Pluralistic: 28 Jan 2021

Today's links

Mexican indigenous telco wins spectrum fight (permalink)

In the early 2000s, dramatic shifts in radio spectrum allocation for mobile data applications, combined with advances in radio transmission and receiving prompted some networking engineers to propose a radical rethink of radio.

Our current spectrum management assumes that senders and receivers have characteristics that are fixed at the point of manufacture, determined by things like the shape of an antenna and the type of quartz crystal used as an oscillator.

But software-defined radios (SDRs) and software-tunable phased-array antennas make those assumptions obsolete. Today, a radio can be a commodity computer that can sense other devices' RF use and transmit and receive on multiple frequencies to share the airwaves.

This was dubbed "cognitive radio" and its proponents imagined a world where the exclusive spectrum allocations handed out to telcos, broadcasters and other powerful entities would be replaced by a cooperative spectrum model.

Two radios that needed to talk to one another might make contact in one band, switch to another, or ask a third receiver to relay messages for them, using just enough power to reach one another, avoiding the bands that were already in use.

These proposals – which would vastly increase wireless data capacity – were met with fierce resistance, from incumbent licensors, from spectrum speculators, and from HAMs, who are brilliant but also tend to be conservative about spectrum allocation.

These debates inevitably ran up against a hard limit: no one had ever built any kind of serious cognitive radio network. Just trying it would likely trigger massive, brutal FCC enforcement action, as it would trample all that exclusive spectrum.

But that didn't cool the ardor of cognitive radio's fiercest proponents. People like Dwayne Hendricks roamed the world, looking for spectrum havens – places where cognitive radio could be tried. The King of Tonga greenlit one project!

But the most promising on-shore spectrum laboratories were First Nations territories – sovereign nations whose treaties predated any understanding of electromagnetic spectrum and thus did not cede spectrum rights to settler colonial powers.

Though the legal theory was as untested as the technical one, some First Nations bands dallied with it, wondering if they leverage their position to race past the hidebound rules in the US and Canada to bring money and connectivity to their communities.

I wrote a short story about this in 2002, "Liberation Spectrum," which Salon published in 2003:

Making sovereign spectrum policy is one of the better interpretations of treaty law; it has the potential to be as lucrative as, say, casinos – and could also bridge the digital divide for First Nations communities.

Certainly, it's a better idea than the pharma trolls who briefly experimented with transfering patent portfolios to sovereign bands in the hopes of of muddying the jurisdictional questions so that their profiteering would be harder to shut down.

Thankfully, that plan petered out. Likewise, First Nations experiments with spectrum policy seem also to have lost momentum, since then – at least, none have crossed my radar.

Until now.

On Jan 13, the Mexican Supreme Court found in favor of Indigenous Community Telecommunications (TIC), unanimously finding that community groups like TIC were entitled to free "social use" spectrum licenses.

The decision did not rely on treaty rights, but rather upon a carve out in Mexican spectrum policy that gives free spectrum to community groups. TIC is an incredibly effective network of 80 towns in 18 Indigenous communities operating voice and data mobile networks.

Since 2018, TIC has been under threat, with the regulator demanding 1m pesos for continued access to spectrum; a demand the Supreme Court unanimously voided.

The decision will ease expansions of TIC's service into the vast majority of Indigenous communities that lack reliable mobile service.

And it also allows for services beyond telephony. As TIC's Erick Huerta says, this paves the way for other Indigenous media being exempted from regulatory barriers.

How apps steal your location (permalink)

A new research report from Sean O'Brien and Expressvpn in honor Data Privacy Day reveals the incredible extent of commercial location tracking hidden in everyday apps.

App vendors use free software development kits (SDKs) to build their products, not realizing (or not caring) that the SDKs come from commercial surveillance companies that harvest all their users' data and sell it in hidden, sprawling commercial markets.

That's how the US military was able to buy location data on users of a Muslim prayer app: the app was built with one of these surveillance SDKs, so the data was extracted, packaged and sold on the cheap to the Pentagon.

The survey encompasses 450 apps with 1.7b downloads. It found that messenger apps (including many masquerading as Wechat, FB Messenger, and Telegram) were rife with location tracking. Other major offenders include dating and social apps.

The sleaziest SDK vendors are also the most prolific. X-Mode (a company that is theoretically banned from app stores) is in 44% of the analyzed apps. X-Mode is especially prevalent in religious apps, especially Islamic ones.

The researchers did me the honor of naming their report Project Xoth – Xoth is the name of one of the sinister commercial surveillance companies in Attack Surface, the third Little Brother book.

Understanding /r/wallstreetbets (permalink)

There is no shortage of takes about what's going on with Gamestop (and other surging stocks), Robinhood and Reddit's r/wallstreetbets, many of them contradictory – at least on the face of them. But I think it's possible for most of these takes to be right. Here's how.

First you need to understand the underlying mechanics of the story. Stock markets are fundamentally a way of making bets, including bets on the outcome of other peoples' bets, and bets on the outcomes of those bets.

All this complexity creates lots of exploitable opportunities. Some of these opportunities are considered legitimate and are given respectable names like "arbitrage." Others are considered illegitimate, and are called disreputable things like "stock manipulation."

A hypothetical Martian observing all this through a telescope could not tell you which kinds of bets were honest and which were dishonest, because the difference isn't about any objective standard, but rather, about power.

The strategies of powerful people are legit, while the strategies of their would-be dethroners are not legit. Sometimes, even outright frauds are OK if they're done by people with enough power.

If your scam pays out quickly enough, you can sometimes parlay the resulting cash into retrospective legitimization, so even the strategies of the out-group can end up being retconned as legit, if they're successful enough.

That's why Amway isn't illegal: Betsy DeVos's father-in-law was simultaneously the boss of Amway and head of the US Chamber of Commerce, and Gerry Ford was his Congressman, who was then elevated to president in time to legalize its business model.

To understand the Gamestop rise, you have to understand a couple of different kinds of bets.

"Shorting": this is a bet that a stock will go down. There's a complicated backstory to how you make this bet, but it doesn't matter.

The thing to know here is that shorting a stock can make you rich…if the stock goes down. But if the stock goes up, you lose money. There's not really any limit to how much you can lose here.

Every time the stock goes up, the shorts have to pony up more money to keep their bet alive (in the hopes that it will go down again later), or they have to take their losses, pay out the winner of the bet and surrender any chance of winning later.

Shorting isn't just a bet on someone else's failure – it's a way to fund bullshit-detection. If you know (or suspect) that a company is lying about its prospects, you can bet against it.

Shorts fund a lot of research into defective products and scammy businesses, because they win when bad companies are exposed and their stocks go down. Some of the scary security research you read about bad IoT software is funded by shorts.

That's why habitual bullshitters like Elon Musk hate shorts. Musk leads a cult of credulous worshippers who buy whatever he's selling. Shorts make bets that Musk's cultists will get deprogrammed. Musk uses this to sharpen his cultists' resolve: "they want us to fail!"

"Options": many different bets get lumped in as "options" but for the purposes of this discussion, buying an option means buying the right to buy stocks later. The people who sell you the option usually go out and buy the stock right away so they'll have it to sell.

"Front-running": Cheating. Front-runners insert themselves into transactions by spying. If I know that Alice is buying a bunch of Bob's shares, I can snap them up a millisecond before Alice gets there, mark them up, and sell to Alice at a profit.

"Retail investor": An "average joe" who buys stocks from a brokerage like Robinhood.

"Institutional investor": Hedge funds, private equity funds, pension funds, index funds, investment banks, etc. Whales and sharks.

"High-frequency trader": A bot. Someone (usually an institutional investor) who uses an algorithm to buy and sell shares very quickly. HFTs might buy a stock and sell it less than a second later (when they're front-running, for example).

With that all out of the way, here's what seems to be going on. Reddit's r/wallstreetbets is a "retail investor" forum of average joes, many of them angry at the scammy, evil stuff that the big institutional investors get up to.

Their grievances are mixed: some are angry that big investors have figured out how to destroy good businesses for money. Some are angry because only big institutionals get in on the action when that happens and average joes are locked out of those plays.

They are stuck at home, have little to spend their money on, and – critically – have access to "trading platforms" like Robinhood that let them buy and sell stocks without any fees (institutionals often have sweetheart deals like this, but average joes used to pay to play).

They're getting together to make money and to punish their enemies. The easiest enemies to punish are shorts, because if they push up a stock even a little, the shorts get pounded for millions of dollars.

If they can keep the stock up long enough, the shorts will give up and the average joes will collect their winnings. And the average joes are clever. They've figured out that they don't even have to buy the stocks to force the price up – they can buy cheaper options instead.

An option is a bet. The people on the other side of the bet usually buy the stocks they sell options on. If I buy an option to buy a stock from you and then the stock goes up, you have to go out and buy the stock and sell it to me at a loss.

If you're an option seller who thinks a stock will go up, you protect yourself by buying shares now.

Buying options is a cheap way to get someone else to buy a stock, which pushes the price up. If the price is going up, options sellers will snap up more stock.

There's two prominent versions of the Gamestop story. The first is that r/wallstreetbets represents so many angry average joes that they can "move markets" by buying unlikely shares, like Gamestop or AMC, and confound the markets.

The second story is that r/wallstreetbets has figured out a hack. They inflict asymmetric pain on shorts (a tiny gain for average joes is a huge wound to the sharks). By buying options, they can eke out tiny gains for a fraction of the price.

But there's a third story, and I think it's the most important one. That's Alexis Goldstein's account of what's going on with Robinhood and the institutional investors it's in bed with.

Recall that all of this is only possible because Robinhood lets average joes buy and sell stocks for free. How can Robinhood give away a service that costs it money and still stay in business? (Hint: They're not making it up in volume).

The answer is: surveillance. Robinhood partners with institutional investors and lets them spy on what the average joes are buying and selling. Sometimes, this is just "market intelligence" ("Hey, people like fidget spinners") but the main event is front-running.

If you're paying Robinhood to tell you what assets its customers are about to buy, you can go out and buy them up first and sell them for a profit to Robinhood's customers.

Or you can buy some of that asset up because you know its price will go up once Robinhood's customers orders are filled.

Or both.

Citadel Securities is Robinhood's main institutional investor partner. Founded by billionaire Ken Griffin, they combine tech (high-frequency trading), an "asset manager" (they spend other peoples' money) and a "market maker" (they sell things like options).

Citadel gets to see all those r/wallstreetbets buy orders before they're filled. They can fill some of those orders, making a profit. They can buy some of the same stock for themselves, making a profit. They can sell options, making a profit.

A little bit of this profit comes at the expense of average joes: if there wasn't a front-runner marking up the stocks they buy, the average joes would pay a little less. But the average joes are still profiting from the destruction of the shorts.

Citadel is merely taxing their winnings. The real losers here, though are Citadel's competitors, funds like Melvin Capital, who were seriously short on Gamestop and went bust thanks to all of this. Guess who bought Melvin at fire-sale prices? That's right, Citadel.

So the third story goes like this: there are a lot of average joes. They're numerous, pissed and smart. They move a lot of money against shorts and make it go farther thanks to the force-multiplier effect of options.

Then all this activity is multiplied again by Citadel, a fund that is no better (and no worse) than Melvin or the other targets of the average joes' wrath. Citadel's bots are triggered by the average joes' activity, which turns kilotons of damage into gigatons.

It's not clear whether the average joes know they're triggering Citadel's bots, or whether this is just Citadel's bet on frontrunning average joes paying off for Citadel. It's possible Citadel is the joes' patsy, and the joes are also Citadel's patsies.

It's also not clear whether Citadel – and its feuding cohort of competing finance-ghouls – can contain the storm. Maybe they profit off the average joes now, but the joes figure it out and turn their weapons on Citadel and the whole system later.

Remember, the "legitimacy" of a financial strategy isn't determined by its objective decency, but rather by the power of the people who deploy it. If the average joes can attain respectability, they may be legitimized.

But the road to legitimacy is rocky. Yesterday, the finance monopolist TD-Ameritrade halted trading on the stocks targeted by the average joes. Today, Robinhood followed suit. Maybe they fear that they can't control the monster they created?

Knowledge is why you build your own apps (permalink)

"How to Build Good Software" is the Singapore's Civil Service College's excellent white-paper on, well, how to build good software. Much of what's in here is well-stated repetition of common wisdom from the field, but there's one standout and novel section.

"Software Is about Developing Knowledge More than Writing Code" presents a really important perspective on software development I'd not seen before: that the complex, messy, iterative process of software development is a feature, not a bug.

Author Li Hongyi argues that getting working software out the door involves making tradeoffs, compromises, and paint-to-cover/file-to-fit style engineering. If you do that work in house, you know where the weak spots are.

But if you outsource this work, the shameful secrets become the property of your contractors, who probably don't even bother to document them. So you lose out on knowledge – and even on the ability to buy that knowledge.

"Even if the system is very well documented, some knowledge is lost every time a new team takes over. Over the years, the system becomes a patchwork of code from many different authors. It becomes harder and harder to keep running; eventually, there is no one left who truly understands how it works.

"For your software to keep working well in the long term, it is important to have your staff learning alongside the external help to retain critical engineering knowledge in your organisation."

(Image: Kevin Todora, CC BY-SA, modified)

This day in history (permalink)

#15yrsago Photographer’s bust-card silkscreened on white-balance cards

#15yrsago What the LibreOffice fork means for Oracle’s shabby treatment of Sun’s free software projects

#15yrsago Danny O’Brien’s Open Source con presentation on Evil

#10yrsago William Gibson on Stuxnet

#10yrsago Fair use for poets, demystified

#5yrsago Bill Gates sold rights to the Tiananmen 1989 pictures to a Chinese company

#5yrsago Guess who donated all the money to Black Americans for a Better Future Super PAC? Rich white men.

#5yrsago Anaheim: the happiest surveillance state on earth

#1yrago “A piece of shit”: Government report on Wells Fargo corruption shows top executives’ direct complicity in millions of acts of fraud

#1yrago A vase ringed with razor-sharp knives

#1yrago “The Art of Computer Designing”: stark, beautiful black-and-white images from 1993

#1yrago RIP, Jason Polan, who tried to draw every single person in New York City

#1yrago What happens when you steadily ramp up the speed at which you listen to podcasts

#1yrago After ransomware took Baltimore hostage, Maryland introduces legislation that bans disclosing the bugs ransomware exploits

#1yrago The “ops lessons we all learn the hard way”

#1yrago Ajit Pai promised that killing net neutrality would spur network investment, but instead Comcast cut spending by 10.5%

#1yrago The Catholic Church broke its promise to publish a list of “credibly accused” abuser priests, so Propublica did it for them

#5yrsago Microsoft billionaire Paul Allen wipes out coral reef with his superyacht

#5yrsago Florida mayors write to GOP presidential hopefuls demanding action on climate change

Colophon (permalink)

Today's top sources: Nat Torkington (), Naked Capitalism (

Currently writing:

  • My next novel, "The Lost Cause," a post-GND novel about truth and reconciliation. Yesterday's progress: 547 words (104156 total).

  • A short story, "Jeffty is Five," for The Last Dangerous Visions. Yesterday's progress: 253 words (1885 total).

Currently reading: Analogia by George Dyson.

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