Hillicon Valley: DOJ sues California over state net neutrality law | Elon Musk to step down as Tesla chair after SEC settlement | Instagram gets new chief | Congress falls flat on election security

Hillicon Valley: DOJ sues California over state net neutrality law | Elon Musk to step down as Tesla chair after SEC settlement | Instagram gets new chief | Congress falls flat on election security
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CALIFORNIA PASSES TOUGH NET NEUTRALITY LAW, DOJ SAYS NOT SO FAST: The Department of Justice on Sunday night sued California over its new net neutrality law, a little over an hour after Gov. Jerry Brown (D) signed the bill.

The lawsuit claims the California bill is "unlawful and anti-consumer" because it goes against the federal government's "deregulatory approach to the Internet."

The bill signed by Brown is the country's strictest net neutrality bill.

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The new California legislation bars internet service providers from slowing down website speeds, blocking access to certain websites and charging extra for large websites such as Netflix and Facebook.

Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsThe Memo: Mueller's depictions will fuel Trump angst Collins: Mueller report includes 'an unflattering portrayal' of Trump Trump frustrated with aides who talked to Mueller MORE in a statement on Sunday said the federal government has exclusive authority over net neutrality policies.

"The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order," Sessions said.

State legislators began crafting the legislation last year when the Trump administration rolled back net neutrality rules.

Read more here.

 

PAI APPLAUDS LAWSUIT: Ajit Pai, the chairman of the Federal Communications Commission (FCC), is cheering the Justice Department's decision to sue California for passing its own net neutrality law after his agency repealed the Obama-era federal regulations.

The Trump administration filed its lawsuit shortly after the bill was signed into law on Sunday, arguing that the state was attempting to subvert a federal "deregulatory approach" to the internet.

"I'm pleased the Department of Justice has filed this suit," Pai said in a statement. "The Internet is inherently an interstate information service. As such, only the federal government can set policy in this area."

Read more here.

 

SEC FORCES MUSK TO STEP DOWN AS TESLA CHAIR: Tesla and SpaceX CEO Elon Musk has reportedly reached a settlement with the Securities and Exchange Commission (SEC) after his abandoned attempt to take Tesla private.

As a part of the settlement, which is still subject to court approval, Musk will have to step down from his role as chairman at Tesla for at least three years and pay a civil penalty of $20 million. He will remain as CEO of Tesla during that time period, but Tesla must also appoint two independent directors with no ties to the company to its board.

"As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla's board will adopt important reforms --including an obligation to oversee Musk's communications with investors--and both will pay financial penalties," said Steven Peikin, who co-directs the SEC's enforcement division.

Tesla will also pay a separate fine of $20 million, according to the press release. The violations stem from Musk's tweet last month stating that he planned to take the company private at $420 per share, claiming that he had secured funding for such a deal.

Read more here.

 

WALL STREET CHEERS: Tesla's shares jumped 17 percent on Monday on news of the settlement. Friday's shares were down 15 percent after Thursday afternoon's announcement from the SEC that it was suing Musk, seeking his permanent removal from Tesla and a lifetime ban on serving as an executive at a publicly traded company.

The SEC's move apparently prompted Musk to come to the table with regulators. Read more here.

 

CONGRESS FALLS FLAT ON ELECTION SECURITY: Congress has failed to pass any legislation to secure U.S. than systems in the two years since Russia interfered in the 2016 election, a troubling setback with the midterms less than six weeks away.

Lawmakers have repeatedly demanded agencies step up their efforts to prevent election meddling but in the end struggled to act themselves, raising questions about whether the U.S. has done enough to protect future elections.

A key GOP senator predicted to The Hill last week that a bipartisan election security bill, seen as Congress's best chance of passing legislation on the issue, wouldn't pass before the midterms. And on Friday, House lawmakers left town for the campaign trail, ending any chance of clearing the legislation ahead of November.

Lawmakers have openly expressed frustration they were not able to act before the 2018 elections.

Read more here.

 

WORRIES ABOUT 5G'S EFFECT ON CITIES: The rollout of 5G high-speed wireless networks are expected to usher in an era of super-fast internet speeds, but many experts worry that the new technology will only leave poor urban communities further behind.

The industry and lawmakers have focused attention on ensuring that rural and urban areas both have access to 5G, but many advocates warn that the digital divide within big cities could also worsen.

Current policies and the way that 5G technology is installed mean that the latest update to wireless broadband will very likely pass over the poorest communities in cities in favor of wealthier locales willing to pay more, telecommunications experts warn.

"It's going to be first deployed areas in highest demand and highest demand for capacity," said Doug Brake, a telecom policy analyst at the Information Technology and Innovation Foundation. "Higher demand tends to be in wealthier areas."

There are already issues over access, but 5G could make the disparities worse: Poorer parts of cities have already experienced various forms of digital redlining. But even with these barriers, many poor urban areas didn't miss the 4G boom because it is distributed via large cell towers that beam internet out over miles. 

But that will change with 5G. This time, tiny small cells that beam internet to under a half-mile radius mean that poor areas can get passed over.

Experts think that this will happen because businesses will be focused on rolling out 5G to wealthier areas that will pay for the newest faster internet first.

Not just cities: Experts we spoke with for a separate story detailed how rural America could get left behind (again) on 5G too.

Read more here and here.

 

GOOGLE UPDATES EU ON SHOPPING CASE: Google has provided a second report on how it is dealing with competitors to its shopping price comparison service, according to the European Union.

"We have received the second Google shopping report," the European Commission, the executive arm of the EU, told Reuters on Monday. Officials did not provide further details.

The Google report comes after Commission fined Google roughly $2.8 billion in June of 2017 for taking advantage of its dominant market position to benefit its comparison shopping tool at the expense of its rivals. As part of the deal, the Commission required that Google provide regular reports on its updates to its shopping tool.

Read more here.

 

SOME BAD NEWS FOR FACEBOOK: The president of Germany's antitrust authority on Monday said that he's "very optimistic" that his group will pursue an enforcement action on Facebook this year for allegedly abusing its dominant market position.

"We are currently evaluating Facebook's opinion on our preliminary assessment and I'm very optimistic that we are going to take further steps, even this year, whatever this would mean," Federal Cartel Office President Andreas Mundt said during a conference on competition law in Berlin, according to Reuters.

Read more here.

 

A LIGHTER TWITTER CLICK: RISE AND GRIND.

 

NOTABLE LINKS FROM AROUND THE WEB:

Billionaire's fight to close path to a California beach comes to a dead end. (The New York Times)

Why is it OK for online daters to block whole ethnic groups? (The Guardian)

This Japanese robot contractor can install drywall. (The Verge)

NASA stands by SpaceX, even as Elon Musk's troubles grow. (The Washington Post)

Engineers are fixing Silicon Valley. (Pando)