2018年4月30日 星期一

Hillicon Valley: Closing arguments in AT&T trial | Cyber 'turf wars' heat up | Dem wants more oversight of DHS cyber mission | Lawmakers seek hearing on T-Mobile, Sprint deal

View in Browser
The Hill Technology
Facebook   Twitter   LinkedIn   Email

The Hill's Overnight Cybersecurity and Tech teams are joining forces to bring you Hillicon Valley, a new comprehensive newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.


Welcome! Follow the tech team, Ali Breland (@alibreland) and Harper Neidig (@hneidig), and the cyber team, Morgan Chalfant (@mchalfant16) and Olivia Beavers (@olivia_beavers), on Twitter.


THE TOPLINE: AT&T, Time Warner and the Justice Department made their closing arguments today in the landmark trial over the $85 billion dollar deal.

Both sides largely summarized the arguments that they had been making over the last six weeks of trial. It was one last chance to make their case before Judge Richard Leon makes his ruling.

The government's case: Craig Conrath, the lead attorney for the Justice Department, told the court that combining the two companies will give AT&T the "ability and incentive" to use Time Warner's stable of entertainment offerings as leverage to hurt competing pay-TV providers. "They'll be a gatekeeper to the content their rivals need," Conrath said, referring to Time Warner assets like HBO and live news and sports programming.

AT&T's argument: AT&T lawyer Daniel Petrocelli dismissed that theory and spent a considerable amount of time attacking the credibility of the government's case and its expert witnesses. "This whole case is a house of cards," Petrocelli said. He dismissed the Justice Department's theories, saying "This model makes no sense."

Flashback: Earlier this month, AT&T CEO Randall Stephenson took the stand to argue the merger is necessary to compete for online ad dollars.

Timeline: Judge Leon pledged to issue a ruling by June 12 in order to beat a June 21 merger deadline that the companies are facing.


Another big merger... T-Mobile announced on Sunday it had reached a deal to buy Sprint for about $59 billion in stock. The deal would remake the wireless industry, reducing the number of national service providers from four to three. The companies argued that the deal is necessary for them to compete with Verizon and AT&T. But critics say reducing the number of players in the market will hurt competition and ultimately raise prices for consumers. Reps. Frank Pallone Jr. (D-N.J.) and Mike Doyle (D-Pa.), the top Dems on the House Energy and Commerce Committee, are already pushing the panel's leadership to hold a hearing to review the merger.


TECH AS TRUMP ANTAGONIST: Tech companies are becoming President Trump's chief antagonists in the business world. On a number of issues, Silicon Valley is directly challenging the administration's policies more forcefully than other industries.

Microsoft is suing the administration for ending the Obama-era Deferred Action for Childhood Arrivals (DACA) program, which provided legal protections for certain immigrants brought to the country illegally as children. IBM has also take a lead role in that fight, filing briefs with the court in favor of the program and having CEO Ginni Rometty press lawmakers for a legislative fix. Tech companies have also taken a lead in criticizing Trump's new tariffs, worrying it could raise production costs, disrupt critical supply chains and discourage foreign investment in their industry.

The sense that the tech world is at loggerheads with Trump is also heightened by one of the president's biggest feuds -- with e-commerce giant Amazon.

In some cases, tech leaders have found themselves under pressure from their employees, who are urging them to use their fortunes and public recognition to push back on Trump's agenda. But activism against the White House has potential pitfalls for tech, say industry insiders. Read more here.



Cyber fight: Congress is out this week but one cyber fight is heating up. Over the weekend, we took a look worries that "turf wars" are complicating the federal government's efforts to defend the nation against hackers.

The issue took center stage before lawmakers left town last week, as senators on the Homeland Security and Governmental Affairs Committee said that they had been unable to pass key cyber legislation requested by the Department of Homeland Security (DHS) because of a disagreement with the Senate Intelligence Committee.

"The reality of the situation is there is conflict here," said Chairman Ron Johnson (R-Wis.) at a hearing Wednesday. "This threat is too significant to allow turf wars to get in the way of as efficient an operation as possible in terms of dealing with a very complex and serious problem."

The dust-up illuminates the broader issue of turf wars over cybersecurity in the federal government. The executive branch has no one single agency assigned to handle cyber. Instead, authorities are spread out over various agencies, including the Justice Department, which investigates and prosecutes cyber crime, and the Pentagon and broader intelligence community, both of which handle what is considered "offensive" cyber activity.

While Homeland Security is broadly recognized as the main agency defending federal networks and critical national assets from cyberattacks, individual agencies also play a major role in guarding their own networks and personnel from malicious cyber actors.  The set-up means that virtually every congressional committee has a say in the federal government's cybersecurity efforts.

Click here for the full scoop.


A closer look at DHS: Rep. Dutch Ruppersberger (D-Md.) is out with a report today calling on House Appropriations lawmakers to give more oversight to DHS's cyber mission. Among his specific requests? Figure out if the department needs more money to protect control systems that help power the energy grid, water systems and other critical services. Read more.

One reason for the urgency: Homeland Security and FBI officials warned of a multi-year Russia-backed hacking campaign on the U.S. energy sector back in March.  


Software security questions: The executive director of the Linux Foundation responded in a lengthy letter to questions from the House Commerce Committee about the security of open-source software. To check out the letter, click here. To read up on the original request, click here.


Dems to force net neutrality vote: Senate Democrats are planning to take the first step next week toward forcing a vote to restore the Federal Communications Commission's (FCC) net neutrality regulations.  

Democrats have been gathering signatures under the Congressional Review Act (CRA) to force a vote to overturn the decision by the FCC to repeal the net neutrality rules. Sen. Ed Markey (D-Mass.) tweeted on Monday that Democrats will file the petition to force the vote on May 9. The vote could take place as soon as the week after.

From Schumer's office: "We're in the homestretch in the fight to save net neutrality," the Senate minority leader said in a statement. "Soon, the American people will know which side their member of Congress is on: fighting for big corporations and ISPs or defending small business owners, entrepreneurs, middle-class families and every-day consumers."

Will it be enough though? Probably not. Democrats would need to get a majority in the House, which no one thinks is happening. In the not impossible, but highly unlikely chance that happens, President Trump would also have to sign off on the sign CRA. No one thinks that's happening either.


WHATSAPP COFOUNDER STEPS DOWN: WhatsApp co-founder Jan Koum said he is leaving the Facebook-owned company in a post on Monday.

"I'm taking some time off to do things I enjoy outside of technology, such as collecting rare air-cooled Porsches, working on my cars and playing ultimate frisbee," Koum said in his statement.

His departure comes as the company clashes with parent Facebook over efforts to weaken encryption and make use of user data.

More Facebook: The company is expanding testing of a "downvote" button with users in Australia and New Zealand, following a similar test in the U.S. this past February.


WHAT TO WATCH IN THE EXECUTIVE BRANCH: Newly-confirmed Secretary of State Mike Pompeo will deliver remarks to State Department employees on Tuesday afternoon, where he could address his long-term plans for the department going forward.

Questions have swirled around what he will do about his predecessor Rex Tillerson's controversial reorganization plans. Those included shutting down the department's cyber office. Cyber diplomacy efforts are now being handled by Rob Strayer, Deputy Assistant Secretary of State for Cyber and International Communications and Information Policy, within the department's Bureau of Economic and Business Affairs. Pompeo has not revealed his plans for the cyber position, though he told lawmakers during his confirmation hearing that he would put a "great deal of resources" toward cybersecurity.


OUTSIDE OF WASHINGTON: Iran is banning a popular instant messaging app that allows its users to send secret messages to one another, joining a handful of other authoritarian countries that have blocked Telegram. To read more about the decision, click here.

Facebook is resisting calls from a prominent Cambodian opposition leader to turn over data to aid his legal fight against the ruling government. Prime Minister Hun Sen has brought multiple criminal and civil claims against Sam Rainsy, the leader of Cambodia's National Rescue Party. Rainsy is seeking Facebook data to prove his counter claim that the government has bought ads to spread propaganda and manipulate voters


LIGHTER (TWITTER) CLICK: How Hackers search for new roommates and Bernie Sanders hits Amazon.


LONGREAD OF THE DAY: YouTube has a lot of great content. YouTube is also a cesspool of troubling videos. That reality has led major brands, on multiple occasions, to pull their advertisements from the platform.

YouTube's wide range of content is what made it so valuable, but now it's trying to clean itself up. Bloomberg Businessweek looks at the tough line the Google-owned company is trying to tow between making profits and insuring a safe user experience.



The Hudson Institute will host a discussion with former FCC Chairman Richard Wiley on the agency's history at noon.



A declining majority believes that the Internet has been good for American society, a Pew survey finds.

Britain's National Health Service is putting more dollars toward cybersecurity following 'Wanna Cry,' according to The Independent.

NATO wins a massive cyber defense exercise.

Energy companies aren't spending a lot on cybersecurity, Bloomberg reports.

The New Yorker delves into the controversial concept of 'hacking back.'
After a Jezebel story detailing sexual harassment at Comcast last year, victims are following up with a petition.

  Facebook   Twitter   LinkedIn   Email  
Did a friend forward you this email?
Sign up for Technology Newsletters  
Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters
The Hill 1625 K Street, NW 9th Floor, Washington DC 20006
©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Energy: Lawyer who coined 'lock her up' to get EPA post | Refinery owned by ex-Trump adviser gets biofuels waiver | Lawmakers press Pruitt on emissions standards

View in your browser
The Hill Energy
Facebook   Twitter   LinkedIn   Email

LAWYER WHO COINED 'LOCK HER UP' TO HEAD EPA OFFICE: Michael Stoker, a former Republican Santa Barbara County supervisor and agriculture attorney, will soon head the Environmental Protection Agency's (EPA) regional office that oversees the entire Pacific Southwest, E&E News reported Monday.

Stoker is perhaps best known for coining the "lock her up" chant about Democratic presidential hopeful Hillary Clinton when at the 2016 Republican National Convention.

The phrase was then routinely used by President Trump to attack Clinton on the campaign trail.

Stoker was also a reported contender for a spot on the National Labor Relations Board.

He was nominated in January to serve as director of the Federal Mediation and Conciliation Service but never came before the Senate for confirmation.

Stoker's appointment will fill a long-open vacancy in San Francisco's Region 9 office -- the only regional office yet to receive a political appointee from the Trump administration.

The administration has reportedly struggled to find people interested in taking the appointment. In January it was widely expected that Ryan Flynn, an oil and gas lobbyist from New Mexico, would take on the role but he later told the Los Angeles Times that he was staying put.

Read more here.


CONGRESSIONAL LETTERS GALORE: Congress is out of session this week but lawmakers aren't slowing down when it comes to their correspondence.

California vehicle emissions: Energy & Commerce Environment Subcommittee Ranking Member Paul Tonko (D-N.Y.) and Rep. Doris Matsui (D-Calif.) sent a letter to EPA administrator Scott Pruitt Monday expressing concern over reports that the National Highway Transportation Safety Administration has drafted a rulemaking that would revoke California's waiver that currently allows the state to implement more stringent vehicle emissions standards if it pleases.

The lawmakers argue that the leaked draft contradicts Pruitt's testimony in front of the House last week that EPA was "not at present" looking into revoking the Golden State's waiver.

Read the letter here.

Ethanol blending: A bipartisan group of Senators sent a letter to the EPA chief Monday flagging recent comments by President Trump that he will allow the blending of natural gas and 15 percent of ethanol year-round--known as E15. The group of mostly Republican lawmakers said they looked forward to a new regulatory pathway to address the Reid Vapor Pressure (RVP) issue. Fossil fuel producers have been forbidden from allowing E15 in the summer months because of the negative environmental impact the fuel creates on the ozone in warmer temperatures.

Read the letter here.


EPA GIVES WAIVER TO COMPANY OWNED BY CARL ICAHN: A fossil fuel company owned by former Donald Trump adviser and billionaire Carl Icahn received a waiver from the Environmental Protection Agency (EPA) meant to help small refineries struggling to meet fuel standards.

The waiver would exempt Icahn's refinery in Oklahoma from the U.S. Renewable Fuel Standard (RFS), which could save it tens of millions of dollars, Reuters reported Monday.

With the waiver, Icahn's company, CVR Energy Inc., can avoid compliance with an EPA biofuel regulation that mandates that businesses spend money to mix oil and gas products with ethanol or buy renewable fuel credits.

The Obama administration had denied the refinery an exemption, according to Reuters.

The law requires the EPA to help small refineries that struggle to meet the RFS without severely damaging their bottom line. But critics say that the program allows too many larger refineries to skirt EPA regulations.

Icahn was an early supporter of Trump's candidacy for the presidency. He also reportedly met with EPA Administrator Scott Pruitt while Pruitt was being vetted for the job.

An EPA spokesperson said the agency hasn't changed how it vets waiver requests.

"The criteria used to grant waivers has not changed since previous administrations. EPA follows a long-standing, objectively determined process where the Agency uses a Department of Energy analysis to inform decisions about refiner exemptions/waivers, for refineries that are below the statutory threshold," said Jahan Wilcox, EPA spokesman, in a statement. "EPA decisions on waivers are based on refinery-specific information that is subject to confidential business information protections."

The EPA confirmed that since April 24 it has approved 24 and denied one small refinery exemption request. Four requests remain pending. An agency official said that currently 38 U.S. plants would qualify for exemptions.

Read more here.

Sen. Chuck Grassley (R-Iowa) opposes the decision: "President Trump committed to a 15 billion gallon annual volume obligation for ethanol under the Renewable Fuel Standard. Administrator Pruitt is breaking that commitment. By handing out 'hardship' waivers to highly profitable, big oil refining companies, Administrator Pruitt is undermining the integrity of the Renewable Fuel Standard," Grassley said in a statement Monday. "He's also breaking his own promise he made to me and several other senators to support the spirit of the law. Hundreds of millions – and in some cases billions – of dollars in profits isn't my definition of 'hardship.' President Trump promised to support home-grown biofuels, and Administrator Pruitt is breaking that promise."



Environmentalists are launching a lawsuit over sage grouse protections in Idaho and Montana the Star-Telegram reports.

Interior Secretary Ryan Zinke helped a local woman jump start her car, the Knoxville News Sentinel reports.

Signs show that a court might take up a battle between a billionaire and environmentalists over access to California beachfront, the Mercury News reports.



Check out stories from Monday and over the weekend...

-Australia announces record investment in Great Barrier Reef protection

-Trump to fill West Coast EPA post with lawyer who coined 'lock her up' chant

-Largest US energy grid operator to study too much reliance on natural gas

-EPA grants waiver to oil refinery owned by billionaire ex-Trump adviser: report

-Interior Dept declines to reimplement grizzly protections near Yellowstone: report

-CEO of chemical industry group to step down


Please send tips and comments to Timothy Cama, tcama@thehill.com; and Miranda Green, mgreen@thehill.com. Follow us on Twitter: @Timothy_Cama@mirandacgreen@thehill

  Facebook   Twitter   LinkedIn   Email  
Did a friend forward you this email?
Sign up for Energy Newsletters  
Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters
The Hill 1625 K Street, NW 9th Floor, Washington DC 20006
©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Finance: Banks close in on Dodd-Frank relief | Inflation reaches threshold for Fed rate hikes | Rubio undercuts GOP tax message | Closing arguments in AT&T trial

View in your browser
The Hill Finance
Facebook   Twitter   LinkedIn   Email

Happy Monday and welcome back to Overnight Finance, which spent White House Correspondents Dinner weekend binging on The Great British Baking Show. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.


THE BIG DEAL: Banks are close to winning long-sought relief from strict regulations imposed after the 2008 financial crisis. 

Congress is near the passage of a bipartisan deal to exempt dozens of banks from parts of the Dodd-Frank Act of 2010. 

Federal agencies controlled by President Trump's appointees are sprinting toward significant rollbacks of key Dodd-Frank rules meant to insulate banks from a disabling financial crisis.

And the acting director of the Consumer Financial Protection Bureau (CFPB) is dismantling the aggressive regulatory and enforcement practices that enraged Republicans and banks while pleasing Democrats and financial sector skeptics.

Advocates for banks and credit unions are beaming as Washington starts to pick apart Dodd-Frank, following years of pressure and wishful thinking.

"This is the beginning of a complete change in attitude among the policymakers of Washington," said Wayne Abernathy, an executive vice president for the American Bankers Association (ABA), the top lobbying group for U.S. banks.

"These are just the hors d'oeuvres. This is setting the stage for a lot more important things to come."

I've got more on those efforts and how they'd reshape banking law right here.


Why it matters: Republicans have struggled in vain for almost a decade to loosen much of Dodd-Frank. The financial sector opposed the law from its inception for significantly expanding the federal power to supervise and penalize banks and lenders.

Democrats successfully defended the law, a pillar of former President Obama's economic legacy, during his tenure. Republicans railed against the new rules but were powerless to repeal the regulations in the face of Obama's veto.

Trump's stunning 2016 victory, which came after he pledged to "dismantle" Dodd-Frank, changed that. Republican control of the White House and Congress made the law vulnerable for the first time since its passage.

Dodd-Frank's critics spent much of 2017 laying the groundwork for its undoing. Trump filled his Cabinet with financial sector veterans devoted to reining in the law, while the House and Senate worked on bills to reshape it.


  • "Leverage in and of itself shouldn't determine the risk profile for the bank. In a particular situation, it shouldn't control the determination of risk but rather be one of the factors to goes into evaluating." -- Bob Kurucza, a partner at Goodwin covering federal banking and securities law.
  • "I can't tell you exactly where the next step is, but it will be soon, and very soon, that this legislation will be moving forward." -- James Ballentine, ABA executive vice president of government relations. 
  • "The Fed is shooting in the dark and they are going to hit some innocent bystanders," -- Karen Petrou, managing partner of Federal Financial Analytics.


What comes next: Currently, House Financial Services Chairman Jeb Hensarling (R-Texas) wants the Senate to consider other roll back provisions and has delayed acting on their bill. But House Majority Leader Kevin McCarthy (R-Calif.) said Monday that the lower chamber is "within a month" of sending the Senate bill to Trump's desk. He controls the House floor, so his projections hold weight. But it's also in McCarthy's best interest to be optimistic, so we'll keep a close eye on it.



  • Deadline for President Trump to grant exemptions from the steel and aluminum tariffs.


Inflation reaches key threshold for Fed rate hikes: Inflation for the first time in several years has increased to the Federal Reserve's annual target, the Commerce Department reported Monday, reaching a key threshold for the future of U.S. interest rates.

The personal consumption expenditures (PCE) index, the Fed's inflation barometer, increased 2 percent in the 12-month period ending in March, according to data released Monday.

Consumer prices stayed flat in the month of March itself, while consumer prices minus volatile food and energy rose 0.2 percent.

Consumer spending overall rose 0.4 percent in March after decreasing 0.2 percent in February.

Personal income increased 0.3 percent in March, the same rate from February. Wages and salaries increased 0.2 percent in March after increasing 0.4 percent in February.

With inflation reaching the Fed's preferred level in March, the bank could increase interest rates further than its current projections. I'll tell you why that matters right here.


Rubio blows hole in GOP tax-cut messaging: Sen. Marco Rubio (R-Fla.) told The Economist in a recent interview that "there's no evidence whatsoever" that the corporate tax cut Republicans passed last year is overwhelmingly benefiting workers.

"There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers," Rubio said in the interview, published late last week. "In fact they bought back shares, a few gave out bonuses; there's no evidence whatsoever that the money's been massively poured back into the American worker." 

The comments are being highlighted by Democrats -- including Senate Minority Leader Charles Schumer's (D-N.Y.) office -- who view the remarks as bolstering their case against the tax law.

Democrats have been hammering Republicans over the increase in stock buybacks that has occurred since the tax law passed. Republicans, though, have generally focused on the companies that have announced bonuses, wage increases and new capital investments. The Hill's Naomi Jagoda digs in here.


Closing arguments made in AT&T-Time Warner merger trial: The two sides in the trial over the AT&T-Time Warner merger squared off in court for the final time on Monday, offering closing arguments in the landmark antitrust case.

The Justice Department said that the proposed AT&T-Time Warner merger would remake the television industry, giving the combined company the ability to use popular Time Warner content to hurt rival pay-TV providers.

Both sides mainly summarized the points they made over the past six weeks of trial. Judge Richard Leon pledged to issue a ruling by June 12 in order to beat a June 21 merger deadline that the companies are facing. The Hill's Harper Neidig takes us inside the courtroom here.


MARKET CHECK: Stocks took a tumble Monday, with all three major indexes ending up with losses. The Dow Jones Industrial Average shaved off 148 points (0.61 percent), while the S&P 500 and Nasdaq dropped 0.82 percent and 0.75 percent each.



  • Sen. Jon Tester (D-Mont.), might be one of the only vulnerable incumbents getting support from the American Bankers Association and Sen. Elizabeth Warren (D-Mass.). ABA released an advertisement last week featuring bankers from his state praising Tester for his work on Dodd-Frank rollbacks. Warren sent out a fundraising email for Tester today defending him in response to Trump's threats against the Montanan. The president is targeting Tester after the senator revealed stunning allegations about Adm. Ronny Jackson, the president's pick to be VA secretary. Jackson withdrew his name from consideration last week.
  • The New York Times checks in on our old pal, former Consumer Financial Protection Bureau director Richard Cordray, as he pursues the Democratic nomination for governor of Ohio against Dennis Kucinich. This is loaded with eyebrow-raising passages about both candidates.
  • Politico looks at why Mick Mulvaney's tenure atop the CFPB hasn't been as "explosive" as expected.
  • Chinese conglomerate HNA Group Co. is set to drop its pursuit of SkyBridge Capital, the investment firm founded by Anthony Scaramucci, amid resistance from the Committee on Foreign Investment in the U.S (CFIUS), according to The Wall Street Journal.



  • President Trump on Monday asked African nations to support a joint North American bid to host the 2026 World Cup, despite FIFA's warning against political influence last week.

Write us with tips, suggestions and news: slane@thehill.comvneedham@thehill.comnjagoda@thehill.com, and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill@NJagoda, and @NivElis.

  Facebook   Twitter   LinkedIn   Email  
Did a friend forward you this email?
Sign up for Finance Newsletters  
Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters
The Hill 1625 K Street, NW 9th Floor, Washington DC 20006
©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.