Executive Briefing March 2, 2018

TOP STORIES — Microsoft v. DoJ Supreme Court Oral Arguments

February 27th represented another milestone in the “Microsoft Warrants Case” as both the US Government and Microsoft were in the Supreme Court for oral arguments.  There was extensive coverage on the proceedings that is highlighted below.   I encourage you to read the VFI Blog which provides a summary as well as Microsoft President and Chief Legal Officer Brad Smith’s blog entitled “A Problem Congress Should Solve.”  Related, I have include an article below from Reuters about potential EU legislation to “force technology companies to turn over customers’ personal data when requested even if it is stored on servers outside the bloc.”

 

Reuters Europe Seeks Power to Seize Overseas Data in Challenge to Tech Giants

BRUSSELS (Reuters) – The European Union is preparing legislation to force companies to turn over customers’ personal data when requested even if it is stored on servers outside the bloc, a position that will put Europe at loggerheads with tech giants and privacy campaigners. The EU executive has previously indicated it wanted law enforcement authorities to be able to access electronic evidence stored within the 28-nation bloc. But the scope of the planned legislation will extend to data held elsewhere, according to two sources with direct knowledge of the matter.

TOP QUOTES

  • “Because, in fact, I think that what this case makes clear, and what this morning has further made clear, is that we need 21st century laws to protect 21st century technology.”

– Microsoft President Brad Smith

  • “If Congress takes a look at this, realizing that much time and innovation has occurred since 1986, it can write a statute that takes account of various interests.”

 – Supreme Court Justice Ruth Bader Ginsburg

  • “In an ideal world, the Act becomes law well before the Supreme Court rules… In a less ideal world, the Supreme Court rules in favor of the government, and directs to the lower courts to engage in a robust comity analysis in cases that involve a foreign target located outside the United States and conflict of laws… And in the least ideal world, Microsoft wins – and we are launched into a world in which the location of data controls access, U.S. law enforcement is unable to access data based simply on where the 0s and 1s happen to be held, and governments are incentivized to pass mandatory data localization laws as a means of controlling access.”

 – Jen Daskal, associate professor of law, American University

  • “The CLOUD Act bridges the divide that sometimes exists between law enforcement and the tech sector by giving law enforcement the tools it needs to access data throughout the world while at the same time creating a commonsense framework to encourage international cooperation to resolve conflicts of law.”

 – Senator Orrin Hatch (R-UT), lead sponsor of the CLOUD Act

HILL UPDATE

ICIT ICIT Analysis: The CLOUD Act – Immediate Passage of the CLOUD Act Ensures Unambiguous Protection of Privacy and National Security

The Institute for Critical Infrastructure Technology (ICIT) published a report, entitled “The CLOUD Act – Immediate Passage of the CLOUD Act Ensures Unambiguous Protection of Privacy and National Security.” Written by ICIT co-founder James Scott, the report analyzes, among other items, that the CLOUD Act is “meaningful bipartisan legislation” that will encourage U.S. law enforcement to enter into bilateral agreements with other countries to more quickly access evidence data stored abroad.

Wired Bipartisan Bill Aims to Prove the Value of Broadband Access for All

Democratic representative Ro Khanna of California and a bipartisan group of lawmakers, including fellow California Democrat Anna Eshoo and Pennsylvania Republicans Ryan Costello and Brian Fitzpatrick, introduced a bill to prove just how big a return on investment broadband access can provide for a community. Called the Measuring the Economic Impact of Broadband Act of 2017, it proposes that the Department of Commerce’s Bureau of Economic Analysis study the effect of broadband access on employment, income, education, and population growth, among other things.

ARTICLE SUMMARY

Forbes The Feds Can Now (Probably) Unlock Every iPhone Model In Existence — UPDATED

Forbes released a report disclosing findings that Cellebrite, an Israel-based firm, reportedly has the capability to unlock most iPhones on the market, including the latest iPhone X, generating subsequent reporting from FOX Business, Ars Technica, TechCrunch, and CNET, among others. Outlets referenced the news as a major development for law enforcement, particularly since that security firm is contracted by several U.S. law enforcement agencies, including the FBI and Immigration and Customs Enforcement.

Washington Post China Grumbles at Trump’s Tariff Moves But Isn’t Expected to Start a Trade War Over Them

BEIJING — China urged the United States on Friday to abide by multilateral trade rules and not do anything to damage the fragile global economic recovery, after President Trump announced his intention to impose import tariffs on steel and aluminum. China is the world’s dominant steel producer, but experts said the impact of Trump’s decision to slap 25 percent tariffs on steel imports, and 10 percent on aluminum, won’t have a big impact on China since it only accounts for 2 percent of U.S. imports. The government in Beijing is not about to start a trade war over the tariffs, they added.

NPR Uber, Lyft Drivers Earning a Median Profit of $3.37 Per Hour, Study Says

The vast majority of Uber and Lyft drivers are earning less than minimum wage and almost a third of them are actually losing money by driving, according to researchers at the Massachusetts Institute of Technology. A working paper by Stephen M. Zoepf, Stella Chen, Paa Adu and Gonzalo Pozo at MIT’s Center for Energy and Environmental Policy Research says the median pretax profit earned from driving is $3.37 per hour after taking expenses into account. Seventy-four percent of drivers earn less than their state’s minimum wage, the researchers say.

Washington Examiner Ajit Pai’s FCC can double down on deregulation

Casey Given, executive director of Young Voices, posted an op-ed in Washington Examiner advocating for TV white space deregulation. The piece noted that “Microsoft has been the industry leader in spearheading white space technology, successfully connecting more than 185,000 people in 20 countries” and that “these positive results could be multiplied in the states if only the FCC updated its spectrum rules.”

KTVH TV White Spaces may offer more Internet access for rural Montana

Highlighted a round-table discussion by Connect Americans Now in Helena, Montana. Attendees included representatives from The Montana Rural Education Association, Montana Telecommunication Association, Helena Chamber of Commerce, Senator Daines’ Office, and Congressman Gianforte’s Office.

CNBC Facebook CFO David Wehner Says New EU Privacy Rules Could Impact Daily User Numbers

Facebook CFO David Wehner said Wednesday that pending online privacy changes in the European Union could impact how many people use the service in that region every day. There “could be some implication on DAUs (daily active users)” because of the coming regulations, Wehner told investors at the Morgan Stanley Technology, Media and Telecom conference. Investors “may want to watch that,” Wehner said.

Washington Post Trump Lashes Out at Sessions Over Alleged Surveillance Abuses

President Trump on Wednesday lashed out again at his attorney general, questioning why the man he picked as the country’s top law enforcement official was relying on the Justice Department’s inspector general to review alleged surveillance abuses. In a Twitter message that took some liberties with the facts, Trump wrote, “Why is A.G. Jeff Sessions asking the Inspector General to investigate potentially massive FISA abuse. Will take forever, has no prosecutorial power and already late with reports on Comey etc. Isn’t the I.G. an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!”

Gizmodo Europe to Facebook and Google: Remove Illegal Content in One Hour (We’re Serious This Time!)

The European Union really wants tech companies to get their shit together when it comes to policing content on their platforms. On Thursday, it issued new guidelines for how companies like Twitter, Google, and Facebook should handle illegal content on its European websites: quickly, proactively, and with human oversight. The European Commission, the EU’s executive body, recommended that tech companies scrub any illegal content—including terrorist material, child pornography, and hate speech—from their platforms within an hour of it being reported by law enforcement officials. Additionally, the Commission said it would like to see greater use of both “proactive measures, including automated detection” and humans supervisors “to avoid unintended or erroneous removal of content which is not illegal.”

Bloomberg Amazon, Apple Struggle to Sit Out NRA Gun-Control Debate

Gun-control activists are demanding that Amazon.com Inc. Chief Executive Officer Jeff Bezos do something he has carefully avoided: pick a side in a hot-button political debate. The online retailer, along with Apple Inc., Roku Inc. and other video streaming services, is facing pressure from customers protesting any corporate relationship with the National Rifle Association in the aftermath of a Florida school shooting that killed 17 people. Even though it doesn’t sell guns or ammunition, Amazon is taking much of the heat. Angry consumers started using the hashtag #StopNRAmazon on Twitter, which surfaced last week with customers threatening to cancel their $99-a-year Prime subscriptions.

TechCrunch Facebook Should Disclose and Limit Pricing for Political Campaign Ads

An interesting report by Antonio García Martínez at Wired on the Facebook ad machinery in play during the 2016 election highlighted an issue that I hadn’t considered before: that Facebook’s ad marketplace gave a huge pricing advantage to one candidate over the other. It seems like a no-brainer in retrospect that these pricing differences should at the very least be made public in the case of political contests, and arguably should be limited in the way political ads are elsewhere.

TechCrunch The FCC’s revamped internet speed map lets you covet nearby exotic broadband

Last week, the FCC released a new official map of broadband access based on agency data. The map is based on the forms submitted to the FCC by broadband providers.

THINK TANK/TECH TRADE ASSOCIATION HIGHLIGHTS

Americans for Tax Reform (ATR)

  • Blog post on 5G: Federal affairs manager Katie McAuliffe wrote, “America is and can remain the leader in Fifth Generation wireless technology (5G) development and deployment as long as regulators practice regulatory humility – taking a right sized role and stepping out of the way when appropriate.” She added that it “is critical that we are the first in the race to be 5G ready, and ensure that every American across the country has access to cheap, competitive, and lightening fast broadband services.” (ATR BLOG – Commissioner Carr Brings Us One Step Closer to Being 5G Ready, By Katie McAuliffe, February 28, 2018)

BSA | The Software Alliance

  • Multiple press quotes on the Microsoft search warrant case:
    • Vice President for Global Policy Aaron Cooper stated that “it was apparent the justices were struggling with how to apply 1980s law to a tech issue.” He also noted “the bipartisan support for the Cloud Act, and [the] Microsoft and DOJ back passage.” He added that the “question now is how quickly Congress acts, and whether the case will be rendered moot.” (COMMUNICATIONS DAILY – Supreme Court Oral Argument on Microsoft Case Touches on Cloud Act, By Karl Herchenroeder, February 28, 2018)
    • Cooper also stated in the Wall Street Journal, “If the court rules in favor of Microsoft, it’s likely to be more difficult for law enforcement to obtain digital evidence from overseas…Such a ruling could also prompt criminals or other bad actors to store their data overseas.” On the other hand, he noted that “If the court rules in favor of law enforcement, however, technology companies may find it more difficult to do business abroad, and may have to violate one country’s laws to comply with those of another.” (THE WALL STREET JOURNAL – Microsoft Case May Shape Law Enforcement’s Influence Over Global Network Architecture, By Steve Norton, February 27, 2018)
    • Senior policy director Tommy Ross “urge[d] Congress to act before the [Microsoft] case is decided.” He stated, “The ideal time to compromise on a solution is when neither side knows what the verdict will be.” (AXIOS – Tech firms want Congress to fix cross-border data access laws, By Joe Uchill, February 26, 2018)

FreedomWorks

  • Statement on 5G: President and CEO Adam Brandon stated, “The expansion of private-sector broadband in America has created countless jobs and improved the quality of life for millions of Americans across the country. This happened despite the many outdated infrastructure regulations that were in place, which hamper the deployment of next generation technologies.” He added, “Reforming our regulatory structure surrounding broadband infrastructure will ensure the U.S. leads the way when it comes to 5G deployment.” (FREEDOMWORKS STATEMENT – FreedomWorks Applauds Commissioner Carr’s Plan to Foster 5G Rollout and Innovation, By Jon Meadows, March 1, 2018)

The Heritage Foundation

  • Blog post on NAFTA: Research coordinator Patrick Tyrrell wrote, “In debating an updated NAFTA trade agreement, we should not lose sight of why we have these agreements and how we grow jobs and our economy.” Moreover, “It is time to do the things we know work, enhance economic freedom, and let companies compete on their own merits. With government enabling their successes rather than their failures, American companies will be good enough to outperform any competitor.” (THE DAILY SIGNAL – How to Revamp NAFTA to Make America the Most Attractive Business Destination, By Patrick Tyrrell, February 27, 2018)

TechNet

  • Statement on Microsoft search warrant case: “It has been over three decades since Congress passed the Stored Communications Act, and neither policymakers nor our laws have kept up with the transformative innovations that have reshaped the way we communicate and the global nature of digital trade.  We hope the Supreme Court will agree with Microsoft’s position and take an important step to safeguard citizens’ privacy rights online and provide greater clarity on how this law applies today,” President and CEO Linda Moore stated. “However, the best approach on this issue is for Congress to finally act and modernize our laws.  Congress should pass the CLOUD Act, which safeguards our citizens’ privacy rights, ensures law enforcement has the tools they need to protect us, and enhances cooperation between governments.” (TECHNET STATEMENT – TechNet Statement on Supreme Court Arguments on International Online Privacy Case, February 27, 2018)

NOTABLE QUOTES

  • “The CLOUD Act is meaningful bipartisan legislation that will empower U.S. law enforcement and authorities in countries that enter into agreements with the government to quickly access essential evidence stored in servers owned by companies that are based in the United States, provided that there is probable cause and warrant to access that information. With support from industry titans including Microsoft and Apple, the CLOUD Act can save lives, preserve international relations, empower law enforcement, and ensure justice for citizens.”

 – James Scott, co-founder & senior fellow, Institute for Critical Infrastructure Technology

  • “An adverse ruling against Microsoft would be an adverse ruling against the entire cloud ecosystem, and every app on your smartphone, every transaction you have with your bank, your healthcare provider.”

– Morgan Reed, president, ACT, The App Association 

  • “I don’t think the American public writ large fully appreciates what universal broadband capacity would mean for our country. The data that might come from this, I think will create a more compelling public policy imperative.”

– Rep. Ryan Costello (R-PA)

  • “Seen in this light, Microsoft has several important implications for civil litigators. First, the bar should watch how the court grapples with the implications of its Morrison extraterritoriality jurisprudence in the context of a discovery (as opposed to liability) rule. Second, consider how the court wrestles with the balancing test in Section 443 of the Restatement. The court could weigh heavily the presence of the executive branch, or it could express its displeasure with the test altogether (given, among other things, the inherent unpredictability of balancing tests). That too could, once again, recalibrate the balance between discovery and comity that informs discovery disputes in a variety of international civil litigation.”

– Peter Rutledge, dean & Amanda Newton, student of law, University of Georgia School of Law 

  • “The internet now is central to any sort of business.  In order to have a first world economy we cannot have third-world internet.  Right now we think that if we adopt TV White Spaces and use it effectively with fiber and satellite we can cut the cost of bridging the digital divide by 80%.”

– Hunter Ross, Connect Americans Now

SOCIAL MEDIA HIGHLIGHTS