Start Up No.1487: Ericsson chief slams Europe on 5G, Bloomberg insists on Supermicro, Apple escapes Epic sideload bill, and more

A huge winter storm caught Texas’s power system out. But what form of power was at fault, and why? CC-licensed photo by Shiva Shenoy on Flickr.

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A selection of 10 links for you. Not funded by a PAC. I’m @charlesarthur on Twitter. Observations and links welcome.

Ericsson chief slams Europe’s ‘non-functioning’ telecoms market • Financial Times

Richard Milne and Michael Peel:


Borje Ekholm, chief executive of the Swedish telecoms equipment maker, told the Financial Times that it was rational for Europe’s telecoms operators not to invest in next generation 5G networks, because many of them failed to earn their cost of capital.

“The problem is that the guys that are supposed to build out that infrastructure don’t make any money. There is a very big cost to waiting,” he added.

Ericsson is worried that Europe is falling far behind China and the US in the rollout of 5G, which it argues will be crucial for the digitalisation of businesses. It has forecast that 5G could boost the continent’s gross domestic product by 2 percentage points a year.

“Without [5G], general industry will be less efficient and less competitive. Without the infrastructure, it’s hard to develop the digital industry, and that impacts huge value potential and potentially millions of future jobs,” said Ekholm.

…The Ericsson chief executive also renewed his criticism of Sweden’s decision to ban Huawei from its telecoms networks because of concerns about spying and technology theft, warning that doing so ran “significant risk of hurting our ability to compete on a global scale”.

He said he had two concerns about the ban: that other countries could “restrict free trade”, endangering the 99% of group revenues that came from outside Ericsson’s home country; and that it was vital for Ericsson “to be in markets at the forefront of tech development: China and the US”.

He added: “For us to have a presence in both China and the US allows us to be a global tech leader. It is high risk to be only in one ecosystem and not the other. It could ultimately lead to the Chinese ecosystem developing faster thanks to its scale.”


Strange for the maker of 5G kit to say it doesn’t earn back. I would love to know the precise process by which 5G rather than pervasive 4G (or even fibre to premises) would add 2% to European GDP. It’s true that the introduction of mobile where it hasn’t been, or of data where it hasn’t been, boosts GDP. But would the raw speed of 5G truly make this so possible? Or is the year where it would do that a long way off?
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Supermicro hack: how China exploited a US tech supplier over years • Bloomberg

Jordan Robertson and Michael Riley:


By 2014, investigators across the U.S. government were looking for any additional forms of manipulation—anything they might have missed, as one former Pentagon official put it. Within months, working with information provided by American intelligence agencies, the FBI found another type of altered equipment: malicious chips added to Supermicro motherboards.

Government experts regarded the use of these devices as a significant advance in China’s hardware-hacking capabilities, according to seven former American officials who were briefed about them between 2014 and 2017. The chips injected only small amounts of code into the machines, opening a door for attackers, the officials said.

Small batches of motherboards with the added chips were detected over time, and many Supermicro products didn’t include them, two of the officials said. 

Alarmed by the devices’ sophistication, officials opted to warn a small number of potential targets in briefings that identified Supermicro by name. Executives from 10 companies and one large municipal utility told Bloomberg News that they’d received such warnings. While most executives asked not to be named to discuss sensitive cybersecurity matters, some agreed to go on the record.

“This was espionage on the board itself,” said Mukul Kumar, who said he received one such warning during an unclassified briefing in 2015 when he was the chief security officer for Altera Corp., a chip designer in San Jose. “There was a chip on the board that was not supposed to be there that was calling home—not to Supermicro but to China.”


This is the same pair of writers who did the original Big Hack story wayy back in 2018. Matt Tait (aka pwnallthethings) did a big Twitter thread about it; he’s utterly unconvinced, thinks it’s briefings passed on in a big game of telephone. (Thanks Himanshu Gupta for the pointer.)
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A radical change is coming to the way major credit cards work • BGR

Andy Meek:


In recent days, PayPal released new debit and credit card vertical designs for its Venmo app, which a company executive said was partly inspired by the vertical orientation of those popular social media apps. Daniela Jorge, vice president of design at PayPal, told Bloomberg in a recent interview that this is just the way the whole world is thinking now. And what people’s expectations are for apps and consumer products like credit cards. “The world around us is becoming more of the portrait mode and the vertical orientation,” Jorge said.

Besides PayPal, major banks are already moving in this direction. Bank of America, the second-biggest provider in the US of debit card products, was one of the first to adopt a debit card with a portrait orientation. Likewise, Discovery Bank started offering vertical credit cards in 2018. And the reasons we should expect this trend to continue, with more banks adopting a vertical style for their card products, include the fact that with the advent of chip readers and tap-to-pay functionality, this is how most people handle their cards already.

With a chip reader, for example, the credit card is inserted into the reader vertically. Likewise, as digital wallets increase in popularity — with card owners increasingly utilizing a digital version of their credit card that’s stored in their smartphone — the phone becomes the device with which the consumer pays, instead of a physical card.


It’s much harder to read a string of numbers (or anything) written vertically. However, there don’t seem to be any actual pictures anywhere of what these are going to look like. Four strings of four numbers, vertically arranged?

Even so, I’m not sure what user experience problem this new orientation actually solves.
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Bitcoin’s overnight collapse probability is about 50% • Trolly McTrollface’s Blog

The aforesaid Trolly:


If you ever had a look at CME’s Bitcoin futures, you might have noticed that there are multiple contracts – one for each month, and that they have different prices. Systematically, the futures contracts for months that are further away, are more expensive than those with closer expiration, and also cheaper than spot. When this happens for a commodity like oil, we’re talking about contango [the normal situation where the future price is higher than the current price].

This is usually due to the fact that there’s a risk premium on the uncertainty of the future, and it costs a little bit to be sure of the price that you’ll pay for something three months from now. But for futures on financial products, it’s very rare. Currently, the premium for Bitcoin is a whopping 2% per month, and it’s a red warning sign.

The reason contango for commodities like oil is normal, is that you can’t arbitrage it. The way to arbitrage contango is to buy spot, short the future, wait till expiry, and collect the premium. But you can’t simply “wait” when you buy thousands of barrels of oil – you have to store those barrels somewhere, and it will cost you an arm and a leg. The storage costs will eat up your contango premium, plus some.

There were occurrences in the past where traders were able to arbitrage this premium, but the contango needed to be absolutely off-the-charts (“super-contango”). For instance, after the 2008 financial panic, the spread between spot and futures in the oil market was so big, traders would literally rent tankers and use them as storage facilities for oil, waiting for their futures leg to mature.

The reason contango for financial products isn’t normal, is that you can arbitrage it very easily, as you don’t have storage costs. You buy Bitcoin spot, sell an April future for 4% more than spot, and simply wait two months.


The “collapse probability” does emerge in a straightforward way from the numbers, though I feel at this point that there’s a certain amount of wishing in writing stuff like this. Put it this way: is bitcoin like Apple stock? Or is it like Gamestop stock, on different timescales? The problem is that if it’s the former, it’s going to keep consuming electricity until governments prevent it.
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Anti-vaxxers misuse federal data to falsely claim COVID vaccines are dangerous • Vice

Shayla Love and Anna Merlan:


In 2004, anesthesiologist James Laidler submitted an alarming report to the Vaccine Adverse Event Reporting System (VAERS). Laidler wrote that after he got his annual influenza vaccine, his muscles began to grow in size, his skin became green, and he turned into the Incredible Hulk. 

Laidler’s intent was not to notify government officials of a dangerous side effect, but to show the need for caution when interpreting the data found in VAERS, the national vaccine safety surveillance program run by the Centers for Disease Control and Prevention (CDC) and the U.S. Food and Drug Administration (FDA). 

VAERS is a passive reporting surveillance system, and the people who submit to it can include doctors and healthcare providers, but also anyone who receives a vaccine, their family members, or even lawyers. (This is different from the CDC’s Vaccine Safety Datalink, which is limited to health care professionals, and requires more documentation for submissions.)

To the CDC’s credit, it followed up with Laidler and asked his permission to remove the report, which he agreed to. “If I had not agreed, the record would be there still, showing that any claim can become part of the database, no matter how outrageous or improbable,” he wrote at the time. 

Since its inception in 1988, anti-vaccine groups have cherry-picked VAERS data and twisted it out of context to show the supposed dangers of vaccines. Now, with several COVID-19 vaccines being administered, and vaccine hesitancy and misinformation on the rise worldwide, VAERS is being used yet again by those same groups—as well as a crop of new bad actors—as a vehicle for claims that various vaccines cause serious side effects like Bell’s palsy, hospitalizations, or death. (A CDC review of safety data to date found this week that Bell’s palsy is no more common in COVID-vaccinated populations than unvaccinated; nor is the rate of death, or other severe health complications.)


Very clear that having an open database like this is just asking for trouble. The amount of vaccine distortion going around social media is just astonishing, as this piece points out, and VAERS only helps it.
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Big tech’s unlikely next battleground: North Dakota • The New York Times

Jack Nicas, a couple of days ago:


If the bill [which would enforce Apple and Google allowing sideloading of apps] fails, Apple and Google’s fight would appear far from over. Georgia and Arizona lawmakers are considering nearly identical app-store legislation, and Andy Vargas, a state representative in Massachusetts, said he planned to introduce a comparable bill this week. Lobbyists said they were also pushing for app-store bills in Wisconsin and Minnesota.

An Apple spokeswoman said most iPhone apps were free and didn’t pay any commission. She added that most of the North Dakota companies that shared revenue with Apple earned less than $1 million a year from their apps, meaning they pay Apple 15% of some sales, rather than 30 percent. Apple lowered its rate for smaller companies last year amid scrutiny of its App Store policies.

Google did not respond to a request for comment.

Mr. Davison said he had been given the draft legislation by Lacee Bjork Anderson, a lobbyist with Odney Public Affairs in Bismarck. Ms. Anderson said in an interview that she had been hired by Epic Games, the maker of the popular game Fortnite and the plaintiff in lawsuits against Apple and Google over their app policies. She said she was also being paid by the Coalition for App Fairness, a group of firms, including Epic, Spotify and Match Group, that has protested app commissions and is leading the push for app-store bills.


The bill died in the North Dakota senate, but Apple clearly needs some lobbyists to put out those fires. Epic isn’t playing by the same rules.
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TikTok slammed in Europe over ‘hidden advertising’ to kids • Gizmodo

Matt Novak:


The European consumer advocacy group BEUC filed a complaint against TikTok on Tuesday, including allegations the Chinese-based social media platform isn’t been transparent about why it needs to collect some data on users. The complaint also claims TikTok is deploying “hidden advertising” aimed at children, according to the group’s press release.

While most of the concerns around TikTok in the U.S. revolve around user data and the ability of the Chinese government to monitor content, BEUC’s formal complaint with the European Commission on Tuesday includes allegations which have received little attention in mainstream coverage in the U.S., including fears that kids are receiving marketing messages in covert ways.

A press release from BEUC explains the organization’s concerns about hashtag challenges and other marketing initiatives on TikTok, emphasis ours:


TikTok fails to protect children and teenagers from hidden advertising and potentially harmful content on its platform. TikTok’s marketing offers to companies who want to advertise on the app contributes to the proliferation of hidden marketing. Users are for instance triggered to participate in branded hashtag challenges where they are encouraged to create content of specific products. As popular influencers are often the starting point of such challenges the commercial intent is usually masked for users. TikTok is also potentially failing to conduct due diligence when it comes to protecting children from inappropriate content such as videos showing suggestive content which are just a few scrolls away.



I guess the EU could threaten to sell TikTok to Larry Ellison.
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Texas’ power grid crumples under the cold • Ars Technica

John Timmer:


According to a statement released today by ERCOT, the grid entered a state of emergency shortly after 1am on Monday, meaning it could no longer guarantee enough power generation to meet customer demands. This is because roughly 30 gigawatts of generation capacity has been forced offline.

While some early reports indicated that frozen wind turbines were causing significant shortfalls, 30GW is roughly equal to the entire state’s wind capacity if every turbine is producing all the power it’s rated for. Since wind in Texas generally tends to produce less during winter, there’s no way that the grid operators would have planned for getting 30GW from wind generation; in fact, a chart at ERCOT indicates that wind is producing significantly more than forecast.

Power supplied by wind (green) is coming in ahead of forecasts. Source: ERCOT

So while having Texas’ full wind-generating capacity online would help, the problems with meeting demand appear to lie elsewhere. An ERCOT director told Bloomberg that problems were widespread across generating sources, including coal, natural gas, and even nuclear plants. In the past, severe cold has caused US supplies of natural gas to be constrained, as use in residential heating competes with its use in generating electricity. But that doesn’t explain the shortfalls in coal and nuclear, and the ERCOT executive wasn’t willing to speculate.

With generation failing to meet demand, ERCOT was left with no other option other than to cut off customers’ access to power.


Texas isn’t part of the US federated grid, because it wanted to avoid federal regulations many decades ago. Now it’s getting bitten by the fact it can’t bring energy in from other states.
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Trump’s false posts were treated with kid gloves by Facebook • The Markup

Jon Keegan, Colin Lecher and Corin Faife:


As users drifted through Facebook in the aftermath of the presidential election, they may have run across a satirical article about the Nashville bombing in December. Playing off conspiracies about COVID-19 death diagnoses, a viral photo jokingly suggested the bomber had “died from COVID-19 shortly after blowing himself up.”

In the beginning of January, a New York woman was shown the photo—shared by a friend—in her news feed. Facebook appended a note over the top: The information was false.

But four days earlier, as a woman in Texas looked at Facebook, she saw the same post—shared to her feed by a conservative media personality with about two million followers. That post only had a “related articles” note appended to the bottom that directed users to a fact-check article, making it much less obvious that the post was untrue.

In August, as the election approached and misinformation about COVID-19 spread, Facebook announced it would give new fact-checking labels to posts, including more nuanced options than simply “false.” But data from The Markup’s Citizen Browser project, which tracks a nationwide panel of Facebook users’ feeds, shows how unevenly those labels were applied: Posts were rarely called “false,” even when they contained debunked conspiracy theories. And posts by Donald Trump were treated with the less direct flags, even when they contained lies.

…The top spreader of posts that were given flags? Trump. His posts, however, were never called “false” or “misleading,” even when they contained inflammatory lies. When Trump shared a mid-December post claiming it was “statistically impossible” for Joe Biden to have won, for example, Facebook simply noted the United States “has laws, procedures and established institutions to ensure the integrity of our elections.”

In contrast, Joe Biden’s posts were given several flags as well, but they were limited to notes simply saying he had won the election. The flag was placed on even innocuous content, like an obituary for Chuck Yeager


You’re not surprised, and this already feels like ancient history. But Facebook is a loop. What happened before happens again. Trump wasn’t the first to get this kid glove treatment.
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Following on from Radio Garden yesterday, this is suggested by Raymond Lee: “select a country and a decade” and get radio from that time. Though apparently not from the Netherlands in the 1990s.
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Errata, corrigenda and ai no corrida: none notified

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