Tech Brief: Apple Plans to Invest $1 Billion in SoftBank’s Technology Fund

Washington Brief

  • Donald Trump is working with top advisers to craft a plan that would restructure the Office of the Director of National Intelligence because the president-elect believes the agency has become bloated and politicized. Trump is also looking to cut back on staffing at the Central Intelligence Agency’s headquarters in Virginia. (The Wall Street Journal)
  • A group of 15 former foreign policy and intelligence officials — including former Secretary of State Madeleine Albright, former CIA Director Mike Morrell and former Defense Secretary Leon Panetta — is supporting the creation of an independent commission to study alleged Russian hacking aimed at interfering with U.S. elections. (The Hill)
  • The Federal Bureau of Investigation didn’t examine the servers of the Democratic National Committee before releasing a report attributing the broad cyberintrusion to the Russian government. Six months after the FBI first said it was investigating the hack of the DNC’s network, the agency still has not requested access to the hacked servers. (BuzzFeed News)

Business Brief

  • Apple Inc. said it plans to invest $1 billion in SoftBank Group Corp.’s technology fund. Oracle, Qualcomm and Foxconn will also invest undisclosed amounts in the Japanese group’s Vision Fund, allowing SoftBank to hit its $100 billion goal weeks ahead of schedule. (Financial Times)
  • Apple removed the English-language and Chinese-language news apps created by The New York Times from its app store in China on Dec. 23 to comply with what it says was a request from Chinese authorities. Apps from The Financial Times and The Wall Street Journal were still available. (The New York Times)
  • BMW AG will dispatch 40 autonomous cars on the roads of U.S. and European cities in the second half of this year. The move is the next step in a partnership with Mobileye NV and Intel Corp. to introduce fully self-driving cars by 2021. (Bloomberg News)

Chart Review

Events Calendar (All Times Local)

Clapper, Rogers testify at Senate Armed Services Committee hearing on foreign cyber threats 9:30 a.m.
FCC’s Wheeler, FTC’s Ramirez speak at CES 2017 11:30 a.m.
FCC, FTC commissioners speak at roundtable at CES 2017 2:15 p.m.
DC Internet Society holds debrief of the 2016 Internet Governance Forum 9 a.m.
Commerce, USPTO officials speak at CES 2017 1 p.m.



Oracle’s Ellison, Apple, Qualcomm invest in SoftBank fund
James Fontanella-Khan, Financial Times

Oracle founder Larry Ellison will join Apple, Qualcomm and Foxconn in backing SoftBank’s record-setting technology fund, allowing the Japanese telecoms group to hit its $100bn goal weeks ahead of schedule. Abu Dhabi’s sovereign wealth fund is also in talks to invest in SoftBank’s Vision Fund, according to people briefed about the negotiations.

Department of Labor sues Google for withholding data in anti-discrimination audit
Russell Brandom, The Verge

Google has been sued by the Department of Labor for withholding data in an ongoing audit. In a complaint filed today, the Department says Google refused to provide compensation data as part of an anti-discrimination audit, and seeks a court order forcing the company to comply. The case stems from Google’s federal contracting business, which provides advertising and cloud computing services to a number of federal agencies.

In Apple-Spotify World, SoundCloud Can’t Find Room
Adam Satariano and Lucas Shaw, Bloomberg News

After years of trading physical dollars for digital dimes, the music industry is finally seeing a payoff. Subscriptions to streaming music services jumped about 50 percent in 2016, topping 92 million.

Amazon delivered more than 2 billion items for other merchants in 2016
Ángel González, The Seattle Times’s handling of items sold by independent merchants on its site doubled in 2016, showing how the world’s largest e-commerce retailer has also become a sizable logistics titan. More than 2 billion items were delivered to customers last year through the Fulfillment by Amazon program, in which Amazon stores third-party sellers’ products and ships them to customers.

Google’s Latest Push To Capture The Indian Market Will Put Offline Businesses On The Internet
Pranav Dixit, BuzzFeed News

Millions more Indians are now coming online, but India’s small businesses — including everything from decades-old mom and pop stores to neighborhood bakeries — are lagging behind. Google wants to change that.

Dollar Rally Stymied by China, Fed as Gold Climbs: Markets Wrap
Cecile Gutscher and Natasha Doff, Bloomberg News

The dollar faced further headwinds as Chinese efforts to stem capital outflows and the Federal Reserve conspired to halt the strongest rally in the currency in more than a decade. Gold rose.

Intellectual Property

How Ronda Rousey Clips Reveal Facebook’s Copyright Challenge
Jeff John Roberts, Fortune

In mid-2015, one-time UFC champion Ronda Rousey destroyed her opponent in just 34 seconds, and the flight clip was all over Facebook. Fast forward to the end of 2016, and things were reversed: Now, it was Rousey getting a beatdown as new champ, Amanda Nunes, punched her into a pulp in about the same amount of time.

Telecom, Wireless and TV

Obama renominates former FCC commissioner
Harper Neidig and Ali Breland, The Hill

President Obama on Wednesday renominated former FCC Commissioner Jessica Rosenworcel to the agency just weeks after Senate Republicans refused to confirm her to a new five-year term. “This was the right thing to do,” said Sen. Bill Nelson (Fla.), the ranking Democrat on the Senate Commerce Committee.

Donald Trump asked Rupert Murdoch to name picks for FCC chair
Russell Brandom, The Verge

Newscorp CEO Rupert Murdoch may have a significant influence in the next four years of American telecom policy. According to a new report from New York Magazine’s Gabriel Sherman, President-elect Trump has asked the conservative Australian broadcast titan to submit names of his preferred candidates for chair of the Federal Communications Commission. Current chairman Tom Wheeler plans to step down when Trump takes office, and the president-elect is expected to nominate a successor in the weeks to come.

Indiana robocall ban doesn’t violate First Amendment, court rules
Ryan Lovelace, The Washington Examiner

The 7th Circuit Court of Appeals rejected a challenge to an Indiana ban on robocalls, ruling that the measure didn’t violate the First Amendment. Indiana’s Automated Dialing Machine Statute prevents a caller from using an automated telephone call that delivers a recorded message, with limited exceptions for such sources as school districts and employers.

AT&T to conduct 5G network trials for DirecTv Now customers
Laharee Chatterjee, Reuters

AT&T Inc said it plans to test its high-speed wireless 5G network, which reached speeds of 14 gigabits per second in lab trials, for customers of its online streaming television service, DirecTv Now, in Austin, Texas. The U.S. wireless carrier, which plans to conduct the trial in the first half of 2017, has also teamed up with Qualcomm Technologies and Ericsson for mobile and broadband trials of the 5G network in the second half of the year.

Thune Plans ‘Step-by-Step’ Comms Act Rewrite in New Congress
Brendan Bordelon, Morning Consult

Senate Commerce Committee Chairman John Thune (R-S.D.) said Wednesday that he plans to adjust key portions of the Communications Act this year, but he stressed that his committee would likely take a piecemeal approach to the effort rather than attempt a full-scale rewrite. “It’s time to update the law,” Thune told reporters.

Mobile Technology and Social Media

BMW Deploying Self-Driving 7 Series Fleet to Roads This Year
Gabrielle Coppola and Ian King, Bloomberg News

BMW AG will dispatch a fleet of autonomous vehicles to U.S. and European cities in this year’s second half, the next step in its partnership with Mobileye NV and Intel Corp. to introduce fully self-driving vehicles by 2021. The German automaker will put 40 of its 7 Series sedans on the road and train them to drive in urban areas, Klaus Froehlich, BMW’s head of development, said in an interview.

Apple Removes New York Times Apps From iTunes Store in China
Katie Benner and Sui-Lee Wee, The New York Times

Apple, complying with what it said was a request from Chinese authorities, removed news apps created by The New York Times from its app store in China late last month. The move limits access to one of the few remaining channels for readers in mainland China to read The Times without resorting to special software.

Snapchat Accused of Misleading Investors in Ex-Employee’s Lawsuit
Ashley Cullins, The Hollywood Reporter

An ex-Snapchat employee says he was fired just weeks after the company poached him from Facebook and is being blackballed. Snap says his claims have no merit.

Lyft’s Ridership Reaches 52.6 Million in Fourth Quarter
Greg Bensinger, The Wall Street Journal

Ride-hailing service Lyft Inc. more than doubled its quarterly ridership from a year before, a welcome boost as it seeks to keep apace with larger rival Uber Technologies Inc. The San Francisco startup said it logged 52.6 million rides in the U.S. in the fourth quarter, up from 21.1 million a year earlier.

Uber Doesn’t Want to Give NYC (or Anyone) More Data
Joshua Brustein, Bloomberg News

Uber Technologies Inc. is starting off the year preparing for a new political fight. As New York City seeks more information about ride-hailing drivers’ activities, it’s shaping up to be Uber’s second major conflict with the administration of Mayor Bill de Blasio.

Cybersecurity and Privacy

Donald Trump Plans Revamp of Top U.S. Spy Agency
Damian Paletta and Julian E. Barnes, The Wall Street Journal

President-elect Donald Trump, a harsh critic of U.S. intelligence agencies, is working with top advisers on a plan that would restructure and pare back the nation’s top spy agency, people familiar with the planning said. The move is prompted by his belief that the Office of the Director of National Intelligence has become bloated and politicized, these people said.

Ex-intelligence officials back independent probe of Russian hacking
Katie Bo Williams, The Hill

A group of 15 former foreign policy and intelligence officials and outside experts is backing a proposal to create an independent commission to study Russian interference in the U.S. presidential election. Among those backing an independent commission are former Secretary of State Madeleine Albright, former CIA Director Mike Morrell and former Defense Secretary Leon Panetta.

The FBI Never Asked For Access To Hacked Computer Servers
Ali Watkins, BuzzFeed News

The FBI did not examine the servers of the Democratic National Committee before issuing a report attributing the sweeping cyber intrusion to Russia-backed hackers, BuzzFeed News has learned. Six months after the FBI first said it was investigating the hack of the Democratic National Committee’s computer network, the bureau has still not requested access to the hacked servers, a DNC spokesman said.

Trump’s team tries to stifle rift on Russia
Bryan Bender, Politico

A war is brewing among Donald Trump’s advisers over how to deal with Russia and Vladimir Putin — and his team is trying to keep it from breaking out into the open. As the president-elect’s top national security picks prepare to testify before Congress starting next week, his transition team is plotting ways to prevent a public spectacle that airs their most wildly divergent assessments of the threat Russia poses, according to two members of the Trump camp directly involved in the deliberations.

Republicans voice disdain after Trump tweets support for Julian Assange
Julian Borger, The Guardian

Leading Republicans broke with Donald Trump on Wednesday after the president-elect appeared to put more faith in WikiLeaks founder Julian Assange than in US intelligence agencies. The sharp differences on a highly charged national security issue are the latest sign that matters of intelligence and policy towards Russia reflect a deep fault line in Trump’s relationship with the Republican party establishment.

McCain and Graham vs. Trump and Putin
Burgess Everett and Austin Wright, Politico

John McCain and Lindsey Graham have spent the past eight years chiding President Barack Obama’s foreign policy, sarcastically calling the president naïve when it comes to world affairs and regularly grilling his Cabinet members at congressional hearings. Now it’s Donald Trump’s turn as the target.

Opinions, Editorials and Perspectives

The Trump effect
Walt Mossberg, Recode

A couple of weeks ago, President-elect Donald Trump summoned the leaders of top tech companies to his New York skyscraper for a meeting. He showered them with praise. “There’s nobody like you in the world,” he said in the public portion of the session, adding, “we’re going to be there for you.”

Why Mark Zuckerberg Is Suddenly Acting Like a Politician
Will Oremus, Slate

Mark Zuckerberg woke up on Christmas morning and posted his status on Facebook. The Facebook CEO was “celebrating Christmas,” he reported, adding a message so anodyne it would make a Hallmark card look edgy in comparison. Yet there was a revelation coming.

Tech Giants Seem Invincible. That Worries Lawmakers.
Farhad Manjoo, The New York Times

In the technology industry, the sharks have never long been safe from the minnows. Over much of the last 40 years, the biggest players in tech — from IBM to Hewlett-Packard to Cisco to Yahoo — were eventually outmaneuvered by start-ups that came out of nowhere.

A Timeline of Trump’s Strange, Contradictory Statements on Russian Hacking
Andy Greenberg, Wired

Since the cybersecurity community last summer pointed to the Russian government as the culprit behind the hack of the Democratic National Committee, reasonable people have disagreed with that finding. Even after US intelligence agencies came to the same conclusion with “high confidence,” skeptics have called on those agencies to reveal more of the evidence that linked that political attack to the Kremlin.

The Siberian Candidate
Kara Swisher, Recode

A long time ago, writer Jonathan Swift wrote: “Falsehood flies, and truth comes limping after it, so that when men come to be undeceived, it is too late.” And that, it seems, has been one of President-elect Donald Trump’s most effective tactics whenever he is faced with a problematic issue.

The hackers are winning
Daniel Castro, The Christian Science Monitor

As Washington continues to wrangle over technical details and diplomatic consequences of Russian hacking allegations, we may lose sight of the only undisputed fact in this saga: Hackers attempted to undermine the integrity of US elections. And, it wasn’t hard to do. Regardless of the culprits’ identity or motives, Congress and the administration now have an urgent responsibility.

Research Reports

A Theory of Bundling Advertisements in Media Markets
Kevin M. Murphy and Ignacio Palacios-Huerta, The National Bureau of Economic Research

Watching TV and other forms of media consumption represent, after sleeping and working, the main activity that adults perform in developed countries. We present a dynamic theory of commercial broadcasting where the media trade utility-raising goods (programs, information, and services) with audiences in exchange for their exposure to advertisements (utility-decreasing bads), and where goods are otherwise free to the audience except for their opportunity cost of time.