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Fourteen months after unveiling a $45.2 billion merger that would create a new Internet and cable giant, Comcast Corp. is planning to walk away from its proposed takeover of Time Warner Cable Inc., people with knowledge of the matter said. The decision marks a swift unraveling of a deal that awaited federal approval for more than a year. Opposition from the U.S. Justice Department and Federal Communications Commission took shape over the past week, leaving officials of the two companies to conclude the deal wouldn’t pass muster.

Comcast’s board will meet to finalize the decision on Thursday, and an announcement may come as soon as Friday, said one of the people, who asked not to be identified because the information is private. Time Warner Cable executives plan to tell shareholders on an earnings conference call next Thursday how the company can survive independently, the person said.

On Wednesday, FCC staff joined lawyers at the Justice Department opposing the transaction. That day, FCC officials told representatives of the two companies they are leaning toward concluding the merger doesn’t help consumers, a person with knowledge of the matter said. The FCC’s plan to call a hearing effectively killed the deal’s chances of success. An FCC hearing can take months to complete and drag out the approval process beyond the companies’ time frame for completion. Bloomberg News reported last week that Justice Department staff was leaning against the deal. Senators including Al Franken, a Democrat from Minnesota, also voiced opposition. “Comcast’s withdrawal of its proposed merger with Time Warner Cable would be spectacularly good news for consumers,” Michael Copps, a Democratic former FCC commissioner working with Common Cause to oppose the deal, said in a statement.

SALT LAKE CITY – A Utah lawmaker concerned about government spying on its citizens is questioning whether city water service should be cut off to a massive National Security Agency data storage facility outside Salt Lake City.Republican Rep. Marc Roberts, of Santaquin, said there are serious questions about privacy and surveillance surrounding the center, and several Utah residents who spoke at a legislative committee hearing Wednesday agreed.During the last legislative session, lawmakers opted to hold off on Roberts' bill to shut off the facility's water and decided to study it during the interim."This is not a bill just about a data center. This is a bill about civil rights," web developer Joe Levi said. "This is a bill that needs to be taken up and needs to be taken seriously."Pete Ashdown, founder of Salt Lake City-based Internet provider XMission, called the center a stain upon the state and its technology industry. "I do encourage you to stand up and do something about it," he said.Lawmakers said they aren't considering shutting down $1.7 billion facility, but the committee chair acknowledged the concerns and said there might be another way to get the point across. "We may look at some type of a strong message to give our representatives to take back to Congress," said Republican Sen. David Hinkins, of Orangeville.

The NSA's largest data storage center in the U.S. was built in Utah over 37 other locations because of open land and cheap electricity. The center sits on a National Guard base about 25 miles south of Salt Lake City in the town of Bluffdale.NSA officials said the center is key to protecting national security networks and allowing U.S. authorities to watch for cyber threats. Beyond that, the agency has offered few details.The center attracted much discussion and concern after revelations last year that the NSA has been collecting millions of U.S. phone records and digital communications stored by major Internet providers.

Cybersecurity experts say the nondescript Utah facility is a giant storehouse for phone calls, emails and online records that have been secretly collected.Outside the computer storehouses are large coolers that keep the machines from overheating. The coolers use large amounts of water, which the nearby city of Bluffdale sells to the center at a discounted rate.City records released earlier this year showed monthly water use was much less than the 1 million gallons a day that the U.S. Army Corps of Engineers predicted the center would need, causing some to wonder if the center was fully operational.NSA officials have refused to say if the center is up and running after its scheduled opening in October 2013 was stalled by electrical problems.City utility records showed the NSA has been making monthly minimum payments of about $30,000 to Bluffdale. The city manager said that pays for more water than the center used.The state of Nevada shut off water to the site of the proposed Yucca Mountain nuclear waste dump 90 miles northwest of Las Vegas in 2002, after months of threats.The project didn't run dry because the Energy Department built a 1-million-gallon tank and a small well for the site. Department officials said the stored water, plus 400,000 gallons stored in other tanks at the Nevada Test Site, provided time for scientists to continue experiments and design work at the site.

Microsoft's new plan to keep the US government's hands off its customers' data: Germany will be a safe harbor in the digital privacy storm. Microsoft on Wednesday announced that beginning in the second half of 2016, it will give foreign customers the option of keeping data in new European facilities that, at least in theory, should shield customers from US government surveillance. It will cost more, according to the Financial Times, though pricing details weren't forthcoming. Microsoft Cloud - including Azure, Office 365 and Dynamics CRM Online - will be hosted from new datacenters in the German regions of Magdeburg and Frankfurt am Main. Access to data will be controlled by what the company called a German data trustee: T-Systems, a subsidiary of the independent German company Deutsche Telekom. Without the permission of Deutsche Telekom or customers, Microsoft won't be able to get its hands on the data. If it does get permission, the trustee will still control and oversee Microsoft's access.

Microsoft CEO Satya Nadella dropped the word "trust" into the company's statement: Microsoft’s mission is to empower every person and every individual on the planet to achieve more. Our new datacenter regions in Germany, operated in partnership with Deutsche Telekom, will not only spur local innovation and growth, but offer customers choice and trust in how their data is handled and where it is stored.

On Tuesday, at the Future Decoded conference in London, Nadella also announced that Microsoft would, for the first time, be opening two UK datacenters next year. The company's also expanding its existing operations in Ireland and the Netherlands. Officially, none of this has anything to do with the long-drawn-out squabbling over the transatlantic Safe Harbor agreement, which the EU's highest court struck down last month, calling the agreement "invalid" because it didn't protect data from US surveillance. No, Nadella said, the new datacenters and expansions are all about giving local businesses and organizations "transformative technology they need to seize new global growth." But as Diginomica reports, Microsoft EVP of Cloud and Enterprise Scott Guthrie followed up his boss’s comments by saying that yes, the driver behind the new datacenters is to let customers keep data close: We can guarantee customers that their data will always stay in the UK. Being able to very concretely tell that story is something that I think will accelerate cloud adoption further in the UK.

Until just last week, the U.S. government kept up the charade that its use of a stockpile of security vulnerabilities for hacking was a closely held secret.1 In fact, in response to EFF’s FOIA suit to get access to the official U.S. policy on zero days, the government redacted every single reference to “offensive” use of vulnerabilities. To add insult to injury, the government’s claim was that even admitting to offensive use would cause damage to national security. Now, in the face of EFF’s brief marshaling overwhelming evidence to the contrary, the charade is over. In response to EFF’s motion for summary judgment, the government has disclosed a new version of the Vulnerabilities Equities Process, minus many of the worst redactions. First and foremost, it now admits that the “discovery of vulnerabilities in commercial information technology may present competing ‘equities’ for the [government’s] offensive and defensive mission.” That might seem painfully obvious—a flaw or backdoor in a Juniper router is dangerous for anyone running a network, whether that network is in the U.S. or Iran. But the government’s failure to adequately weigh these “competing equities” was so severe that in 2013 a group of experts appointed by President Obama recommended that the policy favor disclosure “in almost all instances for widely used code.” [.pdf].

The newly disclosed version of the Vulnerabilities Equities Process (VEP) also officially confirms what everyone already knew: the use of zero days isn’t confined to the spies. Rather, the policy states that the “law enforcement community may want to use information pertaining to a vulnerability for similar offensive or defensive purposes but for the ultimate end of law enforcement.” Similarly it explains that “counterintelligence equities can be defensive, offensive, and/or law enforcement-related” and may “also have prosecutorial responsibilities.” Given that the government is currently prosecuting users for committing crimes over Tor hidden services, and that it identified these individuals using vulnerabilities called a “Network Investigative Technique”, this too doesn’t exactly come as a shocker. Just a few weeks ago, the government swore that even acknowledging the mere fact that it uses vulnerabilities offensively “could be expected to cause serious damage to the national security.” That’s a standard move in FOIA cases involving classified information, even though the government unnecessarily classifies documents at an astounding rate. In this case, the government relented only after nearly a year and a half of litigation by EFF. The government would be well advised to stop relying on such weak secrecy claims—it only risks undermining its own credibility.

The new version of the VEP also reveals significantly more information about the general process the government follows when a vulnerability is identified. In a nutshell, an agency that discovers a zero day is responsible for invoking the VEP, which then provides for centralized coordination and weighing of equities among all affected agencies. Along with a declaration from an official at the Office of the Director of National Intelligence, this new information provides more background on the reasons why the government decided to develop an overarching zero day policy in the first place: it “recognized that not all organizations see the entire picture of vulnerabilities, and each organization may have its own equities and concerns regarding the prioritization of patches and fixes, as well as its own distinct mission obligations.” We now know the VEP was finalized in February 2010, but the government apparently failed to implement it in any substantial way, prompting the presidential review group’s recommendation to prioritize disclosure over offensive hacking. We’re glad to have forced a little more transparency on this important issue, but the government is still foolishly holding on to a few last redactions, including refusing to name which agencies participate in the VEP. That’s just not supportable, and we’ll be in court next month to argue that the names of these agencies must be disclosed. 

The battle over the Federal Communications Commission’s (FCC) repeal of net neutrality rules is entering a new phase, with opponents of the move launching efforts to preserve the Obama-era consumer protections.The net neutrality rules had required internet service providers to treat all web traffic equally. Republicans on the commission decried the regulatory structure as a gross overreach, and quickly moved to reverse them once the Trump administration came to power. The reversal of the rules was published in the Federal Register Thursday, and even though the order is months away from implementation, net neutrality supporters are now free to mount legal challenges to the action. A coalition of Democratic state attorneys general, public interest groups and internet companies have vowed to fight in the courts. Twenty-three states, led by New York and its attorney general, Eric Schneiderman (D), have already filed a lawsuit. 

Even if Democrats do manage to find the tie-breaking vote in the Senate, the bill is almost certain to die in the House. But Democrats see a roll call vote as an opportunity to make GOP members stake out a position on an issue that they think could resonate in the midterm elections. On yet another front, Democratic states around the country have already launched their own attack on the FCC’s rules. Five governors (from Montana, Hawaii, New Jersey, Vermont and New York) have in recent weeks signed executive orders forbidding their states from doing business with internet service providers who violate net neutrality principles. And, according to the pro-net neutrality group Free Press, legislatures in 26 states are weighing bills that would codify their own open internet protections. The local efforts could ignite a separate legal battle over whether states have the authority to counteract the FCC’s order, which included a provision preempting them from replacing the rules.

The emerging court battle over net neutrality could keep the issue in limbo for years.Meanwhile, a separate battle over the rules is brewing in Congress.Senate Democrats have secured enough support to force a vote on a bill that would undo the FCC’s December vote and leave the net neutrality rules in place. The bill, which is being pushed by Sen. Ed MarkeyEdward (Ed) John MarkeyRegulators seek to remove barriers to electric grid storage Markey, Paul want to know if new rules are helping opioid treatment Oil spill tax on oil companies reinstated as part of budget deal MORE (D-Mass.), would use a legislative tool called the Congressional Review Act (CRA) to roll back the FCC’s repeal of net neutrality. The entry of the FCC’s repeal order in the Federal Register Thursday means that the Senate has 60 legislative days to move on the CRA bill. Democrats have secured support from one Republican, Sen. Susan CollinsSusan Margaret CollinsOvernight Tech: Judge blocks AT&T request for DOJ communications | Facebook VP apologizes for tweets about Mueller probe | Tech wants Treasury to fight EU tax proposal Overnight Regulation: Trump to take steps to ban bump stocks | Trump eases rules on insurance sold outside of ObamaCare | FCC to officially rescind net neutrality Thursday | Obama EPA chief: Reg rollback won't stand FCC to officially rescind net neutrality rules on Thursday MORE (Maine), and need just one more to cross the aisle for the bill to pass the chamber. 

The encryption debate dates back to Clinton administration proposals for the “clipper chip” and mandatory deposit of decryption keys. But that debate reached new prominence in connection with the FBI’s efforts to compel Apple to decrypt the phone of a dead terrorist in the San Bernardino case. A new study by the National Academies of Sciences, Engineering, and Medicine tries to shed some light, and turn down the heat, in the debate over whether government agencies should be provided access to plaintext versions of encrypted communications and other data. FBI and other law enforcement officials, and some intelligence officials, have argued that in the face of widespread encryption provided by smart phones, messaging apps, and other devices and software, the internet is “going dark.” These officials warn that encryption is restricting their access to information needed for criminal and national security investigations, arguing that they need a reliable, timely and scalable way to access it. Critics have raised legal and practical objections that regulations to ensure government access would pose unacceptable risks to privacy and civil liberties and undermine computer security in the face of rising cyber threats, and may be less necessary given the wider availability of data and alternative means of obtaining access to encrypted data. As the encryption debate has become increasingly polarized with participants on all sides making sweeping, sometimes absolutist, assertions, the new National Academies’ report doesn’t purport to tell anyone what to do, but rather provides a primer on the relevant issues.

Trump national security officials are considering an unprecedented federal takeover of a portion of the nation’s mobile network to guard against China, according to sensitive documents obtained by Axios.Why it matters: We’ve got our hands on a PowerPoint deck and a memo — both produced by a senior National Security Council official — which were presented recently to senior officials at other agencies in the Trump administration.