Get smarter, faster. Axios is launching a movement to help spread trustworthy, shareable news: the Smarter Faster Revolution. Our mission is to help as many people as humanly possible get smarter, faster on the topics that matter. You can help by signing up to be part of the cause, then recruit others to join our campaign and win cool Axios gifts.
Executives from Google, Facebook and Twitter are headed to Capitol Hill this week to testify about what they know, and when they learned, about Russians meddling on their platforms.
Why it matters: Unlike their previous closed-door hearings with lawmakers, these companies will have to face members on camera and in the public eye. While they don't face much of an immediate regulatory threat, other than potentially a political ad disclosure bill, their performance will dictate how public opinion and support on Capitol Hill will play out for years to come.
Some context going into this week:
Go deeper: Axios' David McCabe sets the scene from Capitol Hill.
Why it matters: It's unlikely these companies face serious regulatory threats under this administration, which has rolled back regulations and passed new laws that have favored tech and telecom companies (more below). But they risk a narrative forming around whether they can be trusted to police themselves, and that could alter user confidence and thus affect their lucrative advertising businesses.
Where each company stands:
One more thing: Google, six years older than Facebook, has also had more exposure to these kinds of problems over the years, including a $500 million settlement for knowingly showing illegal drug ads in 2011.
What's the difference between “good" bots and “bad" bots? And why doesn't Snapchat have a fake news problem? Here's a quick guide to some of the discussions that might come up during the hearings this week.
More than half of internet traffic is bots. Bots have always played a major role in our internet ecosystem, although not all bots are bad. (Some, for example, are used to make our search experiences more accurate.) But the bots used to spread fake news are usually bad, and bad bots make up roughly 29% of internet traffic.
Accessibility attracts bots and fake accounts: Google, Facebook and Twitter want to make it easy for users all over the world to get on their platforms, because they believe in free speech and open access. But this level of openness means the barrier to entry on these platforms isn't just low for users, but for bots and bad actors as well.
Bots are programmed to perform simple internet tasks repeatedly: You can program a bot to like, share, or comment on something. Fake news perpetrators create fake stories that are often amplified by a network of bots that automatically like, share or comment on the content. Algorithms elevate content that is popular, further amplifying the effect.
The Internet Research Agency is the source of many Russian bots: It employs a large staff to spread fake news and disinformation and has been using bots to spread Russian propaganda for years.
Bots don't just spread fake news — they can create it. Distil Networks, a cybersecurity company that focuses on bot detection and mitigation, says it's continually warning its digital publishing clients about ways bad bots are used to skew online polls.
Go deeper: The Russian Methbot that has stolen millions of ad dollars from publishers and advertisers.
The FCC is taking up several key measures that could make way for even more media consolidation under the Trump Administration, after it already signed off on a rule change that cleared the way for the Sinclair-Tribune deal. These rules were put in place decades ago to maintain a diversity of voices in local markets.
TV, newspaper ownership rule:
Studio elimination rule: Per Variety's Ted Johnson: "The FCC on Tuesday voted to eliminate a rule that required broadcast station groups to maintain a physical presence in the community of their primary local coverage area, a move that critics say will help media companies further consolidate their operations and even be a boost to the ambitions of Sinclair Broadcast Group."
Why it matters: The Trump Administration's laissez-faire approach to media and telecom regulation is part of what has allowed media deals to reach a two-year high in Q3.
What they're saying: Proponents of repealing them (mostly newspapers and broadcast companies) say a new economic solution is needed for local media to survive in the digital age. Opponents (mostly Democrats) worry it could have an impact on democracy and emergency communications.
Media and telecom deals continue to increase under the Trump administration, with PwC's latest report showing that deal volumes reached their highest point in the past two years — 238 deals total in Q3 2017.
What's next: Per Variety, Time Warner says it still expects the sale to AT&T to close by the end of 2017.
"With five out of the top seven publicly traded linear pay TV platforms, including the top three, reporting customer numbers, it appears the industry's record-bad third-quarter subscriber losses could indeed surpass 1 million users," Fierce Cable reports. We're still waiting on Dish and Altice earnings, but so far 632,000 Pay-TV subscriber losses have been reported in Q3:
Why it matters: Pay-TV losses are forcing the top cable, satellite and video providers to double down on other products and services, especially broadband. Comcast chairman and CEO Brian Roberts said on last week's Q3 earnings call that the majority of its' cable business cashflow is broadband, not video.
Go deeper: I have more in the Axios stream.
A cable lobbyist once told me he thought YouTube TV would be "the cable killer," but it looks like Pay-TV providers have the regular YouTube app to worry about too. Google CEO Sundar Pichai said on Alphabet's earnings call last week that viewers are watching 100 million hours of YouTube on traditional TV sets daily, up 70% from last year.
As Recode's Peter Kafka points out: "It's possible that some of that growth may be coming from YouTube Red, the company's first subscription service, or from YouTube TV, the pay TV service the company launched earlier this year."
Members of the European Parliament on the Civil Rights Committee voted in favor Monday of text surrounding new ePrivacy rules that sets high standards for privacy and security in electronic communications across the EU. The new rules ban "cookie walls," which block access to a website if users don't agree to having their data collected upon entering the site.
Print institutions are some of the most trusted news sources, despite the fact that their once flagship print products are moving online.
FYI — Earnings this week: Wednesday: Facebook, New York Times, Acxiom, CenturyLink, Scripps, tronc; Thursday: CBS, Altice, Discovery, Gannett, iHeartMedia, Pandora; Friday: EW Scripps Co.
Important note: We ran a chart in Axios MT last week that said conservative media sites are suffering from severe traffic declines in 2017. IJR and The Daily Caller have disputed that chart. Details.