The Huawei ripple effect – POLITICO


With help from John Hendel, Ashley Gold and Margaret Harding McGill

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THE HUAWEI RIPPLE EFFECT — The arrest of Chinese telecom executive Meng Wanzhou in Canada is creating new risks for the tech industry. Meng, Huawei’s chief financial officer, reportedly faces an investigation into whether she violated U.S. sanctions against Iran and remains detained in Canada as she faces extradition to the U.S. The incident has increased tensions with China and raised fears that it could reignite the U.S.-China trade fight — something tech companies are keen to avoid.

— “I’m very concerned that that’s just going to ratchet this trade war and make negotiations much more difficult,” former U.S. Ambassador to China Gary Locke said during a Business Roundtable event in Washington on Thursday. Meanwhile Sen. Marco Rubio (R-Fla.) sought to make a broader point about the dangers of doing business with China, issuing a call for tech firms to reduce their reliance on Chinese supply chains.

FIRST IN MT: SENATORS URGE FCC TO SPIKE TEXT MESSAGE PLAN — A group of 10 senators is calling on FCC Chairman Ajit Pai to stand down on his proposal to classify text messaging as an information service. “We urge you to right this wrong and classify text messaging as a telecommunications service, affording this vital means of communications protections that promote innovation and support freedom of speech,” the lawmakers write in a letter led by Sen. Ed Markey (D-Mass.) and co-signed by eight Senate Democrats as well as Bernie Sanders (I-Vt.). Critics of the plan argue that reclassifying texts would give carriers the power to block messages as they see fit.

— An FCC official said last month that the ruling, on the agenda for the commission’s Dec. 12 meeting, resolves regulatory ambiguity. And Pai has cast it as part of an effort to combat robotexting, saying it will help carriers “continue finding innovative ways to protect consumers from unwanted text messages.” The proposed change has already drawn the opposition of Democratic Commissioner Jessica Rosenworcel, who said “the claim that the FCC needs to classify text messages to protect consumers from unwanted texts is bogus doublespeak.”

GREETINGS AND WELCOME TO MORNING TECH, where your host may need to come up with some new Huawei puns pretty soon. Got a news tip? Drop me a line at clima@politico.com or @viaCristiano. Don’t forget to follow us @MorningTech. And catch the rest of the team’s contact info after Quick Downloads.

** A message from Microsoft: Microsoft is expanding its commitment to bring broadband internet to people without access in rural America, with a goal of connecting 3 million people by 2022. Learn more here. **

TAKEAWAYS FROM THE DOJ’S TOUGH DAY IN COURT — From the looks of Thursday’s oral arguments in the appellate hearing on the AT&T-Time Warner merger, the Trump administration’s efforts to unwind the deal may be in trouble. As John reports for Pro, “federal appeals court judges expressed skepticism about the government’s arguments” for why the court should overturn a prior ruling greenlighting the acquisition.

— Forecast cloudy: Hal Singer, an economist specializing in antitrust at Econ One, said the “government took a weak case and made it worse by messing up the execution” during Thursday’s oral arguments, adding that the judges “seized on this failing.”

— But critics of the merger are holding out hope their arguments will win out. Public Knowledge president Gene Kimmelman, a former chief counsel for the DOJ’s antitrust division, said it’s “difficult to tell from the oral arguments” how the appeal will fare. He added: “But consumers are clearly losing out here, so we hope the court recognizes the mistakes in the lower court ruling.” His group earlier filed an amicus brief in support of the DOJ’s appeal.

AT&T, ACCENTURE, JP MORGAN EXECS TALK PRIVACY — AT&T CEO Randall Stephenson, Accenture North America CEO Julie Sweet and JP Morgan Chase CEO Jamie Dimon all expressed support for federal privacy legislation that would preempt state laws. Speaking at a Business Roundtable panel Thursday, they said a patchwork of state laws would be disastrous for the country and consumers. All panelists were confident a law could pass within a year or two.

— Stephenson said it’s not California’s far-reaching data privacy law, set to go into effect in 2020, that’s the problem. It’s that states will keep passing their own laws, leaving consumers and the industry confused, he said.

MICROSOFT: PUT FACIAL RECOGNITION RULES IN PRIVACY BILL — Microsoft President Brad Smith suggested that federal legislation on data privacy should “include a chapter on facial recognition.” Smith, who on Thursday rolled out recommendations for new laws aimed at addressing concerns over privacy, civil liberties and bias in the software, said he hopes to see “new privacy legislation passed in the next two years.”

— Smith also weighed in on criticisms of the company’s work with the federal government. He said Microsoft, one of several tech firms vying for a prized Pentagon cloud computing contract, “made a very different decision from Google,” which dropped its own bid for the JEDI contract amid backlash from its employees. “It’s good to listen to our employees,” he said. “It doesn’t mean that we cede the decision making.”

AIRWAVES, TAKE TWO? — Congress is poised to take another look next year at the AIRWAVES spectrum legislation, introduced in both chambers as S. 1682 (115) and H.R. 4953 (115), congressional staffers agreed during a Thursday Practising Law Institute panel discussion. Despite great enthusiasm from the wireless industry, the bipartisan measure aimed at freeing up more spectrum for the private sector stalled in committee this year and is about to lose House sponsor Leonard Lance (R-N.J.), who fell short in his re-election bid this November.

— But Lance’s legislative partner, Rep. Mike Doyle (D-Pa.), is likely to find a new Republican interested in reintroducing AIRWAVES, said Robin Colwell, GOP chief telecom counsel on the House Energy and Commerce Committee. “It’s been a very popular idea,” she said. Alex Hoehn-Saric, her counterpart for the incoming Democratic majority on the panel, praised the bill but noted the FCC is “moving in that direction already.” Democratic staff will “want to talk with the members and how they’d want to update the bill and see where they’d want to go from there,” Hoehn-Saric predicted.

SCENES FROM TELECOM PROM — Thursday night marked FCC Chairman Ajit Pai’s second time poking fun before a packed room of telecom lawyers at the annual Federal Communications Bar Association Chairman’s Dinner. He ribbed the usual suspects, including Verizon, Sprint and T-Mobile, as well as Philadelphia sports fans like FCC aide Nathan Leamer, during the 30-minute roast.

— Pai started things off with a Brett Kavanaugh-esque opening statement that culminated with him telling the room, “I like beer.” He joked that the dinner would not include Baked Alaska, because he “thought that would’ve been a little insensitive to Brendan” Carr, whose nomination is being held up by an Alaskan senator.

— But the main event was a video riff on Carpool Karaoke, with Pai singing Mariah Carey’s “All I Want for Christmas Is You” with former FCC Commissioner Mignon Clyburn, NCTA president Michael Powell, CTIA President Meredith Attwell Baker, NTIA Administrator David Redl, and FCC Commissioners Carr and Mike O’Rielly all taking a turn singing along in the passenger seat.

— Terrell McSweeny, a former Federal Trade Commissioner, is joining Georgetown Law’s Institute for Technology Law & Policy as a distinguished fellow. … Kevin Morgan will serve as chairman of the Fiber Broadband Association board starting next year, and will be joined by newly elected board member Teles Fremin, director at LUS Fiber … Joe Nolan, former deputy chief of staff to Sen. Thom Tillis (R-N.C.), is joining Amazon’s public policy office.

— It wasn’t me: The Trump and Trudeau administrations have sought to distance the world leaders from the arrest of Huawei’s Meng, Reuters reports.

— Sliding into those DMs: Australia has passed an encryption law that will require tech companies to provide law enforcement agencies access to encrypted communications, over the objection of privacy advocates, The New York Times reports.

— Autobots, unite! Elon Musk said his Boring Company will unveil “fully road legal autonomous transport cars” on Dec. 18, Business Insider reports.

— Today in things that actually happened: Dozens of Amazon workers were hospitalized after an Amazon robot set off bear repellent at a warehouse, The Guardian reports.

** A message from Microsoft: Broadband internet is the electricity of the 21st century, yet millions in the U.S. do not have reliable broadband access. Microsoft has been working with partners to expand broadband availability using a mix of technologies, including TV white spaces, to reach rural and remote areas of the country.

Last year, the Microsoft Airband initiative committed to bring broadband to 2 million people in rural America by 2022. On Tuesday, we announced we are reaching the 1 million mark and have raised our goal to reaching 3 million people in rural America by 2022.

Learn more here about the Microsoft Airband Initiative. **





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