Global Tech Policy Briefing: January 2022

Hello, happy new year and welcome back to Citizen Tech, InformationWeek’s monthly tech policy roundup. This month we’re looking at:

Ukraine and Cyber War

The whole world is watching the Ukraine crisis unfold. Over 100,000 Russian troops have amassed just over Ukraine’s border, while Britain and other countries have ferried arms to Kyiv. Will this be the first European war since Kosovo? If a war breaks out, expect it to be at least partly digital. 

Ukraine has invested heavily in Turkish drone technology, as Reuters reports; Baykar, the military drone manufacturer, has supplied arms to all recent conflicts from the Azerbaijan’s standoff with Armenia to the Libyan Civil War. War is increasingly a digital game, fought through computers and the passive reception of online media. In the words of veteran combat reporter Aris Roussinos, “Drone, camera, and social media sharer … become a single, integrated weapon system, a hybrid semi-autonomous proxy.”

Not surprisingly, the threat of hacks originating in Russia has spiked. On January 11, the US Cybersecurity and Infrastructure Agency (CISA) released new guidelines for mitigating Russian state-sponsored cyber threats on US critical infrastructure. The guidelines include 13 frequently targeted vulnerabilities, as well as a list of tactics and techniques to watch out for.

The guidelines urge companies to have a response plan laid out well in advance, and to contact the FBI or CISA at the first sign of an attack.

Green Tech and 'Energy Security' 

One of the much-debated kinks in Europe and NATO’s response, or lack of response, to Russia’s aggressive maneuvers, is the Nord Stream 2 natural gas pipeline, or Russian gas generally. Germany famously relies on it, which has contributed to that country’s reluctance to stir the waters. French president Emmanuel Macron, among others, considers this a betrayal of European values; the Germans consider it good sense. But more European countries are in that same situation: Finland and Poland, for example, depend on Russian gas and oil.

On January 28, President Biden and European Commission President Ursula van der Leyen released a joint statement “committed to Europe's energy security and sustainability and to accelerating the global transition to clean energy.” Both the Biden and VDL presidencies have pushed for greater investment in green tech and ambitious carbon reduction goals, but this is one of the first times these green initiatives have been explicitly, aggressively tied to geopolitics.

“We also share the objective of ensuring the energy security of Ukraine,” the statement reads, “and the progressive integration of Ukraine with the EU gas and electricity markets.”

This understanding between the EU and the US isn’t quite as green as it seems, though. The statement notes with tacit approval that the US is the greatest supplier of liquified natural gas to the EU; there is no mention of other, less polluting technologies, like solar or nuclear. Some addictions have priority over others, it seems.

Taiwan, Lithuania Lead European Microchip Effort

In the December 2021 issue of Citizen Tech we covered the EU’s (rather unimpressive) push to produce more chips at home, in a drive to make their tech sector (including automotive) more viable and less dependent on international supply chains. As POLITICO reports, Lithuania has found itself unexpectedly leading that charge, with the help of … Taiwan. The Taiwan Semiconductor Manufacturing Company, which produces over 60% of global foundry revenue (per CNBC), has invested 200 million euro in Lithuania’s domestic chip industry. This is a kind of thank you for Lithuania’s persistent support of Taiwanese sovereignty, which China sees as a provocation.

Mathieu Dûchatel, director of the Asia Program at the Institut Montaigne, told POLITICO that, “Taiwan is playing its economic cards smartly. Clearly, Taiwan has something concrete to offer to strengthen the European semiconductor ecosystem, and the message is that this is linked to deepening Taiwan's international space -- so this is a form of economic statecraft.”

FCC Bans Unicom

On January 27, the US Federal Communications Commission (FCC) announced that it was revoking China’s state-owned telecom company Unicom’s services authority, effectively banning Unicom from the US. The FCC cited a number of “serious concerns” for this action, among them the “changed national security environment” and a “lack of candor, trustworthiness, and reliability” on the part of the Chinese government.

The FCC expressed concerns that Unicom could (or has already) allowed “the Chinese government to access, store, disrupt, and/or misroute US communications, which in turn allow them to engage in espionage and other harmful activities against the United States.”

Unicom has 60 days to comply with the order.

5G Face-Off

Why is the US government so hesitant to adopt 5G networks? It has nothing to do with the conspiracy theories. As explained by Michael Calabrese on Slate, it’s a practical concern: Last year, mobile carriers like Verizon purchased a range of radio-wave frequencies, called the C-band, at an FCC auction. The plan was to use the C-band for 5G transmitters, as many countries already do.

However, in the US, airlines use a range of frequencies close to the C-band -- well, 200 megahertz away, which is either a good safe distance or perilously close depending on which character in this story you ask. The airlines (and the Federal Aviation Administration) are worried that the 5G traffic could interfere with altimeters and radio communications between pilots and airports, leading potentially to crashes and other disasters.

Transportation Secretary Pete Buttigieg tried all month to get the airlines and mobile providers to get along, mostly without success. Late in the month they finally agreed to allow 5G except in areas around airports. But this is a very temporary solution, and leaves a number of technical questions unanswered.

The need for 5G infrastructure is growing rapidly, as illustrated by John Deere’s interest in 5G GPS-run tractors, but the US government is a house divided. Commerce and the FCC are butting heads over C-band safety, the Pentagon demands a greater radio buffer for security’s sake, and there’s no up-to-date federal spectrum policy.

Crypto’s Wild West Refuses to Settle

Cryptocurrencies resist regulation -- that’s the point. It makes them a thorn in the side of central banks and governments all over the world, as we’ve reported in Citizen Tech. Now, as POLITICO reports, crypto firms are returning fire, this time against the US Securities and Exchange Commission (SEC), whose chair, Gary Gensler, has referred to the proliferating demimonde of crypto as a “Wild West.”

One crypto firm, Ripple, has led the charge in the courts with a suit over digital asset regulation. Grayscale Investments and Terraform have followed Ripple’s lead, bringing new cases against the SEC over agency overreach and accusations of securities law violations.

The Ripple case started in 2020, when the SEC accused Ripple of failing to meet the Howey test standard in raising $1.3 billion off a cryptocurrency. (The Howey test defines an investment contract.) Now Ripple is countersuing.

POLITICO quotes financial industry writer Jeff Hauser as saying that “Ripple’s claim is akin to arguing that new cars might not be subject to existing speed limits.”

Whether or not that’s true, Ripple’s general counsel may be right when he calls the SEC’s initial action “not just … a case against Ripple, but a case against the entire industry.” The viability of a completely decentralized, digitized money market could well be decided by cases like these.

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