Next Stop: Blockchain
AUSTIN, TEXAS – Lee Bratcher, President of the Texas Blockchain Council (TBC), is confident that the lone star state is primed to become the center of the “Great Mining Migration” – a term coined by American tech media outlets like TechWire, to describe the forced exit of cryptocurrency mining companies from China after Xi Jinping’s government moved to institute an outright ban on the energy-intensive, computing activity in the country.
“Texas,” Bratcher says, “is in a unique spot because of our dynamic economy and the presence of large energy, banking and telecom sectors”. The former Dallas police officer and current chair for politics, philosophy, and economics at Dallas Baptist University (DBU) is on a mission to make Texas “the jurisdiction of choice for blockchain innovation”.
On Friday, his blockchain advocacy organization will hold the inaugural Texas Blockchain Summit in the capital, a one-day event featuring speakers from state and federal government as well as representatives of other blockchain and cryptocurrency-focused companies and non-profits. The list includes Texas Republican senators and incurable China-hawks, Ted Cruz and John Cornyn.
Framing blockchain technology as a bulwark against totalitarian communist regimes is as predictable as it is disingenuous. But, it is the script members of the post-Trump Republican party are using to lead the charge for the implementation of the digital ledger technology at the heart of applications like IBM’s Digital Health Pass and similar ‘innovations’ of the nascent biosecurity state.
Bratcher has been dispensing blockchain technology training to DBU students since receiving his own “blockchain practitioner” certification from IBM in 2019, during his last year at University of Texas (UTD) Dallas, where he earned a PhD in political science and international relations, while a member of the school’s IBM-partnered “Blockchain Club“.
In addition to delivering the welcome address at the upcoming conference, Batcher will be moderating a panel session called “Geopolitics of Bitcoin: Implications for US Sovereignty & National Security” with former Boeing Global Defense president and Raytheon’s once vice president of cyber engagement, Ed Dolanski, opining on the issues.
Fellow TBC member and chairwoman Natalie Smolenski will preside over another session titled “Blockchain and Digital Identity in Government”; a topic currently being sandboxed in Miami, Florida, where the country’s first experiment in the integration of blockchain technology to government services is underway, with many of the same tired, quasi-Libertarian tropes being used to foist programmable money and other pillars of the data-driven ‘smart city’, impact finance models on the oblivious, largely immigrant population.
Welcome to the City of No Future
Visitors to the blockchain “Summit” in Austin will be able to test drive one of the latest smart city implementations. The SwimATX ticketing app was only recently unveiled by the municipal Parks and Recreation department to handle mobile payments and access to any one of the City’s forty-five pools and aquatic facilities.
Developed by a French multinational “urban intelligence” company called Flowbird, a mobile ticketing app for outdoor activities might seem innocuous. In reality, it represents a giant leap towards the normalization of geo-fenced, algorithmically enforced digital enclosures, where everything from our financial history to our health status can and will be used to restrict our access to services, shelter or even a refreshing dip in the pool.
The same company already operates the city’s smart parking meters along with those of dozens of other cities around the U.S. It is the largest “urban mobility and smart city solutions” company in the world, offering user-right management, ticketing and enforcement for mass transit systems and other urban mediation products in more than five thousand cities and eighty countries. It boasts a 70% global market share of on-street parking and 100 million users transferring data over their apps every week as well as 20 million banking transactions a month.
With data operations at this scale, some might be tempted to conjure the specter of the CCP and its ostensible social credit scoring system. But, Flowbird’s roots are much closer to home and the data analytics they provide to countless governmental entities to facilitate access point enforcement along with their proprietary hardware maintenance services affords the company the type of leverage that would make Beijing jealous.
In fact, Flowbird’s origins are far closer to Paris, Texas than Paris, France where the company has its headquarters. Three hundred miles south in Houston, a French prospecting company set up shop in 1935 using a new technique to map subsurface structures by generating an electrical field below ground.
Founded in France as the Société de Prospection Electrique by brothers Conrad and Marcel Schlumberger with $500,000 francs from their father, the American division – Schlumberger Well Surveying Corporation – soon became the company’s most profitable venture and in due time, Schlumberger would morph into an oil industry powerhouse that would be logging 70% of the world’s oil wells by the 1980s.
Schlumberger’s dominance in the oil drilling business was compared to IBM’s in the computer industry and as it diversified its interests, Schlumberger began to venture into the technology sector, itself, acquiring multiple semiconductor and electronics manufacturers. In 1987, Schlumberger established the Austin Systems Center to develop advanced computer systems and artificial intelligence (AI) applications and machine learning techniques for the resource prospecting industry and was a Silicon Valley pioneer, of sorts, when it moved its Palo Alto computer science research center to Austin a year later.
The oil company was ahead of its time in many respects, it seems. As it diversified, Schlumberger developed a parallel technology business focusing on access control systems, like intercoms, electronic locks and parking meters, which it consolidated under a division it called Schlumberger e-City as far back as the 1970s. It came to dominate that space just as it had dominated the oil drilling and prospecting business.
Schlumberger e-City had installed their “Pay & Display” parking terminals in thousands of cities and was the leader in the implementation of urban mediation technology. In 1993, New York City had 500 of its Muni-Meters installed on its streets, a previous generation from the units it would install in Portland, Oregon a few years later, which had a first-of-its-kind “two-way cellular communications” capability to relay data to municipal offices.
In 2002, the City of Portland awarded Schlumberger e-City a multi-year contract to replace all of its downtown parking meters at a cost of approximately $6,100 each and became one of the first American cities to adopt the new “multi-space pay stations” – machines that could accept credit cards and other modes of payment. The following year, Schlumberger e-City would be spun off into a new company called Parkeon in what would be the beginning of a massive consolidation of urban mediation technologies that are now setting the stage for the inescapable digital enclosure.
Private Equity Pirates and Consolidating the New Oil Pipelines
“The name change is just the visible part,” said Parkeon’s brand new director of operations Bob Barnes, “we have far-reaching goals”. The buyout had been led by Apax Partners – the venture capital firm owned by Sir Ronald Cohen – with some help from BNP Paribas. Barnes highlighted Apax’s hands on approach, stating that the investment firm would provide “strategic guidance and financial support […] to identify and leverage growth opportunities, especially in the US market”.
Schlumberger e-City’s transformation into Parkeon was finalized in 2003, just as the Iraq war was about to sink oil prices to record lows and place enormous pressure on the oil industry as a whole. Sir Ronald Cohen would undergo a transformation of his own soon enough, when he retired from Apax two years later and would assume the mantle of the “father of impact investment”. In the meantime, however, there was work to be done. Yves Chambeau, the director of Schlumberger e-City who had been kept on at the new company, likewise recognized that it would be their new owners who had the “capability and market insight to turn Parkeon into a global leader”.
As Parkeon’s Portland contract was getting started, Apax was busy acquiring Intelsat, a major commercial satellite communications company that beamed data to more than 200 countries and territories. Other commercial satellite companies were simultaneously absorbed by VC firms like KKR and The Carlyle Group in the wake of the dot com bubble. Intelsat would end up acquiring these, too, in spite of losses.
At the same time, Cale Access, a Swedish supplier of advanced parking products and pay and display terminals with a solid market presence in Norway, Germany and the UK began making inroads into Parkeon’s turf in America, erupting in a corruption scandal that ended with the FBI raiding Portland’s parking manager’s office and the civil servant convicted of taking $200,000 in bribes to award a contract to Cale in 2006. Despite this, Cale was awarded a new contract in 2014, after the City’s director of transportation determined that the municipality had no legal grounds to bar the company from seeking a contract with the city.
Among the most interesting conclusions reached by the city in this case, was that changing vendors would interrupt the monthly servicing of the machines due to “proprietary” issues and would effectively “shut down” the city’s meter program until an alternate provider was found. This is especially significant given that Cale and Parkeon – the two largest players in the urban mediation space – were merged in 2018 to become Flowbird, creating a de facto monopoly that leaves cities with few, if any, choices.
This stark reality is buttressed by the multiple mergers and acquisitions executed by the VC ownership in the interim. After Apax refinanced Parkeon and sold it to Barclays Private Equity, the latter brought in another firm, Intermediate Capital Group (ICG), to acquire the UK’s leading public transport fare company, Wayfarer Group, which controls 80% of the United Kingdom’s bus revenue systems and counting with a “significant expertise in the use of smart cards.
In 2013, ICG took a majority stake in Parkeon and hired three Blackstone executives, including its Vice President to lead its North American private debt division. That same year, Parkeon launched its mobile payment platform Whoosh!, setting the stage for a partnership with the leading MPP (mobile parking payment) software company, Waysis a year later.
Cale Access’ owner, Mellby Gård AB, purchased Parkeon in 2016 as the game of private equity musical chairs continued and the consolidation of urban mediation technologies advances with no contravening force to stop it. In 2019, after Cale and Parkeon became Flowbird, the new smart city juggernaut acquired the remaining outstanding stake in Waysis, giving it a nearly unbeatable edge in the urban access enforcement space.
The First Step
Flowbird now has wings to shape the market, and with its new SwimATX app, the focus on “last mile” solutions revolving around vehicle transportation can branch out to “last step” integrations as our bodies become the new repositories of the data moving on the day trader’s computer dashboard.
However, the real scaling can’t begin until the data becomes fully interoperable and exists in a blockchain/smart contract ecosystem. That is what will be discussed at the Texas Blockchain Summit, though presenters will likely find ways to avoid detailing the most egregious implications, such as how these technologies will be used to enforce things beyond a simple parking ticket.
Texas is at the heart of the immigration debate and refugees amassing at the U.S.-Mexico border are at the vanguard of the most abusive forms of these technologies. A report published Wednesday by the Transnational Institute and the Immigrant Defense Project’s Surveillance, Tech & Immigration Policing Project, titled Smart Borders Or A Humane World?, broaches many of these questions and provides very unsettling answers.
On the heels of Wednesday’s decision by the 9th District Court of Appeals to reverse a California ban on private detention facilities and Big Tech in league with social impact investors chomping at the bit to capture this market, as well, it behooves us to see right through the political rhetoric or marketing copy that only serves the interests of the very few and take the first step away from our digital wards.
