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Old 18-04-18, 06:28 AM   #1
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Default Peer-To-Peer News - The Week In Review - April 21st, ’18

Since 2002

"The truth is that we totally have screwed over younger generations. And that’s a bigger story than just the social-media and tech thing, but the social-media and tech thing is a big part of it. We’ve created a scammy society where we concentrate wealth in ways that are petty and not helpful, and we’ve given them a world of far fewer options than we had." – Jaron Lanier

April 21st, 2018

Broadband Advisor Picked by FCC Chairman Ajit Pai Arrested on Fraud Charges

Elizabeth Pierce allegedly tricked investors into pouring $250 million into a fiber optic scheme by forging revenue agreements
Nick Statt

A broadband advisor selected by Federal Communications Commission Chairman Ajit Pai to run a federal advisory committee was arrested last week on claims she tricked investors into pouring money into a multi-million dollar investment fraud scheme, according to The Wall Street Journal.

The advisor, Elizabeth Pierce, is the former chief executive of Quintillion, an Alaska-based fiber optic cable provider operating out of Anchorage. In her capacity as CEO, Pierce allegedly raised more than $250 million from two New York-based investment companies using forged contracts with other companies guaranteeing hundreds of millions of dollars in future revenue. Pierce resigned from Quintillion in August of last year, and she stepped down from her role in Pai’s Broadband Deployment Advisory Committee (BDAC) the following month.
"Pai picked Pierce last year to chair his newly created broadband advisory group"

“As it turned out, those sales agreements were worthless because the customers had not signed them,” US attorney Geoffrey Berman said in prepared remarks, as reported by the WSJ. “Instead, as alleged, Pierce had forged counter-party signatures on contract after contract. As a result of Pierce’s deception, the investment companies were left with a system that is worth far less than Pierce had led them to believe.” Pierce was trying to raise money to help build out a fiber optic system that would wire Alaska with high-speed internet and better help connect it to networks in other US states. Pierce was charged with wire fraud last Thursday and faces a maximum sentence of 20 years in prison.

Pierce was tapped by Pai in April of last year to be the chair of the BDAC, which he formed “to accelerate the deployment of high-speed internet access, or broadband, by reducing and removing regulatory barriers to infrastructure investment.” According to broadband industry news and advocacy website Stop the Cap, Pierce may have gotten on Pai’s radar by complaining about how cumbersome it was to bring internet access to parts of the country like Alaska.

In a statement issued last week, Quintillion says it began cooperating with the Department of Justice as soon as allegations against Pierce surfaced last year. “Quintillion became aware of the situation regarding the alleged actions of Ms. Pierce last year, took swift action and self-reported to the Department of Justice (DOJ). Quintillion has been cooperating fully with the authorities during this ongoing investigation,” reads the company’s press release on the charges. The company goes on to say that “the ongoing investigation has not impacted Quintillion’s operations nor the quality of its services,” and that it “continues to move aggressively to extend its network and provide world-class telecommunications to Alaska and beyond.”

Large ISPs that Orchestrated the Repeal of the Open Internet Order Ask California’s Legislature to Stand Down and Just Let Them Win Already
Ernesto Falcon

The fight to protect Internet freedom is coming to California this month as the Senate Energy and Utilities Committee (April 17) and Senate Judiciary Committee (April 24) have scheduled hearings and votes on Senator Wiener’s S.B. 822, comprehensive legislation that would utilize the tools available to the state of California to promote net neutrality. As these critical dates approach the large ISPs have filed their opposition (see attached) and it is worth looking at what they say in the context of what they have been doing in D.C. and in the courts. It is also important to see what they are not saying to California Senators.

Parties that Decimated Federal Law are Decrying States Acting in Response

While opponents of S.B. 822 profess to prefer a federal solution, they have never really supported network neutrality at the federal level either. In fact, they spent more than $26 million to support the FCC’s effort to repeal network neutrality and are likely spending millions in California right now to sustain their victory. The money spent helps explain how the FCC reached a decision opposed by roughly 8 out of 10 Americans across the political spectrum.

The ultimate resolution to protecting network neutrality across the country is going to include restoring the 2015 Open Internet Order’s protections. That can happen in three ways: the FCC loses in court, the FCC reverses course, or, most likely, Congress passes a new law. Each of these scenarios are very likely years in the making and, in a matter of weeks, the so-called “Restoring Internet Freedom Order” will take effect. That leaves a very long gap of time for companies like Comcast and AT&T to strike exclusive deals with dominant Internet companies like Facebook to begin prioritizing their services and ensure no future small Internet competitors can compete and replace them (it was not that long ago when Facebook supported AT&T’s antitrust violating merger with T-Mobile).

ISPs Oppose Net Neutrality Because They Want It to Be Legal for Them to Charge More for Access Under Paid Prioritization

The large ISPs pretend they support network neutrality by proclaiming their support for a law banning blocking and throttling. What they consistently leave out in all of their letters is their desire to legalize paid prioritization, the ability for them to pick winners and losers determined by how much they can pay the ISP. This is an especially serious problem when considering the high-speed access market gives more than half of all Americans one choice. Notably, Comcast abandoned its pledge to not engage in paid prioritization the moment the FCC began its process to repeal network neutrality protections and no major ISP has ever fully committed to not begin sorting out the Internet by who can pay them more. They are already relying on their allies in Congress to promote their goal to charge more for Internet access simply because they have the leverage to demand more money.

Making paid prioritization legal gives Comcast, AT&T, and Verizon full control on deciding which Internet products and services get preferential treatment and that has enormous value. In fact, a recent study by Adobe found that close to half of Internet users simply switch to a different service if it is slow loading with up to 85 percent switching if it is a video service that is slow loading. The power to harm online services by slowing them down for other services willing to pay extra is the central danger to a free and open Internet particularly as large ISPs now are vertically integrated with content companies. There is such an extraordinary temptation to self-deal and favor their own content to the detriment of alternatives that it is the central antitrust claim by the Department of Justice’s lawsuit against AT&T’s merger by Time Warner. As they aptly stated, AT&T with control over shows like HBO has “the incentive and ability to use…that control as a weapon to hinder competition.” This is also why zero-rating is a problem (also addressed by SB 822) in the context of companies like AT&T exempting their product (DirecTV) from its own data caps and distorting the market.

The Biggest Myth ISPs perpetrate on Sacramento is There is No Network Neutrality Problem and Repealing Network Neutrality is a Return to the Status Quo

The worst talking point goes to US Telecom, which is effectively AT&T and Verizon, saying we have never had a network neutrality problem. The history of net neutrality is full of violations by ISPs. It is almost humorous that a very old talking point by companies like AT&T used more than ten years ago finds new life at the state level. It is as if the Republican-led FCC that sanctioned Comcast for throttling Bit-Torrent was a figment of our imagination or AT&T itself blocking Skype, Google Voice, or FaceTime (let alone zero-rating its own product DirecTV, which the FCC expressed concerns about until Chairman Ajit Pai was sworn into office).

What the FCC did in 2017 will likely go down as the worst Internet policy decision in history and that is because it was such a radical departure. Despite the fact that the ISP market is more concentrated than ever and that even the Trump Administration’s Department of Justice worries about ISPs exerting power to harm competition this FCC concluded that it was proper for it to absolve itself of responsibility. There is nothing normal about that decision when compared to the previous decades of FCCs that regularly promoted network neutrality and took action against ISPs that violate it. And after years of litigation and losing against ISPs under its efforts to promote network neutrality under Title I of the Communications Act, it is completely insincere to argue that returning ISPs to Title I status is going back to FCC regulation as intended.

If all of this nonsense large ISPs like AT&T, Comcast, and Verizon are pushing at your elected state officials in Sacramento has you upset, then you need to take action and make sure your voice is heard as SB 822 comes to a vote.

What It's Like to Live in America Without Broadband Internet

In every single state, a portion of the population doesn’t have access to broadband, and some have no access to the internet at all.
Kaleigh Rogers

Ben Wilfong leaned toward his computer screen, fingers poised over the mouse and keyboard, ten-gallon hat above his brow. A long list of personal details appeared under the chosen lot: name, date of birth, sire: important things to know when bidding on expensive Black Angus beef cows. The actual cow that was up for auction could be seen in a video next to these stats: a kind of livestock glamour roll of the animal moving through a field. This is farming in the 21st century.

For Wilfong, however, the auction was little more than a mirage. The internet connection on his rural West Virginia farm was so agonizingly slow, there was no way to load the video in enough time to actually see the animal.

“By the time I’ve clicked to bid on cattle, the auction is over,” Wilfong told me recently. “Five seconds is an eternity in an auction. It’s cost me a lot of revenue.”

Wilfong is one of the more than 24 million Americans, or about 8 percent of the country, who don’t have access to high-speed internet, according to the Federal Communications Commission (FCC)—and that’s a conservative estimate. Most of them live in rural and tribal areas, though the problem affects urban communities, too. In every single state, a portion of the population doesn’t have access to broadband.

The reasons these communities have been left behind are as diverse as the areas themselves. Rural regions like Wilfong’s hometown of Marlinton are not densely populated enough to get telecom companies to invest in building the infrastructure to serve them. Some areas can be labeled as “served” by telecoms even if many homes don’t actually have internet access, as in Sharon Township, Michigan, just a short drive from the technology hub of Ann Arbor. Others are just really far away. These places are so geographically remote that laying cable is physically and financially prohibitive, so towns like Orleans, California, have started their own nonprofit internet services instead.

There are alternative options for internet service, such as satellite dish or fixed wireless. But rarely are these services reliable and fast enough for modern use, and they’re often much more expensive than cable.

This gap, between the internet haves and have-nots, is known as the digital divide. The problem isn’t that these folks are missing out on spending an entire weekend binge-watching the latest season of Stranger Things (though that’s a totally reasonable use of the internet). The problem is that, increasingly, the tools we use in our daily lives are moving online, sometimes exclusively so. Students are assigned internet-based homework. Tax filings and applications for government programs or student loans are more commonly done online—and are processed more quickly than via snail mail.

The economic impacts especially are vast: When was the last time you saw a job posting anywhere other than online? Businesses are less likely to set up shop in areas without good internet access, and realtors say it’s more difficult to sell homes that aren’t connected.

A lack of internet is forcing many young people to move away, fleeing their home states altogether to find modern career opportunities. It prevents areas already hard-hit by the demise of other industries, like coal, from finding new ways to make money online or telecommuting. A lack of internet access hurts businesses, hinders education, prevents people from getting jobs, and can even be life-threatening, as emergency services increasingly rely on internet-connected communications and documentation. The federal government and its agencies for years have promised to invest in internet infrastructure, but progress has not been made fast enough for many rural towns. These communities are left to find a way to bridge this divide themselves, lest the gulf between them and the rest of the country expand even further. Here’s what it looks like from the other side of the digital divide:
Marlinton, West Virginia

Driving through the mountains in Pocahontas County is breathtaking. The highways twist around switchback bends through dense forest and rocky cliff sides. You’ll see plenty of deer, rabbits, and possums, but few other cars. Cell phone service is practically nonexistent. On the radio, when you can get a signal, you’ll hear ads for opioid addiction treatment programs and once a day, the local lost and found bulletin.

More than 60 percent of the roughly 900-square-mile county consists of protected state or federal lands. A population of about 9,000 spreads out over this landscape—about ten residents per square mile. Pocahontas County has a distinctly southern feel: locals speak with a warm, lilting drawl; Civil War trenches still dot the hillsides. And Marlinton, population 1,054, is its largest town.

This place is isolated, not just physically but also by the distinct lack of access to communication technology. As of June 2016, not a single home in Pocahontas County outside of the ski resort has high-speed internet as defined by the FCC: a minimum of 25 megabits per second download speeds and 3 Mbps upload speeds. In most of America, these speeds are pretty standard. In many major cities, access to regular home internet with speeds as high as 100 Mbps or even 1 gigabit per second is common. In Marlinton, what little access many households do have is unreliable, spotty, or slow. A handful of people have no internet at all.

It’s a particularly common problem in West Virginia, where 40 percent of rural residents don’t have access to broadband internet. Only a handful of states have similar or worse connectivity rates. In many cases, the areas are too sparsely populated to be worth the expense of running cable internet for the large telecoms that cover most of the country, like AT&T, Comcast, and Charter. When that happens, wireless internet and cell phone coverage is often the only alternative.

But even those stopgaps are out of reach for parts of Pocahontas County, because it is also home to the Green Bank Telescope, the world's largest fully steerable radio telescope. Used, in part, to listen for signals from intelligent extraterrestrial life, the telescope requires radio silence in the surrounding area to be able to function. It's part of two overlapping radio quiet zones, one federal and one state, that limit the use of electric signals. Within a ten-mile radius of the observatory, people can't use cell phones or WiFi, if it exists, and on site, microwaves are banned.

It means when teenagers in the area want to hang out on the weekend, they aren’t sending each other texts. They still call each other up on landlines.

While the idea of unplugging has a certain shine to it for those of us exhausted by our constant connection, an actual lack of access has serious consequences on the community. In Pocahontas County, the unemployment rate is higher than the national average, for examples, and studies have shown that increased broadband adoption in rural areas has a strong, possibly causal, impact on employment. But aside from the local ski resort, this region has yet to benefit from such a technological boost. Despite the rolling bucolic beauty of the landscape, it makes you wonder why anyone chooses to live here. But when I pose that question to locals, they seemed stunned that I would even ask.

“I don’t want to live in a city, that’s why I’m here,” Wilfong, the cattle farmer, said with a laugh. “It’s beautiful. It’s peaceful. It’s a healthy environment in which to raise your kids. And it’s home.”

Wilfong’s father, grandfather, and great-grandfather were all farmers here, too. This legacy extends so far back that Wilfong’s not sure exactly what generation farmer he is. But I wanted to meet with him to talk about a different role he’s adopted in recent years, one of broadband internet proponent.

“We rely on the internet just as much as we do power, water, phone,” Wilfong told me as we waited for our lunch at a diner in Marlinton. “We’ve reached the period where it’s a necessity for everyday life.”

It impacts the community in a multitude of ways, Wilfong explained, from making it more difficult for students to do their homework and access study resources, to preventing new businesses from opening and existing businesses from succeeding. I learned of one local auto shop where employees had to write down customers’ credit card numbers by hand, and then go to a coffee shop with internet at the end of each day to finally make the charges, hoping they hadn’t made any mistakes. That shop had gone out of business by the time I arrived.

Over at the Pocahontas County Board of Education, a squat, two-story brick building next to the elementary school in Marlinton, Ruth Bland spends her days as the Board's technology coordinator making sure students are able to get online at least while they’re at school. Bland told me that all the schools in the county are equipped with internet, including 1 Gbps fiber access at the sole high school. She estimates that for about 30 percent of students, that’s the only internet access they have at all.

Bland led me past the playground to the single-story school, where we found a class of kindergarteners playing educational games in the computer lab. Some of the youngsters there tell me they have internet at home, others seem unphased as they shake their heads “no.” But as students get older, this lack of access starts to play a more significant role in their education and lives, Bland said.

“We don’t assign as much homework and things online because we understand the instability of the service,” Bland told me. “It isn’t fair to the kids.”

Bland pointed to the SATs as an example. For now, the SATs are still paper-and-pencil tests, but there are multiple online study tools that let students with internet do practice tests and receive study guides. Many Pocahontas County students can’t do this at home, and the schools don’t have enough devices to let the students do it at school. Instead, Bland said the high school is asking students to bring their own devices—smartphones and laptops—and teachers can help them download the material to study at home.

“We’ll be able to do it at the school but I don’t know how well they’ll be able to utilize it at home,” she said. “We’re in uncharted territory.”
Director for Pocahontas Schools Ruth Bland works on her computer. Image: Julia Rendleman/VICE

Growing up in a rural community, especially one with so much natural beauty, is a privilege I can personally attest to. There’s no reason these students shouldn’t also have the benefit of a fully digital education experience that their peers in other communities have.

In towns where internet access is limited, the local library often becomes a digital oasis. I wanted to see if that was the case in Marlinton, so I popped in unannounced and asked the librarian how many of the visitors come strictly to use the internet. Pulling out a stack of handwritten daily records, we flipped through and were able to see that about a third of the visitors come just to log on. I sat down at one of the computer stations and opened an online speed test. Even there, speeds were far from broadband: 2.31 Mbps download, 0.79 upload. Enough to check your email or go on Facebook, but not much else.

Yet high above the streets of Marlinton, at the Snowshoe Mountain ski resort, another world exists. Fast internet, WiFi, and even cell phone coverage are readily available. In order to retain business from weekend warriors accustomed to consistent connection, the President and COO of the resort has invested heavily in a system that’s custom-built not to interfere with the telescope. It’s the only place in the entire county where my cell phone actually worked.

This recent development demonstrates that it is physically and technologically possible to build reliable, fast internet infrastructure that doesn’t interfere with the Quiet Zone. But in order to create that kind of network in the rest of the county, there needs to be funding, which is why Wilfong has continuously petitioned for help from the state and federal government.

He believes public-private partnership to bring down costs and incentivize telecom companies to invest in rural areas is the best way to ensure that rural areas like Marlinton are not left behind. So far, no concrete plans along those lines have come to fruition at the state or local level. Though locals continue to raise concerns, a solution is nowhere in sight.

The state of West Virginia has long been shaped by extraction. It’s a place that exported its most valuable resources for the benefit and profit of outsiders. First, it was coal and lumber being ferried out of the state in heaping stacks. Now, it’s West Virginians themselves, as young people leave in search of career opportunities, chasing a modern world that might otherwise leave them behind.

“It affects so much of the economy in this county and we’re losing so much,” Wilfong said. “I want my kids to stay here, but at this point there’s not much for me to offer them.”

On Thursday mornings, locals from Sharon Township, Michigan, can drive to the 100-year-old town hall and meet with their local government. The supervisor, planning chair, and zoning administrator all gather at a long wooden table, where they share a box of doughnuts and wait for the heat to kick on. On these days, the township clerk dutifully saws open envelopes containing tax payments from residents and—if it’s anything like the frigid February Thursday when I visited—has to take a break to thaw her fingers, numb from the frozen mail.

The digital divide is perhaps more starkly illustrated here, in Washtenaw County, than anywhere else in the US. Sharon Township is just 30 minutes outside of Ann Arbor, and a little over an hour from Detroit, in the next county over. Its 1,700-odd residents are spitting-distance from some of the most technologically advanced areas of the state, including the University of Michigan. Yet when it comes to internet access, Sharon Township may as well be in the mountains of West Virginia.

On a map showing Michigan’s internet access at the county level, the square representing Washtenaw looks like one of the best-served regions in the state. Fewer than 10 percent of residents don’t have access to broadband internet. But the fact that the city centers are so well-served only makes it more difficult for communities like Sharon Township to get access. Telecom companies aren’t expanding their land-based networks to reach these relatively small markets, and money for rural broadband get earmarked for areas farther away.

“It looks like we’re covered,” said Kathy Spiegel, the Sharon Township Planning Commission Chair. “When Peter [Psarouthakis, the township supervisor] first started going to meetings at the state level, they said Washtenaw County had full coverage and he just kept laughing.”

Spiegel, who grew up in Tennessee and went to grad school in New York City, has lived in Sharon Township for 23 years. She and her late husband raised two children, and several dogs, on their sprawling, wooded lot. For a long time, the lack of internet access was not a dealbreaker, but when Spiegel began working from home as a regulatory writer for pharmaceuticals (first freelance, and now for a California-based company) suddenly it became crucial. For the first few years, without a decent connection at home, Spiegel worked out of coffee shops, or traveled to her cottage in northern Michigan, which, surprisingly, had great internet access.

These days, she relies on a 4G LTE wireless router that gives her sub-broadband speeds: a recent speed test clocked her download speed at 3.57 Mbps. She also has a monthly data cap of 80 GB, after which service is throttled. Now, 80 GB in a month is nothing to sneeze at, but you’d be surprised how quickly it can get eaten up. Netflix estimates an HD stream uses about 3 GB per hour, and Spiegel doesn’t subscribe to the service because she feels she couldn’t get her money’s worth.

Besides, Spiegel works from home, and often has to do video conferences or download large files. Netflix isn’t even an option by the time she gets all her work done. She only treats herself to a streamed TV show or movie at the end of the month if she has bandwidth left over. It’s one of the best setups available in the area, and she pays $450 per month for the privilege.

Meanwhile, just 20 miles away in Ann Arbor, residents have an embarrassment of options for high-speed internet. Fiber optic cable to the home, largely considered the gold standard for internet connections, is widely available. AT&T advertises plans of 1 Gbps for $70 per month and Xfinity advertises 60 Mbps (plus a handful of TV channels) for $45.

Even Chelsea, a small town of about 7,500 just north of Sharon Township, has plentiful high-speed connections. It’s not unusual to spot people from the surrounding communities sitting in parked cars in the library’s lot in the wee hours of the morning, taking advantage of one of the few free high-speed hotspots in the region.

Sharon Township will vote this May on a new tax that, if passed, would fund a fiber internet infrastructure to finally connect residents in an affordable and reliable way. It’s the same conclusion that many other small towns in the area have come to, including Lyndon Township, where last summer residents voted to approve a similar measure. As folks in rural communities so often do, they’ve decided to stop waiting and build what they need themselves.

At Spiegel’s home, as we watched her three dogs whip around in the snow, she told me that, in truth, she doesn’t mind the lack of internet, personally. Spiegel loves the rural township where she chose to settle down, even with its challenges—she shrugged off a massive impending snowstorm during my visit, still planning to make it to her hair appointment the next day. But she worried about the future of the community if things don’t change.

“The issue is very much like rural electrification,” said Spiegel, referring to the federal subsidization of electric infrastructure in the 1930s that ensured all Americans had power. “Areas will die if they don’t get internet. It’s become essential, and if we want to keep a community here, you’ve got to have something.”

It’s not easy to get to the remote town of Orleans, California, but it’s a hell of a journey. To reach it, I drove for three hours on gorgeous, winding highways straight out of a car commercial. As the fog melted away, the sun rose to reveal the forested mountains around the Klamath River—a vista that would make Bob Ross faint. This is the heartland of the Karuk Tribe, one of California’s largest Indigenous communities. And it’s the last place ISPs would ever think of running high-speed internet.

“It was too much cost for not enough profit,” said Dennis “Beau” Donahue, the computer systems technician for the Karuk Tribe. “Without a grant or something, it’s a lot of money to run fiber and the bigger companies won’t see a profit for however many years. They’re just not interested in it.”

For indigenous tribes on sovereign land, legal complexities often mean that communities on reservations have trouble attracting telecom companies. The Karuk Tribe is not on a reservation and so hasn’t had that issue, but it faces a different struggling: being miles and miles away from nowhere.

Donahue toured me around the quiet town of about 600, where the cliché of everybody knowing everybody else proved true. We got warm waves from everyone we passed, half of whom Donahue would then reveal were relatives. Everybody here knows Beau’s name, but he joked that “most people just call me the Áan Chúuphan guy.”

Áan Chúuphan, a Karuk phrase meaning “talking line,” is the name of the Tribal-owned ISP. After years of waiting for internet service to improve, in 2010 the Tribe decided to take matters into its own hands. With the help of a more than $1 million grant from the US Department of Agriculture, the Tribe was able to run fiber optic cable from Somes Bar, a town eight miles north where the Siskiyou Telephone Company already had internet infrastructure, to Orleans. The fiber travels along the mountains, alternating between being buried underground and hung along the power lines. Once the fiber makes it to Orleans, wireless towers placed strategically—on the town water tower, a nearby mountain overview, and the Tribal headquarters in the center of town—beam the signal into customers’ homes. Today, Áan Chúuphan serves more than 100 customers.

Dodging thickets of poison oak, we stomped up hillsides surrounding the town to get close up views of the ISP’s towers. As we stood on one flat, mountain outcrop, Donahue pointed to glimmering shapes dotted through the trees on the other side of the river. These shapes, he explained, were the various rooftops of homes that he had personally connected to the Tribe internet. Not all homes have landlines, he told me, and cell service is only available in a few buildings using the tribe ISP. Some residents live far up in the mountains without even electricity; they use solar panels and generators, but they have the internet.

“It’s a nonprofit ISP and our goal is just to get people internet,” Donahue said. “Getting it out here is pretty important. Even just having a cell phone you can use with WiFi is a huge improvement over nothing.”

The speeds aren’t anything revolutionary: the basic plan provides 1.4 Mbps for $40 per month, and local businesses can get speeds up to 10 Mbps at a rate of $200 per month. And it’s not available to everyone in Orleans yet. Because the ISP is a fixed wireless system, it works best with a direct line of sight between the towers and the customer’s premises. That means homes tucked behind even a single row of trees might not be able to pick up a signal. Instead, they’re stuck with the only other option: satellite internet.

Satellite internet is the sole option for many rural communities. Like TV, it provides signal to homes from geostationary satellites, which means it can reach many of the unserved corners of the country. But it has its limitations: Bad weather can make the signal disappear. It’s slow. And it’s expensive: Donahue says that for many residents of Orleans, satellite internet is out of their budget.

Babbie Peterson lives just down the road from the library-slash-community center where I met Donahue. The manager of the local health clinic in Orleans, Peterson told me the Tribe ISP isn’t able to reach her home, which is surrounded by lush trees. When I visited her in February, she said she was paying $150 per month for satellite service that she called “better than dial-up.”

“There are a lot of people in the area that have limited access to things that most folks take for granted,” Peterson added.

Around midday in Orleans, the sun is just coming up in Guam, where Peterson’s oldest son lives with Marlowe, her faraway grandchild. Though she’s tried doing video chats with the six-year-old, the internet access is too slow and glitchy, an inconvenience that breaks her heart.

“It doesn’t work so good here,” she told me. “It’s really disappointing when you see them and you’re a total stranger to them because they don’t recognize you. I have cousins who can read their grandchildren bedtimes stories [over Skype]. I’m jealous.”

Stories like this make Donahue, who learned his tech skills on the job, more determined to expand the Tribe ISP. He told me his goal is to get everyone in the town who wants internet a connection.

Luckily, his home is close enough to a tower to get the Tribe ISP, so his two sons and two nieces are able to connect to the rest of the world in ways he never imagined as a kid growing up in these mountains. There was a time when he and his wife lived in other parts of the state, but when they were both able to get jobs back home—his wife is a children’s counsellor—they jumped at the chance. Even with all the challenges, the isolation, the remoteness, there’s nowhere else they’d rather be, and they’re determined to close the divide that for so long left their community behind.

“This is where we grew up and this is where all our ceremonial sites are located,” Donahue said. “It’s important for us to be near that. We always knew we were going to live here.”


Before the Rural Electrification Act was passed in 1936, many Americans were on the far side of a different technological divide. Though we take for granted the ubiquity of electricity now, for a long time many Americans were left behind by electric companies that didn’t want to spend the money to power remote, rural, poor, and less-populated areas. Senator George Norris, who represented Nebraska from 1913 until 1943, later recalled in his autobiography that at the time rural Americans had become sharply "conscious of the great gap between their lives and the lives of those whom the accident of birth or choice placed in towns and cities."

It’s difficult not to draw similarities between that “great gap” and the digital divide holding so much of America back today. Many solutions have been proposed, and successfully executed in specific areas, but a widespread, ambitious solution like the Rural Electrification Act is little more than a dream at this point.

Instead, as the internet continues to become more and more vital to daily life, the areas without access drift further away from the rest of the country.

“Our world is a little bit different than everybody else’s,” said Ruth Bland, the school technology coordinator in West Virginia. “We can’t just sit in this county and let the rest of the world go by.”

BT Pushes Ahead with Plans to Switch Off Telephone Network

Consultation next month following plan to shift Brits over to VoIP
Kat Hall

BT is forging ahead with plans to shut its traditional telephone network in Britain, with the intention of shifting all customers over to IP telephony services by 2025.

The closure of the public switched telephone network (PSTN) is part of plans by BT toward internet-based voice calls via a fibre network. As such it will be looking to close a chunk of exchanges.

Yesterday, Openreach wrote to its communications providers about the move. The broadband division will open consultation next month on the withdrawal of its Wholesale Line Rental (WLR) products, which are reliant on the PSTN.

In an email, seen by The Register, it said:

"This is a truly significant change for the industry and represents a move from an analogue to a digital, fibre led future. These changes will affect how you do business with Openreach."

The consultation will seek feedback on the process and timeline for the withdrawal of WLR and related products.

Cathy Gerosa, head of Regulatory Affairs at representative body for providers, the Federation of Communication Services, noted many of its members have a large WLR presence. She said many do business directly with Openreach for managing that. "This gives them a direct route in for ordering products and for chasing when things go wrong.

"With the move to fibre-only, the B2B [comms providers] are likely to be pushed one place down the chain... and will have less direct control over the services that they offer."

An Openreach spokesman said: "In May, we’ll consult with industry around the process of withdrawing WLR and related products.

"This follows plans by BT to upgrade its customers from analogue (PSTN) to digital (all IP) telephone services by 2025.

"We’ll be working with our Communication Provider customers over the coming months as we consider the move to IP voice services - where broadband rather than voice becomes the primary service."

Other communications companies in Germany, Japan, Sweden, are already in the process of moving voice to run over IP. Orange has set a goal of having all IP (digital) networks by 2020, and Deutsche Telekom aims to migrate all its lines in Europe to digital by the end of 2018.

Openreach also plans to pass three million homes and businesses with fibre-to-the-premise by 2020.
http://www.theregister.co.uk/2018/04...on e_network/

Justice Department Probes U.S. Wireless Carriers’ Work on SIM Card Alternative

AT&T, Verizon at center of probe into whether major carriers are making it harder for subscribers to switch providers
Drew FitzGerald and Brent Kendall

The U.S. Department of Justice is investigating whether U.S. wireless carriers and an industry trade group teamed up to make it harder for cellphone subscribers to switch providers, according to people familiar with the investigation.

The agency in February sent civil investigative demands to the four major U.S. wireless carriers and the GSMA, an international standards organization responsible for eSIM technology, the people said. The eSIM standard lets wireless subscribers move their phone number to a new carrier without having to remove a physical SIM card.

The department for more than a year has had its eye on the issue of SIM cards and phone portability, with a focus on the two largest carriers, AT&T Inc. T -0.43% and Verizon Communications Inc., VZ -1.09% though the February subpoenas represent a new stage of the inquiry, the people said.

The department told the GSMA in an October 2016 letter that it was closing its investigation, according to a copy reviewed by the Journal. The letter warned the association that the government might reopen the probe.

Spokesmen for the Justice Department and the London-based GSMA declined to comment.

An AT&T spokesman said the company is aware of the investigation and provided information to the government. A Verizon spokesman said the company is cooperating with the probe.

“The reality is that we have a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards,” Verizon spokesman Rich Young said. “Nothing more.”

News of the recent probe was first reported by the New York Times.

Most mobile devices won’t work without a SIM card—subscriber identity module—that contains a customer’s account information. In the U.S., SIM cards tend to be usable only on the cellular network of the carrier that issued it.

An eSIM, or embedded SIM, is typically a chip inside a device that cannot be removed. It allows consumers to store multiple carrier profiles on the same device and switch between their networks, though only one can be used at a time.

The technology is already available on some consumer devices, such as the Apple Watch Series 3, Samsung Gear S2 smartwatch and Microsoft’s Surface Pro LTE tablet.

One of the first smartphones released with embedded SIM technology is the Google Pixel 2, which the Alphabet Inc. unit started selling last year. It is testing the technology with its Project Fi wireless service.

Apple Inc. has helped advance efforts to replace the traditional SIM card. In 2014, it introduced an iPad with a built-in SIM card that allowed users to turn their cellular data plans on or off or switch between three of the four big U.S. providers. The iPad’s “soft SIM” sparked speculation that it might put similar technology into its popular iPhones, but that has yet to happen.

“Apple’s desperate for this technology to be there because they want to make the phone smaller and thinner,” said Kyle Wiens, chief executive of iFixit, which tears down iPhones and writes an iPhone repair manual.

He said that eliminating the SIM would create more space for a larger battery or chips to boost performance. “The ideal phone would have no buttons, no ports, nothing, so you know the SIM card has to drive them crazy from a design perspective.”

Apple declined to comment.

—Tripp Mickle contributed to this article.

Here’s how The New York Times is Trying to Preserve Millions of Old Pages the Way they were Originally Published

“We like to think of ourselves as the paper of record, but then it’s important that we actually keep those records.”
Shan Wang

Remember Flash?

Adobe is sunsetting the software, which powered so many early web games and videos, in December 2020; browsers like Chrome, Edge, and Safari have already choked off or limited support for Flash Player over the past few years.

The fate of so many Flash games and interactives, absent proper guardians, is part of a broader problem: how to rescue work painstakingly built on now-outdated formats from the dustbin of internet history.

It’s one The New York Times has been grappling with for its two decades of online content. The entire organization is moving from a previous version of the system that had been powering NYTimes.com to the latest framework. (For those following extremely closely, the stack was called NYT4 from 2006 to 2014 and NYT5 starting in 2014; the new system is called VI.) With these changes, article pages can get broken or shoehorned into a new page format in which important elements of the original piece disappear. The Times has recently started moving its published content — that’s everything from web pages to images to fonts to CSS files — from its own data centers to cloud services, spurring a concerted internal push to systematically un-break and preserve as many of its older pages as possible.

Readers can now see some public-facing fruits of that labor. The Times started directing some traffic to old stories to archive.nytimes.com in the past few months. If you go searching for the Times’ real-time coverage of the 9/11 attacks, for instance, you might get to the this archived page, where you’d see the page nearly exactly the way it appeared to site visitors on that day in time. (There aren’t live ads on these archived pages, mostly since the old ad technologies being used on those pages no longer work. Nor would you see modules like “Most Read” or “Most Emailed.”)

These preserved pages are all in front of the Times paywall for now; there’s an interesting thread going here about making the case for archiving in newsrooms and practical archiving approaches, from Ben Welsh of the Los Angeles Times. (Welsh is himself the man behind the homepage-archiving site PastPages, which we first wrote about back in 2014.)

“When we started this effort last summer, it was exciting to have people involved who believed it was important to preserve the original presentation of things,” Eugene Wang, a senior product manager at the Times, said. Wang is part of a core team that works on the Times’s archiving efforts, which are part of a broader internal effort called Project Kondo (as in, life-organizing phenomenon Marie Kondo) to review old features and initiatives on the site — and then decide what to save and what to shut down. “There was one path we could’ve taken where we’d say: We have all these articles and can render them on our new platform and just be done with it. But we recognized there was value in having a representation of them when they were first published. The archive also serves as a picture of how tools of digital storytelling evolved.”

Here’s “Angry Birds, Farmville and Other Hyperaddictive ‘Stupid Games,’” a 2012 New York Times magazine story, as it appears on the site today.

Click on “see how this article appeared when it was originally published on NYTimes.com” and it’ll take you to the archive.nytimes.com version of the article, which has mostly replicated the original flash game that accompanied the story online in 2012:

(We wrote about that story when it came out in 2012 if you’re interested in how it was made.)

“Because we were moving things from one domain another, from www.nytimes.com to archive.nytimes.com, some of them depended on assets existing on certain paths that wouldn’t be on those specific paths anymore. So we needed to figure out how to identify in an automated way these pages that were not maintained but being shown to readers,” Times software engineer Justin Heideman, who built internal tools to help create the online archives, said. “A lot of the things we discovered were already broken. These were things built 10 years ago, maybe more, that nobody had been maintaining for maybe 9.5 years. And when we do come across a thing that’s broken, it’s a bit of web archaeology to figure out why it’s broken, if it’s broken for any unique reason, or if there’s a whole class of pages that are broken that can be fixed as a class.”

The Times team first made sure to screenshot via Google Chrome and save to Google Cloud 740,000 articles that would at least be preserved in that way, should something go seriously wrong in the archiving process. I’ll let Heideman describe what he built to actually move pages into the official Times web archive. (He also described the technical process in depth at a talk last November at RJI’s Dodging the Memory Hole, if you’re interested in additional nitty gritty.)

“For the archiving itself, we built a tool I called the ‘munger.’ It’s basically a big complicated find-and-replace engine in JavaScript, where we find references to servers that aren’t running, dynamic code blocks, old tags, and all kinds of other junk and strip it out or clean it up. The end result we get is tidied, clean HTML that we can share with the world and that has a more reliable set of dependencies. The munger runs with un-modified data we copied into Google Cloud Storage and outputs archival HTML into another GCS bucket, so we can re-run the pipeline again and again as we discover/fix bugs.

We also tried to update pages from HTTP to HTTPS, and to facilitate this we used the same tooling for screenshotting to analyze the pages in a real browser and see if they would throw mixed content errors (where an HTTPS page tries to load HTTP content), which could break a page. So our archive is a mix of HTTP and HTTPS pages. It is simply not practical for us to fix every page. We do this by injecting a bit of data about the page into the page itself, which lets a script we also inject figure out if it should be HTTPS or not, in addition to adding a visual header on the page letting visitors know that it’s an archived page.”

“Some stuff just keeps working fine. For the most part, this is a thing that people rarely think about except when things go wrong. These stories are so dependent on code, on special designs, and everyone needs to be focused on their next stories, so there’s overall not much thought given to how old stuff works,” Albert Sun, assistant editor of news platforms at the Times, said. “When we make a transition to use the latest and greatest website system — one that gives us the latest ad framework, that plays well with the subscriber model, is nicely mobile-optimized — we can lose a lot of that original work. Given the amount of work and attention and care that’s gone into producing all of these pieces over the years, this seemed like a real shame.”

Visitors to broken pages have sent in feedback. There’s also an internal form for reporting issues. Still, pages will always be breaking. Tens of thousands of NYTimes.com pages, for instance, contain Flash graphics, Heideman said. After 2020, when Flash support formally ends, what will places like the Times do with all that content? And Flash is far from the only issue. To name just one other major headache: Last year, the Times started enabling HTTPS on NYTimes.com, but stories before that were not being served over a secured connection. (Meredith Broussard and Katherine Boss at NYU have been thinking additional steps ahead and researching methodologies that would allow newsrooms to fully preserve their news apps and interactives even as the technologies they were built on change.)

“There are some instances of old stories where, when we put them into the archive we were still getting a ton of reader interest on them, or it turned out a story ranked really strongly in search and people were upset their links stopped working,” Sun said. A 2005 David Leonhardt project around income and class in America, for instance, was being assigned as part of class reading. “A bunch of people actually wrote in to say: I can’t do my homework. That was a good reminder that people, over a decade later, still find value in that page.”

“For us, there are implications outside just our own pages to making sure things we served back then on a particular path, continue to be there forever. For instance, Google Search may have indexed one of our photographs of George Bush, and if we broke that image, people may lose that search, and we lose that referral traffic,” Heideman said. “We like to think of ourselves as the paper of record, but then it’s important that we actually keep those records.”

(Somewhere, Nicholson Baker is laughing — and here’s an archive.nytimes.com article page to prove it.)

German Supreme Court Rules Ad Blockers Legal, in Defeat for Springer

Germany’s Supreme Court on Thursday threw out a case brought by Axel Springer seeking to ban a popular application that blocks online advertising, in a landmark ruling that deals a blow to the publishing industry.

The court found in favor of Adblock Plus adblockplus.org, an app marketed by a firm called Eyeo that has been downloaded more than 100 million times by users around the world seeking protection from unwanted or intrusive online advertising.

“We are excited that Germany’s highest court upheld the right every internet citizen possesses to block unwanted advertising online,” Adblock Plus said after the verdict.

Springer and other media firms - including ProSiebenSat.1 Media, RTL, the Sueddeutsche Zeitung and Spiegel Online - had brought separate cases against Adblock Plus. It was the first to reach the Supreme Court.

The publisher of Bild and Business Insider argued that blocking online ads violated competition law - as did charging companies to be added to a ‘white list’ whose advertising would be allowed through - and had sought compensation.

In its ruling the court in Karlsruhe struck down the case brought by Springer. It found online ad blockers to be legal, and overturned a lower court decision that operating a white list was tantamount to unfair competition.

Springer said it would appeal to the Constitutional Court on the grounds that ad blockers violated press freedom by disrupting online media and their financial viability.

“We are talking about an attack on the heart of the free media,” Springer’s head of media law, Claas-Hendrick Soehring said after the verdict.

Reporting by Ursula Knapp and Douglas Busvine; Editing by Hugh Lawson

Children Prefer to Read Books on Paper Rather than Screens

Children may actually prefer reading books the traditional way.
Margaret Kristin Merga

There is a common perception that children are more likely to read if it is on a device such as an iPad or Kindles. But new research shows that this is not necessarily the case.

In a study of children in Year 4 and 6, those who had regular access to devices with eReading capability (such as Kindles, iPads and mobile phones) did not tend to use their devices for reading - and this was the case even when they were daily book readers.

Research also found that the more devices a child had access to, the less they read in general.

It suggests that providing children with eReading devices can actually inhibit their reading, and that paper books are often still preferred by young people.

These findings match previous research which looked at how teenagers prefer to read. This research found that while some students enjoyed reading books on devices, the majority of students with access to these technologies did not use them regularly for this purpose. Importantly, the most avid book readers did not frequently read books on screens.

Why do we think children prefer to read on screens?

There is a popular assumption that young people prefer to read on screens. This was mainly driven by education writer Marc Prensky who in 2001 coined the term “digital natives”. This term characterises young people as having high digital literacy and a uniform preference for screen-based reading.

But young people do not have a uniform set of skills, and the contention that screens are preferred is not backed up by research.

Despite this, the myth has already had an impact on book resourcing decisions at school and public libraries, both in Australia and in the US, with some libraries choosing to remove all paper books in response to a perceived greater preference for eBooks.
But by doing this, libraries are actually limiting young people’s access to their preferred reading mode, which in turn could have a detrimental impact on how often they choose to read.

Young people are gaining increasing access to devices through school-promoted programs, and parents face aggressive marketing to stay abreast of educational technologies at home.

Schools are motivated to increase device use, with Information and Communication Technology being marked as a general capability to be demonstrated across every subject area in the Australian Curriculum.

The drivers toward screen-based recreational book reading are strong, but they are not well-founded.

Why are students more likely to prefer paper books?

Reading on devices through an application leaves more room to be distracted, allowing the user to switch between applications.

For students who already experience difficulty with attention, the immediate rewards of playing a game may easily outweigh the potentially longer-term benefits of reading.

Digital literacy could also be an issue. In order to use a device to read books, children need to know how to use their devices for the purpose of reading books.

They need to know how to access free reading material legally through applications such as Overdrive or websites such as Project Gutenburg.

Tips for encouraging your child to read

Research shows that reading books is a more effective way to both improve and retain literacy skills, as opposed to simply reading other types of text. Yet international research suggests that young people are reading fewer and fewer books.

While equipping children with devices that have eReading capability is unlikely to encourage them to read, there are a number of strategies, supported by research, that can help encourage children to pick up a book. These include:

• Be seen to enjoy reading. This study found that a number of students did not know if their literacy teachers actually liked reading. Teachers who were keen readers inspired some students to read more often and take an interest in a broader range of books.

• Create (and regularly access) reading-friendly spaces at home and at school. Loud noises, poor lighting and numerous distractions will not help provide an enjoyable reading experience, and are likely to lead to frustration.

• Encourage regular silent reading of books at school and at home. Giving children time to read at school not only encourages a routine of reading, but it also may be the only opportunity a child has to read self-selected books for pleasure.

• Teachers and parents should talk about books, sharing ideas and recommendations.

• Continue to encourage your child and students to read for pleasure. While we know that children tend to become disengaged with books over time, in some cases this can be due to withdrawal of encouragement once children can read on their own. This leads children to falsely assume that reading is no longer important for them. Yet reading remains important for both children an adults to build and retain literacy skills.

• Find out what your child enjoys reading, and support their access to books at school and at home.


'Rampage' Debuts at No. 1, But it's Sleeper Hit 'A Quiet Place' that Keeps Rocking the Box Office
Jen Yamato

Dwayne Johnson and his gorilla buddy George might have scored the box office crown with a $34.5 million take for city-smashing action flick “Rampage” — but the weekend’s real winner knew how to speak softly and carry a big second weekend.

Falling shy of pre-release projections that pegged the $120-million-budgeted “Rampage” for an opening of $35 million to $45 million, the Warner Bros. and New Line release arrived in theaters with just enough of a box office bang to eke out a #1 opening over previous weekend winner “A Quiet Place.”

Global audiences smelled what Johnson was cooking last December when he helped lead Sony Pictures’ positively reviewed “Jumanji: Welcome to the Jungle” to a colossal $950-million worldwide box office.

But “Rampage,” in which he plays a primatologist trying to save the world and his primate BFF from a nefarious scientific experiment gone haywire, split critics down the middle with a 50% Rotten Tomatoes score even as audiences gave it an “A-” CinemaScore rating.

The Brad Peyton-directed action adventure took $114.1 million internationally in its worldwide debut for a $148.6 total and will have to lean heavily on Johnson’s star power to keep a momentum that can offset the pricey budget.

Impressively, less than $2 million in ticket sales stood in the way of a “Quiet Place” upset by director-star John Krasinski, whose critically acclaimed tale about a family living in silence to hide from monsters came in at second with $32.6 million. That's a modest 35% decline from its surprisingly potent debut last weekend.

The tense genre film also stars Emily Blunt, Noah Jupe and Millicent Simmonds and is on the verge of breaking $100 million domestically, with a worldwide total of $151.3 million after 10 days in theaters.

The success of an inventive horror concept like “A Quiet Place” coincides with the more low-hanging frights of Universal’s “Blumhouse’s Truth Or Dare,” which landed a “B-” CinemaScore but an anemic 15% on Rotten Tomatoes.

Making the most of a gruesome plot inspired by the real-life game and tween catnip stars Lucy Hale and Tyler Posey, the critically panned PG-13 outing took in $19.09 million over the Friday the 13th weekend. Even so, made within the low-budget Blumhouse model, that’s still a recipe for success.

Fourth place went to Steven Spielberg’s pixel-party nostalgia-fest “Ready Player One,” which fell a hefty 54% from last weekend but added $11.2 million to its coins for a total of $114.6 million domestic to date.

The Kay Cannon-directed “Blockers” came in fifth, slipping a steep 50% to add another $10.29 million to its $36.92 million domestic tally. Universal’s R-rated comedy starring John Cena, Leslie Mann, Ike Barinholtz, Geraldine Viswanathan, Kathryn Newton and Gideon Adlon has notched $52.9 million worldwide to date.

Wes Anderson’s stop-motion outing “Isle of Dogs” went ambitiously wide but made just $5 million from 1,939 locations. The Fox Searchlight release added 1,385 locations from last week but saw a weekend box office bump of only 10%.

Three weeks ago, "Dogs" opened in limited release to the best per-screen average of the year but also faced criticisms of cultural appropriation, largely from the Asian American community.

Elsewhere in canine cinema, upstart distributor Fun Academy unleashed the animated title "Sgt. Stubby: An American Hero" — and added an “A” CinemaScore to a robust 90% Rotten Tomatoes rating — also in wide release, but weekend grosses barely cracked $1 million.

Slipping into 755 theaters for a $1.65-million take was Bleecker Street’s R-rated Jon Hamm starrer “Beirut,” a CIA spy film directed by “The Machinist’s” Brad Anderson. Written and produced by Tony Gilroy, the film scored 78% on Rotten Tomatoes. It also stars Rosamund Pike.

The specialty release of note this week is Sony Pictures Classics’ “The Rider.” The award-winning drama from director Chloé Zhao stars Brady Jandreau as a former rodeo star redefining his sense of self after a devastating riding accident. It’s sitting pretty at 96% on Rotten Tomatoes.

After premiering at Cannes, where it won the Directors’ Fortnight Art Cinema Award, the film opened to $45,268 from three theaters and solidifies Zhao as a rising director to watch.

Next weekend's wide releases include STX Entertainment's Amy Schumer vehicle "I Feel Pretty," Fox Searchlight's comedy sequel "Super Troopers 2" and Lionsgate and Codeblack's thriller "Traffik."

Netflix Licensed Content Generates 80% of U.S. Viewing, Study Finds
Todd Spangler

Netflix is spending a pretty penny on original entertainment — but while that stuff grabs most of the headlines, it’s actually licensed titles like TV show reruns that still form the core of the company’s streaming business.

That’s according to a data analysis from 7Park Data, which found that 80% of Netflix U.S. viewing is from licensed content with 20% from original shows like “House of Cards” or “Stranger Things.” The firm also found that 42% of Netflix subscribers watch mostly licensed content (95% or more of their total streaming). Just 18% of Netflix’s U.S. streaming customers are “originals dominant,” whose viewing comprises 40%-100% of originals, according to 7Park. The data is for the 12-month period that ended September 2017.

Top licensed titles on Netflix for that period included “Breaking Bad,” “Grey’s Anatomy,” “The Blacklist,” “How I Met Your Mother,” “The Office,” “Parks and Recreation,” “Criminal Minds,” “Supernatural,” “The Flash,” and “Friends.” (Note that “How I Met Your Mother” rolled off Netflix and moved to Hulu in November 2017 under a deal with 20th Century Fox Television.)

For Hulu, which has fewer original series than Netflix, the ratio of licensed-to-original content viewing is even higher: 97% of Hulu streams were from licensed content for the 12 months ended September 2017. Hulu’s biggest breakout success to date has been award-winning series “The Handmaid’s Tale,” based on Margaret Atwood’s novel.

Moreover, while originals play an important role in driving new subscriptions, even here licensed content has the edge: 58% of new Netflix U.S. subs watched licensed programming first, while 89% of Hulu subs did.

Even when Netflix debuts a much-hyped new show, licensed content remains the bulk of U.S. customers’ viewing. For example, in the seven days after “Stranger Things” season 1 debuted, licensed shows were still 63% of TV viewing; in the week following the premiere of “Black Mirror” season 3, around 88% of TV series viewing was licensed content, 7Park found.

There aren’t public numbers on what the tonnage is of Netflix’s originals vs. licensed content. It’s possible that original TV shows and movies overindex in terms of viewing — but the point is, for all the noise about Netflix originals, the bulk of its value proposition for consumers is still largely in second-run (or later) content windows.

Reps for Netflix and Hulu declined to comment on the 7Park report.

Of course, as with other attempts to measure SVOD services, some caveats are in order about the limitations of 7Park’s methodology. Most significantly, the research firm’s panel measures only desktop viewing — excluding mobile and connected-TV platforms. (According to 7Park, it has conducted “extensive testing” of its data against industry metrics for mobile and connected TV platforms, indicating that the data is “highly representative of all viewership, regardless of platform or device.”) Meanwhile, 7Park claims to have more than 2 million panel members in 50 countries, but it doesn’t disclose how many it has in the U.S. or what the margin of error is for the latest study.

That said, there’s no denying that licensed content remains a key part of the lineup for Netflix, Hulu, Amazon Prime Video and other services. Such programming is popular because there’s already a broad awareness among consumers of TV shows like “Breaking Bad” or “Grey’s Anatomy.” Plus, in a subscription VOD streaming environment, viewers are able to binge-watch full seasons — and they don’t have to watch ads.

“Licensed content is the engagement engine that drives SVOD viewership, retention and revenue,” commented Christopher Coby, senior industry analyst at 7Park Data.

Even so, Netflix isn’t taking its foot off the gas on the originals front. CFO David Wells projected the company will have some 700 original series total globally this year. Netflix, which expects to spend up to $8 billion on content in 2018, has set a long-term target of allocating 50% of its content budget to originals.

The company’s strategy continues to be, “Let’s continue to add content — it’s working, it’s driving growth,” Wells said at an investor conference in February.

And in fact, Netflix’s booming slate of original content is moving the needle. For the 12-month period ended September 2016, just 12% of U.S. streams were Netflix originals — increasing to 20% the following year, per 7Park’s study.

New York-based 7Park Data, founded in 2012, is backed by investors including Mueller Ventures. The company sells data tracking Netflix, Hulu and Amazon VOD viewing to clients across the entertainment industry including studios, TV networks, production companies, and talent agencies.

Per 7Park’s analysis, the most popular Netflix originals for the 12 months ended September 2017 included: “Stranger Things” season 1, the fifth seasons of “Orange Is the New Black” and “House of Cards,” “Marvel’s Luke Cage,” “Marvel’s The Defenders,” “Marvel’s Iron Fist,” “13 Reasons Why,” “Ozark,” “Santa Clarita Diet,” “A Series of Unfortunate Events,” “Master of None” season 2, “Narcos” season 3, “Grace & Frankie” season 3, “Black Mirror” season 3, “The Unbreakable Kimmy Schmidt” season 3, and “Bojack Horseman” season 4.

Fury in Germany as Rap Duo With Anti-Jewish Lyrics Gets Award
Melissa Eddy and Andrew Curry

In Germany’s hugely popular hip-hop music scene, one of the biggest albums of the past year was from two trash-talking rappers who rhymed about their prowess in bed and in the weight room and about violently dominating their opponents.

The album has racked up sales, but has also attracted a different sort of attention. In one song, the pair boast about how their bodies are “more defined than Auschwitz prisoners.” In another, they vow to “make another Holocaust, show up with a Molotov.”

Widespread condemnation turned into an uproar in the last week since the rappers, Farid Bang and Kollegah, won the Echo award for best hip-hop album at Germany’s equivalent of the Grammys on April 12.

The lead singer of the country’s pre-eminent punk rock band objected to the award from the same stage that night. “In principle I consider provocation is a good thing,” Campino, the lead singer of Die Toten Hosen, said. “But we need to differentiate between art as a stylistic device, or a form of provocation that only serves to destroy and ostracize others.” Other winners have said they are returning their prizes.

Posting on Twitter in German, the foreign minister, Heiko Maas, wrote: “Anti-Semitic provocations do not deserve awards, they are simply disgusting.”

He also noted the unfortunate timing of the ceremony. April 12 is a day of worldwide solemnity. “That such a prize was handed out on Holocaust Remembrance Day is shameful,” he wrote.

The country’s recording industry association had criticized the lyrics but defended its choice in the name of artistic freedom. Nominations are based on popularity and rankings on music charts, not artistic quality — a process the association has pledged to re-examine after the outcry.

But beyond the resentment over the award, the episode has also provoked soul-searching about incitement in art, and the extent of anti-Jewish sentiment in German hip-hop in particular.

And most troubling, many believe, is what it says about the rise in anti-Semitism among young people, and the millions of impressionable rap fans who are generations removed from the horrors of Nazi rule.

Germany’s attempts to atone for the evils of its past, while confronting the troubles of its present, is its never-ending preoccupation. On Wednesday, in response to a video showing a man in Berlin wearing a Jewish skullcap being attacked by a group of young men speaking Arabic, Chancellor Angela Merkel vowed to commit her government to fighting anti-Semitism “relentlessly and with resolve.”

“This fight against such anti-Semitic excesses must be won,” Ms. Merkel said. (The victim in the video turned out not to be Jewish — he was an Arab Israeli who said he was trying to prove to a friend that he could wear a skullcap in Germany without being hassled.)

The objectionable lyrics in the winning album, titled “Young, Brutal, Good Looking 3,” do not explicitly deny the mass slaughter of some six million Jews by the Nazis, nor do they specifically incite hatred of Jews, both of which would have made them illegal under Germany’s strict laws banning Holocaust denial.

Kollegah and Farid Bang did not respond to requests for comment. On the night of the ceremony, Kollegah replied to criticism by saying, “I don’t want to make a political debate out of this,” and invited anyone who wanted to discuss it to approach him at the after-party.

In the past, they have defended their lyrics as art and exaggeration. On Facebook last month, Farid Bang apologized to Esther Bejarano, a 93-year-old singer and Auschwitz survivor who had spoken out about the lyrics. Both men have offered to let Jews come to their concerts for free forever as proof, they said, that they bore no hatred.

But Jakob Baier, a researcher at the Hans Böckler Foundation focusing on anti-Semitism in German rap music, called the lyrics “despicable” and said they scorned the victims of Auschwitz. He noted that some of Kollegah’s other songs and music videos promoted conspiracy theories and the message that “the world is in control of evil, and the evil is marked as Jewish.”

In the music video for his track “Apocalypse,” a banker in a London office tower is shown controlling the evil forces in the world, and wearing a Star of David ring. After a final showdown between good and evil, Kollegah — a 33-year-old convert to Islam whose real name is Felix Blume — raps, “Muslims, Christians and Buddhists lived together in peace,” pointedly not mentioning Jews.

Allegations of anti-Semitism have dogged German hip-hop for years and were even the subject of a recent documentary, “The Dark Side of German Rap.” One song by the rapper Haftbefehl mentions a conspiracy theory about the Rothschilds, a Jewish banking family, and the video for another features images of Orthodox Jews carrying suitcases of money and diamonds over the lyrics “money, money rich.”

Many lyrics are also homophobic and degrading to women — issues in rap music that transcend Germany’s borders. In one song, the rapper Shindy says that his openness to having sex — described in an obscene way — with Jewish women is proof he is not an anti-Semite.

The scene’s politics lean heavily anti-Israel. Bushido, another best-selling German rapper, once used a map of the Middle East, without Israel, as his Facebook profile picture. In an interview on Wednesday, he said that he had done it in solidarity with Palestinians because of his own Arabic roots.

“It’s not just about Israel, it’s about injustice everywhere,” he said. “But no one listens when you’re calm and polite, and so you have to use more drastic means.”

Nevertheless, he faulted Kollegah’s and Farid Bang’s lyrics. Words that conjure images like “concentration camps, Auschwitz, Jews, people who were gassed — those shouldn’t be used,” Bushido said.

With surveys increasingly showing that the Holocaust is receding from memory, many are concerned that downplaying the gravity of what happened under the Nazis can open the door for a return of discrimination against Jews. This comes amid a rise of far-right populism across Europe, and the arrival of some 1.4 million migrants and refugees in Germany, many from Middle Eastern countries where hatred for Israel is taught in schools. Some popular hip-hop artists hail from Germany’s inner cities and are of Turkish or Arabic descent. (Farid Bang, whose real name is Farid El Abdellaoui, has North African roots.)

Ms. Merkel’s government has for the first time appointed a commissioner to combat anti-Semitism in response to reports that incidents are increasing, especially among the young.

According to the Research and Information Center in Berlin, which records incidents of anti-Semitism in the German capital, 947 occurred last year, a 60 percent increase from 2016.

Children in German schoolyards casually toss about “You Jew,” as an insult, and reinforce stereotypes about Jews, such as saying “Don’t be such a Jew” when trying to convince someone to lend some change.

“At a time when hate against Jews is increasing around the world and a flood of anti-Jewish sentiment can be seen online, especially among young people,” said Monika Schwarz-Friesel, a professor of linguistics at Berlin’s Technical University, “to declare anti-Semitic and fantastical, conspiratorial song texts as ‘artistic freedom,’ and award them prizes is viewed by researchers of anti-Semitism as particularly irresponsible.”

Anti-Semitic themes have plagued other German music genres — in particular, punk and metal music popular among the country’s neo-Nazis. But those groups have remained largely underground, often forced to perform outside Germany because of its Holocaust-denial laws.

Popular German rappers, on the other hand, have a huge fan base; Kollegah has 1.4 million followers on Instagram. And the fans skew young. The music appeals to children and teens who share and debate the latest songs on social media and in schoolyards. “Young, Brutal, Good-Looking 3” topped the charts in Germany, Austria and Switzerland and was streamed 23 million times on Spotify in the first week of its release on the service.

Some rap fans have said that the lyrics were being unfairly scrutinized by people who did not understand the genre, in which rappers constantly try to outdo and outshock their rivals.

“Of course I think this line is tasteless,” Michael Fritzsche, 26, of Leipzig, said, referring to the offending lyrics. “But let’s be honest, a discussion about the political correctness in music lyrics should not be limited to rap.”

But for all of the uproar over the words, Viola Funk, a journalist in Berlin who covers hip-hop, said she believed a larger point was being missed.

“German rap is a scapegoat, because youth culture is always a scapegoat,” Ms. Funk, who directed “The Dark Side of German Rap,” said. “As if it didn’t have anything to do with society at large.”

U.S.-U.K. Warning on Cyberattacks Includes Private Homes
David D. Kirkpatrick and Ron Nixon

The United States and Britain on Monday issued a first-of-its-kind joint warning about Russian cyberattacks against government and private organizations as well as individual homes and offices in both countries, a milestone in the escalating use of cyberweaponry between major powers.

Although Washington and London have known for decades that the Kremlin was trying to penetrate their computer networks, the joint warning appeared to represent an effort to deter future attacks by calling attention to existing vulnerabilities, prodding individuals to mitigate them and threatening retaliation against Moscow if damage was done.

“When we see malicious cyberattacks, whether from the Kremlin or other nation-state actors, we are going to push back,” Rob Joyce, a special assistant to the president and the cybersecurity coordinator for the National Security Council, said in joint conference call with journalists by senior officials in Washington and London. That would include “all elements of U.S. power available to push back against these kinds of intrusions,” he added, including “our capabilities in the physical world.”

Robert Hannigan, an executive with the cybersecurity company BlueVoyant and the former director of the British electronic spying agency GCHQ, said: “We have found the Russians in routers and deep inside networks for 20 years. But this is about saying to the Russians, ‘We know where you are pre-positioned and if something happens, we will know it is you.’”

The sweep and urgency of the statements from both sides of the Atlantic called to mind a computer-age version of a Cold War air raid drill, but asking citizens to upgrade their passwords rather than duck and cover.
Continue reading the main story

Ciaran Martin, chief executive of Britain’s National Cyber Security Center, said Russia had targeted “millions” of devices in both countries, often seeking to hack into individual homes or small businesses or to control their routers.

“Once you own the router, you own all the traffic, to include the chance to harvest credentials and passwords,” said Howard Marshall, deputy assistant director of the cyber division at the Federal Bureau of Investigation. “It is a tremendous weapon in the hands of an adversary.”

In particular, both governments said, Russians were seeking to exploit the increasing popularity of internet-connected devices around homes and businesses — the so-called internet of things — “the kind of thing you and I have in our homes,” Mr. Joyce said.

The officials said the Kremlin was often utilizing what were known as man-in-the-middle attacks, in which hackers secretly inserted themselves into the exchange of data between a computer or server in order to eavesdrop, collect confidential information, misdirect payments or further compromise security.

“Russian state-sponsored actors are using compromised routers to conduct spoofing ‘man-in-the-middle’ attacks to support espionage, extract intellectual property, maintain persistent access to victim networks and potentially lay a foundation for future offensive operations,” the British government said in a prepared statement. “Multiple sources including private and public-sector cybersecurity research organizations and allies have reported this activity to the U.S. and U.K. governments.”

But the officials said that the extent of Russia’s successful penetration of Western computer networks was not fully clear, nor was the Kremlin’s ultimate intent. Russia might be tapping into millions of home or small business computers and other devices to gain the ability to use them later in a coordinated attack on government computers or critical infrastructure, the officials said.

The goal “is not always to steal information,” Mr. Joyce said. “Sometimes it is to facilitate other operations” or “for further aggressive acts.”

The warnings issued Monday, including the release of technical guidance to businesses and individuals, had been in the works for a long period and do not reflect any response to recent events, the officials said. But the finger pointing toward Moscow also comes at a moment of escalating tensions.

Russian diplomats have castigated the United States, Britain and France for their airstrikes last week on what they said were chemical weapons facilities in Syria, where the Kremlin is backing the government of President Bashar al-Assad. Russia and the Western governments have also recalled diplomats in a back and forth over British accusations that the Kremlin used a nerve agent to try to assassinate a former Russian spy living near London.

In Washington, both Democrats and Republicans have criticized President Trump for what they say is his reluctance to hold Russia accountable for its hacking of the Democrats during the 2016 presidential election; American intelligence agencies have also blamed the Kremlin for those attacks.

Against that backdrop, Washington and London have been moving together for months to publicize allegations of other malicious cyberactivities by the Kremlin. In February, they blamed Russia for a cyberattack the previous June that was known as NotPetya. Initially aimed at Ukraine, the attack spread through computer networks around the world, doing what the White House said was billions of dollars in damages in the United States, Europe and Asia.

Both the United States and Britain have accused the Kremlin of trying to penetrate the electrical grid in both countries, although without yet doing any damage.

After describing the Russian threats, officials of both governments on Monday repeatedly urged individuals and businesses to better protect their own networks. “We need to place as much emphasis on security as we do on ease and functionality,” Mr. Joyce urged manufacturers.

David D. Kirkpatrick reported from London, and Ron Nixon from Washington.

Palantir Knows Everything About You

Peter Thiel’s data-mining company is using War on Terror tools to track American citizens. The scary thing? Palantir is desperate for new customers.
Peter Waldman, Lizette Chapman, and Jordan Robertson

High above the Hudson River in downtown Jersey City, a former U.S. Secret Service agent named Peter Cavicchia III ran special ops for JPMorgan Chase & Co. His insider threat group—most large financial institutions have one—used computer algorithms to monitor the bank’s employees, ostensibly to protect against perfidious traders and other miscreants.

Aided by as many as 120 “forward-deployed engineers” from the data mining company Palantir Technologies Inc., which JPMorgan engaged in 2009, Cavicchia’s group vacuumed up emails and browser histories, GPS locations from company-issued smartphones, printer and download activity, and transcripts of digitally recorded phone conversations. Palantir’s software aggregated, searched, sorted, and analyzed these records, surfacing keywords and patterns of behavior that Cavicchia’s team had flagged for potential abuse of corporate assets. Palantir’s algorithm, for example, alerted the insider threat team when an employee started badging into work later than usual, a sign of potential disgruntlement. That would trigger further scrutiny and possibly physical surveillance after hours by bank security personnel.

Over time, however, Cavicchia himself went rogue. Former JPMorgan colleagues describe the environment as Wall Street meets Apocalypse Now, with Cavicchia as Colonel Kurtz, ensconced upriver in his office suite eight floors above the rest of the bank’s security team. People in the department were shocked that no one from the bank or Palantir set any real limits. They darkly joked that Cavicchia was listening to their calls, reading their emails, watching them come and go. Some planted fake information in their communications to see if Cavicchia would mention it at meetings, which he did.

It all ended when the bank’s senior executives learned that they, too, were being watched, and what began as a promising marriage of masters of big data and global finance descended into a spying scandal. The misadventure, which has never been reported, also marked an ominous turn for Palantir, one of the most richly valued startups in Silicon Valley. An intelligence platform designed for the global War on Terror was weaponized against ordinary Americans at home.

Founded in 2004 by Peter Thiel and some fellow PayPal alumni, Palantir cut its teeth working for the Pentagon and the CIA in Afghanistan and Iraq. The company’s engineers and products don’t do any spying themselves; they’re more like a spy’s brain, collecting and analyzing information that’s fed in from the hands, eyes, nose, and ears. The software combs through disparate data sources—financial documents, airline reservations, cellphone records, social media postings—and searches for connections that human analysts might miss. It then presents the linkages in colorful, easy-to-interpret graphics that look like spider webs. U.S. spies and special forces loved it immediately; they deployed Palantir to synthesize and sort the blizzard of battlefield intelligence. It helped planners avoid roadside bombs, track insurgents for assassination, even hunt down Osama bin Laden. The military success led to federal contracts on the civilian side. The U.S. Department of Health and Human Services uses Palantir to detect Medicare fraud. The FBI uses it in criminal probes. The Department of Homeland Security deploys it to screen air travelers and keep tabs on immigrants.

Police and sheriff’s departments in New York, New Orleans, Chicago, and Los Angeles have also used it, frequently ensnaring in the digital dragnet people who aren’t suspected of committing any crime. People and objects pop up on the Palantir screen inside boxes connected to other boxes by radiating lines labeled with the relationship: “Colleague of,” “Lives with,” “Operator of [cell number],” “Owner of [vehicle],” “Sibling of,” even “Lover of.” If the authorities have a picture, the rest is easy. Tapping databases of driver’s license and ID photos, law enforcement agencies can now identify more than half the population of U.S. adults.

JPMorgan was effectively Palantir’s R&D lab and test bed for a foray into the financial sector, via a product called Metropolis. The two companies made an odd couple. Palantir’s software engineers showed up at the bank on skateboards. Neckties and haircuts were too much to ask, but JPMorgan drew the line at T-shirts. The programmers had to agree to wear shirts with collars, tucked in when possible.

As Metropolis was installed and refined, JPMorgan made an equity investment in Palantir and inducted the company into its Hall of Innovation, while its executives raved about Palantir in the press. The software turned “data landfills into gold mines,” Guy Chiarello, who was then JPMorgan’s chief information officer, told Bloomberg Businessweek in 2011.

Cavicchia was in charge of forensic investigations at the bank. Through Palantir, he gained administrative access to a full range of corporate security databases that had previously required separate authorizations and a specific business justification to use. He had unprecedented access to everything, all at once, all the time, on one analytic platform. He was a one-man National Security Agency, surrounded by the Palantir engineers, each one costing the bank as much as $3,000 a day.

Senior investigators stumbled onto the full extent of the spying by accident. In May 2013 the bank’s leadership ordered an internal probe into who had leaked a document to the New York Times about a federal investigation of JPMorgan for possibly manipulating U.S. electricity markets. Evidence indicated the leaker could have been Frank Bisignano, who’d recently resigned as JPMorgan’s co-chief operating officer to become CEO of First Data Corp., the big payments processor. Cavicchia had used Metropolis to gain access to emails about the leak investigation—some written by top executives—and the bank believed he shared the contents of those emails and other communications with Bisignano after Bisignano had left the bank. (Inside JPMorgan, Bisignano was considered Cavicchia’s patron—a senior executive who protected and promoted him.)

JPMorgan officials debated whether to file a suspicious activity report with federal regulators about the internal security breach, as required by law whenever banks suspect regulatory violations. They decided not to—a controversial decision internally, according to multiple sources with the bank. Cavicchia negotiated a severance agreement and was forced to resign. He joined Bisignano at First Data, where he’s now a senior vice president. Chiarello also went to First Data, as president. After their departures, JPMorgan drastically curtailed its Palantir use, in part because “it never lived up to its promised potential,” says one JPMorgan executive who insisted on anonymity to discuss the decision.

The bank, First Data, and Bisignano, Chiarello, and Cavicchia didn’t respond to separately emailed questions for this article. Palantir, in a statement responding to questions about how JPMorgan and others have used its software, declined to answer specific questions. “We are aware that powerful technology can be abused and we spend a lot of time and energy making sure our products are used for the forces of good,” the statement said.

Much depends on how the company chooses to define good. In March a former computer engineer for Cambridge Analytica, the political consulting firm that worked for Donald Trump’s 2016 presidential campaign, testified in the British Parliament that a Palantir employee had helped Cambridge Analytica use the personal data of up to 87 million Facebook users to develop psychographic profiles of individual voters. Palantir said it has a strict policy against working on political issues, including campaigns, and showed Bloomberg emails in which it turned down Cambridge’s request to work with Palantir on multiple occasions. The employee, Palantir said, worked with Cambridge Analytica on his own time. Still, there was no mistaking the implications of the incident: All human relations are a matter of record, ready to be revealed by a clever algorithm. Everyone is a spidergram now.

Thiel, who turned 50 in October, long reveled as the libertarian black sheep in left-leaning Silicon Valley. He contributed $1.25 million to Trump’s presidential victory, spoke at the Republican convention, and has dined with Trump at the White House. But Thiel has told friends he’s had enough of the Bay Area’s “monocultural” liberalism. He’s ditching his longtime base in San Francisco and moving his personal investment firms this year to Los Angeles, where he plans to establish his next project, a conservative media empire.

As Thiel’s wealth has grown, he’s gotten more strident. In a 2009 essay for the Cato Institute, he railed against taxes, #government, women, poor people, and society’s acquiescence to the inevitability of death. (Thiel doesn’t accept death as inexorable.) He wrote that he’d reached some radical conclusions: “Most importantly, I no longer believe that freedom and democracy are compatible.” The 1920s was the last time one could feel “genuinely optimistic” about American democracy, he said; since then, “the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ into an oxymoron.”

Thiel went into tech after missing a prized Supreme Court clerkship following his graduation from Stanford Law School. He co-founded PayPal and then parlayed his winnings from its 2002 sale to EBay Inc. into a career in venture investing. He made an early bet on Facebook Inc. (where he’s still on the board), which accounts for most of his $3.3 billion fortune, as estimated by Bloomberg, and launched his career as a backer of big ideas—things like private space travel (through an investment in SpaceX), hotel alternatives (Airbnb), and floating island nations (the Seasteading Institute).

He started Palantir—named after the omniscient crystal balls in J.R.R. Tolkien’s Lord of the Rings trilogy—three years after the attacks of Sept. 11, 2001. The CIA’s investment arm, In-Q-Tel, was a seed investor. For the role of chief executive officer, he chose an old law school friend and self-described neo-Marxist, Alex Karp. Thiel told Bloomberg in 2011 that civil libertarians ought to embrace Palantir, because data mining is less repressive than the “crazy abuses and draconian policies” proposed after Sept. 11. The best way to prevent another catastrophic attack without becoming a police state, he argued, was to give the government the best surveillance tools possible, while building in safeguards against their abuse.

Legend has it that Stephen Cohen, one of Thiel’s co-founders, programmed the initial prototype for Palantir’s software in two weeks. It took years, however, to coax customers away from the longtime leader in the intelligence analytics market, a software company called I2 Inc.

In one adventure missing from the glowing accounts of Palantir’s early rise, I2 accused Palantir of misappropriating its intellectual property through a Florida shell company registered to the family of a Palantir executive. A company claiming to be a private eye firm had been licensing I2 software and development tools and spiriting them to Palantir for more than four years. I2 said the cutout was registered to the family of Shyam Sankar, Palantir’s director of business development.

I2 sued Palantir in federal court, alleging fraud, conspiracy, and copyright infringement. In its legal response, Palantir argued it had the right to appropriate I2’s code for the greater good. “What’s at stake here is the ability of critical national security, defense and intelligence agencies to access their own data and use it interoperably in whichever platform they choose in order to most effectively protect the citizenry,” Palantir said in its motion to dismiss I2’s suit.

The motion was denied. Palantir agreed to pay I2 about $10 million to settle the suit. I2 was sold to IBM in 2011.

Sankar, Palantir employee No. 13 and now one of the company’s top executives, also showed up in another Palantir scandal: the company’s 2010 proposal for the U.S. Chamber of Commerce to run a secret sabotage campaign against the group’s liberal opponents. Hacked emails released by the group Anonymous indicated that Palantir and two other defense contractors pitched outside lawyers for the organization on a plan to snoop on the families of progressive activists, create fake identities to infiltrate left-leaning groups, scrape social media with bots, and plant false information with liberal groups to subsequently discredit them.

After the emails emerged in the press, Palantir offered an explanation similar to the one it provided in March for its U.K.-based employee’s assistance to Cambridge Analytica: It was the work of a single rogue employee. The company never explained Sankar’s involvement. Karp issued a public apology and said he and Palantir were deeply committed to progressive causes. Palantir set up an advisory panel on privacy and civil liberties, headed by a former CIA attorney, and beefed up an engineering group it calls the Privacy and Civil Liberties Team. The company now has about 10 PCL engineers on call to help vet clients’ requests for access to data troves and pitch in with pertinent thoughts about law, morality, and machines.

During its 14 years in startup mode, Palantir has cultivated a mystique as a haven for brilliant engineers who want to solve big problems such as terrorism and human trafficking, unfettered by pedestrian concerns such as making money. Palantir executives boast of not employing a single sales#person, relying instead on word-of-mouth referrals.

The company’s early data mining dazzled venture investors, who valued it at $20 billion in 2015. But Palantir has never reported a profit. It operates less like a conventional software company than like a consultancy, deploying roughly half its 2,000 engineers to client sites. That works at well-funded government spy agencies seeking specialized applications but has produced mixed results with corporate clients. Palantir’s high installation and maintenance costs repelled customers such as Hershey Co., which trumpeted a Palantir partnership in 2015 only to walk away two years later. Coca-Cola, Nasdaq, American Express, and Home Depot have also dumped Palantir.

Karp recognized the high-touch model was problematic early in the company’s push into the corporate market, but solutions have been elusive. “We didn’t want to be a services company. We wanted to do something that was cost-efficient,” he confessed at a European conference in 2010, in one of several unguarded comments captured in videos posted online. “Of course, what we didn’t recognize was that this would be much, much harder than we realized.”

Palantir’s newest product, Foundry, aims to finally break through the profitability barrier with more automation and less need for on-site engineers. Airbus SE, the big European plane maker, uses Foundry to crunch airline data about specific onboard components to track usage and maintenance and anticipate repair problems. Merck KGaA, the pharmaceutical giant, has a long-term Palantir contract to use Foundry in drug development and supply chain management.

Deeper adoption of Foundry in the commercial market is crucial to Palantir’s hopes of a big payday. Some investors are weary and have already written down their Palantir stakes. Morgan Stanley now values the company at $6 billion. Fred Alger Management Inc., which has owned stock since at least 2006, revalued Palantir in December at about $10 billion, according to Bloomberg Holdings. One frustrated investor, Marc Abramowitz, recently won a court order for Palantir to show him its books, as part of a lawsuit he filed alleging the company sabotaged his attempt to find a buyer for the Palantir shares he has owned for more than a decade.

As shown in the privacy breaches at Facebook and Cambridge Analytica—with Thiel and Palantir linked to both sides of the equation—the pressure to monetize data at tech companies is ceaseless. Facebook didn’t grow from a website connecting college kids into a purveyor of user profiles and predilections worth $478 billion by walling off personal data. Palantir says its Privacy and Civil Liberties Team watches out for inappropriate data demands, but it consists of just 10 people in a company of 2,000 engineers. No one said no to JPMorgan, or to whomever at Palantir volunteered to help Cambridge Analytica—or to another organization keenly interested in state-of-the-art data science, the Los Angeles Police Department.

Palantir began work with the LAPD in 2009. The impetus was federal funding. After several Sept. 11 postmortems called for more intelligence sharing at all levels of law enforcement, money started flowing to Palantir to help build data integration systems for so-called fusion centers, starting in L.A. There are now more than 1,300 trained Palantir users at more than a half-dozen law enforcement agencies in Southern California, including local police and sheriff’s departments and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The LAPD uses Palantir’s Gotham product for Operation Laser, a program to identify and deter people likely to commit crimes. Information from rap sheets, parole reports, police interviews, and other sources is fed into the system to generate a list of people the department defines as chronic offenders, says Craig Uchida, whose consulting firm, Justice & Security Strategies Inc., designed the Laser system. The list is distributed to patrolmen, with orders to monitor and stop the pre-crime suspects as often as possible, using excuses such as jaywalking or fix-it tickets. At each contact, officers fill out a field interview card with names, addresses, vehicles, physical descriptions, any neighborhood intelligence the person offers, and the officer’s own observations on the subject.

The cards are digitized in the Palantir system, adding to a constantly expanding surveillance database that’s fully accessible without a warrant. Tomorrow’s data points are automatically linked to today’s, with the goal of generating investigative leads. Say a chronic offender is tagged as a passenger in a car that’s pulled over for a broken taillight. Two years later, that same car is spotted by an automatic license plate reader near a crime scene 200 miles across the state. As soon as the plate hits the system, Palantir alerts the officer who made the original stop that a car once linked to the chronic offender was spotted near a crime scene.

The platform is supplemented with what sociologist Sarah Brayne calls the secondary surveillance network: the web of who is related to, friends with, or sleeping with whom. One woman in the system, for example, who wasn’t suspected of committing any crime, was identified as having multiple boyfriends within the same network of associates, says Brayne, who spent two and a half years embedded with the LAPD while researching her dissertation on big-data policing at Princeton University and who’s now an associate professor at the University of Texas at Austin. “Anybody who logs into the system can see all these intimate ties,” she says. To widen the scope of possible connections, she adds, the LAPD has also explored purchasing private data, including social media, foreclosure, and toll road information, camera feeds from hospitals, parking lots, and universities, and delivery information from Papa John’s International Inc. and Pizza Hut LLC.

The Constitutionality Question

Why the courts haven’t ruled on whether Palantir’s analytical tools are legal

Civil rights advocates say the compilation of a digital dossier of someone’s life, absent a court warrant, is an unlawful intrusion under the U.S. Constitution. Law enforcement officials say that’s not the case. For now, the question is unsettled, and that may be no accident. Civil liberties lawyers are seeking a case to challenge the constitutionality of Palantir’s use, but prosecutors and immigration agents have been careful not to cite the software in evidentiary documents, says Paromita Shah, associate director of the National Lawyers Guild’s National Immigration Project. “Palantir lives on that secrecy,” she says.

Since the 1970s, the Supreme Court has differentiated between searching someone’s home or car, which requires a warrant, and searching material out in the open or shared with others, which doesn’t. The justices’ thinking seems to be evolving as new technologies rise.

In a 2012 decision, U.S. v. Jones, the justices said that planting a GPS tracker on a car for 28 days without a warrant created such a comprehensive picture of the target’s life that it violated the public’s reasonable expectation of privacy.

Similarly, the court’s 2014 decision in Riley v. California found that cellphones contain so much personal information that they provide a virtual window into the owner’s mind, and thus necessitate a warrant for the government to search. Chief Justice John Roberts, in his majority opinion, wrote of cellphones that “with all they contain and all they may reveal, they hold for many Americans ‘the privacies of life.’” Justice Louis Brandeis, 86 years earlier, wrote a searing dissent in a wiretap case that seems to perectly foresee the advent of Palantir.

“Ways may someday be developed,” Brandeis warned, “by which the government, without removing papers from secret drawers, can reproduce them in court, and by which it will be enabled to expose to a jury the most intimate occurrences.”
—Peter Waldman

The LAPD declined to comment for this story. Palantir sent Bloomberg a statement about its work with law enforcement: “Our [forward-deployed engineers] and [privacy and civil liberties] engineers work with the law enforcement customers (including LAPD) to ensure that the implementation of our software and integration of their source systems with the software is consistent with the Department’s legal and policy obligations, as well as privacy and civil liberties considerations that may not currently be legislated but are on the horizon. We as a company determine the types of engagements and general applications of our software with respect to those overarching considerations. Police Agencies have internal responsibility for ensuring that their information systems are used in a manner consistent with their policies and procedures.”

Operation Laser has made L.A. cops more surgical—and, according to community activists, unrelenting. Once targets are enmeshed in a spidergram, they’re stuck.

Manuel Rios, 22, lives in the back of his grandmother’s house at the top of a hill in East L.A., in the heart of the city’s gang area. Tall with a fair complexion and light hair, he struggled in high school with depression and a learning disability and dropped out to work at a supermarket.

He grew up surrounded by friends who joined Eastside 18, the local affiliate of the 18th Street gang, one of the largest criminal syndicates in Southern California. Rios says he was never “jumped in”—initiated into 18. He spent years addicted to crystal meth and was once arrested for possession of a handgun and sentenced to probation. But except for a stint in county jail for a burglary arrest inside a city rec center, he’s avoided further trouble and says he kicked his meth habit last year.

In 2016, Rios was sitting in a parked car with an Eastside 18 friend when a police car pulled up. His buddy ran, pursued by the cops, but Rios stayed put. “Why should I run? I’m not a gang member,” he says over steak and eggs at the IHOP near his home. The police returned and handcuffed him. One of them took his picture with a cellphone. “Welcome to the gang database!” the officer said.

Since then he’s been stopped more than a dozen times, he says, and told that if he doesn’t like it he should move. He has nowhere to go. His girlfriend just had a baby girl, and he wants to be around for them. “They say you’re in the system, you can’t lie to us,” he says. “I tell them, ‘How can I be in the hood if I haven’t got jumped in? Can’t you guys tell people who bang and who don’t?’ They go by their facts, not the real facts.”

The police, on autopilot with Palantir, are driving Rios toward his gang friends, not away from them, worries Mariella Saba, a neighbor and community organizer who helped him get off meth. When whole communities like East L.A. are algorithmically scraped for pre-crime suspects, data is destiny, says Saba. “These are systemic processes. When people are constantly harassed in a gang context, it pushes them to join. They internalize being told they’re bad.”

In Chicago, at least two immigrants have been detained for deportation by Immigration and Customs Enforcement officers based on erroneous information in gang databases, according to a pair of federal lawsuits. Chicago is a sanctuary city, so it isn’t clear how ICE found out about the purported gang affiliations. But Palantir is a likely link. The company provided an “intelligence management solution” for the Cook County Sheriff’s Office to integrate information from at least 14 different databases, including gang lists compiled by state and local police departments, according to county records. Palantir also has a $41 million data mining contract with ICE to build the agency’s “investigative case management” system.

One of the detained men, Wilmer Catalan-Ramirez, a 31-year-old body shop mechanic, was seriously injured when six ICE agents burst into his family’s home last March without a warrant. He’d been listed in the local gang database twice—in rival gangs. Catalan-Ramirez spent the next nine months in federal detention, until the city of Chicago admitted both listings were wrong and agreed to petition the feds to let him stay in the U.S. ICE released him in January, pending a new visa application. “These cases are perfect examples of how databases filled with unverified information that is often false can destroy people’s lives,” says his attorney, Vanessa del Valle of Northwestern University’s MacArthur Justice Center.

Palantir is twice the age most startups are when they cash out in a sale or initial public offering. The company needs to figure out how to be rewarded on Wall Street without creeping out Main Street. It might not be possible. For all of Palantir’s professed concern for individuals’ privacy, the single most important safeguard against abuse is the one it’s trying desperately to reduce through automation: human judgment.

As Palantir tries to court corporate customers as a more conventional software company, fewer forward-deployed engineers will mean fewer human decisions. Sensitive questions, such as how deeply to pry into people’s lives, will be answered increasingly by artificial intelligence and machine-learning algorithms. The small team of Privacy and Civil Liberties engineers could find themselves even less influential, as the urge for omnipotence among clients overwhelms any self-imposed restraints.

Computers don’t ask moral questions; people do, says John Grant, one of Palantir’s top PCL engineers and a forceful advocate for mandatory ethics education for engineers. “At a company like ours with millions of lines of code, every tiny decision could have huge implications,” Grant told a privacy conference in Berkeley last year.

JPMorgan’s experience remains instructive. “The world changed when it became clear everyone could be targeted using Palantir,” says a former JPMorgan cyber expert who worked with Cavicchia at one point on the insider threat team. “Nefarious ideas became trivial to implement; everyone’s a suspect, so we monitored everything. It was a pretty terrible feeling.” —With Michael Riley

Lawmakers Call FBI's 'Going Dark' Narrative 'Highly Questionable' After Motherboard Shows Cops Can Easily Hack iPhones

US lawmakers have asked FBI Director Christopher Wray to answer questions around phone unlocking technology, after Motherboard found agencies have bought tools to crack iPhones.
Joseph Cox

This week, Motherboard showed that law enforcement agencies across the country, including a part of the State Department, have bought GrayKey, a relatively cheap technology that can unlock fully up-to-date iPhones. That revelation, cryptographers and technologists said, undermined the FBI’s renewed push for backdoors in consumer encryption products.

Citing Motherboard’s work, on Friday US lawmakers sent a letter to FBI Director Christopher Wray, doubting the FBI’s narrative around ‘going dark’, where law enforcement officials say they are increasingly unable to obtain evidence related to crimes due to encryption. Politico was first to report the letter.

“According to your testimony and public statements, the FBI encountered 7,800 devices last year that it could not access due to encryption,” the letter, signed by 5 Democrat and 5 Republican n House lawmakers, reads. “However, in light of the availability of unlocking tools developed by third-parties and the OIG report’s findings that the Bureau was uninterested in seeking available third-party options, these statistics appear highly questionable,” it adds, referring to a recent report from the Justice Department’s Office of the Inspector General. That report found the FBI barely explored its technical options for accessing the San Bernardino iPhone before trying to compel Apple to unlock the device.

The lawmaker’s letter points to Motherboard’s report that the State Department spent around $15,000 on a GrayKey. Grayshift, the company that makes the device, offers two different versions: the $15,000 model offers 300 iPhone unlocks (working out to around $50 per phone), and a $30,000 version, which allows customers to unlock as many devices as they want. Both can unlock iPhones running iOS 11, Apple’s latest mobile operating system, and GrayKey works on the latest Apple hardware, including the iPhone X.
The letter also points to a recent Forbes piece, which found established mobile forensics firm Cellebrite can now unlock iOS 11 devices as well.

The lawmakers’ letter included a set of specific questions for FBI Director Wray, including whether he agrees there are solutions that can help unlock nearly every device on the market; whether the FBI has tried using third-party tools to unlock those 7,800 phones; and what is the rationale for not using such a tool to decrypt particular devices.

Motherboard has also found that regional forces, such as the Maryland and Indiana State Police have bought GrayKey; local police departments have indicated they may have purchased the device; others have received quotes for the device; the Secret Service is planning to buy six GrayKeys; and that the DEA and the FBI is looking to buy products from Grayshift.

‘I Fundamentally Believe That My Time at Reddit Made the World a Worse Place’

A conversation with former Reddit product head Dan McComas on the problems of growth as a metric and what Twitter is doing wrong.
Noah Kulwin

Reddit started a couple of years after Facebook, and it’s super giant, and the kind of thing that you were present for was the challenge of building a platform that can accommodate a really large and sprawling set of communities, but at the same time make sure that it’s able to maintain community standards. You worked at it, I know, from the product end. I’m interested in hearing a bit about how you came to work at Reddit, and the questions you were thinking about.
I came to work at Reddit through Reddit Gifts. I started Reddit Gifts, and the intention there was just really to see if we could get people to do nice things for other people. That was it. It was just kind of a concept that we came up with and then ran with it. It ended up being pretty impactful, I think, to the overall community. Ultimately, it was too much time for us to manage, so we were going to shut it down, and then Reddit acquired us.

I came in to work at Reddit officially in 2011, and kept doing Reddit Gifts and also being involved with the Reddit side. For a few years there, it was just interesting. I was watching them kind of from the outside, but from the inside as well because I was privy to all the conversations going on. That was kind of during the time of, I think, the r/jailbait debacle. We were acquired just before Yishan became CEO. I worked really closely with Yishan throughout the years.

For me, it was an interesting aspect that I got on it because I got to see the inner workings of the decisions they were making and why they were making the decisions they were making, but I wasn’t in the position, nor would I want to be in the position, of having any kind of impact on the decisions being made.

What were some of those critical decisions that you’re thinking of?
First, I’ll say there were very few decisions made. I think that the biggest problem that Reddit had and continues to have, and that all of the platforms, Facebook and Twitter, and Discord now continue to have is that they’re not making decisions, is that there is absolutely no active thought going into their problems — problems that are going to exist in coming months or years — and what they can do to combat them. I know firsthand that between 2011 and 2015 or 2016, there was just really no thought going into it until I took over product, Ellen [Pao] took over the CEO role, and Jessica [Moreno] took over the head of community role, and we started trying to think about what was going on and what was going to be happening in the future.

We can talk about those decisions if you want, but I think the more interesting aspect is just why people aren’t thinking about this stuff, and how can we get people to think about this stuff. That’s really half of the premise of why Imzy was started. I think there’s just a complete breakdown in the kind of thought process behind how your technology is going to affect the users that use it and the world at large, and the incentive structure that is behind Silicon Valley start-ups and how they’re formed.

What’s that incentive structure?
The incentive structure is simply growth at all costs. There was never, in any board meeting that I have ever attended, a conversation about the users, about things that were going on that were bad, about potential dangers, about decisions that might affect potential dangers. There was never a conversation about that stuff.

The only time we would ever hear anything from the board on that stuff is when there were huge press debacles like the Anderson Cooper thing. In that case, we would get a call from the people who were being negatively affected by the press basically wanting to know how they should answer and what we were going to do about it.

The kind of classic comment that would come up in every board meeting was, “Why aren’t you growing faster?”

We’d say, “Well, we’ve grown by 40 million visitors since the last board meeting.”

And the response was, “That’s slower than the internet is growing; that’s not enough. You have to grow more.” Ultimately, that is why Ellen and I were let go.

Because you pushed back against that?
Because there was so much shit going on: on the site; in the press because of Ellen’s case; internally in the company, we had just moved everybody to San Francisco and pretty much the entire employee base was totally pissed off, and there was so much cleanup to be done just from an organization side; and the technology was in such bad shape. There was no way that we could focus on the type of growth efforts that they wanted. And if you have a small staff, you have to focus on the problems that are going to give you the biggest impact.

If you look from a product angle, if you look at that just from a funnel basis, it’s like 99 percent of everybody who visits Reddit don’t know what Reddit is. They find it by organic search or from a person sharing it. They land on a page and they leave and they never come back. The biggest opportunity to grow Reddit is to focus on that part of the funnel. By doing that, and putting 90 percent of your resources toward focusing on that part of the funnel, you pretty much completely ignore everything that’s actually going on on the site. You ignore the moderators; you ignore the users who are contributing content; you ignore the communities that are being created and the activities going on within them. You basically risk the health of your platform.

It’s a really mismatched incentive structure because if Reddit, specifically, focused all their efforts on the health of their platform, on the people that are really the contributors and not the consumers, they would see growth beyond what they’re getting. It’s kind of a backward way of looking at the problem from a traditional product perspective because you’re not directly affecting growth.

Why, then, do they care so much about growth? Revenue?
From the inside, I can tell you that the board is never asking about revenue. They honestly don’t care, and they said as much. They’re only asking about growth. They believe that if they have a billion unique visitors a month, that they have a property that is going to be worth a ton of money in some way eventually. They really do look at it in that abstract way.

I know they’re making a lot of strides on the advertising side. But I guarantee, that is not their focus. Their focus is purely growth.

This dynamic at Reddit is hardly unique. It seems like it applies to all the major digital platforms.

In Reddit’s case, that presented a lot of challenges, and it means that they prioritized growth and sacrificed instituting measures or investing in the kinds of changes that would have made the site less toxic. Looking at it from the outside and based on your experience at Reddit and your knowledge of that platform, how do you see this problem mapping onto Facebook or YouTube or Twitter?
Yeah, those sites are wholly different in their incentive structure at this point. It’s a bit different and nuanced in that they’re all public. That brings on a number of other expectations. There is an ultimate expectation of revenue and profit. There’s also another expectation of — I wouldn’t say growth, but I would say a predictable pattern of growth, I guess. I don’t think it’s Facebook’s ultimate objective to get to 5 billion users or something. They have a humongous user base and they don’t want to lose anybody, and they want to have the right kind of activity going on.

I absolutely disagree with a lot of people and think that Facebook has done a better job at this than any other company. I think they have tried to prioritize user safety and they have tried to put processes in place for managing content. I think Twitter is much worse. I think, ultimately, the problem that Reddit has is the same as Twitter and Discord. By focusing on growth and growth only and ignoring the problems, they amassed a large set of cultural norms on their platforms. Their cultural norms are different for every community, but they tend to stem from harassment or abuse or bad behavior, and they have worked themselves into a position where they’re completely defensive and they can just never catch up on the problem. I really don’t believe it’s possible for either of them to catch up on the problem. I think the best that they can do is figure out how to hide this behavior from an average user. I don’t see any way that it’s going to improve. I have no hope for either of those platforms.

I just think that the problems are too ingrained, in not only the site and the site’s communities and users but in the general understanding and expectations of the public. I think that if you ask pretty much anybody about Reddit, they’re either not going to know what Reddit is, which is the large majority of people, or they’re going to be like, “Oh, it’s that place where there’s jailbait or something like that.” I don’t think that they’re going to be able to turn these things around.

Were there moments in which Reddit chose to double down on something and made it that much harder to work toward a solution?
I don’t know. I’m trying to think about your question. The typical pattern that we always went through was, there would be a bunch of bad behavior on the site, and the community team would have to deal with it and would be really annoyed. Sometimes they would take the free-speech side and decide that we don’t want to make a call on this. Other times they would say, “Hey, we need to take care of this,” and somebody above them would raise either the free-speech side or the “I don’t want to deal with this because it would cause too many problems on the site” side. That was more often the response.

There are a couple of subreddits, some of which have been banned and some haven’t, but the FatPeopleHate one was a really bad one. There are a bunch of animal-cruelty subreddits, specifically with a sexual nature, that they would always refuse to ban. The arguments were usually, “We don’t want to touch this because these are our most volatile users and they’ll just make things a nightmare,” and then, ultimately, these things will bubble up, make it into the press, and then we would make a decision to change things. We would deal with the immediate impact, which was painful, would last a week or two, and then it would go away. For the most part, unfortunately, I see them still following this pattern.

Is there something recent that you’re thinking of?
I can’t remember the specific instances right now, but there was a bunch of press about things that were going on on Reddit and Discord, and they both reacted and banned the subreddit. They made an announcement, “We’re taking a bigger stance against these things.” Discord made the same announcement.

It’s just more of the same. I don’t see them getting in front of the problem and it’s a total bummer, to be honest. It’s a super bummer. I hate it. I still grapple with the fact that I worked at Reddit, and so does Jessica. She’s decided to leave the industry completely. She’s completely changing her career and has left the tech industry altogether. It’s a bummer.

There’s now this rising chorus of tech executives who, whether it’s because of the Russia election stuff or user privacy concerns or broader user safety issues, are speaking out. Do you think this could amount to any substantial change?
I don’t think the existing platforms are going to change. I do believe that new platforms could be started up, could operate better, could be more mindful, and could create better infrastructure and platforms for the large public. But in order to do that, I think that one of two things needs to happen. I think that the venture capitalists need to kind of reframe their thinking on how these companies look as they start up and grow. I know firsthand that at least the investors that I worked with at Imzy are not ready to undertake that path. Imzy shut down, we still had $8 million in the bank, and we had raised $11 million. I know firsthand the palate of these investors, and from my experience, the majority of Silicon Valley investors are all the same archetype. I think that somebody needs to come along and change their thinking on that. I don’t think that that’s going to happen.

The other way is for a group of people to get together and create a modern platform using in some way their own resources, or finding the resources in interesting ways to do so. Unfortunately, it’s a really expensive process to build a platform like this. It takes a lot of engineering, it takes a lot of human power, it takes a lot of marketing and PR power, and it’s just an expensive process and it takes a long time. It’s really hard to get a network effect going. It would take years. It’s just a really hard process that somebody needs to be in for that ride. I just don’t believe that right now we have found the right mix of the right founders and team to build the infrastructure, and the right funding mechanism to make that happen. I tried, and it just totally didn’t work. It failed. I don’t know. I would love to take a crack at it, but it’s fucking hard to put these resources together.

Let’s say you were able to change the thinking and you were able to get a group of folks who were interested in putting up the capital necessary to create a new platform. Could you get a seat at the table with Facebook and Twitter?
I think it’s absolutely possible, but it takes a couple of major factors. I think a start-up needs to think about the monetization and how it can work with the users instead of against the users. I think they need to figure out the right funding mechanisms and incentive structures that also work toward the users. I think they need to have the right product team in place to focus on users. You’ll start to see a pattern emerge here. I think that they need to have a community or a service team from day one that focuses on users’ well-being. I think they need to have the right intentions. I think you need to get all those kinds of things in place; you need to understand the investment that you’re in for, as far as time. Most start-ups these days have a 12-to-18-month horizon that they look at, and that’s just not enough. That’s not enough to build one of these platforms.

Reddit got lucky. I always thought being acquired and then ignored by Condé Nast was a blessing and a curse. It allowed the communities time to organically grow. Developers let it set and evolve. And that’s exactly the opportunity the platforms need — they need that time to find their footing and to find a number of different cohorts to grow in.

I think that the acquisition that happened was a weird one. I think Condé Nast wanted some street cred, that’s why they bought it. I don’t think they knew what they were buying. In fact, I know they didn’t know what to do with it other than just to let it sit and gain some momentum. Now [co-founder and CEO] Steve [Huffman] is able to grow it into something, and I think he’s gonna do a great job. I think he’s gonna grow it into something huge.

But you don’t think that growth solves the problems?
No, absolutely not. It’s just gonna keep getting worse. I fundamentally believe that my time at Reddit made the world a worse place. And that sucks, and it sucks to have to say that about myself.

If you were talking to people making platforms now, what would you urge them to pay attention to?
I don’t have very many opinions or thoughts about what Reddit or Twitter should do at this time. I just don’t. But I’ve got a lot of advice for start-ups, and it’s not very fucking complicated. It’s just: Think about the impact that you want to have on your users and on the people consuming your content and do the right thing. They know what the right thing is. Discord knows what the right thing is. I had conversations with Jason [Citron] a year ago about the problem of white supremacy on his site, and he said, “I don’t want to invade their privacy by going into their channels and reading what they’re doing.” And I said, “They’re gonna cause deaths because you’re not doing that.” And he said, “You really think so?” And I said, “Yeah.” And sure enough they didn’t do anything, and sure enough deaths were caused because of the shit going on in their channels.

These things can be foreseen. Don’t be idiots about it. You’re people, you see what’s going on, you see trends that are forming, just fucking do something. It’s not that hard. That’s my advice to founders of start-ups, just be mindful of it. Or put somebody in charge of being mindful of it.

All the big companies do have people who are paid to mind this, but it doesn’t seem to be enough.
My guess is that Reddit has six to ten community managers. And even if they had double that, that’s not enough. And my guess is that they have five engineers working on it; that’s just not enough. When I was there and we scaled up the community team, there were three people on the community team. There was a community of 250 million people. It’s not enough. Facebook and Twitter have teams in other countries taking care of the worst of the internet, and Reddit hasn’t even considered doing something like that. And it takes a big investment. I think you’ve got to get out in front of the problem when you start up, and you gotta be able and willing to invest in what it takes to keep up with it. But I think that ignoring either of those puts you in a place where I don’t think you can ever really catch up from it.

I really appreciate you taking the time to speak with me. I’ve been thinking about this for a few years, and it’s felt at once kind of affirming to see it blow up this way, and at the same time totally terrifying.
It’s awful and it’s gonna get worse, so you’re in the right business.

‘One Has This Feeling of Having Contributed to Something That’s Gone Very Wrong’

A conversation with VR pioneer Jaron Lanier on Silicon Valley’s politics, being quoted by Mark Zuckerberg, and what went wrong with the internet.
Noah Kulwin

Jaron Lanier: Can I just say one thing now, just to be very clear? Professionally, I’m at Microsoft, but when I speak to you, I’m not representing Microsoft at all. There’s not even the slightest hint that this represents any official Microsoft thing. I have an agreement within which I’m able to be an independent public intellectual, even if it means criticizing them. I just want to be very clear that this isn’t a Microsoft position.

Noah Kulwin: Understood.
Yeah, sorry. I really just wanted to get that down. So now please go ahead, I’m so sorry to interrupt you.

In November, you told Maureen Dowd that it’s scary and awful how out of touch Silicon Valley people have become. It’s a pretty forward remark. I’m kind of curious what you mean by that.
To me, one of the patterns we see that makes the world go wrong is when somebody acts as if they aren’t powerful when they actually are powerful. So if you’re still reacting against whatever you used to struggle for, but actually you’re in control, then you end up creating great damage in the world. Like, oh, I don’t know, I could give you many examples. But let’s say like Russia’s still acting as if it’s being destroyed when it isn’t, and it’s creating great damage in the world. And Silicon Valley’s kind of like that.

We used to be kind of rebels, like, if you go back to the origins of Silicon Valley culture, there were these big traditional companies like IBM that seemed to be impenetrable fortresses. And we had to create our own world. To us, we were the underdogs and we had to struggle. And we’ve won. I mean, we have just totally won. We run everything. We are the conduit of everything else happening in the world. We’ve disrupted absolutely everything. Politics, finance, education, media, relationships — family relationships, romantic relationships — we’ve put ourselves in the middle of everything, we’ve absolutely won. But we don’t act like it.

We have no sense of balance or modesty or graciousness having won. We’re still acting as if we’re in trouble and we have to defend ourselves, which is preposterous. And so in doing that we really kind of turn into assholes, you know?

How do you think that siege mentality has fed into the ongoing crisis with the tech backlash?
One of the problems is that we’ve isolated ourselves through extreme wealth and success. Before, we might’ve been isolated because we were nerdy insurgents. But now we’ve found a new method to isolate ourselves, where we’re just so successful and so different from so many other people that our circumstances are different. And we have less in common with all the people whose lives we’ve disrupted. I’m just really struck by that. I’m struck with just how much better off we are financially, and I don’t like the feeling of it.

Personally, I would give up a lot of the wealth and elite status that we have in order to just live in a friendly, more connected world where it would be easier to move about and not feel like everything else is insecure and falling apart. People in the tech world, they’re all doing great, they all feel secure. I mean they might worry about a nuclear attack or something, but their personal lives are really secure.

And then when you move out of the tech world, everybody’s struggling. It’s a very strange thing. The numbers show an economy that’s doing well, but the reality is that the way it’s doing well doesn’t give many people a feeling of security or confidence in their futures. It’s like everybody’s working for Uber in one way or another. Everything’s become the gig economy. And we routed it that way, that’s our doing. There’s this strange feeling when you just look outside of the tight circle of Silicon Valley, almost like entering another country, where people are less secure. It’s not a good feeling. I don’t think it’s worth it, I think we’re wrong to want that feeling.

It’s not so much that they’re doing badly, but they have only labor and no capital. Or the way I used to put it is, they have to sing for their supper, for every single meal. It’s making everyone else take on all the risk. It’s like we’re the people running the casino and everybody else takes the risks and we don’t. That’s how it feels to me. It’s not so much that everyone else is doing badly as that they’ve lost economic capital and standing, and momentum and plannability. It’s a subtle difference.

There’s still this rhetoric of being the underdog in the tech industry. The attitude within the Valley is “Are you kidding? You think we’re resting on our laurels? No! We have to fight for every yard.”
There’s this question of whether what you’re fighting for is something that’s really new and a benefit for humanity, or if you’re only engaged in a sort of contest with other people that’s fundamentally not meaningful to anyone else. The theory of markets and capitalism is that when we compete, what we’re competing for is to get better at something that’s actually a benefit to people, so that everybody wins. So if you’re building a better mousetrap, or a better machine-learning algorithm, then that competition should generate improvement for everybody.

But if it’s a purely abstract competition set up between insiders to the exclusion of outsiders, it might feel like a competition, it might feel very challenging and stressful and hard to the people doing it, but it doesn’t actually do anything for anybody else. It’s no longer genuinely productive for anybody, it’s a fake. And I’m a little concerned that a lot of what we’ve been doing in Silicon Valley has started to take on that quality. I think that’s been a problem in Wall Street for a while, but the way it’s been a problem in Wall Street has been aided by Silicon Valley. Everything becomes a little more abstract and a little more computer-based. You have this very complex style of competition that might not actually have much substance to it.

You look at the big platforms, and it’s not like there’s this bountiful ecosystem of start-ups. The rate of small-business creation is at its lowest in decades, and instead you have a certain number of start-ups competing to be acquired by a handful of companies. There are not that many varying powers, there’s just a few.
That’s something I’ve been complaining about and I’ve written about for a while, that Silicon Valley used to be this place where people could do a start-up and the start-up might become a big company on its own, or it might be acquired, or it might merge into things. But lately it kind of feels like both at the start and at the end of the life of a start-up, things are a little bit more constrained. It used to be that you didn’t have to know the right people, but now you do. You have to get in with the right angel investors or incubator or whatever at the start. And they’re just a small number, it’s like a social order, you have to get into them. And then the output on the other side is usually being acquired by one of a very small number of top companies.

There are a few exceptions, you can see Dropbox’s IPO. But they’re rarer and rarer. And I suspect Dropbox in the future might very well be acquired by one of the giants. It’s not clear that it’ll survive as its own thing in the long term. I mean, we don’t know. I have no inside information about that, I’m just saying that the much more typical scenario now, as you described, is that the companies go to one of the biggies.

I’m kind of curious what you think needs to happen to prevent future platforms, like VR, from going the way of social media and reaching this really profitable crisis state.
A lot of the rhetoric of Silicon Valley that has the utopian ring about creating meaningful communities where everybody’s creative and people collaborate and all this stuff — I don’t wanna make too much of my own contribution, but I was kind of the first author of some of that rhetoric a long time ago. So it kind of stings for me to see it misused. Like, I used to talk about how virtual reality could be a tool for empathy, and then I see Mark Zuckerberg talking about how VR could be a tool for empathy while being profoundly nonempathic, using VR to tour Puerto Rico after the storm, after Maria. One has this feeling of having contributed to something that’s gone very wrong.

So I guess the overall way I think of it is, first, we might remember ourselves as having been lucky that some of these problems started to come to a head during the social-media era, before tools like virtual reality become more prominent, because the technology is still not as intense as it probably will be in the future. So as bad as it’s been, as bad as the election interference and the fomenting of ethnic warfare, and the empowering of neo-Nazis, and the bullying — as bad as all of that has been, we might remember ourselves as having been fortunate that it happened when the technology was really just little slabs we carried around in our pockets that we could look at and that could talk to us, or little speakers we could talk to. It wasn’t yet a whole simulated reality that we could inhabit.

Because that will be so much more intense, and that has so much more potential for behavior modification, and fooling people, and controlling people. So things potentially could get a lot worse, and hopefully they’ll get better as a result of our experiences during this era.

As far as what to do differently, I’ve had a particular take on this for a long time that not everybody agrees with. I think the fundamental mistake we made is that we set up the wrong financial incentives, and that’s caused us to turn into jerks and screw around with people too much. Way back in the ’80s, we wanted everything to be free because we were hippie socialists. But we also loved entrepreneurs because we loved Steve Jobs. So you wanna be both a socialist and a libertarian at the same time, and it’s absurd. But that’s the kind of absurdity that Silicon Valley culture has to grapple with.

And there’s only one way to merge the two things, which is what we call the advertising model, where everything’s free but you pay for it by selling ads. But then because the technology gets better and better, the computers get bigger and cheaper, there’s more and more data — what started out as advertising morphed into continuous behavior modification on a mass basis, with everyone under surveillance by their devices and receiving calculated stimulus to modify them. So you end up with this mass behavior-modification empire, which is straight out of Philip K. Dick, or from earlier generations, from 1984.

It’s this thing that we were warned about. It’s this thing that we knew could happen. Norbert Wiener, who coined the term cybernetics, warned about it as a possibility. And despite all the warnings, and despite all of the cautions, we just walked right into it, and we created mass behavior-modification regimes out of our digital networks. We did it out of this desire to be both cool socialists and cool libertarians at the same time.

This dovetails with something you’ve said in the past that’s with me, which is your phrase Digital Maoism. Do you think that the Digital Maoism that you described years ago — are those the people who run Silicon Valley today?
I was talking about a few different things at the time I wrote “Digital Maoism.” One of them was the way that we were centralizing culture, even though the rhetoric was that we were distributing it. Before Wikipedia, I think it would have been viewed as being this horrible thing to say that there could only be one encyclopedia, and that there would be one dominant entry for a given topic. Instead, there were different encyclopedias. There would be variations not so much in what facts were presented, but in the way they were presented. That voice was a real thing.

And then we moved to this idea that we have a single dominant encyclopedia that was supposed to be the truth for the global AI or something like that. But there’s something deeply pernicious about that. So we’re saying anybody can write for Wikipedia, so it’s, like, purely democratic and it’s this wonderful open thing, and yet the bizarreness is that that open democratic process is on the surface of something that struck me as being Maoist, which is that there’s this one point of view that’s then gonna be the official one.

And then I also noticed that that process of people being put into a global system in which they’re supposed to work together toward some sort of dominating megabrain that’s the one truth didn’t seem to bring out the best in people, that people turned aggressive and mean-spirited when they interacted in that context. I had worked on some content for Britannica years and years ago, and I never experienced the kind of just petty meanness that’s just commonplace in everything about the internet. Among many other places, on Wikipedia.

On the one hand, you have this very open collective process actually in the service of this very domineering global brain, destroyer of local interpretation, destroyer of individual voice process. And then you also have this thing that seems to bring out this meanness in people, where people get into this kind of mob mentality and they become unkind to each other. And those two things have happened all over the internet; they’re both very present in Facebook, everywhere. And it’s a bit of a subtle debate, and it takes a while to work through it with somebody who doesn’t see what I’m talking about. That was what I was talking about.

But then there’s this other thing about the centralization of economic power. What happened with Maoists and with communists in general, and neo-Marxists and all kinds of similar movements, is that on the surface, you say everybody shares, everybody’s equal, we’re not gonna have this capitalist concentration. But then there’s some other entity that might not look like traditional capitalism, but is effectively some kind of robber baron that actually owns everything, some kind of Communist Party actually controls everything, and you have just a very small number of individuals who become hyperempowered and everybody else loses power.

And exactly the same thing has happened with the supposed openness of the internet, where you say, “Isn’t it wonderful, with Facebook and Twitter anybody can express themselves. Everybody’s an equal, everybody’s empowered.” But in fact, we’re in a period of time of extreme concentration of wealth and power, and it’s precisely around those who run the biggest computers. So the truth and the effect is just the opposite of what the rhetoric is and the immediate experience.

A lot of people were furious with me over Digital Maoism and felt that I had betrayed our cause or something, and I lost some friends over it. And some of it was actually hard. But I fail to see how it was anything but accurate. I don’t wanna brag, but I think I was just right. I think that that’s what was going on and that’s what’s happening in China. But what’s worse is that it’s happening elsewhere.

The thing is, I’m not sure that what’s going on in the U.S. is that distinct from what’s going on in China. I think there are some differences, but they’re in degree; they’re not stark. The Chinese are saying if you have a low social rating you can’t get on the subway, but on the other hand, we’re doing algorithmic profiling that’s sending people to jail, and we know that the algorithms are racist. Are we really that much better?

I’m not really sure. I think it would be hard to determine it. But I think we’re doing many of the same things; it’s just that we package them in a slightly different way when we tell stories to ourselves.

This is something I write about, you know I have another book coming out shortly?

Yeah, that was gonna be where I took this next.
One of the things that I’ve been concerned about is this illusion where you think that you’re in this super-democratic open thing, but actually it’s exactly the opposite; it’s actually creating a super concentration of wealth and power, and disempowering you. This has been particularly cruel politically. Every time there’s some movement, like the Black Lives Matter movement, or maybe now the March for Our Lives movement, or #MeToo, or very classically the Arab Spring, you have this initial period where people feel like they’re on this magic-carpet ride and that social media is letting them broadcast their opinions for very low cost, and that they’re able to reach people and organize faster than ever before. And they’re thinking, Wow, Facebook and Twitter are these wonderful tools of democracy.

But then the algorithms have to maximize value from all the data that’s coming in. So they test use that data. And it just turns out as a matter of course, that the same data that is a positive, constructive process for the people who generated it — Black Lives Matter, or the Arab Spring — can be used to irritate other groups. And unfortunately there’s this asymmetry in human emotions where the negative emotions of fear and hatred and paranoia and resentment come up faster, more cheaply, and they’re harder to dispel than the positive emotions. So what happens is, every time there’s some positive motion in these networks, the negative reaction is actually more powerful. So when you have a Black Lives Matter, the result of that is the empowerment of the worst racists and neo-Nazis in a way that hasn’t been seen in generations. When you have an Arab Spring, the result ultimately is the network empowerment of ISIS and other extremists — bloodthirsty, horrible things, the likes of which haven’t been seen in the Arab world or in Islam for years, if ever.

Black Lives Matter has incredible visibility, but the reality is that even though it has had an enormous effect on the discursive level, and at making the country fixated on this conversation, that’s distinct from political force necessary to effect that change. What do you think about the sort of gap between what Silicon Valley platforms have promised in that respect and then the material reality?
That observation — that social-media politics is all talk and no action or something, or that it’s empty — is compatible with, but a little bit different from, what I was saying. I’m saying that it empowers its opposite more than the original good intention. And those two things can both be true at once, but I just wanna point out that they’re two different explanations for why nothing decent seems to come out in the end.

I want to be wrong. I especially wanna be wrong about the March for Our Lives kids. I really wanna be wrong about them. I want them to not fall into this because they’re our hope, they’re the future of our country, so I very deeply, profoundly wanna be wrong. I don’t want their social-media data to empower the opposite movement that ends up being more powerful because negative emotions are more powerful. I just wanna be wrong. I so wanna be telling you bullshit right now.

So far it’s been right, but that doesn’t mean it will continue to be. So please let me be wrong.

Platforms seem trapped in this fundamental tension, and I’m just not sure how they break out of that.
My feeling is that if the theory is correct that we got into this by trying to be socialist and libertarian at the same time, and getting the worst of both worlds, then we have to choose. You either have to say, “Okay, Facebook is not going to be a business anymore. We said we wanted to create this thing to connect people, but we’re actually making the world worse, so we’re not gonna allow people to advertise on it; we’re not gonna allow anybody to have any influence on your feed but you. This is all about you. We’re gonna turn it into a nonprofit; we’re gonna give it to each country; it’ll be nationalized. We’ll do some final stock things so all the people who contributed to it will be rich beyond their dreams. But then after that it’s done; it’s not a business. We’ll buy back everybody’s stock and it’s done. It’s over. That’s it.”

That’s one option. So it just turns into a socialist enterprise; we let it be nationalized and it’s gone. The other option is to monetize it. And that’s the one that I’m personally more interested in. And what that would look like is, we’d ask those who can afford to — which would be a lot of people in the world, certainly most people in the West — to start paying for it. And then we’d also pay people who provide data into it that’s exceptionally valuable to the network, and it would become a source of economic growth. And we would outlaw advertising on it. There would no longer be third parties paying to influence you.

Because as long as you have advertising, you have this perverse incentive to make it manipulative. You can’t have a behavior-modification machine with advertisers and have anything ethical; it’s not possible. You could get away with it barely with television because television wasn’t as effective at modifying people. But this, there’s no ethical way to have advertising.

So you’d ban advertising, and you’d start paying people, a subset of people; a minority of people would start earning their living because they just do stuff that other people love to look at over Facebook or the other social networks, or YouTube for that matter. And then most people would pay into it in the same way that we pay into something like Netflix or HBO Now.

And one of the things I wanna point out is that back at the time when Facebook was founded, the belief was that in the future there wouldn’t be paid people making movies and television because armies of unpaid volunteers organized through our network schemes would make superior content, just like what happened with Wikipedia. But what actually happened is, when people started paying for Netflix, we got what we call Peak TV — things got much better as a result of it being monetized.

So I think if we had a situation where people were paying for something like Facebook, and being paid for it, and advertising was absolutely outlawed, the only customer would be the user, there would be no other customer. If we got into that situation, I think we have at least a chance of achieving Peak Social Media, just like we achieved Peak TV. We might actually see things improve a great deal.

So that’s the solution that I think is better. But we can’t do this combination of libertarian and communist ideology. It just doesn’t work. You have to choose one.

You’ve written this book, Ten Arguments for Deleting Your Social Media Accounts. I don’t want to make you summarize the whole book, but I want to ask what you thought was the most urgent argument, and to explain why.
Okay. By the way, it’s … For Deleting Your Social Media Accounts Right Now.

Right now! So the whole thing is already urgent, so which of these urgent pleas do you believe to be the most pressing?
There’s one that’s a little complicated, which is the last one. Because I have the one about politics, and I have the one about economics. That it’s ruining politics, it’s empowering the most obnoxious people to be the most powerful inherently, and that’s destroying the world. I have the one about economics, how it’s centralizing wealth even while it seems to be democratizing it. I have the one about how it makes you feel sad; I have all these different ones.

But at the end, I have one that’s a spiritual one. The argument is that social media hates your soul. And it suggests that there’s a whole spiritual, religious belief system along with social media like Facebook that I think people don’t like. And it’s also fucking phony and false. It suggests that life is some kind of optimization, like you’re supposed to be struggling to get more followers and friends. Zuckerberg even talked about how the new goal of Facebook would be to give everybody a meaningful life, as if something about Facebook is where the meaning of life is.

It suggests that you’re just a cog in a giant global brain or something like that. The rhetoric from the companies is often about AI, that what they’re really doing — like YouTube’s parent company, Google, says what they really are is building the giant global brain that’ll inherit the earth and they’ll upload you to that brain and then you won’t have to die. It’s very, very religious in the rhetoric. And so it’s turning into this new religion, and it’s a religion that doesn’t care about you. It’s a religion that’s completely lacking in empathy or any kind of personal acknowledgment. And it’s a bad religion. It’s a nerdy, empty, sterile, ugly, useless religion that’s based on false ideas. And I think that of all of the things, that’s the worst thing about it.

I mean, it’s sort of like a cult of personality. It’s like in North Korea or some regime where the religion is your purpose to serve this one guy. And your purpose is to serve this one system, which happens to be controlled by one guy, in the case of Facebook.

It’s not as blunt and out there, but that is the underlying message of it and it’s ugly and bad. I loathe it, and I think a lot of people have that feeling, but they might not have articulated it or gotten it to the surface because it’s just such a weird and new situation.

On the other hand, there’s a rising backlash that may end the platforms before they have the opportunity to take root and produce yet another vicious problem.
I’m in my late 50s now. I have an 11-year-old daughter, and the thing that bothers me so much is that we’re giving them a world that isn’t as good as the world we received. We’re giving them a world in which their hopes for being able to create a decent, happy, reasonably low-stress life, where they can have their own kids, it’s just not as good as what we were given. We have not done well by them.

And then to say that observing our own mistakes means that you’re old and don’t get it is profoundly counterproductive. It’s really just a way of evading our own responsibility. The truth is that we totally have screwed over younger generations. And that’s a bigger story than just the social-media and tech thing, but the social-media and tech thing is a big part of it. We’ve created a scammy society where we concentrate wealth in ways that are petty and not helpful, and we’ve given them a world of far fewer options than we had. There’s nothing I want more than for the younger people to create successful lives and create a world that they love. I mean, that’s what it’s all about. But to say that the path to that is for them to agree with the thing we made for them is just so self-serving and so obnoxiously narcissistic that it makes me wanna throw up.

Until next week,

- js.

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