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Connected cars: OEM car maker strategies – where does the network operator fit in?

Connected Car Emerging Tech Series Part 3

Author: Waseem Haider

Today’s car industry is not the same as it used to be, thanks to technology. OEMs are not only manufacturing cars but also developing software solutions for a more connected, personalized customer experience. The ever-evolving auto industry provides opportunities to OEMs to advent new revenue streams and to have more direct, ongoing relationships with their consumers. The changing landscape comes with its share of challenges for OEMs as they need to now focus on products and services outside of their core activities and try to improve profitability by selling connectivity as part of their overall offering.

OEMs are developing different strategies to reap the full benefit of the connected car opportunity. Some OEMs are working on their own ecosystem while others are developing partnerships with specialist vendors. The expanded connected car ecosystem plays a significant role in catering to the consumer demand of today and in the future. Among the different stakeholders in the ecosystem, the role of network operators – both telcos and webscalers – cannot be ignored. In this third part of the connected car tech series, we will talk about the strategies of OEM car manufacturers in the connected car space, and the role played by network operators.

OEM connected car strategies

As with any other industry, the digital transformation of the automotive industry poses a great challenge to OEMs. The digital world has pushed car manufacturers to become software companies selling a personalized customer experience to meet changing consumer demands. Future car buyers will not make it easy for OEMs as the world will move to autonomous vehicles with some drastic changes in consumers’ willingness to own a car. OEMs are aware of these challenges, and are implementing different strategies to keep their dominance in the connected car space despite competition from big tech companies. 

In this section, let’s dive into some of the OEMs connected car strategies.

From the premium car manufacturers like BMW, Porsche, Audi, Mercedes etc. to the volume brands like Ford, Opel, Volvo etc., strategies differ based on relative dominance of the OEM, customer engagement, in-house capabilities, innovation, and investment in R&D. To simplify, let us group the OEM strategies in the connected car space into three main approaches:

  1. Developing In-house Capabilities
  2. Partnership/Building an Ecosystem
  3. Working with Global Industry Standards

1 – Developing In-house Capabilities

Big tech companies like Google, Facebook, and Amazon are at the forefront of connected car technology, putting Automotive OEMs in a difficult situation. As the expertise required for connected cars goes beyond the core business of OEMs, they are facing a big challenge to keep a dominant position in the ever-expanding ecosystem. Some of the OEMs are taking on these tech players directly by building in-house assets and capabilities for connected cars. One of most prominent OEMs who is realigning its strategy from car manufacturer to a software-driven mobility provider is Volkswagen.

Case Study: Volkswagen Connected Car Strategy

Volkswagen is reinventing itself into a digital mobility provider by investing heavily into several areas: software development, autonomous driving capabilities, electric vehicles’ battery technologies and other mobility services. With the new Group strategy “NEW AUTO – Mobility for Generations to Come”, the Volkswagen Group is realigning from a vehicle manufacturer to a leading, global software-driven mobility provider.

Volkswagen’s Car.Software group is central to this realignment (figure 1, below). The automotive giant is building its own end-to-end software platform with an in-car operating system (VW.OS), and capabilities aimed to enable the next generation of infotainment, vehicle performance, and passenger comfort as well as automated driving.

Figure 1: Volkswagen’s Car.Software organization

Fig 1, VW car software

Source: Volkswagen

In addition, Volkswagen has announced a strategic partnership with Cubic Telecom and Microsoft to develop the Microsoft Connected Vehicle Platform (MCVP).

Together with Microsoft, VW hopes to accelerate the development of one of the largest dedicated automotive industry clouds, known as Volkswagen Automotive Cloud or VW.AC. Designed to provide a smart, scalable foundation for connected vehicles, VW.AC is expected to handle data from millions of vehicles per day, with the goal of delivering connected experiences to customers around the globe starting in 2022 – a key part of the Volkswagen Group strategy to become a leading automotive software innovator.

Volkswagen Group writes less than 10 percent of the software embedded in its vehicles, the rest of which is tied to third party-owned proprietary software. With efforts like the Car.Software Organisation and VW.AC, the Volkswagen Group aims to write 60 percent of the vehicle software by 2025, providing a truly integrated end-to-end software.

Where does the network operator fit in? 

While Volkswagen is focused on in-house capabilities, its work with Microsoft makes clear that this strategy still involves network operators. Microsoft is one of the world’s largest “webscale network operators”, a tech company investing heavily in its own data centers, subsea cables, and related cloud infrastructure. It is possible that other types of operators may play a role in Volkswagen’s strategy over time, including telcos. Apart from providing connectivity, the operator is strongly positioned to offer cloud services, software and hardware solutions to supplement the OEM’s connected car in-house capabilities.

2 – Partnership/Building an Ecosystem

Some automotive OEMs are partnering with other OEMs by building global alliances to develop digital technologies for connected cars and future mobility services. One such global partnership is “The Alliance,” involving three OEM groups – Groupe Renault, Nissan Motor Company and Mitsubishi Motors Corporation –  working together on future mobility technologies and solutions.

Where does the network operator fit in?

With this approach, three big OEMs are working with each other to develop connected car technologies and solutions. Telcos can be helpful partners in such alliances to provide technology software and solutions. As an example, the Renault-Nissan-Mitsubishi alliance is working together with Orange in the field of electric vehicles (EVs). Microsoft also plays a role in The Alliance, as discussed below.

Case Study: Renault-Nissan-Mitsubishi connected car strategy

The Alliance connected vehicle team is developing the Alliance Intelligent Cloud. Microsoft supports the Connected Vehicles Platform component of the Alliance Intelligent Cloud (figure 2, below). The Connected Vehicles Platform manages Alliance connectivity across all markets. 

Figure 2: The Alliance Intelligent Cloud

Fig 2, the Alliance Intelligent Cloud

Source: Microsoft

Microsoft is not the only Alliance partner. In September 2018, the Alliance signed a global multiyear agreement to partner with Google to equip Renault, Nissan, and Mitsubishi Motors vehicles with intelligent infotainment systems. The Alliance will utilize Android to offer customers a new array of services including Google Maps, the Google Assistant, and the Google Play Store.

These services will be combined with Alliance Intelligent Cloud-based remote software upgrades and vehicle diagnostics. By combining the latest technologies from the Alliance and Google, the Alliance member companies’ vehicles aim to have the most intelligent infotainment system in the market. Drivers and passengers can leverage Android capabilities to access an ecosystem that includes several existing applications and an expanding array of new apps. Per Microsoft, vehicles utilizing the Alliance Intelligent Cloud “will benefit from seamless access to the internet, providing enhanced remote diagnostics, continuous software deployment, firmware updates and access to infotainment services.”

The Alliance Intelligent Cloud is designed to leverage the combined scale of the three partners and Azure’s vast footprint. The Alliance cloud aims to consolidate multiple legacy connected vehicle solutions with future connected car features and business operations, and support mobility services. Features built into the connected platform include remote services, proactive monitoring, connected navigation, connected assistance, over-the-air software updates and other customer tailored services. As noted, The Alliance does leverage Google’s Android app ecosystem, but relies heavily on Microsoft for the cloud. The goal is for this partnership of OEMs to own, operate, and design their own intelligent cloud platform on Azure.

The Alliance Intelligent Cloud also aims to connect Alliance vehicles with future smart cities infrastructure, simplifying negotiations and technical development by providing a single point of contact.

3 – Influencing Global Industry Standards

Automotive OEMs are not anymore only manufacturing cars but are also new-age software companies which need to comply with standards. The challenge, though, is for OEMs there are hardly any global industry standards for connected cars. This lack of standards also creates an opportunity; those who write the standards often have a strong position in the market to follow. One strategy is ensuring you have a seat at the table when the standards are drafted.

To address the standards issue, OEMs together with other automotive vendors formed a non-profit alliance in 2009 – GENIVI. The alliance develops standard approaches for integrating operating systems and middleware present in the centralized and connected vehicle cockpit. The GENIVI platform consists of Linux-based core services (kernel, libraries), middleware and an open user interface. The goal is for this platform to form the basis upon which automobile manufacturers and their suppliers can establish a wide variety of products and services.

Notably, the alliance currently has no participation from the network operator side. The only exception is that Github has long been a member, and Github was acquired by Microsoft in 2018. Going forward, telcos and webscalers aiming to play a key role in the connected car market may need to participate in GENIVI.

Conclusion

Regardless of which connected car strategy is adopted, the common thread is that OEMs do not want to give away their dominant position to big tech players or new entrants. The three approaches discussed above should not be seen as exclusive. There are opportunities to combine one or more approaches with other innovative strategies. Network operators from both the telco and webscale/cloud world have opportunities to collaborate with OEMs, offering complementary solutions such as cloud services, software and hardware solutions along with the core asset of an operator, network connectivity.

Image source: Baidu

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Webscalers ramp up push into telecom in 1Q21

Webscalers ramp up push into telecom in 1Q21

MTN Consulting’s formal review of 4Q20 performance for the webscale sector will be published within a week. Based on preliminary stats, it is clear that the webscale market of operators continued blockbuster growth in 2020, ending the year with just over $1.7 trillion in revenues, from $1.45T in 2019. The growth is due to several factors: acquisitions (e.g. Alibaba-Sun Art, Amazon-Zoox, and Microsoft-Zenimax); strong digital advertising spend (e.g. Google up 9% YoY to $146.9B), and increased cloud spending across a number of verticals amidst the COVID-19 pandemic.

Webscalers have been attacking the telco vertical for several years. Since the close of 4Q20, over the last three months the webscale sector’s efforts to engage telcos have picked up steam. A number of telcos have recently announced new deals with webscalers in the areas of edge computing, service development, digital transformation, and workload shift. At the same time, more traditional suppliers to telcos (e.g. Nokia) have expanded their own collaboration with the cloud providers who dominate the webscale market. These deals aim to differentiate among traditional telco vendors, prevent webscalers growing too fast in the market, and save costs for telcos. What follows is a brief outline of some of the key developments in 1Q21.

Telco deals with webscalers

Key deals from 1Q21 include the following.

Telefonica has engaged IBM, classified as a webscale operator in our coverage, to act as a systems integrator for an open RAN trial in Argentina. The proof of concept includes software and hardware components from Altiostar, Red Hat (an IBM subsidiary), Quanta, Gigatera, and Kontron. SDx Central notes that the trial follows on recent work between IBM and Telefonica on an overhaul of the telco’s enterprise-focused cloud platform (“Cloud Garden 2.0”)

TIM Brasil announced it would work with Oracle and Microsoft to migrate all of its on-premises workloads to the cloud. Capacity Media notes that the telco will “leverage Oracle Cloud Infrastructure (OCI) and Microsoft Azure, to move its mission-critical applications to the cloud, optimising and simplifying management of its IT infrastructure, as well as improving scalability and agility.”

SK Telecom made several announcements in 1Q21:

  • The company will connect its 5G mobile edge computing services with 34 other telcos across multiple regions via the Bridge Alliance. 
  • With Dell Technologies and its subsidiary VMWare, SK Telecom will create a technology called OneBox MEC to combine private wireless capabilities with an edge computing platform.
  • In early January, the Korean telco announced the launch of SKT 5GX Edge in collaboration with Amazon Web Services. The service allows its customers to build mobile applications that require ultra-low latency, according to Capacity Media.

South African provider Vodacom Business announced that it was certified as “the first” AWS partner in Africa to attain the AWS Outposts Ready designation. Vodacom clients can purchase datacenter managed services from both Vodacom and AWS, choosing a mix of private cloud on-premises, Vodacom data center hosting, public cloud using a local AWS availability zone, or a combination of multiple options.

Telecom Egypt has selected IBM and its Red Hat unit to develop an open hybrid cloud strategy. Per Computer Weekly, the largest telco in Egypt “has implemented IBM Cloud Pak for Automation to infuse artificial intelligence (AI) into its workflows to provide the flexibility to scale automation projects quickly, across any cloud or on-premise environment.”

Google Cloud announced a win at Canada’s Telus billed as a 10-year strategic alliance. The two will co-develop “new services and solutions that support digital transformation within key industries, including communications technology, healthcare, agriculture, security, and connected home.” The collaboration will also target network modernization within Telus’ operations. Telus will use GCP’s managed application platform, Anthos, to support 5G services and mobile edge computing.

Singtel announced it would offer 5G edge computing over the Microsoft Azure cloud platform. Trials will start later this year, and ultimately allow Singtel clients to run applications such as autonomous vehicles, drones, robots, and VR/AR with very low latency.

Australia’s Optus, a unit of Singtel, signed a 3-year partnership with Google Cloud to transform its customer support operations, using GCP’s Contact Center AI solution.

Globe Telecom in the Philippines announced it would use AWS to accelerate its own digital transformation and improve customer experience. Per the Manila Standard, Globe has “migrated carrier-grade and mission-critical applications, including contact center operations, customer analytics, network and service assurance systems and infrastructure operations, monitoring, and security, from its on-premises data centers to AWS.” That includes transitioning 3,000 customer service agents from a legacy Avaya solution to Amazon Connect.

Liberty Global’s Belgium unit, Telenet, announced vendors for its 5G rollout in March which include Ericsson, Nokia and Google Cloud. Ericsson won the radio access, and Nokia the core. Nokia will leverage Google Cloud’s Anthos for Telecom platform in Telenet data centers. Liberty says the Anthos platform will provide “the innovation infrastructure with solutions and applications for 5G users, to drive better customer experiences and service.”

Telecom-focused vendors partnering with cloud providers

Nokia was by far the most active of telco-focused vendors in 1Q21, announcing several collaborations with the webscale sector. 

In January, Nokia announced a partnership with GCP to develop cloud-native 5G core solutions. Nokia is supplying its voice core, cloud packet core, network exposure function, data management, and 5G core, while GCP’s Anthos for Telecom platform will serve as the platform for deploying applications. In March, Nokia expanded its work with GCP, announcing it would also partner to develop cloud-based 5G radio solutions. The collaboration leverages Nokia’s RAN, Open RAN, Cloud vRAN and edge cloud technologies with GCP’s edge computing platform and application ecosystem. Initial efforts center around Cloud RAN, and aim at integrating Nokia’s 5G virtualized distributed unit and virtualized centralized unit with Google’s edge computing platform running on Anthos. Nokia aims to certify its AirFrame Open Edge hardware with Anthos.

At the same time as the March GCP announcement, Nokia announced deals with Microsoft and Amazon. 

The Microsoft agreement will develop “new market-ready 4G and 5G private wireless use cases designed for enterprises”, combing Nokia’s Cloud RAN, Open RAN, radio access controller, and multi-access edge cloud technologies with the Azure Private Edge Zone.

With Amazon Web Services, Nokia and AWS will conduct joint R&D into enabling Nokia’s RAN, Open RAN, Cloud RAN, and edge solutions to operate “seamlessly” with AWS Outposts. The goal is to develop new customer-focused 5G solutions. Per Nokia, “operators will be able to simplify the network virtualization and platform layers for the Core and RAN network functions by leveraging the agility and scalability of cloud.” Ultimately Nokia will be able to leverage Amazon services like EC2, EKS, Local Zones and others to help automate network functions and deploy end customer applications.

Intel, which has attacked the telco market aggressively over the last few quarters, signed a deal with GCP in February to develop “reference architectures and integrated solutions” for telcos to enable 5G and edge network solutions. The collaboration involves three main aspects: virtualized RAN and open RAN solution development; a network functions validation lab; and, service delivery to the edge.

Israeli telco vendor Radcom announced the integration of its 5G assurance solution (ACE) with Microsoft Azure. Radcom says that the integration of ACE with Azure “enables operators to assure the quality of 5G services by leveraging AI and machine learning-driven assurance and automation” ACE runs as a cloud native function over the Azure Kubernetes Service.

Vendor collaborations with webscalers will continue throughout 2021, no doubt. Mavenir’s SVP for Business Development, John Baker, addressed this trend indirectly in a January interview with SDx Central: “I really do believe the hyperscalers are going to become the new telecom providers going forward…Apart from the physical radio that goes on a tower, everything we’re doing now follows the data center model, and these guys know how to manage data centers, software, and applications.”

For webscale operators to support all these new activities requires heavy investment in network infrastructure. The figure below shows capex by type, on an annualized basis, for the total webscale network operator market since 2016.

webscale capex trendline2

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Webscale earnings and 2021 capex outlook

Amazon drives webscale capex jump in 4Q20, Alphabet lags; Oracle’s 63% YoY increase is sign of OCI ramp 

Webscale capex on track to close 2020 around $122 billion

Most webscale network operators (WNOs) have now reported 4Q20 earnings. For a large sample of reporting WNOs, 4Q20 capex jumped by an average of 52% YoY versus 4Q19. Amazon was by far the most significant company, spending over $14 billion on capex in 4Q20, from $5.3B the year prior. Remove Amazon, and the YoY increase was only 14%. This is a sign of both how influential Amazon has become in the cloud and how COVID-19 enticed the ecommerce side of its business to ramp up logistics and fulfillment capacity.

The figure below illustrates YoY changes in capex for key WNOs who have already reported earnings. As shown, all but Cognizant and Alphabet increased capex YoY on an absolute basis (in US$), but nobody comes close to the Amazon surge.

webscale prelim capex change 4Q20

In MTN Consulting’s recently published capex forecast, we projected that webscale capex would close out 2020 around $122 billion, up from $104 billion in 2019. Preliminary results from 4Q20 are consistent with this projection. Looking further out, we still expect webscale capex to continue solid growth, climbing to just over $200B by 2025. The network/IT/software portion of capex will come in at roughly 50% in 2020, as it did in 2019, decline to 42% by 2023 as a spate of new data centers come on line, but grow back up to 50% by 2025 as more of capex is for server/capacity expansion of existing infrastructure. Within the technology part of capex, data centers and their components (networking, compute, storage, power) will soak up the bulk of spending, but subsea cables and satellite networks will become increasingly important over the next 5 years.

Earnings calls: A rundown of webscale capex & plans for 2021

Oracle has big plans for expanding it data centers in 2021, according to its fiscal 2Q (calendar year 4Q20) earnings call on December 2020. The technology corporation, now headquartered in Houston, reported that it plans to continue adding new data centers through 2021, and expects to have 38 by YE-2021.

Oracle is a small cloud player relative to Amazon, especially considering Oracle’s heavy reliance on collocated facilities (mainly with Equinix). However, Oracle is clearly becoming more significant in the cloud, and its use of Ampere’s data center chips could also have an impact on the competitive landscape in the chip market.

Oracle’s frequent mention of its data center plans indicates a high commitment to its cloud rollout and a bullish outlook on its prospects in this business. During the first half of its earnings call, Chairman Larry Ellison noted the company’s “great quarter” would have been even better if it had not been capacity constrained in Oracle Cloud Infrastructure (OCI). He said to remedy this Oracle is adding OCI capacity and building OCI data centers as fast as it can. Ellison claimed that, as of December, Oracle had increased its footprint to 29 regional data centers worldwide, “more than AWS” (per Oracle), adding customers, and growing revenue well over 100% year-on-year.

Ellison explained that Oracle’s strategy recognizes that, because the company has a large existing business and installed base of software customers, “we just have to get into more countries than someone – than Amazon, let’s say, because we have to serve those customers where we have an installed base.”  He pointed to Indonesia and Israel as examples: Indonesia is a very big country with a lot of people where Oracle has a large installed base, “but a lot of people don’t have data centers there.” Ellison said it’s very important to get a good data center in Israel, but “some of the cloud companies have been late to get there.”

CEO and Director Safra Ada Katz noted Oracle has greatly increased its capital spending plans due to strong demand, and expected that it will increase 50% sequentially in 1Q21. Such an increase would imply around $850M of capex in 1Q21, a 144% increase relative to 1Q20. Oracle’s data center strategy has traditionally been capex-light due to the company’s partnership with Equinix, which provides many of the properties into which Oracle installs its equipment. That makes Oracle’s capex increases all the more significant.

Amazon’s earnings call revealed very little about its data center plans, in contrast to Oracle. That’s consistent with history but also may be due to management changes. Amazon promoted its AWS CEO, Andy Jassy, to replace CEO and founder Jeff Bezos just before its earnings call webcast on February 2, 2021. In response to a capex outlook question, CFO Brian Olsavsky said “We are working through our future plans.” Olsavsky did elaborate somewhat, suggesting that its 2020 capex reached $44B due to some unusual one-off investments.

Like Amazon, most other webscale providers avoided specifics on data center investment plans for 2021 on their 4Q20 earnings calls. Oracle was a standout. Clearly Oracle wants to make a splash in the market quickly, and assure its customers and prospects that its infrastructure is rapidly getting up to speed relative to the top 3 (AWS, Azure, and GCP).

Among the 17 WNO companies tracked by MTN Consulting, Alphabet had the second largest annualized capex through 3Q20, at $23B (behind Amazon). Looking forward to 2021, SVP Eric Schindler said he expected the pace of investment to return to normal levels, with spending on servers driving an increase: “Servers will continue to be the largest driver of spend on technical infrastructure.”

In addition to servers and new data centers, Alphabet continues to spend on subsea cables. For instance, Google reported on its blog on February 3, 2021 that its new Dunant subsea cable, which connects US and Europe, is now ready for service. The Dunant cable, which was made in partnership with SubCom, will have ultimate capacity of 250 Terabits per second, “enough to transmit the entire digitized Library of Congress every second.” Google notes that “Dunant is the first long-haul subsea cable to feature a 12 fiber pair space-division multiplexing (SDM) design.”

Facebook is the most bullish of the big webscale providers in terms of its 2021 investment outlook. During its 4Q20 Earnings call, Facebook CFO Dave Wehner said “We continue to expect 2021 capital expenditures to be in the range of $21 billion to $23 billion, driven by data centers, servers, network infrastructure and office facilities.” This compares to a 2020 capex total of just $15.1 billion. Wehner said several projects were delayed in 2020 due to the pandemic.

Microsoft CEO Satya Nadella noted that the company has announced 7 new data center regions recently, in Asia, Europe, and Latin America, which will contribute to capex over the next few quarters. CFO Amy Hood, speaking just after Nadella, said the company expects to see a “sequential increase on a dollar basis” in capital expenditures in 1Q21 as the company continues to meet growing global demand for its cloud services. Microsoft spending on finance leases, a.k.a. capital leases, is also significant and contributes to the company’s network infrastructure footprint.

IBM, which made no specific mention of data centers in its 4Q20 call, had much discussion of its focus on and efforts to bring AI-powered automation across its platform. IBM says it is building out its cloud integration offerings for this purpose. CEO Arvind Krishna also discussed quantum computing, and claimed that this “has the potential to unlock hundreds of billions of dollars of value” for its clients by the end of the decade. IBM says it has a roadmap to build a 1,000 qubit quantum computer by 2023.

Baidu is one of the smaller WNOs but, like Oracle, its 4Q20 capex grew significantly, up 162% from 4Q19 to reach $329M in 4Q20. Baidu did not speak specifically about data centers or capex projections in its earnings call. The company’s focus was on its self-driving and auto-driving projects, mentioning some combination of those terms 51 times. These projects require high levels of R&D spending. During its call, the CFO Cheng Chun Yu noted that it spent about 21% of its $12.1B USD core revenue in 2020 on research and development. During the call, a questioner asked how much time the company spends on different segments and what its priorities are. CEO Yanhong Ling answered that “half of our time and resources are invested in the mobile ecosystem part, and the other half in the AI cloud and intelligent driving and other growth areas…going forward, we will continue to do this”. Baidu has fallen in relative importance over the years, but it will remain an important player in the webscale market.

SAP made one minor reference to capex and data centers in its call. CFO Luka Mucic said there will be additional capex requirements this year and next for the purpose of harmonization and modernization of its cloud infrastructure. Apple and eBay made no mention of future capex or data center investments in their latest earnings calls.

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Telco-webscale collaboration growing in 2021

Telco-webscale collaboration gains momentum in January 2021

One key research theme for MTN Consulting in 2021 is the impact of the cloud on how telcos run their networks. Among other things, this involves a growing level of collaboration between telcos and the webscale sector, particularly the cloud services divisions of Alphabet (GCP), Alibaba (AliCloud) Amazon (AWS), Microsoft (Azure), and Tencent (Tencent Cloud). The three US-based providers are especially important given their global scope. In our annual forecast of network operator spending, published in late December 2020, we advised telcos to embrace collaboration with the webscale sector:

“Telcos remain constrained at the top line and will remain in the “running to stand still” mode that has characterized their last decade. They will continue to shift towards more software-centric operations and automation of networks and customer touch points. What will become far more important is for telcos to actively collaborate with webscale operators … in order to operate profitable businesses. The webscale sector is now targeting the telecom sector actively as a vertical market. Successful telcos will embrace the new webscale offerings to lower their network costs, digitally transform their internal operations, and develop new services more rapidly.”

In 2021, we already see this collaboration growing, much of which fits into the general theme of telco cloud, broadly defined. As such we are tracking the growing deals and partnerships related to this collaboration. Here is a brief recap of recent developments:

Amazon elevates AWS Chief Andy Jasser to CEO, Bezos steps back

On February 3, Amazon announced that AWS’ current CEO, Andy Jassy, would take over for Jeff Bezos as the company’s CEO in a few months. Amazon founder and current CEO, Jeff Bezos, will transition to executive chair of Amazon’s board. This announcement doesn’t relate strictly relate to telco cloud but is a sign of the success of Amazon’s AWS division, which has marketed heavily to telcos in the last two years.

Rakuten Communications Platform picking up steam

On February 5, Japanese greenfield mobile player Rakuten announced that it has 15 global customers for its RCP, and “these are not small customers. Some of them are very, very massive”, per CTO Tareq Amin. Rakuten’s RCP is essentially the company’s effort to sell its approach to building disaggregated, virtualized cloud-based mobile networks to the rest of the mobile industry. The RCP effort is ambitious and faces competitors across the industry, including from the mobile operators’ network divisions themselves, but it clearly has potential. Telcos are looking to cut operational costs and simplify networks, and Rakuten has some valuable experience to offer. 

AWS and Telstra sign framework agreement on 5G

On January 27, Telstra announced a new agreement with Amazon Web Services focused on developing “differentiated multi-access edge computing solutions.” AWS says its edge computing solutions will allow Telstra to “build and deploy applications even closer to its customers, and deliver more seamless user experiences in such areas as industrial robotic and drone automation, connected vehicles, ML-assisted healthcare, and immersive entertainment.” Related to the AWS deal, Telstra will be setting up a “cloud guild” to train up to 4,000 of its employees on AWS cloud operations.

Ford and Google tie up on connected cars

On February 1, Ford and Google entered into a 6-year deal worth hundreds of millions of dollars, under which Google will be responsible for much of the car company’s in-vehicle connectivity, as well as cloud computing and other technology services. 

One potential revenue opportunity for telcos lies in the area of connected cars, aka autonomous vehicles. The market for true autonomy is years away, but will inevitably require a highly responsive, low latency network. Telcos should be in the pole position to enable this level of performance (and reap the revenue upside), but increasingly they are relying on webscale operators to provide edge computing support for 5G. For the Ford-Google deal, it’s not clear if Google itself will need partnerships with telcos at the edge of their mobile networks to make the connectivity piece work. If not, this deal calls into question whether telcos will play a significant role in the connected car market. This is definitely a space to watch.

  • News release from Ford

Singtel works with Microsoft Azure on 5G edge computing

On February 2, Singtel announced it would rely on Azure for 5G edge computing, with trials planned for later in 2021. As with the Telstra-AWS deal mentioned above, Singtel expects the Azure platform to enable enterprises to deploy a range of new applications requiring low latency, such as autonomous vehicles, drones, robots, and virtual/augmented reality. 

Google and Nokia partner to help telcos deploy 5G edge computing

On January 14, Google Cloud agreed to work with Nokia to develop solutions aimed at telcos deploying 5G in need of edge computing support. The idea is to make it easier for telcos to build and deploy cloud-native applications across public and private clouds and edge locations. Again, like Telstra and Singtel above, the focus is likely to be on applications requiring low latency and back-end cloud support.

The collaboration relies heavily on Anthos, Google’s Kubernetes-based application management platform. Google Cloud is signing similar partnerships directly with telcos for 5G mobile edge computing solutions, but working with Nokia may give both an edge at least when Nokia supplies the key mobile network components.

  • News release from Nokia

Huawei shifts Richard Yi to head the Cloud division

As Huawei has faced more challenges in its carrier networks division over the last two years, the company has started to shift emphasis to services, software and its Huawei Cloud division. R&D efforts have matched that shift. Now a big executive change also reflects the change. On January 27, Huawei named Richard Yu as the head of Huawei Cloud. Yu’s previous assignment was to oversee the Consumer Business Group in charge of devices/handsets.

Huawei remains the #1 global supplier to telcos, and has strength across a wide range of product lines. Huawei Cloud has steadily been expanding its overseas data center infrastructure, largely built off of Huawei-developed products (servers, storage, power solutions, etc.). Huawei has a clear opportunity to push ahead into cloud services with a focus on the telco market, and has incentive to do this given its ongoing supply chain constraints. The vendor inevitably will struggle with supply chain issues on the server side as well, however, as long as it’s blocked from reliance on companies like TSMC and ASML. This is a space to watch closely in 2021. 

Optus using Google Cloud for customer service transformation

In a much different kind of announcement, Australia’s Optus announced on January 19 that it would rely on a Google Cloud contact center to power a customer service transformation effort. This is a three year partnership, comprising three GCP products: Dialogflow for automating interactions and self-service, Agent Assist to help contact center agents find information while they are on calls, and a contact center “insights” tool. What’s notable here is that some of the more traditional software- and services-focused telecom vendors provide similar platforms to what GCP is offering. The webscale providers are clearly going to be competing more directly with these specialist telecom vendors in coming years. 

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Webscale sector’s capex push to bring many more data centers online in 2021-23

Webscale sector’s capex push to bring many more data centers online in 2021-23

Capex surge from webscale operators will continue

Technology spending by the webscale sector is on a tear. While COVID-19 depressed the telco sector in 2020, strong demand for cloud services and ecommerce drove the webscale operators providing these services to expand investments considerably. Webscale capex rose 25% YoY to hit $34.7 billion in 3Q20, or $120.9 billion on an annualized (12 month) basis. That amounts to 42% of the telco industry total for the same period. Just three years prior, in the 3Q17 annualized period, webscale capex was only 24% of the telco market.

The webscale market is dominated by a small number of big spenders. Alphabet, Amazon, Facebook and Microsoft captured 70% of sector capex in the last 4 quarters, Apple added 6%, and each of China’s two big players (Alibaba and Tencent) added another 5% each. Going forward, China will account for a bigger share of the total, possibly as much as 20% by 2025.

As a reference point, the figure below illustrates recent single quarter capex trends for the 5 biggest US-based and 3 biggest China-based webscale providers.

webscale capex top 8

Source: MTN Consulting

The growth in 3Q20 wasn’t a one-time thing. While the outlook for telco capex is modest, MTN Consulting expects webscale sector capex to end 2021 at roughly $143 billion, and grow further to reach approximately $201 billion by 2025 (figure, below). The network/IT/software portion of capex will come in at roughly 50% of total in 2020, as it did in 2019, decline to 42% by 2023 as a spate of new data centers come on line, but grow back up to 50% by 2025 as more of capex is for server/capacity expansion of existing infrastructure. Within the technology piece of capex, data centers and their components (networking, compute, storage, power) will soak up the bulk of spending, but subsea cables and satellite networks will become increasingly important over the next 5 years.

Webscale capex outlook to 2025

Source: MTN Consulting

All of the big webscale providers have major data center construction or expansion projects underway, in multiple corners of the world. Some of this activity leans on partners from the carrier-neutral sector, for instance Oracle is relying heavy on leased collocation space from Equinix for the Oracle cloud buildout. However, the bulk of webscale capex is aimed at enormous, self-owned facilities designed to spec. The choice of location is crucial, and depends on many factors, including access to major population centers, big customers, submarine cables, internet exchanges, and low-cost renewable energy; government incentives such as tax abatements; and how the location complements the operator’s overall global network strategy. Because location is so important, many webscale providers buy land in attractive markets far in advance of a decision to build a data center; this is known as “land banking.”

Below is a brief summary of some of the webscale sector’s major data center projects, either currently underway or recently completed.

Table 1: Data center projects underway – a snapshot

webscale DC summary table

Source: MTN Consulting

Blog Details

What Can President Biden Do to End the Disinformation Age?

On Jan. 6, 2020, something extraordinarily dangerous occurred. During Congress’ certification of the Electoral College votes from the 2020 election, armed protesters stormed the Capitol Building, overwhelming police officers and forcing lawmakers to seek shelter. What made this occurrence so out-of-the-ordinary was that the protesters were supporters of then-President Donald J. Trump, who had been defeated in his bid for re-election by former Vice President Joe Biden.

Five people died in the attack, or as a result of the attack. Brian Sicknick, a Capitol Police officer, died of his injuries after a savage beating from the insurrectionists. Ashli Babbitt, a Trump supporter, was shot and killed by Capitol Police. Three other Trump supporters died that day, as well: Kevin D. Greeson, who suffered a fatal heart attack; Rosanne Boyland, who was apparently trampled by in the crowd as they attempted to breach police lines; and Benjamin Philips, founder of a pro-Trump website called Trumparoo, who reportedly suffered a fatal stroke.

As for what sparked the violence? Disinformation.

What is that, anyway?

According to Merriam-Webster, disinformation is “false information deliberately and often covertly spread (as by the planting of rumors) in order to influence public opinion or obscure the truth.” In other words, disinformation is always intentional.

This is in contrast to misinformation, which is simply “incorrect or misleading information.” Admittedly, members of the news media frequently use these terms interchangeably. That needs to change, because they could not be any more different.

Misinformation can happen by accident, and be a simple mistake without malicious intent. Disinformation, however, is intentionally malicious, as it purposefully aims to spread falsehoods.

In this case, Trump, prior to Election Night, continually claimed (falsely) that the election was rigged against him.   Later, rather than accept his election loss, Trump loudly and frequently insisted (again, falsely) that the election was stolen from him. He claimed that a massive plot of voter fraud had robbed him of his second term and, after various state recounts failed to sway the election results, took to the courts in an effort to prove his case. In the overwhelming majority of the court cases, the Trump campaign’s arguments were heard and dismissed, typically for lack of evidence, although all too often for improper legal preparation.

Trump, throughout it all, continued to call upon his followers to resist, to “Stop the Steal,” and hinted that there would be violence if the so-called plot against him didn’t end. And his followers believed his disinformation,  culminating with their storming the Capitol Building.

The events of Jan. 6 demonstrate one of the most visible – and increasingly common — outcomes of disinformation: violence.

HOW DID THIS ALL START?

Let’s walk things back a bit. Over a decade ago, an Ohio State University study warned that news consumers, rather than access a diverse array of ideas, instead were migrating to news networks that reinforced the beliefs they already held. That bias has, in the decade-plus since, metastasized into the disinformation age we see today, as people increasingly looked at their own values and points-of-view as “correct,” and any dissenting viewpoint as “wrong.” In time, dissenters were attacked as being “anti-American.” Even the way people perceived the world is different, with the concept of “common ground” having been relegated to the dustbin of social history.

At some point, many people stopped considering their opinions as merely their own beliefs, but as “facts.”  With a growing segment of the population, even considering facts counter to what they believed led to cognitive dissonance, defined as a “psychological conflict resulting from incongruous beliefs and attitudes held simultaneously.”  More, it has been shown that attempting to “simple change someone’s mind” on a deeply held belief actually triggers parts of the brain associated with self-identity and negative emotions. In other words, the brain actually rejects concepts that run counter to what the person believes.

So, now you know why people “believe the crazy things they do,” and why they aren’t swayed by facts. Even when that information is wrong, they still believe it. And then they spread their bad beliefs, their “alternative facts,” creating a dangerous, and ever-growing, cycle that eventually leads to the demise of objective facts, and of truth.

Fun fact: Science, journalism, and voting, the bedrock of politics, rely on the idea that facts are objective, not subjective, and are thus reliable. When one starts to question whether “truth” is real or not, it jeopardizes belief in those institutions. And that can lead to outcomes like we see today, with a growing, partisan divide between those who believe in science, in journalism … and those who do not.

Disinformation sparks lack of trust in journalism, science, and political structures. That lack of trust creates a void. And ironically enough, as nature abhors a vacuum, something will always attempt to fill that empty space.

Enter disinformation.

On Dec. 30, 2020, Sen Ben Sasse, R-Nebraska, noted that “America has always been fertile soil for groupthink, conspiracy theories, and showmanship. But Americans have common sense. We know up from down, and if it sounds too good to be true, it probably is. We need that common sense if we’re going to rebuild trust.”

However, Emily Dreyfuss, editor of Harvard University’s Media Manipulation Casebook, warns that the proliferation of disinformation has a way of overriding common sense:

“Social science studies have shown that the more a person hears something or is exposed to something, the more true it sounds. It’s kind of a glitch in the human brain. It has evolutionarily served us before. But in a disinformation ecosystem, it really is dangerous. And what these hashtags do, what viral slogans and all of these – even memes – what they do is they take really complicated, nuanced issues that people can debate about, that people feel passionate about, and they distill them down to this really simple piece of information that becomes unstoppable in some ways.”

These days, everyone has their own definition of reality. Even as I write this, many in this country believe, whole-heartedly, in two different, conflicting, realities. In one, Biden won the 2020 presidential election, making him the president-elect. In the other, Trump won re-election by a landslide. In the first, people believe that an authoritarian president with aspirations to dictatorship was unseated. In the latter, people believe that the Chosen One was brought down by a massive conspiracy of fraud

It is important to point out that, for the purpose of this presentation, we will be preceding with the objective reality: that Biden won the U.S. presidency with 81.2 million votes, compared to Trump’s 74.2 million; that Biden won the Electoral College vote, 306 to Trump’s 232; that the Electoral College certified that victory; and that the U.S. Congress certified the Electoral College results.

I bring this up because the current social and political atmosphere is a direct result of disinformation. Indeed, the repeated assertion that the election was “stolen” from Trump directly led to the assault on Congress. 

Elizabeth Neumann, former assistant secretary of counterterrorism at the Department of Homeland Security, put it simply:

“A huge portion of the base of the Republican party has now bought into a series of lies that the election was stolen from them, that there is rampant fraud, and, therefore, their voice is no longer heard.”

Indeed, Hallie Jackson, chief White House correspondent for NBC News, mentioned this in December 2020. She referenced Trump counselor Kellyanne Conway’s 2017 comment that “alternative facts” were used to estimate the size of the crowd present at Trump’s inauguration. Jackson warned that the U.S. is “reaching peak alternative fact-cism,” adding that “here we are four years later and it’s not just alternative facts … It’s alternative realities.”

Effectively, those who attacked Congress firmly believed the alternate reality pushed by Trump and his allies. Despite the lack of provable facts behind the argument, this disinformation radicalized Trump’s followers to the brink of violence. One more push, provided by Trump himself, and the insurrection exploded.

But how did we get to that point?

Let’s take a look.

AUTHENTIC HUMAN CONNECTIONS

The entire concept of social media hinges on the idea that it creates social connections online between people. The key word in that simplified explanation is “people.” When you’re on social media, you expect to be communicating and sharing ideas with other people. That honest communication, the authenticity of the human connection, is what makes the entire concept of social media thrive. 

Let’s be honest: we humans worship celebrities. From composers to pop singers, actors of stage and screen, athletes to politicians, we equate celebrity with power. The more popular a person is, the more power we assume that they have.  (Money, of course, is also associated with power. But more money does not automatically equate to more popularity or influence – at least, not in the eyes of the public.  After all, if you had a list of the world’s top billionaires, how many of the names would you actually recognize?)

So, popularity equals power online. On social media, popularity is measured in the number of followers, and the number of accounts that respond to your posts. And if the popularity isn’t enough, there’s a more personal payoff for social media users: a quick high, as though you’ve taken a drug. According to the research magazine Now:

Neuroscientists are studying the effects of social media on the brain and finding that positive interactions (such as someone liking your tweet) trigger the same kind of chemical reaction that is caused by gambling and recreational drugs.

 According to an article by Harvard University researcher Trevor Haynes, when you get a social media notification, your brain sends a chemical messenger called dopamine along a reward pathway, which makes you feel good. Dopamine is associated with food, exercise, love, sex, gambling, drugs … and now, social media. Variable reward schedules up the ante; psychologist B.F. Skinner first described this in the 1930s. When rewards are delivered randomly (as with a slot machine or a positive interaction on social media), and checking for the reward is easy, the dopamine-triggering behavior becomes a habit.

In other words … “Hello. My name is Social Media User, and I am an addict.”

So, you have a system that a) rewards social media users by giving them more influence and power when they attain enough followers, and b) provides an addictive instant-high reward system. And we tend to believe that the system is honest and fair and true.

The problem, of course, is that it isn’t.

ENTER THE BOTS

Bots, as we’ve covered before, are automated computer algorithms that have been programmed to perform specific tasks. One of the things that makes them so useful is that they can be programmed to simulate human interaction. A common example of bots is the automated customer service that many websites offer. Bots are designed to automatically perform tasks that a human would normally perform.

However, technological aids such as bots jeopardize that human connection we were discussing, particularly when social media users’ all-too-human responses are driven not by a post conceived by a human, but by a computer algorithm designed to provoke an emotional, and sometimes irrational, response.

For a long time, Trump was at the top of the news cycle, so he’s an easy example. Large parts of his popularity, prior to his general exile from social media, were because of his social media followers, who he frequently rewarded by mentioning them. Indeed, during the first presidential debate of the 2016 election campaign, he noted that he had 30 million followers on Twitter and Facebook. That number had, prior to Jan. 6, 2021, risen to 88.5 million followers on Twitter, and 35.1 followers on Facebook. An impressive following, to be sure.

But was it real?

A 2016 Oxford University study revealed that, between the first and second presidential debates that year, more than a third of pro-Trump tweets, and nearly a fifth of pro-Clinton tweets, came from bot-controlled accounts — a total of more than a million tweets.

The study also found:

  • During the debates, the bot accounts created up to 27 percent of all Twitter traffic related to the election
  • By the time of the election, 81 percent of the bot-controlled tweets involved some form of Trump messaging

And this isn’t just a problem during high-profile events like presidential debates. Two years later, a Pew Research Center study showed that bots had made a disproportionate impact on social media.  In summer 2017, the center examined 1.2 million tweets that shared URL links to determine how many of them where actually posted by bots, as opposed to people. The findings were worrisome:

  • Sixty-six percent of all tweeted links were posted by suspected bots, which suggests that links shared by bots are actually more common than links shared by humans.
  • Sixty-six percent of links to sites dealing with news and current events were posted by suspected bots. Higher numbers were seen in the areas of adult content (90 percent), sports (76 percent), and commercial products (73 percent).
  • Eighty-nine percent of tweeted links to news aggregation sites were posted by bots.
  • Putting it all a bit more in perspective: The 500 people who were the most active online generated only an estimated six percent of links to news sites. In contrast, the 500 most active bot accounts were responsible for 22 percent of the tweeted links to popular news and current events sites. In other words, bot accounts tweeted more than three times as much as their human-controlled counterparts.

In other words, bots had essentially seized control of a large portion of social media. The digital province of humans was, instead, being partially ruled by bots. A few more examples of how that manifests, and the results:

  • In 2016, Congress passed the Better Online Ticket Sales Act, which banned the use of bots to “circumvent a security measure, access control system, or other technological control or measure on an Internet website or online service that is used by the ticket issuer to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules.”
  • November 2018: The FBI warned that “Americans should be aware that foreign actors—and Russia in particular—continue to try to influence public sentiment and voter perceptions through actions intended to sow discord. They can do this by spreading false information about political processes and candidates, lying about their own interference activities, disseminating propaganda on social media, and through other tactics.” The statement was a joint release with the Department of Homeland Security, the Department of Justice, and the Office of the Director of National Intelligence.
  • February 2019: A study showed that bots, including thousands based in Russia and Iran, were much more active during the 2018 midterm elections than previously thought. In nearly every state, more than a fifth of Twitter posts about the elections in the weeks before Election Day were posted by bots.
  • 2019: Twitter detected and removed more than 26,600 bot-controlled accounts. Granted, that sounds like a lot, until you consider that, at the time, the platform had more than 330 million active users.
  • May 2020: Researchers determine that nearly half of the Twitter accounts posting information about COVID-19 were, in fact, actually bots. Researchers found more than 100 fake narratives about COVID-19 being published by the bot accounts, including conspiracy theories “about hospitals being filled with mannequins,” or that the spread of the coronavirus was connected to 5G wireless towers.
  • September 2020: Facebook and Twitter warn that the Russian group that interfered in the 2016 presidential election had again set up a network of fake accounts, as well as a website designed to look like a left-wing news site.
  • October 2020: Emilio Ferrara, a data scientist at the University of Southern California in Los Angeles, warns that bot-controlled social media accounts have become more sophisticated and harder to detect.

As we’ve discovered, bots are excellent at shaping ongoing public narratives to influence public opinion. Another example: Bots have been discovered being used by scammers to write and post fake consumer reviews for ride-share companies, restaurants, hotels, and many other industries. The very information you rely upon to make informed decisions might have been subtly influenced by bots designed to shift your thinking along a predetermined narrative.

But, of course, the bots don’t just appear out of thin air. They are created, and controlled, by humans.

SEND IN THE TROLLS

According to Merriam-Webster, a troll is a person who intentionally antagonizes others online by posting inflammatory, irrelevant, or offensive comments or other disruptive content.

Now, this isn’t necessarily a bad thing. Trolls, of course, can serve a useful purpose in society by generating conversations that people may be reluctant to begin. Writing and publishing a controversial post can be a useful way to get people talking.

Of course, there’s the other kind of troll that is more concerning. Some people post disinformation in order to control the narrative. This type of troll has no interest in an honest, open dialogue. Rather, they want to spread their message, regardless of how harmful it is. And that is always a danger in a social media environment … particularly in a politically polarized nation further traumatized by a global pandemic.

To a large degree, trolls are responsible for a great deal of the disinformation plaguing the internet. Some countries establish troll farms to carry out disinformation campaigns against other sovereign nations, or even just to target specific individuals. As has been previously established, Russia did just that during the 2016 election campaign, acting both to support Trump and weaken Democratic nominee Hillary Rodham Clinton.

Trolling has always been a problem on the internet, but it picked up in 2020 during the COVID-19 crisis.

“Because so many in such a brief span of time have experienced the pandemic and indirectly the sudden increase in unemployment, the contagion effect associated with trolling behavior should be more extensive,” warns Dr. Kent Bausman, a Maryville University professor in the Online Sociology program. “Therefore, what may be grotesquely cathartic at the individual level simultaneously blooms into a toxic form of expression that ultimately erodes collective good will.”

Adds Jevin West, an associate professor at the University of Washington’s Information School: “It is difficult to measure whether trolls during this crisis are worse than others, but are we seeing a lot of troll activity and misinformation. We are swimming in a cesspool of (disinformation). The pandemic likely makes it worse because increased levels of uncertainty (create) the kinds of environments that trolls take advantage of.”

Trolls can simply post disinformation on social media networks. And, of course, that’s a relatively simple task. But, to really make an impact, they turn to more automated techniques.

Bots, anyone?

 DIGITAL PANDEMIC

With the help of bots and trolls, disinformation spreads like wildfire over social media networks. Clare Wardle, of First Draft News, a truth-seeking non-profit based at Harvard’s Shorenstein Center, covered this in an interview with the BBC:

“In the early days of Twitter, people would call it a ‘self-cleaning oven,’ because yes there were falsehoods, but the community would quickly debunk them. But now we’re at a scale where if you add in automation and bots, that oven is overwhelmed.

“There are many more people now acting as fact-checking and trying to clean all the ovens, but it’s at a scale now that we just can’t keep up.”

For example, fake content was widespread during the 2016 presidential campaign. Facebook has estimated that 126 million of its platform users saw articles and posts promulgated by Russian sources. Twitter has found 2,752 accounts established by Russian groups that tweeted 1.4 million times in 2016. Despite billions of dollars spent annually by big tech on R&D, they still haven’t solved these problems.

Dreyfuss, who is also a Harvard Shorenstein Center journalist, explained recently why disinformation is so pervasive:

“A lot of these media manipulation campaigns, and especially when it comes to vaccine hesitancy, they really prey on existing social ledges and cultural inequalities. So groups of people who may already be hesitant and distrustful of doctors are often targeted. …  But in that environment where people are looking for answers and there aren’t necessarily simple and easy answers readily available, into that environment flows disinformation.”

Indeed, disinformation poses a clear threat — particularly when people desperately need information like health guidelines during a global pandemic. It can also stoke anger and spark violence, as we saw on Jan. 6.

It is disingenuous to suggest that all of Trump’s supporters advocate the violence that occurred in the Capitol attack. What is known, however, is the composition of the mobs that ran riot at the Capitol.

According to ABC News:

 “Members of far-right groups, including the violent Proud Boys, joined the crowds that formed in Washington to cheer on President Donald Trump as he urged them to protest Congress’ counting of Electoral College votes confirming President-elect Joe Biden’s win. Then they headed to the Capitol. Members of smaller white supremacist and neo-Nazi groups also were spotted in the crowds. Police were photographed stopping a man identified as a leading promoter of the QAnon conspiracy theory from storming the Senate floor.”

White supremacy and neo-Nazi philosophies, of course, are forms of disinformation that have a negative impact on society because they a) promulgates a false narrative of inherent racial superiority to its believers, and b) cause varied and widespread types of harm to those they deem “inferior.” Conspiracy theories also are forms of disinformation spreading contradictory and often nonsensical ideas.

Security officials and terrorism researchers warn that the embrace of conspiracy theories and disinformation causes a “mass radicalization,” which increases the potential for right-wing violence.

Back in December 2020, National Public Radio delivered this warning:

“At conferences, in op-eds and at agency meetings, domestic terrorism analysts are raising concern about the security implications of millions of conservatives buying into baseless right-wing claims. They say the line between mainstream and fringe is vanishing, with conspiracy-minded Republicans now marching alongside armed extremists at rallies across the country. Disparate factions on the right are coalescing into one side, analysts say, self-proclaimed ‘real Americans’ who are cocooned in their own news outlets, their own social media networks and, ultimately, their own ‘truth.’

BAD ACTORS

The debate over free speech vs. hate speech has persisted … oh, pretty much since forever. Granted, the U.S. Supreme Court has never “created a category of speech that is defined by its hateful conduct, labeled it hate speech, and said that that is categorically excluded by the First Amendment.” Because of that, hate speech cannot be made illegal simply because of its hateful content. However, when you examine the context, then “speech with a hateful message may be punished, if in a particular context it directly causes certain specific, imminent, serious harm — such as a genuine threat that means to instill a reasonable fear on the part of the person at whom the threat is targeted that he or she is going be subject to violence.”

That said, after the Capitol attack, social media platforms moved to further restrict hate speech, conspiracy theories, and other harmful disinformation. Granted, they had been attempting to do so for years, but critics said that the companies’ pattern of what they considered half-measures had helped cause the crisis.

“Blame for the violence (at Congress) will appropriately fall on Trump and his enablers on Capitol Hill and in right-wing media,” said Roger McNamee, an early advisor to Facebook founder Zuckerberg. “But internet platforms — Facebook, Instagram, Google, YouTube, Twitter, and others — have played a central role.”

The Capitol attack had been organized on social media platforms for months. Red State Succession, a Facebook group, was administered by a group that called for a revolution on Jan. 6. After Buzzfeed reporter Ryan MacNamee exposed the group, Facebook shut it down the same day as the attack. Without Buzzfeed’s alert, Facebook may still today be booking revenues based on the ads served up to supporters of this group. Any thoughtful observer would wonder why Facebook doesn’t spend more on self-policing. It’s worth noting that Facebook ended 3Q20 with nearly $56 billion of cash and cash equivalents on its books, over twice what it had before Trump took office. The company has benefited enormously from looking the other way.

McNamee warns that internet platforms “amplify hate speech, disinformation and conspiracy theories, while only selectively enforcing their terms of service.” It is an argument with which others agree.

 Let’s face it: While we’d like to blame trolls for all of the disinformation free-flowing on social media, we can’t. To some degree, this is because the tech companies that run the social media platforms a) have a difficult time keeping up with the sheer amount of false information, and b) possibly have no real interest in reining in such information, as doing so might negatively impact their financial goals.

Admittedly, there is evidence to support both arguments. For example, in March 2020, Twitter made an effort to update its Developer Policy. It sought to, among other goals:

  • Take “a more proactive approach to improving the health of our developer platform by continuing to remove bad actors, which resulted in over 144,000 app suspensions during the last six months.”
  • Ask that “developers clearly indicate (in their account bio or profile) if they are operating a bot account, what the account is, and who the person behind it is, so it’s easier for everyone on Twitter to know what’s a bot – and what’s not.”

In the context of U.S. politics, critics blasted the effort as too little, too late, and demanded that the platform do more to remove disinformation from its content. One critic, CNN journalist Lisa Ling, attacked Twitter on Jan. 2, 2021, saying, “At least you’re trying to call out disinformation but so much damage has been done. TRY TO FIX IT! Our country has never been more divided and you have played a massive role in it.”

James Murdoch, the youngest son of Rupert Murdoch, recently continued that theme in a joint statement with his wife Kathryn:

“Spreading disinformation — whether about the election, public health or climate change — has real world consequences,” the two said. “Many media property owners have as much responsibility for this as the elected officials who know the truth but choose instead to propagate lies. We hope the awful scenes we have all been seeing will finally convince those enablers to repudiate the toxic politics they have promoted once and forever.”

Indeed, after the November election, Newsmax, and elements of Fox News began to walk back their false “massive voter fraud” narrative, as the threat of legal liability became too great to ignore.

And in the aftermath of the Capitol insurrection, Twitter and Facebook moved more aggressively against disinformation – specifically against Trump. Twitter temporarily shuttered Trump’s account for 12 hours, noting that he had violated the platform’s standards against disinformation and glorifying violence. The next day, Facebook suspended Trump’s account on their platform and on Instagram until after Biden’s inauguration.

“We believe the risks of allowing the President to continue to use our service during this period are simply too great,” wrote Facebook chief executive Mark Zuckerberg. “Therefore, we are extending the block we have placed on his Facebook and Instagram accounts indefinitely and for at least the next two weeks until the peaceful transition of power is complete.”

After that, social media companies began banning Trump from their platforms, or restricting his use. In addition, they stepped up their battles against disinformation by targeting content that glorified violence, much of which involved Trump, QAnon adherents, or idealogues for support neo-Nazi or White supremacist beliefs. A few examples:

Guy Rosen, vice president of integrity at Facebook, summarized measures that had been implemented, or were going to be implemented for Facebook and Instagram, that were designed to battle the spread of hate speech and incitements to violence. The measures included:

  • Taking “enforcement action consistent with our policy banning militarized social movements like the Oathkeepers and the violence-inducing conspiracy theory QAnon.
  • We’ve also continued to enforce our ban on hate groups including the Proud Boys and many others. We’ve already removed over 600 militarized social movements from our platform.”
  • Boosting the “requirement of Group admins to review and approve posts” prior to publication”
  • “Automatically disabling comments … (in groups with) a high rate of hate speech or content that incites violence”
  • Using artificial intelligence to identify and remove content that likely violates Facebook policies.

Again, critics say the moves are too little, too late.

“While I’m pleased to see social media platforms like Facebook, Twitter and YouTube take long-belated steps to address the President’s sustained misuse of their platforms to sow discord and violence, these isolated actions are both too late and not nearly enough,” said Sen. Mark R. Warner, D-Virginia. “Disinformation and extremism researchers have for years pointed to broader network-based exploitation of these platforms.”

A growing number of people on both sides of the political divide have called for more regulation of social media platforms. Trump and conservatives want more regulations because they say they believe that the platforms censor conservatives … even though ample evidence exists showing that conservatives rule the platforms – making their argument more disinformation. Democrats and liberals are also calling for change, mostly because of how much hate speech exists online that can be directly traced to conservatives.

“The social media sphere is, at its core, a connection and amplification machine, which can be used for both bad and good,” says Morten Bay, a research fellow at the University of Southern California Annenberg’s Center for the Digital Future. “… But unlike, say, the ‘public square’ that social media CEOs want their platforms to be, we have no established ethics for social media, and so neither platforms nor users know what can be considered good and right, except for obvious cases, like extremism and hate speech,” Bay noted. “If we did, most people would know how to handle trolls best, which is to simply ignore them.”

However, human nature makes it difficult to ignore trolls, as we’re compelled to respond to information that we either strongly believe in, or seriously disagree with. Add in that fact that trolls and bots tend to reinforce the messaging of other trolls and bots, and you begin to see a feedback loop that can easily spread. As a result, online discourse can quickly get hijacked by disinformation specialists, whether they are human or not.

WHAT CAN BIDEN DO?

In December 2020, a group of Democratic lawmakers asked Biden to, after his inauguration, combat the “infodemic” of disinformation plaguing America:

“Understanding and addressing misinformation – and the wider phenomena of declining public trust in institutions, political polarization, networked social movements, and online information environments that create fertile grounds for the spread of falsehoods – is a critical part of our nation’s public health response.”

In a previous blog, we discussed what Biden, once inaugurated as president of the United States, might do to enhance our security and protect our privacy on the digital front. The purpose was to relay suggestions on approaches that could be used to deal with threats to our privacy and security in the form of cyberattacks, over-reaching retailers, and the abuse of authority when using biometric technologies such as facial recognition.  

However, the blog did not delve into the threat posed by disinformation. Let’s correct that now, and reflect upon the various actions the newly inaugurated president can help bring the Disinformation Age to an end.

REGULATION OF SOCIAL MEDIA COMPANIES

President Biden should consider several of the recommendations proposed by the Forum on Information and Democracy:

  • New transparency standards “should relate to all platforms’ core functions in the public information ecosystem: content moderation, content ranking, content targeting, and social influence building.”
  • “Sanctions for non-compliance could include large fines, mandatory publicity in the form of banners, liability of the CEO, and administrative sanctions such as closing access to a country’s market.”
  • “Online service providers should be required to better inform users regarding the origin of the messages they receive, especially by labelling those which have been forwarded.”

Getting a bit more in-depth, Biden should:

  • Set new legal guidelines establishing that “whoever finances dissemination of fake news, or orders it from an institution, (will be held legally responsible) for the disinformation,” and held accountable.
  • Draft new definitions of protected speech, designed to eliminate hate speech as a protected class of free speech. Biden can, perhaps, take cues from Germany’s laws, in which, as Wired describes, there are limitations to freedom of speech:

 Germany passed laws prohibiting Volksverhetzung—“incitement to hatred”—in 1960, in response to the vandalism of a Cologne synagogue with black, symmetrical swastikas. The laws forbid Holocaust denial and eventually various forms of hate speech and instigation of violence, and they’re controversial chiefly outside Germany, in places like the US, which is subject to interpretive, precedent-based common law and, of course, a rousing if imprecise fantasy of “free speech.” 

  • Establish new rules, perhaps in the form of additions to the Communications Decency Act of 1996, defining acceptable content, and setting penalties for violations of those definitions. (In 2017, Germany passed its Network Enforcement Act, a law requiring internet companies to remove “obviously illegal” content within 24 hours of being notified about it, and other illegal content within a week. (It should be noted that, unlike the United States, Germany has long had some of the world’s toughest laws involving hate speech. For example, denying the Holocaust or inciting hatred against minorities results in federal criminal charges. Companies can be fined up to $57 million for content that is not deleted from the platform.
  • Make it illegal to profit from disinformation. “Clickbait” in general is designed to generate profit from brand-building and/or ad revenues. Profiting from disinformation should result in legal action and financial penalties against the executives running the companies that violate the regulation.
  • Require social media platforms to police the accuracy of their content, and hold them legally liable for any disinformation published on their platform. This would require changes to the Communications Decency Act, specifically, Section 230.
  • Consider the recommendation of the News Media Alliance, which sent Biden’s staffers suggestions on how to “work with Congress on a comprehensive revision” of Section 230 in order to remove legal immunity for platforms that “continuously amplify – and profit from – false and overtly dangerous content.” This would be a punitive measure that would affect only those platforms that refuse to alter their format.
  • Demand “real name” requirements for social media platforms, in which the accounts can only be opened with a photocopy of a government-issued ID card. Admittedly, there would be a loss of privacy here, but it would lead to a decrease in the frequent “mob” mentality we see online, and an increase in the accountability of account users for their content. For verification, require the platform to confirm the account applicant’s information with two-factor verification: one via text or email, and the other via snail mail, such as a code sent in a letter. (Corporate accounts would likewise have to have verifiable people behind the accounts.)
  • Require social media platforms to pay for news content that was created not on the platform, but by a journalism outlet. The platform should be required to pay the originating news outlet for the use of its content. Australia took the lead on this type of legislation back in December 2020.
  • Require social media platforms to ban the use of bot-controlled accounts, and require big tech to use its deep pockets to scrutinize accounts more closely in order to detect and delete such accounts.

NEW EDUCATION GUIDELINES

  • The U.S. Department of Education should be ordered to develop better training for students in the areas of critical thinking and news literacy. These guidelines should them be disseminated to states for consideration in elementary education.
  • The Education Department should launch grants “to support partnerships between journalists, businesses, educational institutions, and nonprofit organizations to encourage news literacy.”

NEW REGULATION OF JOURNALISM OUTLETS

  • Expand the reach of the Federal Communications Commission to include newspapers, as well as cable and online news outlets. Currently, the FCC covers only radio and broadcast television.
  • Reestablish the Fairness doctrine, a communications policy established 1949 by the FCC. The rule, which applied to licensed radio and television broadcasters, required them to present “fair and balanced coverage of controversial issues of interest to their communities, including by devoting equal airtime to opposing points of view.” The FCC repealed the guidance in 1987. Biden should also update the FCC guidance to include cable news channels and online news outlets. He should then push for the Fairness doctrine to be made into law, and ensure that adherence to the law is a vital part of the licensing for broadcast, cable and online journalism outlets.
  • Set new legal guidance, based on the Fairness doctrine, defining what constitutes factual, objective news, as opposed to the “slanted” takes we see so often on news platforms such as Huffington Post, MSNBC, Fox News, Breitbart, One America Network and NewsMax. Hold news outlets accountable for broadcasting disinformation.
  • Establish concrete definitions over what constitutes a news outlet, as opposed to a venue for entertainment. Ban disinformation from being disseminated by news outlets.

CONCLUSION

These are but a few of the approaches that President Biden might take to end the Disinformation Age. He’ll need to make changes to education, as well as the laws and regulations governing education and social media platforms. Of course, some of the above recommendations will likely be seen as controversial. Some need to be fleshed out within legislative and regulatory bodies. And, of course, there will be those that will inevitably argue that fighting disinformation is a violation of the freedom of speech.

What good is this freedom, though, when it is being abused to spread disinformation? The freedom of speech already has one intelligent exception: the classic “shouting fire in a crowded theater.” If we can make that exception, which is aimed at preventing harm, then we should do the same with disinformation. After all, disinformation is all about taking advantage of others, which inevitably leads to harm. No one should have the right to cause harm in the name of politics, or some insane idea of racial superiority, or because of belief in some fantastical conspiracy myth.

Disinformation does not benefit society. It tears it apart. If the “United” – currently divided – States of America is to continue as a coherent nation, we would do well to remember that.

Abraham Lincoln, after accepting the Illinois Republican Party’s nomination as U.S. senator, spoke in 1858 on the “agitation” caused by differing opinions on slavery. Although the White supremacy component of the agitation is smaller today than it was in Lincoln’s day, I believe parts of the speech still apply, particularly if we apply it to the “agitation” of disinformation:

 If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it.

 We are now far into the fifth year, since a policy was initiated, with the avowed object, and confident promise, of putting an end to slavery agitation.

 Under the operation of that policy, that agitation has not only, not ceased, but has constantly augmented.

 In my opinion, it will not cease, until a crisis shall have been reached, and passed –

 A house divided against itself cannot stand.

About the author

Melvin Bankhead III is the founder of MB Ink Media Relations, a boutique public relations firm based in Buffalo, New York. An experienced journalist, he is a former syndicated columnist for Cox Media Group, and a former editor at The Buffalo News.  

 

Note from MTN Consulting

MTN Consulting is an industry analysis and research firm, not a company that typically comments on politics. We remain focused on companies who build and operate networks, and the vendors who supply them. That isn’t changing. However, we are going to dig into some of the technology issues related to these networks and networking platforms which are having (or will have) negative societal effects.

Image credits: (1) iStock, by Getty Images (cover); (2) Gayatri Malhotra (Biden flag); (3) Charles Deluvio (troll doll); (4) Joshua Hoehne (smartphone close-up); (5) Joshua Bedford (Abraham Lincoln statue).

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Telco collaboration with webscale sector picking up steam

Telco-Webscale Collaboration

In our recently published capex forecast, we discussed how essential collaboration will be for the future of telecommunications network operators (telcos). In particular, collaboration with the webscale sector.

Many of the largest webscale network operators (WNOs) operate cloud services, serving a wide range of vertical markets. Over the last 3 years, the telco sector has become an increasingly important vertical market for webscale services. This telco-webscale collaboration activity picked up in 2020. WNOs help telcos with service and application development, shifting of workloads, and development and marketing of cloud services. Managing costs is a central purpose of telcos’ willingness to partner with webscale providers. Also, with the emergence of 5G, webscale operators are developing a range of edge compute services aimed at facilitating 5G rollouts and service deployment. Collaborations can involve delivery of a portfolio of 5G edge computing solutions that leverage the telco’s 5G network and the webscale operator’s global cloud coverage, as well as its expertise in areas like Kubernetes, AI/ML, and data analytics. 

While many observers – including more than a few telco execs – look at the webscale sector with trepidation, the smart ones are now pursuing collaboration. A wave of promising partnerships between telcos and webscale providers has emerged over the last 12-18 months. We expect this activity to accelerate in 2021 as telcos search for cost savings and webscale operators reap the benefits of their cash stockpiles and an unexpectedly strong 2020. As a reference point, here is a chart depicting the top webscale providers as of 3Q20 based upon annualized Network/IT/Software capex:

top wnos network capex 3q20

Below, we discuss some recent developments of note.

Alibaba knocked back by Chinese regulators, cloud aspirations may take a hit

Alibaba is regularly ranked as the top domestic provider of cloud services in China, and has invested heavily in a network of data centers to support this (Figure 1). Alibaba’s corporate capex amounted to $6.2 billion in the four quarters ended 3Q20. Its aspirations have grown rapidly in the last two years with a series of acquisitions and search for growth beyond ecommerce, and aim for cloud growth beyond China’s borders. 

Figure 1: Alibaba Data Center Footprint 

Alibaba DC map

They say the tall trees get cut down first, though, and that appears to be happening. Alibaba’s effort to launch an IPO of its fintech division Ant – possibly the largest ever IPO, anywhere – was pulled in November after company founder Jack Ma went a little too far in criticism of the Chinese government. Then China’s State Administration of Market Regulation (SAMR) announced an antitrust probe of Alibaba on December 24, focused on Alibaba’s alleged monopolistic business practices. Now Ma hasn’t been seen in public for a couple months, as he reportedly “lays low” – whether that’s his own choice or not is an open question.

Adding to the pressure on Alibaba, US President Trump – on his way out, possibly sooner than expected – issued an executive order on January 6 banning transactions between US companies and individuals with eight Chinese apps, including Alipay, Alibaba’s payment app. This ban takes effect in mid-February, so could be reversed by the Biden administration, but that seems unlikely.

One reason it’s unlikely is the news from mid-December, when a report found that the company “openly offers Uyghur/’ethnic minority’ recognition as [a] service [on Alibaba Cloud], allowing customers to be alerted any time Alibaba detects a Uyghur.” This blatantly racist affront to human rights and dignity is not going over well.

The only significant overseas cloud win with a telco announced by Alibaba recently was in Saudi Arabia, interestingly enough, a land where money talks a bit more loudly than human rights concerns. stc announced in December that it would invest $500 million in a cloud services partnership with venture fund eWTP Arabia Capital and Alibaba Cloud. Through this project, stc aims “to reinforce digital infrastructure and to leverage the proven cloud-based technologies and services of Alibaba Cloud to accelerate the growth of local technology ecosystem.” 

Alibaba also retains a cloud partnership agreement with China Telecom, and in fact held a press event for the venture in mid-December. China Telecom faces its own restrictions in a number of overseas markets, though, particularly in the US where it has been the subject of claims of hijacking Internet traffic. Alibaba’s challenges outside its home market open up new opportunities for Microsoft Azure, GCP, and AWS, including in the telco vertical.

Huawei aiming for cloud expansion to offset lagging equipment business

Huawei’s carrier networks division had a good 2020 but due almost entirely to China’s rush to deploy 5G. Elsewhere, the company faces severe restrictions in its ability to bid on 5G network contracts and continues to cope with supply chain restrictions limiting its access to core semiconductor technologies with US origin.

One way Huawei has coped with these challenges is to lean more heavily on services and software contracts, where supply chain constraints are less of a concern. Another way is to push ahead in deploying its own network of data centers – built on Huawei technology, largely – and offering its own cloud services through the Huawei Cloud unit. 

This strategy became all the more clear recently with a leaked internal speech from company founder & CEO, Ren Zhengfei. The speech expressed some disappointment with Huawei Cloud’s progress to date, suggesting the company needs to narrow its focus: “Huawei can’t take the same path as Alibaba and Amazon, since we don’t have ‘endless money’ from the US stock market like them.” 

One clear point was the need for Huawei to build an application ecosystem similar to Amazon AWS. But the speech reads more aimed to foster discussion than one with clear marching orders.

Ren stated, “Alibaba Cloud, Tencent Cloud, and Amazon’s AWS have introduced more and more hardware-software fusion devices. Huawei’s advantage lies in hardware. We must strengthen the software and application ecosystem and should not give up the advantages that hardware brings to Huawei Cloud.” 

Huawei is not the first traditional vendor to build a cloud division. IBM, HPE, Oracle, and others from the IT services vendor world are all tracked as webscale operators by MTN Consulting due to their large network of owned data centers. But Huawei remains the number 1 vendor based on sales to telcos, worldwide. And it’s not even close; Huawei’s annualized sales to telcos through 3Q20 were approximately $46.2 billion, more than the sum of second and third ranked Ericsson and Nokia. As such, Huawei’s plans for its Cloud unit could have a big impact on the shape of telco-webscale collaboration to come, in parts of the world.

Whether it makes sense to call Huawei Cloud a webscale operator or not is not a crucial question at this point. What is more important is to what degree Huawei can leverage its huge installed base of customer relationships in the telco world to help grow its position in the cloud. In this regard, Huawei and Alibaba are going after some of the same business: telcos in MEA, CALA and emerging Asia who are more concerned about price and less concerned about technology origins. 

Mavenir SVP predicts webscalers will play big role in telecom going forward

SDxCentral published a fascinating interview on January 6 with John Baker, the SVP of business development for open RAN proponent Mavenir. He predicted that the webscale operators (which Baker calls “hyperscalers”) are going to “become the new telecom providers going forward.” That’s due to the rising importance of cloud computing in network infrastructure. Baker stated: “Apart from the physical radio that goes on a tower, everything we’re doing now follows the data center model, and these guys know how to manage data centers, software, and applications…If you look at open RAN essentially as being a collection of applications that run on a server, then it really is falling into their camp.”

This prediction might imply that telcos have much to fear from webscale operators simply taking over their business. It’s not that simple, though. More likely is that the telcos will rely more and more on webscale infrastructure for incremental network functionality and capacity (and service development) over time. Telcos will aim to stick to their core business of managing and marketing services to the customers they have had a lock over for decades, and retaining control over a large portion of their network infrastructure. Importantly, change in the access portion of telco networks is measured by decades, not months or years, so there is some time to work out this transition. 

Read more at SDxCentral.

SKT launches edge cloud in collaboration with AWS

In early January, SK Telecom announced the launch of an edge cloud service with AWS known as ‘SKT 5GX Edge’. This leverages AWS Wavelength to enable SKT customers to build mobile applications requiring the ultra-low latency 5G is supposed to deliver. The rollout will start in Daejeon and move to other areas including Seoul later in 021. 

AWS has no plans (or ability) to take over SKT’s operations or its interaction with its customers. This is about using the familiar AWS services, API, and tools to develop new services on SKT’s 5G network. It sounds like a win-win. SKT is not the average telco, though, as it’s an early adopter of new technologies with a healthy R&D budget of its own, and strong ties to a range of domestic manufacturers and software developers. What will be interesting to see is whether AWS Wavelength deals with telcos in less sophisticated markets than Korea will be structured in the same way.

Read more at Capacity Media.

Deutsche Telekom extends its reliance on the Microsoft Azure network

In mid-December, DT announced it would shift the majority of its internal IT workloads to the public cloud by 2025, with Azure central to that plan. DT has been working with Azure for several years, but this 7-year deal is a significant expansion. DT will also offer its customers access to Azure’s cloud and AI services, including ExpressRoute. 

Read more at the Microsoft News Center.

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On the digital front, what can President Biden do to enhance our security and protect our privacy?

After Joseph R. Biden Jr. takes the oath of office on Jan. 20, 2021, the newly inaugurated president of the United States will need to contend with an America in turmoil.

Naturally, the scourge of COVID-19, and its devastating impact on the nation, will be near or at the top of his list of Things That Must Be Dealt with Immediately. With over 311,000 deaths and total and more than 3,000 more deaths per day (as of Dec. 18, 2020), he has no choice but to respond to that grim reality. Recently released vaccines from Pfizer and Moderna will no doubt be very useful weapons in his arsenal.

However, America is also still reeling from Russia’s ongoing, unprecedented cyberattack against U.S. governmental agencies and corporations. Even though tens of billions of dollars had been spent to prevent such an attack, it had gone undetected for most of a year — and remains an ongoing concern.

Toss in the fact that states and consumers are becoming more wary of the power wielded by corporations and social media platforms to use your personal data for their own ends and profit – effectively turning you into a monetized resource for their exploitation.

And, of course, there is also the growing concern that facial recognition technology is being weaponized against underrepresented minorities in the U.S – invading their privacy and possible violating their rights.

When it is all added up, it becomes clear that America is on the precipice of a digital war. The only question as yet unanswered is, when all is said and done, will the war for cybersecurity and digital privacy be decided in our favor, or in the favor of those that would exploit us for money and power?

Soon-to-be President Biden has several options available to deal with these issues. Let’s explore what we know, and what Biden might do.

CYBERSECURITY

What We Know

 The U.S. government had spent billions of dollars in creating a new war room for U.S. Cyber Command, while also installing Einstein, a web of sensors throughout the nation that was designed to detect and avert cyberattacks. Unfortunately, according to the U.S. intelligence community, Russia designed its most recent attacks to bypass Einstein, slipping their assault past the sensor web and into the computer infrastructure of corporations and government agencies.

The list of impacted agencies is large: The U.S. Commerce, Homeland Security, Treasury and Energy departments reported having been hit, as did the Pentagon, the U.S. Postal Service, and the National Institutes of Health.

Although the sheer breadth of the attacks was stunning in its size — indeed, it is believed that the attack is one of the largest ever — it has not been revealed what information might have been stolen, or whether the hacks succeeded in changing or destroying data.

Investigators have yet to determine whether any classified systems were breached. Still, the intrusion seems to be one of the biggest ever, with the amount of information put at risk dwarfing other network intrusions.

However, it is known that the hackers exploited a weakness in the cyber infrastructure. The attackers accessed software from SolarWinds, an Austin, Texas-based company. SolarWinds’ Orion software, which is designed to monitor computer networks, is used by thousand of companies and by many federal agencies, making it an inviting target.

Indeed, SolarWinds estimated, in a Securities and Exchange Commission filing on Dec. 14, that perhaps as many as 18,000 of its customers may have been impacted by the breaches.

On Dec. 13, the U.S. Cybersecurity and Infrastructure Security Agency (CISA) ordered all  federal agencies “to immediately disconnect or power down affected SolarWinds Orion products from their network.” CISA is part of the Department of Homeland Security which, on Dec. 16, announced that it, the FBI and the Office of the Director of National Intelligence (DNI) had formed a joint team to “coordinate a whole-of-government-response to this significant cyber incident.”

Aside from that, there has been no comment from President Donald Trump regarding the attack. Critics are saying that Trump’s silence is more proof that he refuses to take a stand against Russia, no matter the provocation.

Meanwhile, CISA is warning that “this threat poses a grave risk to the (federal government) and state, local, tribal, and territorial governments as well as critical infrastructure entities and other private sector organizations.”

What Biden Can Do:

Once in the White House, Biden has a wealth of options at his disposal:

  • Declare, in no uncertain terms, that Russia is responsible for various intrusions into corporate, state, and U.S. governmental computer systems and that such actions need to be halted immediately.
  • Determine how many government agencies, states, and corporations use the same or similar software, and order researchers to find a) more diverse software for computer monitoring, or b) create ways to strength the security of the software to resist intrusion.
  • Form an agreement with other nations to refuse to sell any software or computer hardware (or parts) to Russia, Russia-controlled nations and territories, or Russian-headquartered businesses.
  • Create an equivalent to the National Transportation Safety Board. Rather than investigate accidents and transportation standards, this proposed agency would “track attacks, conduct investigations into the root causes of vulnerabilities and issue recommendations on how to prevent them in the future,” says Alex Stamos, director of the Stanford Internet Observatory. Stamos is former chief information security officer of Yahoo and Facebook.
  • Make sure Congress passes a law requiring companies and government agencies to reveal every time their cybersecurity is breached. Currently, no such law exists to force such compliance in areas other than medical or banking information. As Stamos notes, you “can’t respond to the overall risk as long as we’re discussing only a fraction of the significant security failures.”
  • Implement harsh financial sanctions of the leaders of Russia’s technology industries.
  • Launch federal investigations into the cyberattacks in an effort to identify individual hackers. If possible, prosecute the hackers and their superiors.
  • Establish a ban on all Russian-created software and hardware in the United States. Such a ban should include Kaspersky Labs, which is currently prohibited from selling to the federal government, but remains free to sell otherwise.
  • Conduct mandatory cybersecurity “stress tests” of state and federal governmental computer systems, as well as those utilized by major corporations, banks, hospital systems and insurance companies.
  • Update all federal government computer systems to include stronger security.
  • Launch a series of retaliatory cyberattacks against the business holdings of Russia President Vladimir Putin’s most ardent financial backers and where he banks himself.

Not only would these changes result in a more digitally secure America, but they would also provide a massive boost to the U.S. economy. As the COVID-19 pandemic continues to rage, MTN Consulting’s research has shown that the pandemic has proved beneficial to parts of the communications industry, as:

  • “The sudden, widespread need to work and study from home has increased demand for the cloud services offered by many webscale players.”
  • “Technology investments by the webscale sector are also (surging, with research and development) spending increased by 17% in 3Q20 to $46.1 billion.”
  • “Webscale spending on … network infrastructure has also spiked,” with total capital expenditures rising 25 percent year-over-year “to hit $34.7 billion in 3Q20. A good portion of capex in 2020 has supported the growth of ecommerce activity, which was given a lift by pandemic-related lifestyle changes. However, the Network/IT/Software portion of capex grew 31% YoY in 3Q20 to $16.0 billion. New data center construction slowed in 2020 but rapid growth of traffic and cloud services adoption forced operators to invest heavily in new servers and other incremental capacity additions.”

A sudden, technology industry-wide push to secure the nation’s cyber infrastructure would create jobs, inject large amounts of money into the economy, and, of course, make the country more secure. A win-win for a newly installed president.

CONSUMER PRIVACY

What We Know

In recent weeks, we’ve seen state governments open a new front in the war for digital privacy. People have become more aware of the fact that social media platforms and other telecommunications companies collect your personal data, store it, and then use it to fuel their marketing efforts, or sell the data to other business entities. However, it is difficult to tell what company is doing what to/with the data, as many companies are not remotely transparent about what happens after they acquire the data.

Americans are very much aware that their everyday lives – both online and off – are being watched closely by various corporate interests.  In a 2019 Pew Research Center survey, it was revealed that a majority of Americans admitted that they believe their lives — online and off —were being heavily monitored both by corporate interests and the federal government.

“Roughly six-in-ten U.S. adults say they do not think it is possible to go through daily life without having data collected about them by companies or the government,” the report warned.

Granted, the Pew report also admitted that “data-driven products and services are often marketed with the potential to save users time and money or even lead to better health and well-being.” Still, 81 percent of those surveyed expressed the belief that “the potential risks they face because of data collection by companies outweigh the benefits, and 66% say the same about government data collection.” The report also noted that 79 percent of respondents worry about how their data is used by companies, while 64 percent worry about the same data’s use by the government. Indeed, “most also feel they have little or no control over how these entities use their personal information.”

Enter the Federal Trade Commission. On Dec. 14, the FTC ordered Amazon, Discord, Facebook, Reddit, Snap, Twitter, WhatsApp YouTube, and ByteDance, which operates TikTok, to “provide data on how they collect, use, and present personal information, their advertising and user engagement practices, and how their practices affect children and teens.”

In a statement, the FTC commissioners said that: 

These digital products may have launched with the simple goal of connecting people or fostering creativity. But, in the decades since, the industry model has shifted from supporting users’ activities to monetizing them. This transition has been fueled by the industry’s increasing intrusion into our private lives. Several social media and video streaming companies have been able to exploit their user-surveillance capabilities to achieve such significant financial gains that they are now among the most profitable companies in the world.

Never before has there been an industry capable of surveilling and monetizing so much of our personal lives. Social media and video streaming companies now follow users everywhere through apps on their always-present mobile devices. This constant access allows these firms to monitor where users go, the people with whom they interact, and what they are doing. But to what end? Is this surveillance used to build psychological profiles of users? Predict their behavior? Manipulate experiences to generate ad sales? Promote content to capture attention or shape discourse? Too much about the industry remains dangerously opaque.

A few days later, another gauntlet was thrown. Thirty-eight state attorneys general filed an antitrust lawsuit against Google – its third in under two months. hit Google with the company’s third antitrust complaint in less than two months.

“Google sits at the crossroads of so many areas of our digital economy and has used its dominance to illegally squash competitors, monitor nearly every aspect of our digital lives, and profit to the tune of billions,” said New York Attorney General Letitia James.

In other words, states were worried that Google had used its massive amounts of data on what people do online to benefit itself at the expense of its competitors. Sound familiar?

Meanwhile, a leaked Google document detailing the company’s plan to undermine European Union legislation for its own ends has EU lawmakers on the alert. According to the New York Times:

“Academic allies” would raise questions about the new rules. Google would attempt to erode support within the European Commission to complicate the policymaking process. And the company would try to seed a trans-Atlantic trade dispute by enlisting U.S. officials against the European policy.

For many officials in Brussels, the document confirmed what they had long suspected: Google and other American tech giants are engaged in a broad lobbying campaign to stop stronger regulation against them.

As MTN analyst Matt Walker puts it, “Big tech wants to serve up ads to exactly the right person, at the right time, in the right place – and the only way to do this is by a massive invasion of what many would consider private information.”

According to Zenith Media, about $587 billion was spent on digital advertising  in 2020.

Another firm, Magna, says that digital ad spending, which it estimates rose 8 percent in 2020, will comprise 59 percent all global ad spending by year end. This eclipses traditional advertising such as television, radio, print and out-of-home, which Magna estimates has fallen 18 percent from 2019.

What Biden Can Do

Many groups and organizations, including Public Citizen and the Parent Coalition for Student Privacy, have offered recommendations of this matter. Like on the subject of cybersecurity, Biden has a variety of options:

  • If Democrats win both Senate runoff races in Georgia this January, then Democrats will control the U.S. Senate and Biden may consider expanding the responsibilities of the Consumer Financial Protection Bureau to include regulation of social media platforms and corporations in the realms of consumer privacy and data usage. Created in 2010 by the Obama administration, in which Biden served as vice president, the CFPB’s current mandate is consumer protection in the financial sector. However, it already has experience engaging “with the data economy in a number of ways. Its enforcement actions have required it to look at how financial entities are using social media and algorithms to sell to consumers. The agency has become active in enforcing privacy matters. It has also taken steps toward improving data portability principles and building a regulatory sandbox.”
  • Limit access by others to our digital lives. As we’ve noted previously, an increasing number of employers, schools and the federal governmental agencies are requiring access to our digital accounts.  S. border enforcement agents are demanding that travelers unlock their devices and provide passwords. Schools are utilizing services that allow them to access students’ devices and social media accounts. All of those entities should be required to obtain a warrant prior to being granted access. After all, the right not to incriminate yourself IS spelled out in the U.S. Constitution.
  • Ban social media platforms and other companies from using consumer data without express written permission from said consumers. Companies should have a standardized form governing whether to grant permission to companies to sell or share their personal data.
  • Require all companies and lobbying entities to have fully transparent systems in place as to how data is collected and used.
  • Require all entities that collect consumer data to publish an annual notice to consumers whose data they use
  • Ban anonymous social media accounts. In other words, social media accounts must have a verifiable name, address, phone number and email address prior to account’s activation. Said information must be confirmed every two years.  (This might help diffuse some of the mob mentality currently evident on social media platforms.)
  • Hold social media responsible for the content that they publish. Ban content that advocates harm against others based on race, gender, gender ID, sexual orientation, race, ethnicity, religion, etc.
  • The previous suggestion could work alongside a redesign or elimination of Section 230, a section of the Communications Decency Act of 1996. The section shields internet companies from liability over the content they publish. In recent years, Republicans – notably Trump – and Democrats are argued for reforming or abolishing the rule. Indeed, Bruce Reed, Biden’s top technology adviser, advises reforming Section 230 in a book he coauthored, “Which Side of History? How Technology Is Reshaping Democracy and Our Lives.” In it, he and coauthor James Steyer, a Stanford University lecturer, argue that if internet companies and social media platforms “sell ads that run alongside harmful content, they should be considered complicit in the harm. If their algorithms promote harmful content, they should be held accountable for helping redress the harm. In the long run, the only real way to moderate content is to moderate the business model.”
  • Companies should be required to establish easier ways for consumers to manage their devices’ and accounts’ privacy settings.
  • After it was revealed that many members of Congress simply didn’t comprehend how social media platforms work, even though they were trying to regulate the industry, members of Congress should be required to be briefed annually on the current state of the social media, as well as its impact on their constituents.
  • Require technology companies to create more secure privacy settings for minors using social media.
  • Push the Federal Communications Commission to reassert net neutrality, a rule that banned telecommunications operators from blocking or slowing internet traffic originating from unaffiliated Internet access providers.

FACIAL RECOGNITION

What We Know

In the above discussion on privacy, one area that we neglected to delve into is the impact of facial recognition on privacy. A fundamental aspect of the American criminal justice system is that people are innocent until proven guilty, an axiom more commonly known as the “presumption of innocence.”  This is echoed in the Fifth Amendment to the U.S. Constitution, which states, in part that no person “shall be compelled in any criminal case to be a witness against himself.” In other words, when people “take the Fifth,” they are exercising their right not to incriminate themselves.

By contrast, the growing usage of facial recognition technology, which is widely recognized as a tool to enhance security and identify potential criminal suspects, jeopardizes people’s right to privacy, as well as that presumption of innocence. Indeed, on Dec. 22, 2020, New York Gov. Andrew M. Cuomo signed into law of the nation’s first statewide ban on using biometric identifying technology such as facial recognition in schools. The law bans the use of such technology in schools until July 1, 2022, or until after the state Education Department has conducted extensive research into whether the technology should be used in schools.

“This technology is moving really quickly without a lot of concern about the impact on children,” said Stefanie Coyle, deputy director of education policy for the New York Civil Liberties Union. “This bill will actually put the brakes on that.”

Even scientists are growing concerned about the assault of privacy posed by facial recognition systems, with many calling for “a firmer stance against unethical facial-recognition research. It’s important to denounce controversial uses of the technology, but that’s not enough, ethicists say. Scientists should also acknowledge the morally dubious foundations of much of the academic work in the field — including studies that have collected enormous data sets of images of people’s faces without consent, many of which helped hone commercial or military surveillance algorithms.”

With the growing push in retail spheres toward more protections of consumers’ privacy, is it so surprising that a similar push would eventuate in other areas? The controversy of using facial recognition to surveil public spaces has been under debate for some time – particularly as people grow a deeper understanding of how unreliable the systems are when dealing with people who are not White men.

Indeed, in December 2019, a National Institute of Standards and Technology study demonstrated the results of testing 189 facial recognition systems from 99 companies. The study found that the majority of the software had some form of bias. Indeed, among the broad findings were these troubling revelations:

  • One-to-one matching revealed higher error rates for “Asian and African American faces relative to images of Caucasians. The differentials often ranged from a factor of 10 to 100 times, depending on the individual algorithm.”
  • Among U.S.-made software, “there were similar high rates of false positives in one-to-one matching for Asians, African Americans and native groups (which include Native American, American Indian, Alaskan Indian and Pacific Islanders). The American Indian demographic had the highest rates of false positives.”

Such errors in identifying criminal suspects can be devastating to those innocents who are caught up in a criminal investigation. One prevalent example comes from January 2020 in Michigan: Detroit police arrested Robert Williams, a Black man, as a suspect in a shoplifting case. However, they were following the lead of a facial recognition scan, which had incorrectly identified Williams as the suspect. The charges were later dropped, but the damage was done: Williams’ “DNA sample, mugshot, and fingerprints — all of which were taken when he arrived at the detention center — are now on file. His arrest is on the record,” said the  American Civil Liberties Union. “… Given the technology’s flaws, and how widely it is being used by law enforcement today, Robert likely isn’t the first person to be wrongfully arrested because of this technology. He’s just the first person we’re learning about.”

Side view of conceptual face recognition technology.

As previously mentioned, there is a growing view that facial recognition technology is being weaponized against underrepresented minorities in the United States. In recent months, in the time since the deaths – some would say murders — of George Floyd and Breonna Taylor at the hands of White police officers, civil rights groups have pointed to the use of facial recognition technologies by law enforcement at protests. Also, critics of Trump have noted similar technologies in use by law enforcement at protests against the now-outgoing president.  And with growing awareness of the growing right-wing and White supremacist influences in law enforcement, people are wary of permitting any more advances that can be used in an oppressive fashion.

As I indicated in a previous essay on facial recognition systems,  such digital tools are used for a variety of purposes, many of them beneficial. However, as I also demonstrated, those tools are also extremely easy to abuse, particularly in the hands of governments and the law enforcement community. And in today’s politically explosive environment, all it takes is the wrong person in elected office to turn a beneficial tool into a weapon for suppression.

There is, of course, the “Big Brother” scenario: George Orwell’s dystopian nightmare of a totalitarian government that maintains control through constant electronic surveillance of its citizens. Although people argue that “such things can never happen here,” a great many things have happened in America over the last four years that people once argued only happened in dictatorships or “Third-World” countries. For example, armed, unidentifiable “security officers” never used to roam America’s streets, grabbing up citizens and transporting them to places unknown. Attorneys working for elected officials didn’t use to call for the deaths of their client’s perceived enemies. White supremacists didn’t openly accept orders from the president of the United States.  Conspiracy theorists didn’t publicly tout their illogical views while running for, or working in, public office. And the president of the Unites States, and his supporters in Congress, didn’t flatly assert that an election was fraudulent just because he lost it.

A lot can happen in a nation “where it can’t possibly happen here.” In fact, many of the examples cited above used to “only happen overseas.” Of course, if something happens overseas, it should not be all that difficult to believe that it could happen here in America. Which is why the following developments, here and abroad, are so troubling:

  • In April 2019, it was revealed that the Chinese government was using facial recognition technology to surveil Uighurs, a mostly Muslim ethnic group. As the New York Times also reported, hundreds of thousands of Uighurs were surveilled, arrested, and then imprisoned in secret camps.
  • In January 2020, Amnesty International warned that, “In the hands of Russia’s already very abusive authorities, and in the total absence of transparency and accountability for such systems, the facial recognition technology is a tool which is likely to take reprisals against peaceful protest to an entirely new level.” The warning came as a Moscow court took on a case by a civil rights activist and a politician who argued that Russia’s surveillance of public protests was a violation of their right to peacefully assemble.
  • Six months later, in Portland, Oregon, unidentified “federal police officers” began detaining those protesting police violence. Portland Mayor Ted Wheeler called them Trump’s “personal army,” and Attorney General Bill Barr acknowledged sending the officers. Many of those detained were imprisoned for a short time, then released, often with no charges being filed and no way to identify the officers involved.
  • In the summer of 2020, Black Lives Matter protesters, as well as those protesting Trump’s policies, complained that they were being surveilled by police officers using facial recognition software.
  • And in December 2020, it was revealed that Huawei is marketing facial recognition software to the Chinese government that is reportedly capable of sending “automated ‘Uighur alarms’ to government authorities when its camera systems identify members of the oppressed minority group.” On Dec. 16, it was revealed that tech giant Alibaba also possessed a similar system.

America is a nation too often consumed by racial tensions. Indeed, we see increasingly violent rhetoric and actions of right-wing activists, who are in turn often fueled by and, in turn, fuel right-wing media and White supremacist ideologies.  So when we see other countries cracking down on racial minorities, it is important to remember that the same thing can happen here. It is equally important to remember that race-based violence and suppression are a long part of America’s history, built into its very foundation.

And with racially coded language in political speeches such as “Take Back America” and “Make America Great Again,” underrepresented minorities see themselves being blamed for America’s failures by a rising number of politicians who identify with or are followed by conspiracy theorists and/or White supremacists. Regretfully, the accusers are not mature enough to recognize their own culpability in such failures because they can’t see past their own self- interest.

What Biden Can Do

This is one area in which Biden will absolutely need a majority in Congress with which he can work. If he gains that advantage, he can:

  • Follow the lead of soon-to-be Vice President Kamala Harris, who, as part of a group of legislators, sent letters to the FBI, the Equal Employment Opportunity Commission (EEOC), and the FTC to point out research showing how facial recognition can produce and reinforce racial and gender bias. Harris asked “that the EEOC develop guidelines for employers on the fair use of facial analysis technologies and called on the FTC to consider requiring facial recognition developers to disclose the technology’s potential biases to purchasers.”
  • Take the suggestion from IBM and Microsoft to craft a federal law regulating the use of facial recognition systems.
  • Order an evaluation of all facial recognition technology in use by government agencies, as well as state and local law enforcement agencies, to determine their accuracy dealing with diverse groups of people.
  • Offer incentives to companies that crack the bias problem in facial recognition technologies
  • Set a new federal threshold for such systems, at least 85 percent accuracy for all racial/ethnic groups, before use by law enforcement agencies.
  • In federal cases, ban use of facial recognition tech when it is being used as the primary reason for probable cause.

CONCLUSION

These are but a few of the approaches Biden can take to improve America’s cybersecurity infrastructure while improving consumer privacy. There are, of course, likely many more ideas out there that experts will recommend.

I hope he keeps an open mind and considers them.

About the author

Melvin Bankhead III is the founder of MB Ink Media Relations, a strategic communications firm based in Buffalo, New York. An experienced journalist, he is a former syndicated columnist for Cox Media Group, former editor at The Buffalo News, and current instructor at Hilbert College.

Note from MTN Consulting

MTN Consulting is an industry analysis and research firm, not a company that typically comments on politics. We remain focused on companies who build and operate networks, and the vendors who supply them. That isn’t changing. However, we are going to dig into some of the technology issues related to these networks and networking platforms which are having (or will have) negative societal effects.

Image credits: (1) Gayatri Malhotra (cover); (2) John Salvino ; (3) iStock, by Getty Images.

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THE RISE OF DIGITAL ADVERTISING AND THE DEATH OF OBJECTIVE JOURNALISM

In the beginning, the people of Earth told their truths, voiced their opinions, and advertised their wares and services in print media such as newspapers and magazines.

And the people of Earth looked upon their works, and called it good.

In time, humanity harnessed the power of parts of the electromagnetic spectrum. And lo, the people of Earth told their truths, voiced their opinions, and advertised their wares and services on radio.

And the people of Earth looked upon their works, and called it good.

In time, humanity harnessed the power of more of the electromagnetic spectrum. And lo, the people of Earth told their truths, voiced their opinions, and advertised their wares and services on television.

And the people of Earth looked upon their works, and called it good.

In time, humanity harnessed the power of even more of the electromagnetic spectrum. And lo, the people of Earth told their truths, voiced their opinions, and advertised their wares and services in the digital realm.

And the people of Earth looked upon their works, and … well, that’s where all kinds of things got screwed up … particularly for news outlets.

Getting to the point

Of course, “screwed up” is a completely subjective interpretation of the current reality of the state of journalism.  Still, I consider it appropriate. At least as it relates to digital marketing and social media. An advantage of my journalism career starting in 1997 and ending in 2018 is that I was able to watch in real time as journalism as a whole shifted to accommodate the new reality of the internet.  I’ve also been able to watch as the rise and growth of social media was seemingly accompanied by a loss of many Americans’ critical thinking skills and, from there, a hyper-partisan nation where your political affiliation dictated your news source.

My biased version of history notwithstanding, there is no arguing that there has been a massive shift in how journalism is defined and perceived in this country. With the rise of the internet came the birth of social media. With social media came an expansion of where people could share their news and voice their opinions.

Where things got “screwed up,” as I said, is when people stopped looking at their opinions as their own thoughts and biases, and started perceiving them as “facts.”  And then they spread these “alternative facts” (more on this later) via social media. And as the social media platforms gained power, and truth became more and more subjective, news organizations lost power.

Recent news

Digital advertising has fueled the growth of Facebook, Google, Baidu, Tencent, and other internet services companies. The companies don’t charge their users, which enhances the social media platforms’ popularity. Still, the proliferation of the social media platforms hasn’t been the best thing for the news business. Indeed, digital companies have been in the news fairly often in recent years, as has their connection to news outlets. A few examples:

  • In fall 2019, it became apparent that the two reigning giants of digital advertising would have to acknowledge a third member of the club. Facebook and Google, which had ruled the industry for most of the decade, was about to be joined by Amazon. Indeed, Amazon’s advertising revenue has continued to grow, with even its 1Q20 numbers, from the beginning of the COVID-19 crisis, showing a year-over-year increase of 44 percent. Still, that growth comes with a price. Amazon is owned by Jeff Bezos, the owner of The Washington Post. The Post’s investigative reporting on President Donald J. Trump drew Trump’s wrath, and that rage spilled over onto Amazon.
  • A growing number of companies, in response to the growing repercussions of the Black Lives Matter protests, have been removing their ads from Facebook. The companies have been declaring solidarity with the #StopHateForProfit boycott, which is being led by a coalition of civil rights groups. Among the more than 400 companies is the retailer Patagonia, which tweeted on June 21 that “Patagonia is proud to join the Stop Hate for Profit campaign. We will pull all ads on Facebook and Instagram, effective immediately, through at least the end of July, pending meaningful action from the social media giant.” In a later series of tweets, the company said:

“From secure elections to a global pandemic to racial justice, the stakes are too high to sit back and let the company continue to be complicit in spreading disinformation and fomenting fear and hatred. As companies across the country work hard to ensure that Americans have access to free and fair elections this fall, we can’t stand by and contribute resources to companies that contribute to the problem.”

  • Amid this backdrop, media buying agency GroupM predicted that “digital advertising on platforms such as Google, Facebook and Alibaba is set this year to overtake spending on traditional media for the first time, a historic shift in market share that has been accelerated by the coronavirus pandemic. Excluding online ads sold by old media outlets such as news publishers or broadcasters, digital marketing is predicted to account for more than half the $530 (billion) global advertising industry in 2020, according to GroupM, the media buying agency owned by WPP.”

It is that latter point that shows the phenomenal power of digital advertising. Indeed, the Internet Advertising Bureau (IAB) has tracked U.S. digital advertising revenues almost since its beginning. To give you an idea of how much and how quickly digital advertising has grown, the IAB reported that, in 1996, revenues from such advertising had reached $267 million. By 2000, a mere four years later, that number had grown to $8.2 billion. as the calendar rolled forward, so, too, did the ad spending, soaring to $12.5 billion in 2005; $26.0 billion in 2010; $59.6 billion in 2015; exceeding $100 billion for the first time in 2018; and hitting $124.6 billion in 2019. That’s roughly 10 times the 2005 figure.

Is that spending worth it? According to Statista, the average return-on-investment for each dollar spent on digital advertising was about $11 in 2018, “making it the medium with the highest return on advertising spending (or ROAS).”

What does all this have to do with journalism?

A whole heck of a lot, actually.

A less biased history of technology and journalism

Journalism has always been fueled by three forces: retail sales, subscribers, and advertisers. When journalism was pretty much only newspapers and magazines, the businesses survived on revenue generated by the sales of copies in retail venues such as shops and newsstands; via paid subscriptions, which allowed the copies to be mailed to the recipients; and through what advertisers paid to have their wares and services mentioned in print.

In time, however, radio rose up. Although the first radio program was broadcast in Canada on December 24, 1906, it took several more years before the first radio news broadcast would occur.  On Aug. 31, 1920, a Detroit radio station aired the first radio news broadcast. Shortly thereafter, for a one-time cost of purchasing a radio (as well as the cost of powering the device), listeners could hear news and entertainment without needing to pay for it.  Unfortunately, sales of the radios themselves didn’t benefit the news outlets, and the subscription model didn’t work for radio, either.  As a result, radio news outlets relied on corporate sponsorships and advertisers. Newspapers and magazines continued as normal, but kept a wary eye on their new competitor.

Television was next, with the 1922 transmission via radio waves of a still picture. The technology was improved in 1925, with the successful transmission of a live human face.

Meanwhile, the federal government decided to regulate these new technologies, starting with the Federal Communications Act in 1934. The law created the Federal Communications Commission (FCC). Here’s how the FCC was initially described, according to “That’s the Way It Is: A History of Television News in America,” by Charles L. Ponce de Leon:

(The FCC) was responsible for overseeing the broadcasting industry and the nation’s airwaves, which, at least in theory, belonged to the public. Rather than selling frequencies, which would have violated this principle, the FCC granted individual parties station licenses. These allowed licensees sole possession of a frequency to broadcast to listeners in their community or region. This system allocated a scarce resource—the nation’s limited number of frequencies—and made possession of a license a lucrative asset for businessmen eager to exploit broadcasting’s commercial potential. …  As part of this process, they had to demonstrate to the FCC that at least some of the programs they aired were in the “public interest.” Inspired by a deep suspicion of commercialization, which had spread widely among the public during the early 1900s, the FCC’s public-interest requirement was conceived as a countervailing force that would prevent broadcasting from falling entirely under the sway of market forces.

In reality, however, the FCC tended to be “unusually sympathetic to the businessmen who owned individual stations and possessed broadcast licenses and made it quite easy for them to renew their licenses. They were allowed to air a bare minimum of public-affairs programming and fill their schedules with the entertainment programs that appealed to listeners and sponsors alike. By interpreting the public-interest requirement so broadly, the FCC encouraged the commercialization of broadcasting and unwittingly tilted the playing field against any programs—including news and public affairs—that could not compete with the entertainment shows that were coming to dominate the medium.”

The National Broadcast Company’s Red Network launched the first daily radio news program on Feb. 24, 1930. The Columbia Broadcasting System (CBS) followed on Sept. 29, 1930, with radio broadcaster Lowell Thomas as the host. Thomas made history again in 1939, when he simultaneously read a news report over radio and television, making it the first television news broadcast.

It wasn’t until Sept. 2, 1963, that the concept of a daily news program translated to television, when Walter Cronkite anchored the first daily half-hour news program on network television for CBS. For well over a decade, ABC, NBC, and CBS ruled television news – until the June 1, 1980, launch of the Cable News Network, better known as CNN. The creation of a 24-hour television news network forever changed the way news was delivered. In response, all three network broadcasters dropped their 30-minute daily programs and went on to create longer-form news shows, including morning news broadcasts.

Throughout all these changes, news outlets continued to operate pretty much as they had at the very beginning. Newspapers and magazines continued to rely on retail sales, subscribers, and advertising revenue. Radio and television broadcasters relied far more heavily on advertising revenue. As time marched on, both print and broadcast news outlets updated how they gathered and spread the news as technology evolved.

But their time-tested business models were about to be upended by one new technology that would change everything.

The advent of the Internet

The world-spanning phenomenon known as the internet began as a Department of Defense research project in 1969. A few quick facts about it, mostly courtesy of Vox:

  • “The internet began as ARPANET, an academic research network that was funded by the military’s Advanced Research Projects Agency (ARPA, now DARPA).”
  • “… In 1973, software engineers … began work on the next generation of networking standards for the ARPANET. These standards, known as TCP/IP, became the foundation of the modern internet. ARPANET switched to using TCP/IP on January 1, 1983.”
  • “During the 1980s, funding for the internet shifted from the military to the National Science Foundation. The NSF funded the long-distance networks that served as the internet’s backbone from 1981 until 1994. In 1994, the Clinton Administration turned control over the internet backbone to the private sector. It has been privately operated and funded ever since.”
  • As of April 2020, nearly 4.57 billion people “were active internet users,” encompassing 59 percent of the global population.
  • And no, despite the hype, former Vice President Al Gore did not create the internet. In truth, he never claimed that he had. What he did say, in a 1999 interview with CNN, was he “took the initiative in creating the internet.” The actual inventors of the internet, TCP/IP designers Bob Kahn and Vint Cerf, have said that “Gore was “the first political leader to recognize the importance of the internet and to promote and support its development” — particularly with his sponsorship of the 1991 High Performance Computing and Communications Act (HPCCA). Kahn and Cerf say that law “became one of the major vehicles for the spread of the internet beyond the field of computer science.”

In 1994, three years after the HPCCA’s passage, the founding of Netscape and Yahoo! helped to kickstart mass-market adoption of the web and email, respectively. Online searches were simplified by Google’s arrival in 1998. Hundreds of other Internet companies were founded in the latter half of the 1990s — too many, as it turned out. However, the advertising-supported model of free Internet services survived the dotcom bubble’s collapse in 2001.

 The trouble starts

In 2004, the Pew Research Center published its first annual State of the News Media Report. In the report’s inaugural edition, Pew noted that then-President George W. Bush had told ABC News in December 2002 that he “preferred to get his news not from journalists but from people he trusted, who ‘give me the actual news’ and ‘don’t editorialize.’” Indeed, a New Yorker writer noted that senior White House staff “saw the news media as just another special interest group whose agenda was making money, not serving the public – and surveys suggest increasingly that the public agrees.”

These observations were some of the earliest warnings that a sharply partisan divide was coming over previously agreed-upon norms such as truth, facts, and the mission of journalism.  Indeed, the 2004 report went on to warn:

Some argue that as people move online, the notion of news consumers is giving way to something called “pro­sumers,” in which citizens simultaneously function as consumers, editors and producers of a new kind of news in which journalistic accounts are but one element.

 With audiences now fragmented across hundreds of outlets with varying standards and agendas, others say the notions of a common public understanding, a common language and a common public square are disappearing.

 For some, these are all healthy signals of the end of oligarchical control over news. For others, these are harbingers of chaos, of unchecked spin and innuendo replacing the role of journalists as gatekeepers over what is fact, what is false and what is propaganda. Whichever view one prefers, it seems everything is changing.

Sound familiar?

Going back to digital for a moment … among the 2004 Pew report’s conclusions, two items stand out:

  • The biggest question may not be technological but economic…If online proves to be a less useful medium for subscription fees or advertising, will it provide as strong an economic foundation for newsgathering as television and newspapers have? If not, the move to the Web may lead to a general decline in the scope and quality of American journalism, not because the medium isn’t suited for news, but because it isn’t suited to the kind of profits that underwrite newsgathering. 
  • Those who would manipulate the press and public appear to be gaining leverage over the journalists who cover them. Several factors point in this direction. One is simple supply and demand. As more outlets compete for their information, it becomes a seller’s market for information. Another is workload. The content analysis of the 24 ­hour­ news outlets suggests that their stories contain fewer sources.

So, at the time, news outlets weren’t yet certain of what to make of using the internet to gather and disseminate news. And concerns about manipulation of the media were already on people’s radar.

The fuse is lit

The 2008 presidential campaign of Barack Obama, and his 2009 inauguration, exacerbated the racism and xenophobia of many White Americans. Fox News, which had been known for its motto of being “fair and balanced,” immediately launched racist attacks on Obama and his wife, Michelle:

  • May 2008: Fox News contributor Liz Trotta joked that then-candidate Obama should be assassinated.
  • June 6: On the Fox News program “America’s Pulse,” host E.D. Hill referred to a celebratory fist bump shared by the Obamas to celebrate his acceptance as the Democratic presidential nominee as a “terrorist fist jab.” Hill was dropped from her show a week later.
  • June 11: A Fox News chyron referred to Michelle Obama as “Obama’s Baby Mama.”

Things would only deteriorate from there.

Amid the sharply partisan tone of Fox News and other conservative news outlets, the explosion in growth of social media platforms occurred. As the BBC noted:

 Clearly the enabler of the modern form of “fake news” – or, if you like, misinformation – has been the explosive growth of social media.

“In the early days of Twitter, people would call it a ‘self-cleaning oven’, because yes there were falsehoods, but the community would quickly debunk them,” (says Clare Wardle of First Draft News, a truth-seeking non-profit based at Harvard’s Shorenstein Center). “But now we’re at a scale where if you add in automation and bots, that oven is overwhelmed.

“There are many more people now acting as fact-checking and trying to clean all the ovens, but it’s at a scale now that we just can’t keep up.”

One example of the latter comment is the proliferation of bots in social media. As has been noted elsewhere, bots serve a useful purpose for social media companies. Regrettably, they also represent a danger to social media platforms in that they can rapidly spread misinformation and propaganda. Indeed, the malicious use of bots helped sway public opinion in the 2016 election, in which Russia used them to help position Trump into a better position for him to win election to the presidency.

In addition, in 2009, an Ohio State University study warned that more Americans, rather than seeking to be informed by their news outlets, were instead increasingly flocking to news that reinforced their own prejudices. Conservatives headed to Fox News; liberals, to CNN and MSNBC.

Meanwhile, during Obama’s two terms in office, the Pew Research Center noticed something else happening to journalism: tech companies were increasingly becoming involved in their operations:

In 2013, the business of journalism saw another twist in its digital evolution: An influx of new money – and interest – from the tech world.

 At this point, professional newsgathering is still largely supported by advertising directed to such legacy platforms as print and television and, secondarily, by audience revenues (mostly subscriptions). But other ways of paying for news are becoming more visible. Much of the momentum is around this high-profile interest from the tech world, in the form of venture capital and individual and corporate investments, which bring with them different skill sets and approaches to journalism.

 But as the tech companies continued to invest, and more advertising shifted to the digital world, news outlets found themselves “competing for an increasingly smaller share of those dollars.” As a result, even as news outlets fought a battle against an increasingly partisan readership, it was also fighting a war on a different front: namely, against the impact and influence of technology companies and social media platforms. According to the conclusions in Pew’s 2016 report:

  • It has been evident for several years that the financial realities of the web are not friendly to news entities, whether legacy or digital only. There is money being made on the web, just not by news organizations. 
  • Increasingly, the data suggest that the impact these technology companies are having on the business of journalism goes far beyond the financial side, to the very core elements of the news industry itself. In the predigital era, journalism organizations largely controlled the news products and services from beginning to end, including original reporting; writing and production; packaging and delivery; audience experience; and editorial selection. Over time, technology companies like Facebook and Apple have become an integral, if not dominant player in most of these arenas, supplanting the choices and aims of news outlets with their own choices and goals. 
  • The ties that now bind these tech companies to publishers began in many ways as lifelines for news organizations struggling to find their way in a new world. First tech companies created new pathways for distribution, in the form of search engines and email. The next industry overlap involved the financial model, with the creation of ad networks and app stores, followed by developments that impact audience engagement … Now, the recent accusations regarding Facebook editors’ possible involvement in “trending topics” selections have shined a spotlight on technology companies’ integral role in the editorial process.

Meanwhile, as the end of Obama’s second term neared, the lines of partisan perception had been drawn: CNN, MSNBC, The New York Times, The Washington Post, and many other news outlets were firmly perceived as “liberal.” Fox News, Breitbart, The New York Post and the Wall Street Journal were counted as “conservative.”

By June 16, 2015, when Trump descended an escalator in Trump Tower to announce his candidacy for the 2016 presidential election, the opposing forces of technology companies and news outlets were about to combust.

Things go boom

You know what happened next:

  • The bot attacks from Russia that manipulated social media, influenced the very facts Americans used to vote, and continue to be a clear and present danger to American democracy.
  • Fox News effectively becoming a part of the Trump campaign. Indeed, Fox News, Trump’s news outlet of choice during his campaign, stopped using its motto “fair and balanced” in August 2016 – one month after Trump was confirmed as the Republican presidential nominee. In June 2017, five months after Trump’s inauguration, Fox News officially dropped the motto.

Meanwhile, we’ve seen new phrases that shatter our understanding of once-simple concepts such as truth or facts. Trump advisor Kellyanne Conway coined the phrase “alternative facts” on Jan. 21, 2017, in an effort to defend false estimates by then White House press secretary Sean Spicer on the size of the crowd gathered in Washington for Trump’s inauguration.

And, of course, there is “fake news,” which was popularized by Hillary Rodham Clinton in a speech on Dec. 8, 2016. While refuting the Pizzagate conspiracy theory,  she noted “the epidemic of malicious fake news and false propaganda that flooded social media over the past year. It’s now clear that so-called fake news can have real-world consequences. This isn’t about politics or partisanship. Lives are at risk… lives of ordinary people just trying to go about their days, to do their jobs, contribute to their communities.”

Less than a month later, then-President-elect Trump made use of the phrase during press conference in which he said “you’re fake news” to CNN reporter Jim Acosta.  A day or so later, on Jan. 11, 2017, he tweeted (in all-caps) about various news investigations into his political and business dealings, “FAKE NEWS – A TOTAL POLITICAL WITCH HUNT!” Since then, he’s made “fake news” a standard response to virtually any news report that casts him in a negative light.

And that brings us to today, when Americans are increasingly growing wary of the role social media platforms play in delivering the news… particularly when those platforms have been shown to be receptive to inflammatory points of views. The current ad boycott of Facebook is but one example.

The reach of technology companies, political partisanship, and social media platforms has had a definite impact on modern journalism. Unlike previous technological advances such as radio and television, digital technology’s influence on news outlets has changed the very nature of journalism, as well as how journalism is perceived. Indeed, even as more than half of Americans get their news from social media, a Pew Research Center study shows that:

  • Almost all Americans – about nine-in-ten (88%) – recognize that social media companies have at least some control over the mix of news people see.
  • About six-in-ten (62%) say social media companies have too much control over the mix of news that people see on their sites, roughly four times as many as say that they don’t have enough control (15%).
  • Just 21% say that social media companies have the right amount of control over the news people see.
  • While social media companies say these efforts are meant to make the news experience on their sites better for everyone, most Americans think they just make things worse. A majority (55%) say that the role social media companies play in delivering the news on their sites results in a worse mix of news.
  • About eight-in-ten U.S. adults (82%) say social media sites treat some news organizations differently than others
  • As large majorities say that the tone of American political debate has become more negative in recent years, about a third of U.S. adults (35%) say that uncivil discussions about the news are a very big problem when it comes to news on social media. Additionally, about a quarter (27%) say that the harassment of journalists is a very big problem associated with news on social media.

The questions that remain are simple:

  • Will we continue to tolerate the outsized influence of technology companies on journalism?
  • Should social media companies be legally required to police the accuracy of their content?
  • Should social media platforms ban all political advertising?
  • Will Americans see the value of paying a fee for news content, as long as the content is objective and of high quality?
  • And, finally, will Americans see past their own prejudices to force news outlets to present news that is not only factually accurate, but free from bias?

Time will tell.

About the author

Melvin Bankhead III is the founder of MB Ink Media Relations, a boutique public relations firm based in Buffalo, New York. An experienced journalist, he is a former syndicated columnist for Cox Media Group, and a former editor at The Buffalo News.

 

Note from MTN Consulting

MTN Consulting is an industry analysis and research firm, not a company that typically comments on politics. We remain focused on companies who build and operate networks, and the vendors who supply them. That isn’t changing. However, we are going to dig into some of the technology issues related to these networks and networking platforms which are having (or will have) negative societal effects.

Image credits: (1) iStock, by Getty Images (cover); (2) Will Francis; (3) CBS; (4) Shutterstock; (5) CNN‘s Twitter feed.

Blog Details

DIGITAL PRIVACY, PART TWO: WHAT CAN WE DO ABOUT OUR DATA’S PRIVACY?

As I indicated in Part One of these reports on digital privacy, digital tools such as facial recognition are used for many beneficial purposes. However, as I demonstrated, those tools are also extremely easy to abuse, particularly in the hands of governments and the law enforcement community.

One of the films of the blockbuster film series, the Marvel Cinematic Universe, demonstrated the threat in a most capable manner.

Reel life reflecting real life

In “Captain America: The Winter Soldier,” Steve Rogers, the titular super-soldier, finds himself in a race against time to stop a deadly conspiracy that is fueled by abuse of digital surveillance. It’s discovered that the government security agency SHIELD has been infiltrated by a terrorist group known as Hydra. As Hydra scientist Arnim Zola explains, “Hydra was founded on the belief that humanity could not be trusted with its own freedom. What we did not realize is that if you try to take that freedom, they resist. (World War II) taught us much. Humanity needed to surrender its freedom willingly. After the war … the new Hydra grew. For 70 years, Hydra has been secretly feeding crises, reaping war. … Hydra created a world so chaotic that humanity is finally ready to sacrifice its freedom to gain its security.”

Hydra infiltrator Jasper Sitwell explains how digital information is being used to determine the targets for the imminent lethal uprising. “The 21st century is a digital book. Zola taught Hydra how to read it. Your bank records, medical histories, voting patterns, emails, phone calls, your damn SAT scores. Zola’s algorithm evaluates people’s past to predict their future. … And then the Insight helicarriers [heavily armed aerial transports] scratch people off the list a few million at a time.”

Yeah, that’s a frightening scenario: “Big Brother” writ large. Depending on your age and education, you might wonder what the hit CBS television show has to do with digital privacy. After all, the reality TV show is designed for entertainment. But the phrase “Big Brother” debuted in George Orwell’s 1949 novel “1984,” in which a totalitarian government maintains control through constant electronic surveillance of its citizens. Today, the phrase “Big Brother” is “a synonym for abuse of government power, particularly in respect to civil liberties, often specifically related to mass surveillance.”

And, as I demonstrated in the previous essay, digital information, particularly facial recognition, can easily be misused and abused … as demonstrated by these most recent examples, which were made public after the last essay was published:

  • In Michigan, Robert Williams, a Black man, was arrested by Detroit police in his driveway. Police thought Williams was a suspect in a shoplifting case. However, the inciting factor for the arrest was a facial recognition scan, which had incorrectly suggested that Williams was the suspect. And while the charges were later dropped, the damage was done: Williams’ “DNA sample, mugshot, and fingerprints — all of which were taken when he arrived at the detention center — are now on file. His arrest is on the record,” says the American Civil Liberties Union, which has filed a complaint with Detroit police department.
  • In May, Harrisburg University announced that two of its professors and a graduate student had “developed automated computer facial recognition software capable of predicting whether someone is likely going to be a criminal. With 80 percent accuracy and with no racial bias, the software can predict if someone is a criminal based solely on a picture of their face.” On June 23, over 1,500 academics condemned the research paper in a public letter. In response, Springer Nature will not be publishing the research, which the academics blasted as having been “based on unsound scientific premises, research, and methods which … have [been] debunked over the years.” The academics also warn that it is not possible to predict criminal activity without racial bias, “because the category of ‘criminality’ itself is racially biased.”

Today, we’ll explore another aspect of digital privacy — namely, how much of a threat your own digital footprint can pose to your security. Because, as has become readily apparent, humanity doesn’t need “to surrender its freedom willingly.” It’s already done it.

I always feel like somebody’s watching me

Not too long ago, my wife and I were relaxing. I was reading a book; she was watching television. She asked me a question about the drug commercial that had just aired, and we laughed while discussing how the “minor” side effects of the drug didn’t sound all that minor. In the midst of our laughter, her phone started talking, telling us all about the drug.

She hadn’t touched the phone, which was sitting beside her on the couch.

I said, “Skynet is real.” She picked up the phone, put it into sleep mode, and set it back down, all without directly looking at it. And then, of course, for the next week or so, her supposed interest in the drug influenced what kind of ads popped up on her phone and laptop.

They say it’s not being paranoid if people really are out to get you. And they are out to get you … or your data, anyway.

The thing is, both of us have voice recognition software on our phones. With it, we can instruct our phones to open a specific app, call a person, search Google for information, and various other tasks.  It just never occurred to us that the phones could listen in without our specifically activating the voice-recognition software.

But we’re not the only ones creeped out by our devices’ antics. A few years ago, users of Amazon’s Alexa reported that the AI assistant would abruptly laugh for no apparent reason. Sometimes, the laughter would come in response to a user query. Other times, the user would be sitting silently when Alexa would suddenly chuckle. The laughter disturbed a lot of Alexa users. One user tweeted, “Lying in bed about to fall asleep when Alexa on my Amazon Echo Dot lets out a very loud and creepy laugh… there’s a good chance I get murdered tonight.”

Admittedly, we know that it’s highly unlikely that our phones, or Alexa, are going to pick up a weapon and come after us. While some say the age of Skynet is inching ever closer, most of us realize that it’s not all that likely that all of our machines are going to rise up and wipe us out … the repeated attempts of GPS notwithstanding. (Ever had your GPS tell you to “Turn right” … while you’re in the middle of a bridge over a very wide and deep river? I have!)

They say it’s not being paranoid if people really are out to get you. And they are out to get you … or your data, anyway. Corporations want your data, which fuels their marketing; social media platforms want your data, which fuels their interconnectivity, as well as the demographic data they can use for targeting their ads; the government wants your data, to fuel their research, voting, and criminal justice databases; and hackers want your data so they can steal your money.

The ACLU breaks down its concerns over privacy and technology into the categories of Internet privacy; cybersecurity; location tracking; privacy at borders and checkpoints; medical and genetic privacy; consumer privacy; and workplace privacy.

Internet privacy

In 2019, the Pew Research Center published the results of a survey in which a majority of Americans admitted their belief that their activities — both online and offline —were being monitored by the government and companies. “Roughly six-in-ten U.S. adults say they do not think it is possible to go through daily life without having data collected about them by companies or the government,” the report warned.

Although the report acknowledges that “data-driven products and services are often marketed with the potential to save users time and money or even lead to better health and well-being,” 81 percent of respondents said that “the potential risks they face because of data collection by companies outweigh the benefits, and 66% say the same about government data collection. At the same time, a majority of Americans report being concerned about the way their data is being used by companies (79%) or the government (64%). Most also feel they have little or no control over how these entities use their personal information.”

There are various aspects of Internet privacy:

  • Consumer Online Privacy: One of the concerns that many consumers have is how their data is collected online, and what happens to it afterward. Ever Googled a retail website and then, shortly afterward, ads for that website start popping up in the margins of whatever other website you’re looking at? Your Internet Search Provider likely sold your information, or the website left “cookies” on your computer that allowed it to target you for the ads. Because ISPs are in the perfect position to see everything we do online, Maine regulates how they operate by requiring that they gain permission from users before using their data. Others are using Virtual Private Networks to put barriers between their devices and the ever-watching eyes of the ISPs. Maine is an outlier, though, and VPNs can be inconvenient and costly.
  • Social Networking Privacy: When you’re not at work, you would think that what you post on social media is your own private business. But increasingly, employers, school and the federal government are requiring access to our digital lives. U.S. border enforcement agents are demanding that travelers unlock their devices and provide passwords. Schools are utilizing services that allow them to access students’ devices and social media accounts. The concern about overreach has become so widespread that some states have taken steps to prevent employers from researching the habits and postings of job applicants on social media, or trying to require that employees surrender passwords to their accounts.
  • Cell Phone Privacy: You know from movies, television shows and the news that your digital devices also act as reliable tracking devices. Indeed, recent events alone have shown that the tech can track stolen devices; allow advocacy and voting rights groups to track the movements of protesters (and communicate with them); and allow companies like Venntel can collect and then sell data from citizen’s phones to government agencies, which can lead to warrantless tracking of their activities.
  • Email Privacy: One of the biggest stories in 2016 was the hacking of emails that belonged to the Democratic National Committee and then-presidential candidate Hillary Clinton. Today, concerns remain over just how private our emails really are, creating opportunities for services that give you more control Mozilla is now offering Firefox Relay, which effectively acts as call forwarding in the form of email aliases that are connected to your real account, but doesn’t allow others access to your real account.  Google is also offering new features to make Gmail safer.
  • Cybersecurity: As our reliance on our digital devices continues to grow, and the technology that connects those devices continues to improve, it can be argued that we are increasing the opportunities for hackers to exploit that same dependence. As the prevalence of hacker attacks grow, so does the need to protect computers, databases, electronic systems, mobile devices, networks and servers. A recent poll showed that most companies’ electronic security breaches were the result of poorly planned security infrastructure. Yet, even though U.S. business losses in cybersecurity attacks averaged $1.41 million in 2018, with over 68 million sensitive records exposed in 2019, the United States faces a coming shortage of cybersecurity experts. At a time when 5G is fast becoming the go-to resource of connectivity, it needs to be considered that the expansion of 5G could also lead to a massive expansion of internet-connected devices, which will raise the stakes for cybersecurity even higher. One such concern, from Consumer Watchdog, is that “all the top 2020 cars have Internet connections to safety critical systems that leave them vulnerable to fleet wide hacks,” which could lead to “a 9-11 scale catastrophe.”  

Location Tracking

The very nature of a cell phone requires that the device be tracked from tower to tower to maintain the integrity of calls.  Since mobile companies store that location data, the government can obtain a great deal of information about you from your movements. Similarly, the mobile company might sell that information. By triangulating cell towers, your location data can reveal where you live, your doctor’s office, your school, your workplace, your place of worship, your friends’ homes … the list goes on.

Back in 2013, whistleblower Edward Snowden revealed that the National Security Agency was obtaining almost 5 billion records a day from cellphones around the world. This collection effort allowed U.S. intelligence officials to track phones, the phones’ users, and map out the relationships of the phones’ users to other users and their phones. This meant that people around the world, Americans among them, were caught up in the NSA’s web, where that data was stored … all without a warrant.

However, the pace at which technology evolves means that, for every advance that can be used for oppressive purposes, a counter will shortly follow. In September 2019, protesters in Hong Kong were well aware of the fact that Chinese authorities monitored WiFi and the Internet. They turned to Bridgefy, a Bluetooth-based app that does not use the Internet and, as a result, is more difficult for the Chinese authorities to trace.

Privacy at Borders and Checkpoints

People carry a great deal of information —personal and professional — on their phones and other devices. Typically, they take steps to ensure that said information doesn’t fall into the wrong hands.  For example, my phone contains my emails, as well as access to my various social media accounts.  My communications with my clients are accessible via my laptop and my cell phone.  As a result, I keep my devices pass-coded. However, a growing problem is that of government agents attempting to gain access to travelers’ devices without a warrant. An argument can be made that the Constitutional prohibition on unreasonable search and seizure appears to be under assault, as government agents at border crossings demand access to travelers’ devices.

Medical and Genetic Privacy

What would you do if your employer, acting upon a question from your health insurance company, asked you to submit the results of that DNA testing you had performed via Ancestry.com or 23andMe? Right now, your medical and genetic information is protected under the provisions of the 1996 Health Insurance Portability and Accountability Act (signed by President Bill Clinton), the 2008 Genetic Information Nondiscrimination Act (signed by President George W. Bush). Meanwhile, you are protected from being denied health insurance because of pre-existing conditions by the 2010 Affordable Care Act (signed by President Barack Obama). But these laws, intended to protect Americans from predatory health care, may not be as strong as we think they are:

  • The ACA, which is more commonly known as “Obamacare,” has been under relentless attack by the Trump administration. Indeed, during the writing of this report, the Trump administration has asked the U.S. Supreme Court to “invalidate” the ACA. If it falls, insurance companies could again deny coverage to those with pre-existing conditions. It should be noted that a 2017 U.S. Department of Health and Human Services analysis estimated that between 61 million and 133 million Americans have a preexisting condition.
  • In 2017, a committee in the Republican-controlled House of Representative approved HR 1313, “a bill that would let companies make employees get genetic testing and share that information with their employer — or pay thousands of dollars as a penalty.” The bill died from inaction after Democrats won the House in the 2018 midterm elections.
  • In 2018, police in California identified a serial killer by matching his DNA with DNA from members of his family who had signed up for a genealogy website called GEDmatch. Since then, questions have been raised about the accessibility of such data to law enforcement agencies.
  • Consumer genetics testing companies frequently sell your data, often to pharmaceutical companies. This is a modern spin on the case of Henrietta Lacks, a poor Black woman who was treated for cervical cancer in 1951. Researchers discovered that her cells were incredibly resilient, and where other cancer patients’ cell samples would die, Lacks’ cells would continue to live and thrive. Without Lacks’ permission, researchers used her cells to conduct research into “the effects of toxins, drugs, hormones and viruses on the growth of cancer cells without experimenting on humans. They have been used to test the effects of radiation and poisons, to study the human genome, to learn more about how viruses work, and played a crucial role in the development of the polio vaccine.” Although the discovery was a boon to the worlds of science and medicine, the fact remains that Lacks’ medical and genetic information was used without her permission in what is now an industry worth more than $1 billion annually, as of 2019.
  • The GINA law bans employers and health care companies from using genetic data to deny you coverage or employment. However, “companies with fewer than 15 people are exempt from this rule, as are life insurance, disability insurance, and long-term care insurance companies — all of which can request genetic testing as part of their application process.”
  • What happens if companies make your medical or genetic information part of the interview process? Granted, some state and federal laws protect against genetic discrimination, but those laws do not cover everything.

Consumer Privacy

I mentioned earlier that companies want your data for their marketing. Indeed, it’s been shown that Facebook, for example, looks at its customers as less like people and more like products to be sold to advertisers. A Vermont law forced some transparency on companies that sell our information, but very little is actually known about who has access to our information, and what happens to it after it is sold. California has taken steps to address that lack of knowledge, but it is too early to see what kind of impact the law is having.

…take a closer look at the various apps you keep on your devices. How much access do those apps have to your private information? For example, do you really need to grant “Candy Crush” access to your microphone, camera, and location?

Workplace Privacy

When you’re at work, you likely don’t expect to have privacy. A 2018 study showed that 50 percent of companies monitor their workers’ emails and social media accounts, “along with who they met with and how they utilized their workspaces.” Fast forward a year, and 62 percent of companies were “leveraging new tools to collect data on their employees.” And even in the current work-from-home reality of COVID-19, employers are still keeping an eye on their workers. For example, random screenshots of your workers’ screens will tell you what they’re actually doing. Indeed, “monitoring software can track keystrokes, email, file transfers, applications used and how much time the employee spends on each task.” Also, if you ever use your personal phone for business purposes? You could be risking all of your personal data should your employment be terminated.

A hopeless situation?

Earlier, I mentioned a 2019 Pew Research Center study showing that “roughly six-in-ten U.S. adults” believed they were being monitored by the government and companies., and that they “do not think it is possible to go through daily life without having data collected about them by companies or the government.” The report also noted that most Americans feel “they have little or no control over how these entities use their personal information.”

With that information as a backdrop, it is important to realize that what may seem like a hopeless situation actually is an opportunity. Granted, U.S. laws on privacy have fallen behind the pace of technology, and it has been shown that those in charge of regulating technology and social media platforms often do not understand the very technologies they’ve been charged with monitoring. As a 2018 Brookings Institution paper warns:

“This is where we are with data privacy in America today. More and more data about each of us is being generated faster and faster from more and more devices, and we can’t keep up. It’s a losing game both for individuals and for our legal system. If we don’t change the rules of the game soon, it will turn into a losing game for our economy and society.”

Indeed, news reports seem to bear this out. From the Snowden revelations in 2013, to the 2017 Equifax breaches that exposed the data of nearly 146 million Americans, to the 2018 Cambridge Analytica scandal and beyond, more and more attention is being paid to the subject of data privacy. But that just means that we’re more aware. What can we actually do about it?

Recommendations

First of all, I strongly recommend that you make use of the one aspect of your digital data that you do control —namely, your device privacy settings.  Some of the data sharing our devices perform is within our ability to control. However, it is important to remember than many aspects of it are not.

Second, take the time to actually read the privacy policies of the digital devices and online services that you use. As the Brookings Institution has noted, perhaps the concept of “informed consent was practical two decades ago, but it is a fantasy today. In a constant stream of online interactions, especially on the small screens that now account for the majority of usage, it is unrealistic to read through privacy policies. And people simply don’t.” The fact that so many people don’t bother to read those polices effectively makes them complicit when their own data is used against them.

Third, take a closer look at the various apps you keep on your devices. How much access do those apps have to your private information? For example, do you really need to grant “Candy Crush” access to your microphone, camera, and location?

And then, of course, are the ideas that you could demand from digital service companies.

Pitch these ideas to lawmakers, activists, and journalists to force companies to discuss them:

  • Demand that companies establish easier ways to manage your devices’ privacy settings
  • Demand that companies be transparent over how they store, and if they share, your information.
  • Demand “real name” requirements for social media, in which the accounts can only be opened with a photocopy of a government-issued ID card. Admittedly, there would be a loss of privacy here, but it would lead to a decrease in the frequent “mob” mentality we see online, and an increase in the accountability of account users for their content.
  • Companies should have a standardized form governing whether to grant permission to companies to sell or share their personal data.
  • Question lawmakers to ensure that they understand the technologies they’re attempting to regulate.
  • Demand that, if someone is cleared of criminal charges, any biometric data that was gathered as a result of the arrest be deleted within 30 days.
  • Require that greater scrutiny be given to digital applications coming from foreign countries that have a history of intellectual property theft.
  • Demand that lawmakers reveal if they have any financial ties to technology companies
  • Require technology companies to create more secure privacy settings for minors using social media.

Admittedly, some of the above suggestions may be long shots, particularly given how much money technology companies and their lobbyists have at their disposal. This would seem an impossible task, taking back control of our digital data.

However, to put it into a historical context: Women’s right to vote, the end of slavery, and same-sex marriage were once considered impossible tasks, too.

About the author

Melvin Bankhead III is the founder of MB Ink Media Relations, a boutique public relations firm based in Buffalo, New York. An experienced journalist, he is a former syndicated columnist for Cox Media Group, and a former editor at The Buffalo News.

 

Note from MTN Consulting

MTN Consulting is an industry analysis and research firm, not a company that typically comments on politics. We remain focused on companies who build and operate networks, and the vendors who supply them. That isn’t changing. However, we are going to dig into some of the technology issues related to these networks and networking platforms which are having (or will have) negative societal effects.

Image credit: iStock, by Getty Images