Max-Q: This week in space

Space is becoming a major area of startup and commercial investment, and so I’ve decided to start providing a weekly round-up of the biggest news in aerospace, space science and space-related technologies. Let me know if you appreciate this or have suggestions, and I’ll make sure it evolves as needed to be useful resource.

This week, there was an abundance of spacesuit news, and signs from multiple operators that there’s going to be an orbital traffic boom in the immediate future. Also, we’re heading into the annual International Astronautical Congress (IAC) this coming week, so expect a lot more news starting tomorrow.

1. NASA unveils its Artemis-generation spacesuits

NASA showed off a brand new generation of spacesuit, including the one that the first American woman and next American man to set foot on the Moon will don for that historic moment. The new Artemis suits are designed to scale from essentially the smallest to the largest possible adult human frame, which NASA touts as a way to make the astronaut program more accessible to a wider range of Americans. The agency should be going out of its way to fix that, because of what happened that led to item #2 this week.

For the first time, NASA is looking to outsource the full production of these Artemis-generation spacesuits (including the Orion survival suit, which was also revealed today and will be worn only during flight aboard the Orion capsule). To that end, it has put out a request for input from industry about their design and development ahead of setting up a proper RFP.

2. NASA astronauts Christina H. Koch and Jessica Meir complete historic first all-woman spacewalk

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NASA astronauts Christina H. Koch and Jessica Meir

As I alluded above, there was a very good reason that NASA really emphasized how inclusive its Artemis suit designs are: The agency had to cancel a first all-woman spacewalk earlier this year because it didn’t have the right amount of properly sized spacesuits on board the International Space Station. It sent one up in June, however, and that historic moment happened this past week, with Koch and Meir performing a roughly seven-hour spacewalk to repair a power controller.

3. SpaceX applies for permission to launch 30,000 more Starlink satellites

That’s on top of the 12,000 it’s already had cleared, which makes for a total potential constellation size of 42,000. That’s about 8x the number of satellites currently in orbit, across all orbital zones. It’s a move that is definitely raising the ire of both industry and space researchers, because it’ll make it a lot more complicated to ensure orbital spacecraft avoid collisions, and it could potentially obscure the view of the stars from Earth. SpaceX says it has taken steps to ensure it can avoid both problems, but not everyone is convinced.

4. Swarm gets the ‘OK’ for its 150-satellite constellation

Meanwhile, startup Swarm has been granted FCC approval to deploy its own, much-smaller constellation of 150 satellites. Swarm isn’t competing directly with SpaceX’s Starlink – it wants to provide low-bandwidth IoT connectivity. And while it isn’t looking to put up a huge volume of spacecraft, there was some concern that its toaster-sized satellites might be too small to track and present a risk that way.

5. Rocket Lab’s swap launch is a success

New Zealand-born and lately U.S.-headquartered Rocket Lab was successful in launching its fifth Electron rocket this year. The startup’s success was more a proof point for its business model than its technology, however, since the payload that flew aboard this mission was actually one that wasn’t slated to go up until much later in the queue. Rocket Lab’s original client for this one had to drop out due to unfortunate circumstances, and Rocket Lab was able to get client Astro Digital an earlier ride. This kind of late-stage payload swap has not typically been a strength of the established commercial space launch industry.

6. Under Armour built some fancy tracksuits for space

IMG 20191016 103752 1 1Richard Branson’s Virgin Galactic will begin ferrying wealthy paying tourists to the very edge of space next year, if all goes to plan, and now we know what they’ll be wearing when they do: Under Armour. The sportswear company and Branson’s space enterprise unveiled the new suits at a flashy special event featuring the first tourists who have reserved $250,000 tickets aboard Virgin Galactic’s atmosphere-skimming spacecraft.

7. How Lockheed Martin’s Venture arm spends its $200 million in available funding

Lockheed Martin has been in the commercial space business since there has been a commercial space business to be in, and around a decade ago it established a corporate venture fund to make strategic bets on startups. I sat down with the fund’s GM and Executive Director J. Christopher Moran to talk about what the fund looks for in startups – and the industry giant is a lot more interested in early stage companies that you might have thought. Extra Crunch Subscription required.

Foursquare CEO calls on Congress to regulate the location data industry

The chief executive of Foursquare, one of the largest location data platforms on the internet, is calling on lawmakers to pass legislation to better regulate the wider location data industry amid abuses and misuses of consumers’ personal data.

It comes in the aftermath of the recent location sharing scandal, which revealed how bounty hunters were able to get a hold of any cell subscriber’s real-time location data by obtaining the records from the cell networks. Vice was first to report the story. Since then there have been numerous cases of abuse — including the mass collection of vehicle locations in a single database, and popular iPhone apps that were caught collecting user locations without explicit permission.

The cell giants have since promised to stop selling location data but have been slow to act on their pledges.

“It’s time for Congress to regulate the industry,” said Foursquare’s chief executive Jeff Glueck (shown on the left in the photo above) in an op-ed in The New York Times on Wednesday.

In his opinion piece, Glueck called on Congress to push for a federal regulation that enforces three points.

Firstly, phone apps should not be allowed to access location data without explicitly stating how it will be used. Apple has already introduced a new location tracking privacy feature that tells users where their apps track them, and is giving them options to restrict that access — but all too often apps are not clear about how they use data beyond their intended use case.

“Why, for example, should a flashlight app have your location data?,” he said, referring to scammy apps that push for device permissions they should not need.

Second, the Foursquare chief said any new law should provide greater transparency around what app makers do with location data, and give consumers the ability to opt-out. “Consumers, not companies, should control the process,” he added. Europe’s GDPR already allows this to some extent, as will California’s incoming privacy law. But the rest of the U.S. is out of luck unless the measures are pushed out federally.

And, lastly, Glueck said anyone collecting location data should promise to “do no harm.” By that, he said companies should apply privacy-protecting measures to all data uses by not discriminating against individuals based on their religion, sexual orientation or political beliefs. That would make it illegal for family tracking apps, for example, to secretly pass on location data to healthcare or insurance providers who might use that data to hike up a person’s premiums above normal rates by monitoring their driving speeds, he said.

For a business that relies on location data, it’s a gutsy move.

But Glueck hinted that businesses like Foursquare would be less directly affected as they already take a more measured and mindful approach to privacy, whereas the fast and loose players in the location data industry would face greater scrutiny and more enforcement action.

“These steps are necessary, but they’re not sufficient,” said Glueck. But he warned that Congress could do “great damage” if lawmakers fail to sufficiently push overly burdensome regulations on smaller companies, which could increase overheads, put companies out of business and have a negative effect on competition.

“There’s no good reason that companies won’t be able to comply with reasonable regulation,” said Glueck.

“Comprehensive regulation will support future innovation, weed out the bad companies and earn the public trust,” he said.

Senate report says Russian election interference ‘invariably’ supported Trump, recommends national PSA

A bipartisan Senate investigation into Russian interference in the 2016 election released today definitively implicates the country in online operations designed specifically to get then-candidate Donald Trump elected. The tactics used were “overtly and almost invariably supportive” of his campaign even to the detriment of other Republicans. The report recommends major chances to how disinformation and election interference are handled in this country.

The bulk of the report, volume 2 of the Intelligence Committee’s investigation of Russian interference (the first arrived in July), focuses on the specifics of the country’s use of social media and other online channels to affect the election. (You can read the full report at the bottom of this post.)

“This campaign sought to polarize Americans on the basis of societal, ideological, and racial differences, provoked real world events, and was part of a foreign government’s covert support of Russia’s favored candidate in the U.S. presidential election,” the report reads at the outset. So much is already known, but the report goes into great detail on the exact means.

More importantly, it officially characterizes what had in many ways only been observed by other parties or alluded to: that “Russia’s favored candidate” was Trump from the beginning and that operations were undertaken specifically to get him and no one else elected.

Another point the report makes, which others had noted before, is that black Americans were of particular interest to the Russian agents.

“No single group of Americans was targeted by IRA information operatives more than African-Americans. By far, race and related issues were the preferred target of the information warfare campaign designed to divide the country in 2016,” the report states. Race issues are certainly always top of mind for many in this country, and clearly Russia perceived that as an opportunity.

While a perusal of our past articles on the topic will give an idea of the interference itself, what is new here is a set of recommendations on how to prevent the 2016 calamity from occurring again next year. Here are the major ones:

“Examine legislative approaches to ensuring Americans know the sources of online political advertisements.”

Political ads in most media are required by law to disclose who paid for them. The same is not true online, and while companies like Facebook are taking steps toward transparency, it seems odd that a private company last seen being unwitting accomplice to foreign election interference should be the vanguard of that change. Perhaps, the committee suggests, we should pass a law.

“Congress should continue to examine the full panoply of issues surrounding social media.”

This is a frustratingly vague recommendation, and its wording suggests Congress is already examining this “panoply.” But it is not specific because there is so much to say. “Privacy rules, identity validation, transparency in how data is collected and used, and monitoring for inauthentic or malign content” are among the several things that deserve continued attention. Between the lines is to be read that Congress is not going to let go of these issues any time soon if the Intel Committee has anything to do with it.

“Reinforce with the public the danger of attempted foreign interference in the 2020 election.”

This recommendation to the Executive seems unlikely to find much purchase, since this administration has been careful to play down the role of Russian and other interference in the election that put them in power. It is hard to imagine any administration doing otherwise, to be honest. But this recommendation may very well filter down to the innumerable agencies and offices that perform all kinds of work under the umbrella of the Executive, and there is only so much that the White House can suppress. If there is, as we all understand there to be, a major risk of foreign interference in the 2020 election, the Executive should acknowledge that publicly or find itself accused of complicity.

“Building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.”

It is worth quoting this in full:

…Disinformation in the long-term will ultimately need to be tackled by an informed and discerning population of citizens who are both alert to the threat and armed with the critical thinking skills necessary to protect against malicious influence. A public initiative-propelled by federal funding but led in large part by state and local education institutions-focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.

It’s hardly realistic to expect an education campaign to have any effect next year, which is why this is a “long-term” approach to taking on disinformation. But how can federal education guidelines or campaigns be taken seriously when the government is itself deeply invested in counterfactual narratives regarding things like climate change? Media literacy is important, but the feds need to learn their own lessons before they can teach them.

“Stand up an interagency task force to continually monitor and assess foreign country’s use of social media platforms for democratic interference.”

Another recommendation to the Executive, this one is half practical and half CYA. A task force is the lip service of the federal government, but even so they have a habit of documenting things that others would rather were swept under the rug. No one would take the proposed “deterrence frameworks” seriously, but they make great ammo for political battles after the fact. If the task force warned of X six months before X caused Y, the politicians who appear to have taken X seriously at the time score valuable politics points.

“Develop a clear plan for notifying candidates, parties, or others associated with elections when those individuals or groups have been the victim of a foreign country’s use of social media platforms to interfere in an election.”

This kind of thing — the knowledge that there’s a hacking collective in Brazil trying to take down Pete Buttigieg or something — should be shared in a structured fashion. This is as much to benefit the target as it is to punish those who would withhold that information.

Furthermore, as Senator Ron Wyden (D-OR) adds in notes at the end of the report, it is not enough to simply say that there were attempts at subversion — the intelligence community must share their “assessment of the goals and intent” of those attempts.

In other words, if we knew what we knew now in 2016, it would be required that the government in some way disclose not only that Hilary Clinton’s campaign was being targeted, but that it was being targeted with the specific goal of getting Donald Trump elected.

Wyden also had some choice words for the social media and tech community.

Until Facebook, Google, and Twitter have developed effective defenses to ensure that their micro-targeting systems cannot be exploited by foreign governments to influence American elections, these companies must put the integrity of American democracy over their profits.

Congress should pass legislation that addresses this concern in three respects. First, the Federal Trade Commission must be given the power to set baseline data security and privacy rules for companies that store or share Americans’ data, as well as the authority and resources to fine companies that violate.those rules, Second; companies should be obligated to disclose how consumer information is collected and shared and provide consumers the names of every individual or institution with whom their data has been shared. Third, consumers must be given the ability to easily opt out of commercial data sharing.

You can read the full report below.

Senate Intel report on Russian election interference (volume 2) by TechCrunch on Scribd

To curb lobbying power, Elizabeth Warren wants to reinstate the Office of Technology Assessment

In a move to correct the imbalance of power between technologically sophisticated corporations and the lawmakers who regulate them, presidential candidate Senator Elizabeth Warren is proposing that Congress reinstate the Office of Technology Assessment.

It’s a move that gets deep into the weeds of how policy making in Washington works, but it’s something that Warren sees as essential to leveling the playing field between well-paid corporate lobbyists who are experts in their fields and over-worked under-staffed congressional members who lack independent analysts to explain highly technical issues.

“Lobbyists are filling in the gaps in congressional resources and expertise by providing Congress information from the perspective of their paying corporate clients. So let’s fix it,” writes Warren.

It’s one of the key planks in Warren’s latest policy proposal and an attempt to tip the scales against corporations and their lobbyists. With the move Warren clearly has her eye on technology companies and their representatives, who often are the very people Congressional lawmakers rely on to explain how rule-making would impact their industries.

“[Members] of Congress aren’t just dependent on corporate lobbyist propaganda because they’re bought and paid for. It’s also because of a successful, decades-long campaign to starve Congress of the resources and expertise needed to independently evaluate complex public policy questions,” Warren writes.

“For every bad faith actor in Congress bought off by the big banks, there are others who are genuinely trying to grapple with the technical aspects of financial reform. But as the issues facing Congress have grown more complex, resources to objectively and independently analyze them have been slashed. Republicans eliminated an independent office of experts dedicated to advising Congress on technical and scientific information,” the Senator says.

The lack of independent analysis stymies Congressional oversight in areas from banking and finance reform, to the oversight of technology companies, to the potential to effectively pass laws that will respond to the threat of climate change. Committees that oversee science and technology have seen their staff levels fall by over 40 percent in the past decade, according to Warren and staff salaries have failed to keep up with inflation, meaning that policymakers in Washington can’t compete for the same level of talent that private companies and lobbyists can afford several times over.

Sen. Warren saw this firsthand when she worked at the Consumer Financial Protection Bureau .

“Financial reform was complicated, and the bank lobbyists used a clever technique: They bombarded the members of Congress with complex arguments filled with obscure terms. Whenever a congressman pushed back on an idea, the lobbyists would explain that although the congressman seemed to be making a good point, he didn’t really understand the complex financial system,” she writes. “And keep in mind, the lobbyists would tell the congressman, that if you get this wrong, you will bring down the global economy.”

The inability of lawmakers to understand basic facts about the technologies they’re tasked with regulating was on full display during the Senate hearings into the role technology companies played in the Russian interference in the 2016 election.

Issues from net neutrality to end-to-end encryption, or online advertising to the reduction of carbon emissions all rely on Congress having a sound understanding of those issues and how regulation may change an industry.

Right now, it’s case of which multi-billion dollar company can buy the best lobbyists — as is the case with Alphabet and Yelp or Facebook and Snap.

Under the auspices of Warren’s anti-corruption plan, the Senator is calling for the reinstatement and modernization of the Congressional Office of Technology Assessment, a significant increase to salaries for congressional staffers and stronger funding for agencies that support congressional lawmaking.

The OTA was created in the seventies to help members of Congress understand science and technology issues that they’d be regulating. Over the tenure of the agency, it created over 750 reports — including two landmark studies on the impacts of greenhouse gas emissions and global warming in the 90s, which brought it to the attention of conservative lawmakers that defunded it in 1995.

At the time, House Speaker Newt Gingrich, said the agency was “used by liberals to cover up political ideology.”

Under Warren’s plan the OTA would be lead by an independent director to avoid partisan manipulation. The newly re-formed agency would have the power to commission its own reports and respond to requests from lawmakers to weigh in on rule-making, help congressional legislators prepare for hearings, and write regulatory letters.

Warren also calls for funding to be increased for the other congressional support agencies — the Congressional Research Service, the Congressional Budget Office, and the Government Accountability Office. Combined these agencies have lost half of their staff.

Money for the increased activities of the agencies would come from a tax on “excessive lobbying”. The . goal would be “to reverse these cuts and further strengthen support agencies that members of Congress rely on for independent information,” according to the Warren plan.

“These reforms are vital parts of my plan to free our government from the grip of lobbyists – and restore the public’s trust in its government in the process,” Warren writes.

America’s largest companies push for federal online privacy laws to circumvent state regulatory efforts

As California moves ahead with what would be the most restrictive online privacy laws in the nation, the chief executives of some of the nation’s largest companies are taking their case to the nation’s capitol to plead for federal regulation.

Chief executives at Amazon, AT&T, Dell, Ford, IBM, Qualcomm, Walmart and other leading financial services, manufacturing and technology companies have issued an open letter to congressional leadership pleading with them to take action on online privacy, through the pro-industry organization, The Business Roundtable.

“Now is the time for Congress to act and ensure that consumers are not faced with confusion about their rights and protections based on a patchwork of inconsistent state laws. Further, as the regulatory landscape becomes increasingly fragmented and more complex, U.S. innovation and global competitiveness in the digital economy are threatened,” the letter says.

The subtext to this call to action is the California privacy regulations that are set to take effect by the end of this year.

As we noted when the bill was passed last year there are a few key components of the California legislation, including the following requirements:

  • Businesses must disclose what information they collect, what business purpose they do so for and any third parties they share that data with.

  • Businesses would be required to comply with official consumer requests to delete that data.

  • Consumers can opt out of their data being sold, and businesses can’t retaliate by changing the price or level of service.

  • Businesses can, however, offer “financial incentives” for being allowed to collect data.

  • California authorities are empowered to fine companies for violations.

There’s a reason why companies would push for federal regulation to supersede any initiatives from the states. It is more of a challenge for companies to adhere to a patchwork of different regulatory regimes at the state level. But it’s also true that companies, following the lead of automakers in California, could just adhere to the most stringent requirements, which would clarify any confusion.

Indeed, many of these companies are already complying with strict privacy regulations thanks to the passage of the GDPR in Europe.

Trump administration bans federal agencies from buying Huawei, ZTE tech

The Trump administration has banned U.S. federal agencies from buying equipment and obtaining services from Huawei and two other companies as part of the government’s latest crackdown on Chinese technology amid national security fears.

Jacob Wood, a spokesperson for the White House’s Office of Management and Budget, was quoted as saying that the administration will “fully comply” with the legislation passed by Congress as part of a defense spending bill passed last year.

CNBC first reported the spokesperson’s remarks.

The new rule will take effect in a week — August 13 — and will also take aim at Chinese tech giants ZTE, Hytera, and Hikvision, amid fears that the companies could spy for the Chinese government. The rule comes in a year before Congress’ mandated deadline of August 2020 for all federal contractors doing business with Huawei, ZTE, Hytera and Hikvision.

The government will grant waivers to contractors on a case-by-case basis so long as their work does not pose a national security threat.

Huawei has long claimed it does not nor can it spy for the Chinese government. Critics, including the government and many lawmakers, say the company’s technology, primarily networking equipment like 5G cell stations, could put Americans’ data at risk of Chinese surveillance or espionage. Huawei has vigorously denied the allegations, despite findings from the U.K. government that gave a damning assessment of the technology’s security.

The company first came to focus in 2012 following a House inquiry, which labeled the company a national security threat.

Spokespeople for Huawei and ZTE did not respond to requests for comment.

Senate Intelligence Committee releases first volume of its investigation into Russian election hacking

The Senate Select Committee on Intelligence today released the first volume of its bipartisan investigation into Russia’s attempts to interfere with the 2016 U.S. elections.

Helmed by Select Committee Chairman Richard Burr, the Republican from North Carolina, and Virginia Democratic Senator Mark Warner, who serves as Vice Chairman, the committee’s report Russian Efforts Against Election Infrastructure,” details the unclassified summary findings on election security. 

Through two and a half years the committee has held 15 open hearings, interviewed over 200 witnesses, and reviewed nearly 400,000 documents, according to a statement and will be publishing other volumes from its investigation over the next year. 

“In 2016, the U.S. was unprepared at all levels of government for a concerted attack from a determined foreign adversary on our election infrastructure. Since then, we have learned much more about the nature of Russia’s cyber activities and better understand the real and urgent threat they pose,” Committee Chairman Burr said in a statement. “The Department of Homeland Security and state and local elections officials have dramatically changed how they approach election security, working together to bridge gaps in information sharing and shore up vulnerabilities.”

Both Sen. Burr and Sen. Warner said that additional steps still needed to be taken.

“[There’s] still much more we can and must do to protect our elections. I hope the bipartisan findings and recommendations outlined in this report will underscore to the White House and all of our colleagues, regardless of political party, that this threat remains urgent, and we have a responsibility to defend our democracy against it.”

Among the Committee’s findings were that Russian hackers exploited the seams between federal and state authorities. State election officials, the report found were not sufficiently warned or prepared to handle an attack from a state actor.

The warnings that were provided by the Federal Bureau of Investigation and the Department of Homeland Security weren’t detailed enough nor did they contain enough relevant information that would have encouraged the states to take threats more seriously, the report indicated.

 More work still needs to be done, according to the Committee. DHS needs to coordinate its efforts with state officials much more closely. But states need to do more as well to ensure that new voting machines have a voter-verified paper trail. 

So does Congress. The committee report underscores that Congress need to evaluate the results of the $380 million in state security grants which were issued under the Help America Vote Act and ensure that additional funding is available to address any security gaps in voting systems and technologies around the U.S.

Finally, the U.S. needs to create more appropriate deterrence mechanisms to enable the country to respond effectively to cyber attacks on elections.

The Committee’s support for greater spending on election security and refining electoral policy to ensure safe and secure access to the ballot, comes as Senate majority leader, Mitch McConnell of Kentucky has blocked two election security measures that were attempting to come before the Senate floor for a vote.

New York Democratic Senator Chuck Schumer, tried to get consent to pass a House bill that requires the use of paper ballots and included new funding for the Election Assistance Commission.

In a statement explaining his rejection of the Bill, McConnell told The Hill, “Clearly this request is not a serious effort to make a law. Clearly something so partisan that it only received one single solitary Republican vote in the House is not going to travel through the Senate by unanimous consent.”

McConnell also rejected a consent motion to pass legislation that would require that candidates, campaign officials, and family members to reach out to the FBI if they received offers of assistance from foreign governments.

‘The Great Hack’: Netflix doc unpacks Cambridge Analytica, Trump, Brexit and democracy’s death

It’s perhaps not for nothing that The Great Hack – the new Netflix documentary about the connections between Cambridge Analytica, the US election and Brexit, out on July 23 – opens with a scene from Burning Man. There, Brittany Kaiser, a former employee of Cambridge Analytica, scrawls the name of the company onto a strut of ‘the temple’ that will eventually get burned in that fiery annual ritual. It’s an apt opening.

There are probably many of us who’d wish quite a lot of the last couple of years could be thrown into that temple fire, but this documentary is the first I’ve seen to expertly unpick what has become the real-world dumpster fire that is social media, dark advertising and global politics which have all become inextricably, and, often fatally, combined.

The documentary is also the first that you could plausibly recommend those of your relatives and friends who don’t work in tech, as it explains how social media – specifically Facebook – is now manipulating our lives and society, whether we like it or not.

As New York Professor David Carroll puts it at the beginning, Facebook gives “any buyer direct access to my emotional pulse” – and that included political campaigns during the Brexit referendum and the Trump election. Privacy campaigner Carroll is pivotal to the film’s story of how our data is being manipulated and essentially kept from us by Facebook.

The UK’s referendum decision to leave the European Union, in fact, became “the petri dish” for a Cambridge Analytica experiment, says Guardian journalist Carole Cadwalladr She broke the story of how the political consultancy, led by Eton-educated CEO Alexander Nix, applied techniques normally used by ‘psyops’ operatives in Afghanistan to the democratic operations of the US and UK, and many other countries, over a chilling 20+ year history. Watching this film, you literally start to wonder if history has been warped towards a sickening dystopia.

carole

The petri-dish of Brexit worked. Millions of adverts, explains the documentary, targeted individuals, exploiting fear and anger, to switch them from ‘persuadables’, as CA called them, into passionate advocates for, first Brexit in the UK, and then Trump later on.

Switching to the US, the filmmakers show how CA worked directly with Trump’s “Project Alamo” campaign, spending a million dollars a day on Facebook ads ahead of the 2016 election.

The film expertly explains the timeline of how CA had first worked off Ted Cruz’s campaign, and nearly propelled that lack-luster candidate into first place in the Republican nominations. It was then that the Trump campaign picked up on CA’s military-like operation.

After loading up the psychographic survey information CA had obtained from Aleksandr Kogan, the Cambridge University academic who orchestrated the harvesting of Facebook data, the world had become their oyster. Or, perhaps more accurately, their oyster farm.

Back in London, Cadwalladr notices triumphant Brexit campaigners fraternizing with Trump and starts digging. There is a thread connecting them to Breitbart owner Steve Bannon. There is a thread connecting them to Cambridge Analytica. She tugs on those threads and, like that iconic scene in ‘The Hurt Locker’ where all the threads pull-up unexploded mines, she starts to realize that Cambridge Analytica links them all. She needs a source though. That came in the form of former employee Chris Wylie, a brave young man who was able to unravel many of the CA threads.

But the film’s attention is often drawn back to Kaiser, who had worked first on US political campaigns and then on Brexit for CA. She had been drawn to the company by smooth-talking CEO Nix, who begged: “Let me get you drunk and steal all of your secrets.”

But was she a real whistleblower? Or was she trying to cover her tracks? How could someone who’d worked on the Obama campaign switch to Trump? Was she a victim of Cambridge Analytica, or one of its villains?

British political analyst Paul Hilder manages to get her to come to the UK to testify before a parliamentary inquiry. There is high drama as her part in the story unfolds.

Kaiser appears in various guises which vary from idealistically naive to stupid, from knowing to manipulative. It’s almost impossible to know which. But hearing about her revelation as to why she made the choices she did… well, it’s an eye-opener.

brit

Both she and Wylie have complex stories in this tale, where not everything seems to be as it is, reflecting our new world, where truth is increasingly hard to determine.

Other characters come and go in this story. Zuckerburg makes an appearance in Congress and we learn of the casual relationship Facebook had to its complicity in these political earthquakes. Although if you’re reading TechCrunch, then you will probably know at least part of this story.

Created for Netflix by Jehane Noujaim and Karim Amer, these Egyptian-Americans made “The Square”, about the Egyptian revolution of 2011. To them, the way Cambridge Analytica applied its methods to online campaigning was just as much a revolution as Egyptians toppling a dictator from Cario’s iconic Tahrir Square.

For them, the huge irony is that “psyops”, or psychological operations used on Muslim populations in Iraq and Afghanistan after the 9/11 terrorist attacks ended up being used to influence Western elections.

Cadwalladr stands head and shoulders above all as a bastion of dogged journalism, even as she is attacked from all quarters, and still is to this day.

What you won’t find out from this film is what happens next. For many, questions remain on the table: What will happen now Facebook is entering Cryptocurrency? Will that mean it could be used for dark election campaigning? Will people be paid for their votes next time, not just in Likes? Kaiser has a bitcoin logo on the back of her phone. Is that connected? The film doesn’t comment.

But it certainly unfolds like a slow-motion car crash, where democracy is the car and you’re inside it.

Congressional testimony reveals some faults in Facebook’s digital currency plans

As Facebook continues to lay the foundation for getting some of the world’s largest payment processing and technology companies a seat at the global monetary policy table, the company faces significant obstacles to enacting its plans from both sides of the Congressional aisle.

In the second of what’s sure to be many (many many many) hearings in front of Congressional committees, David Marcus, the chief executive of Facebook’s new digital payments subsidiary, Calibra, faced hours of questions from Representatives on the House Financial Services Committee about the how and why of Facebook’s digital currency plans.

Facebook’s critics had questions about both sides of the company’s two-pronged approach to transforming the global financial services industry.

Marcus was able to avoid answering some of his toughest questioning by taking advantage of the grey area between Facebook’s role as the chief architect behind Libra (a financial instrument that uses blockchain technology to enable transactions using a digital currency managed by a consortium of private companies) and Calibra (the payments subsidiary that Facebook owns).

Marcus stated in his testimony, Facebook’s plans for Libra are entirely about getting the digital currency that the company is creating recognized by international financial bodies — skirting the oversight of U.S. banking and financial services regulators in favor of Switzerland’s “neutral” approach.

Representatives, rightly, have concerns about each step of the process, so it’s probably best to examine the currency that Facebook is hoping to create with its partners in the Libra Association and the Calibra subsidiary separately.

First, there are significant questions around the Libra Association that Facebook assembled itself, and the regulatory responsibility that Congress and various Federal agencies have to oversee the digital currency that it’s hoping to create.

The structural problems of the Libra Association and its currency

Concerns begin with the independence of the association Facebook selected to be its partners in the cryptocurrency. There are any number of ties between the corporations and investors that are on Libra’s existing governing body and Facebook. The fact that Facebook selected the initial charter members that paid $10 million for the privilege of being co-founders of the currency was not lost on Representatives like Alexandria Ocasio Cortez, the first term representative from New York.

“The membership is open, based on certain criteria,” Marcus said in his testimony responding to a question from Representative Ocasio Cortez about the membership of the Libra Association. “The first 27 members that have joined are companies that have shared that desire to build this network and solve problems.”

Representative Ocasio Cortez responded, “So, we are discussing a currently controlled by an undemocratically selection of largely massive corporations.”

The New York representative wasn’t alone in her criticism of the composition of the Libra Association, questioning whether Facebook would have undue influence over the organization.

Setting aside the independence of the Libra Association, Representatives also had some pertinent questions about the ways in which the currency is structured.

Libra’s currency is set up as a stablecoin whose value is set by the Association and is pegged to a basket of global currencies that provide a hedge against the the currency fluctuating in value as a result of speculative investment. Users pay in a certain amount of currency and receive an amount of Libra that they can spend at participating merchants or companies (a vast network considering that Mastercard, PayPal, and Visa are all participating in the Association).

Given the size of Facebook’s user base (which numbers in the billions), if every user put an average of $100 into the network, the Libra Association would vault into the ranks of the top 20 largest banks in America (assuming $100 billion in assets). That alone would warrant regulatory oversight by any number of Federal agencies, some representatives argued.

They also expressed concern about how the Libra Association and its membership could manipulate currencies and potentially displace the U.S. dollar as the global reserve currency.

“Sovereign currencies should remain sovereign and we do not want to challenge sovereign currencies,” said Marcus in response to a particularly sharp line of questioning. “We just want to augment their capabilities in the way they can be used.”

It’s an engineer’s answer to a question about the social function of currencies. Facebook can use the basket of currency structure to argue that Libra isn’t actually a currency, but instead rests atop of several currencies to provide more stability and access for its users — and make the system function more effectively. But should Libra’s adoption begin to accelerate, the organization behind it would be able to pick currency winners and losers and begin to leverage its holdings to potentially manipulate markets, some representatives feared.

Facebook could destabilize currencies and governments,” said California Rep. Maxine Waters. “Facebook’s entry is troubling because it has already harmed vast numbers of people.”

For some members of the Finance Committee, the structure of the asset-backed currency itself makes it resemble a financial instrument that also demands regulation from government agencies. At varying times they compared the proposed currency to an Exchange Traded Fund (because it relies on a basket of currencies to create value) or an alternative fiat currency itself.

“What exactly is this? Is it fish or fowl? And it seems to me that it’s more of a platypus and it evolves in its different parts,” said Rep. Bill Huizenga, of Michigan.

For Connecticut Rep. Jim Himes, the foreign currency risk that users could be exposed to presents an opportunity for the government to exercise oversight under investment laws passed in 1940. “They will have some degree of volatility,” said Marcus in his testimony.

“This looks to me exactly like an exchange traded fund. Backed by a series of short term instruments in foreign currency… it even has a creation and remittance mechanism,”  says Himes. If that’s true, then the Libra Association would be subject to regulations under the Securities and Exchange Commission.

Marcus says that the instrument behind Libra isn’t an exchange traded fund, because the users that will transact using the cryptocurrency through services like Facebook’s Calibra, aren’t going to be speculating on the currency’s rise in value. However, that logic seems to be slightly faulty given that all of the members of the Libra Association are expected to generate returns from the assets that are held in Libra and invested in the short term basket of currencies.

What’s the matter with Calibra?

If the Libra Association and its mechanism for establishing a stablecoin creates one knot for regulators to untie, then the actual transaction mechanism that Facebook is proposing in the form of the Calibra subsidiary is yet another.

Here again a host of issues raise their head for members of Congress… Some are associated with Facebook’s perennial privacy problems and the history of predatory behavior that reared its head yet again with the company’s $5 billion fine for continuing violations.

MROthers are related to the company’s policy of what conservative critics called “social engineering” which saw Facebook boot some controversial users from its platforms (potentially denying them access to the benefits of Libra). Still another batch of concerns rests on Facebook’s ability to properly implement the know your customer (KYC) regulations that are required of banks and other financial services institutions.

The concern about Facebook’s propensity for de-platforming was topmost in the mind of Wisconsin’s Republican Representative Duffy

“Can Milo Yiannopoulos or Louis Farrakhan use Libra?” Duffy asked. “I bring that up because both of those two individuals have been banned from Facebook.”

Marcus could only respond “I don’t know yet.”

Rep. Duffy compared the potential for Facebook to engage in the same kind of social engineering to grant access to its new payment network as the experiments that China is conducting with its social credit scoring.

“For this system, I think you’re going to see a lot of pushback from both sides,” said Duffy. “I’m also concerned about the data privacy and how we’re going to use that data… How we spend our money is really powerful information and you have access to that too.”

Calibra may face anticompetitive challenges too. Facebook has said that its payment processing app will be the only one that’s directly integrated with the company’s other social networking and communication tools, but that other potential wallets would be interoperable. The exclusive access to Facebook gives Calibra an automatic advantage over other potential payment tools and opens the company up to receive a whole host of transaction information that it would otherwise not be privy to.

And while Facebook is restricting wallet access on its platform to its own digital payments service, it’s giving free rein to developers to build other apps for Libra’s payment platform without vetting them at all.

It’s a situation that could lead to another Cambridge Analytica-style scandal for Facebook and is yet another hole in the company’s oversight.

The appropriate response 

The Libra project is hugely ambitious and its critics have several valid concerns about its execution. Some of the concerns about the risk that it poses are justified and it could, indeed, become a systemic player in the global financial system more quickly than its proponents are willing to accept. All of that doesn’t mean that it should necessarily be thrown out or dismissed because of the potential dangers it poses, some economists argued.

The hard work of governing demands appropriate oversight (which Facebook has been calling out for — although it’s arguably doing it in the jurisdictions that will have the lightest touch over its activities).

No less an expert than the acting International Monetary Fund chair, David Lipton, has said as much in recent discussions over the role that Libra should play (or could play) in the global monetary system.

“Risks include the potential emergence of new monopolies, with implications for how personal data is monetized; the impact on weaker currencies and the expansion of dollarization; the opportunities for illicit activities; threats to financial stability; and the challenges of corporates issuing and thus earning large sums of money — previously the realm of central banks,” Lipton said of Facebook’s proposed digital currency, according to Bloomberg. “So, regulators — and the IMF — will need to step up”

But stepping up does not mean regulating Facebook’s currency out of existence.

“We look back at the the history of technology and innovation, and a conclusion is you never know at the beginning how valuable a technology will be,” Lipton said. “It requires experimentation and adaptation over years and often decades.”

Adopting a ratings system for social media like the ones used for film and TV won’t work

Internet platforms like Google, Facebook, and Twitter are under incredible pressure to reduce the proliferation of illegal and abhorrent content on their services.

Interestingly, Facebook’s Mark Zuckerberg recently called for the establishment of “third-party bodies to set standards governing the distribution of harmful content and to measure companies against those standards.” In a follow-up conversation with Axios, Kevin Martin of Facebook “compared the proposed standard-setting body to the Motion Picture Association of America’s system for rating movies.”

The ratings group, whose official name is the Classification and Rating Administration (CARA), was established in 1968 to stave off government censorship by educating parents about the contents of films. It has been in place ever since – and as longtime filmmakers, we’ve interacted with the MPAA’s ratings system hundreds of times – working closely with them to maintain our filmmakers’ creative vision, while, at the same time, keeping parents informed so that they can decide if those movies are appropriate for their children.  

CARA is not a perfect system. Filmmakers do not always agree with the ratings given to their films, but the board strives to be transparent as to why each film receives the rating it does. The system allows filmmakers to determine if they want to make certain cuts in order to attract a wider audience. Additionally, there are occasions where parents may not agree with the ratings given to certain films based on their content. CARA strives to consistently strike the delicate balance between protecting a creative vision and informing people and families about the contents of a film.

 CARA’s effectiveness is reflected in the fact that other creative industries including televisionvideo games, and music have also adopted their own voluntary ratings systems. 

While the MPAA’s ratings system works very well for pre-release review of content from a professionally- produced and curated industry, including the MPAA member companies and independent distributors, we do not believe that the MPAA model can work for dominant internet platforms like Google, Facebook, and Twitter that rely primarily on post hoc review of user-generated content (UGC).

Image: Bryce Durbin / TechCrunch

 Here’s why: CARA is staffed by parents whose judgment is informed by their experiences raising families – and, most importantly, they rate most movies before they appear in theaters. Once rated by CARA, a movie’s rating will carry over to subsequent formats, such as DVD, cable, broadcast, or online streaming, assuming no other edits are made.

By contrast, large internet platforms like Facebook and Google’s YouTube primarily rely on user-generated content (UGC), which becomes available almost instantaneously to each platform’s billions of users with no prior review. UGC platforms generally do not pre-screen content – instead they typically rely on users and content moderators, sometimes complemented by AI tools, to flag potentially problematic content after it is posted online.

The numbers are also revealing. CARA rates about 600-900 feature films each year, which translates to approximately 1,500 hours of content annually. That’s the equivalent of the amount of new content made available on YouTube every three minutes. Each day, uploads to YouTube total about 720,000 hours – that is equivalent to the amount of content CARA would review in 480 years!

 Another key distinction: premium video companies are legally accountable for all the content they make available, and it is not uncommon for them to have to defend themselves against claims based on the content of material they disseminate.

By contrast, as CreativeFuture said in an April 2018 letter to Congress: “the failure of Facebook and others to take responsibility [for their content] is rooted in decades-old policies, including legal immunities and safe harbors, that actually absolve internet platforms of accountability [for the content they host.]”

In short, internet platforms whose offerings consist mostly of unscreened user-generated content are very different businesses from media outlets that deliver professionally-produced, heavily-vetted, and curated content for which they are legally accountable.

Given these realities, the creative content industries’ approach to self-regulation does not provide a useful model for UGC-reliant platforms, and it would be a mistake to describe any post hoc review process as being “like MPAA’s ratings system.” It can never play that role.

This doesn’t mean there are not areas where we can collaborate. Facebook and Google could work with us to address rampant piracy. Interestingly, the challenge of controlling illegal and abhorrent content on internet platforms is very similar to the challenge of controlling piracy on those platforms. In both cases, bad things happen – the platforms’ current review systems are too slow to stop them, and harm occurs before mitigation efforts are triggered. 

Also, as CreativeFuture has previously said, “unlike the complicated work of actually moderating people’s ‘harmful’ [content], this is cut and dried – it’s against the law. These companies could work with creatives like never before, fostering a new, global community of advocates who could speak to their good will.”

Be that as it may, as Congress and the current Administration continue to consider ways to address online harms, it is important that those discussions be informed by an understanding of the dramatic differences between UGC-reliant internet platforms and creative content industries. A content-reviewing body like the MPAA’s CARA is likely a non-starter for the reasons mentioned above – and policymakers should not be distracted from getting to work on meaningful solutions.