People with mild or mod­er­ate hear­ing loss could soon be able to buy hear­ing aids with­out a med­ical exam or spe­cial fit­ting, un­der a new rule be­ing pro­posed by the Food and Drug Administration. The agency says 37.5 mil­lion American adults have dif­fi­cul­ties hear­ing.

“Today’s move by FDA takes us one step closer to the goal of mak­ing hear­ing aids more ac­ces­si­ble and af­ford­able for the tens of mil­lions of peo­ple who ex­pe­ri­ence mild to mod­er­ate hear­ing loss,” Health and Human Services Secretary Xavier Becerra said as he an­nounced the pro­posed rule on Tuesday.

There is no time­line yet for when con­sumers might be able to buy an FDA-regulated over-the-counter hear­ing aid. The pro­posed rule is now up for 90 days of pub­lic com­ment.

The Hearing Loss Association of America, a con­sumer ad­vo­cacy group, wel­comed the pro­posal.

“This is one step closer to see­ing OTC hear­ing de­vices on the mar­ket,” Barbara Kelley, HLAA’s ex­ec­u­tive di­rec­tor said in an email to NPR. “We hope adults will be en­cour­aged to take that im­por­tant first step to­ward good hear­ing health.”

Advocates and law­mak­ers have been call­ing for OTC hear­ing aids for years, in­clud­ing a big push in 2017, when Sen. Elizabeth Warren (D-Mass.) and co-spon­sor Sen. Chuck Grassley (R-Iowa) in­tro­duced the bi­par­ti­san Over-the-Counter Hearing Aid Act. The leg­is­la­tors are now prais­ing the FDA’s move.

“Soon, mil­lions of peo­ple with mild to mod­er­ate hear­ing loss will fi­nally have lower cost hear­ing aid op­tions — and more op­tions mean more com­pe­ti­tion in the mar­ket, fur­ther dri­ving down the cost for con­sumers,” Warren and Grassley said in a joint state­ment to NPR. “This is ter­rific news.”

The OTC hear­ing aid leg­is­la­tion was was signed into law as part of the FDA Reauthorization Act of 2017. It states that the FDA “must cat­e­go­rize cer­tain hear­ing aids as over-the-counter hear­ing aids and is­sue reg­u­la­tions re­gard­ing those hear­ing aids.”

But the law was fol­lowed by four years of pub­lic in­ac­tion. President Biden’s re­cent ex­ec­u­tive or­der on Promoting Competition in the American Economy sin­gled out hear­ing aids as an area where fam­i­lies are pay­ing overly high prices for ne­ces­si­ties — and Warren and Grassley sent a let­ter to the FDA to urge im­me­di­ate ac­tion.

For decades, the FDA has reg­u­lated hear­ing aids as a pre­scrip­tion med­ical de­vice — an arrange­ment that adds to the cost and ef­fort peo­ple must ex­pend to get them. The new pro­posal would shake that arrange­ment up. The FDA says peo­ple who have trou­ble hear­ing will now face fewer hur­dles to im­prov­ing their lives.

On the mar­ket side of things, the FDA says the change will boost com­pe­ti­tion — and also put reg­u­la­tors’ scrutiny on com­pa­nies that aren’t ap­proved to sell hear­ing aids but are ef­fec­tively al­ready do­ing so, by mar­ket­ing “personal sound am­pli­fi­ca­tion prod­ucts” or PSAPs.

A PSAP can look and per­form very sim­i­larly to a hear­ing aid, but it can be sold di­rectly to con­sumers as a sound booster, os­ten­si­bly for peo­ple with nor­mal hear­ing who just want a bit more vol­ume. In the ab­sence of OTC hear­ing aids, the de­vices have be­come es­tab­lished as an ac­ces­si­ble al­ter­na­tive, as they don’t en­tail get­ting a de­tailed hear­ing test or vis­it­ing an au­di­ol­o­gist to cal­i­brate a hear­ing aid. And while hear­ing aids can cost thou­sands of dol­lars, a PSAP is much cheaper, as NPR has re­ported.

Hearing loss has been linked to cog­ni­tive de­cline and other health prob­lems in older peo­ple, as well as the sense of in­se­cu­rity and iso­la­tion it can bring to some­one ex­pe­ri­enc­ing it.

“The greater the hear­ing loss, the greater the risk of loss of think­ing and mem­ory abil­i­ties over time,” re­searcher Dr. Frank Lin of the Johns Hopkins University School of Medicine told NPR in 2017.

It’s not just the el­derly who are hav­ing trou­ble hear­ing. One in five teenagers ex­pe­ri­ences hear­ing loss to some de­gree, ac­cord­ing to the Hearing Loss Association of America.

People with mild or mod­er­ate hear­ing loss could soon be able to buy hear­ing aids with­out a med­ical exam or spe­cial fit­ting, un­der a new rule be­ing pro­posed by the Food and Drug Administration. The agency says 37.5 mil­lion American adults have dif­fi­culty hear­ing.

“Today’s move by FDA takes us one step closer to the goal of mak­ing hear­ing aids more ac­ces­si­ble and af­ford­able for the tens of mil­lions of peo­ple who ex­pe­ri­ence mild to mod­er­ate hear­ing loss,” Health and Human Services Secretary Xavier Becerra said as he an­nounced the pro­posed rule on Tuesday.

There is no time­line yet for when con­sumers might be able to buy an FDA-regulated over-the-counter (OTC) hear­ing aid. The pro­posed rule is now up for 90 days of pub­lic com­ment.

The Hearing Loss Association of America, a con­sumer ad­vo­cacy group, wel­comed the pro­posal.

“This is one step closer to see­ing OTC hear­ing de­vices on the mar­ket,” Barbara Kelley, the group’s ex­ec­u­tive di­rec­tor, said in an email to NPR. “We hope adults will be en­cour­aged to take that im­por­tant first step to­ward good hear­ing health.”

Advocates and law­mak­ers have been call­ing for OTC hear­ing aids for years, in­clud­ing in a big push in 2017, when Sen. Elizabeth Warren, D-Mass., and co-spon­sor Sen. Chuck Grassley, R-Iowa, in­tro­duced the bi­par­ti­san Over-the-Counter Hearing Aid Act. The leg­is­la­tors are now prais­ing the FDA’s move.

“Soon, mil­lions of peo­ple with mild to mod­er­ate hear­ing loss will fi­nally have lower cost hear­ing aid op­tions — and more op­tions mean more com­pe­ti­tion in the mar­ket, fur­ther dri­ving down the cost for con­sumers,” Warren and Grassley said in a joint state­ment to NPR. “This is ter­rific news.”

The OTC hear­ing aid leg­is­la­tion was signed into law as part of the FDA Reauthorization Act of 2017. It states that the FDA “must cat­e­go­rize cer­tain hear­ing aids as over-the-counter hear­ing aids and is­sue reg­u­la­tions re­gard­ing those hear­ing aids.”

But the law was fol­lowed by four years of pub­lic in­ac­tion. President Biden’s re­cent ex­ec­u­tive or­der on “Promoting Competition in the American Economy” sin­gled out hear­ing aids as an area where fam­i­lies are pay­ing overly high prices for ne­ces­si­ties — and Warren and Grassley sent a let­ter to the FDA to urge im­me­di­ate ac­tion.

For decades, the FDA has reg­u­lated hear­ing aids as pre­scrip­tion med­ical de­vices — an arrange­ment that adds to the cost and ef­fort peo­ple must ex­pend to get them. The new pro­posal would shake that arrange­ment up. The FDA says peo­ple who have trou­ble hear­ing will now face fewer hur­dles to im­prov­ing their lives.

On the mar­ket side of things, the FDA says the change will boost com­pe­ti­tion — and also put reg­u­la­tors’ scrutiny on com­pa­nies that aren’t ap­proved to sell hear­ing aids but are ef­fec­tively al­ready do­ing so by mar­ket­ing “personal sound am­pli­fi­ca­tion prod­ucts” (PSAPs).

A PSAP can look like and per­form very sim­i­larly to a hear­ing aid, but it can be sold di­rectly to con­sumers as a sound booster, os­ten­si­bly for peo­ple with nor­mal hear­ing who just want a bit more vol­ume. In the ab­sence of OTC hear­ing aids, the de­vices have be­come es­tab­lished as an ac­ces­si­ble al­ter­na­tive, as they don’t en­tail get­ting a de­tailed hear­ing test or vis­it­ing an au­di­ol­o­gist to cal­i­brate a hear­ing aid. And while hear­ing aids can cost thou­sands of dol­lars, a PSAP is much cheaper, as NPR has re­ported.

Hearing loss has been linked to cog­ni­tive de­cline and other health prob­lems in older peo­ple and can bring a sense of in­se­cu­rity and iso­la­tion to some­one ex­pe­ri­enc­ing it.

“The greater the hear­ing loss, the greater the risk of loss of think­ing and mem­ory abil­i­ties over time,” Dr. Frank Lin, a re­searcher at the Johns Hopkins University School of Medicine, told NPR in 2017.

It’s not just the el­derly who are hav­ing trou­ble hear­ing. One in 5 teenagers ex­pe­ri­ences hear­ing loss to some de­gree, ac­cord­ing to the Hearing Loss Association of America.

A con­tract with a tech gi­ant can put a startup on the map with ven­ture cap­i­tal­ists and the mar­ket at large. That’s what hap­pened for Netskope, a cloud-based data se­cu­rity provider. Founded in 2012, the com­pany was able to quickly scale up and se­cure mul­ti­ple rounds of fund­ing — in part be­cause it had a top-tier cus­tomer right out of the gate: Netflix.

There was just one catch to land­ing that deal: It had to hire the stream­ing com­pa­ny’s vice pres­i­dent of IT op­er­a­tions, Michael Kail, as a con­sul­tant and an ad­vi­sor, and pay him with fees and stock op­tions. Netskope (not to be con­fused with the now-de­funct Netscape) was­n’t the only startup con­fronted with that propo­si­tion. At least nine firms that worked for Netflix en­tered into sim­i­lar arrange­ments, ac­cord­ing to the U. S. Justice Department.

Other com­pa­nies drawn into Kail’s web in­cluded soft­ware, cloud-stor­age and an­a­lyt­ics com­pa­nies Docurated, Numerify, NetEnrich, Platfora, VistaraIT, ElasticBox, Maginatics and Sumo Logic.

The shady-sound­ing plot was de­scribed by the gov­ern­ment dur­ing a crim­i­nal trial ear­lier this year in San Jose fed­eral court. Kail was found guilty of more than two dozen fraud and money laun­der­ing counts. At his sen­tenc­ing Oct. 19, pros­e­cu­tors will ask that he get a stiff pun­ish­ment of seven years in prison as well as be or­dered to pay fines, resti­tu­tion, and for­feit a $3.3 mil­lion home in Los Gatos, California.

The for­mer Netflix VP, who also briefly served as chief in­for­ma­tion of­fi­cer at Yahoo, “leveraged his sta­tus as a leader of the IT com­mu­nity in Silicon Valley to sub­vert the trust of Netflix and oth­ers to profit at their ex­pense,” pros­e­cu­tors said in a re­cent court fil­ing. They added that the sim­i­lar schemes are “almost cer­tainly” com­mon among high-level tech ex­ec­u­tives, but that in no way ex­cuses the be­hav­ior.

“The star­tups that paid to play, and pos­si­bly many oth­ers, be­lieved this was how Netflix did busi­ness,” the pros­e­cu­tors said.

A dis­turb­ing el­e­ment of this nar­ra­tive is the un­equal play­ing field star­tups are on when they ne­go­ti­ate with big com­pa­nies. As the gov­ern­ment sug­gested, the crimes also seem rel­a­tively easy for an in­flu­en­tial ex­ec­u­tive to carry out — es­pe­cially since the founders of fledg­ling firms have lit­tle if any in­cen­tive to blow the whis­tle, and may feel they have no choice but to go along with a pay-to-play scheme.

In his own mem­o­ran­dum to the court, re­quest­ing that he be sen­tenced to a year of house ar­rest, Kail, 49, de­scribed him­self as a “global power leader, top dev ops in­flu­encer and a thought leader.” He ap­peared to min­i­mize the im­pact of the crimes, de­scrib­ing them as “regrettable flaws in com­mu­ni­ca­tion and trans­parency,” and as­sert­ing that his undis­closed busi­ness re­la­tion­ships were more help­ful than harm­ful to all in­volved.

Yet many startup founders al­ready have am­ple com­plaints about overly-gen­er­ous ad­vi­sor com­pen­sa­tion and messy cap ta­bles, even with­out the added cor­po­rate bribery wrin­kle. Earlier this year, Reddit co-founder Alexis Ohanian brought at­ten­tion to a com­pany called Cabal, which aimed to help founders al­lo­cate shares more ju­di­ciously and cut down on “dead eq­uity” handed out to men­tors, friends and con­sul­tants.

Startups are also at a dis­tinct dis­ad­van­tage in ne­go­ti­a­tions with es­tab­lished firms, and may fall prey to dire­sputible tac­tics, ac­cord­ing to re­search pub­lished in 2018 in Harvard Business Review. The re­searchers re­cruited 250 ex­pe­ri­enced pur­chas­ing and sales man­agers and asked them to carry out a ne­go­ti­a­tion sce­nario as ei­ther buy­ers or sell­ers. The par­tic­i­pants who were told their coun­ter­party was a startup, rather than a ma­ture firm, were sig­nif­i­cantly more likely to use de­cep­tion, ac­cord­ing to the re­searchers.

“Startups rightly face in­creased scrutiny when ne­go­ti­at­ing with part­ners be­cause of their per­ceived ‘fake-it-till-you-make it ethos,’” the re­searchers wrote, ref­er­enc­ing high-pro­file scan­dals such as the fraud in­volv­ing blood-test­ing firm Theranos. “But our re­search sug­gests that, if there is to be fraud dur­ing a ne­go­ti­a­tion, it is new com­pa­nies that are more likely to be the mark — and they should take steps to safe­guard them­selves ac­cord­ingly.”

Luckily, for the tech firms en­snared in Kail’s wrong­do­ing, dam­age was rel­a­tively lim­ited, and some like Netskope may have even ben­e­fit­ted from the fraud. Other com­pa­nies in sim­i­lar cir­cum­stances might not end up un­scathed.

Amended as of May 4, 2021.

SAN JOSE — A fed­eral jury con­victed Michael Kail, the for­mer Vice President of IT Operations at Netflix, of wire fraud, mail fraud, and money laun­der­ing, an­nounced Acting United States Attorney Stephanie M. Hinds, Federal Bureau of Investigation Craig D. Fair, and IRS-Criminal Investigation Acting Special Agent in Charge Michael Daniels.  The ver­dict fol­lows a two and a half-week trial be­fore the Honorable Beth L. Freeman, U. S. District Judge.

Kail was in­dicted May 1, 2018, of nine­teen counts of wire fraud, three counts of mail fraud, and seven counts of money laun­der­ing, in vi­o­la­tion of 18 U. S.C. §§ 1341 (mail fraud), 1343 (wire fraud), 1346 (honest ser­vices fraud), and 1957 (money laun­der­ing).  The in­dict­ment also sought for­fei­ture of Kail’s Los Gatos res­i­den­tial prop­erty.  The jury re­turned a ver­dict of guilty on 28 of the 29 counts.  The jury fur­ther found real prop­erty pur­chased by Kail with laun­dered money is for­feitable to the gov­ern­ment.

“Bribery un­der­mines fair com­pe­ti­tion and in­no­va­tion in any busi­ness arena, and par­tic­u­larly Silicon Valley’s highly com­pet­i­tive en­vi­ron­ment of cut­ting-edge in­no­va­tion,” said Acting United States Attorney Stephanie M. Hinds.  “As Netflix’s Vice President of IT Operations, Michael Kail wielded im­mense power to ap­prove valu­able Netflix con­tracts with small tech ven­dors, and he rigged that process to un­lock a stream of cash and stock kick­backs to him­self.  Netflix and other com­pa­nies ex­pect and de­serve hon­est ser­vices from its em­ploy­ees.”

“Not only did Mr. Kail de­prive Netflix of its money and re­sources by abus­ing his po­si­tion as VP of IT Operations, he cre­ated a pay-to-play en­vi­ron­ment whereby he stole the op­por­tu­nity to work with an in­dus­try pi­o­neer from hon­est, hard­work­ing, Silicon Valley com­pa­nies,” said FBI Special Agent in Charge Craig D. Fair. “Bribes and kick­back schemes, such as those fa­cil­i­tated by Mr. Kail, un­der­mine the fab­ric of com­pe­ti­tion in Silicon Valley, and the FBI will ag­gres­sively pur­sue any­one who at­tempts to crim­i­nally ex­ploit their po­si­tion for per­sonal gain.”

“High-ranking cor­po­rate of­fi­cials hold po­si­tions of trust not only in their com­pa­nies, but also in the eyes of the pub­lic,” said Michael Daniels, Acting Special Agent in Charge IRS Criminal Investigation.  “That trust is bro­ken when such of­fi­cials abuse their power and com­mit crimes to un­justly en­rich them­selves.”

According to the ev­i­dence pre­sented at trial to the fed­eral jury, Kail, 49, of Los Gatos, was em­ployed at Netflix as the Vice President in charge of IT Operations from 2011 un­til July 2014.  In this po­si­tion, Kail owed Netflix his hon­est ser­vices.  Netflix pro­hib­ited con­flicts of in­ter­est by its em­ploy­ees in its Code of Ethics and its “Culture Deck” which re­quired dis­clo­sure of ac­tual or ap­par­ent con­flicts of in­ter­est and the re­port­ing of gifts from peo­ple or en­ti­ties seek­ing to sell to the com­pany.

As Netflix’s Vice President of IT Operations, Kail ap­proved con­tracts to pur­chase IT prod­ucts and ser­vices from smaller out­side ven­dor com­pa­nies and au­tho­rized their pay­ment.  The ev­i­dence demon­strated that Kail ac­cepted bribes in ‘kickbacks’ from nine tech com­pa­nies pro­vid­ing prod­ucts or ser­vices to Netflix.  In ex­change, Kail ap­proved mil­lions of dol­lars in con­tracts for goods and ser­vices to be pro­vided to Netflix.  Kail ul­ti­mately re­ceived over $500,000 and stock op­tions from these out­side com­pa­nies.  He used his kick­back pay­ments to pay per­sonal ex­penses and to buy a home in Los Gatos, California, in the name of a fam­ily trust.

To fa­cil­i­tate kick­back pay­ments, the ev­i­dence at trial showed that Kail cre­ated and con­trolled a lim­ited li­a­bil­ity cor­po­ra­tion called Unix Mercenary, LLC.  Established on February 7, 2012, Unix Mercenary had no em­ploy­ees and no busi­ness lo­ca­tion.  Kail was the sole sig­na­tory to its bank ac­counts.

Two days be­fore Unix Mercenary was reg­is­tered, Kail signed a Sales Representative Agreement to re­ceive pay­ments from Netenrich, Inc. amount­ing to 12% of the billings from Netenrich, Inc. to Netflix for its con­tract pro­vid­ing staffing and IT ser­vices to Netflix.  Later in 2012, Kail be­gan to re­ceive 15% of all billing pay­ments that VistaraIT, LLC, a wholly owned com­pany of Netenrich, re­ceived from Netflix.  From 2012 to 2014, Netenrich, Inc. paid Unix Mercenary ap­prox­i­mately $269,986, and VistaraIT, LLC paid Unix Mercenary ap­prox­i­mately $177,863.  The pay­ments stopped in mid-2014, af­ter Kail left Netflix.

Evidence at trial showed that sev­eral more com­pa­nies paid Kail.  Neither Netenrich, Vistara, nor any of these other com­pa­nies were charged with crim­i­nal con­duct.  Only Kail was charged with de­vis­ing the crim­i­nal scheme to de­fraud Netflix.

In 2013, the ev­i­dence showed, Platfora, Inc. sought to do busi­ness with Netflix. In June 2013 — at the time Kail was seek­ing to buy his Los Gatos res­i­dence — he met with Platfora em­ploy­ees and signed an eval­u­a­tion agree­ment for Netflix en­gi­neers to test Platfora’s prod­uct, a data an­a­lyt­ics soft­ware pro­gram.  On July 13, 2013, Kail met with Platfora’s CEO for drinks and later thanked him in an email, say­ing “I look for­ward to help­ing you in both a Netflix and Advisory ca­pac­ity.”  Two days later, Kail signed an “advisory” agree­ment with Platfora that pro­vided him with the right to pur­chase up to 75,000 op­tions, ap­prox­i­mately .25% of the com­pany.  Shortly there­after, Kail pro­vided Platfora with Netflix’s in­ter­nal in­for­ma­tion about Platfora’s com­peti­tor’s con­tract bid price to Netflix.  In September 2013, while be­ing a paid ad­vi­sor to Platfora, Kail signed on be­half of Netflix a multi-stage $250,000 per year con­tract with Platfora.  Kail then urged his Netflix em­ploy­ees to find a use for the prod­uct, de­spite their ob­jec­tions and pref­er­ence for a com­pet­ing prod­uct that Netflix was al­ready pay­ing for.  When an in­quiry from the Netflix CEO en­sued, Kail falsely de­nied that he was for­mally work­ing with Platfora.  Kail re­signed from his ad­vi­sory po­si­tion at Platfora the next week.

Additional ev­i­dence showed that Kail re­ceived pay­ments or other com­pen­sa­tion from nu­mer­ous other com­pa­nies do­ing busi­ness with Netflix.  In June 2012, he be­came an ad­vi­sor to and re­ceived op­tions for shares in the com­pany Sumo Logic, Inc.  The next month, Kail au­tho­rized and signed on be­half of Netflix a ven­dor agree­ment be­tween Netflix and Sumo Logic.  The agree­ment led to over $300,000 in pay­ments by Netflix, ap­proved by Kail, to Sumo Logic.  Kail then ap­proved a fur­ther $800,000 two-year con­tract with Sumo Logic, de­spite his IT team feed­back about the prod­uct un­der­per­form­ing.  Kail ac­knowl­edged the prob­lem in an email to Sumo Logic, say­ing “[i]t is be­com­ing in­creas­ingly dif­fi­cult for me to cham­pion Sumo in­ter­nally and then con­tinue to have se­vere per­for­mance is­sues.”

Similarly, trial ev­i­dence showed Kail re­ceived $5,000 per month con­sult­ing for Netskope, Inc., and also re­ceived op­tions to pur­chase 71,500 shares of Netskope stock op­tions, and then au­tho­rized Netflix to en­ter a $112,500 con­tract with that com­pany, in  the same month that Kail re­signed from Netflix.  Kail also pur­chased, on be­half of Netflix, a small amount of stor­age from Maginatics, Inc., and there­after be­came an ad­vi­sor to Maginatics, which al­lowed him to pur­chase up to 30,000 shares.  Kail then in­creased Netflix’s pur­chase of stor­age from Maginatics by ten­fold.  Kail made ap­prox­i­mately $120,000 when Maginatics was sold the next year to EMC.  Kail also was promised shares in the com­pany ElasticBox, Inc., and there­after signed a June 2013 Netflix or­der for a $600,000, 3-year sub­scrip­tion to ElasticBox’s cloud ser­vices.  Later that year, he signed an ad­di­tional $850,000 con­tract for more cloud ser­vices.  Kail also ac­cepted an ad­vi­sor po­si­tion with Numerify, Inc. in February 2014, which pro­vided him with an early op­tion to pur­chase 36,000 shares. Three months later, Kail, on be­half of Netflix, signed an $85,000 sub­scrip­tion agree­ment for Numerify’s soft­ware.

The ev­i­dence fur­ther showed that many Netflix IT em­ploy­ees in­volved with test­ing the prod­ucts did not know that many of the star­tups’ soft­ware was be­ing paid for by Netflix, as­sum­ing it in­stead to be un­paid “pilots” of the untested soft­ware, which was rou­tine.

Kail faces a max­i­mum sen­tence of twenty years in prison and a fine of $250,000, or twice his gross gain or twice the gross loss to Netflix, whichever is greater, for each count of a wire or mail fraud con­vic­tion, and ten years in prison and a fine of $250,000 for each count of a money laun­der­ing con­vic­tion.  However, any sen­tence fol­low­ing con­vic­tion would be im­posed by the court only af­ter con­sid­er­a­tion of the U. S. Sentencing Guidelines and the fed­eral statute gov­ern­ing the im­po­si­tion of a sen­tence, 18 U.S.C. § 3553.

United States District Judge Beth L. Freeman sched­uled post-ver­dict mo­tions to be heard on June 29, 2021, at 10 a.m., with a sen­tenc­ing hear­ing to fol­low on September 14, 2021.

Assistant U. S. Attorneys Colin Sampson and Daniel Kaleba pros­e­cuted the case with the as­sis­tance of Laurie Worthen.  The pros­e­cu­tion is the re­sult of an in­ves­ti­ga­tion by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.

Current Queue |

Current Queue for Engineering |

Engineering archives

Try the links in the MadSci Library for more in­for­ma­tion on Engineering.

I re­cently watched “The Billion Dollar Code” lim­ited-se­ries on Netflix, which claims that Google Earth is a rip-off of a pro­ject called TerraVision, cre­ated by the German art col­lec­tive ART+COM. The show chron­i­cles their law­suit against Google, which ul­ti­mately failed.

I am drawn to sto­ries of in­ven­tors hav­ing their work stolen by greedy ass­holes. I can gen­uinely re­late to the in­ven­tors in this case, and their var­i­ous strug­gles. If some­one is owed credit or money for their in­ven­tion, I want them get it. And I truly re­spect the early and in­no­v­a­tive work done by ART+COM.

On 22 September, around mid­day, ESA’s Integral space­craft went into emer­gency Safe Mode. One of the space­craft’s three ac­tive ‘reaction wheels’ had turned off with­out warn­ing and stopped spin­ning, caus­ing a rip­ple ef­fect that meant the satel­lite it­self be­gan to ro­tate.

As a re­sult of the space­craft turn­ing, data were only reach­ing ground con­trol patchily and the bat­ter­ies were quickly dis­charg­ing. With just a few hours of power left, it seemed pos­si­ble that the 19-year-old mis­sion could be lost. The Integral Flight Control Team, to­gether with Flight Dynamics and Ground Station Teams at ESA’s ESOC mission con­trol, teams at ESAC and Airbus Defence & Space, set to work. With quick think­ing and in­ge­nious so­lu­tions, they found the prob­lem and res­cued the mis­sion.

A Single Event Upset (SEU) oc­curs when a charged par­ti­cle strikes a sen­si­tive part of elec­tri­cal equip­ment, caus­ing a one-off ‘change of state’ that dis­rupts its func­tion­ing. These charged, ‘ionised’ par­ti­cles of­ten come from the Sun when it spews out mat­ter and en­ergy dur­ing so­lar flares or coro­nal mass ejec­tions.

“I don’t think that the SEU on this oc­ca­sion was caused by our lo­cal, oc­ca­sion­ally grumpy star. This strike hap­pened on a day when no rel­e­vant space weather ac­tiv­ity was ob­served,” ex­plains Juha-Pekka Luntama, ESA’s Head of Space Weather.“Based on a dis­cus­sion with our col­leagues in the Flight Control Team, it looks like that the anom­aly was trig­gered by charged par­ti­cles trapped in the ra­di­a­tion belts around Earth.”The Van Allen ra­di­a­tion belts are two dough­nut-shaped re­gions en­cir­cling Earth, where en­er­getic charged par­ti­cles are trapped in­side Earth’s mag­netic field. Their prop­er­ties vary ac­cord­ing to so­lar ac­tiv­ity and they rep­re­sent a haz­ard to satel­lites and hu­mans in space that pass through them. Because the low­est point of Integral’s or­bit is now only 1500 km from Earth’s sur­face, the space­craft passes through both ra­di­a­tion belts in its or­bit.

Integral uses ‘reaction wheels’ — wheels that store en­ergy as they spin — to sub­tly con­trol the di­rec­tion the space­craft points in with­out the need of thrusters.Sud­denly, one of these re­ac­tion wheels stopped and, be­cause of the law of con­ser­va­tion of en­ergy, that turn­ing force pre­vi­ously in the wheel had to go some­where else — the en­tire space­craft. The space­craft be­gan to spin, trig­ger­ing an Emergency Safe Attitude Mode which un­for­tu­nately, due to a pre­vi­ous fail­ure, was no longer re­li­able and did not man­age to sta­bilise the mis­sion.

The re­ac­tion wheel was re­ac­ti­vated by teams on the ground, but the space­craft kept spin­ning at an av­er­age rate of about 17 de­grees per minute (roughly one ro­ta­tion every 21 min­utes), as well as wob­bling un­pre­dictably about its axes. This may not sound like much, but the space­craft was ro­tat­ing at five times its max­i­mum when un­der con­trol.“The data com­ing down from Integral was choppy, com­ing in for short pe­ri­ods due to it spin­ning. This made analy­sis even harder,” ex­plains Richard Southworth, Operations Manager for the mis­sion.“The bat­ter­ies were dis­charg­ing, as there were only short charg­ing pe­ri­ods when the pan­els briefly faced the Sun.”The first chal­lenge was to de­crease Integral’s en­ergy con­sump­tion to buy more time. First es­ti­mates of the charge re­main­ing be­fore black­out and the loss of the satel­lite was just three hours. Step by step, by turn­ing off var­i­ous in­stru­ments and non-crit­i­cal com­po­nents, this in­creased to more than six hours. Next step — stop the spin­ning.With sup­port from in­dus­try ex­perts, the team at ESOC analysed the state of the re­ac­tion wheels, com­ing up with a se­ries of com­mands to change their speed and brake the spin­ning satel­lite. By late af­ter­noon, the com­mands were sent and im­me­di­ately showed suc­cess, but an­other three long hours passed be­fore the satel­lite was fully un­der con­trol and out of im­me­di­ate dan­ger.

“Everyone breathed a huge sigh of re­lief. This was very close, and we were im­mensely re­lieved to get the space­craft out of this ‘near-death’ ex­pe­ri­ence,” re­calls Andreas Rudolph, Head of the Astronomy Missions Division in ESOC’s Mission Operations Department.

An artist’s im­pres­sion of the mech­a­nisms in an in­ter­act­ing bi­nary sys­tem

“Most of the Control Team were work­ing from home at this point — I was fol­low­ing op­er­a­tions from the train! — and worked un­til four in the morn­ing to get the space­craft fully sta­ble, back into po­si­tion and fac­ing the Sun to recharge its bat­ter­ies.”Un­for­tu­nately, a few hours later as the team re­con­vened to dis­cuss the next steps, the space­craft once again started to ro­tate, its re­ac­tion wheels again turn­ing at high speed. The rea­son for this is still not com­pletely un­der­stood but is thought to be as­so­ci­ated with a ‘star tracker oc­cul­ta­tion’ or ‘blinding’ which was­n’t han­dled cor­rectly by the satel­lite’s con­trol sys­tems — ef­fec­tively when Earth gets in the way of the space­craft’s view of the stars, which it uses to ori­ent it­self.The team re­peated the pre­vi­ous days steps to sta­bilise the space­craft and re­turn to a Sun point­ing po­si­tion, this time with­out get­ting in the way of the star track­ers. The re­cov­ery took just a cou­ple of hours, putting in to prac­tice the lessons learnt from the first time.

Integral has since re­mained un­der con­trol, and from 27 September all sys­tems are back on­line. Since 1 October, af­ter an ex­tended check­out, its in­stru­ments are back ob­serv­ing the high en­ergy Universe.One of the first tar­gets for Integral will be to ob­serve mas­sive stars in the Orion re­gion, and study the im­pact on their sur­round­ings when they go su­per­nova.“We are also back to ‘target of op­por­tu­ni­ty’ ob­ser­va­tions, which means that Integral is again re­act­ing quickly to study un­ex­pected ex­plo­sive events in the Universe,” says Erik Kuulkers, ESA’s Project Scientist for Integral.

It’s not the first time this al­most 20-year-old mis­sion gave the con­trol team at ESA’s ESOC Operations Centre a scare. Last year, Integral fired its thrusters for pos­si­bly the last planned time, af­ter a fail­ure with its propul­sion sys­tem.

It’s this de­fi­cient propul­sion sys­tem that meant a nor­mally rec­ti­fy­ing Safe Mode was in­ef­fec­tive on this oc­ca­sion. With the mode now dis­abled, the Control Team are work­ing on a new au­to­matic res­cue se­quence that should mimic many of the op­er­a­tions car­ried out af­ter this anom­aly, only much faster.When the propul­sion sys­tem failed, the team re­alised they would have to learn to ma­noeu­vre the four-tonne satel­lite us­ing its highly sen­si­tive re­ac­tion wheels alone, to dump en­ergy at reg­u­lar pe­ri­ods and coun­ter­act forces on the space­craft, in­clud­ing the gen­tle shove from the Sun’s light. It was a so­lu­tion that had never been tried be­fore.“I did­n’t be­lieve it was pos­si­ble at first. We checked with our flight dy­nam­ics col­leagues and the the­ory in­di­cated it would work. After do­ing a sim­u­la­tion, we tested it on the space­craft. It worked,” ex­plains Richard.“Thanks to our quick-wit­ted team and the help of ex­perts from across in­dus­try, Integral lives on. Almost two decades old, it is far out­liv­ing ex­pec­ta­tions for what was meant to be a five-year mis­sion.”Lis­ten to Richard re­count the story of Integral’s pre­vi­ous res­cue and up­grade and the amaz­ing team­work that saved the mis­sion, in the lat­est episode of the ESA Explores Space Operations pod­cast.

Thank you for lik­ing

You have al­ready liked this page, you can only like it once!

Web browsers are ubiq­ui­tous, but how do they work? This book ex­plains, build­ing a ba­sic but com­plete web browser, from net­work­ing to JavaScript, in a thou­sand lines of Python.

Get an email every time we pub­lish a new chap­ter:

Adding your email to the list…

Error! Something seems to have gone wrong.

Close

Follow this book’s blog or Twitter for up­dates. You can also talk about the book with oth­ers in our dis­cus­sion fo­rum.

If you are en­joy­ing the book, con­sider sup­port­ing us on Patreon.

Did you find this chap­ter use­ful?

NEW YORK, NY — Hindenburg Research, a foren­sic fi­nan­cial re­search firm, to­day an­nounces it is launch­ing the Hindenburg Tether Bounty Program (the “Program”) — a re­ward of up to $1,000,000 for in­for­ma­tion lead­ing to pre­vi­ously undis­closed de­tails about cryp­tocur­rency “stablecoin” Tether’s back­ing.

Tether is a key un­der­pin­ning of the multi-tril­lion-dol­lar crypto mar­ket. Yet de­spite its re­peated claims of trans­parency, its dis­clo­sures around its hold­ings have been opaque. The com­pany claims to hold a sig­nif­i­cant por­tion of its re­serves in com­mer­cial pa­per yet has dis­closed vir­tu­ally noth­ing about its coun­ter­par­ties.

Hindenburg has doubts about the le­git­i­macy of Tether’s back­ing due to the com­pa­ny’s sparse dis­clo­sures.

Tether has been re­ferred to as a “stablecoin” in the crypto space due to the com­pa­ny’s his­tor­i­cal claims that it was equiv­a­lent to $1 USD and was backed 1-to-1 by “traditional cur­rency” re­serves.

Since those claims that gar­nered it “stablecoin” sta­tus were made years ago, Tether sub­se­quently re­vealed that its coin was backed only by a small per­cent­age of tra­di­tional cur­rency, and that much of its back­ing con­sists of hold­ings in com­mer­cial pa­per is­sued by un­named coun­ter­par­ties.

Despite mul­ti­ple reg­u­la­tory sanc­tions over its al­leged lack of truth­ful dis­clo­sure about its re­serves, and de­spite Tether now hav­ing a $70 bil­lion mar­ket cap, Tether still re­fuses to pro­vide trans­parency to the pub­lic on its hold­ings.

Recent re­port­ing has in­di­cated that Tether’s claims would make it one of the largest hold­ers of com­mer­cial pa­per in the world. But ma­jor trad­ing desks stated to the press that they had never worked with them or seen them in the mar­ket.

Hindenburg’s pro­gram en­ables users to sub­mit in­for­ma­tion on Tether’s back­ing to Hindenburg for a chance to earn re­wards in an amount up to $1,000,000, the (“Bounty”).

Hindenburg Research founder Nathan Anderson said: “We feel strongly that Tether should fully and thor­oughly dis­close its hold­ings to the pub­lic. In the ab­sence of that dis­clo­sure, we are of­fer­ing a $1,000,000 bounty to any­one who can pro­vide us ex­clu­sive de­tail on Tether’s sup­posed re­serves.”

Securities and Exchange Commission Chair Gary Gensler said in September of this year that sta­ble­coins were act­ing as “poker chips” at the crypto Wild West “casino gam­ing ta­bles”.

Gensler said he feared that: “[the SEC will] keep bring­ing these en­force­ment cases but there’s gonna be a prob­lem, on lend­ing plat­forms, on trad­ing plat­forms, and, frankly, when that hap­pens…a lot of peo­ple are go­ing to get hurt.”

Hindenburg Research seeks to help ad­vance the pub­lic’s knowl­edge of what it be­lieves is a grow­ing threat to in­vestors by en­cour­ag­ing dis­clo­sure re­lated to a cru­cial part of the crypto mar­kets, which are near­ing “systemic” size.

The full terms and con­di­tions of Hindenburg’s Tether bounty pro­gram can be found here and should be read closely by any­one con­sid­er­ing sub­mit­ting in­for­ma­tion to the pro­gram.

Disclosure: Hindenburg Research does not hold po­si­tions, ei­ther long or short, in Tether, bit­coin or any cryp­tocur­rency at the time of this press re­lease.

Hindenburg Research is a re­search firm that spe­cial­izes in foren­sic fi­nan­cial re­search. The com­pa­ny’s ex­pe­ri­ence in the in­vest­ment man­age­ment in­dus­try spans decades, with a his­tor­i­cal fo­cus on eq­uity, credit, and de­riv­a­tives analy­sis.

Hindenburg uses fun­da­men­tal analy­sis to aid its in­vest­ment de­ci­sion-mak­ing and be­lieves the most im­pact­ful re­search re­sults from un­cov­er­ing hard-to-find in­for­ma­tion from atyp­i­cal sources. In par­tic­u­lar, the com­pany spe­cial­izes in un­cov­er­ing ac­count­ing ir­reg­u­lar­i­ties, ques­tion­able man­age­ment, undis­closed re­lated party trans­ac­tions and il­le­gal/​un­eth­i­cal busi­ness, fi­nan­cial re­port­ing or dis­clo­sure prac­tices.