Daily Digest 6/19/2018 (The Third Wave)

After visiting communities in the heart of the country, in a huge drive to help entrepreneurs, internet pioneer Steve Case, co-founder of AOL, says the future looks bright. "I believe that we are entering the Third Wave of the internet, a period in which entrepreneurs will leverage technology to revolutionise major sectors of the economy - healthcare, financial services, agriculture and others," he says. These deep, structural changes and bursts of creativity appear to be especially evident in cities and towns in the Midwest, long derided as "flyover country." Now it's more like "flying back home country" as thousands of people return to their hometowns from bigger coastal cities, bringing with them new ideas and a drive to succeed.

The Federal Communications Commission has opened a comment docket on the proposed T-Mobile-Sprint merger and signaled the deal is about to be filed with the commission. The two wireless companies announced April 29 that they had struck a deal to merge that valued the combined company at $146 billion (including debt). It is only the latest in a flurry of merger activity, from the approval of the AT&T-Time Warner deal by a federal judge to Comcast's announced play for 21st Century Fox assets.  The FCC has even set up its 180-day shot clock on the proposed T-Mobile-Sprint meld, though it will be on day zero until after the deal is filed, which could come June 18.

AT&T will soon offer a new streaming video service thanks to its acquisition of Time Warner, and it will be buying more companies in order to beef up its advertising platform, AT&T CEO Randall Stephenson said. The streaming service will be free for AT&T mobile customers who subscribe to unlimited data plans and $15 a month for everyone else. AT&T will announce more acquisitions soon to improve its advertising system. "We're standing up a significant advertising platform; you should expect some smaller [mergers and acquisitions] in the coming weeks to demonstrate our commitment to that," Stephenson said. The company is also launching "AT&T Watch TV," a streaming service that includes Turner programming. "Those are the kinds of things we'll be bringing to market [because of the Time Warner buy]," Stephenson said. "These will be ad-supported models." Stephenson said that "every single one of our mobile customers will get" AT&T Watch TV, although it's not clear what that means since only customers with unlimited data plans will get it for free.

Although consent orders sound good in theory, recent revelations about Facebook’s behavior have left consumers doubting that they work in practice. While consent orders remain an important tool in the Federal Trade Commission’s enforcement toolkit, the Commission lacks the resources to properly administer them. Further, even if consent orders were fully and consistently enforced, the FTC’s ex post facto enforcement can only address consumer privacy violations after they have occurred. These problems must be resolved through comprehensive federal privacy legislation that provides the Commission with both additional administrative support and ex ante rulemaking authority. So, what can be done? Here are a couple of things: (1) give the Commission sufficient funding and staffing to protect consumer privacy in the digital age; (2) give the Commission rulemaking authority to promulgate rules to prevent consumer privacy harms before they occur.

Cyberattacks have been around for two decades. As President Barack Obama once feared, a cyberarms race of historic but hidden proportions has taken off. et in this arms race, the United States has often been its own worst enemy. Because our government has been so incompetent at protecting its highly sophisticated cyberweapons, those weapons have been stolen out of the electronic vaults of the National Security Agency and the CIA and shot right back at us. Cyberweapons have emerged as effective tools for states of all sizes: a way to disrupt and exercise power or influence without starting a shooting war. Cyberattacks have long been hard to stop because determining where they come from takes time — and sometimes the mystery is never solved. But even as the United States has gotten better at attributing attacks, its responses have failed to keep pace. Today cyberattackers believe there is almost no risk that the United States or any other power would retaliate with significant sanctions, much less bombs, troops or even a counter cyberattack. So while the United States remains the greatest cyberpower on earth, it is increasingly losing daily cyberconflicts. The range of American targets is so wide and deep that it is almost impossible to understand all of the vulnerabilities. And because most of those targets don’t belong to the government — banks, power grids, shipping systems, hospitals and internet-linked security cameras, cars and appliances — confusion reigns over who is responsible for defending them and who will decide when to strike back. We have the most fearsome cyberweaponry on the planet, yet we’re afraid to use it for fear of what will come next. So what is to be done?

• First, the United States must significantly improve its cyberdefenses. The wide-open vulnerabilities in America’s networks have essentially deterred the United States from credibly threatening retaliation against the Russians, the Chinese, the North Koreans and the Iranians. One way to start is to make sure no new equipment goes on the market unless it meets basic security requirements.
• Second, we must decide what networks we care most about defending — and make those priorities clear. 
• Finally, the United States needs to end the reflexive secrecy surrounding its cyberoperations. We need to explain to the world why we have cyberweapons, what they are capable of and, most important, what we will not use them for.

[Sanger is a national security correspondent for The New York Times. This article is adapted from his forthcoming book]

The US Supreme Court agreed to hear Apple's bid to kill an antitrust lawsuit over the market for iPhone apps in a case that could shield e-commerce companies from consumer claims over high commissions. The lawsuit accuses Apple of monopolizing the app market so it can charge excessive commissions of 30 percent. Apple, backed by the Trump administration, says it can’t be sued because the commission is levied on the app developers, not the purchasers who are suing. A victory for Apple could insulate companies that run online marketplaces and interact with consumers on behalf of third-party sellers. Companies that could be affected include Alphabet’s Google, Amazon, and Facebook, Apple told the Supreme Court in its appeal. "This is a critical question for antitrust law in the era of electronic commerce," Apple argued. 

In today’s fast-paced and complex information environment, news consumers must make rapid-fire judgments about how to internalize news-related statements – statements that often come in snippets and through pathways that provide little context. A new Pew Research Center survey examines a basic step in that process: whether members of the public can recognize news as factual – something that’s capable of being proved or disproved by objective evidence – or as an opinion that reflects the beliefs and values of whoever expressed it. The findings reveal that even this basic task presents a challenge. A majority of Americans correctly identified at least three of the five statements in each set. But this result is only a little better than random guesses. Far fewer Americans got all five correct, and roughly a quarter got most or all wrong. Even more revealing is that certain Americans do far better at parsing through this content than others. Those with high political awareness, those who are very digitally savvy and those who place high levels of trust in the news media are better able than others to accurately identify news-related statements as factual or opinion.

Justice Department Inspector General Michael Horowitz and FBI Director Christopher A. Wray faced lawmakers to defend a report on the FBI’s investigation of Hillary Clinton’s e-mails, which rebuked the conduct of former director James B. Comey and senior investigators but found no evidence that bias affected the probe’s conclusion. Bias was not a factor in the decision against charging Clinton, Horowitz found, but he concluded that senior officials had indicated a “willingness to take official action” to hurt Donald Trump’s chances of becoming president. Senate Judiciary Committee Chairman Charles E. Grassley (R-IA) asserted that the report showed Clinton “got the kid glove treatment,” and if it were not for the inspector general, FBI officials would “still be plotting about how to use their official position to stop” Trump from being elected president. The report detailed how investigators on the Clinton case shied from using subpoenas or other legal tools to force witnesses to testify or turn over materials, though it did not conclude the tactics were unreasonable.