Across the country, technology companies have found themselves at odds with local and state governments.

I've worked with dozens of tech companies from established giants like Uber and Tesla, to emerging enterprises like Lemonade and AltSchool, and done so in nearly every state in the country.

You can pretty much write the script for how the dynamic will play out before it even gets started: a technology company introduces a product/service that upsets the status quo, the local or state government questions the appropriateness of the innovation, and invariably, tension starts to build, a nasty debate ensues, facts are misrepresented, the public is deprived of a substantive debate, and nothing is resolved.

The motives of government - led by politicians - are often not pure. Conversely, too many tech companies believe they can do whatever they want and no one should get in the way of innovation; rules - and democratic process - be damned.

I recently witnessed a major deviation from the patterns I described above.

The primary government decision maker acted out of his commitment to the duties of his office, the tech company respected the government process and the public got a real debate and resolution of a complicated issue.

This deviation from the norm - and more in line with how it should be - was in New York State, regarding the debate over fantasy sports.

It started last fall, when New York State Attorney General Eric Schneiderman issued a cease and desist order to two major fantasy sports companies, DraftKings and FanDuel.

(A bit of disclosure: FanDuel is a current Tusk client and Tusk has an equity stake in the company.)

The Attorney General stated he believed the companies' offerings violated existing state law. The fantasy companies disagreed. The fight began - legal proceedings, barbs in the media, political activism and all the typical trimmings you see when a tech company and the government go head to head.

But behind the scenes, there was something different. The fantasy sports companies and the Attorney General were having thoughtful, respectful and substantive conversations about how to move forward.

What allowed that to happen?

First, the fantasy sports companies were an anomaly in the tech space: they wanted government regulation of their product - most tech companies reflexively (and foolishly) ingest a belief the government should simply not touch them.

Second, and perhaps even more atypical, the New York Attorney General wasn't seeking a self-serving political outcome, he was simply trying to do what he thought was right.

He believed the law dictated that fantasy sports were illegal and that it was his job to enforce the law. At the same time, he knew the state's statues were created long before fantasy sports became relevant and there were legitimate questions about what the state's policy toward this recent technological innovation should be.

So he didn't overreach. He knew it was not his job to decide the state's polices, and the policy decision should be left to the elected legislature.

But Attorney General Schneiderman also knew the legislature would be paralyzed, unable to have a legitimate debate on the subject with the legal case in flux.

In order to allow an unencumbered debate on the issue to transpire, the Attorney General agreed to a deal with the companies separately which in this case meant to suspend legal action and suspend fantasy sports in the state while the legislature debated the issue.

I've interacted with hundreds of public officials, but after witnessing these negotiations, I can say I know very few who have shown such a deep commitment to fairness and good governance as AG Schneiderman. At a moment when most other elected officials simply grandstand, he demonstrated principled restraint by allowing the legislature to debate the issue on the merits.

In a reasonably timely manner the State Legislature debated the issue and passed a law clarifying the state statues and affirming fantasy sports are legal in New York State.

The Attorney's Example

The Attorney General has now said he will enforce and defend the new law, just as he did with the old law. The process worked because he didn't let ego or political consideration drive decision making - he evaluated the facts, made his decisions based on the merits and allowed a reasoned debate to occur.

It wasn't about protests or soap opera. It was about the companies working in good faith with an Attorney General who had the public good in mind every step of the way. The law passing in favor of the fantasy sports companies is not why I say the process "worked" - if the legislature voted against fantasy sports I would have said the same. The process matters.

As I mentioned, I've worked on countless similar issues in states across the country. If the operating model we saw in New York State with Attorney General Schneiderman and the fantasy sports companies could be imported to every state, we would see smarter, more reflective discussions about the future of technology and the appropriate role of government oversight, as opposed to the pedantic and unproductive life cycle of the government vs. tech debates that have become all too common.

Today, FanDuel and DraftKings settled claims with Attorney General Schneiderman related to their past advertising practices. The settlement - $12 million - was a tough pill for the companies to swallow and the Attorney General could have taken them to court.

But he looked at each company's financials and, after driving a tough but fair negotiation, agreed that neither company would pay more than they have now agreed to.

In the end, this is an example of the parties involved being able to do something seemingly crazy in the tech vs. government playing field - talk to each other like grownups and work out solutions to move forward.

Published on: Oct 25, 2016