It’s time for the VC community to stop overlooking the childcare industry

Square. Uber. Zillow. Airbnb. Besides being some of the biggest technology companies, what else do these titans have in common? They all operate in entrenched, highly fragmented, geographically localized and regulated industries. That means they required a lot of upfront venture capital investment to disrupt their respective markets. And the investment has paid off — these are now some of the most valuable companies in the world.

Venture capital alone hasn’t funded some of the largest companies. One of today’s most successful tech entrepreneurs was funded by massive infusions of investment from the federal government — Elon Musk received $4.9 billion in public subsidies for his companies, including SpaceX and Tesla. Moreover, government investment, via tax credits for electric vehicle purchases, made it more affordable for consumers to buy the green transportation they needed.

But one massive industry has not yet benefited from the large amounts of money that both venture capital and government can provide: Childcare. Families in the United States spend $136 billion on infant and child care every year, and the market is only growing. If you include school-age care and education for all children under 18, that number grows to $212 billion. In investor terms, the TAM (total addressable market) is huge.

To put things in perspective, one new company has raised more funding in 2021 than the entire childcare industry.

So where is the investment? Biden’s current compromise on an infrastructure plan does not include many provisions for childcare. Venture investment in this space is nascent and insufficient. In 2020, only $171 million was invested in care and early childhood education. The funding situation has improved in 2021, with $516 million invested in childcare, but it’s still just a tiny fraction of the $288 billion of venture capital invested so far this year.

To put that in perspective, a single new company has raised more funding in 2021 than the entire childcare industry.

Funding emerging childcare technology may require a lot of upfront capital. For starters, the industry is regulated and safety is and should remain a priority. Caring for and educating young children takes training, skill and love — it cannot be done by a computer.

But there are so many facets of the industry that are ripe for innovation. Parents sometimes take weeks to find a childcare provider that meets their needs. In some markets, there is not nearly enough supply (three children for every licensed slot) to meet the demand. Assessing quality, pricing and availability is challenging, and payments and business operations tools for the nation’s 300,000+ daycares are still often pen, paper and Excel spreadsheet affairs.

This industry just needs patient investors with long-term perspectives.

This is a great time to diversify investment portfolios and support relatively recession-proof companies meaningfully expanding access to childcare. COVID has finally started to bring this largely offline industry online. Parents are now willing to go digital for childcare decisions and providers are adopting new online technologies at a record pace. These tailwinds provide the perfect conditions for startups.

Solving this problem is a huge business opportunity that affects so much else. When the millions of parents with young children can’t find care, they can’t work. We saw this over and over again since the start of the pandemic. The average American family can spend up to 25% of their income on early childhood care, while the average care worker makes approximately $12 an hour.

Unlocking innovation here at scale will require public and private investment. Government shapes and enables markets, from the explosion of technology that followed from Kennedy’s investment in the space race to more recent fundamental investments in wind, solar and electric vehicles. NASA catalyzed dozens of new technologies in the 1960s because it had both a generous budget and the flexibility to work with the best private-sector contractors available to solve specific problems.

The revitalization of the childcare sector would benefit from an ambitious and galvanizing “moonshot” goal, like providing universal, free childcare for all Americans.

By collaborating with flexibility and creativity across the public and private sectors, we can achieve a basic shared goal that other democracies have already fulfilled — the accessible provision of high-quality childcare for all members of society.

#child-care, #column, #corporate-finance, #covid-19, #diversity, #economy, #federal-government, #opinion, #startups, #tc, #tesla, #uber, #venture-capital

Suing your way to the stars

Hello friends, and welcome back to Week in Review!

I’m back from a very fun and rehabilitative couple weeks away from my phone, my Twitter account and the news cycle. That said, I actually really missed writing this newsletter, and while Greg did a fantastic job while I was out, I won’t be handing over the reins again anytime soon. Plenty happened this week and I struggled to zero in on a single topic to address, but I finally chose to focus on Bezos’s Blue Origin suing NASA.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.


The big thing

I was going to write about OnlyFans for the newsletter this week and their fairly shocking move to ban sexually explicit content from their site in a bid to stay friendly with payment processors, but alas I couldn’t help myself and wrote an article for ole TechCrunch dot com instead. Here’s a link if you’re curious.

Now, I should also note that while I was on vacation I missed all of the conversation surrounding Apple’s incredibly controversial child sexual abuse material detection software that really seems to compromise the perceived integrity of personal devices. I’m not alone in finding this to be a pretty worrisome development despite Apple’s intention of staving off a worse alternative. Hopefully, one of these weeks I’ll have the time to talk with some of the folks in the decentralized computing space about how our monolithic reliance on a couple tech companies operating with precious little consumer input is very bad. In the meantime, I will point you to some reporting from TechCrunch’s own Zack Whittaker on the topic which you should peruse because I’m sure it will be a topic I revisit here in the future.

Now then! Onto the topic at hand.

Federal government agencies don’t generally inspire much adoration. While great things have been accomplished at the behest of ample federal funding and the tireless work of civil servants, most agencies are treated as bureaucratic bloat and aren’t generally seen as anything worth passionately defending. Among the public and technologists in particular, NASA occupies a bit more of a sacred space. The American space agency has generally been a source of bipartisan enthusiasm, as has its goal to return astronauts to the lunar surface by 2024.

Which brings us to some news this week. While so much digital ink was spilled on Jeff Bezos’s little jaunt to the edge of space, cowboy hat, champagne and all, there’s been less fanfare around his space startup’s lawsuit against NASA, which we’ve now learned will delay the development of a new lunar lander by months, potentially throwing NASA’s goal to return astronauts to the moon’s surface on schedule into doubt.

Bezos’s upstart Blue Origin is protesting the fact that they were not awarded a government contract while Elon Musk’s SpaceX earned a $2.89 billion contract to build a lunar lander. This contract wasn’t just recently awarded either, SpaceX won it back in April and Blue Origin had already filed a complaint with the Government Accountability Office. This happened before Bezos penned an open letter promising a $2 billion discount for NASA which had seen budget cuts at the hands of Congress dash its hoped to award multiple contracts. None of these maneuverings proved convincing enough for the folks at NASA, pushing Bezos’s space startup to sue the agency.

This little feud has caused long-minded Twitter users to dig up this little gem from a Bezos 2019 speech — as transcribed by Gizmodo — highlighting Bezos’s own distaste for how bureaucracy and greed have hampered NASA’s ability to reach for the stars:

“To the degree that big NASA programs become seen as jobs programs and that they have to be distributed to the right states where the right Senators live, and so on. That is going to change the objective. Now your objective is not to, you know, whatever it is, to get a man to the moon or a woman to the moon, but instead to get a woman to the moon while preserving X number of jobs in my district. That is a complexifier, and not a healthy one…[…]

Today, there would be, you know, three protests, and the losers would sue the federal government because they didn’t win. It’s interesting, but the thing that slows things down is procurement. It’s become the bigger bottleneck than the technology, which I know for a fact for all the well meaning people at NASA is frustrating.

A Blue Origin spokesperson called the suit, an “attempt to remedy the flaws in the acquisition process found in NASA’s Human Landing System.” But the lawsuit really seems to highlight how dire this deal is to the ability of Blue Origin to lock down top talent. Whether the startup can handle the reputational risk of suing NASA and delaying America’s return to the moon seems to be a question very much worth asking.


Elon Musk, co-founder and chief executive officer of Tesla Inc., speaks during an unveiling event for the Boring Company Hawthorne test tunnel in Hawthorne, south of Los Angeles, California on December 18, 2018.

Photo: ROBYN BECK/AFP via Getty Images

Other things

Here are the TechCrunch news stories that especially caught my eye this week:

OnlyFans bans “sexually explicit content”
A lot of people had pretty visceral reactions to OnlyFans killing off what seems to be a pretty big chunk of its business, outlawing “sexually explicit content” on the platform. It seems the decision was reached as a result of banking and payment partners leaning on the company.

Musk “unveils” the “Tesla Bot”
I truly struggle to even call this news, but I’d be remiss not to highlight how Elon Musk had a guy dress up in a spandex outfit and walk around doing the robot and spawned hundreds of news stories about his new “Tesla Bot.” While there certainly could be a product opportunity here for Tesla at some point, I would bet all of the dogecoin in the world that his prototype “coming next year” either never arrives or falls hilariously short of expectations.

Facebook drops a VR meeting simulator
This week, Facebook released one of its better virtual reality apps, a workplace app designed to help people host meetings inside virtual reality. To be clear, no one really asked for this, but the company made a full court PR press for the app which will help headset owners simulate the pristine experience of sitting in a conference room.

Social platforms wrestle with Taliban presence on platforms
Following the Taliban takeover of Afghanistan, social media platforms are being pushed to clarify their policies around accounts operated by identified Taliban members. It’s put some of the platforms in a hairy situation.

Facebook releases content transparency report
This week, Facebook released its first ever content transparency report, highlighting what data on the site had the most reach over a given time period, in this case a three-month period. Compared to lists highlighting which posts get the most engagement on the platform, lists generally populated mostly by right wing influencers and news sources, the list of posts with the most reach seems to be pretty benign.

Safety regulators open inquiry into Tesla Autopilot
While Musk talks about building a branded humanoid robot, U.S. safety regulators are concerned with why Tesla vehicles on Autopilot are crashing into so many parked emergency response vehicles.


 

Image Credits: Nigel Sussman

Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

The Nuro EC-1
“..Dave Ferguson and Jiajun Zhu aren’t the only Google self-driving project employees to launch an AV startup, but they might be the most underrated. Their company, Nuro, is valued at $5 billion and has high-profile partnerships with leaders in retail, logistics and food including FedEx, Domino’s and Walmart. And, they seem to have navigated the regulatory obstacle course with success — at least so far…”

A VC shares 5 keys to pitching VCs
“The success of a fundraising process is entirely dependent on how well an entrepreneur can manage it. At this stage, it is important for founders to be honest, straightforward and recognize the value meetings with venture capitalists and investors can bring beyond just the monetary aspect..

A crash course on corporate development
“…If you’re going to get acquired, chances are you’re going to spend a lot of time with corporate development teams. With a hot stock market, mountains of cash and cheap debt floating around, the environment for acquisitions is extremely rich.”


Thanks for reading! Until next week…

Lucas M.

#afghanistan, #america, #astronaut, #banking, #blue-origin, #computing, #congress, #dave-ferguson, #elon-musk, #entrepreneur, #extra-crunch, #facebook, #federal-government, #fedex, #food, #google, #government-accountability-office, #greg, #jeff-bezos, #lunar-lander, #nasa, #nuro, #robyn, #social-media-platforms, #spaceflight, #spacex, #taliban, #tc, #tesla, #united-states, #walmart, #week-in-review, #zack-whittaker

GSA blocks senator from reviewing documents used to approve Zoom for government use

The General Services Administration has denied a senator’s request to review documents Zoom submitted to have its software approved for use in the federal government.

The denial was in response to a letter sent by Democratic senator Ron Wyden to the GSA in May, expressing concern that the agency cleared Zoom for use by federal agencies just weeks before a major security vulnerability was discovered in the app.

Wyden said the discovery of the bug raises “serious questions about the quality of FedRAMP’s audits.”

Zoom was approved to operate in government in April 2019 after receiving its FedRAMP authorization, a program operated by the GSA that ensures cloud services comply with a standardized set of security requirements designed to toughen the service from some of the most common threats. Without this authorization, federal agencies cannot use cloud products or technologies that are not cleared.

Months later, Zoom was forced to patch its Mac app after a security researcher found a flaw that could be abused to remotely switch on a user’s webcam without their permission. Apple was forced to intervene since users were still affected by the vulnerabilities even after uninstalling Zoom. As the pandemic spread and lockdowns were enforced, Zoom’s popularity skyrocketed — as did the scrutiny — including a technical analysis by reporters that found Zoom was not truly end-to-end encrypted as the company long claimed.

Wyden wrote to the GSA to say he found it “extremely concerning” that the security bugs were discovered after Zoom’s clearance. In the letter, the senator requested the documents known as the “security package,” which Zoom submitted as part of the FedRAMP authorization process, to understand how and why the app was cleared by GSA.

The GSA declined Wyden’s first request in July 2020 on the grounds that he was not a committee chair. In the new Biden administration, Wyden was named chair of the Senate Finance Committee and requested Zoom’s security package again.

But in a new letter sent to Wyden’s office late last month, GSA declined the request for the second time, citing security concerns.

“GSA’s refusal to share the Zoom audit with Congress calls into question the security of the other software products that GSA has approved for federal use.” Sen. Ron Wyden (D-OR)

“The security package you have requested contains highly sensitive proprietary and other confidential information relating to the security associated with the Zoom for Government product. Safeguarding this information is critical to maintaining the integrity of the offering and any government data it hosts,” said the GSA letter. “Based on our review, GSA believes that disclosure of the Zoom security package would create significant security risks.”

In response to the GSA’s letter, Wyden told TechCrunch that he was concerned that other flawed software may have been approved for use across the government.

“The intent of GSA’s FedRAMP program is good — to eliminate red tape so that multiple federal agencies don’t have to review the security of the same software. But it’s vitally important that whichever agency conducts the review do so thoroughly,” said Wyden. “I’m concerned that the government’s audit of Zoom missed serious cybersecurity flaws that were subsequently uncovered and exposed by security researchers. GSA’s refusal to share the Zoom audit with Congress calls into question the security of the other software products that GSA has approved for federal use.”

Of the people we spoke with who have first-hand knowledge of the FedRAMP process, either as a government employee or as a company going through the certification, FedRAMP was described as a comprehensive but by no means an exhaustive list of checks that companies have to meet in order to meet the security requirements of the federal government.

Others said that the process had its limits and would benefit from reform. One person with knowledge of how FedRAMP works said the process was not a complete audit of a product’s source code but akin to a checklist of best practices and meeting compliance requirements. Much of it relies on trusting the vendor, said the person, describing it like ” an honor system.” Another person said the FedRAMP process cannot catch every bug, as evidenced by executive action taken by President Biden this week aimed at modernizing and improving the FedRAMP process.

Most of the people we spoke to weren’t surprised that Wyden’s office was denied the request, citing the sensitivity of a company’s FedRAMP security package.

The people said that companies going through the certification process have to provide highly technical details about the security of their product, which if exposed would almost certainly be damaging to the company. Knowing where security weaknesses might be could tip off cyber-criminals, one of the people said. Companies often spend millions on improving their security ahead of a FedRAMP audit but companies wouldn’t risk going through the certification if they thought their trade secrets would get leaked, they added.

When asked by GSA why it objected to Wyden’s request, Zoom’s head of U.S. government relations Lauren Belive argued that handing over the security package “would set a dangerous precedent that would undermine the special trust and confidence” that companies place in the FedRAMP process.

GSA puts strict controls on who can access a FedRAMP security package. You need a federal government or military email address, which the senator’s office has. But the reason for GSA denying Wyden’s request still isn’t clear, and when reached a GSA spokesperson would not explain how a member of Congress would obtain a company’s FedRAMP security package

“GSA values its relationship with Congress and will continue to work with Senator Wyden and our committees of jurisdiction to provide appropriate information regarding our programs and operations,” said GSA spokesperson Christina Wilkes, adding:

“GSA works closely with private sector partners to provide a standardized approach to security authorizations for cloud services through the [FedRAMP]. Zoom’s FedRAMP security package and related documents provide detailed information regarding the security measures associated with the Zoom for Government product. GSA’s consistent practice with regard to sensitive security and trade secret information is to withhold the material absent an official written request of a congressional committee with jurisdiction, and pursuant to controls on further dissemination or publication of the information.”

GSA wouldn’t say which congressional committee had jurisdiction or whether Wyden’s role as chair of the Senate Finance Committee suffices, nor would the agency answer questions about the efficacy of the FedRAMP process raised by Wyden.

Zoom spokesperson Kelsey Knight said that cloud companies like Zoom “provide proprietary and confidential information to GSA as part of the FedRAMP authorization process with the understanding that it will be used only for their use in making authorization decisions. While we do not believe Zoom’s FedRAMP security package should be disclosed outside of this narrow purpose, we welcome conversations with lawmakers and other stakeholders about the security of Zoom for Government.”

Zoom said it has “engaged in security enhancements to continually improve its products,” and received FedRAMP reauthorization in 2020 and 2021 as part of its annual renewal. The company declined to say to what extent the Zoom app was audited as part of the FedRAMP process.

Over two dozen federal agencies use Zoom, including the Defense Department, Homeland Security, U.S. Customs and Border Protection, and the Executive Office of the President.

#apps, #biden, #biden-administration, #chair, #cloud-computing, #cloud-services, #computing, #congress, #department-of-defense, #executive, #federal-government, #fedramp, #government, #head, #internet, #internet-security, #official, #president, #ron-wyden, #security, #senator, #software, #spokesperson, #technology, #u-s-government, #united-states, #web-conferencing, #zoom

What the growing federal focus on ESG means for private markets

The increasing regulation of ESG (environmental, social, governance) disclosure reporting may have started in the public markets, but will almost certainly have downstream effects for private market actors — for founders, companies and investors.

Since his confirmation as the chair of the U.S. Securities and Exchange Commission in April, Gary Gensler has made reforming ESG disclosures concerning climate change risk and human capital a top priority. The SEC’s regulatory agenda confirms as much. And Gensler is not alone in his focus on ESG at the federal level.

President Joe Biden issued an executive order encouraging regulators to assess climate-related financial risk. At the end of March, Treasury Secretary Janet Yellen wrote on Twitter that “our future livelihoods … depend on the financial sector to build a more sustainable and resilient economy.” Congress is considering measures that would require increased ESG disclosures, including the Improving Corporate Governance Through Diversity Act, the Diversity and Inclusion Data Accountability and Transparency Act and the Climate Risk Disclosure Act.

This renewed federal focus on ESG issues will bolster the SEC’s effort to create disclosure practices for public companies and mutual funds. Regardless of whether these federal policies around ESG come to pass, they reflect a momentum that will almost certainly impact private markets:

  • Firms that want to go public — whether via SPAC, direct listing or traditional IPO — may have to seriously consider board diversity or environmental reporting in conjunction with — or well in advance of — their debuts.
  • Private companies seeking to align with public companies as vendors or partners may be expected to meet specific ESG requirements before the engagement.
  • Startup founders and venture funds raising capital may work to maintain the largest target market by proactively scoping ESG engagements to ensure they meet criteria for investors who may have their own ESG-focused investment requirements.

In his confirmation hearing before the Senate in early March, Gensler said, “Markets — and technology — are always changing. Our rules have to change along with them.”

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies.

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies. These requirements are a response to the changing markets — demands from consumers, scrutiny from investors and a general insistence for higher corporate standards from society at large.

Private markets aren’t immune to these forces. Already, three-quarters of investors in a 2020 survey said it was very important to measure the success of sustainability initiatives, but they also said there’s been a lack of clarity on how to define and measure outcomes.

To be sure, private markets are not headed toward full-scale adoption of ESG regulations. They will not be subject to the same reporting or disclosures framework as their public counterparts. Not today, and possibly not for some time.

But we may begin to see private investors, funds and companies adapting to get ahead of ESG regulation and position themselves to effectively operate in a new — albeit adjacent — regulatory environment. In their case, the rules may not change — but the game could.

#column, #congress, #environmentalism, #esg, #federal-government, #government, #greentech, #joe-biden, #opinion, #policy, #private-equity, #senate, #tc, #u-s-securities-and-exchange-commission, #venture-capital

Biden’s sweeping executive order takes on big tech’s ‘bad mergers,’ ISPs and more

The Biden administration just introduced a sweeping, ambitious plan to forcibly inject competition into some consolidated sectors of the American economy — the tech sector prominent among them — through executive action.

“Today President Biden is taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses,” a new White House fact sheet on the forthcoming order states.

The order, which Biden will sign Friday, initiates a comprehensive “whole-of-government” approach that loops in more then twelve different agencies at the federal level to regulate monopolies, protect consumers and curtail bad behavior from some of the world’s biggest corporations.

In the fact sheet, the White House lays out its plans to take matters to regulate big business into its own hands at the federal level. As far as tech is concerned, that comes largely through emboldening the FTC and the Justice Department — two federal agencies with antitrust enforcement powers.

Most notably for big tech, which is already bracing for regulatory existential threats, the White House explicitly asserts here that those agencies have legal cover to “challenge prior bad mergers that past Administrations did not previously challenge” — i.e. unwinding acquisitions that built a handful of tech companies into the behemoths they are today. The order calls on antitrust agencies to enforce antitrust laws “vigorously.”

Federal scrutiny will prioritize “dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” Facebook, Google and Amazon are particularly on notice here, though Apple isn’t likely to escape federal attention either.

“Over the past ten years, the largest tech platforms have acquired hundreds of companies—including alleged ‘killer acquisitions’ meant to shut down a potential competitive threat,” the White House wrote in the fact sheet. “Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions.”

The biggest tech companies have regularly defended their longstanding strategy of buying up the competition by arguing that because those acquisitions went through without friction at the time, they shouldn’t be viewed as illegal in hindsight. In no uncertain terms, the new executive order makes it clear that the Biden administration isn’t having any of it.

The White House also specifically singles out internet service providers for scrutiny, ordering the FCC to prioritize consumer choice and institute broadband “nutrition labels” that clearly state speed caps and hidden feeds. The FCC began working on the labels in the Obama administration but the work was scrapped after Trump took office.

The order also directly calls on the FCC to restore net neutrality rules, which were stripped in 2017 to the widespread horror of open internet advocates and most of the tech industry outside of the service providers that stood to benefit.

The White House will also tell the FTC to create new privacy rules meant to guard consumers against surveillance and the “accumulation of extraordinarily amounts of sensitive personal information,” which free services like Facebook, YouTube and others have leveraged to build their vast empires. The White House also taps the FTC to create rules that protect smaller businesses from being pre-empted by large platforms, which in many cases abuse their market dominance with a different sort of data-based surveillance to out-compete up-and-coming competitors.

Finally, the executive order encourages the FTC to put right to repair rules in place that would free consumers from constraints that discourage DIY and third-party repairs. A new White House Competition Council under the Director of the National Economic Council will coordinate the federal execution of the proposals laid out in the new order.

The antitrust effort from the executive branch mirrors parallel actions in the FTC and Congress. In the FTC, Biden has installed a fearsome antitrust crusader in Lina Khan, a young legal scholar and fierce Amazon critic who proposes a philosophical overhaul to the way the federal government defines monopolies. Khan now leads the FTC as its chair.

In Congress, a bipartisan flurry of bills intended to rein in the tech industry are slowly wending their way toward becoming law, though plenty of hurdles remain. Last month, the House Judiciary Committee debated the six bills, which were crafted separately to help them survive opposing lobbying pushes from the tech industry. These legislative efforts could modernize antitrust laws, which have failed to keep pace with the modern realities of giant, internet-based businesses.

“Competition policy needs new energy and approaches so that we can address America’s monopoly problem,” Sen. Amy Klobuchar, a prominent tech antitrust hawk in Congress, said of the executive order. “That means legislation to update our antitrust laws, but it also means reimagining what the federal government can do to promote competition under our current laws.”

Citing the acceleration of corporate consolidation in recent decades, the White House argues that a handful of large corporations dominates across industries, including healthcare, agriculture and tech and consumers, workers and smaller competitors pay the price for their outsized success. The administration will focus antitrust enforcement on those corners of the market as well as evaluating the labor market and worker protections on the whole.

“Inadequate competition holds back economic growth and innovation… Economists find that as competition declines, productivity growth slows, business investment and innovation decline, and income, wealth, and racial inequality widen,” the White House wrote.

 

#amazon, #america, #biden, #biden-administration, #big-tech, #broadband, #competition-law, #congress, #department-of-justice, #executive, #facebook, #federal-communications-commission, #federal-government, #federal-trade-commission, #google, #government, #healthcare, #internet-service-providers, #lina-khan, #president, #tc, #white-house, #youtube

Trump’s new lawsuits against social media companies are going nowhere fast

Trump’s spicy trio of lawsuits against the social media platforms that he believes wrongfully banned him have succeeded in showering the former president with a flurry of media attention, but that’s likely where the story ends.

Like Trump’s quixotic and ultimately empty quest to gut Section 230 of the Communications Decency Act during his presidency, the new lawsuits are all sound and fury with little legal substance to back them up.

The suits allege that Twitter, Facebook and YouTube violated Trump’s First Amendment rights by booting him from their platforms, but the First Amendment is intended to protect citizens from censorship by the government — not private industry. The irony that Trump himself was the uppermost figure in the federal government at the time probably won’t be lost on whoever’s lap this case lands in.

In the lawsuits, which also name Twitter and Facebook chief executives Jack Dorsey and Mark Zuckerberg as well as Google CEO Sundar Pichai (Susan Wojcicki escapes notice once again!), Trump accuses the three companies of engaging in “impermissible censorship resulting from threatened legislative action, a misguided reliance upon Section 230 of the Communications Decency Act, and willful participation in joint activity with federal actors.”

The suit claims that the tech companies colluded with “Democrat lawmakers,” the CDC and Dr. Anthony Fauci, who served in Trump’s own government at the time.

The crux of the argument is that communication between the tech companies, members of Congress and the federal government somehow transforms Facebook, Twitter and YouTube into “state actors” — a leap of epic proportion:

“Defendant Twitter’s status thus rises beyond that of a private company to that of a state actor, and as such, Defendant is constrained by the First Amendment right to free speech in the censorship decisions it makes.”

Trump’s own Supreme Court appointee Brett Kavanaugh issued the court’s opinion on a relevant case two years ago. It examined whether a nonprofit running public access television channels in New York qualified as a “state actor” that would be subject to First Amendment constraints. The court ruled that running the public access channels didn’t transform the nonprofit into a government entity and that it retained a private entity’s rights to make editorial decisions.

“… A private entity… who opens its property for speech by others is not transformed by that fact alone into a state actor,” Justice Kavanaugh wrote in the decision.

It’s not likely that a court would decide that talking to the government or being threatened by the government somehow transform Twitter, YouTube and Facebook into state actors either.

Trump vs. Section 230 (again)

First Amendment aside — and there’s really not much of an argument there — social media platforms are protected by Section 230 of the Communications Decency Act, a concise snippet of law that shields them from liability not just for the user-generated content they host but for the moderation decisions they make about what content to remove.

In line with Trump’s obsessive disdain for tech’s legal shield, the lawsuits repeatedly rail against Section 230. The suits try to argue that because Congress threatened to revoke tech’s 230 protections, that forced them to ban Trump, which somehow makes social media companies part of the government and subject to First Amendment constraints.

Of course, Republican lawmakers and Trump’s own administration made frequent threats about repealing Section 230, not that it changes anything because this line of argument doesn’t make much sense anyway.

The suit also argues that Congress crafted Section 230 to intentionally censor speech that is otherwise protected by the First Amendment, ignoring that the law was born in 1996, well before ubiquitous social media, and for other purposes altogether.

For the four years of his presidency, Trump’s social media activity — his tweets in particular — informed the events of the day, both nationally and globally. While other world leaders and political figures used social media to communicate or promote their actions, Trump’s Twitter account was usually the action itself.

In the shadow of his social media bans, the former president has failed to re-establish lines of communication to the internet at large. In May, he launched a new blog, “From the Desk of Donald J. Trump,” but the site was taken down just a month later after it failed to attract much interest.

The handful of pro-Trump alternative social platforms are still struggling with app store content moderation requirements at odds with their extreme views on free speech, but that didn’t stop Gettr, the latest, from going ahead with its own rocky launch last week.

Viewed in one light, Trump’s lawsuits are a platform too, his latest method for broadcasting himself to the online world that his transgressions eventually cut him off from. In that sense, they seem to have succeeded, but in all other senses, they won’t.

#articles, #brett-kavanaugh, #ceo, #communications-decency-act, #congress, #donald-j-trump, #donald-trump, #federal-government, #google, #government, #jack-dorsey, #mark-zuckerberg, #new-york, #president, #qanon, #section-230, #social, #social-media, #social-media-platforms, #sundar-pichai, #supreme-court, #susan-wojcicki, #tc, #the-battle-over-big-tech, #twitter

Opioid addiction treatment apps found sharing sensitive data with third parties

Several widely used opioid treatment recovery apps are accessing and sharing sensitive user data with third parties, a new investigation has found.

As a result of the COVID-19 pandemic and efforts to reduce transmission in the U.S, telehealth services and apps offering opioid addiction treatment have surged in popularity. This rise of app-based services comes as addiction treatment facilities face budget cuts and closures, which has seen both investor and government interest turn to telehealth as a tool to combat the growing addiction crisis.

While people accessing these services may have a reasonable expectation of privacy of their healthcare data, a new report from ExpressVPN’s Digital Security Lab, compiled in conjunction with the Opioid Policy Institute and the Defensive Lab Agency, found that some of these apps collect and share sensitive information with third parties, raising questions about their privacy and security practices.

The report studied 10 opioid treatment apps available on Android: Bicycle Health, Boulder Care, Confidant Health. DynamiCare Health, Kaden Health, Loosid, Pear Reset-O, PursueCare, Sober Grid, and Workit Health. These apps have been installed at least 180,000 times, and have received more than $300 million in funding from investment groups and the federal government.

Despite the vast reach and sensitive nature of these services, the research found that the majority of the apps accessed unique identifiers about the user’s device and, in some cases, shared that data with third parties.

Of the 10 apps studied, seven access the Android Advertising ID (AAID), a user-generated identifier that can be linked to other information to provide insights into identifiable individuals. Five of the apps also access the devices’ phone number; three access the device’s unique IMEI and IMSI numbers, which can also be used to uniquely identify a person’s device; and two access a users’ list of installed apps, which the researchers say can be used to build a “fingerprint” of a user to track their activities.

Many of the apps examined are also obtaining location information in some form, which when correlated with these unique identifiers, strengthens the capability for surveilling an individual person, as well as their daily habits, behaviors, and who they interact with. One of the methods the apps are doing this is through Bluetooth; seven of the apps request permission to make Bluetooth connections, which the researchers say is particularly worrying due to the fact this can be used to track users in real-world locations.

“Bluetooth can do what I call proximity tracking, so if you’re in the grocery store, it knows how long you’re in a certain aisle, or how close you are to someone else,” Sean O’Brien, principal researcher at ExpressVPN’s Digital Security Lab who led the investigation, told TechCrunch. “Bluetooth is an area that I’m pretty concerned about.”

Another major area of concern is the use of tracker SDKs in these apps, which O’Brien previously warned about in a recent investigation that revealed that hundreds of Android apps were sending granular user location data to X-Mode, a data broker known to sell location data to U.S. military contractors, and now banned from both Apple and Google’s app stores. SDKs, or software development kits, are bundles of code that are included with apps to make them work properly, such as collecting location data. Often, SDKs are provided for free in exchange for sending back the data that the apps collect.

“Confidentiality continues to be one of the major concerns that people cite for not entering treatment… existing privacy laws are totally not up to speed.” Jacqueline Seitz, Legal Action Center

While the researchers keen to point out that it does not categorize all usage of trackers as malicious, particularly as many developers may not even be aware of their existence within their apps, they discovered a high prevalence of tracker SDKs in seven out of the 10 apps that revealed potential data-sharing activity. Some SDKs are designed specifically to collect and aggregate user data; this is true even where the SDK’s core functionality is concerned.

But the researchers explain that an app, which provides navigation to a recovery center, for example, may also be tracking a user’s movements throughout the day and sending that data back to the app’s developers and third parties.

In the case of Kaden Health, Stripe — which is used for payment services within the app — can read the list of installed apps on a user’s phone, their location, phone number, and carrier name, as well as their AAID, IP address, IMEI, IMSI, and SIM serial number.

“An entity as large as Stripe having an app share that information directly is pretty alarming. It’s worrisome to me because I know that information could be very useful for law enforcement,” O’Brien tells TechCrunch. “I also worry that people having information about who has been in treatment will eventually make its way into decisions about health insurance and people getting jobs.”

The data-sharing practices of these apps are likely a consequence of these services being developed in an environment of unclear U.S. federal guidance regarding the handling and disclosure of patient information, the researchers say, though O’Brien tells TechCrunch that the actions could be in breach of 42 CFR Part 2, a law that outlines strong controls over disclosure of patient information related to treatment for addiction.

Jacqueline Seitz, a senior staff attorney for health privacy at Legal Action Center, however, said this 40-year-old law hasn’t yet been updated to recognize apps.

“Confidentiality continues to be one of the major concerns that people cite for not entering treatment,” Seitz told TechCrunch. “While 42 CFR Part 2 recognizes the very sensitive nature of substance use disorder treatment, it doesn’t mention apps at all. Existing privacy laws are totally not up to speed.

“It would be great to see some leadership from the tech community to establish some basic standards and recognize that they’re collecting super-sensitive information so that patients aren’t left in the middle of a health crisis trying to navigate privacy policies,” said Seitz.

Another likely reason for these practices is a lack of security and data privacy staff, according to Jonathan Stoltman, director at Opioid Policy Institute, which contributed to the research. “If you look at a hospital’s website, you’ll see a chief information officer, a chief privacy officer, or a chief security officer that’s in charge of physical security and data security,” he tells TechCrunch. “None of these startups have that.”

“There’s no way you’re thinking about privacy if you’re collecting the AAID, and almost all of these apps are doing that from the get-go,” Stoltman added.

Google is aware of ExpressVPN’s findings but has yet to comment. However, the report has been released as the tech giant prepares to start limiting developer access to the Android Advertising ID, mirroring Apple’s recent efforts to enable users to opt out of ad tracking.

While ExpressVPN is keen to make patients aware that these apps may violate expectations of privacy, it also stresses the central role that addiction treatment and recovery apps may play in the lives of those with opioid addiction. It recommends that if you or a family member used one of these services and find the disclosure of this data to be problematic, contact the Office of Civil Rights through Health and Human Services to file a formal complaint.

“The bottom line is this is a general problem with the app economy, and we’re watching telehealth become part of that, so we need to be very careful and cautious,” said O’Brien. “There needs to be disclosure, users need to be aware, and they need to demand better.”

Recovery from addiction is possible. For help, please call the free and confidential treatment referral hotline (1-800-662-HELP) or visit findtreatment.gov.

Read more:

#android, #app-developers, #app-store, #apple, #apps, #artificial-intelligence, #bluetooth, #broker, #computing, #director, #federal-government, #google, #google-play, #governor, #health, #health-insurance, #healthcare-data, #imessage, #law-enforcement, #mobile-app, #operating-systems, #privacy, #read, #security, #software, #stripe, #terms-of-service, #united-states

Drata raises $25M Series A to expand its security compliance platform

Security compliance is precisely three things: incredibly boring, time consuming, and entirely necessary to run a business in the modern age. Compliance isn’t going away, but startups like Drata are making it slightly easier to bear.

Drata helps companies get their SOC 2 compliance quicker by using automation. SOC 2 is a certification used to show that a company can store customer data in the cloud securely, but the process is notoriously complex and can take months to complete — and you have to do it all over again every year. That’s particularly burdensome for startups and smaller firms.

Drata says it can get companies SOC 2-compliant faster and keep them in compliance for longer by integrating with popular business tools and cloud services to get a better picture of a company’s security posture.

Now with a new round of $25 million at Series A in the bank, Drata said it’s expanding its compliance platform to also include ISO 27001, another core security standard used all over the world to help companies protect their systems and safeguard data.

The round landed six months after its $3.2 million seed round in January, and was led by GGV Capital, with participation from Silicon Valley CISO Investors, Okta Ventures, Cowboy Ventures, Leaders Fund, and SV Angel.

Drata CEO and co-founder Adam Markowitz told TechCrunch that the company is growing on average 100% month-over-month since it launched out of stealth and is serving hundreds of customers, including three-person startups to publicly traded companies.

The startup joins several other companies in the compliance space. Secureframe raised $18 million at Series A in March to offer SOC 2 and ISO 27001 certifications. Strike Graph raised a $3.9 million seed round last year to help companies automate security audits and get FedRamp certification needed to provide technology to the federal government. And, Startup Battlefield participant Osano in 2019 raised $5.4 million at Series A to build out its risk and compliance platform.

Related funding news:

#adam-markowitz, #bank, #boston, #cloud-services, #computing, #cowboy-ventures, #federal-government, #finance, #ggv-capital, #gv, #investment, #leaders-fund, #okta-ventures, #security, #startup-company, #techcrunch

Maryland and Montana are restricting police access to DNA databases

Maryland and Montana have become the first U.S. states to pass laws that make it tougher for law enforcement to access DNA databases.

The new laws, which aim to safeguard the genetic privacy of millions of Americans, focus on consumer DNA databases, such as 23andMe, Ancestry, GEDmatch and FamilyTreeDNA, all of which let people upload their genetic information and use it to connect with distant relatives and trace their family tree. While popular — 23andMe has more than three million users, and GEDmatch more than one million — many are unaware that some of these platforms share genetic data with third parties, from the pharmaceutical industry and scientists to law enforcement agencies.

When used by law enforcement through a technique known as forensic genetic genealogy searching (FGGS), officers can upload DNA evidence found at a crime scene to make connections on possible suspects, the most famous example being the identification of the Golden State Killer in 2018. This saw investigators upload a DNA sample taken at the time of a 1980 murder linked to the serial killer into GEDmatch and subsequently identify distant relatives of the suspect — a critical breakthrough that led to the arrest of Joseph James DeAngelo.

While law enforcement agencies have seen success in using consumer DNA databases to aid with criminal investigations, privacy advocates have long warned of the dangers of these platforms. Not only can these DNA profiles help trace distant ancestors, but the vast troves of genetic data they hold can divulge a person’s propensity for various diseases, predict addiction and drug response, and even be used by companies to create images of what they think a person looks like.

Ancestry and 23andMe have kept their genetic databases closed to law enforcement without a warrant, GEDmatch (which was acquired by a crime scene DNA company in December 2019) and FamilyTreeDNA have previously shared their database with investigators. 

To ensure the genetic privacy of the accused and their relatives, Maryland will, starting October 1, require law enforcement to get a judge’s sign-off before using genetic genealogy, and will limit its use to serious crimes like murder, kidnapping, and human trafficking. It also says that investigators can only use databases that explicitly tell users that their information could be used to investigate crimes. 

In Montana, where the new rules are somewhat narrower, law enforcement would need a warrant before using a DNA database unless the users waived their rights to privacy.

The laws “demonstrate that people across the political spectrum find law enforcement use of consumer genetic data chilling, concerning and privacy-invasive,” said Natalie Ram, a law professor at the University of Maryland. “I hope to see more states embrace robust regulation of this law enforcement technique in the future.”

The introduction of these laws has also been roundly welcomed by privacy advocates, including the Electronic Frontier Foundation. Jennifer Lynch, surveillance litigation director at the EFF, described the restrictions as a “step in the right direction,” but called for more states — and the federal government — to crack down further on FGGS.

“Our genetic data is too sensitive and important to leave it up to the whims of private companies to protect it and the unbridled discretion of law enforcement to search it,” Lynch said.

“Companies like GEDmatch and FamilyTreeDNA have allowed and even encouraged law enforcement searches. Because of this, law enforcement officers are increasingly accessing these databases in criminal investigations across the country.”

A spokesperson for 23andMe told TechCrunch: “We fully support legislation that provides consumers with stronger privacy protections. In fact we are working on legislation in a number of states to increase consumer genetic privacy protections. Customer privacy and transparency are core principles that guide 23andMe’s approach to responding to legal requests and maintaining customer trust. We closely scrutinize all law enforcement and regulatory requests and we will only comply with court orders, subpoenas, search warrants or other requests that we determine are legally valid. To date we have not released any customer information to law enforcement.”

GEDmatch and FamilyTreeDNA, both of which opt users into law enforcement searches by default, told the New York Times that they have no plans to change their existing policies around user consent in response to the new regulation. 

Ancestry did not immediately comment.

Read more:

#23andme, #ancestry, #dna, #electronic-frontier-foundation, #federal-government, #gedmatch, #genetics, #health, #judge, #law-enforcement, #maryland, #montana, #privacy, #security, #the-new-york-times, #united-states

CISA launches platform to let hackers report security bugs to US federal agencies

The Cybersecurity and Infrastructure Security Agency has launched a vulnerability disclosure program allowing ethical hackers to report security flaws to federal agencies.

The platform, launched with the help of cybersecurity companies Bugcrowd and Endyna, will allow civilian federal agencies to receive, triage and fix security vulnerabilities from the wider security community.

The move to launch the platform comes less than a year after the federal cybersecurity agency, better known as CISA, directed the civilian federal agencies that it oversees to develop and publish their own vulnerability disclosure policies. These policies are designed to set the rules of engagement for security researchers by outlining what (and how) online systems can be tested, and which can’t be.

It’s not uncommon for private companies to run VDP programs to allow hackers to report bugs, often in conjunction with a bug bounty to pay hackers for their work. The U.S. Department of Defense has for years warmed to hackers, the civilian federal government has been slow to adopt.

Bugcrowd, which last year raised $30 million at Series D, said the platform will “give agencies access to the same commercial technologies, world-class expertise, and global community of helpful ethical hackers currently used to identify security gaps for enterprise businesses.”

The platform will also help CISA share information about security flaws between other agencies.

The platform launches after a bruising few months for government cybersecurity, including a Russian-led espionage campaign against at least nine U.S. federal government agencies by hacking software house SolarWinds, and a China-linked cyberattack that backdoored thousands of Microsoft Exchange servers, including in the federal government.

#bugcrowd, #cisa, #computer-security, #computing, #cyberattack, #cybercrime, #cyberwarfare, #federal-government, #government, #information-technology, #internet-security, #security, #solarwinds, #united-states

Restrictions on acquisitions would stifle the US startup ecosystem, not rein in big tech

Bipartisanship has long been out of fashion, but one common pursuit among Democrats and Republicans in Washington has been placing Big Tech companies under a microscope.

Congressional committees have held scores of hearings, lawsuits have been filed and legislation has been introduced to regulate privacy and data collection. The knock-on effect of these reforms for young companies and their venture investors is unclear. But one aspect of increased antitrust scrutiny — restrictions on acquisitions — would have a significant negative effect on our entrepreneurial ecosystem, and policymakers should approach these changes with caution.

Acquisitions are an important element of the startup ecosystem

For VC-backed companies, there are effectively three outcomes: standalone company (often via an IPO), merger or acquisition, or bankruptcy. Despite best efforts, company failure is the most common outcome — more than 90% of startups fail. Fortunately, the success stories are often companies with a big impact, like Moderna and Zoom, which helped the world in the pandemic.

Acquisitions contribute to the health of the startup ecosystem, as entrepreneurs who realize liquidity through the sale of their company regularly go on to found innovative new companies and often invest in other startups as angel investors or venture capitalists.

Entrepreneurs are optimists by nature, and so when the company journey begins, there is great hope of one day creating a standalone public company. However, in most cases, an IPO is not possible. The reality is that entrepreneurship is incredibly hard, and the journey from infancy to public company is one that relatively few companies achieve.

Silicon Valley Bank’s 2020 Global Startup Outlook puts it this way: “[T]he fact is most entrepreneurs never expect to reach a public market exit.” Accordingly, 58% of startups expect to be acquired. NVCA-Pitchbook data on acquisitions and IPOs back up the sentiment of founders when it comes to likely exit opportunities. In 2020, there was an approximately 10:1 ratio of acquisitions of VC-backed companies to IPOs, with 1,042 venture-backed companies acquired and 103 entering the public markets.

Some might argue that acquisitions are more dominant today because of the anti-competitive motivations of current tech incumbents. But as Patricia Nakache of Trinity Ventures said in testimony before the Senate Judiciary Committee: “[Acquisitions have] been commonplace in the U.S. since before the dawn of the modern venture capital industry.” In fact, today we are witnessing fewer acquisitions relative to IPOs than in years past, as the average acquisition-to-IPO ratio since 2004 is approximately 15:1. This is happening against a backdrop of challenges in taking small-cap companies public that has reduced the number of companies in the public markets today.

Acquisitions contribute to the health of the startup ecosystem, as entrepreneurs who realize liquidity through the sale of their company regularly go on to found innovative new companies and often invest in other startups as angel investors or venture capitalists.

Furthermore, acquisitions help power the returns of VC funds, thereby allowing VCs to raise new funds and invest in the next generation of entrepreneurs. This “recycling effect” is one of the key drivers of dynamism in our economy and should not be slowed down.

Acquisition changes could impact entrepreneurship

Despite the importance of acquisitions, antitrust reform has included significant changes to how acquisitions are assessed by the federal government. The two most prominent examples in this space are Sen. Amy Klobuchar’s Competition and Antitrust Law Enforcement Reform Act (CALERA) and Sen. Josh Hawley’s Trust-Busting for the Twenty-First Century Act.

These bills are likely a reaction to findings that incumbents have acted like Pac-Man, gobbling up would-be competitors before they become a competitive problem. But both proposals would ultimately harm startup activity and competition rather than propel it.

A common thread between these proposals is to restrict acquisitions by companies valued at more than $100 billion. Hawley’s bill would impose an outright ban on acquisitions by companies of that market cap that “lessen competition in any way.”

Klobuchar’s bill would shift the burden of proof to parties to an acquisition, a major change because the U.S. government bears the burden currently. This means if the government challenges an acquisition in federal court, the parties to the acquisition must demonstrate it does not “create an appreciable risk of materially lessening competition.” If that standard is not met, the acquisition could be blocked.

Both proposals have negative ramifications for venture-backed companies.

First, consider the scope of the proposals: A $100 billion company is indeed a large one, but setting the threshold there captures far more than the large tech companies that have been hauled before Congress for antitrust hearings. Globally, about 150 companies are valued at $100 billion or more, and the U.S. is home to more than 80 of those companies. That exposes acquirers as wide-ranging as Estee Lauder, John Deere, Starbucks and Thermo Fisher Scientific. If you are struggling to recall those companies being under the antitrust spotlight, then you are not alone.

Second, the legal standards imposed by these new bills are daunting. Klobuchar’s proposal leaves startups scratching their heads on where the line is on which acquisitions are tolerated, while Hawley’s bill throws up a misguided red light for vast amounts of acquisitions. These two standards are particularly vexing since acquirers are generally looking for acquirees that complement their existing business. In addition, many of the most acquisitive companies are multifaceted ones that presumably compete with an array of other companies in some way.

Ultimately, the bills from Klobuchar and Hawley would disrupt an important part of our nation’s startup ecosystem. Acquisitions act like grease to help keep the wheels moving by injecting liquidity into the system so participants can move on to create new and hopefully better companies for our country. Those wheels should not be slowed down when the country needs all the entrepreneurship it can muster.

#column, #congress, #entrepreneurship, #federal-government, #opinion, #policy, #private-equity, #startups, #venture-capital

Biden’s labor secretary thinks many gig workers should be reclassified as employees

Biden Labor Secretary Marty Walsh charged into the white hot issue of the gig economy Thursday, asserting that many people working without benefits in the gig economy should be classified as employees instead.

In an interview with Reuters, Walsh said that the Department of Labor is “looking at” the gig economy, hinting that worker reclassification could be a priority in the Biden administration.

“… In a lot of cases gig workers should be classified as employees,” Walsh said. “In some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board.”

Walsh also said that the labor department would be talking to companies that benefit from gig workers to ensure that non-employees at those companies have the same benefits that an “average employee” in the U.S. would have.

“These companies are making profits and revenue and I’m not [going to] begrudge anyone for that because that’s what we are about in America… but we also want to make sure that success trickles down to the worker,” Walsh said.

Walsh’s comments aren’t backed by federal action, yet anyway, but they still made major waves among tech companies that leverage non-employee labor. Uber and Lyft stock dipped on the news Thursday, along with Doordash.

In the interview, Walsh also touched on pandemic-related concerns about gig workers who lack unemployment insurance and health care through their employers. The federal government has picked up the slack during the pandemic with two major bills granting gig workers some benefits, but otherwise they’re largely without a safety net.

Reforming labor laws has been a tenet of Biden’s platform for some time and the president has been very vocal about bolstering worker protections and supporting organized labor. One section of then President-elect Biden’s transition site was devoted to expanding worker protections, calling the misclassification of employees as contract workers an “epidemic.”

Biden echoed his previous support for labor unions during a joint address to Congress Wednesday night, touting the Protecting the Right to Organize Act — legislation that would protect workers looking to form or join unions. That bill would also expand federal whistleblower protections.

“The middle class built this country,” Biden said. “And unions build the middle class.”

#america, #biden, #biden-administration, #congress, #department-of-labor, #economy, #employment, #federal-government, #gig-economy, #gig-workers, #government, #labor, #president, #secretary, #tc, #temporary-work, #united-states

Tech talent can thrive in the public sector but government must invest in it

Building, scaling and launching new tools and products is the lifeblood of the technology sector. When we consider these concepts today, many think of Big Tech and flashy startups, known for their industry dominance or new technologies that impact our everyday lives. But long before garages and dorm rooms became decentralized hubs for these innovations, local and state governments, along with many agencies within the federal government, pioneered tech products with the goal of improving the lives of millions.

Long before garages and dorm rooms became decentralized hubs for innovation, local and state governments, along with many agencies within the federal government, pioneered tech products with the goal of improving the lives of millions.

As an industry, we’ve developed a notion that working in government, the place where the groundwork was laid for the digital assistants we use every day, is now far less appealing than working in the private sector. The immense salary differential is often cited as the overwhelming reason workers prefer to work in the private sphere.

But the hard truth is the private sector brings far more value than just higher compensation to employees. Look no further than the boom in the tech sector during the pandemic to understand why it’s so attractive. A company like Zoom, already established and successful in its own right for years, found itself in a situation where it had to serve an exponentially growing and diverse user base in a short period of time. It quickly confronted a slew of infrastructure and user experience pivots on its way to becoming a staple of work-from-home culture — and succeeded.

That innate ability to work fast to deliver for consumers and innovate at what feels like a moment’s notice is what really draws talent. Compare that to the government’s tech environment, where decreased funding and partisan oversight slow the pace of work, or, worse, can get in the way of exploring or implementing new ideas entirely.

One look (literally, see our graph below) at the trends around R&D spending in the private and government sectors also paints a clear picture of where future innovations will come from if we don’t change the equation.

Chart of Facebook R&D spending vs. DARPA annual budget

Image Credits: Josh Mendelsohn/Hangar

Look no further than the U.S. government’s own (now defunct) Office of Technology Assessment. The agency aimed to provide a thorough analysis of burgeoning issues in science and technology, exposing many public services to a new age of innovation and implementation. Amid a period of downsizing by a newly Republican-led Congress, the OTA was defunded in 1995 with a peak annual budget of just $35.1 million (adjusted for 2019 dollars). The authoritative body on the importance of technology to the government was deemed duplicative and unnecessary. Despite numerous calls for its reinstatement, it has since remained shuttered.

Despite dwindling public sector investment and lackluster political action, the problems that technology is poised to help solve haven’t gone away or even eased up.

From the COVID pandemic to worsening natural disasters and growing societal inequities, public leaders have a responsibility to solve the pressing issues we face today. That responsibility should breed a desire to continuously iterate for the sake of constituents and quality of life, much in the same way private tech caters to the product, user and bottom line.

My own experiences in government have shaped my career and approach to building new technologies more than my time in Silicon Valley. There are plenty of tangible parallels to the private sector that can attract driven and passionate tech workers, but the responsibility of giving government work realistic consideration doesn’t just fall at the feet of talent. The governments that we depend on must invest more capital and pay closer attention to the tech community.

Tech workers want an environment where they can thrive and get to see their work in action, whoever the end user may be. They don’t want to feel hamstrung by the threat of decreased funding or the red tape that comes as a result of government partisanship. Replicating the unimpeded focus of Silicon Valley’s brightest examples is a must if we’re serious about drawing talented individuals into government or public-sector-focused work.

A great example of these ideas in action is one of the most beloved government agencies, NASA. Its continued funding has produced technologies developed for space exploration that are now commonplace in our lives, such as scratch-resistant lenses, memory foam and water filters. These use cases came much later on, only after millions of dollars were invested without knowing what would result.

NASA has continued to bolster its ability to stay nimble and evolve at a rapid pace by partnering with private companies. For talent in the tech sphere, the ability to leverage outside resources in this way, without compromising the product or work, is a boon for ideation and iteration.

One can also point to the agency when considering the importance of keeping technology research and innovation as apolitical as possible. It’s one of the few widely known public entities to prosper on the back of bipartisan support. Unfortunately, politicians typically do all of us a disservice, particularly tech workers in government, when they too closely connect themselves or their parties to a particular program or platform. It hinders innovation — and the ensuing mudslinging can detract from talented individuals jumping into government service.

There is no shortage of extremely capable tech workers who want to help solve the biggest issues facing society. Will we give them the legitimate space and opportunity to conquer those problems? There’s been some indication that we can. These ambitious and forward-looking efforts matter today more than ever and show all of us in the tech ecosystem that there’s a place in government for tech talent to grow and flourish.

#column, #congress, #covid-19, #federal-government, #innovation, #opinion, #silicon-valley, #tc, #united-states

SolarWinds hackers targeted NASA, Federal Aviation Administration networks

Hackers are said to have broken into the networks of U.S. space agency NASA and the Federal Aviation Administration as part of a wider espionage campaign targeting U.S. government agencies and private companies.

The two agencies were named by the Washington Post on Tuesday, hours ahead of a Senate Intelligence Committee hearing tasked with investigating the widespread cyberattack, which the previous Trump administration said was “likely Russian in origin.”

Spokespeople for the agencies did not immediately respond to a request for comment, but did not deny the breach in remarks to the Post.

It’s believed NASA and the FAA are the two remaining unnamed agencies of the nine government agencies confirmed to have been breached by the attack. The other seven include the Departments of Commerce, Energy, Homeland Security, Justice, and State, the Treasury, and the National Institutes of Health, though it’s not believed the attackers breached their classified networks.

FireEye, Microsoft, and Malwarebytes were among a number of cybersecurity companies also breached as part of the attacks.

The Biden administration is reportedly preparing sanctions against Russia, in large part because of the hacking campaign, the Post also reported.

The attacks were discovered last year after FireEye raised the alarm about the hacking campaign after its own network was breached. Each victim was a customer of the U.S. software firm SolarWinds, whose network management tools are used across the federal government and Fortune 500 companies. The hackers broke into SolarWinds’ network, planted a backdoor in its software, and pushed the backdoor to customer networks with a tainted software update.

It wasn’t the only way in. The hackers are also said to have targeted other companies by breaking into other devices and appliances on their victims’ networks, as well as targeting Microsoft vendors to breach other customers’ networks.

Last week, Anne Neuberger, the former NSA cybersecurity director who last month was elevated to the White House’s National Security Council to serve as the deputy national security adviser for cyber and emerging technology, said that the attack took “months to plan and execute,” and will “take us some time to uncover this layer by layer.”

#anne-neuberger, #biden-administration, #computer-security, #computing, #cyberattacks, #cybercrime, #cyberwarfare, #director, #federal-aviation-administration, #federal-government, #fireeye, #government, #information-technology, #malwarebytes, #microsoft, #russia, #security, #senate-intelligence-committee, #software, #solarwinds, #supply-chain-attack, #the-washington-post, #trump-administration, #u-s-government, #united-states

Bringing jobs and health benefits, BlocPower unlocks energy efficiency retrofits for low income communities

Retrofitting buildings to make them more energy efficient and better at withstanding climate change induced extreme weather is going to be a big, multi-billion dollar business. But it’s one that’s been hard for low-income communities to tap, thanks to obstacles ranging faulty incentive structures to an inability to adequately plan for which upgrades will be most effective in which buildings.

Enter BlocPower, a New York-based startup founded by a longtime advocate for energy efficiency and the job creation that comes with it, which has a novel solution for identifying, developing and profiting off of building upgrades in low income communities — all while supporting high-paying jobs for workers in the communities the company hopes to serve.

The company also has managed to raise $63 million in equity and debt financing to support its mission. That money is split between an $8 million investment from some of the country’s top venture firms and a $55 million debt facility structured in part by Goldman Sachs to finance the redevelopment projects that BlocPower is creating.

These capital commitments aren’t charity. Government dollars are coming for the industry and private companies from healthcare providers, to utility companies, to real estate developers and property managers all have a vested interest in seeing this market succeed.

There’s going to be over $1 billion carved out for weatherization and building upgrades in the stimulus package that’s still making its way through Congress

For BlocPower’s founder, Donnel Baird, the issue of seeing buildings revitalized and good high-paying jobs coming into local communities isn’t academic. Baird was born in Brooklyn’s Bedford Stuyvesant neighborhood and witnessed firsthand the violence and joblessness that was ripping the fabric of that rich and vibrant community apart during the crack epidemic and economic decline of the 1980s and early 90s.

Seeing that violence firsthand, including a shooting on his way to school, instilled in Baird a desire to “create jobs for disconnected Black and brown people” so they would never feel the hopelessness and lack of opportunity that fosters cycles of violence.

Some time after the shooting, Baird’s family relocated from Brooklyn to Stone Mountain, Georgia, and after graduating from Duke University, Baird became a climate activist and community organizer, with a focus on green jobs. That led to a role in the presidential campaign for Barack Obama and an offer to work in Washington on Obama’s staff.

Baird declined the opportunity, but did take on a role reaching out to communities and unions to help implement the first stimulus package that Obama and Biden put together to promote green jobs.

And it was while watching the benefits of that stimulus collapse under the weight of a fragmented building industry that Baird came up with the idea for BlocPower.

“It was all about the implementation challenges that we ran into,” Baird said. “If you have ten buildings on a block in Oakland and they were all built by the same developer at the same time. If you rebuild those buildings and you retrofit all of those buildings, in five of those buildings you’re going to trap carbon monoxide in and kill everybody and in the other five buildings you’re going to have a reduction in emissions and energy savings.”

Before conducting any retrofits to capture energy savings (and health savings, but more on that later), Baird says developers need to figure out the potential for asbestos contamination in the building; understand the current heating, ventilation, and cooling systems that the building uses; and get an assessment of what actually needs to be done.

That’s the core problem that Baird says BlocPower solves. The company has developed software to analyze a building’s construction by creating a virtual twin based on blueprints and public records. Using that digital twin the company can identify what upgrades a building needs. Then the company taps lines of credit to work with building owners to manage the retrofits and capture the value of the energy savings and carbon offsets associated with the building upgrades.

For BlocPower to work, the financing piece is just as important as the software. Without getting banks to sign off on loans to make the upgrades, all of those dollars from the federal government remain locked up. “That’s why the $7 billion earmarked for investment in green buildings did not work,” Baird said. “At BlocPower our view is that we could build software to simulate using government records… we could simulate enough about the mechanicals, electrical, and plumbing across buildings in NYC so that we could avoid that cost.”

Along with co-founder Morris Cox, Baird built BlocPower while at Columbia University’s business school so that he could solve the technical problems and overcome the hurdles for community financing of renewable retrofit projects.

Right before his graduation, in 2014, the company had applied for a contract to do energy efficiency retrofits and was set to receive financing from the Department of Energy. The finalists had to go down to the White House and pitch the President. That pitch was scheduled for the same day as a key final exam for one of Baird’s Columbia classes, which the professor said was mandatory. Baird skipped the test and won the pitch, but failed the class.

After that it was off to Silicon Valley to pitch the business. Baird met with 200 or more investors who rejected his pitch. Many of these investors had been burned in the first cleantech bubble or had witnessed the fiery conflagrations that engulfed firms that did back cleantech businesses and swore they’d never make the same mistakes.

That was the initial position at Andreessen Horowitz when Baird pitched them, he said. “When I went to Andreessen Horowitz, they said ‘Our policy is no cleantech whatsoever. You need to figure out how software is going to eat up this energy efficiency market’,” Baird recalled.

Working with Mitch Kapor, an investor and advisor, Baird worked on the pitch and got Kapor to talk to Ben Horowitz. Both men agreed to invest and BlocPower was off to the races.

The company has completed retrofits in over 1,000 buildings since its launch, Baird said, mainly to prove out its thesis. Now, with the revolving credit facility in hand, BlocPower can take bigger bites out of the market. That includes a contract with utility companies in New York that will pay $30 million if the company can complete its retrofits and verify the energy savings from that work.

There are also early projects underway in Oakland and Chicago, Baird said.

Building retrofits do more than just provide energy savings, as Goldman Sachs managing director Margaret Anadu noted in a statement.

“BlocPower is proving that it is possible to have commercial solutions that improve public health in underserved communities, create quality jobs and lower carbon emissions,” Anadu said. “We are so proud to have supported Donnel and his team…through both equity and debt capital to further expand their reach.”

These benefits also have potential additional revenue streams associated with them that BlocPower can also capture, according to investor and director, Mitch Kapor.

“There are significant linkages that are known between buildings and pollution that are a public health issue. In a number of geographies community hospitals are under a mandate to improve health outcomes and BlocPower can get paid from health outcomes associated with the reduction in carbon. That could be a new revenue stream and a financing mechanism,” Kapor said. “There’s a lot of work to be done in essentially taking the value creation engine they have and figuring out where to bring it and which other engines they need to have to have the maximum social impact.”

Social impact is something that both Kapor and Baird talk about extensively and Baird sees the creation of green jobs as an engine for social justice — and one that can reunite a lot of working class voters whose alliances were fractured by the previous administration. Baird also believes that putting people to work is the best argument for climate change policies that have met with resistance among many union workers.

“We will not be able to pass shit unless workers and people of color are on board to force the U.S. senate to pass climate change policy,” Baird said. “We have to pass the legislation that’s going to facilitate green infrastructure in a massive way.”

He pointed to the project in Oakland as an example of how climate policies can create jobs and incentivize political action.

“In Oakland we’re doing a pilot project in 12 low income buildings in oakland. I sent them $20K to train these workers from local people of color in Oakland… they are being put to work in Oakland,” Baird said. “That’s the model for how this gets built. So now we need them to call Chuck Shumer to push him to the left on green building legislation.” 

 

#advisor, #andreessen-horowitz, #articles, #barack-obama, #ben-horowitz, #biden, #brooklyn, #chicago, #co-founder, #columbia, #columbia-university, #construction, #department-of-energy, #director, #duke-university, #energy, #energy-conservation, #energy-efficiency, #federal-government, #georgia, #goldman-sachs, #mitch-kapor, #new-york, #oakland, #president, #tc, #u-s-senate, #united-states, #washington, #white-house

New stimulus bill includes $35.2 billion for new energy initiatives

The new economic stimulus proposal that has been approved by Congress includes roughly $35.2 billion for energy initiatives, according to summary documents seen by TechCrunch.

“This is probably the biggest energy bill we’ve seen in a decade,” said policy analyst Dr. Leah Stokes, an Assistant Professor at the Bren School of Environmental Science & Management at the University of California, Santa Barbara.  

The spending is split between the Energy Act of 2020 and the Energy for the Environment Act, and both include new money for big technology initiatives.

“[The Energy Act of 2020] is a bipartisan, bicameral energy innovation package that authorizes over $35 billion in RD&D activities across DOE’s portfolio and strengthens or creates programs crucial to advancing new technologies into the market,” a summary document for the legislation reads.

Included in the spending package is over $4.1 billion for new technology initiatives.

The biggest winners are photovoltaics, new transportation technologies, and energy efficiency technologies.

There’s a $1.5 billion for new solar technologies including modules, concentrating solar technology, new photovoltaic technologies and initiatives to expand solar manufacturing and recycling technologies. And $2.6 billion set aside for transportation technologies. Finally, energy efficiency and weatherization programs are continuing to be supported through a $1.7 billion reauthorization of the Weatherization Assistance Program. 

Energy grid technologies get a $3.44 billion boost through $1.08 billion in support for short-term, long-term, seasonal and transportation energy storage technologies and $2.36 billion for smart utility and energy distribution technologies. 

Another $625 million is dedicated to new research, development and commercialization for both onshore and offshore wind technologies. While $850 million is being set aside for geothermal technology development and $933 million for marine energy and hydropower tech. finally, there’s $160 million earmarked for hydropower generator upgrades, and upgrades to existing federal infrastructure through $180 million earmarked to the Federal Energy Management Program. 

In an attempt to ensure that the money and innovation is used in the industries where decarbonization is the most technically challenging, there’s a $500 million pot for stakeholders in industries like iron, steel, aluminum, cement and chemicals as well as transportation businesses like shipping, avaiation, and long-distance transport that are looking to decarbonize.

By making these critical investments now, the Energy Act of 2020 will to help reduce our  nation’s greenhouse gas emissions, bring good paying jobs back to the United States, and allow us to export these technologies to growing markets abroad for years to come,” the summary report reads. 

If the next generation of technologies that already have broad commercial support is one area getting a boost, then another big pool of money is going to support the commercialization of technologies whose viability has yet to be demonstrated at commercial scale.

These include carbon capture utilization and storage technologies that are getting a $6.2 billion boost for roll out at industrial and energy sites. Congress is also approving a $447 milion research and development program for large-scale commercial carbon dioxide removal projects — with a $100 million carve out grant for direct air capture competition at facilities that capture at least 50,000 metric tons of carbon dioxide annually.

Nuclear technologies are also getting their day in the sun thanks to $6.6 billion in funding for the modernization of existing nuclear power plants and the development of advanced reactors. And, the nascent fusion industry can add another $4.7 billion to their calculus for available capital thanks to a carve out for basic and applied research investments.

All of this spending also comes with money to ensure that emerging technologies aren’t left out. Theres a $2.9 billion allocation to ARPA-E, the energy advanced research arm of the government whose structure is similar to the DARPA program that was responsible for the development of the Internet. And, taking a page from the NASA playbook that commercialized a number of technologies, the Office of Technology Transitions, which promotes national lab partnerships, is being codified and supporting the kind of milestone-based projects that have been effectively used by the Air Force and the Department of Defense broadly.

To cap it off, the new energy bill includes a directive to the Department of the Interior to target the generation of 25 gigawatts of solar, wind, and geothermal production on public lands by 2025.

“My understanding of it is that they’re trying to look at what the federal government has done for solar and wind and see how we can do that for other technologies,” Stokes said. 

For her, what’s in other portions of the stimulus are equally important from a climate perspective. There’s a commitment to phase out hydrofluorocarbons, a huge contributor to global warming and climate change by 2035. Phasing out the use of these chemicals globally in refrigeration and other applications could reduce warming by half a degree centigrade (which is a big deal).

Stokes took issue with the duration of some of the tax credits, whose extensions were relatively short, and the absence of a tax credit for electric vehicles. “The tax credits for EVs are a consumer-facing benefit that are absolutely critical to adoption,” Stokes said. “That was a massive equalizer between EVs and combustion engine cars.”

For all of the good news for climate activists baked into this portion of the stimulus, Stokes warns that no one concerned about global climate change should break out the bubbly.

“This package is not going to solve the climate crisis full-stop,” Stokes said. “Next year if the republicans are in control there’s going to be a new chairman and he’s not going to be as generous… We have to learn to celebrate the wins and give credit but recognize what’s missing. Which is a lot.”

#air-force, #aluminum, #arpa-e, #articles, #california, #chairman, #chemicals, #congress, #department-of-defense, #energy, #energy-efficiency, #federal-government, #greenhouse-gas-emissions, #iron, #solar-manufacturing, #steel, #tc, #united-states, #university-of-california

John McAfee arrested after DOJ indicts crypto millionaire for tax evasion

Cybersecurity entrepreneur and crypto personality John McAfee’s wild ride could be coming to an end after he was arrested in Spain today, now facing extradition to the US over charges spanning tax evasion and fraud.

The SEC accuses McAfee of being paid more than $23.1 million worth of cryptocurrency assets for promoting a number of ICO token sales without disclosing that he was being paid to do so. Furthermore the DOJ has levied a number of counts of tax evasion against McAfee, saying that he “willfully attempted to evade” payment of income taxes owed to the federal government.

In a brief announcing the arrest and unsealing of indictment documents, the DOJ also details that the charges are confined to McAfee the individual and that they did not find any connection with the “anti-virus company bearing his name.”

The DOJ’s charges against McAfee are a bit dry but detail 10 counts against the entrepreneur. McAfee faced 5 counts of tax evasion, which each carry a maximum penalty of 5 years in prison, as well as 5 counts of “willful failure to file a tax return,” each carrying a maximum penalty of 1 year in prison.

The SEC filing is a much more interesting read, with 55 pages detailing a lengthy investigation into McAfee’s alleged fraudulent activity promoting a number of ICOs throughout 2017 and 2018. The report specifically notes that McAfee allegedly received more than $11.6 million worth of BTC and ETH tokens worth for promoting seven ICOs. Unfortunately, those offerings were not named in the suit. He additionally received $11.5 million worth of the promoted tokens, the suit alleges.

We have reached out to John McAfee for comment.

#articles, #cryptocurrency, #cryptography, #doj, #entrepreneur, #federal-government, #initial-coin-offering, #john-mcafee, #mcafee, #spain, #tax-evasion, #tc, #u-s-securities-and-exchange-commission, #united-states

TikTok fixes Android bugs that could have led to account hijacks

TikTok has fixed four security bugs in its Android app that could have led to the hijacking of user accounts.

The vulnerabilities, discovered by app security startup Oversecured, could have allowed a malicious app on the same device to steal sensitive files, like session tokens, from inside the TikTok app. Session tokens are small files that keep the user logged in without having to re-enter their passwords. But if stolen, these tokens can give an attacker access to a user’s account without needing their password.

The malicious app would have to exploit the vulnerabilities to inject a malicious file into the vulnerable TikTok app. Once the user opens the app, the malicious file is triggered, letting the malicious app access and send stolen session tokens to the attacker’s server silently in the background.

Sergey Toshin, founder of Oversecured, told TechCrunch, that the malicious app could also hijack TikTok’s app permissions, allowing it access to the Android device’s camera, microphone, and the private data on the device, like photos and videos.

Oversecured published technical details of the bugs on its website.

TikTok said it fixed the bugs earlier this year after Oversecured reported the vulnerabilities.

“As part of our ongoing efforts to build the safest and most secure platform in the industry, we constantly work with third parties to find and fix bugs,” said TikTok spokesperson Hilary McQuaide. “While the bugs in question would only pose a risk if a user had also downloaded a malicious application onto their Android device, we have fixed them. We appreciate the researcher reporting this issue to us so that we could fix it, and we encourage all of our users to download the latest version of the app.”

News of the bugs come just days before an anticipated ban on TikTok is set to take effect. The Trump administration declared the video sharing app a threat to national security earlier this year over its ties to China.

ByteDance, the Beijing-headquartered parent company of TikTok, has denied the claims, and sued the federal government to challenge the allegations.

TikTok, which is not accessible in China, said it had “never provided user data to the Chinese government, nor would we do so if asked.”

#android, #apps, #beijing, #bytedance, #federal-government, #mobile-security, #security, #social, #tiktok

Digitizing Burning Man

For decades, Burning Man has represented an escape from the current reality. An event for free-er spirits to rethink new age ideals inside a stateless entity where art, music and partying reign supreme on the desert plains.

Over the years, the Bay Area-founded event has dealt with an internal clash as the gathering has grown larger and attracted a heavy presence from Silicon Valley’s wealthy tech class, with tales of turnkey experiences, air-conditioned camps, helicopters and lobster dinners. Now, under the shadow of a historic pandemic, the organization behind the massive, iconic event is desperately working to stick to its roots while avoiding financial ruin as it pivots the 2020 festival to a digital format with the pro bono help of some of its tech industry attendees.

With just a few weeks before the event is set to kick off, the organization is bringing together a group of technologists with backgrounds in virtual reality, blockchain, hypnotism and immersive theatre to create a web of hacked-together social products that they hope will capture the atmosphere of Burning Man.

Going virtual is an unprecedented move for an event that’s mere existence already seems to defy precedent.

Burning Man is held in late August every year inside Nevada’s Black Rock Desert. For nine days, the attendees, who refer to themselves as Burners, fill up the desolate landscape with massive art installations, stages and camps. Attendance has been climbing over the past several decades, to the point that the federal government got involved, creating a more than 170-page report arguing why the event’s attendance should be capped. More than 78,000 people attended in 2019.

It’s an escape from society in a shared social experience that doesn’t seem to be replicable elsewhere.

The Multiverse

Steven Blumenfeld became the CTO of Burning Man days before the org’s leaders publicly announced that, due to the COVID-19 pandemic, the physical event was being abruptly canceled and the team was going all-in on a virtual gathering. Though the serial CTO expected the position to largely involve crusty tasks maintaining the event’s media infrastructure, he soon was pressed to rethink the front-end of a sprawling event that’s decades old and steeped in lore.

“My first inclination is, ‘Great! Let’s go build a big 3D VR world blah blah blah… So then I spent the first two weeks looking at what I had for staff, what I had for time frame, and what we could actually do,” Blumenfeld says. “There was just no way. And you know, I actually still wanted to do it. I wanted a challenge… but the reality was it just wasn’t going to happen.”

Burning Man is a massive undertaking, with a particularly deep emotional hold inside San Francisco, where it was first held in 1986, and by extension Silicon Valley. It isn’t all that surprising that when the Burning Man Project announced the event was making the move to a digital format, there was a rapid influx of community input to help decipher what an on-the-grid virtual Burning Man might look like.

“We had 14,000 people tell us they wanted to contribute in some way to a virtual Black Rock City,” said Kim Cook, the org’s director of art and civic engagement. “Some of them said what they wanted to contribute was love; so that’s cool. We also had around a thousand of them say they wanted to do developer-type work.”

Some of the groups that reached out to the Burning Man Project were companies that were willing to build a Burning Man experience but wanted official branding present. Despite a precarious financial position, Burning Man’s organizers declined help from these sponsors, citing the org’s adherence to “de-commodification” — a desire to prevent corporate infiltration of the event, eschewing advertising, branded stages and corporate partnerships.

Turning away from the professional studios, Blumenfeld and others settled on a network of small indie teams filled with Burners that were willing to develop the official digital experiences for the event on their own time.

A new moment for social networking

Eight projects eventually emerged as official “recognized universes,” each taking drastically different approaches to what a virtual Burning Man should look like. While some focus their efforts on virtual reality, others add social layers to video chat or build 3D environments on top of existing platforms like Second Life or Microsoft’s AltspaceVR .

During the pandemic, revamped developer conferences and trade shows have been able to port keynote addresses or panels to a Zoom format fairly seamlessly, but there are plenty of elements of the Burning Man experience that the teams involved realize might be impossible to replicate with online platforms. The developers creating the event’s virtual worlds are determined to rethink the conventions of online social networking to ensure that Burners make new friends this year.

“The sense of awe and scale is tricky,” says Ed Cooke, who is building one of the official apps. “One way of explaining Burning Man is that it’s a state of mind that you access as a side effect of all the things that happen on the way there.”

Cooke, a London startup founder who also boasts the title of Grand Memory Master, earned for — among other things — memorizing the order of 10 decks of cards in less than an hour, has been building SparkleVerse with his friend Chris Adams, whose daytime gig is as a senior software manager at Airbnb.

Their web app, which pairs a 2D map interface with video chat windows, is primarily focused on advancing how shared context can facilitate and better frame social relationships.

Amid quarantine, the pair tells TechCrunch they have been creating deeply complicated video chat parties for their friends. One example is a moon-themed party where they created a clickable map of the lunar surface that guided the 200 attendees through 16 separate virtual spaces with their own themes. Before the party kicked off, the hosts walked people through the “experience of traveling to the moon” by guiding them through the effects of zero gravity and instructing them to play along with experiencing it. Another hot tub-themed party invited guests to jump into their bath tub before firing up Zoom.

Cooke and Adams are leaning on some of these mechanics to create a Burning Man theme, hoping that taking cues from immersive theatre will enable people to commit more deeply to the experience. The acts of driving, losing your phone connection and growing tired and hungry on the way to the physical event add to a “spaciousness in your consciousness” that allows people to act more freely, Cooke says. He wants participants to replicate these experiences by taking steps outside their normal life in the run-up to the event, whether that’s sitting through an obscenely long video chat session to simulate a drive to the desert or setting up a tent in their living room, or cutting off their water line and avoiding showers during the nine days.

“All of this is embedding you further and further into this distant context, miles away from your normal life, where effectively in the course of this, you’re just becoming a radically less boring person,” Cooke explains in a nine-minute video outlining the platform.

Many of the apps are building on the idea of how spatial interfaces can feed greater social context and make it easier to approach people and make new friends.

Another official app, Build-a-Burn, takes the idea of a stylized 2D interface for video chat even further with a sketched-out grayscale map of Black Rock City that users can navigate little stick figures across. As a user moves through different camps and their avatars get physically close to each other, new video chat screens fade in and users can gain the experience of venturing into a new social bubble.

A screenshot of Build-a-Burn

While Build-a-Burn and SparkleVerse are leaning more heavily on video chat, other experiences hope that creating massive 3D landscapes that match the scale of the real-world event will help people get into the spirit of the event.

Other than Burn2, which is wholly contained within the Second Life platform, most of the 3D-centric apps integrate some level of virtual reality support. Projects that support VR headsets include The Infinite Playa, The Bridge Experience, MysticVerse, BRCvr (which taps into Microsoft’s AltspaceVR platform) and Multiverse.

Each of the VR experiences will also allow users to join on mobile or desktop, an effort to ensure that the apps are more widely accessible.


Over on Extra Crunch, read about how a new generation of chat apps are leaning on game-like interfaces


Multiverse creator Faryar Ghazanfari, who runs an AR startup and previously worked on Tesla’s legal team, says that the motivations for building his app were a bit on the selfish side, telling TechCrunch that he became “extremely sad” after the physical event’s cancellation and felt the need to help build a place where he could reunite with his own camp.

Screenshot from a demo of Multiverse.

Ghazanfari tells TechCrunch he feels a responsibility in creating the environment that other Burners will experience; he says his chief concern is capturing the event’s complexity. Compared to the other apps, Multiverse focuses primarily on providing a photorealistic 3D playground where avatars can zoom around.

“As Burners, we don’t think of Burning Man as just a music festival or art festival; it is much more than that. Burning Man is a social experiment of creating a community out of a shared struggle,” Ghazanfari says.

Each of the Burning Man-approved apps seem to engage with evoking that shared struggle differently, which appears to be the most looming challenge of moving this event to a virtual format. While the apps hope to bring elements of the physical event into their virtual spaces, the creators also seem to realize that aiming to compete with attendees’ past memories is unwise. It’s a challenge that has been faced by dozens of startups in the virtual reality space over the past several years.

“I think the main challenge is taking something that exists in reality and then porting it into a different platform,” said Adam Arrigo, CEO of Wave, a venture-backed startup that initially launched a VR app for music concerts but has since shifted focus to mobile and desktop experiences. “When you’re in these digital spaces, the agency that you have as a user and the experiences you can create are so different than something that could exist, even at a concert.”

Financial uncertainty

Perhaps the biggest unknown, as the organization readies for Burning Man’s August 30 start date, is that nobody really has any idea how many people are going to show up. While Blumenfeld pointed me to suggestions the entire digital event could attract up to 30,000 people over its nine-day run, Ghazanfari hopes that hundreds of thousands or millions of users will come into the fold of his experience.

Another point of contention internally is how exactly the groups plan to monetize these digital experiences.

In 2020, the standard ticket price for Burning Man was $475. The organization postponed the “main sale” of tickets prior to this year’s physical event’s cancellation, but they had already sold tens of thousands of tickets. Ticket holders will have the option of being refunded, but the organization has encouraged those who “have the means” to consider making a full or partial donation of the ticket price instead.

In 2018, Burning Man cost $44 million for the organization to produce, according to tax documents. The Burning Man Project reported about $43 million in ticket sales from that event, with other donations and revenue streams bringing the nonprofit’s total revenue for that fiscal year to about $46 million. In a blog post, the event’s organizers noted that though the group had event insurance, they were not covered for a cancellation caused by a pandemic. Burning Man Project says it has $10 million in cash reserves, but that it anticipates draining through that funding by the end of the year to stay afloat. The organization is listed as having received a loan from the federal government’s Paycheck Protection Program for between $2-5 million.

While some like Ghazanfari are pushing to make their experiences free to access with the option of giving a donation later, others expressed desire for a single digital ticket that would give attendees access to all eight digital experiences. Cooke says users will need to pay a $50 entrance fee to access the SparkleVerse.

The disparate nature of the experience being built this year — with some being shipped as native apps, others in HTML5 and others inside existing tech platforms — meant that a unified ticketing platform just wouldn’t work, Blumenfeld told TechCrunch. Not all of the developers were thrilled with this outcome, which they fear could fracture attendance at events on certain platforms. The biggest concern seemed to be ensuring that all of this effort pays off in some way for the organization so that they can continue to host the Burning Man event post-pandemic.

“One of the biggest reasons we’re all doing this is to help Burning Man survive, because the Burning Man organization unfortunately was really badly hit because of COVID,” Ghazanfari says. “The organization is in kind of a precarious situation financially.”

The organization has attracted criticism in recent years for the event’s inclusiveness. Some of the developers acknowledge that planning for a nine-day trip to the middle of the desert can be daunting and prohibitively expensive for people that want to join the community, and they hope that this year’s shift to a digital format will open up the event to more people and that these apps can be a less intimidating way for skeptics to get a taste of the community.

Thinking of the future

None of the developers behind the digital experiences are being paid for their efforts building these apps. However, the Burning Man Project has given at least some of them perpetual licenses to continue operating these digital platforms with the Burning Man name and an option to monetize, though a percentage of proceeds will be kicked back to the organization.

While getting this event across the finish line by the end of the month is daunting enough, the Burning Man Project is also trying to consider how its rapid learnings will apply to next year, though they hope that the physical event returns for 2021.

Blumenfeld says he plans to spend the next year working on the background infrastructure so that items like gating and ticketing functions for a virtual Burning Man can all be centralized.

While having eight distinct experiences this year could complicate the goal of getting one big group together, developers concerned about troubleshooting their new apps or having a sudden influx of virtual Burners overwhelm their infrastructures view multiple entry points to the festival as a necessary logistical move. Organizers hope the diversity of options will keep things interesting for attendees.

“I think we’ve got a good mix, and part of it is, we want to learn,” Blumenfeld says. “What we’re trying very hard to avoid is being in Zoom meeting hell.”

Whether users are connecting via video chat or as avatars inside a large virtual world, the developers building Burning Man’s virtual experiences believe they are operating on the cutting edge of virtual interaction and that they are rethinking elements of modern social networking to create a virtual Burning Man where people will be able to form new social bonds.

“I’ve fallen in love with this idea that at some point in the future, some Ph.D. student in 300 years time is going to write a thesis on the first online Burning Man, because it does feel like an extraordinary moment of avant garde imagineering for what the future of human online interaction looks like,” Cooke tells TechCrunch.

#altspacevr, #burning-man, #chat-room, #computing, #coronavirus, #covid-19, #culture, #digital-media, #events, #federal-government, #london, #man, #nevada, #online-platforms, #san-francisco, #second-life, #social, #social-networking, #tc, #virtual-reality, #virtual-world, #web-app

Trump’s sudden reversal on student visas will be felt in Silicon Valley

Growing up in the Philippines, Andreia Carrillo always liked the stars. It’s what brought her to the United States to study astronomy, and why she wants others to follow in her footsteps and study the stars.

“Though, we’ll see if that happens now,” Carrillo said.

Carrillo is one of the hundreds of thousands of students affected by a recent rule change, issued by U.S. Immigration and Customs Enforcement (ICE) to no longer allow international students from staying in the U.S. if their university moves classes fully online.

The rule change, published Monday, lands as the threat of the coronavirus pandemic grows across the country, forcing some universities to shift to digital-only operations for the fall.

News of the rule change caught immigration lawyers by surprise. The Trump administration said nothing more about the policy beyond a tweet from the president: “SCHOOLS MUST OPEN IN THE FALL!!!,” a decision over which the federal government has little authority. It’s a sharp reversal from the administration’s position in March — at the height of the pandemic’s spread in the U.S. — allowing students to retain their lawful immigration status even as in-person classes were suspended across the country.

The sudden rule change puts universities in a difficult dynamic: administrators can let campuses stay open to keep international students in the country but run the risk of spreading the virus; or close up, maintain social distancing, and international students be damned.

But the knock-on effect will be felt across the U.S., not just by the students, the universities whose revenue largely depends on higher tuition fees from international students, or even the college towns whose economies rely on schools keeping their doors open. The rule change will also impact the fields that these students pursue, largely engineering, math, and computer science, and the rate of innovation that can be sustained in a country without the core, often invisible, talent behind it.

After all, one of the most popular destinations for international students is the state of California, the heart of Silicon Valley.

Eric Tarczynski, the founder of Contrary Capital, says that he’s seen “scores of entrepreneurial people come to universities from abroad explicitly because it’s their gateway to building a company in the United States.

“To some extent, it’s their Ellis Island, and we’ve funded several companies this way,” he said. He pointed to alternative programs, like Lambda School, will help the same talented students shift online.

New York University president Andrew Hamilton said in response to the government’s rule change that “requiring international students to maintain in person instruction or leave the country, irrespective of their own health issues or even a government mandated shutdown of New York City, is just plain wrong and needlessly rigid.”

“If there were a moment for flexibility in delivering education, this would be it,” he wrote..

NYU will join a chorus of other schools in reaching out to federal officials to ask them to revoke the rule change. Harvard and MIT have gone further by suing ICE to stop the rule change going into effect.

“The coronavirus has become a vehicle for the administration to continue in its advancement of anti-immigrant policies,” Tahmina Watson, an immigration lawyer, told TechCrunch. “With the election looming in a few months, the administration is looking for every possible angle to block immigration.”

“The invisible wall is real and gets higher every day,” said Watson.

One option for schools is going to the hybrid model route where some classes are taught live and others are taught online. Harvard, for example, said it will bring up to only 40% of undergraduates to campus this fall. Universities that go virtual may struggle to justify their traditionally exorbitant tuition fees.

The rule change touches on a nerve that has been agitated throughout the pandemic: how remote education shapes what we can learn, and more importantly, who can have the opportunity to learn. Some have noted that a remote shift might harshly impact international students who have spotty connections in other countries. Others say that higher education’s appeal in the U.S. is largely the network it provides.

In Carrillo’s case, there was no opportunity to study astronomy in the Philippines. She had to come to the U.S. if she wanted to pursue her dream career path.

The rule change is likely to face legal challenges. Watson noted that Monday’s policy has questionable legality. The administration referred to it as a “temporary final rule,” which she says essentially avoids the rule going through a more typical public comment period.

“I am sure schools, among others, would have a lot to say about this policy,” said Watson. “If the administration wants to change long standing policy, the Administrative Procedure Act should be followed at every step.”

The rule, thus, awaits more direction and clarity from the administration. Until then, it is up to colleges and students to figure out how to process the drastic step.

One international student who attends graduate school at University of Washington, who asked to remain anonymous fearing their visa status, said that the rule change puts their research and scholarship at risk if they are forced to go back to their home. If their school opts for a hybrid model, they worry about their health.

“I’ve never felt so disrespected in the United States,” the student said. “If only the international students are required to go back to class, and there is a chance of getting the virus, you’re risking the international students to get infected, they said.

When Carrillo heard the rule change, she said she panicked and emailed her department. To her relief, her current college — the University of Texas, Austin — will take a hybrid approach to classes in the fall. She can stay in the country, for now.

But the news isn’t a complete sigh of relief. International students, like Carrillo, are used to feeling a false sense of security under the Trump administration.

“I feel so shitty for wanting things to be hybrid,” she said. “Morally I want things to be safer and have things online, but then that would also mess up my stay here.”

 

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Amazon won’t say if its facial recognition moratorium applies to the feds

In a surprise blog post, Amazon said it will put the brakes on providing its facial recognition technology to police for one year, but refuses to say if the move applies to federal law enforcement agencies.

The moratorium comes two days after IBM said in a letter it was leaving the facial recognition market altogether. Arvind Krishna, IBM’s chief executive, cited a “pursuit of justice and racial equity” in light of the recent protests sparked by the killing of George Floyd by a white police officer in Minneapolis last month.

Amazon’s statement — just 102 words in length — did not say why it was putting the moratorium in place, but noted that Congress “appears ready” to work on stronger regulations governing the use of facial recognition — again without providing any details. It’s likely in response to the Justice in Policing Act, a bill that would, if passed, restrict how police can use facial recognition technology.

“We hope this one-year moratorium might give Congress enough time to implement appropriate rules, and we stand ready to help if requested,” said Amazon in the unbylined blog post.

But the statement did not say if the moratorium would apply to the federal government, the source of most of the criticism against Amazon’s facial recognition technology. Amazon also did not say in the statement what action it would take after the yearlong moratorium expires.

Amazon is known to have pitched its facial recognition technology, Rekognition, to federal agencies, like Immigration and Customs Enforcement. Last year, Amazon’s cloud chief Andy Jassy said in an interview the company would provide Rekognition to “any” government department.

Amazon spokesperson Kristin Brown declined to comment further or say if the moratorium applies to federal law enforcement.

There are dozens of companies providing facial recognition technology to police, but Amazon is by far the biggest. Amazon has come under the most scrutiny after its Rekognition face-scanning technology showed bias against people of color.

In 2018, the ACLU found that Rekognition falsely matched 28 members of Congress as criminals in a mugshot database. Amazon criticized the results, claiming the ACLU had lowered the facial recognition system’s confidence threshold. But a year later, the ACLU of Massachusetts found that Rekognition had falsely matched 27 New England professional athletes against a mugshot database. Both tests disproportionately mismatched Black people, the ACLU found.

Investors brought a proposal to Amazon’s annual shareholder meeting almost exactly a year ago that would have forcibly banned Amazon from selling its facial recognition technology to the government or law enforcement. Amazon defeated the vote with a wide margin.

The ACLU acknowledged Amazon’s move to pause sales of Rekognition, which it called a “threat to our civil rights and liberties,” but called on the company and other firms to do more.

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