Back in March, we wrote about a complaint to the FCC by cable companies about how Verizon was abusing the number portability system to try to retain customers. In April, Kevin Martin took his expected position in siding with Verizon, the telco. However, it appears that only Martin was convinced. All the other FCC commissioners went in the other direction and sided with the cable companies, smacking down Verizon and telling it to stop.

What's impressive, though, is the response and the amount of misinformation flying around. Even before the official vote, Verizon's policy guys put up a blog post claiming that this decision would hurt customers. That resulted in a spirited discussion in the comments on that post between Verizon's public policy guy and a cable lobbyist. There have also been some interesting discussions among public policy followers, with some, like James Gattuso, buying Verizon's take that this is bad for consumers, and others, like Karl Bode, noting that Verizon's spin on this appears to be pure "nonsense."

The reality appears to be somewhere in-between. Verizon is clearly overplaying the situation in claiming that the FCC is saying that it cannot market to customers who have chosen to leave Verizon for cable. That's not what this argument is about, and James Gattuso is incorrect in suggesting that the "question at hand" is really about whether or not Verizon can contact customers who have agreed to switch and ask them not to switch. That's certainly the way Verizon wants you to think about it, but that wasn't really the question. No one is saying that telcos (or cable companies) for that matter, can't try to convince customers not to switch. What the FCC has said is that Verizon cannot abuse its position to block the switch while it tries to convince customers not to switch. That's what Verizon is doing. When it gets the request from the cable companies to switch, it basically goes into procrastinate mode, even though it's required to process the switch. It codes the switch request as a "conflict" which gives it extra time to resolve the "conflict" before obeying the switch request.

That's not the same as simply asking the customer not to switch. It's abusing the technical process for marketing purposes. The FCC has not said that Verizon (as Verizon claims) cannot try to entice customers to stay, or to win back those customers who have decided to leave. All it has said is that Verizon cannot stall and block the change request, once it's been placed, in order to try to win back the customer before the change is made. Once the customer has committed to the change, Verizon should be required to process it, rather than block it. So, don't buy the story about Verizon no longer being able to win back customers or entice them with reasons to stay. That's got nothing at all to do with this decision.

Update: Gattuso responds. I still think he's buying Verizon's spin on this ruling. Verizon is falsely claiming that it cannot market to customers who have decided to leave. That's false. They simply cannot abuse the fact that they have access to certain information from the group that has to make the change to market to them. They can still market to them through other means. In other words, Verizon's complaint here does not fly.

We mentioned the rumored "compromise" bill concerning telecom immunity earlier this week, and now it appears that leaders of both the House and the Senate have agreed to wording in the bill which will be brought to the floor today. From the sound of it, it's exactly what we feared: Congress has effectively given in to the administration, allowing it to grant immunity to any telco. Apparently, all that talk about not allowing the worst of this bill to go through was just talk. It's difficult to know where to begin in reviewing this "deal." It's hardly a compromise -- it's a get out of jail free card.

To summarize: it appears quite likely that various telcos broke a very clear law in providing wiretaps to the government without a warrant (as required under FISA). Despite what you might hear, this has nothing to do with emergency wiretaps where there wasn't time to go the warrants. Under existing law, in such cases, it's possible to get the wiretap and get the warrant within a few days. However, in many cases, it appears no warrant was ever sought. The fact that the telcos approved these wiretaps is almost certainly against the law -- and it seems that it should obviously be tried in a court of law to determine that specifically.

However, under this new law, Congress has basically given the President (who ordered the wiretaps in the first place, and doesn't want these trials to go forward since they may reveal that he broke the law too) "get out of jail free" cards he can hand to each telco, saying that since he told them that the wiretaps were legal, the lawsuits no longer can proceed. Basically, this puts the President above the law, lets him avoid trials that might prove that his activities broke the law and to reward telcos who broke the law at his command.

Even worse, the bill basically grants the administration the right to keep on spying without getting warrants. Intelligence agencies will be able to demand various communications providers hand over communications without court approval and without naming the target, so long as they claim that the communications are "reasonably believed to involve a non-American who is outside the country." Seems rather wide open for abuse doesn't it?

This whole thing is fairly stunning, considering that it's an opposition Congress facing off against a weak administration. Yet Congress basically gave the President exactly what he wanted, and made a mockery of the checks and balances our government was supposed to include. This is allowing a President to say the law is whatever he says is the law, while destroying basic due process and civil liberties along the way.

We've been following the ridiculous attempts by the administration to protect telcos who most likely broke the law in supplying warrantless wiretaps by trying to get "immunity" included in the new FISA bill. As we've pointed out, this makes absolutely no sense. If the administration or the telcos (or both) broke the law -- then that issue should be explored. Granting anyone immunity from even being tried for breaking the law doesn't seem appropriate. If there were special circumstances that explain why the telcos or the administration broke the law, why not at least have them come out in court rather than sweeping them all under the rug?

Unfortunately, now there's word coming out that a new "compromise" bill is likely to be approved. However, the details suggest this isn't a compromise. This is exactly what the administration wanted, and which some members of Congress have been fighting against. Basically, it would let the President say that he assured the telcos that their actions were legal -- and that would grant them immunity. In other words, this law would basically say that as long as the President tells you something is legal, it's automatically legal, and you can't get in trouble for doing it. That's not how the law is supposed to work -- and is a huge abuse of power. There's simply no way Congress should let this through, as it sets an awful precedent.

There's been an ongoing battle in Congress over whether or not telcos that helped the gov't with warrantless wiretaps should get retroactive immunity for their actions. No one has given any good reason why companies should be granted immunity for any sort of illegal actions, and there are plenty of reasons why they should not. The fact that the administration "asked" them to administer the wiretaps is no excuse. The president is not above the law. Basically, the only reason to demand immunity is because it's clear that someone (or, more likely, multiple people and companies) broke the law.

The latest move in this process is a so-called "compromise" bill that would move these disputes into a secret court, who could then dismiss the lawsuits without giving any explanation whatsoever. And, yet, no one has explained why these trials should happen in secret either. Either the companies followed the procedures that are clearly stated in the law, or they did not. You can determine if they followed the procedure without giving up state secrets. This whole thing seems to be involving an awful lot of smoke and mirrors coming out of DC, with people making all sorts of ridiculous statements about "security" and "terrorism." Those statements are all meaningless distractions. There is a clear legal procedure for wiretapping that even allows for going back after the fact to get approval. There is no excuse that the process was too cumbersome or slow, because of that ability to go back. The question here has nothing to do with security and safety. It has to do with whether or not the legal process was followed -- and it's hard to see why that should remain secret.

The Universal Service Fund (USF) is a huge boondoggle for telcos, who keep getting more and more money out of it, with almost no oversight into what's done with that money. And, the way it's set up, it actually blocks more innovative (and cheaper!) services from being used to improve connectivity in rural areas. It's good to see others are beginning to notice this. News.com is running an article from Gregory L. Rosston at Stanford who points out that the USF rewards companies for being the least efficient providers. That is, by showing how much more it costs the telcos to provide for rural users, the FCC grants them even more money. In other words, the less efficient they are, the more money they get. Not exactly the type of incentives the FCC should be setting up -- but given FCC chair Kevin Martin's super chummy relationship with the telcos, perhaps it's no surprise.

It seems that the telcos and the cable companies just can't stop making questionable claims against each other. It's been going on for years, but it seems that the telcos are finally going to court over it. Last month, we mentioned that Verizon was suing Time Warner Cable over what it claimed was false advertising, but then had to embarrassingly admit that its own ads were misleading as well. Now, AT&T is suing Comcast for misleading advertising thanks to a print ad campaign that suggests AT&T DSL customers will have to put a huge cabinet on the side of their homes. As AT&T points out, it only needs to install such cabinets for one out of approximately 750 homes -- and it never installs them on private property without the permission of the homeowner. To be honest, it hardly seems like that big of a deal either. If it took a big box on the side of my house to get great internet speeds, I'd be fine with it.

But the thing that seems most strange, is this constant focus on attacking each other with exaggerated and misleading claims. That's a sign of a stagnating industry. A growing industry focuses on promoting what's new and what great features it has. Or, if it does mention the competition at all, it's to show why its service is better -- not why the other's is worse. The fact that the two sides are attacking each other in this manner, while broadband providers in other countries are spending their money on actual improvements is rather disappointing. If these broadband providers put half as much effort into just offering better service, perhaps it wouldn't have to resort to name calling and lawsuits against each other.

Back in February, we broke the story that some Republican Congressional Representatives were looking to circulate a discharge petition to force a vote on the FISA bill that would grant telcos retroactive immunity for any illegal activity having to do with wiretap activities. And, in fact, that's exactly what happened. Earlier this week, a group of Republicans started circulating just such a petition. This is an extremely rare move. A discharge petition hasn't been used successfully since 2002. However, the reasoning behind the supporters of this discharge petition is highly suspect and deserves to be examined. Rep. Roy Blunt stated:

"More than 66 days have passed since House Democrats allowed a key piece of terrorist surveillance legislation to expire--not because they had concerns with the bill, but because they were seemingly more concerned that not enough trial lawyers would be able to file enough expensive and frivolous lawsuits against U.S. telecom firms."

That's both incorrect and misleading at the same time. First of all, there were concerns with the bill: the concerns about giving telcos immunity for potentially illegal activities. As we've pointed out, there are really only three potential reasons for wanting immunity, and they certainly have nothing to do with filing frivolous lawsuits. If this was about frivolous lawsuits, immunity wouldn't be needed -- because the cases would get thrown out. The only real reason to push for immunity is because it's known that the telcos and/or the administration acted illegally. In such a case, immunity obviously shouldn't be allowed. No one has yet given a decent reason for immunity, and the statement here to back up the discharge petition is incredibly disingenuous. Hopefully, a majority of Congressional representatives will realize that and reject the petition.

Last month we pointed out that the cable companies had filed a complaint with the FCC accusing Verizon of some shady practices in trying to get customers to stay, even after they'd already agreed to switch to cable. Since most customers want to keep their home phone number, the cable companies needed to contact Verizon to make the switch. At that point, Verizon would immediately contact those customers to prevent them from switching. As the cable companies pointed out, this gave the telcos an unfair advantage. They were using information they learned from elsewhere (the group in charge of managing number portability) to steal customers back from the cable companies. Of course, given how today's FCC tends to think that telcos are always right and cable co's are always wrong, it will surprise probably none of you, that the FCC has no problem with Verizon's practices. Perhaps the cable companies should have waited until a new FCC commish was sworn in before making this complaint.

Remember how Bell Canada had decided to start traffic shaping without telling any of its ISP resellers? Well, in a meeting with those resellers, the company both admitted it and told them there was nothing they could do about it, even if it meant that those ISPs were violating their own terms of service and promises to customers. It's good to be a monopoly, you see. Since those ISPs have nowhere else to go, Bell Canada is able to do whatever it wants to the network, and if those ISPs don't like it, they're pretty much out of luck.

Comcast and Time Warner have complained to the FCC that Verizon is taking unfair advantage in preventing customers from dropping their phone service. The basic story is that the cable companies have been offering deals on various "bundles" of TV, internet and phone service, all over cable. When customers agree to switch, most want to keep their existing home phone number (which is allowed under number portability rules). The cable companies take care of that part, informing the phone company of the switch -- at which point (the cable companies say) Verizon calls up those customers and offers them cash discounts to stick around. While it's quite common for telcos (or other firms for that matter) to offer customers who cancel deals to stay, this is somewhat different. The customer hasn't called to cancel in this case. It's just because Verizon owns the telephone network that it finds out about the switch and then proactively contacts the customers. Given the FCC's extra friendly terms with the telcos rather than cable co's, anyone think this has a chance of getting anywhere?