Monday Brief: FEB 22 2021

Testimony on Defense Innovation

What’s New: I am scheduled to testify before a subcommittee of the House Armed Services Committee (HASC) on Tuesday.

Why This Matters: I have been asked to give “insight into the current innovation landscape and discuss opportunities for the Department of Defense to invest in, harness, and transition the innovation, science, and technology required to ensure the US military’s future edge.”

Key Points:

• The hearing will be before the HASC’s new Subcommittee on Cyber, Innovation Technologies, and Information Systems, chaired by Rep. Langevin (D-RI) with Rep. Elise Stefanik (R-NY) as Ranking Member.

• My fellow witnesses will be Hon. Christine Fox — former Acting Deputy Secretary of Defense — and Dr. Victoria Coleman — Former DARPA Director.

• You can watch the live stream starting at 11am Eastern here and my submitted testimony should be available here on Tuesday morning.

What I’m Thinking: The following are the key points I intend to make:

• There is good reason for the United States and its citizens to be optimistic about our future. Our technology and innovation industries remain the envy of the world – pioneering technological discoveries and applications that are the foundation of our national prosperity and security.

• These advantages, however, are not guaranteed and deliberate action is required for the United States to maintain its leadership and to protect its people and interests.

• While the United States Constitution makes the federal government responsible for ensuring the “common defense” of the nation, individual citizens, civil society groups, and private companies have always helped shoulder this burden. This remains unchanged. What is changing is the distribution of this burden among these stakeholders – particularly private companies.

• Our current defense contractors are essential for key capabilities, especially marque platforms like aircraft carriers, fifth-generation jets, and modern fighting vehicles. But they are not typically the source of bleeding-edge developments in artificial intelligence (AI), advanced robotics, or quantum computing. These advancements are overwhelmingly developed by companies who do not regularly work with the Department of Defense and who are not currently trying to solve defense challenges. This needs to change.

• First, we need to recognize and employ new incentives. The current system does not prioritize the best available technology. Instead, it favors cost accounting, regulatory compliance, and administrative ease. 

• The second critical action is to get rid of the innovation-killing regulatory burdens that block the partners we need. The Federal Acquisition Regulation (FAR) — which governs all federal acquisitions, including those of the Department of Defense — is more than 2,000 pages long and even includes a definition on what constitutes a “copier.” There is ongoing effort to update FAR, but it is progressing too slowly, and it must take the nation’s innovation needs as a central concern.

• Finally, third, the US should prioritize the security of our domestic technological and manufacturing capabilities. In a world where securing nations means securing networks and supply chains, it is unavoidably true that the loyalties and security practices of those creating and building our defense innovations matter.

Translating Chinese INFOSEC Assurances

What’s New: I have a new article in The National Interest, “America Needs a Clear Policy to Deal with Chinese Cybersecurity Concerns.”

Why This Matters: More than just another articulation of information security (INFOSEC) concerns, this article specifically deconstructs some of the main assurances Chinese tech companies use to hide their intentions, capabilities, and actions.

Key Points:

• In the article, I deconstruct the three main arguments used by TikTok’s interim CEO Vanessa Pappas in this video. (I recommend you watch it to get a sense of just how disingenuous these assurances are.)

• These assurances are often given, nearly word-for-word, by multiple Chinese tech companies — including telecommunications companies Huawei and ZTE as well as drone maker DJI.

• Assurance number one: “There are much better sources of critical data than our platform.”

• Assurance number two: “Any U.S. data we collect stay in the United States with backups in X country (often Singapore).” 

• Assurance number three: “The Chinese government has never asked us for U.S. user information and, if they did, we would say, ‘no.’”

What I’m Thinking: I hope you’ll read the article. But here’s my bottom line:

In sum, the various data security assurances from TikTok and other Chinese companies are demonstrably suspect. To find a safe path forward, Americans need a clear-eyed-understanding of them.

When Koalas Cry: Thoughts on the Social Media Showdown Down Under

What’s New: Facebook is blocking news content on its platform in Australia.

Why This Matters: The company is responding to legislation that would require it to pay publishers for news articles that are shared or linked on their platform — setting up a showdown that could shape internet policies around the world.

Key Points:

• Canberra’s proposed Media Bargaining Code, requires companies like Facebook and Google to pay publishers when news articles show up on the social media platforms as normal search results, posted by the publishers themselves, or shared by users.

• The bill has passed Australia’s lower house and is now before its upper chamber — where it has been held as a type of “encouragement” for Facebook and Google to preemptively strike agreements with the nation’s publishers.

• Google formally opposes the legislation but has made deals with Australia’s major publishers, including Rupert Murdoch’s News Corp — which controls more than 70% of the nation’s newspapers.

• Facebook chose another path — blocking posts from any Australian publisher on its platform globally and preventing all Australian Facebook users from seeing or sharing any news content, regardless of its origin.

• If you’re wondering how this relates to foreign policy/national security — decisions like these will play as large a role (or perhaps even larger) than pure cybersecurity concerns when it comes to the seemingly inevitable fracturing of the world wide web.

“Australia is the canary in the coal mine, and policymakers in Brussels and D.C. are sitting there eating the popcorn,” said Claire Wardle, U.S. director for First Draft, a nonprofit organization dedicated to educating journalists about misinformation. “They’ve raised the stakes; I worry that it will lead to more of these on-the-edge brinkmanship deals — at a time when the world’s information ecosystem is already at a breaking point.”

What I’m Thinking:

• Australia can make its own rules, but it shouldn’t be surprised by the pushback. Nearly 60% of Australians believe Google and Facebook should be required to pay for news content, so the government certainly has popular support. But the government cannot dictate to these companies what business they’re in — so, if Facebook decides it doesn’t want to be in the paying-for-news business, it can get out of that business down under as it appears to have done. If that’s disruptive to users or upsetting to their representatives, then maybe the costs of this legislation were not fully considered.

• These companies are powerful because we make them powerful. Look, I get it — it must have been an understandable shock for most Aussies when they woke up and couldn’t read or share the news on Facebook. I also understand this situation likely caused a lot of citizens, publishers, and politicians to realize how regularly they turn to these platforms for news. But an honest assessment has to admit that this dependence is self-chosen and can be changed. After all, the webpages for all of these news sources are still available outside of Facebook and can easily be shared via email, text, or other means. Yes, these platforms make life more convenient. But individual users get to decide how much that convenience is worth; and, if they haven’t left these platforms even when they feel they are too powerful, then that’s a market decision — not a market failure.

• I think this is bad policy. The stated goal of this legislation is to “address bargaining power imbalances between Australian news media businesses and digital platforms.” But I’m not sure I buy the premise that publishers are being mistreated. The monetary value of news has always been established by the ad revenue it generates — not the merits of the news itself (unfortunately). There can be no doubt that Facebook and Google dominate such advertising, but they’re not the only beneficiaries. In the first five months of 2020, for example, Facebook generated more than 2 billion “clicks” for Australian news websites at no cost to these websites, which translates to ~AU$200 million worth of additional traffic. Also, these types of regulations almost always privilege incumbents and hurt smaller and alternative media sources.

• Yes there are real problems, but how we address these problems matters. The impact of social media on advertising and on local news are well documented. Broader concerns about the power and influence of these companies is also broadly shared (including by me). But, there seems to be a growing willingness by many to uses whatever legislation they can, not to discreetly improve market distortions, but to cut these companies “down to size.” I’m uncomfortable with an “end justifies the means” rationale for governance and I believe history proves this approach often creates more problems than it solves.

That’s it for this Monday Brief. Thanks for reading, and if you think someone else would like this week’s newsletter, please share it with your friends and followers.

Have a great week!