Paranoid, egotistical and naive – US reportedly wants to nationalise 5G network

An internal memo has found its way into the public domain unveiling White House plans to deploy a nationwide 5G network which would be paid for and built by the US government.

The idea here is simple; the government seemingly doesn’t believe the private sector is doing a good enough job in taking the US forward, so it is stepping in. 5G has been recognised as the catalyst for the next economic superpower, therefore the US must get there first.

Like Dwight Eisenhower’s efforts to build interstates or John Kennedy’s leadership in the space programme, President Donald Trump seems to believe the government has to step in. These are two examples where intervention was possibly necessary, but we think the idea of nationalising such communications infrastructure reeks of unnecessary government intervention which will only cause pain.

US companies have shown they can be immensely successful when there are profits to aim for. With the interstates and space programme, there was no obvious commercial gain for private companies so government funding and management was necessary. With 5G, the profits are there to be seen. The telcos will be better at building and monetizing these networks, so why should the cumbersome and lethargic public sector get involved. This could be a disaster.

The memo, which was first made public by Axios, outlines the mood of the government and it is basically as we all expected; China is out to get us. President Trump and his cronies seemingly believe nationalised communications infrastructure is critical in not only securing US’ position as an economic super-power, but also to make sure the sticky fingers of Chinese spies stay out of the US data vaults.

China is the main driver here, not only because it has an immense economy which only seems to be heading one direction, but because of the security threat. From the tone of the memo, the White House seems 100% convinced the Chinese state is spying on the US, while Huawei and ZTE are conscious assistants with nefarious ambitions. Of course the only option to save the American people from the Chinese is to nationalise 5G infrastructure.

The paranoia inside the White House should not come as a surprise, it has become a standard part of the script in recent months, but the inflated ego coming spilling out of the Oval Office even caught us off-guard a little. The memo indicates the belief that a nationwide network can be rolled out in three years. Despite the government not having a labour force, a domestic supply chain or a means to finance the network, 36 months is apparently enough time. The memo also highlights the need to standardize the rules and regulations in each of the states.

How the US government thinks it is will be able to tick all these boxes within three years is beyond us. Private companies would struggle to meet such a deadline for a truly nationwide network, and considering the stereotypical work ethic of the public sector, we are highly sceptical whether Trump can inspire the productivity boost. Surely there will be other areas which will be taking his attention, he has that wall to build on the south side of his garden after all.

Of course, the mentality of being the best and most qualified, despite evidence to the contrary, is a trait common among those who occupy political office, irrelevant of residence. What we find quite surprising is the naivety on display. Some might even say it goes beyond naivety; Absurdity? Ignorance? Stupidity? Why does the American government think it can convince private industry to put aside commercial ambitions in pursuit of the American dream?

Several ideas have been raised on how to finance such a network. One plan would be for the government to fund it exclusively, though another idea is to bind the carriers together in a consortium to build the network. While this sounds attractive, it would require the businesses to put aside their business models and profit ambitions, work with competitors to put the American people first. Sounds glorious, but it will never happen.

The two leading carriers in the US have been promising shareholders 5G will bring untold fortunes, the number four player desperately needs to make some money and the third-ranking player is owned by a German operator. Why does the government think it is able to convince these companies they should forgo profits in the interest of the American people. Naivety House house or outright moronic beliefs? We’ll leave that up to you.

This is of course the first murmurs of such a radical plan, and there will be backlash. Such a disruptive change to the industry will be met with considerable friction from the ecosystem, and there will be numerous commentators questioning whether this is a sensible way for the government to spend billions of the hard earned tax payers dollars.

Governments have shown on numerous occasions they are happy to stubbornly follow an agenda because of paranoia, egos or naivety. We certainly hope this more does not backfire, but we are not that confident.

Is the Department of Digital, Culture, Media and Sport the real life DOSAC?

Under-qualified Ministers, photo-ops with minimal media presence and a mash-up of policy areas which don’t really align, it’s like government is taking advice from the writers of The Thick of It.

For those who haven’t seen the show, the Thick of It is a BBC series which satirizes the inner workings of modern British government. There are calamities, botched policies, a lack of funding and Ministers who seem to be making it up as they go along. The series focuses around the fictitious Department of Social Affairs and Citizenship (DOSAC), and could easily be likened to the real-life  Department of Digital, Culture, Media and Sport (DCMS).

The most obvious similarity is the departments themselves. Both DCMS and DOSAC seem to be a collection of briefs which have (at best) tenuous links. In the TV show, one of the characters jokes that while the Minister is on holiday staffers were helpless to prevent a garbage truck being driven down White Hall, while Ministers chucked in policy areas they couldn’t be bothered to deal with. This was how DOSAC came to be as a department, and some might assume it was a similar situation at DCMS.

Whoever though that Digital, Culture, Media and Sport belonged in the same department must surely have been joking. But seeing as most public sector organizations are void of a sense of humour the memo was taken seriously. It might be farcical, but this could be a serious problem.

This is supposed to be the department which readies the country for the cut-throat digital era, making sure our infrastructure is ready to compete with the world on the connected stage. The internet and mobility will define commerce over the coming decades, so some would argue ensuring the UK has a suitable foundation for British businesses to compete would be a critical task. Yet the Digital proposals will be put in the same pile as applications to hold the next Badminton World Championships.

Considering the importance of digital initiatives and infrastructure, why aren’t these policies more closely aligned with the Department for Business, Innovation & Skills say, or the Department for Business, Energy and Industrial Strategy? These would perhaps make more sense.

We suspect that as no-one in government seems to be suitably qualified to lead a technology orientated area, no-one really wants to take responsibility. MPs might sell their grandmothers for a good publicity shot, but perhaps the risk of being known as the person who messes up the digital potential of the UK outweighs the PR benefits of being the face of British digital ambitions?

Talking of MPs, our new Secretary of State for Digital, Culture, Media and Sport Matt Hancock is starting to do an excellent impersonation of The Minister for Fun. On his first day on the job, Hancock managed to find his way onto the guest list at a London Fashion Week after party, cosying up to stars such as Rita Ora. And this work-hard-play-hard attitude seems to be filtering down to his minions.

Yesterday we spotted one of the new Ministers in the department, MP Michael Ellis, visiting the Tate Modern, and today he’s been out seeing a heritage museum in Walworth. The department still hasn’t managed to figure out who is doing what yet, but who needs the MPs in the office to actually do that.

We also assumed that while Minister for Fun Hancock and Minister for Tea and Biscuits Ellis were parading around the capital, the other new appointment, Margot James, would the buzzkill doing the work. We hoped there might at least be one person in the department who was at their desk doing work. Alas, we were wrong, as you can see below.

We fully understand that politicians will be out in the field meeting people and helping raise awareness for good causes, but surely this can wait a couple of days. We would like to see these people who are supposedly responsible for our digital capabilities sit down for a couple of hours, hand out the responsibilities and have a bit of a read up about the policies which are in place. But this all seems too much when there is a camera on the horizon.

Who knows what this means for the UK digital ambitions, as while the world moves towards agility, flexibility and power, we seem to be stuck. Quips and witty remarks can only get you so far, as we will need to see some action before too long. Ofcom CEO Sharon White conceded during a stakeholders meeting this week that the UK lags behind the digital powerhouses of the world, but correcting this will be a challenge is our Minister for Fun is coming into the office every day nursing a hangover after a night of chumming up with celebs.

The UK is losing ground in the digital race, and considering the current set-up, we’re not entirely convinced there is a way back to the front of the pack.

Digital Minister visits Tate Modern instead of figuring out what job actually is

Two days after reshuffling the UK cabinet, key roles are yet to be handed out, but DCMS Minister Michael Ellis still found some time to visit the Tate Modern for Modigliani exhibition.

Previous Minister for Digital Matt Hancock received a promotion, now being the Secretary of State for Digital, Culture, Media and Sport, essentially in charge of the entire department, though he has a few new names to keep in line. Ellis and Margot James are two new Ministerial entries to the department, though what they will actually do is unknown (at the time of writing).

Whilst the majority of us might be concerned that our job was undefined, such minor details of course do not bother politicians. Especially when there is an opportunity to shake some hands and show off the pearly whites with a photo op. As you can see below, Ellis seems happy with his new remit:

We were curious about who would be taking over the important task of readying the UK for the connected economy, and ensuring the country’s digital credentials don’t continue to slide downwards, so we called the Department’s media team. During the call, we were told decision on who would be leading what aspect of the department has not yet been made, and we should keep an eye out on the DCMS Twitter page for any announcements. This might be this afternoon (January 10), but more likely tomorrow morning.

We did wonder why there was a hold up, but initially assumed it was just a case of the public sector moving at its usual pace. But with Ellis galivanting around London taking in the sites, while the rest of the poor team are slumming it in front of a laptop, the delay is starting to make a bit more sense.

Just so you are aware, the Minister responsible for Digital will oversee the following areas:

  • Broadband and mobile connectivity
  • Broadcasting
  • Creative industries
  • Cyber security
  • Data
  • Digital Charter
  • Digital economy
  • Digital skills and inclusion
  • Digital technology
  • Internet governance
  • Media
  • Online safety
  • Spectrum
  • Telecoms markets and resilience

As you can see, these are all areas which might be considered crucial as the country readies itself for the era of connectivity and internet businesses.

If you do happen to spot Ellis wandering around London’s Southbank this afternoon, feel free to give him a prod and tell him to get back into the office. The London Eye will still be there on Saturday.

UK Gov turns down BT’s £600m rural broadband offer

The UK Government has finally revealed its plans to connect the unconnected, as it turns down BT’s bold plans in favour of a universal service obligation (USO) which puts the power in the hands of the consumer.

The new plans will effectively give consumers the right to demand a broadband connection which would deliver download speeds of 10 Mbps by 2020, irrelevant as to where they are based in the UK. Such regulation is built on the same lines as rules dictating practices in the fixed-line business. BT has been lobbying hard against craving such ideas into stone, though its alternative idea has finally been shot down.

“We know how important broadband is to homes and businesses and we want everyone to benefit from a fast and reliable connection,” said Culture Secretary Karen Bradley

“We are grateful to BT for their proposal but have decided that only a regulatory approach will make high speed broadband a reality for everyone in the UK, regardless of where they live or work. This is all part of our work on ensuring that Britain’s telecoms infrastructure is fit for the future and will continue to deliver the connectivity that consumers need in the digital age.”

BT’s alternative idea was to provide a commitment to connect, which was full of hedging terms but would be funded through private investment. Not having the government bank account raided would certainly have been considered a plus for the government, as would BT’s claim it could start work as soon as the idea was accepted, though there were no guarantees consumer bills would not be raised to recoup the investment, or whether fibre would actually be used.

By introducing the USO, those in the countryside are likely to be waiting longer for the increased speeds, though regulation does give the government more opportunity to dictate the state of play in the industry. There is also a nice little bonus of avoiding the courts, following legal threats from the likes of Sky and TalkTalk should the BT proposal be accepted.

The rules will be drafted next year, though it won’t be too long before consumers can start badgering BT for a 10 Mbps connection. Some MPs have been arguing these speeds are still too low, but logic prevails; the rule makers have decided to listen to Ofcom’s opinions over those of self-accredited politicians. Ofcom has deemed 10 Mbps as the minimum speed required to fully utilise the internet for work and play, though the minimum speed requirements will be increased as time passes.

The work is expected to take two years to complete, once the secondary legislation is drafted, which should ensure the government meets its promise of 10 Mbps by 2020. That said, we are sceptical. Any new laws would have to be passed through the political web of checks and balances, with the risk of being tied up in red tape very high. In a perfect world, the government could fulfil the promises, but when politicians are involved everything slows to a snail’s pace.

Overall, this isn’t a bad move to be made by the UK government, even if it is not recognising the realistic complexities of getting new regulations through the sticky web. BT has not shown any genuine commitment to those in rural communities to date, and should not be trusted to do so on its own accord. It isn’t as profitable to connect farmers, when hipsters need to pay for deconstructed coffee with their smartphone. Sometimes telcos need to be nudged in the right direction.

Careful what you say, the spooks are listening

Social media giant Facebook has published its Transparency Report,  which reveals how much governments are keeping an eye on you.

Across the world, Facebook received 78,890 requests for information from governments for the first half of 2017, 21% up from the same period in 2016, 32,716 of which were from the US alone. Of those 32,716 in the US, 57% included a non-disclosure order that prohibited the social media giant from notifying the user. The number of non-disclosure orders has increased by 50% year-on-year.

And before you get too shocked about the number of requests, 32,716 actually concerns 52,280 individual users. 85% of these requests were accepted by Facebook, with the most common request type being a search warrant issued by a judge on the ground the account might contain evidence of a crime.

Of course, it would only be fair to point the finger at Uncle Sam once some comparative figures have been disclosed as well. In the UK, 6,845 requests were made for information on 8,167 individuals. Admittedly the UK is substantially smaller than the US, though in India, a country with an extra billion or so people than the US, 9,853 requests were made for information on 13,752 individuals. In India, Facebook only bowed to 54% of the requests.

These numbers should hardly come as a surprise, and considering there have been nefarious government strategies in the past, some might suggest they are a little low. No-one likes to think the government is peering into their private lives without knowledge, but with this report Facebook is making an important move to demonstrate accountability. And naturally, it isn’t the only one which governments are requesting information from.

  Number of requests in H1 2017 (% of successful requests)
Company United States United Kingdom India
Google 187,280 (84%) 32,643 (74%) 41,187 (50%)
Apple 4,479 (80%) 1,064 (77%) 38 (61%)
LinkedIn 187 (71%) 2 (0%) 3 (0%)
Twitter 2111 (77%) 606 (79%) 30 (10%)
Yahoo 4,220 1,113 639

Something which should not be forgotten is the resistance from technology companies to complete these requests. There have been numerous occasions over the last couple of years where legal battles have erupted over the refusal of technology companies to submit to the demands of intelligence agencies and governments (here’s an example). The tech giants are far from being perfect, but they do generally look for every possible reason to turn down such a request.

That said, it would appear that violating user privacy might be considered okay if there is a commercial gain for the company itself. WhatsApp has found itself in trouble once again, falling foul of French privacy regulations.

French data protection watchdog, CNIL, has told WhatsApp it will face a fine if it doesn’t fall into line with French data protection rules within a month. It would appear WhatsApp has continued to share user information with parent company Facebook, despite being told this was a violation of data protection rules back in November 2016.

At the time, Facebook/WhatsApp said it had halted plans across Europe, but if the CNIL suspicions prove to be correct, that previous statement was a lie. The 2016 saga also followed another warning in 2015 for the same reason. It seems that Facebook’s crafty lawyers are just continually looking for new ways around the rules.

So every time you see a technology giant standing tall against a nosey government agency, claiming to be defending your data protection and privacy rights, just remember it might not have the same attitude if there is a commercial gain.

UK urged to improve data protection for the digitally naive

Several consumer groups have written to UK Minister for Digital Matt Hancock urging changes to data privacy and protection rules, removing grey areas which allow companies to navigate breaches unscathed.

Many rules and regulations should be viewed as dated today. This is not necessarily anyone’s fault, but is more a consequence of how quickly the digital society has engulfed the world. Governments are making the necessary changes, but technology moves faster than politicians. In a letter to Hancock, the consumer groups point towards the idea of collective redress in instances of mass data breaches and systemic insecurities in connected devices, as a means to move rules into the digital age.

“Under the current system individuals have the right to seek redress from organisations when their data has been lost or misused,” the letter reads.

“Whilst we wholly support the provisions in Article 80(1), which reflects the existing system, it is inadequate on its own in holding organisations to account. Further, given the potential scale of data breaches and the breach notification duty, a mechanism under Article 80(2) would save significant administrative and court time, in that it will avoid a myriad of individual claims.”

The letter, which has been signed by Which, the Open Rights Group, Age UK, the Financial Services Consumer Panel and Privacy International, effectively asks the government for permission to make complaints against organizations without prior instruction from consumers. This might sound unusual, but there is some logic here.

We had a brief chat with Jim Killock, the Open Rights Group Executive Director, who likened it to the world of competition complaints. Here, there are a select number of organizations, known as ‘Super-Complainants’, who can raise complaints to the Competition and Markets Authority on behalf of consumers, but not because of instruction from individuals.

In the digital world, this could be quite a useful change. Take for example a data breach, few consumers are aware as to whether their information is actually part of the breach, maybe due to anonymised data, or perhaps the breach was suitably long ago that they aren’t actually bothered. Data breach fatigue might be another reason consumers do not take action, but in every circumstance the offending company receives less flak.

Another example is with the very old or very young. The very old might not have the digital know-how or enthusiasm to realise or follow-up on these breaches, but does that mean the companies should be allowed to get away with inferior security? With the young, parents might not want to drag children through the legal process if the personal information of a 14 year-old was breached. Should companies be allowed to profit off non-action?

By creating a ‘Super-Complainant’ in the digital world, organizations like the Open Rights Group can take action against the offending organization, and create an environment of accountability. Currently a human face has to be attached to a complaint before it can be taken forward, but the letter urges for action against bad practice, not necessarily the harm of consumers.

Of course, there would have to be certain conditions for the ‘Super-Complainants’ to operate. For instance, only a small number of organizations would be given the accreditation. These would have to demonstrate they have the in-house resources to deal with such a mission, but also that they are able to act with care; flood the Information Commissioners Office with too many irrelevant cases and you could have the accreditation removed.

There would also be financial conditions. There should not be a financial reward for taking the sword to these companies, but it should be done as the action of a privacy and security advocate. This will rule out the cowboys and digital ambulance chasers of the world.

It certainly sounds like a logical idea, but whether the digital-inept politicians in charge of our digital economy actually do anything remains to be seen. We certainly won’t be holding our breath.

Over-regulation and career politicians could spell disaster for tech

Government intervention has been a hot topic all week at AfricaCom, and it doesn’t seem like there is going to be a resolution to the problem anytime soon.

Of course there will always be a need to regulate any industry; commercial entities should not be left by themselves, they cannot be trusted; but where to you draw the line? Perhaps one of the issues we are facing in the tech space is a lack of qualified leaders.

“Technology ministers should be technologists,” said Mich Atagana, Head of Communications & Public Affairs, Africa at Google.

It’s a comment which is usually limited to the dark corners of old-man pubs, but now it seems to be leaking into the mainstream; career politicians are no good. Gone are the days where politicians used to be business men or the socially conscious out to make a difference, now we have career politicians who’s primary source of value seems to be a nice smile and an ability to speak well. They aren’t experts in their field, they have been trained for years in how to be media friendly and appealing to the general public.

Sounds good enough to win an election, but what does that actually mean when it comes to running a country; not much apparently.

Let’s use an example. In Kenya, M-PESA, the mobile money platform, was immensely successful because the regulation in the country was open enough to allow the new idea to succeed. Some might argue it was a lack of regulation as opposed to open rules, but that is irrelevant. M-PESA fundamentally changed the economic environment for the better, and opened up new opportunities for businesses and the underserved alike.

This success was enough for Vodafone to try and launch its own mobile money platform in South Africa, though here the strict regulations saw the initiative fail. This was not the only reason for the failure, traditional banking is accessible in South Africa so the need wasn’t as great, though the government wasn’t prepared to allow such a threat to the strict financial sector. The appetite to encourage new ideas and disruption was incredibly low, therefore the mobile money revolution died in South Africa.

Protecting the financial sector might have been a good decision at the time, but considering the growing euphoria surrounding mobile money nowadays, this does look like a very short-sighted and brainless. This is the problem with career politicians. They are not experts in their chosen field, therefore they lack the in-depth knowledge to make informed decisions. And these are the guys making the rules.

South Africa is the example here, but it certainly isn’t the only one. In the UK, Matt Hancock is the Minister of State for Digital and Culture. Hancock has a degree in Philosophy, Politics and Economics, before gaining a MPhil in Economics. He then spent a short period of time working for his family’s computer software company, before taking a job as an economist at the Bank of England, specialising in the housing market. He then became an economic adviser to the former Shadow Chancellor of the Exchequer George Osborne, before being elected an MP and taking various roles in business, housing, energy and social issues.

We are sure Hancock is a highly intelligent individual and he does have some very limited experience in the technology space, however he is a generalist. There is no consistent path through the technology world, yet this is the man in charge of the rules which could define the digital economy in the UK. Some might argue, including your correspondent, that being smart, approachable and having a nice smile isn’t enough to be in charge.

Over-regulation and bad decisions are two problems all over the world, but Africa is one place where the businesses are starting to speak up and fight back. Hopefully this lesson can be learnt by other countries.

African governments told to stop messing with telecoms

Two things in life are guaranteed; death and taxes. This is generally accepted by the world, but perhaps the sticky fingers of the government are asking a bit too much.

Day two at AfricaCom brought a couple of sessions with a bit of a bite. Usually your correspondent finds cringe-worthy moments too much to handle, most episodes of The Office are watched from behind a cushion, but watching three senior telecoms figure do quite a bit of government bashing while South Africa’s Deputy Minister for Telecommunications sat in the front row was quite entertaining.

“We need a new wave of investment in Africa,” said Liquid Telecom CEO, Nick Rudnick. “For this to happen, there needs to be government encouragement. In many cases, this means government should stay out of the way.”

It was quite a spicy start to the panel, catching a few by surprise and set the tone for the rest of the session. In short, governments are screwing up the telco landscape across the African continent.

Whether it is taxes on equipment or devices, attempting to build nationalised networks to create a broadband monopoly or irrelevant regulation and legislation, government intervention has been highly frowned upon. And apparently it isn’t simply well-meaning incompetence, the public sector has been accused of being too greedy.

“Some companies in the telco space are being viewed as cash cows, and governments are trying to extract as much value from them as possible,” said Aniko Szigetvari of International Finance Corporation.

It was politely worded, but essentially there is an accusation of overtaxing a successful segment, with figures quoted at 40-50% on the panel. There were a few fingers being pointed, one of which was towards tax regulatory reform, but it was all pleasantly said, with smiles hiding what we can only guess is quite deep seeded resentment.

The feeling in the room was one of frustration. Overtaxing on equipment necessary to build infrastructure has not only crippled operator ambitions to improve connectivity, but overtaxing devices has impacted the availability and accessibility of data for the consumer. 75% of the continent still use feature phones, which would be considered an impairment for the connected economy.

Another source of frustration is government involvement in funding and building networks. A trend which has been noted is the tendency for governments to try and create a government-owned monopoly business. It’s a worrying observation, contradicting successful examples of the digital economy elsewhere in the world.

“My view is that government should be building hospitals, not telecommunications networks,” said Rudnick.

“I’m not too sure I am on the side of the government,” said SafariCom Chief Innovation Officer Kamal Bhattacharya.

And we do have some sympathy with Rudnick and Bhattacharya on this point. Networks are expensive to build and expensive to maintain. In all honesty, private organizations will probably just be better than the government. And not forgetting, monopolies are very bad in every sense of the word.

Just to be clear, this is not every government in Africa, and no specific nations were highlighted, though the feeling of the room was very clear; governments are one of the biggest barriers to connectivity in Africa.

Unfortunately, this doesn’t look like it is going to change in the near future. In the very next presentation, South African Deputy Minister for Telecommunications Stella Tembisa Ndabeni-Abrahams outlined her plan to improve connectivity across the country, while also promising greater government intervention in the telco space. Perfect timing.

UK government bangs on about 5G once more

It’s been 8 months since the UK last said it was really into 5G so the time has apparently come to make another such gesture.

This time the big initiative comes from the Department for Digital, Culture, Media & Sport and takes the form of a nationwide competition to find test locations for 5G with a few million pounds of public cash as the incentive to take part.

“To stay competitive we must be at the cutting edge of new technology and we are determined to be one of the first countries in the world to use 5G,” said Minister for Digital Matt Hancock. “In these very early stages we want all ideas, from all parts of the country, that will help us get the technology and the roll-out right to have a nationwide network of 5G innovators.”

“Improving productivity requires targeted and sustained investment, which is why we are backing the UK’s digital infrastructure with over a billion pounds of government funding,” said Exchequer Secretary to the Treasury, Andrew Jones. “Whether we are doing business online or the weekly grocery shop online, strong and reliable connections are crucial to this. Today’s announcement is a big step forward in bringing 5G to the UK and ensuring our digital infrastructure is fit for the future.”

Only £25 million of that billion is being offered in this initiative, which smacks of the government wanting to be seen to be involved with 5G rather than doing anything really substantial about it. The usual redundant statements about how important connectivity is for the economy are wheeled out once more and meanwhile the private sector just gets on with it.