The AI working group led by Sen. Chuck Schumer, D-N.Y., won’t rush to introduce legislation, members of the group told us after their second Senate AI briefing (see 2307110049).
Exports to China
Requiring a warrant for backdoor searches is one way to curb surveillance abuse under the Foreign Intelligence Surveillance Act, House Judiciary Committee members were told Friday during a hearing on FISA reauthorization (see 2306130053).
With earnings season getting underway and the major wireless carriers set to report results starting with Verizon July 25, AT&T was down 4.10% Friday to $14.50/share after J.P. Morgan analyst Philip Cusick downgraded the company. "Based on recent commentary from management lowering estimates for wireless (in May and again in June) and broadband (in June), we believe AT&T is facing marginally more pressure in Mobility (from Verizon, T-Mobile, and cable) and Consumer Wireline (from cable, [fixed wireless access]) as well as ongoing pressures in Business Wireline," Cusick told investors. He predicted AT&T will grow its postpaid subscriber base by 2.5% this year, compared with 4.7% in 2021 and 3.5% in 2022. Cusick lowered his rating on AT&T to neutral from overweight and cut his per-share price target to $17 from $22. AT&T Chief Financial Officer Pascal Desroches warned last month the carrier expects net postpaid phone adds in the 300,000 range this quarter, compared with 424,000 in Q1 (see 2306200026). Meanwhile, Finland's Nokia cut its annual outlook Friday, and Sweden’s Ericsson reported lower quarterly profits due to a slowdown in consumer spending. Nokia now projects $26 billion-$27.6 billion in sales this year, down from $27.6 billion-$29.4 billion. “The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion,” Nokia said: “Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 -- notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years.” Ericsson reported overall sales dropped 9% year-over-year as it lost $67.2 million, primarily due to restructuring charges. The company cited a “sharp decline in sales in North America … partly offset by strong sales" in India, which is now deploying 5G. “As we've said before, 2023 is a choppy year and Q2 developed much in line with our expectations and what we have said to the market,” CEO Borje Ekholm told analysts. India “continued its strong development and network rollout, and by delivering a record build-out, we now have the leading market share” there, he said: “As expected, we saw a softening in other markets, primarily front-running 5G markets and that includes, of course, North America.” Ekholm noted world data traffic continues to grow. “In addition, we see that 3/4ths of all base station sites outside of China are not yet updated with 5G mid-band, so this, in combination with the migration to 5G stand-alone, will basically continue to drive the need for investments in 5G networks,” he said. Ericsson expects a “gradual recovery” in late 2023, with improvements next year.
A federal civilian agency alerted the Cybersecurity and Infrastructure Security Agency about a recent Chinese cyberattack against Microsoft email accounts, federal officials told reporters Wednesday in a conference call. Microsoft reported Tuesday that Chinese attackers gained access to some 25 organizations including government agencies and individual consumer accounts. The attack started May 15, and Microsoft was alerted to the activity June 16. The hackers gained access “by using forged authentication tokens to access user email using an acquired Microsoft account (MSA) consumer signing key,” Microsoft said. Those tokens have since been blocked. CISA and the FBI issued a joint advisory on the attack Wednesday. The federal agency, which officials declined to identify, noticed unexpected activity on its Microsoft 365 network, a senior CISA official told reporters. The attackers accessed a “limited amount” of Microsoft Outlook data, the official said. The intrusion shouldn’t be compared to the SolarWinds supply chain attack, an FBI official said, calling it a much “narrower” attack. Officials declined to state an exact number of victims in the Microsoft attack. The Senate Intelligence Community is “closely monitoring” the breach, Chairman Mark Warner, D-Va., said Wednesday. “It’s clear [China] is steadily improving its cyber collection capabilities directed against the U.S. and our allies,” said Warner. “Close coordination between the U.S. government and the private sector will be critical to countering this threat.”
China has been blocking thousands of foreign websites and internet technologies since 1996, Strand Consult said in a report released Thursday. The restrictions imposed by China “continue to evolve and are increasingly sophisticated,” Strand said: “They encompass basic blocking and filtering tactics and are also systemic within the PRC’s [People’s Republic of China’s] physical internet architecture and access level, comprising exchange points, hardware, and software. Moreover, restrictions are delivered at many levels of government and enterprise, whether top level regulators like the Cyberspace Administration and the State Information Council or the censorship practices of PRC companies themselves.” Strand said the system is “guided by hundreds of thousands of ‘internet commentators’ who are hired to model preferred discussion and behaviors online, virtual internet police avatars, and stiff punishments for transgressions.”
China-based Dahua disputed Motorola Solutions’ objection to giving Dahua’s compliance plan with FCC rules confidential treatment (see 2306260041). “Rather than maintaining ‘silence’ on the key issue of how the Compliance Plan implicates confidential information as [Motorola] argues, Dahua USA has provided substantive justification for why confidential treatment is consistent with the Commission’s rules,” said a filing posted Monday in docket 21-232: “Dahua USA has explained that the Compliance Plan contains information regarding its internal organization, operations and strategy, and its agreements with distributor and dealer partners.” Dahua, which is on the FCC’s covered list of companies deemed to pose a security risk, filed the plan with the FCC in April to show how its gear won’t affect public safety or other secure communications.
NTIA expects to issue a report on responsible AI policies “later this year,” Associate Administrator-Policy Analysis and Development Russ Hanser said Thursday.
Mobile World Congress Shanghai drew 37,000 attendees, with nearly 3,000 from outside mainland China, GSMA said Friday. Attendees represented more than 8,000 companies and hailed from more than 115 countries, the group said. The conference ended Friday.
CTIA raised concerns Wednesday as China announced it was allocating the top half of the 6 GHz band to 5G. In the U.S., the FCC assigned the entire band to Wi-Fi and other unlicensed use in 2020 (see 2004230059). “BREAKING NEWS: China announces plans to free up far more #5G spectrum than the United States,” CTIA tweeted: “Congress must restore @FCC auction authority and identify new spectrum to secure our leadership of the industries and innovations of the future.” The 6 GHz band “is the largest remaining single block of mid-band spectrum that can be assigned to licensed mobile in the foreseeable future,” Luciana Camargos, GSMA head-spectrum, blogged Wednesday, noting the latest from China. “It can help 5G to play a central role in sustainable social and industrial development,” Camargos said: “As enhanced broadband, IoT, data, analytics, and insight permeate every aspect of society, mobile networks require a long-term vision of each nation’s future.” The development is “a big step” toward a “commercial 6 GHz 5G ecosystem,” she said. Comargos noted China is deploying the world’s largest 5G network, with more than 2.7 million base stations by the end of April, “on track to become the first country to reach 1 billion 5G connections in 2025.” Future use of the band is likely to be an issue at the World Radiocommunication Conference in November (see 2302060052).
China Mobile, China Telecom and China Unicom joined the GSMA's “Open Gateway” initiative designed to provide universal access to operator networks for developers, GSMA said Monday, ahead of this week’s Mobile World Congress Shanghai. The initiative was unveiled in February (see 2302270069) and now is supported by 29 mobile network operators. “China represents the largest 5G market in the world, so having China’s three largest operators committed to this initiative demonstrates its global significance and the strong business case it offers,” said Mats Granryd, GSMA director general.