Hillicon Valley: New FCC commissioner’s arrival signals gridlock early next year | FCC rejects Huawei appeal of national security threat designation | Top election security official to depart federal cyber agency

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Follow our cyber reporter, Maggie Miller (@magmill95), and tech team, Chris Mills Rodrigo (@chrisismills) and Rebecca Klar (@rebeccaklar_), for more coverage.

 

FCC GRIDLOCK AWAITS BIDEN: The Senate’s confirmation of Nathan Simington to the Federal Communications Commission (FCC) on Tuesday guarantees a 2-2 partisan deadlock once Ajit Pai steps down as chairman when President-elect Joe Biden takes office.

Democrats and digital rights groups worry that Republicans will try to block any Biden nominee for FCC chairman, effectively hamstringing the agency and delaying the expected reimplementation of Obama-era net neutrality rules.

A GOP victory in just one of the two Senate runoffs in Georgia on Jan. 5 would give Republicans the votes needed to keep the FCC split at two commissioners from each party, making it difficult if not impossible for Democrats to push through any divisive policies. While Biden could elevate one of the two Democrats to FCC chair, a three-vote majority would still be required to implement new rules and regulations.

Even more worrisome for Democrats and their allies is what’s on the horizon. When Democratic Commissioner Jessica Rosenworcel’s term ends at the end of next year, Republicans could gain a 2-1 advantage if a GOP-controlled Senate rejects Biden’s picks.

Simington’s confirmation this week was pushed through quickly after his nomination by President Trump, who tapped the senior adviser at the National Telecommunications and Information Administration (NTIA) after withdrawing support for Republican Commissioner Mike O’Rielly.

Read more here.

 

UNANIMOUS REJECTION: The Federal Communications Commission (FCC) on Thursday unanimously rejected Chinese telecommunications giant Huawei’s request to reconsider the agency’s designation of the group as a national security threat.

The decision came months after the FCC formally adopted the designation, banning U.S. telecom companies from using money in the FCC’s $8.3 billion Universal Service Fund to purchase equipment from the group, which is one of the largest 5G equipment manufacturers in the world. 

“Huawei has a long and well-documented history of close ties to the Chinese military and intelligence communities, as well as the Chinese Communist Party, at every level of the company all the way up to its founder, compelling Huawei’s assistance and cooperation with the Chinese intelligence services and forbidding the disclosure of that assistance,” FCC Chairman Ajit Pai, a Republican, said during agency’s monthly meeting on Thursday. 

He noted that the FCC’s decision to reject Huawei’s request would “have a direct and positive impact on the security and integrity of America’s networks.”

The decision also comes a month after the agency rejected Chinese telecom group ZTE’s request to have its national security threat designation removed. 

Both Huawei and ZTE are groups the Trump administration and bipartisan members of Congress have increasingly pushed back against, citing concerns around potential ties to the Chinese government and intelligence operations. The companies are both on the Commerce Department’s “entity list,” which means U.S. companies may not do business with them.

Read more here. 

 

MORE CISA LEADERSHIP TURNOVER: Matthew Masterson, the senior election security advisor at the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), will depart the agency, a move that comes just weeks after President Trump fired the agency’s director.

Masterson confirmed to The Hill that he intends to leave CISA for a job outside the federal government on Dec. 18. The agency serves as one of the key federal groups responsible for securing elections and other critical infrastructure.

The Wall Street Journal first reported that Masterson intends to leave CISA. 

According to CyberScoop, Masterson will take up a position at the Stanford Internet Observatory, which is led by former Facebook chief security officer Alex Stamos and researches security issues including election security.

Trump last month fired former CISA Director Christopher Krebs, and shortly afterward former CISA Deputy Director Matthew Travis and top cybersecurity official Bryan Ware resigned after being asked to do so by the White House. 

All three were pushed out after CISA, along with a coalition of state and local officials, put out a statement in the days after Election Day describing the 2020 election as “the most secure in American history,” and after CISA put up a “rumor control” web page meant to debunk disinformation and misinformation around the general election. 

Read more here.

 

GOOGLE TO REVIEW DISPUTED DISMISSAL: Google will review the process that led to the dismissal of a top artificial intelligence (AI) researcher who said she was fired after voicing concerns about the handling of a report on AI bias, though the company’s head of research said Google merely accepted the researcher’s resignation. 

CEO Sundar Pichai sent a memo to employees on Wednesday that addressed the departure of AI ethics researcher Timnit Gebru, apologizing for the “doubts” it led to among the Google community and pledging to have an internal review of the process, according to a copy of the memo first reported by Axios. 

“I’ve heard the reaction to Dr. Gebru’s departure loud and clear: it seeded doubts and led some in our community to question their place at Google. I want to say how sorry I am for that, and I accept the responsibility of working to restore your trust,” Pichai reportedly wrote. 

“We will begin a review of what happened to identify all the points where we can learn — considering everything from de-escalation strategies to new processes we can put in place,” he added. 

A Google spokesperson confirmed the memo is authentic, but said the company has “nothing further to share.” 

Gebru, however, dismissed the efficacy of Pichai’s memo in addressing the root of the issues. 

“I see no plans for accountability and there was further gaslighting in the statement,” she tweeted after the memo was reported. 

Read more here.

 

CREDIT CARDS CUT TIES WITH PORNHUB: Mastercard and Visa said Thursday they will no longer allow their cards to be used on Pornhub, less than a week after the credit card companies said they would review their relationship with the site in light of a recent New York Times column that included allegations that the website contained rape scenes, revenge pornography and underaged sex. 

Mastercard said in a statement its investigation confirmed violations of its standards that prohibit “unlawful content on their site.” 

“As a result, and in accordance with our policies, we instructed the financial institutions that connect the site to our network to terminate acceptance,” MasterCard said. “In addition, we continue to investigate potential illegal content on other websites to take the appropriate action.”

Visa issued a similar statement Thursday.

“We are instructing the financial institutions who serve MindGeek to suspend processing of payments through the Visa network,” the company said in a statement, referring to Pornhub’s parent company.

“At Visa, we are vigilant in our efforts to stamp out illegal activity on our network, and we encourage our financial institution partners to regularly review their merchants’ compliance of our standards on this and other platforms,” the statement continued. 

Pornhub called the credit card companies’ actions “exceptionally disappointing,” noting the website’s policy updates announced earlier this week. 

Read more here.

 

ANOTHER FACEBOOK INVESTIGATION: Germany’s largest competition regulator announced an investigation into Facebook on Thursday, pointing to the company’s acquisition of virtual reality software, devices and a requirement that purchasers of Oculus virtual reality glasses register accounts on Facebook.

The Associated Press reported that the Federal Cartel Office said it would examine whether the practice puts improper pressure on other virtual reality companies or constitutes dominance of the augmented reality market.

“Linking virtual reality products and the group’s social network in this way could constitute a prohibited abuse of dominance by Facebook,” the body’s president, Andreas Mundt, said according to the AP. “With its social network Facebook holds a dominant position in Germany and is also already an important player in the emerging but growing VR market. We intend to examine whether and to what extent this tying arrangement will affect competition in both areas of activity.”

A Facebook spokesperson said in response that the company “will cooperate fully” with the investigation, thought it believes “that there is no basis” for the probe.

The probe comes in response to Facebook’s announcement that owners of Oculus products, which Facebook purchased in 2014, would have until 2023 to register accounts or merge existing accounts with Facebook’s system. The company’s newest glasses, dubbed the Quest 2, require a Facebook login to use. None of the products are currently for sale in Germany, as Facebook paused its sales of the devices in the country this year.

Read more here.

 

AIRBNB’S BIG FIRST DAY: Stocks for Airbnb shot up in the company’s day of public trading, even amid a coronavirus pandemic that has decimated the travel and hospitality industries. 

The company’s shares opened at $146 each Thursday, a 115 percent rise over its initial offering price of $68, making its market capitalization come out to roughly $101.6 billion. 

Airbnb’s is the latest tech I.P.O. of the last year to make a splash, delivering a windfall for Silicon Valley investors and employees. It’s valuation now is greater than that of rideshare giant Uber, and the total $3.5 billion its offering raked in made it the biggest I.P.O. of 2020. 

Read more here.

 

$15B OFFER FOR DIRECTV: AT&T has received bids for its DirecTV broadcast satellite service of more than $15 billion including buying its debt, people familiar with the matter told The Wall Street Journal. 

According to the sources, former banker Michael Klein’s acquisition company Churchill Capital Corp. and private equity firm TPG are among the top bidders. 

Apollo Global Management, which had previously been seen as a frontrunner in the auction to buy the service, submitted a bid of less than $15 billion, the Journal reported. 

The news outlet added that the sale negotiations are in late stages, with a final deal expected by early next year. 

AT&T declined to comment on the reported bids when contacted by The Hill. 

Read more here.

 

Lighter click: (Department Store Mix)

An op-ed to chew on: Why did Congress strip the Chinese drone ban from the NDAA?

NOTABLE LINKS FROM AROUND THE WEB:

A Famed Anti-Sex Trafficking Group Has a Problem With the Truth (Vice World News / Anna Merlan and Tim Marchman)

Facebook’s Global Ad Machine Is The Company’s $80 Billion Annual Lifeblood. Workers Say It Puts Profits Over People. (BuzzFeed News / Craig Silverman and Ryan Mac)

Instagram would be better off without Facebook (The Verge / Ashley Carman)