Tech wary of Huawei fallout harming trade Presented by Ericsson

With help from John Hendel

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TECH WARY OF HUAWEI FALLOUT HARMING TRADE — The Trump administration insists the arrest of a Chinese telecom executive should not affect U.S. trade discussions with Beijing, but not all tech groups are convinced authorities in China would agree. U.S. Trade Representative Robert Lighthizer, who was tapped to lead discussions on tariffs with China, told CBS on Sunday that the case involving Huawei Chief Financial Officer Meng Wanzhou is "totally separate” from his work on trade. And White House economic adviser Larry Kudlow told Fox News Sunday that trade talks with China are “on track,” despite Meng being charged in a conspiracy to defraud banks. She was arrested in Canada at the United States’ behest.

— But is Beijing on the same page? “I don’t see how the arrest of the top Huawei executive cannot have a negative impact on trade negotiations between the United States and China,” said Rob Atkinson, president of the Information Technology and Innovation Foundation. “The United States may view the two as separate, but the Chinese government surely will not.” Information Technology Industry Council President Dean Garfield said that while the timing of the arrest was “sub-optimal,” the group appreciates the administration “reinforcing that the action is separate and distinct” from trade talks.

— Meanwhile, tensions over Meng continue to heighten: According to the South China Morning Post, “China has ratcheted up the pressure on Canada to release the detained executive of Huawei Technologies over the weekend by threatening ‘grave consequences’ and accusing Canada of ‘hurting the feelings of the Chinese people.’” And Chinese officials have called for the U.S. to withdraw its arrest warrant for Meng, who faces extradition to the U.S., Reuters reports.

In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver on Friday. | The Canadian Press via AP

IN OTHER TRADE NEWS — USTR is holding a hearing today on the proposed U.S.-Japan trade agreement, and several top tech trade associations are slated to testify. On the docket: the Telecommunications Industry Association, BSA | The Software Alliance, ACT | The App Association, the Semiconductor Industry Association and ITIC.

— And the tech industry is already looking ahead to the next round of hearings. In advance of a January hearing on U.S.-Europe trade talks, the Computer & Communications Industry Association is filing comments calling for the Trump administration to address regulations on digital trade under consideration in the European Union.

GREETINGS AND WELCOME TO MORNING TECH, where your host is looking forward to watching his two favorite NBA players suit up against each other one last time. Got a news tip? Drop me a line at [email protected] or @viaCristiano. Don’t forget to follow us @MorningTech. And catch the rest of the team’s contact info after Quick Downloads.

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FEDS PROBING FCC NET NEUTRALITY COMMENTS — The FBI has subpoenaed at least one organization for documents related to postings on the FCC’s online comment system, a representative for the group told MT on the condition of anonymity. According to BuzzFeed News, which first reported the news, the investigation is looking at “whether crimes were committed when potentially millions of people’s identities were posted to the FCC’s website without their permission, falsely attributing to them opinions about net neutrality rules.” The FCC did not offer comment Sunday.

— The subpoena was received by the group in October, days after it received a separate request from District of Columbia Attorney General Karl Racine. POLITICO reported in October that New York Attorney General Barbara Underwood issued subpoenas for 14 groups in her probe of fraudulent comments filed to the FCC during the lead-up to its net neutrality repeal. According to BuzzFeed, “the offices of the attorneys general of both Massachusetts and Washington, DC, are supporting the New York investigation, and also issued subpoenas.”

ELON MUSK LETS LOOSE ON ‘60 MINUTES’ — Tesla CEO Elon Musk is not mincing words about the Securities and Exchange Commission, which settled securities fraud claims with him and the company earlier this year. "I want to be clear. I do not respect the SEC. I do not respect them," Musk told "60 Minutes," as your host reports for Pro. But he didn’t stop there. Here’s some of the other highlights from his sit-down with CBS:

— On whether he will seek to return as Tesla chairman: Musk suggested he may not seek to regain his status as chair of Tesla’s board after the three-year ban from the settlement is lifted. “No, I don't think I actually just — prefer to have no titles at all,” he said. But he does not appear to think having to give up the post has diminished his power at Tesla. “I am the largest shareholder in the company. … I can just call for a shareholder vote and get anything done that I want,” he said.

— On criticisms of working conditions at Tesla factories: “Well, it's important to emphasize that there's been an aggressive campaign by the [United Automobile Workers] — to absolutely attack Tesla with — a load of nonsense — [in] order to try to unionize the company.” Reports have detailed grueling working conditions and unreported injuries by workers at the company.

TWILIO NOT FIGHTING FCC OVER TEXTING — Messaging company Twilio will not join consumer groups and Democratic officials in protesting FCC Chairman Ajit Pai’s proposed move to designate texting as an information service, despite the fact it petitioned the Obama-era FCC in 2015 to designate text messaging as a telecommunications service. The FCC is slated to vote Wednesday on a declaratory ruling on the matter, which is stirring opposition from Democratic lawmakers and groups like Public Knowledge and Free Press.

— Twilio suggested in meetings with FCC aides last week that the agency tweak the draft item to more accurately describe its own service and disputed any suggestions that it wants to avoid fighting messaging spam. But the company said in a disclosure filing posted Friday that these “proposed edits do not affect the analysis or conclusion reflected in the draft order.” A group of senators argued last week that changing the classification for text messages would remove its existing protections and give carriers the power to block messages as they see fit.

THE TROUBLE WITH PINNING BLAME ON SOCIAL MEDIA — The rash of recent protests and riots in Paris has renewed discussions about social media rhetoric and real-world violence. Clashes have swept across France in recent weeks, and social media reportedly played a key role in their spread. According to a recent BuzzFeed News report, the movement was “born almost entirely from Facebook,” with organizers communicating “almost entirely on small, decentralized Facebook pages.” And as the Alliance for Securing Democracy found, the protests received an online boost from bots known to promote pro-Russian views.

— But does that make Facebook and Twitter responsible for the riots? Assigning blame to tech platforms might not be so simple, as New York Magazine points out. “The idea that popular outrage is more about ‘the power of social networks’ than actual French politics … seems very wrong, and more than a little irresponsible,” they write. And former Facebook chief security officer Alex Stamos argued that “we should demand more evidence before accepting a claim of a [causal] arrow pointing from online trolls towards a real movement.”

— Regarding the bots, a Twitter spokesperson said the company continues to police its online manipulation policies, but that attribution in this instance is difficult. Regarding the riots, a Facebook spokesperson said the company removes hateful or violent content once alerted to it.

DORSEY’S LATEST HEADACHE — Twitter CEO Jack Dorsey is facing backlash for telling his followers to visit Myanmar, making no mention of the reported genocide in the country nor the role of social media in fueling violent rhetoric regionally. Andrew Stroehlein, European media director for Human Rights Watch, took issue with a Dorsey tweet about meditating in Pyin Oo Lwin, Myanmar, writing, “I’m no expert on meditation, but is it supposed to make you so self-obsessed that you forget to mention you’re in a country where the military has committed mass killings & mass rape, forcing hundreds of thousands to flee, in one of today’s biggest humanitarian disasters?”

— The online dust-up comes just weeks after Dorsey sparked controversy in India by holding up a sign critics say fueled caste anger in the country. Twitter declined comment.



— No more merge madness? Wall Street is expecting a two-year slowdown in big media acquisitions after a crazy year for telecom, CNBC reports.

— Extreme jet lag: American entrepreneurs flocked to China. Now they’re returning to the U.S., disillusioned over obstacles, The Wall Street Journal reports.

— I’m listening: “Live-streaming your broke self for rent money,” via The New York Times reports.

— You’re Makan a mistake?: William Barr, President Donald Trump’s pick to lead the Department of Justice, previously challenged the integrity and motivation of the agency’s current antitrust chief, Makan Delrahim, The Washington Post reports.

— Oi, oi, oi: Australia's competition watchdog outlined concerns about how Facebook and Google monetize content and the extent to which they use consumer data to target ads, Reuters reports.

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