California lawmakers are one step closer to bringing back Obama-era net neutrality protections

California’s state Assembly voted 58-17 on Thursday to advance a bill, called S.B. 822, that would implement the strongest net neutrality provisions in the U.S.

The bill now heads back to the Senate for final approval. If a vote is not held by end of day tomorrow — the deadline for lawmakers to pass any legislation until 2019 — it won’t get the official green, or red, light until next year.

The bill, written by Democratic Senator Scott Wiener, would not only bring back Obama-era net neutrality rules ousted by the FCC in December, but go a step further, adding new protections for internet users. The bill prohibits internet service providers from blocking or throttling lawful content, apps, services or non-harmful devices. Plus, it bans paid prioritization, the practice of directly or indirectly favoring some traffic over other traffic in exchange for money, typically.

Here’s where it goes above and beyond the policy developed under the Obama administration: The bill also bans zero rating, which allows service providers to charge customers for data use on some websites but not on others. If you want to dive deeper into the nitty-gritty, take a look at the bill here.

The decision is a blow to Comcast and AT&T, for obvious reasons. They’ve been advocates for ending net neutrality and had lobbied aggressively against the bill. Net neutrality lobbying groups, on the other hand, are pleased with the results.

“No one wants their cable or phone company to control what they see and do on the internet,” said Evan Greer, deputy director of Fight for the Future, a nonprofit advocacy group for digital rights, in a statement. “California just took a huge step toward restoring protections that prevent companies like AT&T and Comcast from screwing us all over more than they already do.”

“This historic Assembly vote is a testament to the power of the internet. Big ISPs spent millions on campaign contributions, lobbyists and dark ads on social networks, but in the end, it was no match for the passion and dedication of net neutrality supporters using the internet to sound the alarm and mobilize.”

In December, the FCC voted to kill Obama-era net neutrality regulations developed in 2015 to keep the internet open and fair. The organization is led by Ajit Pai, a Republican appointed to the role by President Donald Trump.

The decision from California’s Assembly comes a day after Northern California congressional members asked that the FTC investigate Verizon’s throttling of the Santa Clara County Fire Department, which had reportedly exceeded their monthly allotment of 25 gigabytes when they were making calls and handling personnel issues amid fighting a massive wildfire.

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Enveritas’ technology lets small growers tap into the market for sustainable coffee

Demand for sustainable coffee is growing, a boon for socially conscious coffee lovers — but many small growers are missing out because they lack the ability to verify that their coffee beans are grown using sustainable labor and eco-friendly practices. In fact, verification is often accessible only to large coffee estates or cooperatives. Enveritas wants to change that. The nonprofit, which recently completed Y Combinator’s accelerator program, uses geospatial analysis to make the process more efficient, enabling it to offer free verification to smallholder farms.

Enveritas’ goal is to end poverty in the coffee sector by 2030. Before founding Enveritas in 2016, CEO David Browning and head of operations Carl Cervone worked at TechnoServe, a nonprofit that serves businesses in developing economies. Browning led TechnoServe’s global coffee practice, while Cervone advised coffee growers in Africa, Asia and Latin America about sustainability trends.

Browning tells TechCrunch that TechnoServe’s coffee team spent a lot of time working with smallharder farmers, many of whom don’t have access to sustainability verification because their farms are too remote or small. The typical coffee grower served by Enveritas has less than two hectares of land, lives on less than $2 a day and relies on cash crops for their family’s income.

“The existing solutions work well for large estates and it can also be effective for farmers organized into cooperatives, but many of the world’s coffee farmers are smallholder farmers and not organized into cooperatives,” Browning explains. “For those farmers, the existing solutions can be more difficult to access.”

Part of the reason is because many verification solutions rely on field workers who visit farms and track sustainability standards using pen and paper, a time-consuming and costly process.

To develop a more efficient and scalable system, Enveritas uses geospatial and machine learning to identify coffee farms through satellite imagery and monitor for issues like deforestation. Though it still relies on local partners to visit farms and confirm that sustainability standards are being followed, its technology enables Enveritas to provide verification services for free.

Enveritas checks for 30 standards, which it divides into three categories: social, environmental and economic. “Social” includes no child labor and workers’ rights; “environmental” checks for problems like deforestation, pollution or banned pesticides; and “economic” covers minimum wages, ethical business practices and transparent pricing, among other standards.

The organization currently operates in 10 countries, including Uganda, Indonesia, Ethiopia, Nicaragua and Costa Rica, with plans to expand into more markets.

Sustainable coffee isn’t just in demand by caffeine lovers with a penchant for social justice. Many of the world’s biggest coffee companies, including Illy and Starbucks, have launched sustainability initiatives as part of their corporate responsibility measures. Offering coffee grown using sustainable labor or environmentally friendly practices also helps differentiate their products in a crowded marketplace. Research by the National Coffee Association, an American trade group, recently found that many millennials prefer sustainable coffee, with up to two-thirds of 19 to 24-year-olds surveyed said they pick their coffee based on whether it was grown using sustainable labor and environmentally friendly farming practices.

While coffee is currently its main focus, Browning says Enveritas’ system can be applied to other agricultural products that need more visibility in their supply chains. For example, it also can be used to verify the sustainability of cocoa, cotton and palm oil.

As a nonprofit, Enveritas faces different funding challenges from other tech startups. Browning says it is currently at the equivalent of being ready for a Series A. Much of its backing comes from coffee companies (Enveritas can’t disclose which ones) that hope to benefit from Enveritas’ solutions.

“One of the advantages of this system is that it reduces the cost for coffee companies relative to the traditional pen and paper system, but it’s also simultaneously free for farmers,” Browning says. “That’s one of the most compelling innovations, so it’s a win-win for both.”

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Weebly brings more e-commerce features to mobile

Weebly is part of Square now, but it continues to update as a standalone product. This week, for example, the company announced a number of new e-commerce features for the Weebly mobile app.

Those features include the ability to ship and print labels, to respond to customer questions (via Facebook Messenger, which can be embedded on Weebly sites), to approve customer reviews, to create branded coupon codes and to edit every aspect of your store, including product listing and pricing — all from the app.

Much of this functionality already existed on desktop, so the announcement is about moving these capabilities onto smartphones. In a blog post, the company outlined a vision for the mobile phone to become “the new back office.”

Weebly CEO David Rusenko told me that as his team has been adding more features for merchants, he wants people to think of Weebly “increasingly as an e-commerce platform,” not just a simple website builder. And support for mobile was an important part of that.

“This is what our customers were requesting,” Rusenko said. “Basically, people are taking their entrepreneurial lifestyle and having the freedom to work on things wherever you are.”

And apparently mobile usage is already up significantly, with a 75 percent increase over the past year in customers using the Weebly mobile app to manage orders, as well as a 120 percent increase in mobile usage to manage product listings.

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John McAfee’s ‘unhackable’ Bitfi wallet got hacked — again

If the security community could tell you just one thing, it’s that “nothing is unhackable.” Except John McAfee’s cryptocurrency wallet, which was only unhackable until it wasn’t — twice.

Security researchers have now developed a second attack, which they say can obtain all the stored funds from an unmodified Bitfi wallet. The Android-powered $120 wallet relies on a user-generated secret phrase and a “salt” value — like a phone number — to cryptographically scramble the secret phrase. The idea is that the two unique values ensure that your funds remain secure.

But the researchers say that the secret phrase and salt can be extracted, allowing private keys to be generated and the funds stolen.

Using this “cold boot attack,” it’s possible to steal funds even when a Bitfi wallet is switched off. There’s a video below.

on a completely unrelated note, here is a @Bitfi6 being cold boot attacked.

it turns out that rooting the device does not wipe RAM clean. who would have thought it!?

i feel this music is very appropriate for @Bitfi6 pic.twitter.com/jpSnYBd9Vk

— Saleem "Unhackable" Rashid (@spudowiar) August 30, 2018

The researchers, Saleem Rashid and Ryan Castellucci, uncovered and built the exploits as part of a team of several security researchers calling themselves “THCMKACGASSCO” (after their initials). The two researchers shared them with TechCrunch prior to its release. In the video, Rashid is shown setting a secret phrase and salt, and running a local exploit to extract the keys from the device.

Rashid told TechCrunch that the keys are stored in the memory longer than Bitfi claims, allowing their combined exploits to run code on the hardware without erasing the memory. From there, an attacker can extract the memory and find the keys. The exploit takes less than two minutes to run, Rashid said.

“This attack is both reliable and practical, requiring no specialist hardware,” said Andrew Tierney, a security researcher with Pen Test Partners, who verified the attack.

Tierney was one of the hackers behind the first Bitfi attack. The McAfee-backed company offered a $250,000 bounty for anyone who could carry out what its makers consider a “successful attack.” But Bitfi declined to pay out, arguing that the hack was outside the scope of the bounty, and instead resorted to posting threats on Twitter.

This new attack, Tierney says, “meets the requirements of the bounty in spirit, even if it does not meet the specific terms that Bitfi have set.”

McAfee earlier this month said, “the wallet is hacked when someone gets the coins.”

The press claiming the BitFi wallet has been hacked. Utter nonsense. The wallet is hacked when someone gets the coins. No-one got any coins. Gaining root access in an attempt to get the coins is not a hack. It's a failed attempt. All these alleged "hacks" did not get the coins.

— John McAfee (@officialmcafee) August 3, 2018

Bill Powel, vice president of operations at Bitfi, told TechCrunch in an email that the company defines a hack “as anything that would allow an attacker to access funds held by the wallet.”

“Because the device does not store private keys, that is what prompted the unhackable claim,” he said.

When pressed, Powel did not address the specific claims of the cold boot attack. McAfee, who was copied on the email to Bitfi, did not respond.

Within an hour of the researchers posting the video, Bitfi said in a tweeted statement that it has “hired an experienced security manager, who is confirming vulnerabilities that have been identified by researchers.”

“Effective immediately, we are closing the current bounty programs which have caused understandable anger and frustration among researchers,” it added.

The statement also said it will no longer use the “unhackable” claim on its website.

Rashid said he has no immediate plans to release the exploit code so as to prevent the estimated few thousand Bitfi users from being put at risk.

Just last month, Bitfi won the Pwnie Award for Lamest Vendor Response, a traditional award given out at the Black Hat conference for companies that react the worst in response to security issues.

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Margin of safety in venture capital

Doug Clinton Contributor

Doug Clinton is a co-founder and managing partner at Loup Ventures, a frontier tech-focused investment firm.

More posts by this contributor

• How to create the most value for the next technology wave

As a former stock analyst turned VC, I still spend time thinking about public company investment opportunities. To that end, I recently read Seth Klarman’s Margin of Safety, a hard to find, but very insightful book about value investing. The book’s title, Margin of Safety, is a term borrowed from the godfather of value investing: Benjamin Graham. Warren Buffett’s investment philosophy is very much inspired by Graham; 85 percent as much, according to Buffett himself.

A margin of safety is room for error built into the price an investor pays for an asset to lower the risk that the investor might lose money. In other words, assets are usually quite difficult to price, so you try to pay some amount well below what you think an asset is worth to minimize the impact of various issues that might impact the value of that asset. One potential issue might be in the investor’s analysis of worth (i.e. the investor is wrong); another might be an unforeseeable market event, or a temporary problem specific to the company, etc.

While I was familiar with the margin of safety concept, I hadn’t thought about how it might apply to venture investing, and Klarman’s book sparked my imagination.

Can you fundamentally build a margin of safety into an early-stage venture investment? Can you fundamentally be “wrong” about your investment and still turn out alright?

The answer seems to be “sort of,” but it’s quite different than how you do it in the public markets. To figure it out, it’s worth considering price, market and team as the potential mechanisms.

Price

In the public markets, margin of safety is all about the price you pay for an asset. You’re looking for mispricings in the market primarily due to irrational downward assessments of other investors — usually places where emotion takes hold and logic gives way. Irrational upward assessments happen too, but those aren’t buying opportunities, and value investing is about buying, not shorting.

In the private markets, there may be the same amount of irrational upward assessment as reflected by some valuations that get ahead of themselves, but irrational downward assessment is rarer simply because such an assessment would mean the market thinks a company is not fundable and, without capital, it likely goes out of business. Therefore, it’s difficult for a private company mispriced to the downside to even exist. Even in down rounds at solid companies there doesn’t seem to be anything near a margin of safety that Klarman or Buffett would expect — nor do modest valuation negotiations create such a margin of safety for top venture firms that can pull off such negotiations.

We can comfortably say that price as a mechanism for margin of safety in venture doesn’t seem to work.

Market

A bigger market is always better, so if we only invest in huge markets, that’s a margin of safety, right? Unfortunately, no.

Bigger markets are usually better, but markets are extremely hard to predict, and it’s even harder to predict which market many startups even really fit into at the early stage. If you had to predict the market for people renting air beds on other people’s floors you probably would have missed the potential for the same platform to rent rooms and, ultimately, change the travel industry.

Can you fundamentally build a margin of safety into an early-stage venture investment?

You might apply Klarman’s idea of conservatively estimating a company’s cash flows and the applicable discount rate in valuing a company as part of a margin of safety, but taking a conservative view of what the market may be for a venture investment is arguably even worse than overshooting it because it will probably lead you to miss out on some great opportunities, like Airbnb above.

Market doesn’t seem to be the margin of safety in venture either.

Team

That leaves us with team.

Fundamentally, the point of a margin of safety is to recognize that things are probably not going to go as planned. In a public investment, where value is a constant reflection of supply and demand, you can protect yourself from the unforeseen via price. In a private investment, where shares are illiquid and relationships more important, you can only protect yourself from the unforeseen via the team.

A great team is resourceful, dedicated, persistent, curious and flexible. Those elements reduce the risk of a negative outcome when things don’t go as planned, because a great team adjusts and fights through it. Fighting through a difficult time. Pivoting to something else. Pressing on with a commitment to suffering. Sometimes things go too far off the rails for even a great team to recover, but better to invest in a team that can correct setbacks than an average team that crumbles under even minor deviations.

It’s this reason that all VCs say they invest in team first. They are our margin of safety.

Close

To bastardize Warren Buffett’s bridge analogy regarding the margin of safety: We want to invest in founders that can lift the weight of the world, but really only need to lift the weight of one difficult startup business. We will almost certainly be fooled both positively and negatively by prices, products and markets, but we must do our best not to be fooled by teams, because they’re the only margin of safety we have. 

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Skip and Scoot are the only companies awarded scooter permits in SF

The great San Francisco scooter decision has been made. And Skip and Scoot have claimed the prize.

The San Francisco Municipal Transportation Agency (SFMTA) issued one-year permits to Skip and Scoot on Thursday, a decision that ends months of waiting for 12 companies that applied to operate within the city. JUMP, which Uber acquired in April, as well as Lyft, Skip, Spin, Lime, Scoot, ofo, Razor, CycleHop, USSCooter and Ridecell all applied for permits in San Francisco.

The permits will allow a maximum of 625 scooters for each company in the first six months. Scoot and Skip may have the potential to increase their number of scooters in months seven to 12 to a cap of 2,500, at the SFMTA’s sole discretion.

“The SFMTA’s decision is based on the strength of the proposals submitted by the two companies, combined with their experience of owning, operating and maintaining a shared mobility service in the public right-of-way. The agency looked for applications that prioritized the city’s concerns around safety, disabled access, equity and accountability,” the agency said.

The SFMTA noted in its decision that Skip and Scoot had the strongest applications. The agency seemed particularly interested in safety measures these companies planned to take. Scoot, which has been managing a fleet of shared electric mopeds in San Francisco since 2012, proposed mandatory instructional videos for users, helmets included in rentals and free in-person training.

Scoot also proposed using swappable batteries instead of manually taking the scooters off the street for regular recharging.

“This method could help the city reduce the number of vehicle miles traveled on San Francisco streets, which helps reduce traffic congestion and greenhouse gas emissions,” the SFMTA said in its decision.

Scoot said it will soon introduce an electric kick-style scooter to its line-up of electric motor scooters and electric bicycles in response to the decision.

Unsurprisingly, the companies that lost out have expressed dismay with the decision.

“Jump both submitted a strong application and has a track record of successfully working with the city on our bike pilot,” an Uber spokesperson wrote in an email. “Granting only two scooter permits unnecessarily limits mobility options in San Francisco, and we plan to follow up with the SFMTA to share our concerns,”

Bird, a scooter startup that has $2 billion valuation, said it will continue to work with San Francisco officials, partners, community organizations and advocates in hopes of bringing Bird back to the City by the Bay, a spokeswoman said in an email.

Bird, which has a goal of operating in 50 cities globally before the end of the year, noted that residents have sent nearly 30,000 emails to city officials in support of bringing Bird to San Francisco.

The pilot program is the city’s solution to handling the scooter chaos of 2018. Bird, and soon after, Lime and Spin, released their fleet of scooters into the city in March without permission. They became an instant hit among city residents seeking fast and cheap ways to get around town. They also soon became a pariah as scooters inundated sidewalks and rights of way.

The SFMTA put a temporary ban on all scooters in May and initiated a permit process as part of a 24-month pilot program that would allow up to five scooter companies to operate in the city.

Bird, Lime, Lyft and JUMP didn’t completely lose out Thursday. The city of Santa Monica’s Shared Mobility Device Selection Committee officially awarded Bird, Lime, Lyft and JUMP Bikes permits to operate both electric scooters and/or bikes in the city as part of its 16-month pilot program beginning September 17.

Lyft, which remains hopeful that it will have the chance to offer scooters in San Francisco in the future, is now focused on Santa Monica.

“We are thrilled to have been awarded permits for both bikes and scooters by the City of Santa Monica,”  Caroline Samponaro, Lyft’s bike and scooter policy lead said in an emailed statement. “The city’s decision to collaborate with Lyft deepens a partnership that will reduce vehicle congestion, increase public transportation trips and provide equitable transportation solutions to all residents of Santa Monica.”

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VNTANA CEO Ashley Crowder will talk holograms at TechCrunch Sessions: AR/VR

VNTANA CEO Ashley Crowder calls the company’s technology, “the world’s first scalable, affordable and interactive hologram.” The startup’s tech has certainly wowed crowds in recent years.

In 2016, it collaborated with Microsoft on HOLLAGRAM, beaming in a live hologram of MS executives during a HOLLAGRAM for a keynote at HackSC. The company’s technology has also been embraced by Intel. The chipmaker deployed VNTANA’s tech during its own keynote at Computex that same year.

Crowder co-founded VNTANA in 2012, along with fellow USC grad (and current COO) Ben Conway. Before VNTANA, she worked at Gulfstream, Northrop Grumman and BP, utilizing her experience in manufacturing to help design the new company’s early offerings.

In 2013, the team sent a video of a hacked Kinect to Microsoft, demonstrating how the company’s popular hands-free controller could be used for gesture tracking and control with VNTANA’s holographic images. It was enough to gain the startup a place in Microsoft’s Early Developer and BizSpark programs.

These days, the company is focused on augmented and mixed reality experiences, topics Crowder will discuss at TC Sessions: AR/VR on October 18 at UCLA. The one-day event combines onstage conversations about augmented and virtual reality with in-person demos and networking.

Purchase your Early Bird tickets here for just $99 and you’ll save $100 before prices go up!

Students get a special rate of just $45 when they book here.

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