Welcome to the July 2022 Citizen Tech, InformationWeek’s monthly policy bulletin. This month we are looking at the triumph of Biden’s semiconductor bill, long held up in the Senate; discussions at the SEC over crypto tokens and securities law; Russia’s one-sided information war; interesting results from a census of European digital business; data privacy for women in states that ban abortion; airport infrastructure; and Elon Musk being Elon Musk.
Chips Act Passes
Citizen Tech has covered the semiconductor shortage and Biden’s bill, the “Chips and Science Act,” to promote manufacture of them domestically. The $280 billion bill cleared the House but languished in the Senate until late on the 27th, when it passed with a substantial 64 votes out of 100. Party politics played a familiar, depressing role, with Republican leadership urging Senators to vote against it as a kind of revenge for other spending bills, as the Washington Post reports. But this truly is a bipartisan concern, as the vote breakdown makes clear, and a number of Republicans considered the chance to bring back more manufacturing jobs, too alluring to turn down. Joe Manchin of West Virginia, who seems to be reconsidering quite a bit lately, voted for it; Bernie Sanders of Vermont voted no, for the same reason as Kevin McCarthy (R-CA): He considers it a sop to Biden’s cronies in semiconductor industry.
Even some of the bill’s supporters felt let down in some ways. Sen. Bob Menendez (D-NJ), for instance, told POLITICO that, “It will be unfortunate. It will be a chips bill, which is critically important, but it won’t be a China strategy bill.”
All the same, it passed. As Commerce secretary Gina Raimondo informed the Post, once the law is in force, the US will be out-spending China on semiconductor production and related activity by $130 billion. This law promises to change not only the US economy, but the course of currents in geopolitics. It’s now up to Biden to makes sure it delivers.
At the SEC: What Is Security...
Do crypto tokens count as securities? Late this month, Bloomberg got wind that the SEC has been investigating Coinbase Global, a major, NASDAQ-traded cryptocurrency platform. This is unrelated to, and began earlier than, the SEC and Department of Justice’s investigation into possible insider trading at the same company. The question at hand is semantic. All companies that deal in securities must register with the SEC, but Coinbase has claimed that the SEC never bothered to define “security.” Technically, the SEC does have a listed definition for “security token,” but it’s circular -- “a crypto asset that is a security -- and thus, for these purposes, useless. If the Biden administration is serious about crypto, it will have to develop an entire new legal lexicon in addition to any regulatory framework. Citizen Tech has covered case after case of governments, often the White House, circling the crypto sector like a suspicious dog, sniffing and growling by turns. If this case results in a definite decision about the nature of Coinbase tokens and securities, the long prelude will end that much quicker, and the real fight can begin.
...And Everything Elon
We can stay with the SEC just a minute longer, to note that Elon Musk’s attempt to give up on his attempt to purchase Twitter has drawn the Commission’s ire. Like most of the news involving Musk, this story, covered by the New York Times, feels embarrassingly infantile. O tempora, o mores. After Musk became Twitter’s major shareholder, but before his aggressive push to buy the company outright, he whined, by tweet, that his campaign had stalled due to “spam” on the platform. It looked like the deal was off, although he had not disclosed any such news to Twitter’s other remaining investors, nor to the SEC. Musk’s lawyers insist that the deal is still on, only paused.
The Commission has cast a baleful eye on Musk for years, most recently for allegedly delaying his disclosure that he’d become Twitter’s major shareholder. Nothing is certain yet, except our gratitude: So far, he’s kept his pants on.
War Bulletin No. 6
The Ukrainian War has digital theaters, even beyond satellite reconnaissance and guided rockets. The information war is a theater in itself, and as POLITICO points out, the European Union is outgunned. Russian foreign minister Sergey Lavrov released an op-ed this month that Russian state media, sympathetic news outlets, and their respective social media audiences circulated widely. The piece got thousands of hits on socials especially. The EU response? Silence.
The EU has a diplomatic body with a quasi-military name, East StratCom, dedicated to countering Russian propaganda and misinformation. One look at its website, hosted by the EU’s diplomatic service, reveals a problem: All they can offer is bland Eurocratese about “strategic partnerships” and “civil society actors.” That’s hardly the red meat that Sputnik offers. What’s more, as POLITICO notes, East StatCom gets nowhere near the kind of funding that the Kremlin lavishes on its information campaigns.
The good news for the EU, and for Kyiv, is that the war has dampened sympathy for propaganda outlets like RT among formerly friendly governments, like Hungary. Russia’s latest information campaign in Africa seems like a waste of time, too: African governments in need of cheap grain are much more likely to bargain with Beijing than Moscow. But on the EU’s periphery, in the Balkans and the Caucasus (not to mention the African Sahel), every Facebook profile is a frontier. East StratCom will adapt or lose.
When the Supreme Court overturned Roe v. Wade early in the month, the White House rushed out an executive order to “protect and expand access to abortion care,” in defiance of states now looking to abolish abortion outright. The order nods toward the tech sector: specifically toward “the potential threat to patient privacy caused by the transfer and sale of sensitive health-related data and by digital surveillance related to reproductive healthcare services.”
How serious is this threat? Even in the era of GDPR, and annoying cookie warnings to click through on every website, personal data is a major commodity; and as the New York Times warns, the harvesting of personal data for targeted ads is going strong. That makes it relatively easy to discover whether a woman has had an abortion -- the data from a period-tracking iPhone app is often a dead giveaway. Will law enforcement in states like Missouri use this kind of data to look for evidence of abortion? They can; they do. Internet search histories and text messages have been used as evidence in such cases in Mississippi and Indiana, as the Times reports, and well before the 2022 Roe decision.
Here’s the dilemma for Democrats: Their support in Big Tech circles could wither if the party takes on the trade in personal data with any real vigor. Likewise, Republicans have long moaned about tech giants turning the Internet into a liberal fiefdom. That may change their tune. Money acquaints a man with strange bedfellows.
EU Digitization Census
On the 28th, the European Commission published the results of its Digital Economy and Society Index (DESI), a census of the bloc’s digitization country by country. The criteria included adaption of 5G networks, adaption of AI by big business, of digitized operations by small to medium enterprises, and other transformations, to which the Commission has dedicated €127 billion.
Some of the results were disappointing -- only 54% of European adults are digitally literate -- and others optimistic, like the enormous strides Greece, Italy, and Poland over the past five years. COVID seems to have accelerated cloud storage transitions and AI, but only among the biggest companies. Barely 8% of companies overall use AI, for example. Two thirds of Europe have 5G access, but half of harmonized spectrums remain unassigned.
Overall, and predictably enough, the Baltic and Scandinavian states scored best in digitization progress. Southern, Central, and Balkan countries, dominated by small business and with historically underdeveloped infrastructure, scored lowest. All EU member states had to dedicate at least a fifth of their post-COVID recovery funds (RFF) to digital transformation; the average percentage was 26.
Spare a Thought for the Airports
Finally, the White House announced this month that it would spend a billion dollars on airport infrastructure throughout the US. The press release cites 70 discrete grants, mostly for terminal expansions and sustainability goals, like net-zero operations and LEED-certified facilities. But the projects are strikingly analogue. There is no mention of 5G anywhere, or indeed of any digital transformation whatsoever. Currently, 5G remains tied up at the FAA, as Citizen Tech has reported, but the absence of any mention of the internet or cybersecurity is striking.