Mar 5, 2019

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1 big thing: Phone numbers are the new SSNs

Illustration: Sarah Grillo/Axios

Cellphone numbers have become a primary way for tech companies like Facebook to uniquely identify users and secure accounts, in some ways becoming a proxy for a national ID, Axios' Scott Rosenberg writes.

Why it matters: That overreliance on cellphone numbers ironically makes them a less effective and secure authentication method. And the more valuable the phone number becomes as an identifier, the less willing people will be to share it for communication.

Driving the news: Facebook faced criticism this week for its handling of phone numbers that users provide for the purpose of two-factor authentication (2FA) — in which a person's login is protected by both a password and a device like their smartphone.

  • Some users found Facebook had enabled people to connect their profiles and phone numbers, transforming 2FA from a way to protect personal security into a personal privacy breach.
  • Facebook pointed to a privacy control option that allows users to limit, but not entirely eliminate, this sort of identification.

The big picture: American culture and law are hostile to establishing any sort of national ID, leaving businesses and organizations to find substitutes.

  • Passports don't work for non-citizens, and drivers' licenses are handled by states.
  • Social Security numbers were created to track workers' contributions to retirement benefits but gradually got drafted for other uses by, among others, the IRS and the health care system.
  • Many Americans try to avoid broadcasting SSNs online. But now people have to share them with so many institutions and clerks that there's very little that's truly secret about them.

Background: The internet lacks its own identity system. Email addresses were long a popular but imperfect choice.

  • Each address is unique and, once verified, is useful for receiving information intended only for you.
  • But email is an insecure system, ridden with spam, and once the addresses became essentially free it became easy for one person to use many accounts or quickly switch to new ones.

What's next: Cellphone numbers are becoming Americans' latest quasi-identity system.

  • Once Congress mandated that you could take your phone number from one provider to another, the U.S. ended up with a de facto "cellphone number for life" system.
  • You can switch, of course, but it means changing how your whole social network connects with you.

To be sure: Since so many of us carry a phone at all times and use it as a wallet and a diary, it's natural for it to be treated like a set of keys as well.

  • Some privacy-conscious apps, like Tinder, give users the option of signing up with a phone number rather than through Facebook.
  • That practice only makes people angrier when they feel they're victims of a bait-and-switch like the one Facebook is being charged with.

Be smart: The more people use phone numbers to unlock things, the less widely they'll want to share them, which makes them less useful for connecting people.

2. Charted: Apex Legends outpaces Fortnite
Expand chart
Data: Roundhill Investments; Chart: Chris Canipe/Axios

Fortnite is still the darling of the video game industry, generating hundreds of millions of dollars in revenue per month.

Buzz: However, a month-old game called Apex Legends is growing far faster than even Fortnite did, at least as measured by signing up users.

  • The game's creators announced Monday that they have reached 50 million registered players in the first 28 days. (It took Fortnite more than 16 weeks to hit that level.)
  • Both titles are from the "battle royale" genre of video game. Per Wikipedia, that means they blend "the survival, exploration and scavenging elements of a survival game with last-man-standing gameplay."

Yes, but: Registered users is one measure, but long-term value comes by ensuring users remain active to generate revenue.

3. Pelosi: Bill to reinstate net neutrality coming

House speaker Nancy Pelosi said that Congress will introduce a bill on Wednesday to restore net neutrality protections, according to The Hill.

Why it matters: While states have proposed their own laws, the national open internet rules created under the Obama administration were revoked by the FCC back in 2017.

Yes, but: Details of the bill have yet to be released. And any bill would not only have to pass a divided Congress, but also gain the approval of President Trump.

4. Huawei hopes ad blitz will change perceptions

Huawei's booth at CES 2019. Photo: Ina Fried/Axios

Huawei has launched a global ad campaign aimed at convincing the world that accusations of fraud, espionage and theft against it are invalid, Axios' Sara Fischer reports.

Details: A full-page ad in the Wall Street Journal last week even went so far as to urge U.S. journalists to visit the telecom giant’s headquarters in China.

“Don’t believe everything you hear,” it states. “Come and see us."

Between the lines: Long-simmering tensions between U.S. regulators and Huawei have boiled over in recent weeks. The company is reportedly preparing to sue the U.S. government soon over an equipment ban to U.S. government agencies, according to the New York Times.

Why it matters: Huawei's campaign is reminiscent of corporate ad efforts by Uber and Facebook over the past 2 years. 

  • Uber reputedly spent $500 million on advertising in 2017 and 2018 to improve its corporate image after a series of scandals led to the ousting of its CEO, according to The Information
  • Facebook has run ads all over the globe tackling topics like fake news and privacy. It similarly placed full-page ads in big national papers in an effort to clarify its position on issues like election security in the U.S. and fake news in Europe.
5. Take Note

On Tap

  • RSA Conference continues in San Francisco.
  • Apple and Qualcomm are back in court, this time in San Diego, battling over patents.
  • World Wide Web founder Tim Berners-Lee is being interviewed on stage at the Washington Post this morning.

Trading Places

  • Former Twitter VP Joel Lunenfeld is joining NorCal Cannabis as chief marketing officer. (Benzinga)
  • Former NBC Entertainment chief Bob Greenblatt was officially named chairman of AT&T's WarnerMedia Entertainment. His appointment follows the exit of longtime HBO chief Richard Plepler and Turner exec David Levy. (The Hollywood Reporter)
  • Venture capitalist David George, who spent the past 7 years at General Atlantic, is joining Andreessen Horowitz. (Axios)