McConnell calls on tech to help 'retaliate' against Russians Presented by CTIA

With help from John Hendel

MCCONNELL CALLS ON TECH TO HELP ‘RETALIATE’ AGAINST RUSSIANS — Senate Majority Leader Mitch McConnell on Saturday called on tech giants to help the U.S. “retaliate” against Russia for the election interference the foreign power has reportedly engaged in. “What we ought to do with regard to the Russians is retaliate, seriously retaliate against the Russians,” McConnell told conservative commentator Hugh Hewitt in an interview on MSNBC. “These tech firms could be helpful in ... giving us a way to do that.” McConnell also joined other lawmakers in arguing that tech company CEOs should have testified before Congress rather than corporate lawyers, noting that “they ought to be more interested in cooperating when you have a clear law enforcement issue.”


— McConnell is not sold on the Honest Ads Act: The Kentucky Republican expressed skepticism about the Honest Ads Act ( S. 1989 (115)), a bipartisan effort to require more transparency about political ads on tech platforms, POLITICO’s Brent Griffiths reports. "I'm a little skeptical of these disclosure-type proposals that are floating around, which strikes me would mostly penalize American citizens trying to use the internet and to advertise," McConnell said. The majority leader has a long history of pushing back on campaign finance regulations he sees as a threat to the First Amendment. He also added that he is not sure a 9/11-style commission is necessary to review the issue of national security on social media platforms, an idea Sen. Lindsey Graham (R-S.C.) floated last week.

— Warner says ad disclosure bill ‘makes sense’: Sen. Mark Warner (D-Va.), the top Democrat on the Senate Intel Committee, said he wants to maintain the “lightest touch possible” in any regulation of tech platforms, but argued that an ad disclosure requirement “makes sense.” "As a pro-tech guy, somebody who's in the tech business longer than I've been in politics, I think we need to take the lightest touch possible,” he said on CBS’ “Face the Nation” on Sunday. “But the basic requirement that there ought to be the same disclosure for political ads on the internet that exists for ads that appear on your show I think makes sense." Regarding whether tech companies understand the severity of the challenge posed by Russian interference, Warner said “I think they get it.” Facebook in recent days has been promoting its “action plan against foreign interference.”

— Kremlin money bolstered investments in Facebook, Twitter: While the congressional heat on tech platforms increases, a New York Times report finds that sizeable investments into two of the tech giants were backed by Russian-linked dollars. “[Yuri] Milner, whose holdings have included major stakes in Facebook and Twitter, is known for expounding on everything from the future of social media to the frontiers of space travel,” The New York Times reports. “Behind Mr. Milner’s investments in Facebook and Twitter were hundreds of millions of dollars from the Kremlin. Obscured by a maze of offshore shell companies, the Twitter investment was backed by VTB, a Russian state-controlled bank often used for politically strategic deals. And a big investor in Mr. Milner’s Facebook deal received financing from Gazprom Investholding, another government-controlled financial institution.” The report adds that there has not been a suggestion that Milner’s investments are linked with any propaganda operations.

— And that’s not the only Russia-related news: Commerce Secretary Wilbur Ross has business ties with Putin “cronies,” The New York Times reports. “After becoming commerce secretary … Ross Jr. retained investments in a shipping firm he once controlled that has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law, according to newly disclosed documents.”

SESTA PICKS UP STEAM — The anti-sex-trafficking bill ( S. 1693 (115)) has garnered the support of the Internet Association — a powerful tech industry group that includes Google and Facebook among its members — following updates that have been made to the legislation, Steven and John report. IA’s backing signals a sharp turn from the group’s initial position on the original version of the bill and indicates that tech is coming around on legislation it once staunchly opposed as the measure gathers widespread bipartisan support. The bill also picked up some more co-sponsors, including Sens. Kamala Harris (D-Calif.) and Catherine Cortez Masto (D-Nev.). Another indication of the legislation’s momentum: It’s scheduled for a markup Wednesday in the Senate Commerce Committee. See the updates, here.

— Also this week in Congress: The House Ways and Means Committee is slated to mark up the tax reform bill beginning today. … The Senate Commerce Committee on Tuesday is due to hold a hearing on growing IoT in rural America. It’s also set to review data breaches on Wednesday, with former Yahoo CEO Marissa Mayer and Verizon Deputy General Counsel Karen Zacharia among the witnesses. … The House Judiciary IP subcommittee examines sovereign immunity and the IP system on Tuesday.

GREETINGS FROM TRUMP’S ASIA TRIP — SoftBank Chairman and CEO Masayoshi Son was among the Japanese business leaders attending a breakfast with President Donald Trump as part of his trip to Asia, according to a pool report. The conglomerate has pledged a $50 billion investment into U.S. firms, a move Trump had been quick to take credit for last year.

GOOD MONDAY MORNING and welcome to Morning Tech, where we’re bundling up now that fall weather is upon us. Send your tech and telecom tips to [email protected] and @liszhou. Catch the rest of the team’s contact info after Quick Downloads.

Got an event for MT’s tech calendar? Email us the details at [email protected].

CONWAY: WH WON’T INTERFERE WITH AT&T-TIME WARNER — Trump counselor Kellyanne Conway said that the administration is not interfering with the Department of Justice’s review of the AT&T-Time Warner merger, after CNN’s Brian Stelter pressed her on a recent Wall Street Journal report indicating that the DOJ was weighing a possible lawsuit challenging the deal. “The Department of Justice and the different departments within the DOJ that look at merger deals will do their work,” Conway said in an appearance on “Reliable Sources.” “We’re not going to interfere with that here. … The Department of Justice is independent.” Stelter noted that Trump had previously vowed to oppose the merger and asked Conway if this was still his position. “I haven’t discussed that with him lately,” she said, giving the same response when he asked about the president’s take on the Sinclair-Tribune merger.

SPRINT AND T-MOBILE CALL IT QUITS — For real, this time. The two companies issued an official release on Saturday announcing that the merger is definitely dead, following on-again, off-again reports in recent weeks. “The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders,” T-Mobile CEO John Legere said in a statement. “While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination,” Sprint CEO Marcelo Claure echoed, adding, “We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.”

— Klobuchar shared her support for the outcome: “This is good news for consumers — a potential merger by T-Mobile and Sprint could have raised serious antitrust issues,” Senate antitrust subcommittee ranking Democrat Amy Klobuchar, of Minnesota, said in a statement. “This is exactly why I urged the FCC and DOJ to investigate this potential merger, because maintaining competition among the four largest cell phone carriers leads to lower prices, better service and more innovation."

PAI EYEING ALERTS — FCC Chairman Ajit Pai responded Friday to Sens. Harris and Dianne Feinstein, both California Democrats, on their concerns about precise geo-targeting of wireless emergency alerts. As he said earlier last week, he plans to soon embark on “a rulemaking that would adopt rules to further enhance the precision of geo-targeted WEAs,” he told them. He also reported that, per FEMA, wireless alerts were used four times amid recent California wildfires, and the emergency alert system was used once. The FCC is “concerned” about Sonoma County’s decision not to activate the alerts due to, as Pai said, “concerns that WEA could not be focused sufficiently to avoid creating road congestion,” and he pledged to follow up. Pai also described “extensive” use of the alerts during recent hurricanes, “including 21 WEA alerts sent in Puerto Rico alone.”

— Pai’s Puerto Rico visit: Pai has been visiting Puerto Rico yesterday and today to survey communications recovery, John reports. "The FCC is committed to supporting recovery efforts and doing everything we can to help restore communications networks as quickly as possible," Pai said in a statement. The communications networks of Puerto Rico were hit hard by Hurricane Maria. As of Friday's FCC report, 52 percent of Puerto Rico's wireless cell sites are still listed as out of service.

SILICON VALLEY MUST-READS

— Broadcom interested in Qualcomm acquisition: “Communications chipmaker Broadcom Ltd is planning to unveil a bid for smartphone chip supplier Qualcomm Inc by Monday, three sources familiar with the matter said on Friday, an attempt to create a roughly $200-billion company through the biggest technology acquisition ever,” Reuters reports. “The bid comes as Broadcom plans to move its headquarters to the United States from Singapore. U.S. President Donald Trump commented on the move on Thursday at a White House event where Chief Executive Hock Tan cited Republican tax efforts.”

— Princeton, Microsoft sue Trump admin over DACA: ”Princeton University, one of its students and Microsoft filed a lawsuit in federal court Friday, seeking an injunction to stop the Trump administration from ending the Deferred Action for Childhood Arrivals program and to bar the government from using personal information provided by DACA participants against them, including for immigration enforcement purposes,” Pro New Jersey’s Linh Tat reports.

— Waymo-Uber lawsuit check-in: “A federal judge in San Francisco made it more difficult for Alphabet Inc’s Waymo unit to prove it suffered financially from the alleged theft of autonomous car trade secrets by Uber, ruling to exclude testimony from Waymo’s damages expert,” Reuters reports.

QUICK DOWNLOADS

Altice jumps into wireless: “U.S. cable operator Altice USA will sell mobile service on wireless carrier Sprint Corp’s network under a new multi-year agreement announced on Sunday, becoming the latest firm to enter the wireless market in a bid to retain customers,” Reuters reports.

YouTube Kids grapples with rogue content: “Videos that are disturbing for children slip past its filters, either by mistake or because bad actors have found ways to fool the YouTube Kids algorithms,” The New York Times reports.

Tips, comments, suggestions? Send them along via email to our team: Eric Engleman ([email protected], @ericengleman), Angela Greiling Keane ([email protected], @agreilingkeane), Nancy Scola ([email protected], @nancyscola), Margaret Harding McGill ([email protected], @margarethmcgill), Ashley Gold ([email protected], @ashleyrgold), Steven Overly ([email protected], @stevenoverly), John Hendel ([email protected], @JohnHendel) and Li Zhou ([email protected], @liszhou)

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