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Facebook Continues to Face Intense Congressional Scrutiny at House Financial Service Committee Hearing

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WASHINGTON, July 17, 2019 – Facebook’s digital currency platform Calibra continues to be the focus of intense congressional scrutiny. On Wednesday, it was from the House Committee on Financial Services.

Chairman Patrick McHenry, R-N.C., said the committee wanted to make sure that Libra isn’t just a “ploy” to send Facebook’s Twitter mentions “through the roof.”

David Marcus, head of Calibra at Facebook, said that the social network giant’s association with Libra aims to establish the “rules of the road” for the blockchain industry. Facebook will not interfere with the monetary policies of central banks, he said.

Calibra will not offer banking services, but wants Libra to become a globally recognized digital currency. Facebook will “take the time to get this right,” he said.

Marcus received pushback from both sides of the aisle regarding Libra’s specific role in the financial service industry and its possible exploitation for nefarious use.

“We need to get Mark Zuckerberg here,” said Rep. Brad Sherman, D-Calif. “This is an attempt to turn power from America to Facebook and its allies.”

Committee Chairwoman Maxine Waters, D-Calif., asked why Facebook should be trusted with spearheading the project. The company has allowed “malicious Russian state actors” to purchase ads in a campaign to influence the 2016 election, she said.

The creation of currency is a core government function and should be left to accountable, democratically elected members, said Rep. Carolyn Maloney, D-N.Y. Congress should “seriously consider” stopping the Calibra project from moving forward, she said, if Facebook does not at least launch a small pilot program to test the system.

Libra is a “complete overhaul” of the circulation system of America’s global economy, said Rep. Jim Himes, D-Conn.

Rep. Ann Wagner, R-Mo., said that Libra could have “significant geopolitical implications” regarding the enforcement of economic sanctions.

60 percent of the world’s population does not live in a country with stable currency, said Rep. Steve Stivers, R-Ohio. We want to encourage cryptocurrency innovation, but we need to address the application of cross-border payments, he said.

People will be able to connect bank cards with their Calibra wallets when making international payments, said Marcus, but he said he expects there to be limits on where money can be sent.

“I doubt people will be paying their rent with Libra anytime soon,” he said.

America needs to remain a leader in global financial services and innovation, said Rep. Gregory Meeks, D-N.Y. He expressed uncertainty of how Facebook should be regulated if it is acting similarly to a bank.

“Libra looks exactly like an exchange-traded fund, so why isn’t it?” said Rep. Bill Foster, D-Ill.

Neither Facebook’s white paper nor subsequent online post provided any concrete plans on how to provide safety for America’s financial system, said Rep. David Scott, D-Ga.

Rep. French Hill, R-Ark., asked Marcus whether users will be charged a fee in the Calibra system. Marcus said that Calibra is hoping to offer little to no price at all between consumers and a small fee for merchants. He also said that people will not be able to open accounts without a government issued identity document or a more traditional “know your customer” assessment.

Facebook will have a number of different payment types on the platform, said Marcus, including debit and credit cards.

Rep. Blaine Luetkemeyer, R-Mo., said he was concerned about who will share the profits of Libra’s reserve.

The value of the reserve will be proportional to the number of Libra coins in circulation, said Marcus. Returns will be used to fund operation costs and to reimburse investors in the Calibra System.

The main point that Marcus addressed was that the current banking is “not working” for most people. Going forward, Facebook needs to be “thoughtful” about Calibra’s project, as the company should not be in the business of deciding what people can do with their money, he said.

(Photo of David Marcus at Facebook F8 developer conference in 2015 by Maurizio Pesce used with permission.)

Cybersecurity

Private Sector Falling Behind on Information Sharing During Cyberattacks, Says Comcast Rep

Comcast’s Noopur Davis says cyber attackers share information better than the private sector.

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Noopur Davis, Chief Product and Information Officer at Comcast Cable.

ASPEN, Colorado, August 23 — In the wake of an influx of ransomware attacks on critical infrastructure and cyberattacks on private carriers, entities across the technology industry are revaluating their strategies and how they share information to prevent such acts.

T-Mobile announced on August 15 that as many as 50 million consumers had their private data compromised during a data breach. Days later, on August 17, as part of Technology Policy Institute’s 2021 Aspen Forum, Noopur Davis, Chief Product and Information Officer at Comcast Cable, sat down for a fireside chat to discuss what the industry was doing to address this event and events like it.

Join in Broadband Breakfast Live Online’s Discussion on “Cybersecurity: Reviewing the Biden Administration’s Executive Order,” on Wednesday, August 25, 2021, at 12 Noon ET.

When Davis was asked how she felt about the current state of cybersecurity, she said it was okay, but that the telecom community at large would have to do more.

She referenced the mean time of comfort—that is, the average duration between the time that a service becomes connected to the internet and when it is targeted by bad actors. While in the early days of the internet cybersecurity experts could expect to have significant mean times of comfort, she stated that this is no longer the case.

“The second you connect [to the internet] you are attacked,” she said.

As soon as a successful breach is recognized, Davis explained that the target companies begin to revaluate their “TTP,” or tactics, techniques, and procedures.

Information sharing is crucial

Though one company may find a remedy to their breach, other companies may remain vulnerable. To combat this, Davis said that it is critical for companies to share information quickly with their counterparts, but she indicated that this is a race that the private sector is currently losing.

“[Attackers] share information better than [the private industry does].”

She went further, revealing that there is now a sophisticated market for malware as a service, where various platforms publish reviews for their products and services and even offer tech support to those struggling to get the most out of their purchases.

Growing market for hacking tools

She pointed to the Colonial Pipeline attack as an example where hackers did not even create the malware themselves—they just purchased it from a provider online. She explained that this marketplace has significantly lowered the barriers of entry and deskilled the activity for would be attackers, and that theoretically anyone could engage in such nefarious acts today.

Though Davis was in favor of collaboration between companies to address these attacks, she made it clear that this would not mean that responses and capabilities would become standardized, and that every company would maintain their own unique strategies to ensure that their services and data remain uncompromised.

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Cybersecurity

DOJ Official Supports Mandatory Breach Reporting

Proposed legislation would make it mandatory for companies to report cyberattacks.

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Richard Downing from the Senate judiciary committee last week

August 2, 2021—An official from the Department of Justice urged members of the Senate judiciary committee last week to proceed with legislation requiring companies to report ransomware attacks to federal agencies.

Richard Downing, deputy assistant attorney general of the criminal division within the department, told the committee studying cybersecurity during a hearing that such mandatory breach reporting legislation would aid in its defense against cyberattacks.

There is currently no federal law requiring such disclosures, but bipartisan Senate legislation co-sponsored by Senator Angus King, I-Maine, would change that. Titled Cyber Incident Notification Act of 2021, the bill was introduced last month.

This legislation would require all contractors, federal agencies, companies, and organizations critical to U.S national security to report all breaches of data to the Department of Homeland Securities’ Cybersecurity and Infrastructure Security Agency (CISA) within 24 hours.

The bill and discussions about it come in light of high-profile cyberattacks that have targeted software company SolarWinds and oil transport company Colonial Pipeline in the last several months. And the discussion isn’t expected to slowdown as more critical infrastructure is hooked up to the internet.

The Last week, the House energy committee approved a series of cyber bills that would improve telecom network security.  

Cyber threats becoming more bold

Downing noted that threat actors are becoming bolder and more sophisticated, and that the government must hasten efforts to thwart attacks and stay ahead of such malicious acts.

“Many actors now research their victims—identifying the victim’s net worth, the cost of a business interruption, and even the value of their cyber insurance policy—to extort as much money as possible,” Downing said during the hearing.

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Cybersecurity

House Energy Committee Approves Series of Cyber Bills to Improve Telecom Security

The committee approved five bills dealing with protecting networks and educating the public on cyberattacks.

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Frank Pallone Jr., D-New Jersey

July 26, 2021—The House Energy and Commerce Committee on Wednesday voted to advance a series of cybersecurity bills. 

“These bipartisan bills will educate the public, smaller providers, and small businesses on how best to protect their telecommunications networks and supply chains,” said committee Chairman Frank Pallone Jr., D-New Jersey.

The bills approved in the session includes the Understanding Cybersecurity of Mobile Networks Act, or H.R. 2685, which was introduced by Reps. Anna Eshoo, D-California, and Adam Kinzinger, R-Illinois. That bill would require the National Telecommunications and Information Administration (NTIA) to conduct examination reports on the vulnerability of networks and mobile service devices to cyberattacks.

Other legislation passed in the committee Wednesday deals with the cooperation of enterprises and educational institutions working with federal agencies to promote secure networks and supply chains. 

The Information and Communication Technology Strategy Act, or H.R. 4028, was introduced reps. Billy Long, R-Missouri, Abigail Spanberger, D-Virginia, Buddy Carter, R-Georgia, and Jerry McNerney, D-California, and would authorize the Secretary of Commerce to submit a report analyzing the economic competitiveness of vendors within the information and communication technology supply chain.

“I think this bill is critically important to ensure that we are thinking about our supply chain security and do what we can to aid a robust marketplace for com equipment,” said McNerney.  

To assure that small telecommunications operators would receive assistance from the federal government, H.R. 4032, the Open RAN Outreach Act, introduced by reps. Colin Allred, D-Texas, Tom O’Halleran, D-Arizona, Brett Guthrie, R-Kentucky, and Richard Hudson, R-North Carolina, directs the NTIA to provide outreach to providers with regard to open radio access networks.

With the future moving toward 6G networks, H.R. 4045 – the Future Uses of Technology Upholding Reliable and Enhanced Networks Act or the FUTURE Networks Act, and introduced by reps. Mike Doyle, D-Pennsylvania, Bill Johnson, R-Ohio, and Lucy McBath, D-Georgia – serves to authorize the FCC to create a task force on this matter.

Members of the task force will comprise representatives from the telecommunications industry, public interest organizations, academic institutions, and federal, state and local governments. 

The committee also moved forward the American Cybersecurity Literacy Act, or H.R. 4055, to raise public awareness of cyberattacks. This bill requires the NTIA develop a cyber literacy campaign to educate the public about cybersecurity risks and prevention measures. 

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