Time Warner acquisition resistance could turn ugly for Trump

President Donald Trump’s administration certainly has been a different shade of politics for the Oval Office, though actions and alleged prejudice could come back to haunt the Commander in Chief.

Despite being proclaimed a resounding victory for the Republicans, the mid-term elections could have gone a hell of a lot better. With the House of Representatives swinging back into the hands of the Democrats, not only will Trump find passing his questionable legislation more difficult, but his actions over the first two years of the Presidency could be called into question.

In an interview with Axios, California Congressman Adam Schiff, who is also the Ranking Member of the House Intelligence Committee, suggested an investigation into the President would now be able to make a material impact because of the swing of power across the aisle. The President’s tax records will once again become a topic of conversation, though the appropriateness of his objections to AT&T’s acquisition of Time Warner will also come under scrutiny, as will his seemingly personal vendetta against Amazon CEO Jeff Bezos.

While the President’s actions have constantly been condemned by critics and political opponents, there has been little opportunity to do anything considering Trump’s political foundations. With majorities in both Houses of Congress, the Republican party have been able to block, or at least stifle, any investigations. However, with last week’s mid-term elections swinging the House of Representatives into a Democrat majority things might be about to change.

Trump’s opposition to the AT&T and Time Warner deal has been widely publicised, dating back to the Presidential campaign trail. Some have suggested his hatred for Time Warner owned CNN is the reasoning behind the probes and appeals against the acquisition, though this will come under question through the investigations.

“We don’t know, for example, whether the effort to hold up the merger of the parent of CNN was a concern over antitrust or whether this was an effort merely to punish CNN,” said Schiff.

While the deal has been greenlight by District Court for the District of Columbia Judge Richard Leon, the Department of Justice is appealing the decision, suggesting Judge Leon is ignorant to the facts and the economic implications of the deal. It has been reported the Trump administration has been pressuring the DoJ to pursue the appeal and attempt to derail the acquisition.

Looking at the spat with Jeff Bezos, this has been tackled on several fronts. Not only has President Trump constantly berated the excellent reporting by the Washington Post, privately owned by Bezos, Trump has been targeting the tax activities of Amazon. Back in March, Trump tweeted he would be tackling the tax set-up at Amazon, sending share price down 2%, while he has also been reportedly pressuring the Post Office to charge Amazon more, despite the eCommerce revolution seemingly saving the service with the vast increases in package delivery.

These are just two examples relevant to the telecoms and technology industry, but the Democrats are seemingly going for the throat. Tax records will be called into question, as well as reports the President blocked the FBI from moving its headquarters because it would negatively impact business as one of his hotels, located opposite the bureau’s offices.

For the moment, this seems to be nothing more than political posturing, as while the statements might appease those in opposition to Trump, they are nothing more than statements. The Democrats will not assume their majority in the House of Representatives for two months, a long-time in the lightly-principled world of politics. Much could change during this period.

What the change in political landscape could mean more than anything else is a bit more stability. President Trump has been praised by his supporters as a man of action, though actions are of questionable benefit to business executives who crave legislative, regulatory and policy consistency. Only with the promise of consistency can businesses made long-term strategies to conquer the world, but with Twitter a constant threat of change it is understandable some are nervous.

With the Democrats in control of the House of Representatives, Trump will find it much more difficult to force through any controversial or overly aggressive policies, though there is also the threat of legislative standstill. The US political landscape has certainly been an interesting one over the last two years, though it could become even more interesting over the next two for completely different reasons.

Democrats eye up Bill of Rights for the Internet

With Silicon Valley seemingly not doing enough to empower the consumer in the digital era, Congressman Ro Khanna is working on new proposals to more tightly regulate the technology industry.

Congressman Khanna, the Democratic representative of California is suggest a new Bill of Rights for the Internet, which would provide more rights for the consumer in controlling how personal information is collected, transferred and utilised. The aim here is simple; pull the balance of power over to the side of the consumer.

While this does sound like a logical idea, the technology industry has largely slipped through the legislative grey areas for years, before such proposals could even be considered the Democrats would have to win the November mid-term elections.

The idea for the Bill would focus on the following principles. Individuals should have the right:

  1. To have access to and knowledge of all collection and uses of personal data by companies;
  2. To opt-in consent to the collection of personal data by any party and to the sharing of personal data with a third party;
  3. Where context appropriate and with a fair process, to obtain, correct or delete personal data controlled by any company and to have those requests honoured by third parties;
  4. To have personal data secured and to be notified in a timely manner when a security breach or unauthorized access of personal data is discovered;
  5. To move all personal data from one network to the next;
  6. To access and use the internet without internet service providers blocking, throttling, engaging in paid prioritization or otherwise unfairly favouring content, applications, services or devices;
  7. To internet service without the collection of data that is unnecessary for providing the requested service absent opt-in consent;
  8. To have access to multiple viable, affordable internet platforms, services and providers with clear and transparent pricing;
  9. Not to be unfairly discriminated against or exploited based on your personal data; and
  10. To have an entity that collects your personal data have reasonable business practices and accountability to protect your privacy.

Of course, many of these principles are ideas which should have been implemented before the internet ball got rolling. Now it is travelling at such a speed it might be difficult. Another factor to consider is the power of the internet giants. These are massive organizations, with heavy-hitting financial punches and an influential lobby. They won’t like the idea of such principles being written into law, so expect some notable resistance.

But first, to even consider such proposals, the Democrats would have to win the mid-term elections. All 435 seats in the House of Representatives are up for election, though 147 and 182 seats are considered safe for the Republicans and Democrats respectively. A further 51 will probably be won by the Republicans and 10 by the Democrats. The interesting battles are the ones which could go either way; 42 of these are currently held by the Republicans and 3 by the Democrats. A majority here has been set as a target, though to pass any new legislation, the Democrats would also have to win the Senate over.

In the Senate, 35 out of the 100 seats are being contested. Three of the contested seats are considered safe for the Republicans and 14 for the Democrats. 2 will probably be held by the Republicans and 8 probably held by the Democrats. 8 seats, four of which are held by either party, could go either way. Here it still looks like the Republicans will maintain control, dampening the potential for any new technology regulations.

The internet giants should have more regulations dictating the field of play, though with the current political landscape it does look like that will be difficult. Even if the Democrats win in the House, a scenario which some believe to be realistic, a Republican Senate will mean gridlock for future legislation.

State versus federal battle looms as California signs net neutrality into law

California Governor Jerry Brown has been busy; 31 state bills vetoed and 34 signed into law, including the controversial net neutrality rulings, kicking off another state versus federal battle.

State Bill 822, claimed to be the strongest net neutrality laws in the country, has officially been signed into law in the State of California, but it only took the US Department of Justice a few minutes to throw a wobbly. Before the army of busybodies and privacy advocates could even get their own press releases out, the Justice Department filed a lawsuit alleging that Senate Bill 822 unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet.

“Under the Constitution, states do not regulate interstate commerce – the federal government does,” said Attorney General Jeff Sessions in the filing. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order.  We will do so with vigour. We are confident that we will prevail in this case – because the facts are on our side.”

Democrat FCC Commissioner Jessica Rosenworcel is clearly excited despite the legal complications:

After being passed back in February 2015, the appointment of FCC Chairman Ajit Pai saw a Republican led assault, with the telcos playing a supporting roles in the wings, on the rules. It didn’t take long for Pai to dismantle net neutrality, the vote to repeal the rules was won on 14 December 2017, though the backlash was almost immediate. Washington State was the first to pass local net neutrality rules, though with 23 Attorney Generals throwing their weight behind the cause it was only going to be a matter of time before other got involved. California is a different beast however, a worthy opponent of the US government.

With a population of roughly 39 million and a gross state product (GSP) of roughly $2.6 trillion, it is the largest in the US in terms of population and economic output. Globally, the economy is only smaller than the GDP of the US, UK, China, Germany and Japan. It is also home to Silicon Valley and the lobby power of the likes of Facebook, Google and Twitter.

While we do have sympathy with California and the internet giants, we do not feel net neutrality is the right way to go. Pai’s approach, reinstating the wild-west internet with the telcos as the tyrants of terror, is equally wrong. Both approaches are too extreme, the right answer lies in the middle, with the telcos afforded the opportunity to make money but still held accountable ensuring the consumer and businesses are not held to ransom. Taking the sensible, middle-ground is the logical approach, but set against the backdrop of such a combative political environment, it will be some time before fairness sets in.

But why is this such an important battle?

In its law suit, the Department of Justice is completely correct in stating California has overstepped its jurisdiction. No state should have the right to impose its own rules on another and the internet by definition is an interstate (international would be more accurate) playground. For these rules to be accepted on a legal basis in the US, California would have to ensure it was only applying the rules to traffic which originated, remained and terminated in California. Not only would this be pretty much impossible, but it would likely only account for a very small percentage of the total.

The stickiness is the clauses in the Communications Act, the piece of legislation which acts as the foundation of all communications orientated rules and precedents in the US. One clause dictates a state is entitled to draft its own rules, assuming it does not contradict that of the federal government. This is the very scenario which California has crafted. If SB 822 is allowed to stand it undermines the whole Communications Act; who is to say other states, businesses or advocacy groups could not use this example as a means to ignore other clauses, aspects of the Communications Act or precedent which has been set. In legalising the contradiction, the risk is to undermine the very basis of the communications industry across the country.

With California retaliating against the FCC’s decision to reverse net neutrality, the consequences are much more significant than they appear on the surface. This is now much more than a battle of technology regulations.

US Democratic candidates told Huawei and ZTE are a no-no

Democratic National Committee (DNC) has warned candidates against using devices manufactured by either ZTE or Huawei due to the threat the pair pose to US national security.

With tensions on the rise between the US and China, both Huawei and ZTE are remaining under the spotlight. Some might suggest there is a genuine threat to national security, while others might believe escalating the Chinese menace is a useful way to distract from domestic debacles, though the reason is irrelevant. With each passing week there is another example of Huawei and ZTE disappearing in the US.

The report comes via Reuters, with a source stating Bob Lord, the Chief Security Officer for the DNC, sending an email to all candidates warning of the threat.

“Please make sure that you are not using or purchasing ZTE or Huawei devices anywhere within your staff – for personal or work-related use,” the email stated.

Although the anti-Chinese rhetoric has been common throughout the last few months, it has largely been restricted to government proclamations. With the opposition now jumping the boo-China bandwagon, the sentiment could become much more common through US society. It is also one of the first example where an official has ventured into the personal lives of employees, instead of just limiting the warning to work-related activities. It might not be too long before the prejudice rubs off on the man-on-the-street.

The apparent threat is due to the proximity of the two organizations to the Chinese government, thus escalating the prospect of espionage through devices and network equipment. Government influence in ZTE is quite apparent, Shenzhen Zhongxingxin Telecommunications Equipment, a Chinese state-owned corporation, is the controlling shareholder of ZTE, though Huawei is a bit more nuanced. Huawei founder Ren Zhengfei previously worked as a military technologist for the People’s Liberation Army, though Huawei is an employee owned organization with little-proved government intervention.

This is of course just another example of the US turning against the Chinese. ZTE is still on thin ice following the ban from using any US components or IP in its supply chain, both Huawei and ZTE have been banned from being sold on military sites, while distribution deals with US telcos also disintegrated due to political pressure. Both have also been banned from selling any networking equipment to any government agencies or departments.

The cards are beginning to stack up, and it is starting to look very feasible both could be banned from US shores completely before too long on the grounds of national security. It does seem Huawei has the same hunch as it was reported in April the vendor was working on its own alternative operating system to Android. Complications with its relationship with Google could mean the millions of Huawei devices around the world are regulated to door-stops.

Paranoid US politicians urge Google to break ties with Huawei

An open letter signed by a US Senator and three members of Congress to Google CEO Sundar Pichai suggests the internet giant should end its relationship with Huawei on the grounds of national security.

Signed by Senator Marco Rubio of Florida, Congressman Mike Conway of Texas, Congresswoman Liz Cheney of Wyoming, and Congressman Dutch Ruppersberger of Maryland, the letter expresses ‘concern’ about the relationship, and the knock-on effect on national security due to the assumed ties between Huawei and the Chinese Government. Anti-China sentiment is hardly a new development in the US, though the threat to Huawei’s ability to operate is starting to become more dangerous.

“We write to express our concerns about Google’s ‘strategic partnership’ with Huawei Technologies,” the letter states. “Chinese telecommunications companies, such as Huawei, have extensive ties with the Chinese Communist Party. As a result, this partnership between Google and Huawei could pose a serious risk to US national security and American consumers.”

Six US intelligence agencies have already warned American citizens not to use Huawei products or services, FBI Director Christopher Wray has testified expressing concern over Huawei’s influence and the influences on Huawei and recent reports over espionage have also began to emerge. It would appear the US is starting to build a case to take Huawei down the same road as ZTE.

ZTE is one company which has already felt the consequences of getting on the wrong side of the US government. A ban on using US technology or services crippled the companies supply chain, effectively rendering the business useless, and while Huawei is not as dependent on the US as ZTE, any actions which would be deemed even remotely similar would be a very negative turn of events for the vendor.

“We urge you to reconsider Google’s partnership with Huawei, particularly since your company recently refused to renew a key research partnership, Project Maven, with the Department of Defence,” the letter states. “This project uses artificial intelligence to improve the accuracy of US military targeting, not least to reduce civilian casualties. While we regret that Google did not want to continue a long and fruitful tradition of collaboration between the military and technology companies, we are even more disappointed that Google apparently is more willing to support the Chinese Communist Party than the US military.”

The politicians seem to be playing on the patriotic values of Pichai, though we feel this is not the most effective route for the budding public servants to head down. Unlike the Senator and members of Congress, Google is a global company with ambitions to work collaboratively with the international community. They are not pro-isolationist, like many of US politicians seem to be positioning themselves, and are keen to make money. Ending the relationship with Huawei on the grounds of paranoia would not be an effective commercial decision for one of the world’s heavy economic powers. There will need to be a more effective argument, and, above everything else, more evidence.

Such developments however should be quite a worry for Huawei. Aside from ending a relationship with one of the world’s most innovative companies, it would also mean no more access to Google’s products. Some could be replaced, however not being able to access the Android operating system would be crippling for the consumer division. Huawei has been working on an in-house alternative for the worst case scenario, though we worry about the effectiveness of such an alternative.

A couple of weeks ago we ran a poll with the Telecoms.com readers asking whether a Huawei ban on US technology impact your decision to buy a Huawei Smartphone or wearable device. It is not exactly the right question for developments here, though it does provide some insight into the communities thoughts on a Huawei operating system. 27% said they would continue to buy Huawei devices, while 21% said it would depend on how good the OS actually is, but 27% said Android was what made the devices any good and 24% would be worried about influence of Chinese government. Clearly ending the relationship with Google would not be a good move.

The threat of Huawei heading down the same route of ZTE is not imminent, but it is certainly more than a distinct possibility. Politicians seems to be building the case, and considering the current Murica-first rhetoric which seems to be flooding the country, it is certainly something the Huawei executives should be concerned about.