Apr 8, 2021

Axios Login

It turns out that everything you thought you knew about physics could be wrong. Fortunately, I didn't think I knew very much about physics, so that's less of a blow to me.

Today's edition is 1,442 words, a 6-minute read.

1 big thing: Biden broadband agenda takes aim at Big Telecom

Illustration: Rae Cook/Axios

The White House wants to lower broadband prices and make the industry more competitive — a sign that President Biden's approach to the telecom sector will be much tougher than his predecessors, Axios' Margaret Harding McGill reports.

Why it matters: Tech giants and internet platforms have been in the brightest spotlight of regulatory scrutiny, but the new administration looks ready to cast a much wider net.

The big picture: The pandemic has made it clear that access to high-speed internet is now a necessity — even, some argue, a human right — and too many families were left disconnected when school and work suddenly went virtual.

  • While Congress and the FCC have made some headway in providing temporary subsidies to help cover the cost of broadband, the administration's go-big-or-go-home infrastructure plan would shift the industry's competitive dynamics to favor alternatives to the biggest internet service providers.

Catch up quick: The White House infrastructure package included $100 billion for broadband deployment, with plans to channel funding to government-owned, non-profit or cooperative networks and a push to reduce prices.

  • "A very positive signal that was sent — that should send chills up the spines of the incumbents — was recognizing that the market is not competitive and Americans generally are paying too much for broadband," Harold Feld, senior vice president of Public Knowledge, told Axios.

Behind the scenes: Key White House officials with progressive backgrounds have been meeting with telecom industry players to discuss Biden's plans for broadband.

  • Bharat Ramamurti, a deputy director for the National Economic Council, has a broad portfolio of financial reform and consumer protection. He is a former aide to Sen. Elizabeth Warren (D-Mass.), who as a presidential candidate championed giving billions to non-profits and co-ops to build affordable fiber networks.
  • Tim Wu, special assistant to the president for technology and competition policy, has a wide purview over tech issues. He rose to prominence by focusing on net neutrality and telecom market issues before turning to tech antitrust more recently.
  • Hannah Garden-Monheit, senior policy advisor with the NEC, is a former aide to Ramamurti. Garden-Monheit's main focus is broadband and is relatively new to the topic, sources told Axios.

Between the lines: The early moves on broadband signal a much more aggressive approach to the telecom industry than the Obama administration.

  • "We've had a long run of the argument being that regulation is harmful to investment and innovation — and I think what this activity is saying is that argument has run its course," former FCC chairman Tom Wheeler told Axios. "This is a watershed where there is a recognition that investment is made based on the returns it will generate, not based on regulation."

The other side: Jonathan Spalter, president of USTelecom, which represents providers like AT&T and Verizon, said while the president's focus on closing the digital divide is important, raising the specter of regulating internet prices is wrong, and "it is not helpful to demonize the companies" doing the work.

Meanwhile, smaller providers are worried they will be cut out of funding that's steered toward municipal or cooperative networks.

  • "I don't think that corporate structure should matter if your blood, sweat and tears are already dedicated to building out broadband in rural America," said Claude Aiken, head of the Wireless Internet Service Providers Association, whose member companies often have 250 or fewer subscribers in rural areas. "Locking out thousands of rural small businesses from competing for these funds, we think should be a non-starter."

Go deeper: Why cable hates Biden's $100B internet plan

2. Platforms hold users accountable for offline actions

Illustration: Sarah Grillo/Axios

New rules from tech companies are making it harder for users with sketchy reputations in the real world to become famous online, Axios' Sara Fischer and Stephen Totilo report.

Driving the news: Twitch, the Amazon-owned livestream platform used primarily by gamers, on Wednesday unveiled a new policy to address "severe misconduct" that happens off its platform, but that may still impact its online community.

  • Twitch says it will only act in cases where it has "verifiable evidence" of off-platform activities such as deadly violence, terrorist activities or recruiting, credible threats of mass violence, sexual exploitation of children, sexual assault or membership in a known hate group.

Be smart: Twitch isn't the first company to create this type of policy and it certainly won't be the last.

  • Snapchat became one of the first social media companies to take action against then-President Trump's account for things he said off its platform last summer. The action came after Trump tweeted comments that some suggested glorified violence amid the 2020 racial justice protests.
  • Months later, following the Capitol insurrection in January, a slew of online platforms and servers removed or suspended Trump’s account or accounts affiliated with pro-Trump violence, conspiracies and hate groups.

The big picture: This approach may help tech companies protect themselves against liability for hosting potentially harmful people or groups, but the policies may also put companies in a bind over free speech.

  • Spotify debuted a "hateful conduct and content policy" in 2018 that limited the active promotion of music by R. Kelly and rapper XXXTentacion, who died shortly after the policy was created. The company discontinued the policy less than a month later.
  • Twitch has in the past banned users from its platform that have been accused of things like sexual misconduct. Its new policies expand the scope of the off-platform activities it will ban users for, like belonging to a hate group.
  • A wave of #MeToo accounts in June 2020 led to a reckoning in the video games industry and at several companies, including at Twitch and Facebook Gaming, which subsequently banned multiple streamers accused of sexual misconduct.
3. T-Mobile makes fresh push for 5G customers

T-Mobile made a series of moves Wednesday aiming to show both the strength of its 5G network and that it hasn't lost its competitive spirit. Specifically, the carrier announced the launch of its home broadband replacement service as well as offers to lure new and existing customers with free and discounted 5G phones.

Why it matters: T-Mobile has some key advantages in 5G, thanks in large part to the 2.5 GHz spectrum it acquired with its Sprint purchase. That mid-band spectrum offers a mix of high speeds and decent coverage that, at least for now, AT&T and Verizon can't match.

Driving the news:

  • T-Mobile's home broadband service, which uses 5G cellular technology, offers average speeds of around 100 megabits per second for $60 per month and will initially be available in 30 million homes.
  • The company is also pushing deeper into rural areas, with plans to open hundreds of stores in smaller markets and also hire 2,500 individual workers in markets not large enough to support a full retail store. Already 1,000 of those jobs are posted, T-Mobile said.
  • On the cell service side, T-Mobile launched a series of promotions offering free or discounted 5G phones, even when trading in an ancient iPhone or Android device. It is also giving those on limited data plans at AT&T and Verizon the chance to get unlimited data at T-Mobile for the same or lower price.
4. Apple and Epic gear up for May trial

Illustration: Sarah Grillo/Axios

Apple and Epic Games burned the midnight oil Wednesday, as the two companies prepared to lay out their case ahead of a May trial in front of a federal judge in Oakland.

Catch up quick: Last year, Epic added its own in-app payment system into Fortnite, despite prohibitions by both Google and Apple on such moves.

  • Both stores pulled Fortnite from their app stores and Epic immediately sued both companies. Apple has also countersued Epic.
  • A court denied Epic's request for a temporary restraining order to keep Fortnite in the App Store, but also temporarily stopped Apple from removing Epic's access to developer tools.

What's new: While the full filings weren't available last night, there's not much mystery as to what each side is arguing.

  • Apple contends that its 30% commission is in line with other digital marketplaces and that companies that don't want to use its in-app payment system can sell digital currencies over the web.
  • Epic is expected to argue that the relevant market is that for in-app purchases on the iPhone and that Apple is using the fact that the App Store is the only way to get apps to force developers to use its payment system for in-app purchases.

What's next: The trial is set to begin May 3 in Oakland, California, with Judge Yvonne Gonzalez Rogers deciding the case. Apple CEO Tim Cook is expected to testify, as are Epic CEO Tim Sweeney and a number of other top Apple executives.

5. Take note

Trading Places

ICYMI

  • Twitter has told the National Archives it can't host Trump's tweets from his time as commander-in-chief, as doing so would violate the service's ban on the former president. (Axios)
  • And, speaking of Twitter, the company discussed acquiring Clubhouse for around $4 billion, sources told Bloomberg, but the talks ended without a deal and Clubhouse is now seeking fresh venture funding at a similar valuation. (Bloomberg)
  • Apple is feeling the pain of the global chip shortage, which has begun to affect production of motherboards for MacBooks and iPads. (Nikkei Asia)
  • MasterClass, which sells subscriptions to online courses taught by experts, is raising new funding led by Fidelity at a $2.5 billion valuation, Axios' Kia Kokalitcheva scooped on Wednesday. (Axios)
6. After you Login

If yesterday's After You Login on AI-generated fake human faces didn't do it for you, what about a "new" Nirvana song created by AI?