EU agrees clampdown on bitcoin platforms to tackle money laundering

BRUSSELS (Reuters) – European Union states and legislators agreed on Friday on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies, the EU said in a statement.

The agreement is part of a broader set of measures to tackle financial crimes and tax evasion. EU legislators also backed stricter controls on pre-paid cards, and raised transparency requirements for the owners of trusts and companies.

“Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing,” Europe’s Justice Commissioner Vera Jourova said.

The EU decision comes as bitcoin’s prices have risen more than 1,700 percent since the start of the year, triggering worries that the market is a bubble that could burst in spectacular fashion.

The agreed measures will end anonymous transactions on virtual currency platforms and with pre-paid payment cards, which investigators said could have been used to fund attacks by militants.

Bitcoin exchange platforms and “wallet” providers that hold the cyber currency for clients will be required to identify their users, under the new rules which now must be formally adopted by EU states and European legislators and then turned into national laws within 18 months.

It took EU legislators more than a year of negotiations to agree on the legislative proposals, put forward by the European Commission in the wake of shooting and bombing attacks in Paris and Brussels in 2015 and 2016 which killed more than 160 people.

The talks dragged on because some EU states opposed increased transparency on trusts and companies, fearing a negative impact on their economies.

The EU lawmaker in charge of the issue, Dutch Green Judith Sargentini, said Britain, Malta, Cyprus, Luxembourg and Ireland were among those opposing the changes. The deal allows the authorities and “persons who can demonstrate a legitimate interest” to access data on the beneficial owners of trusts.

Trusts are legitimate financial vehicles to manage assets but have sometimes been accused of hiding illegal activities because of their lack of transparency.

Amnesty International, a rights group, called the deal “a breakthrough” but lamented the fact that data on trusts’ owners will not be completely public, as it will be for beneficial owners of companies. The increased public scrutiny is considered essential by the EU commission and also by rights groups, to prevent financial crimes and tax evasion.

Additional reporting by Alissa de Carbonnel; Editing by Foo Yun Chee and Peter Graff

How to Buy a $13,000 Apple iMac Pro

Apple’s iMac Pro is officially available. But it might take some time to get your hands on one—especially if you want the high-powered $13,000 model.

The tech giant on Thursday made the iMac Pro available for purchase. And if you order now from Apple’s online store, the desktop computer that features a 27-inch screen, Intel’s latest high-powered processors, and graphics performance that will allow you to play all the latest and most resource-intensive games, it’ll be delivered to your home by December 28 at the latest.

But once you start to configure the iMac Pro, things change dramatically. With changes to processing power, graphics chip, and amount of storage you need, shipments dates slip and prices are sent skyrocketing.

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For fun, I decided to see just how much I’d need to pay if I got all the bells and whistles from Apple. Here’s what I found:

Instead of the standard processor, I boosted it to the top-of-the-line 18-core Intel Xeon W processor. That single change bumped the iMac Pro’s price from $4,999 to $7,399. Next, I chose the 128GB memory option, up from 32GB in the standard configuration. The price was now $9,799. Quadrupling the size of the onboard storage from 1TB to 4TB increased the iMac Pro’s price to $12,599. With a little help from the Radeon Pro Vega 64 graphics processor, a $600 update, I was now on my way to paying $13,199 for the new iMac Pro.

But Apple’s online configuration tool was far from done. I was next offered a variety of add-ons, like the $50 Magic Trackpad 2 that can technically replace a mouse and allow you to control the cursor with your fingers. And if I didn’t want to use the iMac Pro’s stand and instead mount the device to my wall, a $79 VESA mount adapter kit was for me.

My new price? $13,328. My new shipping date? Six to eight weeks from the time the order was placed.

For that, I could get my hands on what Apple has said is the most powerful computer it’s ever released. It’s also wildly expensive.

Federal Communications Commission repeals net neutrality rules

WASHINGTON (Reuters) – The U.S. Federal Communications Commission voted along party lines on Thursday to repeal landmark 2015 rules aimed at ensuring a free and open internet, setting up a court fight over a move that could recast the digital landscape.

FILE PHOTO: Fiber optic cables carrying internet providers are seen running into a server room at Intergate.Manhattan, a data center owned and developed by Sabey Data Center Properties, during a tour of the facility in lower Manhattan, in New York, March 20, 2013. REUTERS/Mike Segar/File Photo

The approval of FCC Chairman Ajit Pai’s proposal marks a victory for internet service providers like AT&T Inc, Comcast Corp and Verizon Communications Inc and hands them power over what content consumers can access.

Democrats, Hollywood and companies like Google parent Alphabet Inc and Facebook Inc had urged Pai, a Republican appointed by U.S. President Donald Trump, to keep the Obama-era rules barring service providers from blocking, slowing access to or charging more for certain content.

Consumer advocates and trade groups representing content providers have planned a legal challenge aimed at preserving those rules.

The meeting was evacuated before the vote for about 10 minutes due to an unspecified security threat, and resumed after sniffer dogs checked the room.

Net neutrality advocates rally in front of the Federal Communications Commission (FCC) ahead of Thursday’s expected FCC vote repealing so-called net neutrality rules in Washington, U.S., December 13, 2017. REUTERS/Yuri Gripas

FCC Commissioner Mignon Clyburn, a Democrat, said in the run-up to the vote that Republicans were “handing the keys to the Internet” to a “handful of multi-billion dollar corporations.”

Pai has argued that the 2015 rules were heavy handed and stifled competition and innovation among service providers.

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“The internet wasn’t broken in 2015. We weren’t living in a digital dystopia. To the contrary, the internet is perhaps the one thing in American society we can all agree has been a stunning success,” he said on Thursday.

The FCC voted 3-2 to repeal the rules.

Consumers are unlikely to see immediate changes resulting from the rule change, but smaller startups worry the lack of restrictions could drive up costs or lead to their content being blocked.

Internet service providers say they will not block or throttle legal content but that they may engage in paid prioritization. They say consumers will see no change and argue that the largely unregulated internet functioned well in the two decades before the 2015 order.

Reporting by David Shepardson; Writing by Chris Sanders; Editing by Jonathan Oatis and Meredith Mazzilli

Bots and Form Letters Make It Nearly Impossible to Find Real FCC Net Neutrality Comments

The Federal Communications Commissions’ public comment period on its plans to repeal net neutrality protections was bombarded with bots, memes, and input from people who don’t actually exist. The situation’s gotten so bad that FCC Commissioner Jessica Rosenworcel, as well as several members of Congress, including one Republican, have called for the FCC to postpone its December 14 net neutrality vote so that an investigation can take place.

The FCC seems unlikely to comply. According to an FCC spokesman, the FCC is zeroing in on legal arguments within those comments, effectively disregarding any outpouring of support for net neutrality from regular Joes. “The purpose of a rulemaking proceeding is to not to see who can dump the most form letters into a docket. Rather, it is to gather facts and legal arguments so that the Commission can reach a well-supported decision,” Brian Hart, the FCC’s head of media relations, tells WIRED. Now, the Commission is barreling ahead toward Chairman Ajit Pai’s plan to essentially allow internet service providers to speed up or slow down internet traffic however they please.

So, with the FCC declining to investigate its own comments, we decided to undertake an analysis of our own.

Yes, researchers have already sliced and diced the data. But parsing 23 million comments can quickly bend toward abstraction. How many of those commenters are real? How many are bots? How many were real, but using identical form letters drafted by advocacy groups?

For a better handle on just how broken the FCC comment system is, we went granular, analyzing all of the submissions that fell under a single name. We wanted a name that was common enough to produce a decent number of hits (so, you know, not Issie Lapowsky), but singular enough that we could actually mine them in a few days (tough luck, James Smith). We settled on Nicholas Thompson, WIRED’s editor in chief, and excluded any Nicks, or Nicholas Thompsons who also supplied a middle initial.

That left us with 39 results between May 11 and December 8 of this year. Using a combination of Facebook, public records tools like Spokeo and Nexis, and the good old fashioned telephone, we attempted to make contact with each of them. It’s far from a perfect or scientific sample, but it does help illuminate what the chaos in the FCC’s comments look like up close. Here’s what we found:

The Bots

Let’s start with the outright fakes, since they’re in some ways the easiest to sniff out. To find the bot Nicholas Thompsons in our sample, we enlisted the help of FiscalNote, a company that processes public comments on behalf of corporations to help them make sense of the policy landscape. Researchers at FiscalNote previously identified nearly one million comments as bot submissions, all of them opposing net neutrality. Each one followed the same paragraph pattern, stringing together 35 synonymous words and phrases in a particular order to form similar, but not identical, comments.

FiscalNote’s vice president of research Vlad Eidelman found six comments that fit that pattern among the 39 Nicholas Thompsons, all submitted over the course of eight days in May. They included strange grammatical formations, like in the example below:

Dear Chairman Pai, I am concerned about internet regulations. I suggest the commission to repeal Tom Wheeler’s decision to control the Internet. Internet users, rather than so-called experts, should be empowered to enjoy whichever applications we want. Tom Wheeler’s decision to control the Internet is a exploitation of the open Internet. It ended a pro-consumer policy that functioned very, very successfully for a long time with bipartisan support.

Four of the bots were attached to fake home addresses, according to public records searches. The one below was associated with an email address that’s available for purchase on

Chairman Pai: In the matter of the FCC’s so-called Open Internet order. I want to recommend you to overturn The previous administration’s decision to take over broadband. Internet users, not Washington, should be free to purchase the applications we choose. The previous administration’s decision to take over broadband is a perversion of net neutrality. It ended a market-based policy that worked very, very successfully for a long time with broad bipartisan support.

Some bot-generated comments, though, used real names and addresses. Using the email address connected to one of these bot comments, we were able to track down one real Nicholas Thompson whose name and old address in Los Angeles were being used without his knowledge.

Thompson, who now lives in Portland, says he had submitted a pro-net neutrality comment to the FCC earlier this year. When we reached him by phone, he was angry to know that his authentic comment had been effectively cancelled out by a fake comment using his information. “That’s pretty messed up. It’s pretty sneaky on whoever decided to do that,” Thompson says. “I feel, for lack of a better term, just robbed of my voice.”

Confirmed Bots: 6

The Form Letters

Form letters are comments that advocacy groups draft for their members to submit en masse. According to Pew Research, only 6 percent of the roughly 23 million comments submitted to the FCC were actually unique. The rest were a combination of form letters and bots. The most popular form, submitted 2.8 million times, was a pro-net neutrality comment drafted by the advocacy group Battle for the Net. Eight Nicholas Thompsons submitted comments associated with Battle for the Net, each one linked to an authentic street address, though we couldn’t confirm their identities directly.

Here’s one of them:

The FCC’s Open Internet Rules (net neutrality rules) are extremely important to me. I urge you to protect them.\n\nI don’t want ISPs to have the power to block websites, slow them down, give some sites an advantage over others, or split the Internet into “fast lanes” for companies that pay and “slow lanes” for the rest.

Three other Nicholas Thompsons submitted comments connected to the group Taxpayers Protection Alliance, which Pew says was responsible for spreading some of the most widely used anti-net neutrality messages. All three of those comments tracked to real addresses associated with Thompson families. Here’s one example:

Obama’s Federal Communications Commission (FCC) forced regulations on the internet that put the government, and unaccountable bureaucrats, in control. These rules have cost taxpayers, slowed down broadband infrastructure investment, and hindered competition and choice for Americans. The time to remove the regulatory stranglehold on the internet is NOW. I urge the taxpayer-funded FCC to undo the terrible regulatory burdens that ex-FCC Chairman Tom Wheeler imposed on the internet. After 20 years, and trillions of dollars in infrastructure investment, there is no reason for the government to come in and ruin what has been a thriving tool that has changed the way we all live. Chairman Pai’s proposal to repeal Title II regulations will ensure the continued growth of a dynamic, open internet for all American consumers and taxpayers.

Confirmed Form Letters: 11

The Real Nick Thompsons

In the end, we were able to directly contact three, actual sentient beings named Nicholas Thompson who either picked up their phones or answered our Facebook messages and confirmed their identities. All three supported net neutrality. One of them had submitted the Battle for the Net form letter mentioned above.

The other two submitted unique comments:

I am writing to express my strong opposition to the repeal of net neutrality. It is an assault on the right of all Americans to an open and equitable internet. The internet has not only become essential for cultural, artistic, social and educational purposes, but has largely replaced other methods of doing essential tasks such as registering with government agencies, paying bills, renewing licenses, etc. In some of these cases the older methods have even been phased out completely, leaving the internet as the ONLY option. It is therefore a public utility that all have an equal right to and it is shameful and abhorrent that there is any attempt at all to repeal net neutrality. Thank you for your consideration.


I oppose the repealing or potential loosening of net neutrality rules in all forms, and wish for the full extent of it as known to the public to be preserved. Please do not take any actions that directly lead to that.

For those keeping score at home, that’s less than 8 percent that we were able to positively confirm over the course of several days. That’s with a pool of 39 comments. Now multiply that task by more than 600,000, and you’ll see what the FCC is up against.

Confirmed Nicholas Thompsons: 3

The Unknowns

It remains unclear who, or what, was behind the remaining comments—nearly half overall. Among the comments that opposed net neutrality, several seemed likely to be fake. One comment, below, was submitted identically by three Nicholas Thompsons, including two who provided home addresses that don’t exist. According to Pew, that same comment was submitted nearly 1.3 million times overall, suggesting many of them may have been fake.

Before leaving office, the Obama Administration rammed through a massive scheme that gave the federal government broad regulatory control over the internet. That misguided policy decision is threatening innovation and hurting broadband investment in one of the largest and most important sectors of the U.S. economy. I support the Federal Communications CommissionÍs decision to roll back Title II and allow for free market principles to guide our digital economy.

Two more anti-net neutrality comments submitted by Nicholas Thompsons, used real addresses linked to Thompson families, but the text of the comment was identical to one that was also flagged by a Redditor named Shaun Seckman. Seckman says his name and old address were also used without his permission to send the same message, which read:

Obama’s Net Neutrality order was the corrupt result of a corrupt process controlled by Silicon Valley special interests. It gives some of the biggest companies in the world a free ride at the expense of consumers and should be immediately repealed!

“This post was absolutely not made by me,” Seckman wrote. “I am in favor of Net Neutrality and would not have made such comments.” Given that the message matches the ones supposedly sent by two Nicholas Thompsons, it seems they may be fake, as well.

The rest are a mystery. Some appear to be form letters whose origins are unclear, because the text doesn’t appear elsewhere online. Others used real home addresses, but people finder sites like Spokeo and Nexis didn’t turn up any Thompsons living there. Those sites, of course, are riddled with inaccuracies of their own. Several other comments were likely fake, because they were submitted using home addresses that don’t exist. At least one was likely real, given it was a unique comment, attached to an authentic address belonging to a Nicholas Thompson, whose voicemail recording includes his name. But without talking to each of these remaining Nicholas Thompsons, it’s impossible to know for sure.

The utter messiness of this tiny sample alone demonstrates just how much is unknown about the comments the FCC received, and which it is required by law to consider.

As a workaround, the FCC has decided to ignore the majority of comments submitted by the public in favor of lengthy legal arguments submitted by interest groups and corporations. In doing so, it undermines the only real tool the public has to express their opinions about the rules that govern them. It’s silencing their voices more than a million bots ever could.

The 3 Biggest Challenges That Every Entrepreneur Faces–and How to Solve Them

Pete Ghiorse, Peter Tight, and James Ghiorse have a vision of transforming the way people give back.

Their iOS app, GiveTide, seeks to make charitable giving effortless by letting users link their credit cards, round purchases up to the nearest dollar, and donate the spare change (similar to apps like Givelify and Uback). It may not be a household name yet, but the three co-founders have already done a few things that should serve as be a model for other entrepreneurs.

That’s the sense I got, anyway, after meeting them last January on a Facebook group for East Coast entrepreneurs and hearing their story. Specifically, they did three things that I think every entrepreneur can — and should — do:

1. Solve a personal problem.

“We’re sorry, the minimum monthly gift amount is $25.”

That’s the message Pete Ghiorse received when he tried to set up a $5 monthly donation to his favorite nonprofit.

It shocked him that a nonprofit would actually refuse money, even if it came in small bills. But on further investigation, it turned out to be a problem with the platform, not the nonprofit.

“The fundraising tools and methods nonprofits have at their disposal haven’t changed in decades,” he explains.

This experience was the impetus for GiveTide. He knew he couldn’t be the only one wanting to donate a few dollars at a time, which meant nonprofits were missing out on a significant revenue source.

Often, the “light bulb” moment for an entrepreneur comes from a personal experience. That’s how it’s worked for me: It was only after nearly going bankrupt on a bad deal that my own agency came up with Roadmapping, a product offering that completely turned our business around.

But the light bulb moment isn’t enough. It’s important to solve a problem you understand — and the specifics of that solution shouldn’t come from the founder. Which brings us to…

2. Get answers from customers.

The inspiration for GiveTide came from personal experience, but Ghiorse and his co-founders understood that one light bulb experience does not a company make.

“We did countless hours of research and had hundreds of conversations,” Ghiorse says. “Through it all, we identified three key barriers to giving: financial, procedural, and social.”

Accordingly, the founders designed GiveTide to remove these barriers.

I’ve also found this to be helpful — it’s a foundational part of my agency business. One of our foundational priorities is to minimize founder-driven design: The only “true” answers come from users.

We spend countless hours testing our apps and design decisions with users, as that’s the only way to know what’s working and what needs to change. And whether it’s a mobile app or a physical product, that’s something every entrepreneur should do.

3. Push through barriers.

Ghiorse says GiveTide’s road to launching was initially clear. “We realized there were barely any charitable giving apps on the App Store, and none whatsoever that did what we were trying to build. We thought that was a good thing,” he explained.

Unfortunately, they missed something.

“Months into development, we discovered that Apple has a big, bold, double underlined section in their development guidelines stating that charitable giving apps are absolutely not allowed,” Ghiorse said.

This might have left them dead in the water. But instead of taking the rules at face value, they changed them. One 20-page appeal and several months later, Apple approved an exception to the rule and GiveTide was go for launch.

The GiveTide story is an instructive lesson in entrepreneurship: It demonstrates that when looking for business ideas, nothing beats a problem you’ve personally experienced. Identifying problems and pain points that you deal with personally is one of the best ways to make sure you’re creating something that people actually want.

However, no matter where the problem comes from, the solution should always be based on customer preference. As a founder, you start out with assumptions. Your job is to test them with customers and revise based on that data. 

And finally, perhaps the most important lesson here is that no problem is insurmountable. If you’re driven, dedicated, and creative enough, you can find a workaround for almost anything. 

When faced with an opportunity, sometimes the best thing is to jump on it and figure out the specifics later. In my own experience with Rootstrap, I’ve found that having a plan is important — but if you allow building the plan to get in the way of building the product, you’re lost.

Sometimes the best course of action is to jump on an opportunity even if you aren’t sure how you’ll execute.

Because the truth is, you can’t find a golden opportunity.

You can only make one.

UBS leads blockchain data reporting pilot ahead of new EU rules

ZURICH/NEW YORK (Reuters) – Financial companies led by Swiss bank UBS are testing a blockchain platform to help them comply with new European Union trade data standards due to come into force next year.

FILE PHOTO: Christmas decorations are seen at the building of Swiss bank UBS at the Paradeplatz square in Zurich, Switzerland, November 27, 2017. REUTERS/Arnd Wiegmann

Blockchain, the technology underpinning cryptocurrencies such as bitcoin, is a shared and immutable database maintained by a network of computers on the internet.

The more stringent requirements are part of the Markets in Financial Instruments Directive II, an overhaul of EU rules aimed at improving financial market transparency..

“The project is getting market participants to collaborate using blockchain to improve regulatory reporting,” Peter Stephens, head of blockchain at UBS, told Reuters.

The group, which includes Barclays, Credit Suisse, KBC, Swiss stock exchange SIX and Reuters parent Thomson Reuters, is testing an Ethereum blockchain to help ensure data accuracy and consensus.

Ethereum, a type of blockchain that can be used to develop decentralized applications, was invented by 23-year-old programer Vitalik Buterin. Many large companies and industry consortia have teamed up to develop standards and technology to make it easier for enterprises to use the Ethereum code, hoping it can help them streamline some of their processes.

“The point is to allow us to come to a consensus for this noncompetitive reference data which is essential for trade reporting purposes,” Stephens said.

Rather than replacing existing processes the blockchain, which runs on the Microsoft Azure cloud, will let financial firms perform a “quality check” of their own data against that of others, Stephens said. UBS Head of Data Christophe Tummers added that the pilot may be expanded to not only detect anomalies but resolve them too.

The new EU rules, which are due to take effect on Jan. 3, 2018, require banks to report more data to regulators and will also oblige banks and financial firms to obtain information identifying clients, issuers and counterparties of trades.

One element in this is a Legal Entity Identifier (LEI), a unique 20-digit code that connects key information about a company or legal entity such as its name, location, industry and regulatory data, which financial groups must obtain from clients before making any transactions that require reporting.

Firms can anonymously submit data onto the private blockchain, which will then check for any anomalies against other submissions under the same LEI, allowing the firm to update or standardise its own submissions.

Financial institutions have been investing in blockchain with the aim of developing software that can help them better manage some data-heavy processes. Proponents say it is well suited for when many parties need access to the same data.

“This use of blockchain to solve real-world regulatory requirements in a cost effective way is very appealing,” Credit Suisse’s head of blockchain strategy, Emmanuel Aidoo, said.

The pilot phase, which uses real LEI data, is set to conclude at the end of January.

Reporting by Brenna Hughes Neghaiwi and Anna Irrera; editing by Alexander Smith

Our Standards:The Thomson Reuters Trust Principles.

Patagonia Going After President Trump Tops This Week's Internet News Roundup

Who can even manage to get into the holiday spirit considering the whirlwind week that just passed? Not only was Southern California on fire, but several politicians resigned amidst sexual harassment claims while others continued to run for office despite facing their own sexual abuse allegations. Yes, time continued to speed up last week, but what else happened? Just a few small things. Keep reading.

This Land Is My Land, Apparently

What Happened: The President of the United States wants Americans to own America. As long as it’s only some Americans, and in a manner he’s OK with.

What Really Happened: In the latest phase of The Plan to Make America Great Again, last week President Trump announced moves to shrink two national monuments, claiming that, by doing so, he was freeing the lands from the control of “a small handful of very distant bureaucrats located in Washington.” The changes also open up the possibility of destroying hundreds of thousands of sites of archaeological importance and impacting the environment, but we’re getting ahead of ourselves. Let’s start with how this came about in the first place.

Oh, that makes a grim amount of sense. Unsurprisingly, not everyone was on board this, uh, “historic” decision.

As the Navajo Nation joined with four other American Indian tribes to sue Trump over this decision, another protest sprouted up in a more unexpected quarter.

This protest went beyond a PR stunt, with Patagonia also suing the president, with their lawsuit being no less than the fourth one filed against him over the national monuments decision. Surely, with this kind of opposition, the president and his administration is reconsidering making this kind of move, right?

Guess not.

The Takeaway: B-b-but Trump sounded so convincing when he was explaining it all during his press conference! What happened?

Oh, OK.

The Mueller Investigation, Part 6,448,003

What Happened: You know what it’s like: You tell the special counsel not to do something, and he just can’t resist. It’s like telling someone not to think of pink elephants, except with a massive federal investigation.

What Really Happened: Those paying attention to special counsel Robert Mueller’s investigation into issues surrounding potential collusion between the Trump 2016 campaign and Russian forces might remember that the president had, in July, announced ared linefor the investigation: his finances. “I think that’s a violation,” he explained. “I have no income from Russia. I don’t do business with Russia.” Why do we mention that now?

Yes, last week news broke that Mueller had apparently subpoenaed records relating to Trump’s finances from Deutsche Bank. That certainly seems like a big deal, doesn’t it?

Or, maybe not. After all, the president’s lawyer was quick to pour scorn on the whole thing.

Well, that certainly puts that to rest, right, everyone?

No, wait. We said that everything was put to rest. Stay on topic, everyone.

Money laundering? That’s surely far too far-fetched…

…Oh. That link, for those who didn’t click through, links to a 2015 press release about the Trump Taj Mahal Casino Resort being fined $10 million for “willful and repeated violations of the Bank Secrecy Act, with future periodic external audits to examine its anti-money laundering (AML) BSA compliance program” required as a result. So… yeahhhhh.

The Takeaway: You may be wondering, however, “So, did the president’s lawyer just outright lie about the subpoena? Is that… legal?” There’s an out, for those who are concerned for the moral upstandingness of Jay Sekulow. He might have been telling the truth, and someone else was lying…

…Sometimes the law turns the truth into Schrödinger’s cat, apparently.

Capitol Gains and Losses

What Happened: The president of the United States made good on one of his campaign promises—and in the process unleashed disaster and calamity.

What Really Happened: When the inevitable history of the Trump administration is written, people will look back on last week as one of the more important ones, and all because of something outside US borders.

…which was followed by some more news reports…

…which was followed by a lot of nervousness…

…and then the official announcement:

The statement was a dramatic one, being called a “deadly provocation,” an “act of diplomatic arson,” and a “big risk” by the media. Others tried to make sense of it all, while noting that it put the Middle East “on edge.” Still, at least evangelical Christians were happy. On social media and elsewhere, the reaction was swift.

At time of this writing, things seemed to be escalating.

The Takeaway: Leave it to Stephen Colbert to try to find the silver lining.

Frozen Out

What Happened: Russia got banned from the Winter Olympics. It was an ordeal.

What Really Happened: Perhaps you remember outrage over Russian doping scandals at the 2014 Winter Olympics. The International Olympic Committee certainly does, and announced last week that Russia will be banned entirely from next year’s Winter Olympics, although Russian athletes would be able to compete if they tested clean and agreed to appear under the Olympic flag.

Turns out, the decision was not only well covered by a somewhat surprised media, but also somewhat controversial on social media, prompting some unusual responses.

There were also, of course, the obvious jokes.

But it’s not like the US would skip the games in solidarity or anything, right?

…Right. But this is definitely the year to go! With all those competitors out of the game, the odds for medals are so much better!

The Takeaway: White House Press Secretary Sarah Huckabee Sanders was asked about this during a briefing last Thursday, and she had a couple of answers, as it turned out:

So, the US going or not? Your guess is as good as anyone else’s, it seems…

One For You, Two For Me

What Happened: The delicate balance between patrons and artists was upset last week when an outside party decided to make a somewhat inexplicable change.

What Really Happened: Patreon is a crowdfunding platform that many people rely upon to support their work, with the relationship between creators and funders being an important one that requires care, attention, and upkeep. It’s definitely not one that either side is willing to mess with for no reason. But apparently, that doesn’t mean that the platform shares that kind of concern.

The short version of those changes is that, starting December 18, Patreon will be changing its service fee structure and pushing the majority of processing charges onto the person pledging money, instead of the creator receiving the money. In theory, it means more money for the creator, but it also means that the funder has to pay more upfront—so a $1 pledge suddenly becomes $1.38, for example. (The new service fee is 2.9 percent of the pledge plus 35 cents; creators get 95 percent of the pledge, with everything else going to Patreon.)

Those using Patreon weren’t too happy with the news.

The media narrative quickly became that Patreon’s changes were likely to hurt smaller, independent content creators, and it only took a brief look at social media to see how true that was.

The Takeaway: Well, surely this is all going to settle down and work in Patreon’s favor soon enough. There’s definitely no way this is going to blow up in its face or anything.

First Solar Series 6 – This Is Huge

First Solar (NASDAQ:FSLR) Series 6 – This is big

This is a synopsis of the 3+ hour investor presentation from First Solar on the new series 6 module. I have watch, listened, to hundreds of similar investor presentations thru the years, but this one was outstanding. First Solar presented a detailed, systematic, well-paced argument that the series 6 module will be the cheapest, most reliable, and most bankable solar module/system for years to come for larger scale solar projects around the globe.

CEO Mark Widmar gave the overall layout of strategy, product road-map, market demand, environmental benefits, and the 3 phases of utility scale solar. CTO Raffi Garabedian was compelling in demonstrating the clear advantage of CdTe over Si- based semiconductor material, as well as the many advantages of the design features of the series 6 module. COO Georges Antoun presented First Solar’s impressive capacity road-map, and the enormous cost reductions of series 6 versus the series 4 modules.

A quick important note about the current cost and position of the old series 4 module emerged during this investor presentation. First Solar confirmed that the current series 4 module has the lowest cost per watt verses all other solar manufactures as of today.

In the Q&A with investment firms, Mark Widmar was questioned about this, since some solar firms claim a cost per watt of 27 cents. Mark did state that these firms do not include freight and warranty (1.5 cents per W), so including this 1.5 cents, he reiterated that the series 4 has the lowest cost. So now First Solar has stated that the current series 4 module has a cost per watt of less than 29 cents. This is important since the presentation compares the cost dynamics of the new series 6 with the current series 4.

In this article, I will lay out the module and system cost dynamics, manufacturing scaling, and the comparisons between CdTe verses Si-based solar systems.

The Series 6 Module

As we can see from the above slide, the new series 6 module has a much larger footprint and wattage. The series 6 module will be 483 watts, versus the 125-watt series 4. These wattage figure include the higher kwh yield that CdTe provides.

One key to CdTe cost advantage is in the scaling of the size of the module. Si-based module are comprised of individual cells, the lower wattage modules have 60 cells, were as the larger 330/350 wattage modules have 72 individual cells. So, when Si-based solar increases the size, there is little module cost advantage since the just linearly increase the number of cells.

First Solar vacuum deposition technology coats the glass at 3 microns thick in one process, so by increasing the size, you get less waste and much lower cost per watt advantage verse Si-based modules.

The above picture demonstrates this larger size scaling advantage by looking at the variable cost differences. First Solar has only 30% variable, and the Si-based competitors have a 60% variable cost. So, when you scale production, First Solar’s cost goes down at a much faster rate.

Module costs

The above graphic shows the cost reduction roadmap for series 6 vs. the series 4. As stated earlier, the current cost was stated by First Solar at 29 cents per watt, so the series 6 module cost will be about 17.5 cents per watt. But even more import is the full system cost including the balance of systems costs.

Full system cost

The above graphics show the various BOS components, and the independent test results for the actual installation and wiring of modules to the tracking racks. The video of the time lapse comparison is eye opening. In many regions, especially the USA market, labor is a stubbornly high component of the BOS costs. The series 6 will lower the installation labor cost by 55%!

Almost every design feature of the series 6 module is aimed at reducing BOS costs:

  1. Handles in the frames for easy 2 person carry – lower labor costs.
  2. The frames interconnect so that the pallets do not need support – lower freight and shipping costs.
  3. The smaller daisy chain wiring looks ridiculously easy to connect – low labor costs.
  4. The new size format works with existing tracking and racking systems. First Solar is leveraging the supply chains R&D and innovations.

First Solar is projecting a 40+% decrease in full system cost. My calculation estimates a 45% reduction based on the lower labor costs. Earlier this year utility scale solar dropped below $1 a watt for the first time:

“According to the report, utility-scale solar systems were priced at an average of $.99 to $1.08/watt, a first in the industry.” (Source)

Also, we have seen 2017 bids for PPA’s below 2 cents per kwh: The 1.8 cents bid in Dubai was unsubsidized, so when you back into the project’s cost per watt it is well below $1. First Solar has confirmed they currently have the lowest cost, so the cost road map for First Solar shows a cost per watt of 55 cents per watt on the conservative side.

So large scale ground mounted tracking systems will cost under 1.4 cents per kwh in the sunnier locations of the USA. Areas around Moab, Utah, where I am modeling solar potential would be in this range. This is an unsubsidized number.

With a tax incentive structure like we currently have in the USA, the cost per kwh could drop below 1 penny a kwh. I know this sounds crazy, but this is the stated cost road map. This incredibly low cost is directly linked to fierce free market competition and innovation.

Commodity cost risk of Si-based solar

“A shortage of polysilicon in China has triggered a 35% price spike, as the cost per kilogram rose from $14 to $19 over the past four months, causing difficulties for solar manufacturers who have already reported a marked decline in profit.” (Source)

After reading thru many Si-based solar firms quarterly reports, this topic was clear. Surging poly demand is causing much higher prices. This is yet one more cost dynamic where First Solar has the edge.

The future of CdTe cost dynamics

As a final note on the cost trends for CdTe, the above graphic demonstrates further cost reduction potential not even included in the current cost road map.

The manufacturing capacity road map

The above 2 graphics show the new capacity road map – I was blown away! By extending series 4, and adding in 2 new series 6 factories in Vietnam, the capacity will grow to around 6 gw’s by 2020. From a cost perspective this is a great use for the Vietnam assets that First Solar already owns. One factory has already been built, and they have the land for two more duplicate factories on that property.

Another eye opener was the large reduction in capex required to scale. Less than 50% of the capex required vs. the series 4, which is already the lowest in the industry. This gives First Solar a huge advantage compared to the other Si-based firms when it come to growing production, which of course creates the lowest cost structure in the industry.

This above graphic also points to another big advantage that First Solar has over its competitors when it comes to scaling production. First Solar will scale up above 6 GWs from existing cash flows, and also they have a $2 billion net cash position.

How will Canadian solar and Jinko (NYSE:JKS) solar scale? With more debt, and higher and higher debt service expenses. With interest rates rising around the globe, this will be another advantage for First Solar on the cost side.

First Solar‘s market demand

In this article, we have focused on the cost and technical advantages First Solar has over Si-based solar firms. First Solar has been mainly in the utility scale solar space. Now they have also stated that the commercial and industrial (C&I) space will be another market for them. I will break down these two markets.

During the investor presentation, First Solar did a great job showing the evolution is utility solar:

Solar 1.0

We are currently still in solar 1.0, that is driven by renewable portfolio standards in individual states, and the power purchase agreements that are focused on the kwh’s produced.

Solar 2.0 is coming up fast in California due to the duck curve issue during the spring. As more and more solar is connected to the grid, utilities will have a harder time with balancing.

Solar 2.0

This above study by CAISO is very important. It shows that larger scale solar arrays, with existing inverter technology can also benefit to grid, and help utilizes manage the grid. First is the fact that with solar you can have instantaneous curtailment – you just stop converting the DC to AC. This can be done to entire arrays, or smaller sub-sets as needed to help with load following.

In fact, the study shows solar can ramp and load follow better than the best natural gas peaking plants. Also of note – solar is better at frequency and voltage control. This new dynamic will allow utility scale solar projects to also get paid for this. This will drive utility scale solar into new markets over the next decade.

Solar 3.0

Fully dispatchable utility scale solar – the holy grail! This is not the present, but maybe the near-term future. First Solar CTO did answer questions on the topic of utility scale storage, and he has the same view I have – we are not there yet. Li-Ion storage will work for residential and commercial solar projects, but may not be able to scale to utility scale storage.

The CTO stated he and his R&D team are looking for new technologies beyond Li-ion, and when it makes financial sense, First Solar will invest. I am a bit more optimistic about large scale Li-ion, as we still have not seen the cost reductions from scale yet. If we can get below $25 per kwh, then solar 3.0 may come to fruition.

Commercial and Industrial demand

As a corporate buyer, the above factors are big. These large firms like Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Wal-Mart (NYSE:WMT) need to know these are cost effective, turnkey, warrant-able (backed by a strong balance sheet) projects. But now when I talk with companies looking at solar to help them with their sustainability programs, another factor is your manufacturing pollution footprint.

First Solar has this environmental advantage over the Si-based solar firms. CdTe technology uses far less energy and water to produce than Si-based. This huge energy demand to produce polysilicon, forces these firms to areas in China were power is cheap – mainly coal based electricity.

60 GW’s from just these firms, and we are just staring to develop this largely untapped market.

Global markets

First Solar is a global firm and wants to grow internationally as well as in the USA. I have been impressed that First Solar has not chased international revenue at the cost of profits. That’s why First Solar has a small footprint in China. Here are the markets First Solar gave as a focus during the presentation:

Bookings and gross market trends

Earnings guidance 2018 – 2020

My 2017 – 2020 projected earnings per share

Based on 2017/2018 numbers, and projected capacity and gross margins I have put together some very rough estimates:

2017=$2.45 EPS – First Solar’s number

2018=$1.5 EPS – First Solar’s number

2019=$5.5 EPS – my estimate

2020=$7 EPS – my estimate

Using the capital asset pricing model for valuation in a low interest rate environment, one needs to look at least the next 10 years of earnings and cash flows. Beyond 2020 no one knows, but First Solar has the advantage in every conceivable category for large scale solar IMHO.

Disclosure: I am/we are long FSLR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Staffordshire University goes all-in on Microsoft Azure for digital transformation

Staffordshire University is in the midst of a major, multi-year digital transformation, geared towards positioning the organisation as a technology leader in UK education.

This process has already seen the higher education provider declare itself the first university in Europe to go “all-in” on the Microsoft Azure public cloud, and move to adopt the software giant’s online productivity suite, Office 365.

The migration was completed over 12 months, from spring 2016, during which time the university decommissioned the two datacentres that were previously used to host all its infrastructure and applications.

Andrew Proctor, the university’s director of digital services, describes the 12-month delivery timeline allocated for the move as “aggressive”, and the project itself was not without its challenges.

“We had to work with a variety of suppliers to move their applications into the cloud environment, which was sometimes a new experience for the supplier as well,” he says.

“Some of the applications were ones you’ll find in any number of organisations, but the trickier ones were those that were a bit more specific to education. And because we were the first university to do this, some of the suppliers had to learn with us.

“They weren’t ready to deploy their solutions in a cloud environment and we had to do a lot of work with them to make that happen.”

The university’s existing datacentres had become unfit for purpose and would have required “significant investment” to bring them back up to standard, says Proctor – but that would have tied up capital that could have been put to better use elsewhere.

“We want to embed digital into everything the university is about”

Andrew Proctor, Staffordshire University

“We’ve got a highly ambitious digital transformation agenda here in Staffordshire and we saw being fully based in the cloud as a key enabler so that we are much more flexible and responsive,” he says.

“Also, one of key visions for the internal IT function here is that I don’t want them spending 80% of their time managing infrastructure. I want to free them up to focus on transformation and add value to the university.”

This is important because the organisation’s digital transformation ambitions go far beyond simply lifting and shifting its IT requirements to the cloud, and extend to ensuring technology plays a central role in every aspect of its students’ lives, says Proctor.

“Digital technologies are so pervasive now in day-to-day life, and we want to embed digital into everything the university is about,” he says.

“We aspire to be the leading digital university across the UK, so this [cloud migration] was a really good way for us to demonstrate how we are going to realise that ambition.”

Putting digital front and centre

In its quest to become the UK’s leading digital university, Staffordshire has worked hard to ensure its technology aims and objectives are woven into every aspect of its overall business strategy and plan.

“We don’t have a separate digital strategy because once you make it something separate, you are kind of missing the point,” says Proctor.

“So digital runs through all our corporate strategies, visions and all the things we do because we want to place digital at our very core, to the extent that when people are graduating from stuff at university, they are equipped for the digital age.”

The university’s workforce is also being encouraged to adopt a more startup-like mindset, with experimentation rewarded and failures treated as learning opportunities, says Proctor.

“One of the key indicators of a digital culture is the ability to experiment quickly to try things out on the understanding that some of these things may fail,” he adds.

“That’s a lot easier to do when you have fully migrated to the cloud because [in order to experiment] we don’t have to go out to procurement to get the hardware we need, which introduces loads of delays.

“If someone comes to us with an idea, we can move very fast and get them set up in hours,” says Proctor.

Reinforcing its reputation

The university is also keen to use its digital transformation to build on its burgeoning reputation as a purveyor of software engineering, games design and e-sports-related courses – and central to that is its commitment to improving the digital learning experiences of its students.

“We see things like games design as specialist, but even if you’re here on a business leadership course, you should leave here with digital skills because they are so important,” says Proctor.

“We do digital specialisms, with games design and software engineering, and more traditional courses, but the difference is we embed digital into those things.”

For example, Proctor says the university is evaluating how Microsoft’s mixed-reality headset technology, HoloLens, could be used to bring aspects of the curriculum for some of its courses to life.

“You don’t suddenly develop digital skills by going on a one-day course or visiting a website – it’s through the confident and pervasive use of digital technology,” he says.

Some of the technologies Staffordshire has already adopted, such as Office 365, are also helping the organisation work towards its goals of embracing the 24-hour university concept, whereby students can access support and education resources out of hours from any location.

However, Proctor says the university’s digital agenda is intended to complement and enhance the work that takes place on the campus, and ensure students make the most of their time there.

“There are things that can happen on campus that you can’t do online, but we want to ensure people are coming to our campus because they want to, not because they feel they have to,” he says.

Data analytics

Looking ahead, the university is investigating the role analytics could play in helping pinpoint students who might be at heightened risk of dropping out, so pre-emptive support and advice can be offered.

“Whether it’s just a conversation or some additional support [they need], just trying to make sure they aren’t dropping out without understanding what their options are and what support could be made available to them, is an immediate use case for analytics,” says Proctor.

There is also scope for using this technology to ensure the course content offered to students remains engaging, but is also tailored to their preferred learning style.

“We want to get to the point where some courses are almost self-optimising,” says Proctor. “They can identify the types of learning and teaching activities that are effective for different types of people and configure courses around people’s personal needs.”

That particular use case is “five to 10 years away” from being realised, he says, but highlights areas of innovation that the university might move into further down the line, now the groundwork for its digital transformation is complete.

And given the benefits both staff and students seem to be reaping from the work Proctor and his 70-strong IT team have done so far, it is hardly surprising that the university is already looking for ways to capitalise on its cloud move.

“The key benefit for staff and students is the significant improvements we have seen around the availability of applications and services,” he says. “We are in a much better position in that respect, and our ability to meet demand has improved as well.”

As an example of this, Proctor cites improvements in the way the university’s infrastructure now deals with surges in application use during peak periods, such as the annual A-level results day in August.

“We know that is a very important time for the university in terms of attracting students, and it is also a peak demand for certain applications that we use,” he says.

“Previously, we have either had to upgrade a server to make sure it has more memory, and kind of hope it will stand up to the demand. Now, a few hours beforehand, we can just dial up the amount of compute resource assigned to those applications very quickly, and are able to meet demand much more effectively and be a lot more agile and flexible.”

Why The World Needs More Bullsh*t Artists

The man with the close-cropped hair and camouflage pants who greeted me at the door of Sarabeth’s in New York City was a far cry from the shaggy-headed mod whose image I knew from countless rock biographies. Yet from the moment he opened his mouth, there was no doubt I was in the presence of Andrew Loog Oldham, the master hype artist who talked his way into handling publicity for the Beatles and then went on to create the bad-boy image of The Rolling Stones.

As a fan and student of both business and rock ‘n’ roll, I was bursting with questions for this legendary promoter and pop culture propagandist. As the owner of my own marketing agency, I am always looking to reverse engineer the secrets of the greats. And Oldham fits firmly into this category.

Like all elite marketers, Oldham naturally fell into storytelling as his main medium of communication. He regaled me throughout the course of our interview with firsthand accounts of Swinging London, including the period he spent as Mick and Keith’s roomie. But as much as I enjoyed these tales, my favorite story was one that had nothing to do with rock music at all.  

That’s because it holds the key to success in every area of entrepreneurship. 

Surfaces Are Everything

Oldham had just finished describing how he got the Stones featured in a major newspaper before anyone knew who they were, when I interrupted him.

“How did you do it?” I asked, “You were only nineteen years old.”

He thought for a moment, as if even he wasn’t sure himself.

And then he began.

“One time Aristotle Onassis (the shipping magnate and husband of Jackie O.) was asked by a reporter what his secret to success was,” Oldham recounted, “Onassis looked at him and said, ‘All you need in life is a suntan, a nice suit, and a good address. And for the last one, it doesn’t matter if it’s in the attic or the basement.'”

It was a model that Oldham followed. For example, when he first got into the publicity business, he barely had enough money for a place to live, let alone an office. However any time he would receive a call, he would pick up the phone and proclaim with utter confidence, “Oldham House.”

From the very beginning, Oldham’s instincts told him to present himself not as he currently was but as the institution he would become.

Become a Bullsh*t Artist

Early in most entrepreneurs’ careers, they don’t really have much of anything. No money. No contacts. Often, no actual products. As such, the best of them create a surface level impression of success and competence and then make the reality fit the projection.

But as entrepreneurs begin to experience real success, they often forget what got them there. That’s when they get themselves into trouble.

The best entrepreneurs, on the other hand, continue to project themselves as being bigger than they are, no matter how big that is. If she owns a million dollar company, she talks about billions. If he already pioneered electric cars, he becomes the guy on the verge of colonizing Mars.

Andrew Loog Oldham said, “I have often been accused of being a bullsh*t artist. However, to my mind, a prophecy of success is always the first step in making it a reality.”

It seems that as entrepreneurs, a little more bullsh*t might not be such a bad thing.