blogger Tom Konrad kindly sponsored recently on my behalf, after I complained to him that it’s hard to get people to read stories about energy efficiency. Energy efficiency is what, in my newspaper days, we called an IBD story–important but dull. How important? Here’s what the L.A. Times wrote last week about a new GAO report on the government’s failure to set stricter efficiency standards:

Over the last three decades, the federal government has missed legal deadlines for setting stricter efficiency standards for common appliances, resulting in billions of dollars in higher utility bills and millions more tons of the greenhouse gases that fuel global warming, congressional investigators reported.

Scandalous, no? Tom’s blog is a great source of info on alternative energy and energy efficiency.

Thanks, too, to the contest winner, Chris Baskind, who is the editor of a great-looking website called A Lighter Footstep. Explaining the headline, Chris writes to me by email: “Bathing makes up the bulk of home water heating expenses.” So by saving water, you save electricity, too. Chris’s site is brand-new and worth checking out.

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