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— Numbers mismatch: Enrollment data for the FCC’s broadband affordability program shows that some broadband providers and their sales agents are engaging in fraudulent behavior, according to a warning from its inspector general.
— What’s the truth? Lawmakers want answers from Facebook over whether it made misleading statements about ads that target minors.
— Study up: A federal agency has launched a wide-ranging study of emerging technologies as lawmakers continue to wrestle with legislation to boost federal funding for them.
IT’S TUESDAY, NOV. 23. WELCOME TO MORNING TECH! I’m your host, Benjamin Din. A huge congratulations to my sister, who got engaged last week! (Who needs an announcement in the Times, when you can get one in MT?)
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FCC FIRES A WARNING SHOT — Some broadband providers are falsely claiming their customers have children who attend high-poverty schools in order to qualify them for an FCC broadband affordability subsidy, the agency’s Office of Inspector General warned in a Monday memo.
It’s not the first time that the Emergency Broadband Benefit program has been targeted for fraud, but the timing could be significant, as the FCC prepares to transition the program from a pandemic relief subsidy to a permanent one under the new infrastructure law. That package slated $14 billion for a successor version of the pandemic subsidy, rebranded as the Affordable Connectivity Program, although the monthly benefit will drop from $50 to $30. The OIG’s report could also offer further ammunition for House Energy and Commerce Republicans, who have complained about the Hill’s lack of FCC oversight during the pandemic.
— How the scheme works: One way to qualify for the subsidy is to have a child who is eligible for free or reduced-price school lunches. But under the USDA National School Lunch Program’s so-called community eligibility provision, those meals are available to any child who attends certain high-poverty schools and school districts, regardless of their family’s income. Under the subsidy program’s eligibility rules, if a household has a child who attends a qualifying school, it can enroll for the FCC’s aid.
An OIG analysis of enrollment data found that school-based eligibility “is commonly abused by providers and their sales agents as an entry point for fraud in the program. … In short, there are many more EBB-enrolled households that claimed they have a dependent child at certain [high-poverty] schools than students who are actually enrolled in those schools.”
— Not adding up: The OIG pointed to a number of schools across the country to illustrate its point. One Florida school had only 200 students, but 1,884 households had claimed eligibility because they said they had a child enrolled in the school. Another Florida school had only 27 students, but 457 households enrolled. “Sales agents who work for just a handful of EBB providers are responsible for the majority of this fraudulent enrollment activity,” the OIG memo said. (These agents are often paid commissions based on their enrollment numbers, it added.) Such providers could face civil or criminal sanctions, it said, although it didn’t name any of the providers.
The memo also outlined other suspicious practices, such as dozens of households putting down a provider’s retail address as their home address. It also found that approximately 1,700 households who qualified through a high-poverty school lived more than 100 miles away from the school they listed. In Alaska, one school had 10 students but 68 households enrolled. Only one of these households put down a home address in Alaska; more than 60 were in New York.
— FCC response: The Wireline Competition Bureau said it would implement additional measures to verify student enrollment in eligible schools, such as by official school documentation, for both future applicants and current subsidy recipients. The agency also said it would refer bad actors to its enforcement bureau for investigation and recoup any funds that were improperly disbursed.
LAWMAKERS DECRY FACEBOOK’S YOUTH-TARGETED ADS — A trio of Democrats is keeping up the pressure on Facebook. In a letter to parent company Meta’s chief executive, Mark Zuckerberg, the group — composed of Sen. Ed Markey (D-Mass.), Rep. Kathy Castor (D-Fla.) and Rep. Lori Trahan (D-Mass.) — called on him to address an “apparent inconsistency between the company’s promises and its practices.”
— Taking a step back: In July, Facebook said it would limit the ways advertisers could target people under 18 on Facebook, Instagram and Facebook Messenger to only age, location and gender. Facebook global head of safety Antigone Davis reiterated that message at a Senate hearing in September. However, a report released last week by advocacy groups Reset Australia, Fairplay and Global Action Plan suggested that although Facebook had made the changes for advertisers, the company itself was still collecting data about young users’ online behavior for its own advertising “delivery system” that could be used to target young users.
“The replacement of targeting ‘selected by advertisers’ with targeting ‘selected by an AI delivery system’ does not represent a demonstrable improvement for children in the way that Facebook characterised in their announcement,” the report said.
Those findings made Facebook’s earlier statements “appear misleading,” the lawmakers wrote. “Targeted advertising to young users is manipulative because young people are more influenced by marketing, less likely to realize a piece of content is an advertisement, and less able to grasp the harms of vast data collection,” they said.
A Meta spokesperson confirmed that the company had received the letter, but pointed MT to a statement the company released in response to the report. “It’s wrong to say that because we show data in our transparency tools it’s automatically used for ads. We don’t use data from our advertisers’ and partners’ websites and apps to personalize ads to people under 18,” spokesperson Joe Osborne said at the time. “The reason this information shows up in our transparency tools is because teens visit sites or apps that use our business tools. We want to provide transparency into the data we receive, even if it’s not used for ads personalization.”
— What’s next? The lawmakers want Facebook to address questions by Dec. 13 surrounding the existence of such a “delivery system” and how it works. They also asked the company if they would “commit to ending targeted advertising to users under 18 on all of its platforms.”
HE’S RUNNING — Rep. Peter Welch (D-Vt.) announced Monday that he is running for the Senate seat being vacated by outgoing Sen. Patrick Leahy (D-Vt.). Welch, who sits on the House Energy and Commerce Committee, is widely regarded as the frontrunner and picked up an endorsement from Sen. Bernie Sanders (I-Vt.), the state’s only other member of Congress. ICYMI, MT laid out last week the tech and telecom credentials Welch would bring to the Senate if elected.
NIST LAUNCHES EMERGING TECH STUDY — The National Institute of Standards and Technology is requesting comments on eight emerging tech areas — including artificial intelligence, the Internet of Things, quantum computing, blockchain, unmanned delivery services and 3D printing — to help shape the growth of technology and foster economic growth and American competitiveness. Here’s what NIST is looking for:
— Federal role: Which agencies have jurisdiction over these tech areas, and which interact closely with industry whenever issues related to them arise? Answers to those questions could help avoid interagency squabbles. (They’re also some of the sticking points between the House and the Senate on their competing visions for how to boost American competitiveness against China, as lawmakers have clashed over how much money should go to specific agencies.)
NIST also hopes to find out how the federal government can foster adoption of emerging technologies and expand economic opportunities in those areas.
— Working together: The agency is seeking ways to boost public-private investment partnerships. It also wants to know which existing pieces of legislation and regulations are working, which aren’t and what more can be done to help the marketplace for emerging tech to grow.
One focus for the agency is strengthening regional innovation centers in the U.S. That effort could benefit from the U.S. Innovation and Competition Act, the Senate-passed competitiveness package, which includes $10 billion for setting up regional tech hubs.
— Looking out: NIST is also keeping a close eye on potential risks, related to either the marketplace for emerging technologies or to their supply chains. It also wants to know the foreign capability and capacity within the areas.
Comments to NIST are due Jan. 31.
— Driving the effort: Last year, Congress passed the American COMPETE Act, led by Senate Commerce members Deb Fischer (R-Neb.) and Kyrsten Sinema (D-Ariz.) and House Energy and Commerce members Cathy McMorris Rodgers (R-Wash.) and Bobby Rush (D-Ill.). The bill called on the Commerce Department and the FTC to study these emerging tech areas.
WHAT TO KNOW ABOUT BIDEN’S SEMICONDUCTOR STRATEGY — The misalignment between supply and demand is expected to last well into next year. POLITICO’s Steven Overly, Annette Choi and Ming Li examine what the administration is doing to address the shortages in a Pro Analysis.
Pro Analysis is here to help you get up-to-speed quickly on emerging issues, understand the power dynamics of who’s involved and how the process may unfold. As a Premium subscriber, you receive Pro Analyses sent directly to your inbox. You can also find them on the Premium Analysis page.
Perry Apelbaum is joining the DOJ antitrust division as senior counsel, following 30 years of service with the House Judiciary Committee, where he was most recently chief counsel and staff director. “I am deeply grateful for having had the benefit of his counsel these many years, and the Committee’s loss is unquestionably the Biden Administration’s gain,” House Judiciary Chair Jerry Nadler (D-N.Y.) said in a statement. Amy Rutkin will continue to lead the committee as chief of staff and staff director, while Aaron Hiller has been appointed chief counsel and deputy staff director. John Doty has been promoted to senior adviser and deputy staff director.
NTCA — The Rural Broadband Association announced board officers for next year: H. Keith Oliver will be chair, Barry Adair will be vice chair and Mike Grisham will be secretary/treasurer. Other representatives elected to the board: Ben Foster for commercial and Tonya Mayer for cooperative in the Central Region, as well as Jim Costello for commercial and Ross Petrick for cooperative in the North Central Region.
The FCC announced the agenda for its December open meeting. Topics include emergency alerts, satellite broadband and the bidding process for the agency’s E-Rate connectivity program for schools and libraries.
Bright lights: “FTC Privacy Probe of Amazon Ring Puts Khan’s Agenda in the Spotlight,” via The Information.
Q&A: Diane Rinaldo, the executive director of the Open RAN Policy Coalition, offered her thoughts on what’s next for open RAN technology, as well as her views on Washington’s other tech and telecom battles. More from John.
Can you hear me now? “Inside the rise and fall of Clubhouse, a pandemic poster child of VC-backed hype now hobbled by ‘drama rooms,’ unhappy creators, dwindling users, and dubious advertisers,” Insider reports.
Welcome to the family: “Bezos and Obama’s Surprise $100 Million Marriage,” via Puck.
Survey says: “Internal Facebook Survey Shows Staff Losing Confidence in Leadership,” Insider reports.
Hearing from labor: The Strategic Organizing Center, a coalition of labor unions, called on the FTC to block the Amazon-MGM merger, providing evidence it said showed Amazon could “substantially lessen competition in the streaming video market and complimentary markets.”
Making progress: “U.S. to drop planned tariffs on Turkey in digital tax deal,” POLITICO’s Gavin Bade reports.
SEE YOU TOMORROW!