Apple goes to war with Facebook and Google

Apple has disabled Facebook and Google’s internal applications after privacy violations were revealed, leaving Google and Facebook employees at a standstill for key operations. Meanwhile, in other Apple news, the tech giant’s revenue declined over the holiday quarter and is reportedly testing new iPhones with three rear cameras and a USB-C port. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Nilay Patel?

  Hey everybody, it's Niall from The Vergecast. Huge news this week. Apple has revoked Facebook and Google's enterprise certificates after both companies were revealed to be installing market research apps. We're a little sketchy on the privacy front. We talk all about that with Casey Newton. We talk about the rumors of a USB-C iPhone, which is very exciting. We talk about Apple's big FaceTime bug. We got to talk Apple earnings, and then we wrap it up with Paul's segment, which we do every week. You all know what it's called. We'll be back right after this.

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• 1:35Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of verge.com, a show that still has its enterprise certificate. That's the news. We got to get started. First, I want to tell you Dieter is out this week. He might leave us a voicemail later. He called me earlier and just started ranting, so I might just make him do that. He's had a lot of thoughts. So he's out on a reporting trip. You'll see that product of that later. So to replace him, I had to bring in two people. Heim Gartenberg is here.

• 2:02Speaker 03

  Hello.

• 2:03Nilay Patel?

  Casey Newton is calling in. What's up? From the road, AirPods in, looking like a pro traveler. And Paul's here. Hey, buddy. Hello. All right, let's just start. World War III, IV. World War 4.0 has begun. Minutes before we started taping, Apple, which is an important company that makes phones and laptops. And software. Software. Yanked Google's enterprise software certificate for iOS, which is the software certificate that lets Google deploy its own internal apps without going through the App Store.

• 2:43Nilay Patel?

  Thus, shutting down all of its betas of Gmail, YouTube, Maps on iOS, and their own internal apps, like the one that like opens, that shows them the menus in the cafe. This literally just happened. It happened minutes before we started taping. This follows the fact that Apple did this to Facebook yesterday. Same situation, yanked the enterprise certificate. Facebook people can no longer like look at their bus schedule or test out builds of Instagram. This is all in response to both Facebook and Google running. Casey, how would you describe them? Research apps? User research apps?

• 3:27Speaker 04

  Market research apps. So, there are plenty of these kinds of programs at all kinds of companies, right? Like, there are a lot of companies that'll pay you 20 or 50 bucks, give you a gift card in exchange for some amount of your time, and typically you'll just sort of answer a bunch of questions about the product and the competition. What made this really different was that they were using a program designed to let companies test apps internally in order to do market research with their customers. And after Apple became aware of it, they pulled the plug and said, "Nah."

• 4:02Nilay Patel?

  So, Facebook very famously owned a VPN called Onavo. Which is a bad name, but they owned a VPN called Onavo. And so famously, Facebook bought this VPN company. They let people install Onavo Protect, which is the app. Route all the traffic through this VPN to say you are more secure. But really what Facebook was doing was monitoring this traffic to see which apps were taking off, which features you were using. So this is how they discovered that WhatsApp was taking off, I believe, before they acquired WhatsApp. It's how they discovered Instagram Stories was taking off and I'm sorry Snapchat Stories were taking off. And they cloned it in Instagram Stories.

• 4:42Nilay Patel?

  So Facebook is like monitoring user behavior on the iPhone through this Onavo Protect app. At one point, I believe they even had a tab in the Facebook, the big blue app that said Protect to try to get you to install Onavo Protect, which is insane. This all came out. Apple said, wait, wait, wait, this is not cool. We do not want anyone, we saw Facebook, monitoring user data in this way. They banned Onavo Protect. But it turns out the same code and the headers of the research app was being used for this Facebook research. By the way, we have to give a shout out to TechCrunch and Josh Konstantin that broke this story.

• 5:25Nilay Patel?

  So Facebook is running a research program where everyone is focused on teens. But I think it was more than teens, right Casey?

• 5:34Speaker 04

  Yeah, they were targeting people ages 13 to 35.

• 5:38Nilay Patel?

  So a broad, a broad definition of teen, but teens in the mix where you would get like a $20 gift card. If you sign up for this program through one of their vendors, they would send you the certificate that lets you sideload apps onto an iPhone, right? Famously, you cannot sideload apps onto an iPhone. You have to go through the App Store. But if you have an enterprise certificate, you can deploy apps without the App Store. So Facebook would send you their enterprise certificate. You would sideload this app that had a ton of Onavo code in it. And it would monitor everything that was happening on your phone. In some cases, it appears even encrypted chats, like they were able to bypass that layer too.

• 6:18Speaker 05

  This is a place, this is a point that I had a hard time figuring out the exact details of. Obviously, a VPN app like the Onavo app could.

• 6:28Speaker 05

  Track a lot of what you do based on your internet traffic. A sideloaded app theoretically has a lot more privileges than just a regular VPN app that got through the App Store.

• 6:39Nilay Patel?

  Yep.

• 6:40Speaker 05

  Was this app doing a lot more than a VPN? Or was the primary data collection just the VPN stuff? Or do we know?

• 6:48Nilay Patel?

  From the TechCrunch article, it appears it was doing much more. And they had some security researchers look into it. Casey?

• 6:54Speaker 04

  Yeah, and you know, Ben Thompson wrote about it today and described it as kind of like what in other terms would have been a classic man in the middle attack where they were able to intercept basically anything. The original TechCrunch article says that tech messages and email content would have been accessible to the person. So based on the reporting we've read, it seems like this was like a near, near total access to all of the most sensitive data on your phone, which again, we should say people volunteered to submit, assuming they actually read the terms of service.

• 7:27Nilay Patel?

  For $20.

• 7:31Nilay Patel?

  Would you give Facebook root access to your phone for 20 bucks? Is really the...

• 7:38Speaker 04

  I think that should acknowledge that 20 bucks is a meaningful amount of money to a lot of people, especially people who, let's say, are 13 years old. And, you know, interestingly, Slate posted an article today in which it interviewed some of the people who were apparently participating in this program. And some of them, in this way that kind of depressed me, said, you know, we thought that this data was being sent to, you know, random companies anyway. So, you know, to us, it was just free money.

• 8:06Nilay Patel?

  That's kind of good. Anyway, so it comes out, TechCrunch breaks the story. Facebook is doing this. They're installing this sideloaded app on iOS through this research program. They're using their enterprise certificate to get on the phone. That's really the heart of the thing. Right? The actual sort of Facebook is once again doing something shady with user data. Right, their excuse is, and I think Sheryl Sandberg even just said this to CNBC was, well, they signed up. Like, they signed up. They wanted this to happen. They got paid. Like, this was the deal. Their parents should, like, so there's like a whole conversation about this app and whether it should work. But then there's the issue of the enterprise

• 8:48Nilay Patel?

  certificate, right? There's sideloading apps on iOS. So Apple responds, and we broke this story. We give credit to TechCrunch. I want to give credit to our team. We broke this story yesterday. They yank Facebook's enterprise certificate. They just disable it, which causes this chain reaction. Every other sideloaded Facebook app that uses a certificate just stops working. You click on it, it doesn't even open.

• 9:12Speaker 05

  And the primary understanding is that the terms of use for having this enterprise certificate is that you do not use it to distribute apps to consumers.

• 9:23Nilay Patel?

  Yes.

• 9:24Speaker 05

  Is that correct?

• 9:24Nilay Patel?

  Yeah. It sounds very much like everyone does it anyway, which is a thing.

• 9:29Speaker 05

  But you, think about it, think about it, Fortnite.

• 9:33Nilay Patel?

  Right. Yeah, Epic distributes Fortnite as a sideloaded enterprise certificate.

• 9:38Speaker 05

  Epic could distribute, yeah, it could give people $23 worth of Fortnite skins were they to sideload Fortnite with their enterprise certificate.

• 9:51Nilay Patel?

  Well, look, here, I don't know anything about what they've considered internally, but I will tell you that I tweeted, this is pretty disturbing that Apple can just disable these certificates. And all of Facebook's internal apps stop working. It's basically like a vacation day at Facebook, from what I can surmise. Casey's nodding his head. Did you hear that, too?

• 10:11Speaker 04

  Uh, yes. I mean, just imagine, you know, your entire workflow is dependent on you having access to the iOS app that you're working on, and there is literally no way for you to get it to launch anymore.

• 10:25Nilay Patel?

  Yeah. So you don't need, I just want to be really clear about this. Many, many people have tweeted many, many things at me. But you don't need an enterprise certificate to be an iOS app developer. You can just plug your phone into Xcode, you can like, do a thing. You can use TestFlight if you have a small enough user base. But if you're Facebook and you're operating at this massive scale, you need this thing to work.

• 10:47Speaker 03

  You can't, you can't deploy to 15,000 devices with, with the standard hundred dollar a year. Apple, Apple developer account.

• 10:55Nilay Patel?

  So there's an element where Facebook needs us to work and Apple said, you broke our deal. You did this thing. We don't like it's bad. We're pulling it and Facebook grinds to a halt. Casey, you wrote about this in your newsletter yesterday. I, I had a glimmer of a thought, which is it is pretty remarkable that Apple has this power. And I think everybody thinks it's a good, like Facebook finally got punished. Let me punch them in the mouth. But I think you share my sort of, sort of hazy discomfort.

• 11:22Speaker 04

  Yeah. And, you know, I tried to say, um, two things about this yesterday and then have been, you know, getting flamed all day for, uh, for the second thing that I said. The first thing I said was this was bad on Facebook's part. Facebook acted really recklessly and Apple acted appropriately in rescinding this access. Okay. The second thing I said was, wow, it's really crazy that a single company unilaterally sets the terms of this enormous part of the economy and even the most powerful companies in the world have no recourse or no system of justice with which to dispute their decisions. And, um, you know, for this, I've, uh, I've been honored on Daring Fireball, uh, with the dumbest take of the day award.

• 12:08Speaker 05

  Wow. Congratulations, Casey.

• 12:13Nilay Patel?

  I like John where, you know, he's been on our show. We've been on his show, but you know, his job is to be Apple PR. So that's fine.

• 12:22Speaker 05

  But this, this is, this is a fundamental thing. This is a fundamental tension in my life. I always enjoyed using iOS. I tend to like Apple products. I decided that I didn't like that Apple had the fundamental say of what I could put on my phone. So I went over to a platform that is way more known for spying on me.

• 12:42Nilay Patel?

  Yeah.

• 12:43Speaker 05

  On Android, but I also have F Droid on there and I can put random apps on there and, and Google can't tell me no. Tim Cook can't say no.

• 12:52Nilay Patel?

  So wait, hold on. I want, I want to go here with you, Paul. This is like,

• 12:56Speaker 05

  Okay.

• 12:57Nilay Patel?

  This is when Dieter called me earlier and ranting and raving. This is what he was, he was sad about missing that conversation because it's a big, deep, important conversation. But let's, let's just finish the chronology. So that was yesterday. At the tail end of yesterday. I got so excited. Right? It's there. That conversation is, that's the Vergecast conversation. But that's yesterday. Please continue. At the tail end of yesterday, a bunch of people noticed, hey, you know, Google has one of these too. It's called Screenwise. And they're doing the same exact thing with these enterprise certificates. And so Google reacts, they issue an apology, like, whoops, didn't mean to do that. We're so sorry, we pulled the app, everything's cool.

• 13:40Nilay Patel?

  You know, they like, sent some pizzas to Cupertino, like, it appeared that they just like, yanked it and they were fine. Right? And to Casey's point, literally this morning, when Dieter and I were talking about it, we're like, it is remarkable that Facebook did this thing. And Apple's system of justice kicked in to punish Facebook. And Google got away with it. And so then later today, and I think that, I saw that just bubbling up on Twitter all day today. And it appeared that everything was fine. And then we definitely got a tip. There's another story our team broke, Tom Warren broke it.

• 14:16Nilay Patel?

  Hey, Google's app stopped working too.

• 14:19Nilay Patel?

  Well, there you go. Like, they, Apple made this decision. And I think the remarkable thing is,

• 14:26Nilay Patel?

  and this is, Paul, where you're going, is, so now Google has ground to a halt, right? The people who work on the YouTube app can't work on it. You can't go to the Google cafeteria or whatever and like, pay with your app.

• 14:40Nilay Patel?

  So they've ground two massive companies to a halt. But one was like, a split second decision. Like TechCrunch posted, Facebook certificate revoked. Google does the same thing, they issue this apology. A day later, Apple makes the same decision. And it's like, completely unclear how they're communicating. It's completely unclear who is making this decision. It's completely, there, I think, Kyle, we've heard about this. Lots of companies deploy apps to customers using these certificates. Because it's a way to deploy its scale without going into the App Store. It is unclear if Apple's gonna review every one of those and revoke all those certificates. It's unclear if you're doing this right now.

• 15:26Nilay Patel?

  If you just say that you are and apologize, you might just reveal yourself and be disabled. Right? So like the, I get, it's great that John Gruber, you know, his entire business is, is, is organizing Apple's actions into a coherent narrative. And that's, it's useful and he's very smart. But to not reckon with the power that Apple has over this massive platform, while at the same time being like, do you know when you reckon with power is when people do the worst thing? Right? Like you, you can't, there's not a, Apple doesn't just yank Instagram out of the, out of the app store because Tim Cook was angry, you know, like they had to do something and then we have to have this power be exercised.

• 16:09Nilay Patel?

  And I think, Paul, this is where I want to get in that conversation. This has been the trade off of all of software. We're going to cede central control of the apps on our phones, of the code on our computers, to some other authority. And they can literally change the bits if they want. They can push updates, they can push security fixes, they can stop malware from running on your phone. And that security benefit is good. And that comes with an enormous amount of power. But the other trade off that everyone, people have been talking about for a long time is you're letting another company control your phone. And you're not, that's not an ongoing negotiation that you're in. It's literally, Apple can just do this whenever it wants. And there's no process that they have to follow.

• 16:54Nilay Patel?

  And I think that's just, we're at that moment where we're all kind of considering it. So Paul, what were you just saying?

• 17:00Speaker 05

  I mean, that's, that's the, the tension. I, I try to view these things of like, what, what choices can I make to change this? And so one of the choices I made is using Android. But it is this, it's this scenario. I mean, I wrote a piece about this a while back about edge computing, because that's the goal for most of these companies is, is they do not want to be providers of, of cool utilities that you buy on a CD-ROM at Best Buy. And then you install on your computer. And then they don't really want you to own the software or the hardware. They want to really control it end to end. And when I say they, I guess I mean Apple.

• 17:45Nilay Patel?

  Well, look, no, Microsoft, like, Microsoft sells Windows 10S, right? Which is the same idea.

• 17:51Speaker 03

  Office is a subscription now. You can buy Surface laptops on a monthly installment plan where you're basically renting it from Microsoft. Like, they're, they're getting there.

• 17:59Speaker 05

  There's an aspect to Photoshop, and my dad runs a graphic design studio. He hates the, the, the way Adobe licenses its graphic design software now that you don't really own it. There is an aspect, like, just think, go through all the tools that you use, and how many of them does Tim Cook or another tech CEO have a button where he could decide that you can't use that software or hardware anymore? I would say it's pretty, pretty large, pretty large. I mean, somebody at Google could decide that you can't use Google Docs anymore.

• 18:34Nilay Patel?

  Yeah. I mean, literally, Jeff Bezos could be like, you know what? Let's break the internet and turn off AWS for five seconds, right? Cashmere Hill of Gizmodo is actually doing a great series right now. That's like, I tried to live a life without ex-tech giant, and it turns out that you cannot do that, like, basically.

• 18:50Speaker 04

  Right, and, and, and that gets at, at what's changed, right? Because when Apple opened the App Store, no one would have had any angst over whether they would eliminate a fart app, right? It was like, look, you know, there's a bunch of apps and, you know, they're gonna make some money, you know, but like, we're, we're not ever gonna be in a position where we can hold the tech economy hostage. And because we have no meaningful antitrust regulation in this country, we now have four, five, or six, depending on how you count them, enormous monopolistic tech platforms, and they are, like, their futures are, like, weirdly at the discretion of the single company. So, you know, there's been a change there.

• 19:33Speaker 04

  And, look, I think it's fine to say, you know what, Apple was in the right here, and because they acted in, in a way that I support here, I will just sort of trust them forever to always make the right decision. And, you know, I just think we journalists are not as trusting by our nature. Like, it's our job to be skeptical of power, which is why I'm like, happy to receive, you know, all of the, the criticism I have today.

• 19:58Nilay Patel?

  So Casey, you described this in your take, which was very smart, I will say, not only because it quoted me, but very smart for other reasons. But Casey, you described this as the beginning of, quote, "a shooting war," right? We've had this sort of like Cold War stalemate between Apple, Google, Facebook. Tim Cook says snippy things. Mark Zuckerberg says, "I hate it when Tim Cook says snippy things about me," right? And Mark Zuckerberg is writing op-eds for the Journal, being like, "I need to do ad tracking because otherwise Facebook wouldn't be free." And, right, that's it. That's the end of my argument. But you say this is, you think this is the beginning of a shooting war. What do you mean there?

• 20:38Speaker 04

  Well, up until now, it's only been about optics, right? It's been about Tim Cook scoring points because he can and because he wants to convince you that Apple devices are worth $1,000 because they protect your privacy. And it's helpful to him to have a boogeyman. And Apple and Facebook, with their advertising-based business models, have been an effective boogeyman. And as his rhetoric has escalated, you know, Google and Facebook have had very little to say because he is holding them hostage, right? He holds the keys to the switch that destroys them, at least in the iOS market, right? But then what happens today? Well,

• 21:19Speaker 04

  there are actual consequences for employees of Google and Facebook beyond, "Oh, Tim Cook made fun of me in a speech when he was receiving a humanitarian award," right? It's like, literally, we can't do our jobs today because, you know, Apple is cracking down. And again, I just want to reiterate, I think Apple acted appropriately and in the interests of its consumers today, and I think that that is a good thing. But if you're working at Google and Facebook on, you know, one of their many apps that were not doing anything against Apple's policies, and you can't do your job anymore, all of a sudden, it's a real consequence. So it is a shooting war. And I do think it's sort of worth asking, how will Facebook and

• 21:59Speaker 04

  Google, if not retaliate, then at least start building backup plans for the next time something like this happens?

• 22:07Nilay Patel?

  So strategically, like tactically, as I agree with you, like, at the big level, the strategic level, like, this is bad. We shouldn't let Facebook...

• 22:18Nilay Patel?

  Have teens get 20 bucks to like screen scrape their phones or whatever this app was doing. It's it's probably bad. Like if you're gonna have this power, this is probably the appropriate use of the power. I think at any point when you give a huge actor that doesn't really have a check on its power, the ability to do something, to your point, Casey, it is very fair to say, well, what if Tim Cook just decides that Netflix shouldn't work tomorrow? Right? Like, what if, you know, they want to get Netflix in the TV app and Eddie Q says, you know, we've noticed you've been distributing this enterprise certificate to some people who are just Netflix contractors, not employees. So, you know, like, pay us the money or like, you're done. Like, that is a power that they have. You might believe

• 23:00Nilay Patel?

  in your heart that Apple and its leadership would never do that. But, you know, people get new jobs, people retire, like, you can't guarantee that a company will stay, act the same way forever. Literally in their earnings reports, they're like, past performance is not indicative of future results. Like, this is a thing companies say out loud all the time. But then there's also the question of like, tactically, Apple yanked this thing from Facebook, which immediately is going to require a meeting between Tim Cook and Mark Zuckerberg. Right? Like, this doesn't happen at like, the lawyer level. This doesn't get, like, they shut down Facebook's iOS department today. People can't get on the

• 23:42Nilay Patel?

  shuttle bus. Like, you have to think it's Mark Zuckerberg who has to make that phone call. And you're like, hey, can you turn our company back on? Right? It's not, you know, the third junior VP of procurement who's like, hey, what the fuck? Shouldn't you just wait to see how that conversation goes before you form Facebook and Google into an alliance against you? Like, there's just a tactical mistake here that I don't understand. Like, now Sundar Pichai and Larry Page and Mark Zuckerberg are in the Escalade on the way to Cupertino to be like, what the fuck, turn our companies back on? Or, hey, you know, this is great. When we go to our antitrust hearings,

• 24:27Nilay Patel?

  we now have this ammunition to say, hey, the platform vendor has the ability to shut our companies down. There's meaningful competition in this market. We don't need any more antitrust enforcement. Like, there's just a, this is, Dieter, what Dieter said to me earlier was, this is Keystone Cops. Like, they're acting impulsively, and I don't even think they're gonna get to the outcome they want, because now they've formed an alliance. And like, I don't think Sundar Pichai wants to be thought of in the same breath as Mark Zuckerberg, but this is a pretty good time for that to happen.

• 24:56Speaker 03

  I mean, the question is also, how much of this is from Apple's motivation? Is what Google and Facebook did, and how much of it is how they did it? Like, would Apple's response be the same if Google was not, and Google and Facebook were not distributing apps that, you know, monitored traffic of teenagers, which looks optically very bad? Like, if this was a flashlight app that they just distributed to people for, you know, no good reason, like, how much, how much of this is motivated from what it was and how much was how it was? And only Apple could really answer that. But like, is Apple just, you know, slamming down the ban hammer because Facebook very publicly, in a, you know, bad

• 25:37Speaker 03

  way flaunted the rules that it wrote? Or is this more like?

• 25:43Speaker 04

  Oh, I have an answer to that, which is that all of Tim Cook's speeches about privacy painted them into this corner, right? When you go around the world presenting yourself as the standard bearer for privacy among tech companies, and you find out that Facebook has circumvented your rules in order to collect the most intimate forms of data about your customers, right? Even if it was with their consent, then I think you are compelled to act. Because had Apple not acted in this case, then we would be saying, wow, it sure seems odd that Apple keeps giving all these speeches about privacy, but when their, their most important partners screw up, all they get is a slap on the wrist, right? So I really think that they felt compelled to act.

• 26:27Speaker 05

  There, there's an aspect of, there's like a viralness to the, there's a security hole in what Google and Facebook were doing. Or, I don't, to be honest, I don't know a lot about what Google was doing. For instance, was Google giving teens $20 gift cards?

• 26:46Speaker 03

  I think so, yeah. I think Google was also giving, giving.

• 26:48Nilay Patel?

  So apparently, this is like a common thing, like Nielsen has an app that measures internet usage in this, like, there's quite a few of these market research apps in the world where they literally, like, the instructions are literally, "Leave this app running in the background at all times and we'll sort of like pay you money over time."

• 27:06Speaker 05

  Right. And there's an aspect that I, as a user, can say, "Hey, go at it. I'm an open book. You can look at all my data." But what am I doing on a phone? I'm not just, I don't have just my data on my phone. I have emails that I talk to other people. I have text messages. I talk to other people. I have video calls that I do with other people. And so there's an aspect where an app like this is spying. Yeah, it's spying on me, but it's also, in a sense, wiretapping all of my conversations.

• 27:37Nilay Patel?

  Yeah. And then learning that you use Snapchat stories so that Instagram can build stories.

• 27:44Speaker 05

  Right. And it makes the platform less secure in a broad sense, not just for this individual person. It, it kind of makes Apple, it increases Apple's liability because their goal is to keep their platform secure.

• 27:57Nilay Patel?

  And, and that's how they're, to Casey's point, that is how they're marketing the platform. And I don't think there's anybody who, like, looks at this whole thing and says, "Well, yeah, if Apple can shut that down, they probably should," right? It's just the tool they have to do it is like a pretty blunt instrument.

• 28:15Speaker 05

  And a great illustration of how much power they have. Here's what I want to happen in the best-case cyberpunk scenario.

• 28:23Nilay Patel?

  Yeah.

• 28:23Speaker 05

  Is that Google buys a GeoHot self-driving car company ostensibly to work on self, on Waymo, but in fact, they create a Skunk Works division to try to jailbreak the iPhone so that the next time they get shut down, they leak a jailbreak and all their employees jailbreak their iPhones so that they can keep running on cyber.

• 28:47Nilay Patel?

  I like this idea a lot. Do you remember the, what was it called? The iPhone Hack Squad? What was the name of the, the main jailbreak group for a while?

• 28:55Speaker 05

  There's Muscle Nerd.

• 28:58Nilay Patel?

  Anyway, I was.

• 28:59Speaker 03

  Red Snow was at one point.

• 29:00Nilay Patel?

  I was, I was routinely told during those years that many of the best iOS jailbreak developers were actually Apple employees.

• 29:11Nilay Patel?

  Which always, it's always made me somewhat happy. No, but Paul, you're right. We should just have, you know, look, if we're not going to have an effective government, we might as well just have massive corporate like warfare at that level. So Casey, what do you think?

• 29:24Speaker 05

  Have you read, have you read Snow Crash?

• 29:27Nilay Patel?

  Yeah, right.

• 29:30Speaker 04

  So, so here's an idea. So, you know, something I've been writing about with Facebook recently has been this oversight board that they want to set up. And the idea is when you run a platform big enough, you can't rely on your own employees to police everything that happens on the platform. Some people are going to want to appeal and they should probably appeal to someone independent of Facebook. And so Facebook is thinking through that and they're going to put some things together over the next year or so. I, I wonder if Apple's platform doesn't deserve an oversight board, right? Where a developer who feels like they have been unfairly penalized and booted off the platform can appeal to some sort of body that then, you know, has to hear their case publicly

• 30:12Speaker 04

  and then, and then publish a decision about it and, and develop some kind of, you know, equivalent to case law, right? Um, I'm sure this suggestion is making many people laugh very hard, right? As if Apple would ever even consider this. But I think the thought experiment is good because if you had that system, you would have something resembling a system of justice in which we sort of understood the terms of power and what avenues we had for the redress of our concerns. And if that kind of system existed, you know, I would be a lot less worried about Apple deciding today to, you know, rip away Google's cert.

• 30:50Nilay Patel?

  I think this idea is so good that I said it, I think in 2009 on the Engadget podcast, and Paul and Josh laughed at me because I sounded like a huge nerd.

• 31:00Nilay Patel?

  App Court.

• 31:00Speaker 05

  I'm sure YouTube creator, App Court. I'm sure YouTube creators would love this. And as much as I was, um, hating on, uh, uh, case law and, um, what's it called when you have something that a judge says one time?

• 31:19Nilay Patel?

  Wait, when a judge says what?

• 31:21Speaker 05

  It's like, you, president.

• 31:25Speaker 04

  A president.

• 31:26Speaker 05

  I was making fun of president last week, but anyway.

• 31:29Nilay Patel?

  You know, as, as one does on this tech news podcast.

• 31:34Speaker 05

  But to Casey's point, a, a sort of, some sort of formal arbitration that had that, because typically arbitration doesn't have precedent involved in this. I learned this from somebody on YouTube talking about law the other day.

• 31:49Nilay Patel?

  Oh, my God, Paul. Just call me, dude.

• 31:51Speaker 05

  It's an always sunny in Philadelphia episode.

• 31:53Nilay Patel?

  Oh, my God, Paul.

• 31:55Speaker 05

  So arbitration typically doesn't have precedent, but if you had arbitration plus precedent, I think people would be really into that.

• 32:03Nilay Patel?

  But, but then you just have, then you just have a legal system. So the-

• 32:07Speaker 05

  Well, you want, you want arbitration and precedent, but you don't want the government.

• 32:13Nilay Patel?

  Yeah, you kind of do for like a variety of reasons, including one is like if things go sideways, you can vote the bastards out, right? But let's just set that entire freshman year bong-based conversation aside. Let me, this is like the problem, right? Casey said earlier, the sort of lack of antitrust enforcement has created this, this moment when these tech giants are in control of a lot of things. Yesterday, I interviewed Lena Khan, who is a very smart antitrust lawyer. You'll hear that interview on Tuesday during the interview episode. But, you know, she's like, we should, we need to like do more to regulate these

• 32:55Nilay Patel?

  companies. So like Amazon is the merchant platform. They can see what sells well and they can make their own product and like burn merchants out of the store. We just wrote that huge feature about the Amazon marketplace economy, which sounds like the Wild West. And there's no, there's no arbitration in there, right? You could just write Jeff Bezos a letter and hopefully he helps you. App developers on the iOS App Store for years have run into weird arbitrary App Store enforcement guidelines. You know what you do then? You write Phil Schiller an email and hopefully he solves it for you, even though there is this very secretive app review, like system that is populated by thousands of people reviewing apps every day.

• 33:38Nilay Patel?

  Things get through and if you're like a political cartoonist, you make a political cartoon app, Phil Scholler might be like, nope, that's against our rules. Right? That's like a big thing. That's part of the economy. Apple's out there being like, yeah, we don't make the iPhone in America, but the app economy is strong and they tightly regulate that economy. Google runs YouTube. They're on Google search. They're in front of Congress. Congress is like, how do you distribute what goes on Google search? Youtubers like, how do you choose who gets demonetized or not? And there's no review of those things. Facebook is a Facebook scandal after like, right? Like they're like Mark Zuckerberg, at least is like Facebook Supreme Court. Here's some ideas. It sounds insane. He's thinking about it.

• 34:20Nilay Patel?

  Twitter is just like a burning car headed towards the ocean. But like the same questions around Twitter constantly appear. Jack, how do you do this? Jack screws it up all the time by making it sound like he's in charge of it when, as Casey reports, every day, every week, there's actually thousands of Twitter employees desperately trying to figure out a system to make this work. This is a problem. It's like a constant problem. They have this power. They use the power. It is unclear. It is not transparent how that power is wielded, how those decisions are made, whether those decisions will be consistent. Even when they do put forth iOS App Store guidelines, it is inconsistent enforcement with no precedent.

• 35:02Nilay Patel?

  And then our government does not have any oversight over that either. Does not say, hey, actually, we think there are some, there are some principles that should guide every platform. Right? We, let's call them laws.

• 35:19Speaker 05

  How do you, how do you, because we're all, I think, pointing in a similar direction right now, which is crazy. But

• 35:26Nilay Patel?

  Yeah.

• 35:26Speaker 05

  How do you make this, this weird court like thing not be only accessible to, like, Facebook can go to this court and afford the lawyers to go to this court and spend three years fighting Apple in this court? You know? How can this actually be more democratizing?

• 35:47Nilay Patel?

  That is one of the hardest questions. I talked to a very smart economist in Halsinger. A while ago, we, we, we've interviewed him. We've talked to him a lot, basically.

• 35:58Nilay Patel?

  And

• 36:00Nilay Patel?

  His model is like, look, we've built this at the FCC for cable systems. Right? So if you are, his famous example is like the tennis channel. Comcast owns a bunch of cable systems. They bought a competitor to like the tennis channel. They down ranked them in the, in the channel guide. It's like your placement in the channel list and a cable box grid guide is like a life and death situation. Right? You'd rather be channel five than channel 5000. So they bought some competitor tennis channel, down ranked the tennis channel. How does the tennis channel get relief? And so the FCC has a whole mechanism of arbitration and like an administrative court

• 36:42Nilay Patel?

  where the cable channels can go and like argue about where they belong in the cable company grid guide that they're being discriminated against. And that sounds insane. Right? And the reason that mechanism exists is because the, the players, the actors in that system are all big companies with lots of lawyers. They can tie up the judicial system. They can lobby Congress. They can do all this stuff. And so we built a system to deal with them. Like lawyers go over here, like Comcast lobbyists, we are tired of hearing about you. There's a basement conference room at the FCC. Just go in there, figure it the fuck out. We don't want to hear from you anymore. Regular people don't have that ability at all.

• 37:24Nilay Patel?

  Right? And in this case, Facebook and Google don't have that ability at all. Apple did some shit to them. We all sort of court of public opinion are saying, that's probably the right thing to do. But there's no, there's no place for them to go mediate that, to talk about it.

• 37:38Speaker 04

  And you know what else happens, Neelai, like in, in this system is that instead of having a system that we can trust to try to adjudicate these things fairly, we just fall back on, well, which brand do I trust the most? Right? And for a lot of people it is Apple. They think, well, you know, yeah, that seems like it has a lot of power, but you know, I like, by and large, this company seems like they have my back. So I'm going to stick with them. But, and, and that like, maybe that sounds okay, but in a world where there's only two smartphone operating systems, that seems like a pretty shitty deal to me.

• 38:13Nilay Patel?

  Yeah. I mean, what if, honestly, what if, disclosure Comcast owns a chunk of Vox Media, which owns The Verge.

• 38:22Nilay Patel?

  What if Comcast just decided that it didn't want you to see YouTube anymore? Right? They could just do that and you would not, as a user, really have any market recourse. And like, we talk about it all the time. That's net neutrality. That's the thing we talk about all the time. They can charge you more for those bits. There's a lot of, Paul and I have probably argued about that 9,000 times. In our rundown, we are supposed to talk about the fact that net neutrality is going to court tomorrow, but we're 45 minutes into one story and so we're probably gonna miss that one. But like, we've been having this conversation about who gets to decide what you see at every layer of the network stack. And I think now it's just hit the platform level because Apple pulled the plug on the, on these certificates.

• 39:05Nilay Patel?

  And it's, you're, most people are probably like, yep, they should have done that. I'm kinda like, yep, they should have done that. But it's this exercise of power that everyone should take one step back and be like, how, how does this power get exercised? What is the check on that power inside of the system? Where it doesn't appear that the government is actually a meaningful actor, which would normally be the check on that kind of power. And it's unclear.

• 39:32Speaker 05

  The answer is clearly Bitcoin.

• 39:36Nilay Patel?

  I knew that was coming. Alright, we're gonna take a break. I think Dieter's gonna, we're gonna play this voicemail from Dieter that I haven't heard yet. Let him yell for two more minutes about this. And we'll come back. And we're gonna talk about this USB-C iPhone. I'm ready to talk about this USB-C iPhone. Alright, let's let Dieter have at it for two minutes.

• 39:57Speaker 06

  Hey everybody, this is Dieter. I'm sorry that I missed the Vergecast. I have been out reporting a thing that you'll see later. Anyway, I couldn't help but notice in the news that your phone, well, not your phone, the phones, the phones of the Google employees and the Apple employees, they, they got turned off. They had all their apps turned off. Cause Apple yanked their root certificate because those companies were doing- Honestly skeezy things. They were, you know, spying, not really spying, market research, but with way too many permissions. But the real problem was that they broke Apple's policy. And you know what? Fair. If, if there was ever a time for Apple to flex its muscle and slap the wrist of its major,

• 40:40Speaker 06

  you know, global competitors, it's when they're doing skeezy stuff. And so it feels really good to watch Apple slap the wrist of people who are doing skeezy stuff. But I don't know. I'm sure that Neel is going to talk about this. Isn't it weird that Apple can just turn off stuff on somebody else's phone? That's like weird, right? Does Apple really want to be the judge and jury for the entire phone ecosystem? I mean, yes, they do. That's how they set up iOS, but also that's rough. Like, it's kind of rough.

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• 42:19Nilay Patel?

  Okay, we're back. More Apple, though.

• 42:22Speaker 03

  More Apple.

• 42:23Nilay Patel?

  So much Apple. How is it that Apple had a bug in FaceTime that let you listen in on calls? And it's like the 45th most important story of the week? Apple posted its earnings, like, they're not selling iPhones in China. 45th most important story of the week. But let's start with some good news. Let's, like, bring it back.

• 42:43Speaker 03

  USB-C iPhone.

• 42:44Nilay Patel?

  Walk me through it, Hyman.

• 42:45Speaker 03

  Okay, so we're in the early phases. This is, like, far from confirmed, but Mark Gurman posted his scoop on the first batch of rumors for the 2019 iPhones. And there's a whole bunch of stuff. There's a dark mode for iOS 13. There's three cameras. There's, like, 3D camera scanning. But Apple is testing some versions with USB-C ports on the phone.

• 43:09Nilay Patel?

  So I want to just walk everyone through the emotional roller coaster that Hyman and I both went on yesterday, which, as we see that, the headline goes out, we're like, "Yes!" And then we're like, "Ah, they're gonna do something."

• 43:22Speaker 03

  Something's gonna happen. Like, they're either not gonna go through with it, someone's gonna go at the last minute. No, let's stick with Lightning. They're gonna get up on stage, you know, Johnny Ive's gonna go. And this year, we've added USB-C to the cable in the box with a Lightning port on it. It's gonna be something like that. Like, I'm gonna be halfway through a tweet in, like, September and just have my hopes crushed.

• 43:46Nilay Patel?

  And now, instead of the USB-A to Lightning, it's USB-C to Lightning by default.

• 43:50Speaker 03

  Or it's gonna be like an MFI USB-C variant where you can still only use cables that are approved by Apple. I mean, that's been the problem all this time, is that the Lightning port is just too essential to Apple, and the control it gives Apple has been too important for Apple to give up up until now. And, like, they put it on everything else. Like, at a certain point, the reason is, is like, they don't want people plugging stuff into the iPhone, because the iPhone makes them all their money. And, like, that's the earnings story, is sort of like, this is like the sacred thing that must be protected, and when it fails, Apple has to release a letter saying that we're missing earnings by $9 billion.

• 44:29Nilay Patel?

  Okay, but let me put a pause to this for a minute.

• 44:33Nilay Patel?

  Apple's money was the iPhone and the iPhone ecosystem for so long. And they have to, you know, they know they're going to sell millions of iPhones. And they just chunk off a percentage of those sales and convert them into MFI, made for iPhone accessories.

• 44:45Speaker 03

  Yeah.

• 44:46Nilay Patel?

  Then they make a lot of money.

• 44:47Speaker 03

  Mm-hmm.

• 44:47Nilay Patel?

  iPhone sales are flat to down. That business, that percentage necessarily down.

• 44:52Speaker 03

  Yeah.

• 44:53Nilay Patel?

  Who cares? We're a services business now. Really what we want you to do is sign up for this mysterious TV service. Screw it, let them charge with USB-C.

• 45:01Speaker 03

  Yeah, I don't think MFI has really ever been about the money for Apple. Like, they're making sense on iPhone chargers.

• 45:08Nilay Patel?

  But they, it's a billion iPhones.

• 45:09Speaker 03

  It's money, but like, I think it's always more been about the control of, of you can only plug this thing into an iPhone if we let you. Like, you still can't plug a camera into an iPhone. Uh, you can't plug an SD card into an iPhone unless you, you know, buy the weird thing and chain together dongles together. Like, Apple wants control over that.

• 45:29Nilay Patel?

  There's a Lightning SD adapter, I own it.

• 45:31Speaker 03

  Yeah.

• 45:32Nilay Patel?

  It's, it's, but I don't use it very often.

• 45:35Speaker 03

  Uh, I, I, I think it's more of a control thing for them. Um, and the switch to USB-C would mean giving up that control.

• 45:43Nilay Patel?

  But I think that control, uh, my point is I think that control is less and less important.

• 45:47Speaker 03

  Yeah.

• 45:47Nilay Patel?

  So, it's funny as Apple makes its transition, and we should talk about their earnings, but they're obviously making this transition into being a more holistic company where they, yes, they sell lots of iPhones, but their money is not in iPhone sales, it's in this long relationship of providing you services while you have the iPhone.

• 46:06Speaker 03

  Yeah, and I think that makes sense for like, Apple. I mean, I also think that they blew the ship on this and should have done this like, three years ago with the iPhone 7, when they killed the headphone jack. You could have done, you could have done everything in one fell swoop, because this, this fall, I'm gonna get like, someone's gonna buy a new iPhone and it's gonna be, you know, the same complaints when they switch from 30-pin, if they do it, which I'm still refusing to get hopes of. Like, we have to use adapters, we have to buy new cables, you could have done it all at once.

• 46:33Nilay Patel?

  I think the idea that you now charge your Mac and your iPad Pro with one cable and your iPhone with another, that has to...

• 46:39Speaker 03

  That has to end.

• 46:40Nilay Patel?

  It has, it has to end.

• 46:41Speaker 03

  It, it, it's had to end since Apple started selling laptops that only have USB-C ports. Like, at a certain point, Apple needs to commit to the decisions that it's made on its own hardware, and it hasn't.

• 46:55Nilay Patel?

  Yeah, I there's I refuse to get my hopes up. So the other argument, just to go through it, is they'll never go to USB C because they're just gonna go to a fully portless phone, which I have never believed because I sit in bed every night with my phone plugged into the wall, using my phone with battery dead.

• 47:12Speaker 03

  Yep.

• 47:13Nilay Patel?

  And I just have to imagine Apple executives have had similar experiences in their lives and fully wireless charging means you can't use your phone when the battery is dying.

• 47:23Speaker 03

  Yeah.

• 47:24Speaker 05

  You'll have to imagine all sorts of things, rainbows.

• 47:28Nilay Patel?

  It's just like.

• 47:31Speaker 05

  Leprechauns.

• 47:32Nilay Patel?

  The idea that like they're like that, you know, they famously have like the six hour management meetings every week and someone's like, we're taking all the ports off and Tim Cook's like, wait, what do how do I use my phone when the battery's dying? And they're like, put it on this pad and just lean over it. That can't have been the answer.

• 47:47Speaker 05

  How do I listen to my music?

• 47:49Speaker 04

  I have five words for you, day iPhone and night iPhone.

• 47:53Nilay Patel?

  Yeah, that's probably it. Just use your watch. Just just poke at that for a while. Okay, so it's it's good news.

• 48:02Speaker 03

  There's a glimmer of hope.

• 48:04Speaker 05

  There's hope. There's this glimmer of hope and then there's also a rumor that the the new iPad might have lightning.

• 48:10Speaker 03

  Yeah.

• 48:11Nilay Patel?

  But the baby, the little, the little iPad, the cheap one.

• 48:15Speaker 03

  Which is bad, like, it's bad for Apple to keep doing that, but.

• 48:19Nilay Patel?

  Well, you segment it out.

• 48:21Speaker 05

  You gotta rip the Band-Aid off.

• 48:22Speaker 03

  The real iPad Pro is the computer and it gets the USB C port. That's that's why, like, I was upset when they announced an iPhone with lightning and then four weeks later announced the USB C iPad. Like, it felt like someone was, like, taunting me, but I can I can imagine the twisted rationalization you need to make that work, which is, this is a computer, this gets USB C, this is mobile, and it gets lightning and like AirPods charge with lightning and then there's a Beats speaker that charges with lightning.

• 48:55Speaker 04

  Here's my frustration. You know, we are now this many years into the lightning era, about to transition fully to the USB C era, and every hotel in America is still in the 30-pin dock connector era.

• 49:07Nilay Patel?

  Yeah.

• 49:08Speaker 04

  I think I have seen one hotel with a lightning connector like ever in my entire li- like hotels are not going to have these USB C connectors until like the 2030s.

• 49:19Nilay Patel?

  Yeah, but all hotels now have like USB, USB ports and like power plugs by the bed. I think they're like, you're going to bring your own charger.

• 49:27Speaker 03

  Hotels are skipping right to Alexa.

• 49:28Nilay Patel?

  Like, the idea that you're going to plug this into an alarm clock that we've provided, it's like, I think they know, like, if you're, I don't know, Bob Marriott, or whoever runs Marriott.

• 49:39Speaker 04

  Yeah, it's Bob Marriott.

• 49:41Nilay Patel?

  Angela Marriott, you're not like, you know what, we should spend millions of dollars on new alarm clocks. You're like, can we just put the plug outlets by the beds, the new hotels?

• 49:51Speaker 03

  Are there, is there a single USB C, is there an iHome with a USB C port on it? Does that exist even?

• 49:59Nilay Patel?

  There has to be.

• 50:00Speaker 03

  I feel like, I feel like we've moved to like Bluetooth at like a certain point.

• 50:02Nilay Patel?

  One of the unique joys of my particular role is I get to come on this podcast and say things like, I want to install plug outlets in my house with USB C connectors and I don't have any, and then like, I get 500 PR pitches for plug outlets with USB C ports. So, it's all coming. Okay, that's the good news. Let's talk about the, the, let's go bad to medium. Right?

• 50:25Speaker 03

  Yeah.

• 50:26Nilay Patel?

  Does that seem right?

• 50:27Speaker 03

  Yeah.

• 50:28Nilay Patel?

  Let's start with that. So, again, it is remarkable that this is like the 45th biggest story of the week, after everything that's happened. But for a minute, it was the story of the week. There's only one story, and it's there was a huge bug in FaceTime that we, I think we all tested, everyone just tried it out, where if you made a FaceTime call, you needed two phones that supported group FaceTime.

• 50:51Speaker 03

  Group FaceTime.

• 50:52Nilay Patel?

  But you made a FaceTime call, and then you added yourself to it, the other phone would just pick up and start sending audio. And if they tried to hang up, it would start sending video, which seems like the worst part of the bug, is that if you tried to hang up this call that you were getting, video would also be sent. I tried it at work, Dieter tried it, you tried it. Apple, so here's the scandal. Paul, I'm curious for your thoughts on like the bug bounty part of this. Apple knew about it for some time. There's like a teenager in Arizona.

• 51:26Speaker 03

  Playing Fortnite.

• 51:27Nilay Patel?

  Of course.

• 51:29Speaker 03

  Actually.

• 51:30Nilay Patel?

  The cause of insolution to all problems there. There's a teenager playing Fortnite. He discovered it with his friends. He told his mom. His mom's a lawyer. Mom was tweeting about it, like screenshots of Facebook Messenger, like threads she was sending to Fox News.

• 51:43Speaker 03

  She faxed Apple.

• 51:44Nilay Patel?

  She faxed Apple a very formal letter. No one got back to her. And then it was, you know, discovered by somebody else. I think nine to five Mac had it. And then Apple shut shut down FaceTime at the server level and put out a statement being like, we'll fix it later this week.

• 51:57Speaker 03

  Yep. Still doesn't work.

• 51:58Nilay Patel?

  Still doesn't. So the show's coming out on Friday.

• 52:01Speaker 03

  Might work by Friday.

• 52:02Nilay Patel?

  Who knows? But it's Thursday night and they haven't fixed it. How does Apple miss a bug like this, Paul? Is like, is it just the systems are not in place to to catch it? I mean, Ashley wrote a long piece for us, basically being like, the systems in place are for professional security researchers. But this thing percolated for a while.

• 52:22Speaker 05

  I have no idea how this wasn't caught instantly the moment somebody mentioned it. Cause it's so easy. I mean, a lot of times bugs can like languish because they're hard to reproduce. And a non-security researcher reporting a bug might not explain how to reproduce the bug very well. And therefore they have a hard time reproducing it. But this is very, apparently very easy to reproduce. I have no idea how how this languished. And I also wanted to say, I know this doesn't need to be said, but I feel like there's a fundamental contract that we all have had as people since the telephone was invented, where if I don't pick up the telephone, it can't hear me.

• 53:05Speaker 05

  They broke like the first rule of telephones.

• 53:08Nilay Patel?

  Yeah. Yeah. I mean, Amazon has broken that rule of drop in. I think that's why everyone finds drop in to be so very creepy. Although if you use it in our comments, so anyway, so Apple puts that.

• 53:18Speaker 05

  This goes to the need for formal verification of software and how we really haven't figured out the mathematical underpinnings of of modeling the possible states that our software can be in. And we need to do a better job at that.

• 53:34Nilay Patel?

  Wait, explain.

• 53:34Speaker 05

  For the safety of of Fortnite teens.

• 53:37Nilay Patel?

  Explain what you mean.

• 53:40Speaker 05

  Well, like, there's, there's multiple states. There's, there's listening, yes or no. And then there's, have I picked up the call? Yes or no? And there are ways of modeling your software, if it's very simple, so that you can formally verify that you can't listen if you haven't picked up. Right? But as software gets bigger and larger, it's much harder. There's, there's a combinatorial explosion of possible states your software can be in. That's why turning it on and off fixes so many problems. Because you get back to a good initial state and then you go on a happy path from there. But if you get into this weird state. And so anyways, I'm just saying that, that it's something that math people, like true

• 54:25Speaker 05

  computer science PhD types, think a lot about how we can formally verify our software that it can, it works how we say it should.

• 54:34Nilay Patel?

  The way that I have implemented this is that I have installed iHome Smart Plugs at all of my parents' cable boxes. And when their U-verse goes out, I just restart them from my phone.

• 54:47Nilay Patel?

  I've done it twice, it's worked both times. That's super interesting. This one, to me, it doesn't. I think they just thought that no one would add themselves to group FaceTime and never tested it.

• 54:58Speaker 03

  Yeah, this, this is such like a weird thing to have even tried. Like, I mean, it's not like, it's not like you've done some like weird permissions thing where, you know, you rebooted the phone at the right time and it kicked it into like a dev mode that allowed you to have like unauthorized permission. This is literally like, no one would ever be this weird to try and add themselves to a group call that they're already on.

• 55:22Nilay Patel?

  Well, maybe you have like two to, I don't know. I, I. So all of the, by the way, this is true. All of the recommendations are like, you gotta turn FaceTime.

• 55:30Speaker 03

  Yeah.

• 55:30Nilay Patel?

  We wrote a piece, here's how to turn FaceTime off. The New York Times is tweeting, major bug, you gotta turn FaceTime off. And I go home and my mom texts me, can I FaceTime the baby? And I was like, well, I guess I'm just leaving this security hole up.

• 55:44Nilay Patel?

  I don't have a choice. Uh, but they turned it off in server level. Hopefully they'll, they'll put out a fix next week. It is remarkable that we just talked about a massive bug in FaceTime that lets, I mean, Apple was like about to hit like a privacy reckoning. Like you felt it growing and then this stuff happened and it's just disappeared, which is remarkable.

• 56:06Speaker 03

  It's weird that Apple was, was privacy angel and privacy devil in the same 24 hour news cycle.

• 56:12Nilay Patel?

  I don't, I wouldn't call them devil. It's just a mistake, right?

• 56:15Speaker 03

  Yeah.

• 56:16Nilay Patel?

  What are you saying?

• 56:16Speaker 04

  That, that's exactly it. Well, that's exactly it. It's like, you know, bugs happen. And I think we just have to accept that as people who use software, we're never going to be able to fix all the bugs. And when a bug gets found, I think that we should celebrate that it was found instead of just existing on the dark net so that it can be sold for, you know, $2 million or whatever. Um, so like, you know, I mean, I, there, there might be some questions about why did it take Apple this long? And, and those are appropriate questions to be asked, but the fact that bugs existed, like, you know, there are a lot of bugs out there.

• 56:47Nilay Patel?

  Okay. I'm going to find another one that lets me spy on Casey tonight. I'm just going to do weird FaceTime stuff until I'm listening to Casey.

• 56:55Speaker 05

  How bad would it have to be for Tim Cook to revoke Apple's?

• 56:58Nilay Patel?

  Tim Cook just sent an email. It's like, snow day, polar vortex, everybody. Take the day off. Uh, all right. We gotta talk about, this is the other huge Apple story of the week. Um, earnings.

• 57:15Speaker 03

  Earnings.

• 57:16Nilay Patel?

  Put out their earnings. They put out revised guidance. They said, we're not going to sell as many phones as we thought. Um, there's lots of numbers. We can run through numbers, but here's two things jumped out at me from both the earnings release and the call. One, Apple last quarter said, we're not going to do unit sales anymore. This quarter, they actually started releasing other kinds of information, which are interesting. So they're very into installed base of, uh, the iPhone, iPad, the Mac, the watch and the Apple TV, which are their, their operating systems. Um, and they said, we have 1.4 billion devices running on the Apple platform. That number is what you convert into services customers. So they have to, I think they're going to disclose that number quite often.

• 58:01Speaker 03

  Yeah.

• 58:02Nilay Patel?

  Second, so that's like really interesting. So they went from here's how many units we sold this quarter to here's how many active devices that we can address with Apple services. Hopefully make some money. Second, uh, like, Tim Cook just said iPhone upgrade like 500 times on this call. Like, that is the story of the iPhone now, is how often will people upgrade?

• 58:25Speaker 03

  Mm-hmm.

• 58:27Nilay Patel?

  And it is remarkable, his answer is basically like, "Look, the phone carriers aren't doing subsidies anymore, it's like, pretty hard to upgrade your phone, even though it's not, I don't know why he keeps saying it, he's like, it's pretty, like, we gotta make it easier for people to upgrade. So, we're gonna start doing like, trade-ins, we're gonna make it easier to move your data right away, you know, and then it starts to, he said this, and it starts to look like a subsidy. Like, you give us your old phone, and the new phone's cheaper, it looks like a subsidy. And I just don't think that's how normal humans perceive that."

• 58:59Speaker 03

  No.

• 59:00Nilay Patel?

  Right? Like, you're giving them your phone that you bought-

• 59:04Speaker 03

  And-

• 59:04Nilay Patel?

  And then buying a new one-

• 59:06Speaker 03

  Yeah. I mean, the value proposition there is, I guess, like, selling phones on, like, the gray market sucks for the average consumer, and no one wants to be like, going into a bank lobby to sell it to some guy on Craigslist, so Apple is like, "We'll be that guy, and you can do it in an Apple store without, you know..."

• 59:27Nilay Patel?

  Yeah, I just, I don't know, like, Casey, you have a car, I have a car, I never think to myself, "I'm gonna subsidize my new car by selling my old one to the dealer," like, that, that's just, like, it's not how it, how your brain works. But they're very focused on, "How do we make upgrades easier?" They talked about it a lot. And then, they're obviously very, very focused on China-

• 59:48Speaker 03

  Mm-hmm.

• 59:49Nilay Patel?

  -where their sales fell the most. And then, they gave some hints about their TV stuff. So, do you wanna kinda just time-walk us through where you think that the China problems are? Cause, I know you were covering earnings yesterday.

• 1:00:01Speaker 03

  Yeah. So, it's kind of like, a two-fold thing. Part of it does seem to be that, that there is, like, a broader economic context, which I'm not qualified to speak on, cause I am very much not an economist. But, Apple's not the only company that has reported, you know, economic downfall due to China, there's like, political stuff, there's economic stuff, uh, which probably has something to do with it. But also, it is just like a very different phone market out there. And Apple has to deal with a lot of competition in China that it doesn't have. You have Xiaomi, you have Huawei, you have these big established players that can't really play in the US, but are these massive, massive brands that have phones that are just as powerful,

• 1:00:45Speaker 03

  like same premium level features, that cost a fraction of what Apple sells for. And I think part of it is just, this is one of the largest customer bases in the world, and Apple has to actually compete on price and feature in a way that it doesn't have to do in any other market, or to an extent that it doesn't have to do in any other market.

• 1:01:02Nilay Patel?

  Yeah, and I think Ben Thompson has a great chart that's like, in China, iPhone sales are directly related to new form factors.

• 1:01:09Speaker 03

  Yeah.

• 1:01:09Nilay Patel?

  Like, they put out a new form factor and sales spike, they do the S cycle, sales go down.

• 1:01:15Speaker 04

  You know, how much of this upgrade anxiety relates to the fact that the XS and XR just aren't very compelling phones to people who have bought a phone within the past couple of years? Like, is it possible that they'll come out with a really slamming phone this year, sales will go up, and they'll kind of be able to shrug off some of this anxiety?

• 1:01:36Nilay Patel?

  Maybe. You know, they were very clear that the XR is their best-selling phone.

• 1:01:41Speaker 03

  It should be.

• 1:01:42Nilay Patel?

  And it's a great phone. And I think everyone sort of thought it was the iPhone 5C comparison. Like, the XR isn't selling in China, they had to revise their earnings. You know, there's like the wave of tweets about, well, I didn't upgrade my phone. And then it turns out, well, actually, in America, their sales are slightly up.

• 1:01:59Speaker 03

  Yeah.

• 1:01:59Nilay Patel?

  Right? And their best-selling phone is the XR. So like, they're doing all right here, I think, on that upgrade curve.

• 1:02:07Nilay Patel?

  The second best-selling phone that they had was the XS Max, and then the XS, which I think cuts against this notion that everybody wants a small phone, even though, you know, the iPhone SE like goes on sale, it sells out in like 10 minutes.

• 1:02:20Speaker 03

  I don't take that as proof positive.

• 1:02:22Nilay Patel?

  They're two biggest screens are their best-selling phones.

• 1:02:25Speaker 03

  I mean, the smallest screen is their second most expensive phone. Like, I can't, I can't take that as evidence that people don't want small phones because people also don't want expensive phones.

• 1:02:35Speaker 05

  I don't think people are saying that everybody wants small phones. I think what people like me are saying is that some people really want a small phone.

• 1:02:45Nilay Patel?

  Yeah, no, I think that's true. And like I said, the iPhone SE goes on the clearance sale and it sells out.

• 1:02:50Speaker 03

  And well, some people really want a USB C iPhone.

• 1:02:53Nilay Patel?

  Anyway, my, my, Casey, my answer to your question is, at least in America, uh, in the United States, they're doing fine, right? And in Europe, they're doing fine. In China, they're doing badly because the phones look the same. And I don't think the, the 10R is compelling as a cheaper phone against the Xiaomi phones. Again, you know, like, those are terrific phones for the same price as the 10R. And like, why wouldn't you want more features for the same money when you're just running WeChat anyway? Right, which is kind of the big comparison. So it's like iPhone, just to say the numbers, there's their iPhone sales revenue fell 15% from last year. Like I said, they were basically flat in sales in America.

• 1:03:37Nilay Patel?

  In terms of revenue, they were flat-ish in Europe and they're down in China and that pulled the whole number down. The other thing is the services narrative, which I like to put in quotes. Because Apple is very much saying that it is now a services company. They're very proud that Apple Music has 56 million subscribers. They're very proud, you know, Tim Cook was like, I'm not going to say much about our TV plans. But he signed a deal with Oprah. And then he, um, what did he say? He's like, we hired some great people and I have super confidence in them. Which prompted me to walk around the Verge office and tell everyone I had super confidence in them.

• 1:04:14Nilay Patel?

  But they won't reveal what that plan is. And I, again, I just come back to the idea that. Apple Music is a success because Apple made a bunch of deals with carriers. Right? Like Verizon gives you Apple Music. Apple preloads it around the world. Spotify has similar deals, but like, Apple Music's the, it's preloaded and you get it for free with your carrier. That goes a long way towards boosting your thing. Apple Maps is not competitive with Google Maps. iCloud is a paid storage service is not quite as useful as the other paid storage services. They're gonna put out this TV service. It's, it sounds like what they're gonna do is like, make some free content with Oprah. Or make some content with Oprah and then sell you some channel subscriptions to like Hulu and HBO and

• 1:04:59Nilay Patel?

  down the line and like aggregate that together. Like, the problem with Apple's services narrative is that their services aren't competitive with their competitors. And they're, they're late to market on some of them. The only one that is far and away like the most, the best service of, in the market is iMessage. Which is locked to the iPhone. So, and I, I stand by that, by the way. I think iMessage is absolutely terrific. It's, I know I'm locked in, I'm like safely ensconced in this wall garden, but that shit works really well. Like, like really well, and I know it's private and they don't have any interest in like putting a chatbot into it and making me turn off the encryption. Like, it works.

• 1:05:41Nilay Patel?

  So there, there's just like, one of the things that Apple said yesterday was, our revenue in China was down because they, the Chinese government stopped approving games in the App Store. And it's like, that had a material impact on their revenue because most of the services money that they make is like, candy crush gems. And like, in-app purchases in games.

• 1:06:04Speaker 05

  I didn't know App, like App Store revenue was that significant of a share of Apple's revenue.

• 1:06:11Nilay Patel?

  It's a huge, I think, under-reported share of Apple's services revenue. So, you know, they say what the services are and one of them is App Store. And so, yes, there's like the subscriptions that you buy, there's the actual apps that you buy. But the, the big driver of it is in-app purchases in games. And so like, that's a weird, that's a weird thing to say, we have a services business around and kind of like allied that like fundamentally like, people are just buying more moves in like two dots or whatever.

• 1:06:41Speaker 05

  This is a, this is kind of interesting. So I remember like the moment, remember when that, I think it was GTA IV came out and it was like, it was like the, one of the biggest media releases ever. And then the headlines kind of started coming out. The video game industry is bigger than the movie industry, at least in like box office numbers comparatively.

• 1:07:03Speaker 05

  And now there's this huge kind of kerfuffle in the games industry of like the core gamers who want games for PCs or at least consoles. And the fact that all the big game companies have realized that the revenue of mobile games has eclipsed all the other video games revenue.

• 1:07:23Nilay Patel?

  Yeah.

• 1:07:24Speaker 05

  And so there's a, there's kind of, there's a lot of tension. There's a kind of a war between like fans of Blizzard games and Blizzard people because Blizzard had the temerity of announcing a mobile Diablo. And Bethesda is doing a mobile Elder Scrolls. So these are like the, the, the old school classic companies that have been loved for decades that, that are kind of risking a backlash just because there's so much money in mobile gaming. I don't know. It's just interesting how, how huge of a market that is.

• 1:07:59Nilay Patel?

  Yeah. And I think Apple hates the fact that free to play games are the most common experience people have with their app platform, right? Like it's not great to just like hit the wall and be like, I guess I'm gonna look at this bad ad or pay you four bucks, you know, like, I don't, that's not like, I don't think Apple, Apple never gets on stage at a keynote and is like, we're so proud of this app. Let's, let's go ahead and bring the Candy Crush people on stage, you know, like.

• 1:08:29Nilay Patel?

  They're just like, yeah, that's the money factory in the basement. We don't talk about it. Services, though, that's great.

• 1:08:36Speaker 03

  It was always the unintended consequence of in-app purchases. Like, when they first announced it, like, most of the keynote was showing off, like, "You download the game for free, and then you can buy the rest of the levels." Like, the Super Mario Run model, which didn't really work, was kind of what Apple always envisioned this as. And then there was, like, one thing at the end where they showed, like, a multiplayer game, and a guy bought, like, a rocket launcher in the middle, and then he suddenly started winning. And that was the one that stuck. But that wasn't what, like, the focus was on when they announced this feature. It was supposed to kill, like, because in the old Wild West days of the App Store, every game had, like, you know, "Game Free," "Game Light," and then "Game Full." And Apple's like, "What if we just had 'Game,' and then you could buy the rest of it?"

• 1:09:21Nilay Patel?

  Yeah.

• 1:09:21Speaker 03

  And that didn't happen.

• 1:09:22Nilay Patel?

  It didn't happen at all. All right.

• 1:09:25Speaker 04

  I hate about Apple services?

• 1:09:26Nilay Patel?

  Yeah.

• 1:09:29Speaker 04

  Well, I hate that they succeed by default, right? Like, because they're so large, because they have so much power, they're able to do things like Apple Music, which, you know, is fine in a lot of ways. It's not as good as Spotify, but its growth, which, again, is by default because it's just so much easier than, you know, downloading Spotify, comes at Spotify's expense. So my fear is that, over the long term, you wind up with fewer interesting consumer apps, like, you know, supporting an external ecosystem and more just kind of like a good enough Apple BS. It similarly drives me crazy. So they finally got me to pay them a dollar a month just so that I can see the one shared photo stream that has every photo of my nephews in it.

• 1:10:14Speaker 04

  And that's, and by the way, that is in spite of the fact that I manually installed Google Photos on the phone of every single member of my family, right? But I still have to pay Apple a dollar, so I see the new pictures of my nephews. So it's like, yeah, like, every time I read about the Apple services narrative, I'm always like, "Oh, like, the bullshit that means that I give Apple $12 a year that they don't need? These guys who have $245 billion in cash, you know, melt me for another 12." Like, congratulations on your damn service narrative.

• 1:10:43Speaker 03

  I mean, 1.4 billion Apple devices paying $12 a year is another $17 billion almost, so that's how they get you.

• 1:10:52Nilay Patel?

  So I just want to sum-

• 1:10:53Speaker 04

  What do you want to do with it?

• 1:10:55Nilay Patel?

  Yeah, it's like, let's try building a car.

• 1:10:57Speaker 03

  They're buying a TV show from Oprah. Oprah's not cheap.

• 1:11:00Nilay Patel?

  It's true, she's not. They've spent a billion dollars on these TV shows and if Planet of the Apps is any indication, we're all in for a wild ride. Anyway, the way you could sum all this up is, it is somewhat uncomfortable when someone with massive distribution power exercises that in a monopolistic way, and I encourage you to tune into the Vergecast on Tuesday when I talk to antitrust expert and scholar Lina Khan, who literally pulled this apart for me for 45 minutes. All right.

• 1:11:27Speaker 05

  Eli, you just pick these interview things to troll me. I'm convinced I'm being personally attacked.

• 1:11:34Nilay Patel?

  I'm gonna try to find somebody in America who thinks that we should live under the thrall of four giant corporations, and I'll bring them on the Vergecast, but I have yet been unsuccessful in locating that person.

• 1:11:47Speaker 05

  That's not the point. That's not the point. You're deliberately misrepresenting my points.

• 1:11:54Nilay Patel?

  All right, we're gonna take one more break. Hold on one second, and we'll be back.

• 1:12:02Speaker 07

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• 1:13:08Nilay Patel?

  All right. Speaking of which, Paul, there's another point you make every week on the show.

• 1:13:12Speaker 05

  It's always the same point.

• 1:13:14Nilay Patel?

  Always the same name. I'd never forget it. It's called-

• 1:13:18Speaker 05

  It's always been called Nightlight Highlights. Sleep Tight.

• 1:13:25Nilay Patel?

  Is that, is that just as much as supposed to be asleep now?

• 1:13:28Speaker 05

  Yeah, you are asleep. This is a dream. Casper is getting into the gadget biz with a nightlight called Glow. And I didn't think this would be interesting at all, but I really like it. It's a little light that sits next to your bed and it sits on a wireless charging stand. And then when you have to go to the bathroom, you like pick it up and it's battery powered. And so you can like light your way through your house and then you bring it back. And it has all these like interesting gestures. Like you twist it to set like a 45 minute timer and it will slowly like dim until you fall asleep.

• 1:14:10Speaker 05

  You can set it as an alarm so they'll wake you up by getting like lighter. I don't know. I just, I like this. I mean, it does have an app like any innovative things device. So you do control it. You kind of configure it from the app. But it seems like it's designed with these kind of really interesting gestures that sound relatively intuitive. And it kind of sounds, it kind of sounds like a future I would accept in my life.

• 1:14:37Nilay Patel?

  Do you have to have a Casper mattress to use it? Is there a lock-in component?

• 1:14:42Speaker 05

  I don't, I don't, I don't see how, but I hope so.

• 1:14:47Nilay Patel?

  Casey's making his squinting at Casper face. Go ahead, Casey.

• 1:14:51Speaker 04

  Well, you know, there's something I like to mention whenever Casper comes up, which is that it literally went out and bought up every mattress review website on the internet to prevent anyone from saying an honest opinion about Casper. So I don't know how that makes about their work, but I gotta be honest.

• 1:15:08Nilay Patel?

  Yes, there's a great Fast Company article. It's like diving into like the deep crazy SEO games of the mattress review wars that Casper played. But look, I love a night.

• 1:15:20Speaker 05

  I have a, I have a soft spot for Casper because they are like one quarter of the funding of like the podcast revolution.

• 1:15:28Nilay Patel?

  Yeah.

• 1:15:29Speaker 05

  Like, I feel like podcasts would not be nearly as big of it. They'd be like 25% less of a big deal if it weren't for Casper. And I want to recommend everybody listen to the My Brother, My Brother and Me Guided Sleep Experience for Spiritual Harmony, which is a whole episode of SpawnCon sponsored by Casper.

• 1:15:46Nilay Patel?

  Yeah, look, I, I, I just let Casey make that point because it is true that there's also the, like, they're a Casper. They go to their thing and like take a nap. Like, that's a real thing you can do in New York at the Casper store. You can buy a, a sleep light. But then at the same time, if you own a mattress review website, they will ruthlessly crush you.

• 1:16:06Speaker 03

  Well, only if you, only if you don't say good things about Casper.

• 1:16:10Nilay Patel?

  That's true. All right. We're way over time. I just want to mention, these are all very nerdy things, but let's just wrap them up. Time, Intel, after seven months, hired a CEO. It's the guy who's their CEO.

• 1:16:25Speaker 03

  Yeah, I wish him luck.

• 1:16:27Nilay Patel?

  Tell me, who is it?

• 1:16:29Speaker 03

  So this is Bob Swan, who is Intel's interim CEO. He is now their permanent CEO. He had told people in June that he wasn't interested in the full-time job and now has the full-time job.

• 1:16:42Nilay Patel?

  Yeah.

• 1:16:43Speaker 03

  I don't know if they couldn't find anyone else. Intel has like a tough road ahead of them. So Moore's Law is like running into a wall a little bit. They still haven't shipped their actual next-gen 10-nanometer process chips. Like, it has been slowing down PC growth. It has been slowing down PC development. We saw some of that at CES this year, where like, a lot of the updates were very iterative because they don't have new chips to put in. And Intel's updated chips were like, gigabit Wi-Fi, does the same thing. So, he's got a job.

• 1:17:14Nilay Patel?

  And also, he is currently the CEO of Intel. He was their CFO before.

• 1:17:19Speaker 03

  He was their CFO. Interim CEO, and now he's...

• 1:17:22Nilay Patel?

  Intel also, in addition to not updating the chips, is not able to make enough chips...

• 1:17:29Nilay Patel?

  Of its unupdated chips. Yeah. So much so that Microsoft's earnings were depressed by the lack of chips. They're like, we would have sold more Windows licenses and PCs. There just aren't enough chips in the world. So there's like two problem, like. They're getting squeezed at both ends. And then invent some new ones. There was a rumor that they were going to hire Apple's chip guy, Johnny Strujie. And you have to imagine he was like, thanks, but, but no, thanks. Anyway, so Intel has a new CEO. Intel has a new CEO. Uh, this one, I think, obviously is near and dear to, to my heart. Which is that Foxconn sort of announced, but didn't announce, then walked back. We actually, Josh, I just have a story today about it.

• 1:18:13Nilay Patel?

  It is unclear what Foxconn is up to. But their spokesperson for the plant in Wisconsin said, we are not building a factory. You cannot measure our success in terms of a factory in Wisconsin. You might remember that Foxconn announced that they were building a factory with the Walker administration. And the state of Wisconsin gave them $4.1 billion in tax credits to build a factory. It also declared the land that people lived on blighted so that it could buy the land at reduced prices and give it to Foxconn for a factory. But now there, there may not be a.

• 1:18:48Speaker 05

  When, when I read this, Neelai, and please enlighten me.

• 1:18:51Nilay Patel?

  Yeah.

• 1:18:51Speaker 05

  I read it as in Wisconsin, we're not building a factory. You know, like dot, dot, dot, we're building a dream, you know?

• 1:19:01Nilay Patel?

  It's more than a factory. That is, uh, that is very much, I think, how Foxconn wants to, to play it. Um, so here, here's just the math at the core. And you know, now all the, you know, the, the Republicans and Democrats in Wisconsin are all yelling each other. Cause you know, Walker got voted out, the new guy, Evers is in, he's Democrats. The Republicans are all like, Foxconn is scared of Tony Evers. He ends, he's anti-job. Of course they're pulling out of this deal. They're, the Democrats are like, it was always a bad deal and that is going to happen. But here's like the, the, just the math underneath it. They promised the state of Wisconsin 13,000 jobs. We're going to build 75 inch Sharp TVs, 13,000 jobs. Everyone's like, yep. And they're like, we're the biggest factory in the world. Like this is like a whole thing. Now it's not a factory.

• 1:19:46Nilay Patel?

  They're still saying 13,000 jobs, but they're going to do it in, uh, and then we got the statement from Foxconn today. In R and D for our AI 8K plus 5G ecosystem.

• 1:19:57Nilay Patel?

  So we're still, we're still right there with that. The problem is 13,000 R and D jobs is the size of Stanford University. It's the size of like the University of Wisconsin's research division, right? Like that is a large research university's worth of jobs. And so where, where are they going to find those people? Like, why are they going to all, like, there's a polar vortex in Wisconsin. And you're just like, maybe they'll have to move with like, I'm from Racine. I'm just saying, I don't think you can lure a lot of people to Racine, Wisconsin's beautiful amenities.

• 1:20:35Speaker 05

  How about Foxconn HQ two coming to New York?

• 1:20:40Nilay Patel?

  Anyway, so it's a thing that's happening. The story's on the site. Josh is working on a follow up. We're obviously pushing Foxconn on it, but things are changing. That's a thing I want to keep everybody updated on. And I'm very proud of like The Verge because I, I think The Verge and Reply All elevated the sort of changing Foxconn plans to be the big story. And I'm, I'm, I'm eager to, to keep pushing them on it because literally it's my hometown. I tweeted this, I don't know if everybody saw that, like one of the houses we owned when I was growing up, it was like sat on a large plot of land. A developer bought more land around that house. And now they're, they're, it's on sale to like be turned into strip malls for like $3 million. And my mom is so mad at my dad for selling that house.

• 1:21:21Nilay Patel?

  Um, but now that happened because they're not building a factory, they're building a dream. Okay. Uh, last one I mentioned, I meant, there's a net neutrality hearing tomorrow. Mozilla suing the FCC. We're going to live tweet that. Hopefully you get this podcast in the morning. Colin and Addie and McKenna are going to be live tweeting that from The Verge account. We'll have a report on that. That's a big case. Net neutrality might come back if Mozilla wins. It's kind of amazing that it's Mozilla up against it. There's obviously a lot of action there, so pay attention to that. And then this one I think is super interesting. There's a company in New York.

• 1:21:57Nilay Patel?

  They found an exception to the copyright law. It's like, it's written into law where nonprofits are allowed to rebroadcast broadcast TV over the internet. It's called Locast. Ed Lee, who's a great reporter at the New York Times, wrote a piece about it today. We followed up. We investigated this loophole that they found. It's not a loophole. It's actually in the law. It says nonprofits are allowed to do this. But go to L O C A S T. It literally, it looks like a nonprofits website, but their whole, the point of this entire effort is, hey, TV is broadcast for free over the air that we, like, the airwaves, the spectrum that we grant to TV providers. Consumers should be able to get that for free. So they've started, it's literally a nonprofit

• 1:22:38Nilay Patel?

  company. You can just, like, donate them $5 if you want. But the big TV providers don't want to sue them because they think that they might not win and they don't want to draw attention to it. So it's just one of those very perfect verge, edge case companies where it's like,

• 1:22:58Nilay Patel?

  you can't poke at it too much because you might lose really bad, but they, the companies hate it.

• 1:23:05Speaker 04

  Well, just real quick, if, if you'll let me know what you're watching on Locast.com, I will give you a $20 gift card. That's all I want.

• 1:23:14Nilay Patel?

  Paul, what were you saying?

• 1:23:15Speaker 05

  I was saying, is this lobbying by form of starting a nonprofit company? Or is this someone's like, I think this nonprofit can really have legs and I want the, I want to run Locast.org for perpetuity because people need access to local channels?

• 1:23:33Nilay Patel?

  So in the Times article, it laid out some of the math of the business. And he's like, yeah, I've raised $10,000 in donations, but I took out a $700,000 loan from the bank. It's 15%. So I think if you're like NBC, you're like, that'll just solve itself.

• 1:23:47Speaker 05

  It sounds like it's gonna solve itself.

• 1:23:50Nilay Patel?

  That'll probably just solve itself over time. But it's super interesting because, look, the cord cutters that we hear from are always putting up antennas. TiVo like makes a cord cutting box with an antenna port because broadcast TV is just like available to you in the air. And there was a big company called Aereo, went there, held their antenna. They were unable to be a company because you're not allowed to rebroadcast without paying fees. But there's, there's a very specific part of the law that says a nonprofit can do it. So this guy started a nonprofit just to be like, come at me. That, that just, that just warms my heart. I wanted to end on the good news that even in this age of, of corporate control, there's

• 1:24:32Nilay Patel?

  still a guy being like, what if I lose a shitload of money just to be like, you can't get me? So hope is alive, Paul.

• 1:24:42Speaker 05

  I mean, it's the government that shut down Aereo.

• 1:24:44Nilay Patel?

  No, they got sued. It was illegal. That was cable companies. You know, you're not, you're just an anarchist. I just want you to know this. You have become like fully an anarchist.

• 1:24:53Speaker 05

  I'm, I'm an anarchist.

• 1:24:55Nilay Patel?

  All right. Well, I'm going to send you the Sex Pistols CD and it's going to be great. I have to send you physical media because the government can shut down your streaming subscription. I'm going to send you some like magnetic tape in the mail. That's The Verge Cast. It was crazy. Highs, lows. Casey was here. Thank you, Heim. Paul, as ever, one of us is going to start a corporation that destroys the other one, I'm sure.

• 1:25:18Speaker 05

  I'll be soon.

• 1:25:21Nilay Patel?

  I wish Dieter was here.

• 1:25:22Speaker 05

  Nonprofit.

• 1:25:23Nilay Patel?

  Tweet at Dieter, say you missed him. That's it. You can follow The Verge on Twitter, on Instagram, or at Verge. You can listen to all of Why'd You Push That Button, Season Three, on Apple Podcasts. You can listen to Pivot with Kara Swisher and Scott Galloway. You can listen to Function with Neil Bash, all part of the Vox Media Podcast Network, of which we are the flagship. And you can tweet at us. I'm at Reckless Heim. At C Gartenberg. Casey. I'm Casey Newton. He said, I'm Casey Newton, but his AirPods did it again. And Paul, is at FuturePaul. That's it. Rock and roll. Promo cut.

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