Jul 25, 2018

Axios Login

By Ina Fried
Ina Fried

If you are debating, I'd go for the extra cup of coffee. I'm guessing today will be another long day.

1 big thing: Another crazy day in Facebookland

Protestors in London. Photo: Victoria Jones/PA Images via Getty Images

In yesterday's Login, experts weighed in with a number of ways Facebook could sensibly rein in conspiracy theories on its site.

Yeah, well, that didn't happen. Instead, the company doubled down on its policies, rejecting calls to remove an Alex Jones video in which the InfoWars founder attempts to link Robert Mueller to child rape and then pantomimes shooting the special prosecutor.

The big picture: This is just one of a half-dozen big Facebook stories from yesterday, collectively showing the company as still a deer in the headlights, frozen in the glare of a growing number of ethical dilemmas.

1. Election interference

On a conference call with journalists, Facebook punted on the key question of whether it has seen evidence of a coordinated information campaign aimed at disrupting the U.S. midterm elections.

“I mean, we know that Russians and other bad actors are going to continue to try to abuse our platform — before the midterms, probably during the midterms, after the midterms, and around other events and election,” Nathaniel Gleicher, Facebook's cybersecurity head, said the first time he was asked. “We are continually looking for that type of activity, and as and when we find things, which we think is inevitable, we’ll notify law enforcement, and where we can, the public.”
  • That doesn’t answer the question. Pressed twice more, Gleicher repeated his talking point.
  • He added, “As we think about how we answer these questions, we need to be careful that we aren’t compromising investigations that we might be running or investigations the government might be running.”

2. The Stamos memo

Shortly before Facebook's conference call with journalists about midterm election security yesterday, BuzzFeed News published the lengthy and candid memo Facebook chief security officer Alex Stamos sent internally last March about his eventual departure. Some key points:

  • “We need to be willing to pick sides when there are clear moral or humanitarian issues,” Stamos wrote, in contrast to Facebook’s repeated messages that it doesn’t want to be the judge of truth in publishers’ content.
  • “We need to intentionally not collect data where possible,” he adds — a suggestion that could be tough to embrace for a company whose business model is built on its ability to collect a huge amount of data to help advertisers.

The other stories:

  • Facebook reached an agreement with Washington State authorities to change policies nationwide in order to keep advertisers from discriminating on the basis of race, religion or sexual orientation.
  • The New York Times reports that Facebook has filed paperwork to establish a Chinese subsidiary, even though CEO Mark Zuckerberg said last week in an interview with Recode's Kara Swisher that "We’re, I think, a long time away from doing anything [in China]."
  • Facebook's general counsel Colin Stretch announced he plans to leave the company at the end of the year.

What's next: Facebook reports earnings after the markets close today, so expect more discussion of these and other topics. Analysts expect a generally upbeat report, including a 40% year-over-year gain in revenue, despite the many issues facing the company. Facebook shares reached all-time highs Tuesday in the wake of Google's strong earnings.

2. Decision looms for Qualcomm on NXP bid

With no indication that the Chinese government is ready to give its blessing to Qualcomm's planned purchase of semiconductor manufacturer NXP, the chipmaker faces a tough decision. The current offer for NXP, which needs the approval of Chinese authorities to move forward, expires just before midnight (Eastern Time) tonight.

The bottom line: Although the companies have extended the deal timeline multiple times, this deadline could be it, Qualcomm has previously suggested.

Why it matters: Having fended off Broadcom's hostile takeover bid, Qualcomm management is under pressure to show it has a credible independent future. A big piece of its case has been the pending NXP acquisition. If that fails to happen, Qualcomm will be betting everything that it can grow its chip business well beyond its cellular roots while ideally maintaining the bulk of its licensing business.

What they're saying: Analysts I talked to see it as reasonably likely that Qualcomm and NXP give up on the deal. But that outcome doesn't worry them quite as much as it once did.

  • Technalysis Research's Bob O'Donnell: "Yes it increasingly looks like the deal might die and while that was concerning before, I think the body of technology (and licenses) that [Qualcomm] owns for 5G will be applicable to much more than smartphones (including automotive) and that should suit them well for at least the next few years."
  • Creative Strategies' Carolina Milanesi: "If the deal does not go through, it surely will be another casualty of the US-China battles that the current administration has started. For Qualcomm, I think there is a little less pressure than there was at the start of the acquisition in demonstrating they have opportunities beyond smartphones. Prolonging this decision process is the worst thing that could happen to both companies."
3. How 5G could widen the rural-urban divide

Illustration: Rebecca Zisser/Axios

New 5G networks are expected to supercharge wireless speeds and trigger an explosion of new services — but they also may exacerbate the stubborn digital divide and leave out wide swaths of rural Americans, Axios' Kim Hart reports.

Why it matters: According to FCC data, 31% of rural residents don't have fixed broadband service, compared to 2% of city residents. Despite the hype around the fifth-generation wireless networks, there's still little financial incentive for the major telecom firms to spend the billions of dollars necessary to serve rural communities, experts say.

Big wireless providers like AT&T, Verizon and T-Mobile are promising that 5G will deliver gigabit speeds — up to 100 times faster than current 4G LTE wireless service — that will power smart cities, instant video delivery, virtual reality and a host of other applications that need constant, robust connections.

The catch: The high-frequency airwaves capable of delivering those fast speeds can't travel very far — only a few hundred feet with a clear line of sight. So networks will need hundreds of thousands more cell antennas to carry the signals. That may be feasible for a metropolitan downtown, but it's too expensive in many rural areas.

Companies investing in the networks acknowledge cities will be the first to get the upgrade, and note that 5G networks can still be far faster than 4G even over more traditional lower-frequency spectrum.

  • Because rural cell towers are less crowded, the real-time speed differences between city and rural use may not be as dramatic, says Sherif Hanna, director of product marketing at Qualcomm.
  • 5G can be a viable rural option where houses are clustered together and close enough to fiber infrastructure, said Steven Steele, CEO of Peoples Telecom, which serves 3,000 wireless subscribers in East Texas. "The nice thing about 5G is everyone's doing it, so equipment will get cheaper," he said.

Go deeper: Kim has more here.

4. Coursera to offer Ivy League degree online

Photo: Education Images/UIG via Getty Images

The University of Pennsylvania’s School of Engineering and Applied Science announced Wednesday it will offer a full master's degree in computer and information technology online through Coursera, according to Axios' Marisa Fernandez.

Why it matters: Coursera's first Ivy League degree offering comes as many exclusive universities try to make degrees more accessible to lower income students. The online version of the course costs less than half the price of sitting in a UPenn lecture hall.

Read more of Marisa's story here.

5. Take Note

On Tap

  • PayPal reports earnings, along with, as previously mentioned, Facebook and Qualcomm.
  • Google's Cloud Next continues in San Francisco.

Trading Places

  • Snap hardware VP Mark Randall left the company earlier this year, Variety reports.
  • Pinterest engineering head Li Fan is leaving for scooter startup Lime, per CNBC.

ICYMI

  • Uber is putting its self-driving cars back on the road, but with a big asterisk — they'll be driven by humans. (Narrator: That doesn't count as self-driving.) Separately, the company announced it has now given 10 billion rides.
  • President Trump criticized the Republican-dominated FCC for opposing the Tribune-Sinclair merger. The Federal Communications Commission alleges that Sinclair may not have been truthful or candid with the agency in trying to get the deal approved.
6. After you Login

Nate Silver's team over at FiveThirtyEight compiled the songs that couples most often put on their "Do Not Play" list at wedding receptions. Or, as Bloomberg editor Joe Weisenthal dubbed it, actually creating the perfect wedding playlist.

Ina Fried