Hillicon Valley: Judge approves AT&T-Time Warner deal in blow to DOJ | Dems renew push to secure state voting systems | Seattle reverses course on tax after Amazon backlash | Trump, senators headed for cyber clash | More Tesla layoffs

Hillicon Valley: Judge approves AT&T-Time Warner deal in blow to DOJ | Dems renew push to secure state voting systems | Seattle reverses course on tax after Amazon backlash | Trump, senators headed for cyber clash | More Tesla layoffs
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The Cyber and Tech overnights have joined forces to give you Hillicon Valley, The Hill's new comprehensive newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

Welcome! Follow the cyber team, Morgan Chalfant (@mchalfant16) and Olivia Beavers (@olivia_beavers), and the tech team, Ali Breland (@alibreland) and Harper Neidig (@hneidig), on Twitter. Send us your scoops, tips and compliments.

 

JUST BREAKING -- JUDGE APPROVES AT&T-TIME WARNER DEAL: A federal judge on Tuesday ruled that AT&T and Time Warner can go through with their $85 billion merger, dealing a blow to the Trump administration's Justice Department and ending a six-week trial.

The decision from U.S. District Judge Richard Leon gives AT&T an entry into the media business with control over popular brands like cable networks CNN, HBO, TNT and TBS. It could also set in motion a series of mega deals across industries.

The Justice Department, which may still appeal the decision, sued the companies in November, arguing that the tie-up could be used to suppress competition and raise prices for consumers.

Makan Delrahim, the Justice Department's antitrust chief, said prosecutors were "disappointed" with the decision but did not reveal whether they would seek a stay or appeal the ruling.

"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner," Delrahim said in a statement. "We will closely review the Court's opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers."

The broader implications: Other major industry players could take Tuesday's ruling as a green light to pursue their own deals. Comcast is expected to try to buy much of 21st Century Fox, potentially laying the groundwork for a bidding war with Disney.

Who loses? The decision is a huge loss for the Justice Department, which broke from recent tradition by challenging the vertical merger, which involves two companies that don't compete directly with each other. 

We've got the latest, with reaction here.

And click here for the 172 (!) page decision.

 

DEMS DROP NEW ELECTION SECURITY BILL: A group of Democratic senators is introducing a bill aimed at securing U.S. elections from hacking efforts, the latest response to attempted Russian interference in the 2016 presidential vote.

The bill introduced Tuesday is specifically designed to ensure the integrity of and bolster confidence in the federal vote count.

It would require state and local governments to take two steps to ensure that votes are counted correctly. Under the legislation, states would have to use voting systems that produce voter-verified paper backups that could be audited in the event a result is called into question.

State and local officials would also be required to implement what are known as "risk-limiting audits" – a method that verifies election outcomes by comparing a random sample of paper ballots with their corresponding digital versions – for all federal elections.

Both steps have been endorsed by cybersecurity professionals as a way to ensure confidence in the vote count. Homeland Security Secretary Kirstjen NielsenKirstjen Michele NielsenHouston-area Mexican restaurant responds to backlash for serving Sessions, slams family separations Jeff Sessions dines at Mexican restaurant before speech against uncontrolled immigration Celebrities launch 'Dear Ivanka' Instagram campaign MORE has also recommended that states transition to voting systems that generate paper backups that can be audited.

"Congress must act immediately to protect our democracy from cyberattacks. Any failure to secure our elections amounts to disenfranchising American voters," Sen. Ron WydenRonald (Ron) Lee WydenTreasury releases proposed rules on major part of Trump tax law Rubio slams Google over plans to unveil censored Chinese search engine Hillicon Valley: GOP leader wants Twitter CEO to testify on bias claims | Sinclair beefs up lobbying during merger fight | Facebook users experience brief outage | South Korea eyes new taxes on tech MORE (D-Ore.), the lead sponsor of the bill, said in a statement.

"For Americans to have confidence that their votes count, and that election results are free and fair, there absolutely have to be paper ballots and mandatory audits for each and every federal election."

 

MEANWHILE ... A bipartisan group of senators is currently trying to attach election security legislation to a must-pass defense policy bill moving through the upper chamber. Sen. Amy KlobucharAmy Jean KlobucharHillicon Valley: FBI fires Strzok after anti-Trump tweets | Trump signs defense bill with cyber war policy | Google under scrutiny over location data | Sinclair's troubles may just be beginning | Tech to ease health data access | Netflix CFO to step down House Intel lawmakers introduce bipartisan election security bill Election Countdown: Takeaways from too-close-to-call Ohio special election | Trump endorsements cement power but come with risks | GOP leader's race now rated as 'toss-up' | Record numbers of women nominated | Latino candidates get prominent role in 2020 MORE (D-Minn.), one of the sponsors of the Secure Elections Act, stumped for the bill during a Senate Judiciary Committee hearing Tuesday morning.

"I just don't know how we can pass an NDAA bill for the defense of our nation and not include something like this," Klobuchar said. Lankford, the lead Republican sponsor, told reporters Tuesday that they would be "fighting all the way to the end" to get the provision into the defense policy legislation. It is still unclear what amendments will be brought to the floor for a vote.

 

SEATTLE REVERSES COURSE ON TAX AFTER AMAZON BACKLASH: Just weeks after passing a new tax on big businesses, Seattle political leaders signaled late Monday they would reverse course and repeal it.

Mayor Jenny Durkan and city council President Bruce Harrell said in statements that they would end the tax, initially meant to combat rising homelessness in a city where housing prices have soared.

"We heard you," Durkan and seven of the nine city council members said in a statement. "This week, the City Council is moving forward with the consideration of legislation to repeal the current tax on large businesses to address the homelessness crisis."

Business groups, led by the city's largest employers like Amazon and Starbucks, had raised $200,000 in just a few weeks to gather signatures for a referendum challenging the new tax. They had planned to submit those signatures on Tuesday in an effort to place the referendum on the November ballot.

"The announcement from Mayor Durkan and the City Council is the breath of fresh air Seattle needs," said Marilyn Strickland, who heads the Seattle Metro Chamber of Commerce. "Repealing the tax on jobs gives our region the chance to address homelessness in a productive, focused and unified way."

The details: The tax would have fallen on businesses that generated more than $20 million in revenue. The 585 businesses in the city that qualified would have faced a $275-per-employee tax, money that would have gone to pay for affordable housing and programs aimed at curbing homelessness.

A study commissioned by the Chamber of Commerce, however, found the tax would have cost Seattle about 14,300 jobs and $3.5 billion in economic output. The council expected the head tax to raise $47 million in revenue.

Several big businesses, led by Amazon, which employs 45,000 workers in Seattle, objected to the tax. Amazon put a hold on projects that would have added another 7,000 new jobs in the city, and began exploring options to sublease thousands of square feet of downtown office space.

More on the tax fight here..

 

TRUMP, SENATORS HEADED FOR CLASH ON CYBER POLICY: Senators are barreling toward a clash with the Trump administration over how to deter and respond to cyberattacks.

The Senate late Monday took up annual defense policy legislation this week that would set a national policy for cybersecurity and cyber warfare, an effort the Trump administration has fought in the past, arguing it would infringe on the president's authorities.

The Senate Armed Services Committee's decision to include the provision in its version of the National Defense Authorization Act (NDAA) reflects frustration that has built up over the years as a result of what lawmakers see as a lack of urgency in the executive branch to set a comprehensive cyber strategy.

"If we don't develop a cyber policy and a doctrine, these attacks are just simply going to continue and at one point, one of them is going to be catastrophic and people are going to say, 'why didn't you do anything?' " Sen. Angus KingAngus Stanley KingThe Hill's 12:30 Report Sen. King ‘reasonably confident’ Russia is behind fake Facebook accounts A single courageous senator can derail the Trump administration MORE (I-Maine).

We've got more on the fight ahead.

 

SPEAKING OF THE DEFENSE BILL ... Last night, senators announced they had struck a deal to insert legislation keeping in place penalties against Chinese telecommunications giant ZTE into the must-pass defense policy bill.

 

AN UPDATE FROM DOJ'S CYBER TASK FORCE: The Department of Justice is likely to issue a public report next month on foreign efforts to interfere in U.S. elections and how to combat them, a top official told lawmakers on Tuesday.

The report would represent the first public product of the department's effort to study foreign government efforts to meddle in elections, and would come nearly five months after Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsHouston restaurant shuts down social media after Sessions photo backlash ACLU’s lawsuit may force Trump to stop granting asylum applications US judge rejects Russian company’s bid to dismiss Mueller charges MORE set up a task force to assess the threat landscape.

Adam Hickey, the deputy assistant attorney general for the Justice Department's national security division, told senators Tuesday that the task force would submit a report on election interference efforts to Sessions at the end of June. After that, he said he anticipates that the department would issue a public version of the document in mid-July.

"I expect that report will provide additional insight into how the department intends to apply longstanding principles and policies in the sensitive context of foreign influence operations," Hickey told the Senate Judiciary Committee.

Hickey provided few further details on what either report would contain.

A little background: Sessions convened a cyber-digital task force in February, as the administration faced criticism from Democrats to do more to address future foreign interference following Russian efforts to meddle in the 2016 vote.

We've got the details here.

 

MORE TESLA LAYOFFS: Tesla is planning to lay off approximately 4,100 of its 46,000 employees to cut costs.

In an email first reported by CNBC, Tesla CEO Elon Musk said the company has not "made an annual profit in the almost 15 years since" it was founded.

"As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately 9% of our colleagues across the company," Musk wrote. 

Don't forget: This follows another large set of layoffs for the company in 2017.

 

FCC CYBERATTACK CONTROVERSY: A pair of Democratic senators are demanding answers from the Federal Communications Commission (FCC) on a 2017 cyberattack following a media report raising questions about the agency's official story.

Sens. Brian SchatzBrian Emanuel SchatzPentagon’s No. 2 official: Trump’s ‘Space Force’ could cost 'billions' Senate Dem rips 'Space Force:' No Republican is willing to tell Trump it's a 'dumb idea' EPA pushes back on asbestos criticisms MORE (D-Hawaii) and Ron Wyden (D-Ore.) sent FCC Chairman Ajit Pai a list of questions about an incident last year during which the agency's comment-filing website was taken offline after the late-night comedian John Oliver urged his audience to flood it with pro-net neutrality comments.

At first, it appeared that a mass filing of submissions caused the Electronic Comment Filing System (ECFS) to crash, but the FCC later said the site was taken down by a cyberattack.

Why the new scrutiny? Last week, Gizmodo released a report questioning the official story of a cyberattack in 2017 as well as a claim that the ECFS had suffered an earlier one in 2014 after another Oliver segment. 

 

ACROSS THE POND: Britain's data watchdog on Tuesday fined Yahoo roughly $334,000 for its handling of a massive email cyberattack in 2014 that exposed the personal data of millions of users worldwide.

The Information Commissioner's Office (ICO) focused its investigation on approximately 515,121 email accounts of United Kingdom (U.K.) customers, which Yahoo's London-based U.K. Services oversaw.  The ICO in a blog post said Yahoo failed repeatedly to protect the personal data of its U.K.-based customers.

Yahoo failed to "take appropriate technical and organizational measures" to protect clients' data, did not comply with data protection standards at the time and did not provide appropriate monitoring services for Yahoo employees with access to customer data, it added. The problems persisted "for a long period of time" without the company discovering or addressing them, the watchdog found.

"People expect that organisations will keep their personal data safe from malicious intruders who seek to exploit it," ICO Deputy Commissioner of Operations James Dipple-Johnstone said in a statement. "The failings our investigation identified are not what we expect from a company that had ample opportunity to implement appropriate measures, and potentially stop UK citizens' data being compromised."

Rough year for Yahoo: Earlier this year, a U.S. watchdog similarly fined Yahoo for its handling of the data breach -- although it was a far more pricey penalty. The U.S. Securities and Exchange Commission (SEC) in April issued a $35 million penalty after Yahoo failed to properly notify customers and investors that hackers had compromised hundreds of millions of user accounts.

Details here.

 

A LIGHTER TWITTER CLICK: The Golden State Warriors Championship hangover gets awkward.

 

LONG(ISH) READ OF THE DAY: Wired gives an inside look at the divisive dynamics involving the tech industry at play in San Francisco's mayoral election.

The general American public's frustration with tech has been largely limited to issues of election meddling and data privacy, but in San Francisco residents outside the tech community are fed up with what they see as a dwindling middle class and extreme rent hikes. And tech's critics see the upcoming election as a way to address that.

 

AN OP-ED TO CHEW ONThe lifesaving difference between connected cars vs. self-driving cars.

 

ON TAP FOR TOMORROW:

The Senate Homeland Security and Governmental Affairs Committee will consider the Cyber SAFETY Act of 2018 at a business meeting on Wednesday.

 

NOTABLE LINKS FROM AROUND THE WEB:

DHS officials visit Virginia on primary to highlight election security efforts. (StateScoop)

A researcher discovered a 15-year-old security flaw in Macs. (The Telegraph)

An argument for why Facebook sees us as a cage full of gerbils. (The Baffler)

Around 5 percent of all Monero currently in circulation has been mined using malware. (Bleeping Computer) ...

Which is probably part of why Apple banned cryptomining apps in its app store. (BGR)

Haunted by a mugshot: how predatory websites exploit the shame of arrest. (The Guardian)

AI could get 100 times more energy-efficient with IBM's new artificial synapses (MIT Technology Review)

Rep. Will Hurd (R-Texas) explains why the government needs to adopt AI. (Fortune)

Facebook gives 500 pages of answers to lawmakers' data privacy questions (The Hill)