US mulls bill for minimum IoT security requirements

A cross-party delegation of US politicians have introduced a bill which will aim to create minimum security standards for any IoT devices used by government agencies and departments.

Led by Democratic Congresswoman Robin Kelly and Republican Congressman Will Hurd, the bill has gained notable support already. While this is a perfectly logical step forward to ensure the integrity and resilience of government systems, the fact the politicians seem to be taking an impartial approach, not targeting a single company or country, is much more encouraging.

“As the government continues to purchase and use more and more internet-connected devices, we must ensure that these devices are secure,” said Kelly. “Everything from our national security to the personal information of American citizens could be vulnerable because of security holes in these devices. It’s estimated that by 2020 there will be 30 million internet-connected devices in use. As these devices positively revolutionize communication, we cannot allow them to become a backdoor to hackers or tools for cyberattacks.”

“Internet of Things devices will improve and enhance nearly every aspect of our society, economy and our day-to-day lives,” said Hurd “This is ground-breaking work and IoT devices must be built with security in mind, not as an afterthought. This bipartisan legislation will make Internet of Things devices more secure and help prevent future attacks on critical technology infrastructure.”

When discussing digital security, a mention of Huawei or China is never far away, but this seems to be an effort to mitigate risk on a much grander scale. Yes, the US does have ideological enemies it should be wary of, but it is critical politicians realise there are risks everywhere throughout the digital ecosystem.

It is easy to point the finger at China and the Chinese government when discussing cybersecurity threats, though this is lazy and dangerous. Having too much of a narrow focus on one area only increases the risk of exposure elsewhere. Such are the complexities of today’s supply chain, with companies and components spanning different geographies and sizes, the risk of vulnerability is everywhere. It is also very important to realise cybercriminals can be anywhere; when there is an opportunity to make money, some will not care who they are targeting. Domestic cybercriminals can be just as much of a threat as international ones.

This impartial approach, applying security standards to IOT devices regardless of origin, is a much more sensible approach to ensure the integrity of networks and safeguard sensitive data.

Of course, this is not necessarily a new idea. Many security experts around the world have been calling for a standardised approach to IOT security, suggesting certification processes with minimum standards. Such a concept has already been shown to work with other products, such as batteries, therefore establishing a baseline for security should not be considered a particularly revolutionary idea.

What is also worth noting is that while this is a good idea and will improve protections, it is by no-means a given the bill will pass into a law. A similar bill was launched in 2017, though it was quashed.

US reportedly pressures Germany over Huawei

After diplomacy failed to convince those pesky Europeans Huawei should be banned, the US has reportedly moved onto the tried and tested tactic for getting its way; being a bully.

It was never going to be long before the blunt hammer of political persuasion came out, and according to the Wall Street Journal, the White House is huffing, puffing and about to start swinging. The German Government has reportedly been told to ditch Huawei kit or it will be barred from accessing US intelligence databases.

Should the reports prove to be true, this would be the first time the US has threatened allies with direct consequences for ignoring the anti-China propaganda. That said, it should come as little surprise. The US is a political power not used to being told no, especially with the narcissistic President Trump acting as puppet master. Being nice can only get you so far, and the White House has seemingly had enough of those pesky Europeans making their own decisions.

While Huawei remains a company under scrutiny, the European nations has so far resisted any knee-jerk reactions. It has been rumoured Germany was preparing new security requirements which would protect itself and its citizens, but also allow Huawei to continue operating in the country, and last week was confirmation. The release of a draft bill, outlining the new security requirements laid out the German position; Huawei looked safe in Germany.

Germany is of course a large economy and a key trading partner of the US, though it is also a heavyweight amongst political featherweights in the European Union. In drafting these new security requirements, other countries across the bloc might follow suit, such is the influence of Berlin. Perhaps this is a situation which the dented-ego of the US would not allow, especially considering its lobby efforts have largely been ignored across the European continent.

With Europeans taking a more proportionate response to the threat of foreign actors, the US will of course not be happy. The bully of yesteryear is beating its chest, and collateral damage from the US/China trade war could be about to get much wider.

The big promise of politics just got bigger

The Senator Elizabeth Warren campaign roadshow is officially underway, and the tech giants are sitting in the crosshairs.

We might be slightly protected from it in the UK, but politics in the US has become much more about theatre than concrete issues of today. For every campaign launched, there needs to be a monumental promise made which will shake the foundations of society. For Donald Trump, the wall proved to be that divisive point, and for Warren, it is the spearhead of US political and economic dominance on the global stage; the internet economy.

“I want a government that makes sure everybody – even the biggest and most powerful companies in America - plays by the rules,” Warren said in a Medium post.

“And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favour and throwing around their economic power to snuff out or buy up every potential competitor.

“That’s why my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.”

And just like Trump’s wall, in reality this promise is nothing more than a PR plug to grab headlines.

Stepping up the hubris game

President Donald Trump is the master and current reigning champion of this competition.

In 2015, Trump entered the world of politics with wide-sweeping messages of hate, xenophobia and borderline racism. These political sound bites, designed to rouse in Middle America and drive forgotten voters to the polls, culminated in the claim he would force Mexico to pay for a wall which would span the width of the US southern borders. Three years into his presidency, Trump is still searching for the wall’s funding, and Warren could be walking into the same problem.

Breaking up the internet giants, the very companies who drove the US economy for years and have now become the world’s punching bag, is a daunting task. It might sound attractive to voters, the people who seek fortunes but cannot congratulate those who have found them, but what happens if Warren is unable to deliver on the marquee promise of her campaign?

This is the very dilemma which Trump is currently facing. His campaign was built on the promise of the wall, but the world still awaits the delivery. Warren is now promising an outcome which will not come easily, potentially becoming the architect of her own downfall, offering ammunition to critics and opponents.

Big promises = big problems

Warren’s promises are a threat to the giants of Silicon Valley, and you can guarantee the lobby machine has already been kicked up a gear.

First, Warren is promising new legislation which will designate some business activities as ‘Platform Utilities’. Facebook is an example, and it does appear Warren’s vision is to separate the functional aspect of the platform from participation activities. It sounds very logical, but you have to consider that the platform in these companies is essentially run as a loss leader; these platforms are free for the consumer and would not exist if the parent company was not entitled to monetize the user.

“These companies would be prohibited from owning both the platform utility and any participants on that platform,” said Warren. “Platform utilities would be required to meet a standard of fair, reasonable, and non-discriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.”

It would be interesting to hear how Warren thinks Facebook or the Google search engine would continue to function if the ability to make money was removed.

The second major point to consider from this post is the unwinding of what could be perceived as anti-competitive mergers.

At Google, Waze, Nest and DoubleClick are the three transactions which are considered anti-competitive, and therefore under these new plans would be reversed. We believe there are two major issues with this promise.

Firstly, removing these aspects of the business would be incredibly difficult, verging on impossible. This might not be the case for some, Nest for example, however DoubleClick is now so deeply embedded in various different functions of the Google business where do you even start?

Secondly, hindsight is an issue. Some of these transactions are only deemed as anti-competitive because of the success. DoubleClick may well not have been a success without the scale and power of Google. The company is being punished for being good at what it does.

In this case, 1+1+1 = 4. This transaction has been deemed as anti-competitive because of the sum of the parts. Google has collected several different components to make a greater result. Individually, each component is powerful, but the outcome is greater.

The not-so-slumbering giants

Google, Amazon, Facebook and numerous others will not take this aggressive attack on the basic business principles of Silicon Valley lying down.

Warren will not be the only politician to make a move against the wealth, power and influence of the internet giants, but the lobby and legal challenges will be astronomical. Should this promise get anywhere near a draft bill or even legislation to pass through the House, legal challenges will be lodged, PR propaganda will be launched, and in-direct, passive-aggressive threats will be made.

Lawyers are excellent at slowing the wheels of progress, and many of the world’s best lawyers call Silicon Valley home.

We suspect the Warren campaign team has not thought this strategy through entirely, there are too many holes and illogical conclusions. From a conceptual perspective, this is the Mexico wall promise in shape-shifting form. It is a promise which sounds attractive to voters but will be almost impossible to deliver.

That said, theatre in US politics works, and Silicon Valley is home to the bad guys right now. We suspect a political administration hell-bent on breaking-up the internet giants will fail, but it could be a big enough promise to attract votes.

FCC and Oval Office locking horns over 5G

The FCC originally looked like a diligent foot-soldier for the President, but with the nationalised 5G infrastructure argument seemingly emerging again, heads are set to butt.

Reports have been emerging in various corners that the White House is revisiting plans to develop a nationalised 5G network, a plan originally raised in January 2018 to keep the US at the front of the technology arms race. The plan was shot-down back then, and the FCC has already raised set the tone of resistance through social media over the last week or so.

Following the President’s twitter rant last month, which saw the Commander-in-Chief bemoan progress being made by the telcos, FCC chiefs set their position out quite firmly.

In the case of FCC Chairman Ajit Pai, a retweeted message from 2018 reiterates a point which was made when the plans were first suggested; hands-off from the government is the best stance. This seems to be one of the only positions the Democrat and Republican representatives on the board of the FCC seem to agree on; the telcos should build the US 5G network, not the government.

Although the White House has not released any official statement confirming its favour of a nationalised 5G infrastructure, the defensive position entrenched by Pai and Commissioner Jessica Rosenworcel suggest there have been conversations which neither like. These tweets could be viewed as in-direct opposition, with the pair attempting to get ahead of the game.

According to Politico, this isn’t the only conflict which is emerging either. The Trump 2020 re-election campaign team have been pushing the benefits of a government-owned, wholesale infrastructure, while the current Trump political administration are keen to avoid the topic. While the disagreement is hearsay and reports for the moment, it would not surprise us if the Trump campaign led with such a promise.

This sort of political manoeuvre fits perfectly into the Trump playbook from his first election campaign. It hits pain-points for US citizens in the politically less-attractive states, the very people Trump was able to mobilise in 2016. However, attacking the digital divide in rural communities is not a new trick, Hilary Clinton used this tactic in 2016 also, but a nationalised 5G infrastructure will appeal to those who feel ignored by corporates. Trump has shown he can communicate effectively to those who believe they are under-represented by mainstream politics, and this angle could prove to be an effective tool.

The idea which seems to have been raised here is to create a wholesale network in partnership with a private third-party. The government would fund the deployment of the network, while the third-party would manage the operations and wholesale business, creating a system which would operate like the electricity market, with parties ‘purchasing connectivity’ on a rolling basis.

Theoretically, this position sounds wonderful. The arguments for nationalisation are often very compelling, and it could be justified as an effective way to spend tax-payers money. However, nationalised businesses and infrastructure have been shown to be ineffective time and time again. The government is not equipped to manage such projects in the long-run and not savvy enough to compete against private entities when they emerge. It might sound very appealing to voters who are stuck in the chasm of the digital divide, but it will not help the US in the global technology arms race.

As Brenden Carr, a Republican FCC Commissioner, notes above, private industry is the best way to secure a leadership position in 5G. This is a lesson which has been learned numerous times over the years in the US; when you leave private industry alone, simply creating a legislative and regulatory framework to encourage growth, much can be gained. In the technology world, this is perfectly evident with the success of Silicon Valley.

The dominance of the US on the technology stage is being widely challenged, though it seems the ego of the Trump party is getting in the way of logic. First to market does not necessarily mean the best, but this seems to be the angle which the President’s team is taking.

The big question is what impact this will have on the future for the Republican party. Should these rumours of a nationalised network evolve into reality, a split may well appear in the rank and file. The Republican FCC representatives are clearly not happy about this position, and neither are the science and technology advisors in the White House. However, you can’t argue that such a campaign promise would be very attractive to those who currently reside on the wrong side of the digital divide.

Here is what the Trump 2020 electoral campaign team will have to assess; is the long-term detriment of communications infrastructure a fair trade-off for the lure of ‘Middle America’ votes in the 2020 election? We suspect they won’t be looking much further beyond 2024.

Trump opposition to AT&T/Time Warner deal was personal revenge – report

Few would consider Donald Trump a conventional President but attempting to block AT&T’s acquisition of Time Warner to get revenge for poor coverage would be another level.

Trump’s distaste for CNN is widely known, though The New Yorker is now claiming the President’s opposition to AT&T’s acquisition of Time Warner was little more than a personal vendetta against the newsroom for poor coverage as opposed to an ideological protest against market consolidation. We’re not too sure whether to be surprised by such an accusation, such is the dramatic impact to the status quo Trump has had on politics.

It is claimed President Trump was attempting to pressure the Department of Justice into blocking the monstrous acquisition as revenge for the negative news coverage on Time Warner-owned CNN. According to The New Yorker, in a meeting with Trump’s former lawyer Michael Cohen and former Chief of Staff John Kelly, the President said:

“I’ve been telling Cohn to get this lawsuit filed and nothing’s happened. I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.” Gary Cohn was, at the time, the Director of the National Economic Council – the main Presidential policy-making forum for economic matters.

The New Yorker then goes onto to claim Cohn resisted the push from the President, with aides suggesting he did not understand the ‘nuances’ of antitrust and competition law.  The Department of Justice did eventually file its complaints, though these were eventually overturned by a Federal Judge, with the DoJ then turning to the court of appeals.

It’s worth noting is that The New Yorker is not a friend of President Trump. Owned by Conde Nast, the editors are apparently given complete freedom from the parent company, with the publication having endorsed Barack Obama in 2012 and Hillary Clinton in the 2016 Presidential Election. The main topic of the New Yorker piece was an investigation into the relationship between right-leaning Fox News and President Trump.

While there certainly is a left-sided slant, it is also a highly respected title which has never failed a fact check according to the Media Bias/Fact Check website. This should not be considered as unusual as there are very few (if any) mainstream media titles in the US (or worldwide for that matter) which can honestly state they are impartial; there is always some sort of political bias.

What this does indicate is the growing, and not always positive, influence of politics of the TMT segments. Although politicians might have been slow off the mark in regard to the digital euphoria, they are certainly catching up quickly. Mass market communication has dramatically shifted away from traditional media in recent years, and the politicians are following the wake.

For AT&T, this is a headache which it will be happy to put in the past. Last week, a US Court of Appeals for the DC Circuit rejected an appeal from the Department of Justice challenging the Federal Judge which overturned its complaint against the acquisition. The DoJ claimed AT&T would have “both the incentive and the ability to raise its rivals’ costs and stifle growth of innovative, next-generation entrants”, though the Federal Judge and the appeals court dismissed the antitrust claims.

The number of lawsuits, counter-lawsuits and appeals has now created an incredibly complicated timeline, but there does not seem to be many routes of resistance left. Sooner or later, AT&T will be able to start figuring out how to recoup the $107 billion it decided to spend on Game of Thrones.

Huawei asks people make their own decisions

In an open letter to US media outlets, Huawei has said it will open-up its doors for any journalist who decides they want to make up their own mind instead of listening to government propaganda.

Signed by Catherine Chen, Huawei’s board member who is responsible for public and government affairs, the letter invites the US press to visit the firm’s campus’ and speak with employees to get first-hand information. The inference here is relatively simple, you shouldn’t trust the White House, come and find out yourself.

“I hope that you can take what you see and hear back to your readers, viewers, and listeners, and share this message with them, to let them know that our doors are always open,” Chen stated in the letter. “We would like the US public to get to know us better, as we will you.”

And just to hammer home the statement, Huawei has also taken out a full-page advert in the Wall Street Journal this morning to publicise the letter:

With many US journalists seemingly operating on a different plane to US President Trump, it will be interesting to see how many take up Chen’s offer. Whether this has any direct impact on the anti-China rhetoric spreading across the US remains to be seen, as Trump certainly has been effective in spreading the ‘America First’ message.

However, there is also the risk of antagonising members of the press. Huawei is indirectly suggesting these individuals have not exercised their own ability of individual thought in recent months, instead simply relying on the stench which wafts out of the White House press room.

This letter is the latest attempt by Huawei to isolate the White House and its opinions on Chinese intelligence activities. The anti-Huawei rhetoric might not be catching on in Europe just yet, but another letter signed by 11 politicians reveals there might well be more aggressive strikes towards China across the US.

The letter, signed by the likes of Republican Senator of Florida Marco Rubio and Democrat Senator of Virginia Mark Warner, demands Huawei’s exclusion should be extended from the telecommunications segment and into any which manages critical infrastructure, such as electricity. The example which the Senators use is Solar Inverters, a component of electrical grids, for which Huawei is the worlds’ largest manufacturer of.

China has already been frozen out of the telecommunications world, but it seems the excitable politicians have smelt blood and are chasing down the wounded Huawei. The aggression towards the firm might start to get very wide-ranging.

“No way US can crush us” – Huawei founder hits back

The usually publicity-shy Huawei founder Ren Zhengfei has hit back at what he perceives as a politically motivated attack, declaring if “the lights go out in the West, the East will shine”.

Although the US government has sustained the anti-China rhetoric over the last couple of months, with Huawei being the focal point of any aggression, the firm is holding strong. That is the message from Zhengfei, a usually media-adverse individual who is currently being carted around Europe in a show of strength against the White House. The aim for Huawei is to demonstrate transparency, and it does seem to be working in Europe.

“There’s no way the world can crush us,” said Zhengfei, in an interview with the BBC. “The world needs Huawei because we are more advanced. Even if they persuade more countries not to use us temporarily, we could just scale things down a bit. And because the US keeps targeting us and finding fault with us, it has forced us to improve our products and services.

“If the lights go out in the West, the East will shine. And if the North goes dark, there is still the South. America does not represent the world.”

While these comments are unusually aggressive for a man who does not like the limelight, they could prove as the perfect antagonistic weapon against President Trump. Zhengfei is sending a simple message across the Atlantic in this interview; the world is not siding with you in this quest.

Huawei has become a proxy in the overarching conflict between the US and China, though it is certainly faring better now than it did a couple of months back. During the initial exchanges, there was a considerable amount of collateral damage heading Huawei’s direction. Banned from providing equipment in Australia, New Zealand and Japan, plus other omissions in countries such as South Korea, it was an ominous sign. But Europe is seemingly not agreeing with Trump.

In the wider US/China dispute, Europe is a critical battle ground. As a bloc, the European Union is the second largest economy in the world. For both China and the US, winning favour would go a long-way to establishing political and economic dominance over the other. And Europe does not seem to share the same deep-rooted distaste for China as the US is currently harbouring.

Many European economies have established trade relationships with the Chinese, and while there are long-standing partnerships with the US also, none of these countries seem to want to readily shun the Chinese. This is the advantage which Huawei has in Europe, these are not nations which will so easily bow to the outside influence of the US.

In the UK, for instance, China is the 5th largest trade partner, as it is also in Germany. Its down in 7th for France, but still accounts for 4.3% of total trade, as it is in Italy for 3% of the total. For Belgium, China is the third largest partner outside of the European Union, while it is the second largest outside the bloc for the Netherlands. Trade with China is too important for the member states to consider siding with the US in the larger international conflict.

Of course, what you have to bear in mind is the over-arching European Commission supposedly considering ways to ban Chinese companies from contributing to critical infrastructure programmes. US Vice President Mike Pence has been touring Europe to talk up the importance of making a stance against China, and also dropping hints other European nations should ditch the Union, but success with the individual member states is looking far more limited.

With Germany and the UK seemingly favouring an approach which would heighten security protocols but still allow Huawei to operate, the Chinese firm is seemingly winning on the continent. With the US throwing political heavyweights at the nation states, Secretary of State Mike Pompeo was another to join the crusade of fear-mongering, the US might soon become quite agitated. Huawei’s resistance might infuriate the Oval Office, but the inability to bend Europe into its own image of perfection might will frustrate.

Europe was supposed to be a political boost for the US ambitions against China. This is of course the bloc which the US saved from the ravages of World War II and also a steadfast set of allies over the last few decades. Whatever the US has done, Europe has generally agreed to. But it seems the brash and aggressive style is not palatable to the conscientious and risk-adverse Europeans.

For Huawei, this is a massive battle. Europe as a whole is the largest market outside of China for Huawei, representing billions of dollars’ worth of business. However, its not just the network infrastructure ambitions at risk her, let’s not forget the consumer business has been making considerable progress across the bloc as well. The fact Huawei is wheeling Zhengfei around demonstrates how important this region is to the company.

President Trump sees himself as one of life’s winners. As the self-proclaimed ‘deal marker’, this is a man who is used to getting his way. With the power of the White House and US economy behind him, this is not an outcome he would have imagined. The stubbornness of the Europeans might force the White House into more drastic action before too long.

Trump’s Huawei executive order not much more than a power play

Rumours are swirling around Washington DC suggesting President Donald Trump is on the verge of signing another executive order, this one the final blow to Huawei’s US ambitions.

While the document itself will actually have very little impact on Huawei’s business, it is more of a symbolic blow to the kit vendor, as well as other Chinese businesses looking to exploit the riches of the Land of the Free. While the rumours were originally reported last week, by the time you get back to the office on Monday the order may well have been signed.

In a single signature, Huawei, a representation of China’s ambitions in the global technology and telecommunications industry, could be officially and explicitly shut out of the worlds’ largest economies.

Although details on the executive order are limited to rumour and hearsay for the moment, officials have stated this order will not impact electronics companies or products which incorporate Chinese components. This is a political move to demonstrate the power of the US. Trump is making a statement to China; look at what I can do to one of your flagbearers.

As it stands, Huawei’s involvement in US communications infrastructure is pretty minimal. T-Mobile US CEO John Legere has very publicly stated his business will very much avoid using Huawei equipment, while back in August Trump signed the Defense Authorization Act into law which effectively banned any meaningful work Huawei or ZTE could do in the US.

Huawei’s, and ZTE to a lesser extent, condemnation has become nothing more than a symbol of US dominance on the technology world. Trump is posturing, demonstrating what will happen to anyone who challenges the US leadership position. Over the last few months, US delegations have been visiting governments around the world to pitch the idea of a ban, admittedly with varied success, though there have been some willing to listen. Banning ZTE from using US components or IP brought the firm to the brink of extinction. The US forced Canada to arrest the Huawei CFO. A lot of this is a demonstration of power.

This is of course a complex and rich tapestry, and there are numerous intertwining and independent narratives going on. Some of it will be political, some economic, some espionage assumptions will be true and there will be validity to accusations of a government-influenced unfair playing field. This is an incredibly complex matter. But look at what the executive order actually is.

Huawei is already incredibly limited in the US, the damage to ambitions has already been dealt, this is chest beating from Trump.

Potential Presidential candidates line up to oppose T-Mobile/Sprint merger

Leading opponents of President Trump have signed a letter to the FCC condemning the proposed T-Mobile US and Sprint merger, suggesting the threat of regionalised monopolies and sky-high bills.

Signed by the likes of Massachusetts Senator Elizabeth Warren, New York Senator Kirsten Gillibrand and New Jersey Senator Cory Booker, all of whom are potential opponents of Trump in the 2020 race to the White House, the 19-page document offers a broad and deep range of reasons for the FCC to block the merger. Whether the Republican FCC Chairman Ajit Pai elects to read the letter is anybody’s guess, such is the state of US politics today.

“The two companies have proposed a four-to-three merger that is likely to raise prices for consumers, harm workers, reduce competition, exacerbate the digital divide and undermine innovation,” the letter states.

“Blocking this proposed combination is necessary to send a strong signal that our enforcement officials are vigorously protection Americans from harmful anticompetitive behaviour.”

Which way this decision will go is still very unclear, but the paperwork arguing against the merger is starting to stack up. These nine politicians are firmly standing in opposition of the transaction, while on the other side of the line, T-Mobile US and Sprint are struggling to muster support. It seems few people are pro-merger, though when has politics ever followed the glories of logic.

As many these transactions, the main crux of the argument seems to be focused around competition. The Senators not only fear there will be nefarious conversations behind closed doors to carve the US into regionalised monopolies between the three remaining players, but they also question this suggests the telcos don’t really care about poorer families and those who are living in the chasm of the digital divide.

One point which might strike a chord for those considering the proposed merger is the focus of the telcos on low- and medium-income families. The letter suggests the two parties has aggressively competed against each other for these demographics, while there is also evidence of a high diversion ratio between offerings. Combining the two would remove this market dynamic, as well as the driver to offer competitive tariffs for lower-income individuals.

Another factor to consider here would be the impact on competitiveness of the wholesale market, and the subsequent ability for MVNOs to remain competitive, another option for low income individuals.

“The proposed merger would permit the new T-Mobile to steadily racket up wholesale prices on MVNOs and block them out of the market,” the letter claims.

While screwing the poor is often considered a political no-no irrelevant as to where you are in the world, Pai is seemingly not built from the same clay. A few months back, the FCC Chairman attempted to rid the ‘Lifeline’ initiative from the books, a programme which was designed to help poorer families and communities bridge the digital divide. This is one of the reasons the House Committee on Energy and Commerce has promised to exercise more oversight on the FCC, suggesting in a letter last week, some of Pai’s actions are not in the ‘public interest’.

Another damning point to the proposed merger is that is being sold on false pretences. The T-Mobile and Sprint management teams have together been promising a newly merged business would allow scale and efficiencies to effectively deliver 5G, though the Senators argue that these are two businesses which have deployment plans which would work on a standalone basis also.

This should not be surprising, as any good business will have created a standalone 5G strategy should the merger be blocked, this is just common sense, though the Senators argue the merger would not necessarily speed up deployment or create a challenge to the leading pair of AT&T and Verizon. Back in 2011, AT&T argued it should be allowed to acquire T-Mobile as there was no feasible way the company could compete in the 4G market but fast-forward a couple of years and look at the result. The T-Mobile success might count against it from a precedent perspective.

On the investment side of things, the argument for the merger also falls apart a little. The merged business has promised to spend $40 billion over the next three years (or three years after the green light) to make 5G a reality. However, both telcos have said they spent $10 billion in CAPEX across 2018 separately. Doing basic maths, the $40 billion of the combined business would not exceed the CAPEX of the standalone business. Economics of scale and a larger network footprint would of course impact this number, but it is a point well made by the Senators.

While we are sure there are Senators who genuinely object to this merger, it is tough to look past the fact so many of these signatories are potential Presidential candidates. For T-Mobile and Sprint, this could quickly evolve into a nightmare.

The positions have been perfectly pitched here. These are Senators who are protecting the interests of the poor, fighting to for the benefits of those in rural communities and of course, battling to make life better for families. These are all political hot buttons and excellent rhetoric to win the favour of potential voters in the run up to the next election. These are arguably the demographics which pushed Trump over the line in 2016.

T-Mobile and Sprint might now be caught between a rock and a hard place. With such politically motivated opposition and few friendlies fighting their case for the greenlight, the path forward is becoming increasingly bumpy.

Committee Democrats tell Pai to stop being so horrid

FCC Chairman Ajit Pai has received a scalding letter from House Committee on Energy and Commerce effectively telling him to play nicer with poor people and Democrats.

Signed by Committee Chairman Frank Pallone (Democrat representative of New Jersey) and Communications and Technology subcommittee Chairman Mike Doyle (Democratic representative of Pennsylvania), the letter accuses Pai of representing the interest of corporations over consumers, ignoring questions from Democrat politicians and inadequately representing the objectives of the FCC.

“Under your leadership, the FCC has failed repeatedly to act in the public interest and placed the interest of corporations over consumers,” the letter states.

“The FCC should be working to advance the goals of public safety, consumer protection, affordable access and connectivity across the United States. To that end, it is incumbent upon the Committee’s leadership and its members to oversee the activities of the FCC.”

While under the protection of a Republican majority across US politics, Pai has been freely swinging the machete to cut public programmes and reduce the influence of the FCC. The destruction of net neutrality is of course what has grabbed the headlines, but Pai has also overseen the deregulation of broadcasters and gutted the Lifeline subsidies which so many families rely on to bridge the digital divide.

These are only a few of the accusations pointed towards Pai by the Democrat politicians, but they are not wrong. The influence and footprint of the FCC has been diluted under Pai, though only time will tell whether it has created too much of a light-touch regulatory landscape. The Democrats clearly believe Pai is impacting the US negatively, but they were never going to be nice after the November elections win.

“Not only have you have failed on numerous occasions to provide Democratic members of this Committee with responses to their inquiries, you have also repeatedly denied or delayed responding to legitimate information requests from the public about agency operations,” the letter states.

“These actions have denied the public of a full and fair understanding of how the FCC under your leadership has arrived at public policy decisions that impact Americans every day in communities across the country.”

One thing which is clear is the relationship with between Pai and the two Democrats is hardly on the friendliest of terms. That would be putting it politely, but Pallone and Doyle have painted a target on Pai.

Moving forward, Pai will no-longer be able to frolic freely through the offices of the FCC. Pallone and Doyle have promised ‘oversight time’, with the Committee reassuming its traditional role of oversight to ensure the agency is acting in the best interest of the public and consistent with its legislative authority. In short, Pallone and Doyle will be breathing down Pai’s collar at every corner.

Pai might have enjoyed freedom over the last two years, but that is all about to change.