Financial Firms Begin Trek Back to the Office

About 50 percent of J.P. Morgan trading floor employees--especially senior staff--will return to their offices Sept. 21, 2020. 

The value of face-to-face interactions seems to be part of the rationale, as well as training of junior personnel. 

J.P. Morgan argues that staff “would lose their camaraderie and junior workers and the incoming class of analysts wouldn't get the training they need if the bank continues to operate remotely.” That is not an unfounded belief. In additional to the value of unintended employee interactions, some note that onboarding new employees is much more difficult when everyone is working from home. 

Goldman Sachs quickly followed the move and other financial firms are expected to follow as well. 

None of those trends should  be unexpected. The more people use technology as a replacement for face-to-face contact, the more they value and seek such contact.  

U.S. Courts Have Not Upheld Free Speech Censorship by Private Firms

Traditional legal doctrine has been that private actors are not constrained by the Constitution generally, under the “state action” doctrine, which holds that  “the First Amendment governs only governmental limitations on speech (Nyabwa v. Facebook, 2018 U.S. Dist. LEXIS 13981, Civil Action No. 2:17-CV-24, *2 (S.D. Tex.) (Jan. 26, 2018).”

The state action doctrine holds that only the government or those acting on its behalf are subject to constitutional scrutiny. Non-governmental conduct therefore lies beyond the Constitutional protections.

On the other hand, the exercise of free speech has recently seemed to be invoked as a right by major league sports figures whose kneeling during the playing of the national anthem is said to be an exercise of free speech rights not traditionally protected by the First Amendment. 

“The time has come to recognize that the reach of the First Amendment be expanded,” says lawyer David Hudson.  

The U.S. Supreme Court recognized this reality last year in Packingham v. North Carolina (2017): 

“While in the past there may have been difficulty in identifying the most important places (in a spatial sense) for the exchange of views, today the answer is clear. It is cyberspace—the ‘vast democratic forums of the Internet’ in general, and social media in particular,” the U.S. Supreme Court has said in the case of Packingham v. North Carolina, 137 S.Ct. 1730, 1735 (2017).

The argument is that social media networking sites have become the modern-day equivalent of traditional public forums like public parks and public streets. 

“Public communications by users of social network websites deserve First Amendment protection because they simultaneously invoke three of the interests protected by the First Amendment: freedom of speech, freedom of the press, and freedom of association,” said Benjamin F. Jackson in a 2014 law review article (Benjamin F. Jackson, Censorship and Freedom of Expression in the Age of Facebook, 44 N.M. L. Rev. 121, 134 (2014)). 

“Federal courts can and should extend First Amendment protections to communications on social network websites due to the importance these websites have assumed as forums for speech and public discourse,” he argued. 

As with debates over network neutrality, where there arguably is a difference between permissible network management and other practices some argue are violations of the basic principle of free access to lawful internet apps and services. 

For example, social network websites may censor communications in order to prevent convicted criminals from preying on victims, accusers, or witnesses or prevent certain users from harassing or intimidating other users without violating free speech principles. 

Censorship of pornographic or violent materials likewise could help create and maintain an environment acceptable to users of as many ages and sensibilities. 

Also, censorship might be necessary to prevent harm to the website due to hacking and phishing attacks and comply with copyright and trademark laws.

The Supreme Court’s reasoning in Reno v. ACLU ( 521 U.S. 844 (1997) supports treating communications on social network websites as constitutionally protected speech. 

To be sure, application of First Amendment principles to private actors would raise the issue of impairment of their property rights. To use the telecommunications analogy, that would be similar to common carrier regulation of prices and terms of service. 

There is legal precedent. Under the public function exception, “the exercise by a private entity of powers traditionally exclusively reserved to the State” constitutes state action (Jackson v. Metro. Edison Co., 419 U.S. 345, 352 (1974). That has not generally been a winning argument in the courts.

But it might be argued that social networks resemble the public spaces the Supreme Court has chosen to protect in both its public function exception (Marsh v. Alabama, 326 U.S. 501 (1946) and public forum doctrines.

The Supreme Court has held that the private property rights of a company did not “justify the State’s permitting a corporation to govern a community of citizens so as to restrict their fundamental liberties.”

The public forum doctrine was pioneered by Hague v. Committee for Industrial Organization (307 U.S. 496 (1939) and Schneider v. Irvington (308 U.S. 147 (1939). Under the public forum doctrine, restrictions on speech in public spaces that have traditionally served as a venue for free expression and debate are subject to special constitutional scrutiny.

There also is an entwinement exception, though that also would face high scrutiny. Under the entwinement concept, a  non-governmental actor might be deemed a state actor if the firm has acted together with or has obtained significant aid from state officials, beyond mere licensing,  regulation or financial aid. 

Courts have thus far rejected claims that social network websites or their parent companies  show “entwinement.” Gilmore v. City of Montgomery, 417 U.S. 556, 569 (1974);

Can Free Speech Rights be Extended to Platforms?

Perhaps ironically, political protests by professional athletes might be opening a new legal avenue by those who seek to have fairness doctrines, equal time rules or other public interest requirements on social media platforms. Up tot his point, the U.S. constitution has protected speakers only from censorship by government entities.

But widespread private firm allowance of such political speech might widen the terrain for those who believe some new expansion of speech freedoms must be extended to powerful private platforms as well.

“Speakers in the United States have few or no legal rights when platforms take down their posts,” according to Daphne Keller, director of the Program on Platform Regulation at Stanford's Cyber Policy Center. 

Some use the analogy of must carry rules once imposed on TV broadcasters. To date, lawsuits likening platforms to “public forums” have failed. 

Also, there are different issues related to content: removal of items that violate terms of service, and the way that ranking systems operate. The former deals with removed content; the latter deals with search ranking algorithms. 

The former issue is similar to the ways stories are constructed by news media, for example. Are opposing views treated fairly and with neutral adjectives? Is the amount of space given to opposing views roughly equal? 

The latter is similar to the choice of stories to run, and not the way content is treated once a “publish” decision is made. Which stories are deemed newsworthy, and which are not?

So far, U.S. courts have held that private platforms do not have a legal obligation to carry user speech. Still, some argue that dominant platforms are de facto gatekeepers, and should be regulated as “essential providers” of political speech, or even utilities, with a common carriage obligation. 

But those claims of speaker rights also bump up against the First Amendment rights of the platforms as speakers. Ranking and removal of content is an exercise of editorial judgment, in other words. 

Largely unexamined--so far--are various methods of giving more control to platform users, says Keller. It is not easy, but some advocate more end user content control settings. The problem is that people disagree about what constitutes “hateful speech.”

Some may  want platforms to carry all legal speech. Others might simply prefer more curation, allowing civil dialogue. 

“One possible approach would let platforms act against highly offensive or dangerous content

but require them to tolerate more civil or broadly socially acceptable speech,” argues Keller. 

Again, the problem is disagreement about how to identify such offensive or dangerous content, and not simply because the censoring algorithm or reviewer simply disagrees with the expression of those views. The same sort of problems arise with efforts to apply “fairness doctrines” that essentially preserve the rights of the listener, rather than the speaker. And all such rules limit free speech rights of speakers and platforms. 

Another approach distinguishes between “hosted” content (allowing anyone to speak) and “recommended” content that appears in news feeds, for example. The former is more akin to a town square, the latter more akin to the “curated” news feeds or search results. 

Yet others might prefer some form of unbundling the ranking and sorting algorithms, allowing third parties to create their own curated feeds. None of these would be simple. None would be free of some limitations on free speech. And most could negatively affect the monetization models that make the platform services possible. 

And yet we might be moving in such directions in any case. The recent issue of political protests by professional athletes raises the issue of whether constitutional free speech rights actually have standing even in the case of private firms. 

Keyboard Made from Paper Operates Without Batteries or Power Sources

Devices that work using only ambient energy are interesting for many sensor or internet of things applications. But researchers also are experimenting with keyboards that require no external source of power, either. 

"MEC Platform" is Intriguing, if Difficult

Few terms are harder to define than "platform." Some define "platform" as the computer architecture and equipment using a particular operating system. So Windows or IoS or Android are platforms. Others might say a computing platform or digital platform is the environment in which a piece of software is executed. 

Some might say cloud computing or virtual machines are platforms. Apple's App Store often is considered a platform. 

A platform also can be a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers. So eBay, Amazon.com, Uber, Airbnb and any advertising marketplace are platforms.

Some telcos are optimistic about prospects for multi-access edge computing, including the opportunity to function as a platform for edge computing. The MobiledgeX initiative is a good example of that belief. MobiledgeX hopes to build an ecosystem of developers able to use common global interfaces, telco data centers and integrated 5G access. 

source: MobiledgeX

The MEC is envisioned as being complementary to the current hyper-scale computing as a service platforms such as AWS Wavelength and Azure Edge Zone. The issue, as always, is how much value actually can be created by a telco-owned edge computing platform or even actual edge computing as a service. 

Already, hyperscalers are moving to create their own edge computing as a service offers. In those instances, telcos become providers of real estate services and connectivity, but not the platform for developers or actual edge computing as a service.

It remains at this point an open question whether, and to what extent, a MEC platform can be created, and what value any potential platform can provide.

It never is easy for any participant in an ecosystem to emerge in additional roles, and has historically been challenging for telcos. Edge computing might not prove much different.

Any Revenue Growth for Telecom in 2020?

Before the Covid-19 pandemic, many telecom service providers expected modest revenue growth. In 2020, most are likely to show flat to negative revenue and revenue growth. Many service providers now expect revenue shrinkage instead. 

But the longer-term trend will reassert itself fairly quickly, in all likelihood, as global revenue growth has been pretty close to flat for some years. 

source: IDC

Overall, the global industry might not even hit one percent revenue growth in 2020. 

source: STL Partners 

International Voice Shrinks 5% a Year

Researchers at Omdia estimate that international wholesale voice revenue will continue to decline at a compound average rate of growth  of -4.8 percent through 2021 (and likely beyond) under the threat from over-the-top voice and messaging services. That trend was not completely clear 20 years ago, as the number of people using phones has grown dramatically. 

Since then, especially as voice and messaging alternatives have grown, with declines starting in the U.S. market about 2001, and elsewhere about 2003. 

source: The Economist

In the monopoly era, it was principally such revenues that produced most of the profits in the telecom industry, and provided the surplus to support consumer services that, in many cases, actually lost money. 

The industry long ago ceased to rely on international voice as the key revenue source. By the 1990s, mobile services had taken the place of international voice as the key revenue growth driver. More recently, text messaging and internet access have taken the place of mobile voice growth. 

A similar trend can be noted for European Union mobile revenues between 2010 and 2018, a period of less than a decade, but still a time when voice revenue dropped from about 80 billion euros to about 45 billion euros, while messaging dropped from about 19 billion euros to perhaps 10 billion euros and mobile internet access grew from about 18 billion euros to perhaps 42 billion euros.

In the U.S. market, long distance voice still provided nearly half of all U.S. telco revenues. By 2007, mobility had grown to about half, while long distance had shrunk to about 18 percent. 

source: FCC

What comes after mobility is a big question.