US lawmakers want to look at private emails from tech execs

Scrutiny of the US tech giants has been taken up another level after members of the US House Judiciary Committee have demanded they expose their internal workings.

The move has been widely reported in the US, including by the Washington Post. It seems there is already a congressional antitrust investigation underway into Amazon, Apple, Facebook and Google, which is presumably related to the actions taken against Google and Facebook earlier this week. They want to know whether the companies have abused their dominant positions to corrupt markets for digital products and services in their favour.

One of the fun things about getting legislators and lawyers involved in scrutinizing the activities of companies is that they have the power to demand access to a bunch of information that would normally be kept locked in a dark cellar, to which only the CEO has a key. The stuff this committee would like financial data about includes their products and services, and private discussions about potential merger targets, we’re told.

Having said that the letters sent apparently don’t have any legal weight behind them right now, so the companies could theoretically refuse. This is a dangerous game to play, however, as they would have to refuse in a way that didn’t imply they had something to hide. Perhaps they could just chuck over some light-hearted Friday afternoon email banter while whistling nonchalantly.

What seems unavoidable is that the state machinery in the US and elsewhere has the tech giants in its sights and seems to have decided the lot of them have far too much power by half. Since they are undeniably dominant their execs and legal departments would be well advised to buckle in for the long haul. They could also do worse than speak to grizzled campaigners from companies like Microsoft and Intel to get some top tips.

Huawei wants to sell its 5G tech to rivals – report

The latest bid by Chinese kit vendor Huawei to adapt to US sanctions could involve licensing its 5G technology to whoever is willing to pay.

The remarkable claim was made by CEO Ren Zhengfei (pictured) in a recent interview with The Economist. “For a one-time fee, a transaction would give the buyer perpetual access to Huawei’s existing 5G patents, licences, code, technical blueprints and production know-how,” declared the piece. It also noted that the acquirer would be free to muck about with the source code, thus removing the risk of there being nefarious, sneaky bits of spyware or whatever hidden in there.

A technology company’s intellectual property is its crown jewels and under normal circumstances offering it up to competitors would be the very last thing it would do. But these are exceptional times for Huawei and it’s having to consider ever more novel ways of adapting to a time in which many countries around the world are blocking its presence in their 5G networks.

The stated aim for this move is apparently to create a viable non-Chinese competitor to Huawei in order to take the geopolitical heat off it. Ericsson and Nokia would be entitled to take exception to the inference there, but at the same time would surely be tempted to get hold of some of that choice IP.

On further reflection this doesn’t really add up. Ericsson, Nokia and to a lesser extent ZTE and Samsung all have competitive networking offerings, so this feels more like a dig at them than a genuine attempt to move things forward. It also feels like a bit of a public relations gimmick, so Ren can say he’s trying everything to resolve the current situation and the US needs to meet him half way.

This move could also be a further attempt to reassure the US that there are no security concerns with its software by putting it in the hands of competitors that have every incentive to uncover any cyber-naughtiness there may be therein. But how can anyone be sure that the IP Huawei licenses to third parties is identical to that contained within its own kit?

Ren deserves credit for continuing to engage with the western media and for at least appearing to try to come up with solutions to the current impasse. As we saw in the matter of the confiscated Huawei gear, the US isn’t always acting in good faith in this case, but it seems unlikely that this latest initiative will do much to ease its concerns about Huawei’s presence in the 5G networks of itself and its allies.

US tech fraternity pushes its own version of GDPR

The technology industry might enjoy light-touch regulatory landscapes, but change is on the horizon with what appears to be an attempt to be the master of its own fate.

In an open-letter to senior members of US Congress, 51 CEOs of the technology and business community have asked for a federal law governing data protection and privacy. It appears to be a push to gain consistency across the US, removing the ability for aggressive and politically ambitious Attorney Generals and Senators to create their own, local, crusades against the technology industry.

Certain aspects of the framework proposed to the politicians are remarkably similar to GDPR, such as the right for consumers to control their own personal data, seek corrections and even demand deletion. Breach notifications could also be introduced, though the coalition of CEOs are calling for the FTC to be the tip of the spear.

Interestingly enough, there are also calls to remove ‘private right of action’, meaning only the US Government could take an offending company to court over violations. In a highly litigious society like the US, this would be a significant win for any US corporation.

And while there are some big names attached to the letter, there are some notable omissions. Few will be surprised Facebook’s CEO Mark Zuckerberg has not signed a letter requesting a more comprehensive approach to data privacy, though Alphabet, Microsoft, Uber, Verizon, T-Mobile US, Intel, Cisco and Oracle are also absent.

“There is now widespread agreement among companies across all sectors of the economy, policymakers and consumer groups about the need for a comprehensive federal consumer data privacy law that provides strong, consistent protections for American consumers,” the letter states.

“A federal consumer privacy law should also ensure that American companies continue to lead a globally competitive market.”

CEOs who have signed the letter include Jeff Bezos of Amazon, Alfred Kelly of Visa, Salesforce’s Keith Block, Steve Mollenkoph of Qualcomm, Randall Stephenson of AT&T and Brian Roberts of Comcast.

Although it might seem unusual for companies to be requesting a more comprehensive approach to regulation, the over-arching ambition seems to be one of consistency. Ultimately, these executives want one, consolidated approach to data protection and privacy, managed at a Federal level, as opposed to a potentially fragmented environment with the States applying their own nuances.

It does appear the technology and business community is attempting to have some sort of control over its own fate. As much as these companies would want a light-touch regulatory environment to continue, this is not an outcome which is on the table. The world is changing but consolidating this evolution into a single agency the lobbyists can be much more effective, and cheaper.

The statement has been made through Business Roundtable, a lobby group for larger US corporations, requesting a national consumer privacy law which would pre-empt any equivalent from the states or local government. Definitions and ownership rules should be modernised, and a risk-orientated approach to data management, storage and analysis is also being requested.

Ultimately, this looks like a case of damage control. There seems to be an acceptance of regulation overhaul, however the CEOs are attempting to control exposure. In consolidating the regulations through the FTC, punishments and investigations can theoretically only be brought forward through a limited number of routes, with the companies only having to worry about a single set of rules.

Consistency is a very important word in the business world, especially when it comes to regulation.

What we are currently seeing across the US is aggression towards the technology industry from almost every legal avenue. Investigations have been launched by Federal agencies and State-level Attorney Generals, while law suits have also been filed by non-profits and law firms representing citizens. It’s a mess.

Looking at the Attorney Generals, there do seem to be a couple who are attempting to make a name for themselves, pushing into the public domain. This might well be the first steps for higher offices in the political domain. For example, it would surprise few if New York Attorney General Letitia James harbours larger political ambitions and striking a blow for the consumer into Facebook would certainly gain positive PR points.

Another interesting element is the fragmentation of regulations to govern data protection and privacy. For example, there are more aggressive rules in place in New York and California than in North Carolina and Alaska. In California, it becomes even more fragmented, just look at the work the City of San Francisco is undertaking to limit the power of facial recognition and data analytics. These rules will effectively make it impossible to implement the technology, but in the State of Illinois, technology companies only have to seek explicit consent from the consumer.

Inconsistency creates confusion and non-compliance. Confusion and non-compliance cost a lot of money through legal fees, restructuring, product customisation and fines.

Finally, from a PR perspective, this is an excellent move. The perception of Big Business at the moment, is that it does not care about the privacy rights of citizens. There have been too many scandals and data breaches for anyone to take claims of caring about consumer privacy seriously. By suggesting a more comprehensive and consistent approach to privacy, Big Business can more legitimately claim it is the consumer champion.

A more consistent approach to regulation helps the Government, consumers and business, however this is a move from the US technology and business community to control their own fate. This is a move to decrease the power and influence of the disruptive Attorney Generals and make the regulatory evolution more manageable.

Momentum is gathering pace towards a more comprehensive and contextually relevant privacy regulatory landscape, and it might not be too long before a US version of Europe’s GDPR is introduced.

US gives Huawei back some gear it nicked two years ago

In September 2017 US authorities confiscated a bunch of Huawei kit on its way from California to China and has only just returned it.

The only account we have of this is from Huawei, but that’s at least in part because the US has been very reticent about explaining many of its actions regarding Huawei. The servers and networking gear had been in a California lab to undergo commercial testing and certification. When it was in the process of being returned the US Commerce Department seized it, citing unidentified export violation concerns.

By June of this year Huawei decided to take legal action to get its property back and, as if by magic, the US decided to return it, once more without explanation, according to Huawei. “Huawei views the decision to return the technology as a tacit admission that the seizure was unlawful and arbitrary,” said Huawei in its announcement, which also revealed that the lawsuit has been dropped as a consequence.

“Arbitrary and unlawful government actions like this – detaining property without cause or explanation – should serve as a cautionary tale for all companies doing normal business in the United States, and should be subject to legal constraints,” said Dr. Song Liuping, Huawei’s Chief Legal Officer.

Presumably the US wanted to inspect the gear to see if it could find any evidence of IP theft, Chinese spy gear, or whatever. If so then it should have followed that same due process it would have applied to US companies, such as just cause, legal representation, etc. Every time the US abandons due process while at the same time accusing Huawei of illegality it undermines its own position.

Google confirms it is in the DoJ crosshairs

The technology industry is facing regulatory and legislative assaults from all angles, and Google has confirmed it is attempting to help the Department of Justice with its own investigation.

It should perhaps be considered second-nature for Google to be dealing with some sort of investigation. It has been the subject of dozens of probes over the last few years, though there are some weighty ones on the horizon.

“We have answered many questions on these issues over many years, in the United States as well as overseas, across many aspects of our business, so this is not new for us,” said Kent Walker, SVP of Global Affairs at Google.

“The DOJ has asked us to provide information about these past investigations, and we expect state attorneys general will ask similar questions. We have always worked constructively with regulators and we will continue to do so.”

In July, the Department of Justice announced an antitrust investigation, though the subjects were not explicitly named. The probe will focus on how online platforms achieve market dominance and whether they are stifling competition and therefore innovation.

Aside from this probe, momentum is gathering to attack Silicon Valley. New York Attorney General Letitia James is looking into antitrust violations at Facebook, which could set some pretty damaging precedent. The House Judiciary Committee’s antitrust subcommittee is also conducting its own investigation, and soon enough Texas might be entering the fray.

Texas Attorney General Ken Paxton has asked the press to gather on the steps of the United States Supreme Court Building in Washington DC later on today to be briefed on yet another antitrust investigation. Details are thin here for the moment, however it is another headache for Silicon Valley to consider.

The next couple of weeks will offer much more colour to the investigations, however it is becoming increasingly obvious the technology industry is going to be very different in a few years’ time. It does appear the days of the Wild West Web are coming to a close.

Microsoft President defends Huawei, calling Trump Un-American

Microsoft President Brad Smith has leapt to the defence of under-fire Chinese vendor Huawei, suggesting the US Government should table evidence if it wants to continue on this path.

In an interview with Bloomberg Businessweek, Smith has aired his views on the prolonged tensions between China and the US. In a similar position to some more considered regulators around the world, Smith has demanded the burden of proof to back-up serious accusation made by the White House.

“Oftentimes, what we get in response is, ‘Well, if you knew what we knew, you would agree with us.’ And our answer is, ‘great, show us what you know so we can decide for ourselves. That’s the way this country works,” Smith said.

Smith is of course 100% correct here. We completely understand some details will not be able to be released in their entirety to the general public, but certain individuals, organizations and agencies should be offered insight to evidence which the White House is hording. The burden of truth is not one which should be brushed aside, and President Trump has not earned the right to demand blind belief.

Fortunately, there are some across the world who elect to make responsible and considered decisions. We’re not talking about the Australians, the state which decided to blindly follow the orange light without asking any questions or demonstrating the ability of independent thought, but the Germans.

The fact that Huawei has not been banned from the German market tells us and the world that the White House has not deemed it pertinent to demonstrate proof of nefarious activities to one of its allies.

Last December, Germany’s Federal Office for Information Security (BSI) took a bold stance against the White House, demanded the US Government produce evidence to support the claims should it want the Germans to introduce its own ban. As there has been no action taken by the German Government or any of its agencies to date, it would be a fair assumption the US Government is yet to produce anything.

The Germans are not alone in ignoring the huffing and puffing from the Oval Office, though Smith joining the party is a notable development.

What is worth noting, is this is probably a commercially based decision, though that is not necessarily something Smith should be scalded for. Like most other US companies, Smith wants the opportunity for his firm to work with one of the technology industry’s fastest growing innovators.

Huawei is one of the world’s leading smartphone manufacturers, but it has also been making some promising moves in the PC and laptop segments also. With tetherless connectivity in laptops set to become a common trait over the next few years, this segment could witness a disruption. As Windows is installed on most PCs and laptops, Smith and Microsoft will win irrelevant as to which brand triumphs, but it will want to make sure it is working with every brand possible.

Microsoft will want to continue working with Huawei, as will many other companies. At least 130 applications have been submitted to the US Commerce Department seeking exemption from the ban to work with Huawei, though none have been approved thus far.

Soon enough, the US Government will have to present evidence to back up the claims. This administration seemingly believes it can bully its way through international relations, though if US companies start turning against US ‘foreign policy’ it creates a very uncomfortable situation.

Multiple US states open Facebook antitrust investigation

An investigation has commenced in the US into possible abuses of Facebook’s market dominance regarding data, advertising and consumer choice.

The leader of the investigation is New York Attorney General Letitia James, but she has got her contemporaries from Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and the District of Columbia to muck in too. They all, apparently, are uneasy about the effect Facebook’s dominant market position has on all kinds of competition.

“Even the largest social media platform in the world must follow the law and respect consumers,” said James. “I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk. We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

Yet to be announced by James, but widely reported nonetheless, is a parallel and similar investigation by the same AGs into Google. Of particular interest in both cases seems to be the digital advertising market, which is dominated in the US by the companies in question, as you can see from the chart below from eMarketer.

emarketer us digital ad spend

Since digital now accounts for the majority of ad spending it’s legitimate to be concerned about such a large market being dominated by so few players. Having said that it’s also reasonable to note that Google and Facebook have reached this position by competing in the open market and to the victor go the spoils. But however you achieve a dominant market position, once you do different rules apply to you and there’s plenty of precedent for such companies facing significant sanctions.

Azure is on a spending spree

Cloud has led the Microsoft recovery in recent years, and the Azure team is doubling down on that momentum with a third acquisition in as many months.

The financial details of the deal have not been revealed, though Movere will join the Microsoft Azure family, adding migration smarts to an already comprehensive armoury.

“As cloud growth continues to unlock opportunities for our customers, cloud migration is increasingly important for business’s digital strategy,” said Jeremy Winter Partner Director for Microsoft Azure. “Today, I am pleased to announce that Microsoft has acquired Movere, an innovative technology provider in the cloud migration space.”

Founded in 2008 as Unified Logic, the focus of the business was altered in 2014 after the management team experienced difficulties in migrating their business onto the Azure platform. The start-up has been a partner of Microsoft for more than a decade, though in the last five years, it has been more acutely focusing on migration challenges for customers.

For Microsoft, this is just another tool it can talk to potential customers about, adding to two acquisitions over the last couple of weeks.

In July, the Azure team announced the acquisition of BlueTalon, a firm which aims to simplify data privacy and governance across modern data estates. Just after in August, jClarity was added to the mix. jClarity, a leading contributor to the AdoptOpenJDK project, will help teams at Microsoft to leverage advancements in the Java platform.

Alongside Amazon AWS, Microsoft Azure is leading the pack in the cloud world and it does not want to give any opportunity for the ‘also rans’ to close the gap. These acquisitions are simply increasing the breadth, depth and variety of the Azure proposition.

And the importance of the cloud to Microsoft should never be under-estimated.

After joining the Microsoft in 2014, CEO Satya Nadella shifted the focus of the business towards the cloud. Azure was the new poster boy of the firm, which was looking like a shadow of the dominant player which dominated the 90s and 00s.

Since that point, total revenues have grown to $110.36 billion in 2018, from $86.833 billion in 2014. Operating income increased to $35.058 billion in 2018, up from $27.759 billion in 2018. And looking at market capitalisation, Microsoft is now valued at $1.05 trillion, the largest in the technology world.

The cloud is driving Microsoft forward, and it is not afraid to spend some cash to capitalise on the momentum.

AT&T tries to breathe McElfresh air into its communications division

US operator giant AT&T has unveiled lifer Jeff McElfresh CEO of AT&T Communications, replacing the retiring John Donovan.

McElfresh has been at AT&T for 25 years and was most recently President of AT&T Communications’ Technology and Operations group, which covers the techie side of things. Since we’re at the start of the switch to a new generation of mobile technology it would seem to make sense to promote someone from that side of the business. They could, of course, have recruited externally, but that doesn’t seem to be AT&T’s style.

AT&T CEO Randall Stephenson doesn’t seem to fancy dealing with McElfresh on a regular basis, however, as he has created a new COO position that will be filled by John Stankey, who is currently in charge of all the stuff AT&T got with its massive Time Warner acquisition. He will now manage McElfresh as well at Warner Media and will also be the direct report for Brian Lesser, CEO of the AT&T’s digital advertising platform Xandr.

“Now is the time to more tightly align our collection of world-class content, scaled consumer relationships, technical know-how and innovative advertising technology,” said Stephenson.  “It’s the natural next step in bringing together the distinct and complimentary capabilities of AT&T Communications, WarnerMedia and Xandr to deliver for consumers the benefits of a modern media company.

“AT&T is alone in the industry in being able to bring together these three great businesses for the launch of innovative consumer offers, relevant advertising and new entertainment services like HBO Max.

“John is an outstanding executive who has led nearly every area of our business, helped shape our strategy and excelled at operations throughout his career. The Board and I look forward to John hitting the ground running in his new role as president and COO.

“And I’m excited to have Jeff leading our communications business into the future. He is an accomplished leader with experience across our business — from strategy, technology and network, to marketing, operations and customer experience. This past year, Jeff led the team that won AT&T recognition for having the best, fastest and most reliable wireless network in the country.”

You have to wonder what that leaves for Stephenson to do, other than approve canned quotes for press releases. Still, he’s been a t the helm for 12 years so he’s earned the right to spend more time with his golf clubs.

US starts edging towards mid-band spectrum release

The Federal Communications Commission (FCC) has released a statement all the telcos have been waiting for; there is finally going to be a spectrum auction for the 3.5 GHz band.

The telcos will have to wait more than year to access the valuable spectrum assets, though the FCC team will hope to discuss rules and procedures to carve up the much-desired mid-band spectrum next June. The auction will likely be later in the year or early 2021, though it is evidence of the slow-moving wheels of progress.

“Making more spectrum available for the commercial marketplace is a central plank of the Commission’s 5G FAST strategy,” FCC Chairman Ajit Pai said in a blog post.

“We’ve already completed two spectrum auctions this year and will begin a third on December 10. And at our September meeting, we will vote to seek comment on draft procedures for an auction of 70 MHz of spectrum in the 3.5 GHz band to begin on June 25, 2020.”

For the telcos, this will be welcome news. The US has largely focused on high-frequency spectrum bands, the mmWave assets, though commentators have suggested this has not been able to deliver the desired experience for 5G connectivity. High speeds might be achievable, however there is a serious compromise to be made on the coverage maps.

This is where the European telcos are reaping the benefits. Most of the 5G launches have been based on mid-band spectrum, striking what is a much more palatable balance between increased speeds and reasonable coverage. This coverage can later be supplemented by higher frequency connectivity to add additional speeds in the future, though the 100+ Mbps speeds should be more than enough for the moment.

“The 3.5 GHz band is prime spectrum for 5G services,” Pai said. “But when I became Chairman, we didn’t have the right rules in place to encourage the deployment of 5G in the band.

“That’s why I asked Commissioner O’Rielly to lead our effort to adopt targeted updates to the licensing and technical rules for the 3.5 GHz band with the aim of promoting more investment and innovation.”

Alongside frequencies in the 3.5 GHz band, the FCC is also considering new procedures to free-up more spectrum in the 3.7-4.2 GHz frequency range. Currently being used for video, this band will offer much more opportunity than the 70 MHz being released for auction in the 3.5 GHz band.

Although the mmWave frequencies will be critical in delivering the promised speeds for the 5G era, it does look like the US has gone the long-way around delivering the foundations for 5G. European telcos and regulators have generally prioritised mid-band spectrum, allowing for a 5G-ish experience on current network densities, with the long-term ambition of supplementing with higher frequencies.

This approach seems to be a much more reasonable one. It creates a foundation layer, with coverage maps consumers have come to expect, though speeds can grow as adoption increases and applications emerge which require the ridiculous speeds which are being promised.

With these auctions promised by the FCC, the US is heading in the right direction, albeit, quite slowly.