December 2016

Sallet Champions Gatekeeper Approach to ISPs in Merger Reviews

The Federal Communications Commission's former general counsel Jon Sallet made the case for FCC Chairman Tom Wheeler's targeting of Internet service providers as the primary threat to Internet openness. That came in a speech Dec 16 at the Capitol Future of Broadband Competition Conference in Washington (DC). In what sounded like a farewell address, Sallet—who moved to the Justice Department's antitrust division as deputy assistant attorney general earlier in 2016—delivered a lengthy address on competition and broadband providers summed up in the first subhead in the transcript of his speech: "Telecommunications Network Providers Have Incentives and Abilities To Artificially Shape Competition And Have Long Been Associated With the Exercise of Gatekeeper Power." The speech was about an approach to mergers that presupposes ISPs are going to use that power unless reined in.

Sallet said he wanted to be clear that he wasn't saying that ISPs "are the only players in the Internet ecosystem that can ever be capable of developing or exploiting this power." But that was essentially the only mention of the edge beyond talking about how online video could be discriminated against by ISPs.

CenturyLink Snags Senate Contract

CenturyLink has secured an $11.4 million contract (three years at $3.8 million per year) to provide VoIP service to the state offices of US Senators. The contract covers hardware, software, training and help desks for more than 450 offices. Yes, there are still only 100 senators, but many have multiple state offices. The contract is with the Senate Sergeant at Arms, who handles the telecommunication and tech support for senators' state offices as well as their DC home base. The contract could actually total $26 million if the government picks up four one-year options.

As Trump era nears, is the media ready for the challenge?

[Commentary] With Donald Trump’s Presidency at hand, the news-media landscape is unlike anything we’ve seen before. What can we expect in the months ahead? With the help of some expert observers, here are a few:
1. Unprecedented conflict between the administration and the media.
2. Journalism that follows the money — but may not hit home.
3. The weakening of journalism in the heartland.
4. More pressure than ever on dominant news organizations.

Online Shopping and E-Commerce

Americans are incorporating a wide range of digital tools and platforms into their purchasing decisions and buying habits, according to a Pew Research Center survey of US adults. The survey finds that roughly eight-in-ten Americans are now online shoppers: 79% have made an online purchase of any type, while 51% have bought something using a cellphone and 15% have made purchases by following a link from social media sites. When the Center first asked about online shopping in a June 2000 survey, just 22% of Americans had made a purchase online. In other words, today nearly as many Americans have made purchases directly through social media platforms as had engaged in any type of online purchasing behavior 16 years ago.

But even as a sizeable majority of Americans have joined the world of e-commerce, many still appreciate the benefits of brick-and-mortar stores. Overall, 64% of Americans indicate that, all things being equal, they prefer buying from physical stores to buying online.

The importance of local content for increasing global internet connectivity

[Commentary] Earlier in Dec the 11th Internet Governance Forum (IGF) was held in Zapopan, Jalisco, Mexico. The IGF, a multi-stakeholder forum convened by the United Nations (UN) Secretary General, allows over 2000 delegates from 83 countries to convene and discuss a wide range of internet policy issues including internet governance, cybersecurity, and internet access issues. The theme of IGF 2016 was how the internet could enable inclusive and sustainable growth to help meet the UN’s goals in its 2030 Agenda for Sustainable Development, an effort to “eradicate poverty in all its forms and dimensions.”

From an internet policy perspective, in its efforts to increase internet connectivity and fight poverty, the UN has prioritized finding ways to support the development of local content in developing countries and making sure the “next billion” of unconnected people around the world get connected to the internet. One local content success story that was highlighted at IGF 2016 was that of “An African City,” a Ghanaian internet video series that went viral. This story shows the potential and importance of local content, which can serve as an important incentive for internet adoption in developing countries.

[Shane Tews is also a consultant for Vrge Strategies.]

December 19, 2016 (Electoral College Meets Today)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for MONDAY, DECEMBER 19, 2016

Follow all the Transition news at https://www.benton.org/taxonomy/term/16241


ELECTION 2016
   The Electoral College Meets Monday. Here’s What to Expect. [links to New York Times]
   All This Talk of Voter Fraud? Across U.S., Officials Found Next to None [links to New York Times]
   FBI in agreement with CIA that Russia aimed to help Trump win White House
   Sen Burr: Senate Intel Panel Will Investigate Russia’s Election Interference [links to Morning Consult]
   Donald Trump’s Team Tones Down Skepticism on Russia Hacking Evidence [links to Wall Street Journal]
   Senators Push to Broaden Inquiry on Election Hacking [links to New York Times]
   Rep Langevin calls for special cybersecurity committee that would lead an investigation into Russian hacks [links to nextgov]
   Kushner: We struck deal with Sinclair for straighter coverage
   President Obama Says He Told Putin: ‘Cut It Out’ on Hacking
   Clinton blames Putin’s personal grudge against her for election interference [links to Washington Post]
   President Obama blames the media for, well, everything [links to Benton summary]
   How Russia Wins an Election: You don’t need a security clearance to understand how Vladimir Putin does it. Just open your eyes. [links to Politico]
   Megyn Kelly: ‘Fox was not without sin’ in 2016 campaign coverage [links to Washington Post]
   When Jimmy mussed Donny and the role of television in Donald Trump's win [links to Los Angeles Times]

TRANSITION/WHEEER
   President-elect Trump holds off-the-record session with reporters [links to Hill, The]
   The FCC’s New Playbook - op-ed
   Chairman Wheeler: Rosenworcel Is Long-Term Communications Policy Leader
   Chairman Wheeler says being a lobbyist was easy—being FCC chairman was hard
   Analysis: Tom Wheeler's FCC Legacy - analysis [links to Benton summary]
   Why The Trump Team Should Adopt Bill Clinton's Plan To Reform The FCC - Larry Downes op-ed
   Who said what inside the Trump tech meeting: Immigration, paid maternity leave and becoming the ‘software president’ [links to Benton summary]
   Trump, Silicon Valley's tech titans share more goals than you think - The Hill op-ed [links to Benton summary]
   Trump transition team is raising money to pay for salaries and "experts" to provide policy advice and briefings [links to Broadcasting&Cable]
   Trump Deregulatory Fever Is Gripping the FCC - TVNewsCheck editorial [links to Benton summary]
   Leading Candidate for WH Press Secretary: Trump would 'absolutely not' ban media outlets from White House [links to Hill, The]
   Trump’s Infrastructure Mistake - op-ed

INTERNET/BROADBAND
   The Hole in the Digital Economy
   Introduction: Digital Inclusion Policies and Programs of Local Governments - Journal of Digital Media Literacy op-ed
   Connecting Students at Home - White House press release [links to Benton summary]
   FCC Fails to Extend Enhanced Transparency Waiver
   OMB Approves Open Internet Enhanced Transparency Rules [links to Benton summary]
   Statement of Commissioners Pai and O'Rielly on Protecting Small Businesses - press release [links to Benton summary]
   San Francisco Passes Ordinance to Protect ISP Competition [links to Benton summary]
   Three rural communities in Massachusetts get $1.9 million in state broadband money [links to Republican, The]

WIRELESS/SPECTRUM
   Remarks of Assistant Sec Strickling on the 5G Wireless Future and the Role of the Federal Government - speech [links to Benton summary]
   End in Sight for FCC War on Free? - Medium op-ed [links to Benton summary]
   Report: IoT Device Penetration Reaches 62% of Americans [links to telecompetitor]
   BMW and Nissan vehicles that rely on AT&T’s 2G wireless links for driver assistance services will need upgrades or lose their connections [links to Wall Street Journal]

GOVERNMENT & COMMUNICATIONS
   President Barack Obama: Espionage Is Being 'Turbocharged' By The Internet

SECURITY/PRIVACY
   U.S. Faces Tall Hurdles in Detaining or Deterring Russian Hackers [links to New York Times]
   In separate attack, Russian hacker targeted US election agency [links to Christian Science Monitor]
   How to Make trump’s Phone Safe [links to nextgov]
   FTC Announces Agenda for PrivacyCon 2017 - press release [links to Benton summary]
   A World of Surveillance Doesn’t Always Help to Catch a Thief [links to New York Times]

JOURNALISM
   Covering Politics in a ‘Post-Truth’ America - Politico op-ed [links to Benton summary]
   A Community-Building Dinner in Newark Homes on Ways to Strengthen Local Media - press release [links to Benton summary]
   Newspapers Deliver Across the Ages - research [links to Benton summary]
   Why Margaret Sullivan left the public editor job at the New York Times [links to Vox]

EDUCATION
   Are librarians the key to a Future Ready school? [links to eSchoolNews]

LABOR
   Aggressive sales goals pressure T-Mobile workers to sell unwanted services, labor group alleges [links to Benton summary]

DIVERSITY
   Advancing Equity for Women and Girls of Color [links to White House, The]
   A blueprint for getting more women into information technology [links to Benton summary]

LOBBYING
   Longtime Business Lobbyist Laments Loss of ‘Smoke-Filled Rooms’ in Washington [links to New York Times]

COMPANY NEWS
   Summer Redstone Relinquishing Voting Power on the Board of Viacom [links to Washington Post]
   Look Who’s Back! Microsoft, Rebooted, Emerges as a Tech Leader [links to Wall Street Journal]
   Christopher Mims: five of the seven most valuable companies in the world are tech companies; why was 2016 a difficult year for them? [links to Wall Street Journal]
   Starry Internet raises more money to beam broadband through the air [links to Vox]

STORIES FROM ABROAD
   UK Communications Regulator: More than 1 million UK homes still don't have decent broadband [links to Guardian, The]
   EU Commission ‘exceeded its powers’ in Apple tax case, says Ireland [links to Irish Times]
   France plans internet ombudsman to safeguard free speech [links to Guardian, The]
   BBC and ITV to Offer Streaming Service of British Shows in U.S. [links to New York Times]

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ELECTION 2016

FBI-CIA AGREEMENT ON HACK
[SOURCE: Washington Post, AUTHOR: Adam Entous, Ellen Nakashima]
FBI Director James B. Comey and Director of National Intelligence James R. Clapper Jr. are in agreement with a CIA assessment that Russia intervened in the 2016 election in part to help Donald Trump win the White House, officials disclosed Friday, as President Obama issued a public warning to Moscow that it could face retaliation. New revelations about Comey’s position could put to rest suggestions by some lawmakers that the CIA and the FBI weren’t on the same page on Russian President Vladi¬mir Putin’s intentions. The positions of Comey and Clapper were revealed in a message that CIA Director John Brennan sent to the agency’s workforce.
benton.org/headlines/fbi-agreement-cia-russia-aimed-help-trump-win-white-house | Washington Post
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SINCLAIR-TRUMP DEAL
[SOURCE: Politico, AUTHOR: Josh Dawsey, Hadas Gold]
Donald Trump's campaign struck a deal with Sinclair Broadcast Group during the campaign to try and secure better media coverage, his son-in-law Jared Kushner told business executives. Kushner said the agreement with Sinclair, which owns television stations across the country in many swing states and often packages news for their affiliates to run, gave them more access to Trump and the campaign. In exchange, Sinclair would broadcast their Trump interviews across the country without commentary, Kushner said. Kushner highlighted that Sinclair, in states like Ohio, reaches a much wider audience — around 250,000 listeners — than networks like CNN, which reach somewhere around 30,000. Kushner told the business executives that the campaign was upset with CNN because they considered its on-air panels stacked against Trump. He added that he personally talked with Jeff Zucker about changing the composition of the panels but Zucker refused. He repeatedly said in the panel that CNN wasn't "moving the needle" and wasn't important as it once was. The campaign then decided not to work as closely with CNN, and Trump ramped up his bashing of the cable network. He also told the crowd that Google and Facebook are now more powerful, and that The New York Times and CNN aren't as powerful.
benton.org/headlines/kushner-we-struck-deal-sinclair-straighter-coverage | Politico
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OBAMA SAYS HE TOLD PUTIN: 'CUT IT OUT' ON HACKING
[SOURCE: New York Times, AUTHOR: Michael Sehar, Mark Landler]
President Barack Obama said that he refrained from taking aggressive public action in retaliation for Russian hacking of Democratic Party institutions before the presidential election because he was concerned that such moves might be interpreted as unfair meddling in the campaign. In a news conference before leaving for a two-week vacation in Hawaii, President Obama said that he told President Vladimir V. Putin of Russia in September to “cut it out,” but that the United States government did not retaliate in a public way before the Nov. 8 election. “We did not,” he told reporters. “And the reason we did not was because in this hyperpartisan atmosphere, at a time when my primary concern was making sure that the integrity of the election process was not in any way damaged,” such a move would “immediately be seen through a partisan lens.” President Obama lamented the powerful effect that fake news had on the 2016 presidential election, condemning "domestic propagandists." “If fake news released by foreign government is almost identical to reports that are issued through partisan news venues,” he said, “then it's not surprising that that foreign propaganda will have a greater effect, because it doesn't seem that farfetched.”
benton.org/headlines/president-obama-says-he-told-putin-cut-it-out-hacking | New York Times | The Hill | The Hill
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TRANSITION/WHEEER

FCC PLAYBOOK
[SOURCE: Multichannel News, AUTHOR: David Sapin]
[Commentary] While a change in policies at the Federal Communications Commission appears to be in the cards, how that gets carried out is a little more complicated. Two of Chairman Tom Wheeler’s landmark rules at the FCC — the network neutrality rule and the recently-passed broadband privacy rule — would be a target of a GOP-led FCC, but would require a formal rulemaking process to “reverse.” This means going through the Administrative Procedures Act process of a notice of proposed rulemaking, a public comment period and an FCC vote to approve any changes. A GOP-led FCC would have the votes to change the rules, but the rulemaking process would be played out in the public with strong opposition from those that originally supported them. This politically charged rulemaking environment may draw attention away from the Trump administration’s higher-priority issues. Another less drastic — and less political — mechanism a GOP-led FCC could use to lighten the impact of the rules is to take a more laissez-faire approach to enforcement. A legislative solution is another much-discussed option to roll back the impact of the net neutrality and privacy rules. Could such legislation pass? This does not appear to be a high priority for the GOP or the Trump administration, which are are focused on tax reform, trade policy, immigration and health care as priority areas early in the president’s first term. The GOP also does not have the 60 votes needed in the Senate to break a filibuster, so it might be difficult to pass legislation unless there is some Democratic support, which may arrive if there is a view that a compromise is the only way to maintain Net Neutrality. The other strategy for the GOP may be to wait until after 2018, when 10 Senate Democrats are up for re-election. The GOP could potentially have a filibuster-breaking majority after 2018, when they could push through the legislation they want.
[David Sapin is technology, media and telecommunications risk and regulatory leader at PwC]
benton.org/headlines/fccs-new-playbook | Multichannel News
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WHEELER: ROSENWORCEL IS LONG-TERM COMMUNICATIONS POLICY LEADER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Communications Commission Chairman Tom Wheeler said commissioner Jessica Rosenworcel's fingerprints are on "so much of what this agency has done." Chairman Wheeler praised his fellow Democrat as she prepares to exit the commission following a fractious Senate's failure to vote her re-nomination by President Barack Obama. "You have been a long-term leader in communications policy on the FCC staff [a top advisor to former commissioner Mike Copps] on the Senate Staff [as a top advisor to former Senate Commerce chairman Jay Rockefeller] and here as a commissioner," said Chairman Wheeler. "I don't think that there is an end point on that leadership and expect to see a lot more out of you in the coming years continuing that great tradition." Chairman Wheeler pointed to her early championing of Title II reclassification of Internet service providers. "I remember you saying to me, 'no, the way to go is Title II,'" he said. The "no" reference is because Wheeler's initial attempt to address a court remand of the original Open Internet order did not include reclassification. "You have always been attuned to the public safety community," he said, "and have been the champion of making sure that we live up to the first title of the Communications Act, which is public safety."
benton.org/headlines/chairman-wheeler-rosenworcel-long-term-communications-policy-leader | Broadcasting&Cable
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WHEELER SAY BEING LOBBYIST WAS EASY -- FCC CHAIRMAN WAS HARD
[SOURCE: ars technica, AUTHOR: Jon Brodkin]
Tom Wheeler was sworn in to the Federal Communications Commission in November 2013, and he knew the industry well because he was a former lobbyist. From 1979 to 1984, he led the cable industry's top lobby group, and from 1992 to 2004 he was the chief lobbyist for the mobile phone industry. Looking back, Chairman Wheeler says it was easier being a lobbyist. "To make decisions that are in the common good is tough," Chairman Wheeler said. "Remember: I have been on the other side. Making demands that benefit a specific constituency is easy, as is attacking the decision-makers when you don't like that decision." Chairman Wheeler said his greatest lesson from being chairman "is how malleable the definition of the public interest becomes when it comes to protecting self-interest. Good people would come into the office and explain that what benefited them was in the public interest, and those of an opposing view would argue that the public interest was only as they defined it." Chairman Wheeler said he concluded that "I needed to define the public interest as the common good. At a time when everyone is wrapping their self-interest in their definition of public interest, the question has to be what is the best way to serve the common interests of the most [people]."
benton.org/headlines/chairman-wheeler-says-being-lobbyist-was-easy-being-fcc-chairman-was-hard | Ars Technica
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WHY THE TRUMP TEAM SHOULD ADOPT BILL CLINTON'S PLAN TO REFORM THE FCC
[SOURCE: Forbes, AUTHOR: Larry Downes]
[Commentary] President-elect Donald Trump’s advisors, along with leading Members of Congress and the agency’s two Republican Commissioners, have already made clear their first priority: to end the agency’s misguided intrusions into the Internet economy, and to reinstate policies that encourage continued private investment. A visionary plan to transform the agency into an effective 21st century enabler of continued digital innovation is sitting on the Commission’s shelf, just waiting to be dusted off. Ironically, or not, it was written almost twenty years ago, under the direction of William Kennard, appointed to Chair the agency from 1997 to 2001 by Democratic President Bill Clinton. In two drafts prepared in 1999, Kennard’s Office of Plans and Policy laid out the design for a dramatically redesigned Commission. “The FCC as we know it today will be very different both in structure and mission,” the proposal said, transitioning over five years “from an industry regulator to a market facilitator.”
[Larry Downes is an Internet industry analyst and author on business strategies and information technology.]
benton.org/headlines/why-trump-team-should-adopt-bill-clintons-plan-reform-fcc | Forbes
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INFRASTRUCTURE MISTAKE
[SOURCE: Wall Street Journal, AUTHOR: Alan Blinder, Alan Krueger]
[Commentary] Divining what Trumponomics will look like is guesswork at this stage, but there is one prominent exception. Late in the campaign, two of Donald Trump’s top economic advisers—Peter Navarro and Wilbur Ross, who is now the nominee for commerce secretary—offered a detailed infrastructure plan. Unsurprisingly, the program seems more about rewarding private-equity investors than about rebuilding America’s crumbling infrastructure. The Trump plan would rely more on private investors motivated by huge tax breaks. Follow the money. Peter Navarro and Wilbur Ross, who is now the nominee for commerce secretary, propose an 82 percent tax credit to attract private-equity investors into the infrastructure business. Yes, 82 percent! A $3 billion public-private “partnership,” according to their plan, could be financed like this: $2.5 billion in municipal bonds, $410 million in tax credits from the federal government, and $90 million in private equity. This means $90 million in private money winds up controlling a $3 billion asset. President-elect Trump likes leverage, but isn’t 33-to-1 a little ridiculous? And under the Trump plan, project selection would be left to profit-seeking investors, using the same criteria they use to decide which hotels to build, for example. Ironically, Navarro and Ross criticize President Obama’s modest 2015 infrastructure proposals because, “These will not fix the 237,600 water mains that break each year. Nor will they stop the 46 billion gallons of water lost each day from pipe leaks.” Does the Trump team really think private-equity investors will swoon over repairing plumbing?
[Blinder and Krueger are professors of economics at Princeton University]
benton.org/headlines/trumps-infrastructure-mistake | Wall Street Journal
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INTERNET/BROADBAND

THE HOLE IN THE DIGITAL ECONOMY
[SOURCE: Technology Review, AUTHOR: David Talbot]
If the next president intends to improve American infrastructure and expand economic opportunities, there’s no better place to start than with the millions of people who still lack broadband access and computer skills. Does everyone deserve access to affordable high-speed Internet, just like water, sewers, electricity, and telephone service? In Ma’Niyah Larry’s apartment and at the Ashbury Community Center, where Monica Moore rebooted her career, you can see that the argument could be made. “There is never a shortage of people who want to show up here and learn,” Bill Callahan, director of the Connect Your Community collaborative, remarked as we looked around the community center.
benton.org/headlines/hole-digital-economy | MIT Technology Review
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DIGITAL INCLUSION POLICIES AND PROGRAMS OF LOCAL GOVERNMENTS
[SOURCE: Journal of Digital and Media Literacy, AUTHOR: Angela Siefer]
[Commentary] In November 2016 we launched Digital Inclusion Trailblazers, a catalog of local, state, and national digital inclusion leadership. This is the first public inventory of local government initiatives promoting digital literacy and broadband access for underserved residents. NDIA and Mobile Citizen developed Digital Inclusion Trailblazers as an advocacy tool. It provides a handy database of examples and contacts for communities interested in taking similar steps themselves. I am pleased to present to you articles from seven of our Digital Inclusion Trailblazers: Austin (TX), Boston (MA), Kansas City (MO), Portland (OR), Raleigh (NC), San Antonio (TX), and San Francisco (CA).
[Angela Siefer is director of the National Digital Inclusion Alliance.]
benton.org/headlines/introduction-digital-inclusion-policies-and-programs-local-governments | Journal of Digital and Media Literacy
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FCC FAILS TO EXTEND ENHANCED TRANSPARENCY WAIVER
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Federal Communications Commission did not extend the small operator waiver from the Open Internet order's enhanced transparency requirements by the Dec. 15 deadline. The FCC's Consumer and Governmental Affairs Bureau extended it in 2015 by a year. In a sense, not extending it does not have much practical effect because the enhanced transparency rules, from which operators are being exempted, have not even gone into effect yet. But industry compliance officers and lawyers like regulatory certainty, and this is not it. FCC Chairman Tom Wheeler circulated an item extending the waiver, but commissioners could not agree on it. The sticking point remains the sub trigger at which the waiver takes effect. Republicans want it to apply to operators with 250,000 subs or fewer, while Democrats want to stick with the current, or until Dec. 15 current, 100,000 or fewer. Bills that passed the House and Senate Communications Subcommittee raised the trigger to 250,000 and some legislators this week were pushing the FCC to extend the waiver. The American Cable Association had been pushing for the waiver extension, so it was not pleased at the lack of regulatory certainty.
benton.org/headlines/fcc-fails-extend-enhanced-transparency-waiver | Broadcasting&Cable
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GOVERNMENT & COMMUNICATIONS

PRESIDENT OBAMA: ESPIONAGE IS BEING 'TURBOCHARGED' BY THE INTERNET
[SOURCE: National Public Radio, AUTHOR: Mary Louise Kelly]
The world is entering a new cyber era — one with no ground rules, and with the potential for traditional espionage to be "turbocharged" by the Internet, President Obama said. "Among the big powers, there has been a traditional understanding of, that everybody is trying to gather intelligence on everybody else," President Obama said. "It's no secret that Russian intelligence officers, or Chinese, or for that matter Israeli or British or other intelligence agencies, their job is to get insight into the workings of other countries that they're not reading in the newspapers every day." The informal, unwritten rules of the past are no longer adequate, the President added. "One of the things that we're going to have to do over the next decade is to ultimately arrive at some rules of what is a new game," he said. "And that is the way in which traditional propaganda and traditional covert influence efforts are being turbocharged by the Internet."
benton.org/headlines/president-barack-obama-espionage-being-turbocharged-internet | National Public Radio
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