Techdirt. Stories filed under "telcos"

Hear That Deafening Silence From AT&T And Verizon About NSA Surveillance?

Mike Masnick — Thu, 13 Jun 2013 10:13:41 PDT

As the various details have come out about the NSA leaks, many people are focused on PRISM, but it's pretty clear that the really big revelation so far was in how the telcos -- Verizon and AT&T being the big ones -- have continued to cooperate closely with the government, more or less handing over all their data to the NSA. That had already been alleged years ago, by AT&T technician Mark Klein, but many in the public and the press had ignored that until the leaks last week revealed the FISA Court's order to Verizon, demanding all records. Declan McCullagh, over at News.com, is pointing out a key point: while the tech companies have loudly denied handing over tons of data to the feds, notice that AT&T and Verizon have remained silent.

The Internet companies have asked Attorney General Eric Holder to lift secrecy restrictions on 702 orders so they can clear their name, in part by disclosing how many records they have turned over in response to legal process. Google sent an open letter to Holder yesterday, and Facebook and Microsoft have also asked the Justice Department for permission to divulge summary statistics. Holder has not responded.

By contrast, AT&T never asked for permission to disclose NSA surveillance. Instead, Deputy Assistant Attorney General Carl Nichols said during a 2006 court hearing in San Francisco that a discussion of all the "facts" about NSA surveillance could only happen in a classified setting. The Bush administration asked that the case be tossed out on "state secrets" grounds.

Neither did Verizon, which has secretly turned over daily logs of all customers' phone calls to the NSA, according to a court order that the Guardian published last week. When USA Today disclosed in 2006 that NSA was vacuuming up phone logs, Verizon didn't deny it. Instead, a spokesman told the newspaper only that "we do not comment on national security matters."

Now, perhaps it's reasonable to question whether or not the statements from the internet companies are completely accurate, but they've been increasingly specific in their denials. On the flip side, the telcos haven't issued any denials at all, and, given the evidence that Klein presented seven years ago, you can see why they might not have grounds to issue a denial. The remaining silence, however, speaks volumes.

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Whatever Happened To The Exaflood?

Mike Masnick — Tue, 4 Jun 2013 15:52:25 PDT

If you remember, about five years ago, a bunch of astroturfing and front groups for the broadband companies started spreading this myth that the internet was facing a catastrophe known as the the exaflood, in which internet traffic would swamp capacity and the internet would sputter to a crawl. They talked about things like "brown outs" where so much traffic would make the internet difficult to navigate. Of course, it was all FUD and scare tactics to hide the real intent: to allow the telcos to put more tollbooths on the internet, to double charge some popular internet companies, and to generally try to avoid investing in basic infrastructure. Of course, it was easy to debunk those claims, but five years later, Broadband Reports takes a look at some of the latest data to note that the feared exaflood never showed up, and the predictions of clogged pipes never appeared -- and the data on internet growth shows little likelihood of that ever happening.

Cisco's latest numbers are an ever further cry from what telecom sector lobbyists and think tankers were predicting in 2010 and before, when they were using a looming "exaflood" to scare regulators and the press and public into buying into bad telecom policy. Companies like Nemertes Research and The Discovery Institute (the latter a PR firm paid directly by carriers, the former long accused of having a rather cozy relationship with AT&T) insisted we'd be seeing Internet "brown outs" by this point courtesy of unsustainable growth rates of up to 100% or more.

The scary predictions were effective. Said lobbyists, think tankers, astroturfers and "fauxcademics" convinced many people that if the telecom industry wasn't given "X" (X being anything from fewer consumer protections and more subsidies to the right to bill by the byte or avoid network neutrality rules), that the Internet would collapse. That obviously never happened and intelligent engineers and networks adjusted, but few of the people who massaged data for their own financial ends over the last five to eight years were ever really held accountable.

Of course, there's always more fear and FUD to go around, so expect plenty more stories about looming problems if we don't give the big broadband guys whatever anti-competitive thing that they want going forward...

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Facebook Backs Away Quietly From Its CISPA Support

Mike Masnick — Thu, 14 Mar 2013 15:08:57 PDT

Many in the internet community were disappointed a year ago when Facebook came out in favor of CISPA. Facebook made its case publicly, agreeing that there were some privacy and civil liberties concerns with the bill, but that on the whole the bill was good. Of course, more cynical people might point out that since the general immunity provisions of CISPA would protect Facebook from liability in sharing info with the government, that of course they'd like it. However, it appears that Facebook is reconsidering that position, perhaps aware of how much public opposition there is to CISPA. Facebook is no longer listed as a CISPA supporter, though it also has not come out directly against the bill. Instead, it issued a statement that says basically nothing:

We are encouraged by the continued attention of Congress to this important issue and we look forward to working with both the House and the Senate to find a legislative balance that promotes government sharing of cyberthreat information with the private sector while also ensuring the privacy of our users.

Still, it's encouraging that a company, like Facebook, which really does rely on the support of their userbase, appears to at least recognize that something like CISPA might not be good for its users. In fact, this seems similar to when Microsoft backed away from its CISPA support last year as well. The article linked above notes that Microsoft still feels the same way, citing the concerns about user privacy with the current draft of CISPA.

So, who is supporting CISPA? The telcos are still there, not surprisingly, as well as mostly infrastructure providers, rather than any company that has a bunch of its own internet users. So, you see IBM, Intel and Juniper Networks. But there is not a single real "internet" company in the bunch any more. Perhaps that should be a loud hint for CISPA's sponsors that the bill is not a good thing for the internet world.

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Big Telcos Love CISPA; More Immunity For Violating Our Customers Privacy?!? Sign Us Up!

Mike Masnick — Fri, 15 Feb 2013 09:36:32 PST

It's well known that the big telcos and the federal government have an all-too-cozy relationship when it comes to handing over data on telco customers. This has included ignoring all the rules and going so far as handing over information based on a post-it note given to them by the FBI. The telcos general standpoint has been that they're happy to let the government reach deep into their data -- more or less adding a direct tap on all of us. Congress, however, gift-wrapped them immunity to any lawsuits from all of that kind of stuff. Still, these days, the telcos sure do like not being liable for coughing up their customer's private info to the government, so it should come as little surprise that they're practically shoving each other aside to support CISPA.

Two major trade groups, CTIA and US Telecom, each issued short statements saying that CISPA is a good thing. US Telecom claimed that the bill would make it more efficient to detect, deter and respond to cyberthreats. That would be nice if true, but no one's yet explained how that actually would work in practice. CTIA knows how to play the press, and started its press release by hyping up recent hack attacks. That CISPA likely would have done absolutely nothing to stop those attacks is conveniently ignored.

Meanwhile AT&T and Verizon each offered their own support for the bill, making it clear that protection from liability is the most important thing to them.

The telcos, of course, have nothing to lose and everything to gain from CISPA. It gives them even more freedom from liability in sharing your info, but doesn't present any specific regulatory burdens on them. Of course, shouldn't we be a lot more concerned about the views of the people whose privacy would be violated, than the views of those violating their privacy?

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Supreme Court Won't Hear Case On Legality Of Retroactive Immunity For Telcos

Mike Masnick — Thu, 11 Oct 2012 07:13:04 PDT

Well, this is unfortunate. Late last year, the 9th Circuit appeals court -- as part of a series of cases concerning warrantless spying on Americans -- decided that the FISA Amendments Act (FAA) passed by Congress in 2008 was not unconstitutional in granting telcos retroactive immunity for carrying out government orders to spy on Americans. This is quite troubling for a variety of reasons, not the least of which is that the government is more or less admitting that it teamed up with telcos to violate the law. Why else would you grant retroactive immunity to telcos if you didn't know they'd already broken the law in the past.

Unfortunately, it appears that the Supreme Court has now refused to hear the appeal on the case, effectively killing off the EFF and ACLU's legal challenge to the legality of giving telcos retroactive immunity.

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Do We Really Want The UN In Charge Of Cybersecurity Standards?

Mike Masnick — Tue, 11 Sep 2012 05:09:28 PDT

We've been talking quite a bit about the upcoming efforts by the International Telecommunication Union (ITU) to expand its ability to govern the internet, and numerous proposals are being submitted by various telcos along those lines. The folks over at CDT are ably demonstrating why this is dangerous in a number of ways, starting with why the ITU is the exact wrong place to be dealing with cybersecurity issues, even though many of the proposals deal with cybersecurity. Take, for example, the proposal of African Member States, which suggests that the ITU can be a central force in "harmonizing" data retention laws and rules. As CDT notes, this seems to assume that the only issue with data retention laws are that they are different in different countries. But that ignores the fact that many people question whether or not such laws even make sense in the first place:

This reference to data retention well illustrates the problems with involving the ITU in issues related to cybercrime and cybersecurity. Not only do national laws on data retention vary greatly, but there is ongoing controversy about whether governments should impose data retention mandates at all. In addition, where data retention is required, there are many different views on the legal standards under which governments should be able to gain access to retained data – whether access should require a court order, for example. Such questions are crucial to adopting a data retention law, but are far outside the expertise of the ITU. Other concerns arise from the fact that data retained by a service provider may, absent specific legal and procedural safeguards, be subject to access by the government to investigate any crime, may be accessed by intelligence agencies, and may be shared with other governments to assist their investigations. In addition, the more data that companies are required to retain, and the longer the retention period, the greater the risk that personal information could be breached, leaked, or otherwise abused.

Elsewhere, the report highlights how many of the proposals on "cybersecurity" seem more likely to set up rules and laws that help repressive regimes crack down on critics and dissidents. And that, of course, highlights the real problem here. There is nothing in the ITU that involves actually determining what's best for the public and for individuals' rights. Instead, the proposals are from big (often state-supported) telcos and governments themselves. The CDT paper correctly argues that a group like the ITU simply isn't as quick or as flexible as any reasonable body dealing with the rapidly changing, always dynamic world of cybersecurity. But it goes even further than that. An effective look at cybersecurity requires recognizing that governments and telcos often have views that are not at all in the best interests of citizens -- and handing off all discussions on "cybersecurity" regulations to such a body seems ripe for abuse in ways that may help governments or telcos, but at the expense of the public and their ability to speak out.

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EU Telcos To UN Regulators: Divert More Money Our Way And No One's Internet Gets Hurt

Mike Masnick — Mon, 10 Sep 2012 08:22:21 PDT

Back in June, we wrote about the European Telecommunications Network Operators Association (ETNO) and its "proposal" to basically tax the internet, which they're hoping the ITU will adopt later this year. The thinking here is not hard to figure out. These are old school (either state run or formerly state run) telco monopolies not used to having to compete or innovate. They look at the success of various internet companies, and get jealous and -- like the big entertainment legacy players -- start thinking "hey, some of that should be my money -- this is unfair!" And, so they come up with schemes and proposals like this -- trying to effectively get regulators to force a revenue shift from those companies that innovated and found business models that work, over to the lazy telcos who sat back, fat and happy with their monopoly, refusing to innovate. It reminds me of Andy Kessler's description of companies that create value vs. those that lock up value. One goes out and builds something new that the market wants... and the other runs to the government and asks them to put in place policies that divert revenue to them.

With that in mind, check out ETNO's latest proposal from ETNO for the ITU to consider (pdf) later this year. And you notice all sorts of questionable claims, all designed to basically say: we haven't adapted, and so regulators need to force money from actual innovators into our bank accounts:

The telecommunications market and the telecoms industry as a whole is undergoing a fundamental shift. Catalysed by the availability of higher bandwidth connectivity, new applications and services are being enabled that go far beyond the traditional services of voice calling. In both the consumer and enterprise segments, services such as Voice over IP (VoIP), social networking, instant messaging and the rise of ‘apps’ have changed the way customers use their mobile and fixed connections. This development is significant and telecoms operators need to adapt and rebalance their tariff structure between voice and data services.

While broadband definitely is a key "catalyst" note how they set this up so that they can claim that it's really all about them... and then how the "tariff structure" needs to be "rebalanced." It's not about how they need to rethink their own business models or innovate or anything along those lines. It's about asking regulators to divert money that others are making to them.

The aim of the ETNO proposal is to contribute to the achievement of a more sustainable model for the Internet. ETNO is not asking for increased regulatory intervention but aims to establish a reference for commercial negotiations. The current interconnection model has some shortcomings that need to be addressed. Today there is a huge disproportion amongst revenues and a clear shift of value towards players (Over the Top players -- OTT) who are not contributing to network investment. Traffic and revenue flows need to be realigned in order to assure the economic viability of infrastructure investment and the sustainability of the whole ecosystem. The revision of the ITRs offers a unique opportunity to propose high‐level principles for IP interconnection.

Yup. "More sustainable" means "more money to the telcos." "Disproportion amongst revenues and a clear shift" towards online service providers is basically "the folks providing the services that make our connections valuable are making more money than we'd like, and we deserve some of that." And the idea that they're "not contributing to network investment" is a red herring. The big internet companies pay a ton for the bandwidth they use. And that money goes to the telcos. If they're not investing it in their networks, then perhaps they should explore why. Any time you hear a company say that "traffic and revenue flows need to be realigned in order to assure the economic viability," you know you're dealing with a company (or industry) that has failed to adapt and is asking the government to bail them out by taking money from those who did adapt. To claim that this isn't asking for regulatory intervention is laughable, since the whole process is one giant regulatory intervention. If this was just about commercial negotiations, this wouldn't be an issue. They'd just go out and negotiate.

ETNO believes that the revised ITRs should acknowledge the challenges of the new Internet economy and the principles that fair compensation is received for carried traffic and operators’ revenues should not be disconnected from the investment needs caused by rapid Internet traffic growth. The ITRs should be flexible enough so as to further encourage future growth and the sustainable development of telecoms markets, while respecting the guiding principles that led to the successful development of the Internet: private sector leadership, independent multi‐stakeholder governance and commercial agreements. ETNO is certainly not asking for any change to the current Internet Governance model which is based on private sector leadership and multi‐stakeholder dialogue.

Whenever a company is asking regulators for "fair compensation," it's basically them saying "our business model is flopping due to changes in the market, and we need you to prop us up." If ETNO really isn't asking for a change in the current internet governance model, then, um, why is it asking regulators to "rebalance" things and change who gets what cut of the revenue?

ETNO wants to avoid decisions that would prevent new business models from emerging or that would hamper differentiated offers, hence limiting consumer choice. The risk of undesirable economic and technical regulation of operator rates, terms and conditions will be much higher if the development of the Internet continues to be jeopardized by the lack of sustainability and/or by the lack of end‐customer satisfaction.

ETNO members have reiterated on many occasions their commitment to an open Internet and to continue enabling consumers to access services and applications of their choice as well as being completely transparent about terms, conditions and limitations. As recognized by the European Commission, operators should not be prevented from developing differentiated offers based on customer needs, in addition to the best effort Internet. It is important to note that nobody will be cut off from the Internet as the best effort Internet will continue to exist and to evolve. New business models based on differentiated offers will ultimately create more choice for consumers.

This is very close to "nice internet system you got there... you wouldn't want anything to, you know, happen, to it, now would you?" Basically, if regulators don't divert more money from successful internet companies to lazy telco monopolists, well, then we might just have to "jeopardize" the network.

There's a lot more like that in there. They're trying very, very carefully to use the language of "internet freedom" and innovation, in order to then explain why the ITU should put in place a proposal that effective forces local regulators to divert money from the companies who innovate, to the lazy monopolists. This is one of the reasons why so many folks interested in keeping the internet truly free and open are quite concerned about ETNO's proposal. It's not designed to benefit the internet or to encourage innovation. It's just designed to divert money from those who innovate to the telcos who haven't had to innovate.

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Telcos Deny Trying To Turn FCC's Open Network Diagnostics Into A Closed, Proprietary Affair

Mike Masnick — Wed, 18 Jul 2012 13:22:23 PDT

The FCC has been working with M-Lab to measure basic network diagnostics using an open source solution, providing public information about internet network performance. This seems like a good thing... though you can see why not everyone would like data public about the performance of their networks. Over the weekend, a warning went up that the telcos are pushing the FCC to stop using M-Lab and switch to their own ISP-managed diagnostics tools. Vint Cerf is raising the alarm about this:

Recently, the FCC measurement program has backed sharply away from their commitment to transparency, apparently at the bidding of the telcos in the program. The program is now proposing to replace the M-Lab platform with only ISP-managed servers. This effectively replaces transparency with a closed platform in which the ISPs -- whose performance this program purports to measure -- are in control of the measurements. This closed platform would provide the official US statistics on broadband performance. I view this as scientifically unacceptable.

For the health of the Internet, and for the future of credible data-based policy, the research community must push back against this move.

The FCC keeps insisting that it's committed to openness -- but all too frequently seems to give in to telco demands. So this warning is concerning.

For what it's worth, the telcos are claiming that Cerf is overreacting. In a response to his call for action, Verizon's David Young responded that there's nothing to see here, and that M-Lab and the telco efforts have co-existed and can continue to co-exist going forward.

Vint breathlessly suggests that the FCC is now backing away from this openness "at the bidding of the telcos" and claims the program is proposing to replace the M-Lab platform with only ISP-managed servers. THIS IS FALSE. ISPs have made no such request of the FCC nor has the FCC proposed to eliminate use of M-Lab’s servers.

What has been proposed is that, in addition to continuing to use the data collected via the M-Lab servers, the FCC and SamKnows may also rely on the ISP provided servers that have been in use since the beginning of the project. These ISP-provided servers meet the specifications required by SamKnows as do the M-Labs servers. In fact, it was only because of the presence of these non-M-Lab, ISP-donated servers, that SamKnows was able to identify problems with an M-Lab server that was affecting the results of the tests being conducted. M-Labs did not identify this server problem on their own. It was only fixed when SamKnows brought the issue to their attention. By the way, this problem forced the FCC to abandon a month's worth of test data, extend the formal test period and delay production of their report. Later, another M-Lab server location had transit problems that again affected results. This was the second M-Labs-related server problem in two months and once again, it was SamKnows, using the ISP-provided servers as a reference who identified the problem and brought it to M-Labs attention.

As with many such disputes, the reality may be somewhere in between the two claims here. It seems like Cerf's fear is that by establishing the telcos' servers on equal footing with the M-Labs' open setup, it opens the door to replacing the M-Labs' efforts and then potentially locking up the data. Young is correct that the openness is mainly due to FCC policy at this point, but that policy is dependent on the current leadership of the FCC, which could change. At the very least, it would be nice to see a stated commitment to keeping the information open on an ongoing basis, so that there isn't any need to worry going forward.

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The EU Telco Plan To Have The UN 'Tax & Track' Internet Usage Goes Against Fundamental Internet Principles

Mike Masnick — Wed, 13 Jun 2012 09:21:00 PDT

We've been talking for a few months about the nefarious plan by the UN's ITU (International Telecommunications Union) to try to begin regulating the internet, and just how dangerous that would be. This is especially true as totalitarian countries have pretty clear plans to use this process to come up with ways to lock down the internet -- and potentially balkanize it. In the last few weeks the issue has been getting a lot more attention, especially in the US, where there's widespread agreement that this is not something for the UN or ITU to be involved in.

Of course, a big part of the problem is just how secretive the entire process is. Not only does it lack transparency, it entirely lacks accountability. It's a system that is ripe for abuse -- and a combination of either gullible or crafty officials seem to have no problem helping enable that kind of abuse.

As we noted in that last post, some of the first proposals had started leaking, and the deeper people dig into them, the worse they look. The basic proposal that is making the rounds is the one submitted by ETNO -- the European Telecommunications Network Operators Association. What they're proposing is a system that effectively puts in place a massive tax system for the internet. Basically, they're taking a long-standing setup concerning how much it costs for telephone calls, in which the calling party pays a ton of money to "connect" to an international phone system. Ever wondered why phone calls to foreign countries can be so crazy expensive?

That's why.

And now the plan is to basically pretend that the internet is just like the phone system, so they can extend this "calling party pays" plan to one where the "sending party" pays. The reasoning here is more or less twofold: (1) lots of these countries still have (either fully or partially) nationally owned telcos (or at least telco monopolies), whose business models have been completely undercut by the internet. Since these firms have been monopolists from the very beginning, they've never been very good at innovating or adapting to the times. The idea of shifting what had been a key money maker -- collecting tolls for international phone calls -- and then applying it to the internet sounds really attractive to lazy national telco folks who would love a system that just starts printing money for them. (2) While they don't like to admit it, plenty of other countries remain quite jealous of the of large massively successful internet companies which are mostly based in the US. By placing a "sending party pays" tax, it's a way for European (and other) countries to more or less put up toll booths on the internet for these companies, forcing Google, Facebook, Twitter and others to "pay" to reach people in their countries. Oh, and on top of that, it's a chance for them to make plans to drop net neutrality and the basic end-to-end principle that defines the internet.

In fact, the head of the ITU, in a series of speeches in which he insists he wants to cut short these rumors of a "UN takeover" of the internet, makes it abundantly clear that a big part of this plan is to simply funnel cash to national telcos, which he assumes (with no proof) will automatically go towards funding new infrastructure. Take for example, one of his recent speeches in Canada, in which he repeatedly talks up how we need to get money to telcos so they'll invest in infrastructure:

Ladies and gentlemen,

Everyone wants mobile broadband and the benefits it will bring. But few seem willing to pay for it – including both the over-the-top players, who are generating vast new demand through their applications, and consumers, who have become accustomed to unlimited packages.

This is putting tremendous pressure on mobile operators, who need to invest in high-capacity broadband networks in order to maintain quality of service as demand rises.

At the same time, as broadband becomes increasingly viewed as basic infrastructure for social and economic development, operators are being asked to extend the reach of their networks to under-served populations.

These are strategic, bottom-line issues, and we need to be talking about them.

The argument he makes is that if we don't somehow subsidize and funnel excess cash to the telcos, they might not be able to survive or invest in additional core internet infrastructure. Of course, all of that ignores the customer, and assumes a primary position for telcos who'd love to bring in this cash (though they appear to severely underestimate both the collateral damage and the lasting impact of such agreements). All of this ignores the fact that there's so much demand for true broadband internet access that more and more private solutions are appearing, none of which require putting a massive tax on the internet. Furthermore, it seems to assume no one will invest in broadband without government help. This, of course, ignores the fact that the effective monopolies of many national telcos has made those companies fat, lazy and slothful when it comes to actual innovation. There are all sorts of reasons to invest in broadband projects that don't require "taxation" every time internet packets cross national boundaries. Furthermore, if these telcos not only have a national monopoly, but are also getting free money from the outside world, what incentive do they really have to actually invest in improving the network?

If you think that roaming charges and international phone calls are crazy in Europe, you haven't seen anything until this ITU proposal moves forward.

And, of course, there's an even more nefarious and mostly unspoken aspect to all of this. While so much of the focus has been on money (and a little bit on technology), there's a bigger issue: destroying privacy online. No one will say that out loud, of course, but taxing the internet as it crosses borders opens up the door to tracking internet usage. Because you can't tax something that you can't track. So all of these proposals have the implicit problem that they open the door for countries who don't truly believe in privacy for their citizens, to also track how they use the internet, and defending it as required to remain in compliance. Anyone believe that won't be abused by corrupt and authoritarian governments?

In the end, this leads to an inevitable balkanization of the internet -- in which internet traffic crossing borders is taxed and tracked as it wasn't before (where the peering system has been mostly effective with just a few minor hiccups). Once you have such taxation it becomes cost prohibitive for some countries to even offer full internet access to its citizens, and that can get worse over time. Add to that the ability to widely track what people do online (and the ability to ditch the end-to-end principle of the internet) and -- especially for more authoritarian governments -- you open a huge can of worms to let officials spy on all sorts of internet activity in the name of supporting a "international relations."

This is why people should be speaking out loudly against these proposals. So far, it's basically the US against everyone else -- and the US only has one vote.

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What Has The FCC Done To Actually Encourage Competition?

Mike Masnick — Tue, 18 Oct 2011 02:10:25 PDT

For the better part of a decade, we've been arguing that the main problem with broadband in the US, and the main reason we remain so far behind many other countries, is the stunning lack of competition. The broadband field is dominated by just a few players, and they always seem to be consolidating, rather than leading to new competition. In fact, we've seen that when competition decreases, the efforts to expand broadband suddenly seem to go away. Competition drives better broadband. It really is that simple. The FCC has been paying lip service to this idea for years, but has never actually done anything. The latest is that it's launched a Connect2Compete program. Yes, it has the word "compete" in there, but an analysis of the plan shows that it's got absolutely nothing whatsoever to do with actual competition.

Much of the plan is an attempt to reform the absolute boondoggle that is the Universal Service Fund -- a mysterious fund with little oversight that often just seems to end up propping up telcos' bottom lines rather than leading to anything like universal service. Fixing the USF would be a good idea, but apparently the "plan" doesn't look like it'll do anything useful:

The primary thrust of the project involves the agency's plan for USF reform, the specifics of which have yet to be fully disclosed but are believed to be largely pulled from AT&T and Verizon lobbyist recommendations. The FCC's "Connect to Compete" website insists this reform could net "$1 billion or more per year in benefits for wireless consumers alone." However, unmentioned is the fact the plan will likely drive up prices for consumer broadband bills by raising the cap on USF fees charged by carriers above $6.50 per month.

What would consumers get for this money? Digging into the telco's USF plan, there's absolutely nothing there that suggests serious broadband expansion beyond what they'd already planned with upcoming LTE efforts. There's also absolutely nothing to suggest the FCC has a handle on auditing the USF and e-Rate program. $25 billion has been poured into large and small telco coffers over the years (in addition to billions in additional subsidies), and yet somehow our libraries still lack adequate bandwidth.

Readers should be able to conclude where most of this money actually went. Ignored by the FCC and the press is the fact that all the state and federal subsidies doled out to phone companies by now could have easily wired every U.S. home with fiber to the home several times over. AT&T and Verizon should not be getting another penny in government subsidies, yet the FCC's USF reform will almost-certainly involve additional handouts you'll be paying for in the form of higher broadband bills.

So there we are. No effort at increased competition and better broadband. But higher fees going into a boondoggle fund that will almost certainly end up in the coffers of our two largest (and super profitable) telco companies.

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DOJ Document Shows How Long Telcos Hold Onto Your Data

Mike Masnick — Fri, 30 Sep 2011 05:20:47 PDT

With the Justice Department believing that it can get all sorts of data from telcos without any oversight or without a warrant, it seems rather important to know what kind of info your mobile operator is keeping -- and for how long. The ACLU, via a Freedom of Information Act request, was able to get a "for law enforcement use only" document that shows how long the carriers hold on to what data (Wired also notes that the document could already be found online if you knew the title). The document itself is a pretty weak scan: Thankfully, however, now that the data is out there, we can show it friendlier formats. Michael Robertson was kind enough to take the data (minus the "for law enforcement use only" part, and put it into a Google docs spreadsheet: Additionally, the folks at Wired put together a nice infographic from the data: What it seems to show is that Verizon holds onto your texting data for the least amount of time, but also retains the actual text of your text messages -- something no one else, outside of Virgin Mobile, does. How long until we see a push for a mobile data retention law to "standardize" what these companies have to hang onto and for how long?

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AT&T Takes A Lesson From Banks: Will Now Charge You For Not Using Enough Long Distance

Mike Masnick — Fri, 26 Aug 2011 17:29:00 PDT

Sometimes you wonder if there's some sort of competition between airlines, banks and telcos as to who can come up with the more ridiculous "fees" to add. AT&T, which last we checked, was still trying to get a merger approved that it claims will benefit customers, has now decided to add a $2/month fee for people who don't have a long-distance plan. In other words, pay more, for less! This comes on top of a whole series of other ways to limit consumer choice while increasing what they have to pay. As Broadband Reports notes:

AT&T imposed new usage caps on broadband users without making sure the meters work. They followed that up by cracking down on unofficial tetherers (imposing a fee for doing nothing while crippling smartphones) and then substantially jacking up the price of SMS service by killing off one of their most popular SMS plans.

But have no fear, once AT&T gets T-Mobile and there's even less competition in the mobile space, we're sure that such practices will only... er... increase.

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Canadian Telcos Appoint Ex-Cabinet Ministers To Their Boards

Blaise Alleyne — Tue, 9 Aug 2011 22:06:07 PDT

Two of Canada's big three telcos have recently appointed former cabinet ministers of the ruling party's government to their respective boards. A few weeks ago, Bell appointed Jim Prentice, who was responsible for telecom policy and regulating companies like Bell while serving as Minister of Industry in 2007-2008. Then, while former cabinet minister Stockwell Day's new "government relations" not-a-lobbying-firm has raised concerns about loopholes in lobbying laws, this past weekend Telus named Day to its board. (How long until Rogers aligns with industry standards and finds an ex-minister of their own?) OpenMedia.ca decried both appointments as examples of big telecom "cozying up to the government," but journalist Peter Nowak argues it's the system's fault: "Lobbying is so pervasive and deeply integrated" into the system that the only way to deal with it seems to be to "fight fire with fire," as even new wireless carriers have quickly learned -- i.e. don't hate the players, hate the game.

Neither Prentice nor Day will be lobbyists, but it seems obvious that their knowledge of government is being sought for the purposes of lobbying. In the broadband space, Bell has been butting heads with the government and regulators over issues like wholesale usage-based billing. In the wireless space, the next spectrum auction is approaching and incumbents want to avoid a repeat of the last auction, where 40% of the spectrum was reserved for new entrants and the government forced incumbents to offer roaming agreements -- rules ironically set by Bell's new board member, Jim Prentice.

Are these appointments examples of regulatory capture? It might appear that way. It's certainly a case of telcos gearing up for a heavy round of lobbying that's unlikely to favor consumers, but it's hardly a case of blatant revolving doors. Day was not actually responsible for telecom policy, and Prentice was behind rules that angered incumbents. If the government favors incumbents in the next spectrum auction or backs down on wholesale usage-based billing, that would be a different story, but Canadian incumbents are scrambling because they've lost some big battles. This isn't so much a cause for deep concern as it is a challenge to those who favor more competition in Canada to keep pressing the government to follow through on what it's started.

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Shocker: More Than Half The Money Paid Into High Cost Universal Service Fund Not Going To Provide Universal Service

Mike Masnick — Thu, 24 Feb 2011 13:19:00 PST

For years, we've pointed out that the "Universal Service Fund," is a huge boondoggle. Basically, we all pay a tax on our phone bills that's supposed to go towards this "universal service fund," which telcos are supposed to use to provide phone service to rural areas. But, as we've been pointing out for over a decade there's little evidence that's what happens. There's almost no oversight of the program, and there are many stories of waste and abuse. The latest, in a long line, is that 59 cents of every dollar that goes to the big telcos from this USF... does not go towards universal service. Instead, the telcos just take that money and do other stuff with it. So, basically, this is a way for the telcos to hide much higher rates through a bogus government "tax," that isn't used for its expressed purpose. That seems like a class action lawsuit waiting to happen.

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As Expected, FCC Approving Net Neutrality Rules That AT&T Wants

Mike Masnick — Tue, 21 Dec 2010 04:38:58 PST

For years, we've been pointing out that while the concept of net neutrality is important, any attempt by the government to put it into law would inevitably involve lobbyists twisting it to be quite favorable to the telcos and others. So, really, it should come as no surprise that the FCC is planning to approve a "net neutrality" plan that was heavily influenced by AT&T and from which long term supporters of "net neutrality" rules are distancing themselves. In other words, pretty much exactly what many folks had warned early on. We shouldn't confuse the concept of the end-to-end principle of the internet with the need for laws that start to regulate parts of the internet, because we've seen time and time again how the telco lobbyists will shape anything along those lines to their own advantage, and it appears this was no exception.

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Telco Opposition To Anti-Bill Shock Plans Doesn't Pass The Laugh Test

Mike Masnick — Wed, 13 Oct 2010 12:55:29 PDT

It's been talked about for ages, but the FCC is finally preparing to take on mobile operator "bill shock," that happens when a user, unknowingly, goes way over their allotted time/data and is charged ridiculous overage fees, leading to the ever popular stories of multi-thousand dollar bills. The FCC plans to require mobile operators to at least alert users when they're nearing the limits on their plan. While I'm often skeptical of FCC actions, I'm having trouble seeing what's wrong with this, and the mobile operators protestations are so silly that it's difficult to take them seriously.

Mobile operator trade association CTIA has warned that these sorts of warnings would "cause customer confusion and frustration." Huh? How? And it's already established that it's the crazy huge bills that are causing customer confusion and frustration (and, um, anger). Then there's Verizon Wireless, quoted as saying that "intense competition has led wireless carriers to provide consumers with usage information." Hmm. Information like the phantom charges that Verizon Wireless denied for nearly two years, until it finally 'fessed up and agreed to pay back to the tune of $50 million to $90 million. Honestly, I can't figure out what the pushback is over actually warning customers before they get insane overage charges?

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Companies Reach 'Deal' On Net Neutrality... But What Does That Mean?

Mike Masnick — Tue, 31 Aug 2010 17:36:00 PDT

A few weeks back, we noted that a bunch of tech and broadband companies were back to "negotiating" around net neutrality, leading us to highlight Adam Smith's famous quote that "people of the same trade" seldom meet together except to create "a conspiracy against the public, or in some contrivance to raise prices." Now comes the news that those involved -- including Verizon, AT&T, Skype, Microsoft, NCTA and "others" have "reached an agreement," which might be "stricter" than the Googrizon "framework," but which probably doesn't really apply to wireless networks.

I'm still at a loss as to how this actually matters. The companies can agree to whatever they want, and none of it makes a difference if Congress acts (or the courts say that the FCC is allowed to act). I guess the idea is to think that an "industry agreement" will stave off legislation, which perhaps might work for some time, but still reeks of collusion without consumer input or review.

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Telcos Close To 'Deal' On Net Neutrality That Gives Them Everything They Want

Mike Masnick — Wed, 4 Aug 2010 03:13:45 PDT

Can't say we didn't warn people on this one. Way back in February, we suggested that people pushing for net neutrality legislation were going to be disappointed after the telco lobbyists got done with it. The telcos came ready for battle, hiring hundreds of former government employees, including 18 former members of Congress to lobby on their behalf. Back in June, we noted that the telcos were privately saying they were okay with net neutrality rules, so long as they helped shape them. Then, last month, we noted that, contrary to its promises of transparency and openness, the FCC was meeting behind closed doors in secret with those telco lobbyists.

Well-connected telco-beat reporter Dave Burstein is now claiming that this past weekend, the top broadband lobbyists finalized the deal on their version of net neutrality, with part of the deal being a back-scratcher promise to dump a bunch of money into the campaign coffers of Democrats this upcoming election season:

This weekend, uber-lobbyists Cicconi (AT&T), Tauke (Verizon) and McSlarrow (Cable) are at the FCC to make a final deal on net neutrality, Arbogast and Kaut report. Ivan Seidenberg has put enormous pressure on the White House to intervene, and the rumor is that chief of staff Rahm Emanuel is telling agencies to go along. Seidenberg, who has been to the White House 16 times,made a major D.C. speech suggesting that the business community would throw their money and power against the Democrats in the campaign. NN was one of the specific points he demanded.

Under pressure like that, Julius has already agreed to almost everything Cicconi really wants, including loopholes wide enough to carry 350 TV channels. K & A say there is still some opposition so that nothing is final and that the public interest groups are ready to assail Julius. Meanwhile, Verizon and Google are discussing a separate peace that will make the FCC irrelevant.

This one is about power and money, not principle. The likely outcome is an agreement that will allow everyone to say noble things, will allow Julius to look himself in the mirror, and will essentially have no substance.

Now, as Burstein notes, this isn't "final," so things could change, but everyone should have seen this coming. Yes, network neutrality principles are important, but fighting for network neutrality and understanding how the political process works are two different things -- and it's been obvious for years that any attempt to enshrine net neutrality in the law would almost certainly be twisted by telco lobbyists.

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Wall Street Calling Telcos' Bluff On Stopping Investment If Net Neutrality Put Into Law

Mike Masnick — Thu, 22 Jul 2010 00:03:22 PDT

While we're still worried that any "net neutrality" rules put in place by the government will contain so many loopholes for the telcos as to make them do more harm than good, it's nice to see that more and more people are calling the telcos on their bogus claim that net neutrality rules would mean that telcos would cut back on investment. Lots of us have debunked that claim before, but the telcos have tried to make the case that this is a big deal for Wall Street people. Eh... perhaps not so much. Broadband Reports notes that even the Wall Street analysts who are against net neutrality rules don't believe it will impact investment:

Net neutrality/reclassification opponent Thomas Seitz (Height Analytics and previously Barclay) today joined the parade of top analysts doubting the claims that Net Neutrality rules would produce a serious cutback in broadband investment. Washington is inundated with claims NN will clobber investment, but the carrier CFO are telling Wall Street it won't be a determining factor. Seitz joins John Hodulik of UBS (voted #1 telco analyst), Craig Moffett (voted #1 cable analyst) and Michael Rollins of Citigroup as well as several others who haven't gone on the record.

As we've seen over and over and over again, telcos invest when there's competition in the market. When competition goes away, that's when they cut back. If the focus is really on encouraging investment in network infrastructure, then the focus should be on encouraging more competition in the marketplace -- which is exactly what the telcos don't want. They like their monopoly rents. They like not having to invest as much in infrastructure. It's great that more and more people are calling them on this bogus claim.

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FCC Finally Admits US Broadband Competitiveness Sucks; Broadband Co's Then Order Their Favorite Politicians To Trash FCC

Mike Masnick — Wed, 21 Jul 2010 03:43:22 PDT

Every year, the FCC is required to come out with a report on broadband competitiveness. Every year, it's a joke. Way back in 2006, the GAO looked at the 2005 report and pointed out that the FCC's methodology sucked and was highly inaccurate. Basically, the FCC looked at whether or not a single node in a zip code was wired for broadband (defined at some laughably low rate), and declared that the provider offered service across that entire zip code. On top of that, it relied on the broadband providers themselves to let the FCC know who was covered. So, in theory, you could have a zip code where only two houses were covered by broadband, and the FCC would define that entire zip code as not only covered, but a competitive market. That was in 2006. Yet, the FCC basically ignored the GAO and kept putting out its bogus reports each year, even as the GAO continued to highlight the problems of the report.

So here we are, years later, and the FCC has finally, finally, finally changed its methodology and for the first time released a report admitting that all is not well in the US broadband market. As Broadband Reports notes:

The report ditches the inaccurate zip code determination, and takes the long-overdue step of bumping the minimum definition of broadband from just 200 kbps, to at least 4 Mbps downstream and 1 Mbps upstream.

I should admit, by that definition, even I don't have broadband at home. To be honest, I'm less concerned about the amount of people who have access to broadband, as I am about the actual level of competition, which isn't really covered by this report. Still, it's amusing to see how angry the telcos and some elected officials are about the FCC finally telling the truth.

A telco lobbying organization, US Telecom immediately trashed the report saying it "strained credulity." And, it didn't take elected officials long to start grandstanding as well. Rep. Cliff Stearns wasted little time blasting the FCC report, saying he was "perplexed" by the report.

Perhaps we can clear up some of the confusion. You see, it appears that over the course of Cliff Stearns career, the single largest contributor to his campaign was (you guessed it) AT&T. Oh, and as for this year's campaign, it's probably worth noting that while AT&T is still his top contributor Comcast and Verizon are number two and three respectively, and closing in fast. And, of course, in the last election (2008), Stearns' top two contributors were AT&T and the National Cable & Telco Association. Verizon was fourth. But I'm sure that has nothing whatsoever to do with Stearn's confusion over the FCC report. Couldn't possibly be... And people wonder why every day citizens think that DC is corrupt.

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FCC Ignores Criticism Over Lack Of Transparency; Negotiates Net Neutrality Behind Closed Doors With Industry Execs

Mike Masnick — Fri, 16 Jul 2010 13:40:00 PDT

As much as we believe in the importance of a neutral network, we've pointed out over and over again that the last thing people should want is for specific net neutrality rules to be written by the government. For a while now, we've warned that once the lobbyists took over, people supporting net neutrality wouldn't like the results. And, of course, everything has been playing out following just that script. The telcos hired a ton of high-power lobbyists to cover net neutrality, including eighteen former members of Congress. And, despite arguing for years that net neutrality was evil, the telcos "miraculously" admitted last month they "might agree" to regulations... just as long as they got to write the details

Given that, there was a lot of outrage last month for a series of secret meetings between telco/cable execs and the FCC. You would think that, given the public beating the FCC got over those meetings it would know better than to hold more. No such luck. Apparently they're right back at it.

As important as the concept of a neutral network might be, what comes out of this sausage making process is going to favor the very companies net neutrality regulations are supposed to keep in line.

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Telcos Still Pretending Google Gets "Free Ride"

Karl Bode — Wed, 14 Apr 2010 06:03:00 PDT

Back in 2005, former AT&T CEO Ed Whitacre (now the head of GM) boldly proclaimed that Google was getting a "free ride" on his company's "pipes," and that they should be charged an additional toll (you know, just because). As we've discussed several times now, Whitacre's argument made absolutely no sense, given that Google not only pays plenty for bandwidth (as do AT&T's customers), but the company owns billions in international and oceanic fiber runs, data centers and network infrastructure. Despite making no sense, this idea that Google was some kind of free ride parasite quickly became the cornerstone of the telco argument against network neutrality. In response,Techdirt has suggested that telco spokespeople should pay for Google's bandwidth bill for a month if it's so low -- with no takers.

Of course, lost under the circus of the network neutrality debate was Whitacre's real goal: to get content providers to subsidize AT&T's network upgrades, something many myopic investors don't want to pay for. Whitacre was also afraid; he understood Google poses an evolutionary threat, the likes of which traditional phone companies like AT&T had never seen before. Incumbent phone companies had grown comfortable sucking down regulatory favors, subsidies and tax cuts while operating in non-competitive markets. Suddenly, increasingly-ubiquitous broadband allowed companies like Google to enter "their" telecom space, gobbling up ad dollars and offering disruptive products like Google Voice -- which threaten sacred cash cows like SMS and voice minutes.

Instead of competing with Google by out-innovating them, Whitacre's first reaction was to impose an anti-competitive toll system like some kind of bridge troll -- which should tell you plenty about pampered phone company thinking. Whitacre's fuzzy logic was given a new coat of paint in pseudo-scientific studies paid for by phone carriers, and has since floated overseas. In the UK, incumbent phone companies have taken a page from Whitacre, insisting that the BBC should pay them extra money -- just because people were using the BBC iPlayer. Now Google's non-existent free ride has popped up in Europe this week, with Telefonica, France Telecom and Deutsche Telekom all jointly insisting that Google should be paying them a special toll for carrying Google traffic:

Cesar Alierta, chairman of Telefonica, said Google should share some of its online advertising revenue with the telecoms groups, so as to compensate the network operators for carrying the technology company's bandwidth-hungry content over their infrastructure. "These guys [Google] are using the networks and they don't pay anybody," he said.

Yes, Google doesn't pay anything -- except for the billions they pay for bandwidth and extensive infrastructure. Were Google a telecommunications carrier, they'd be the world's third biggest according to Arbor Networks. It's absolutely stunning that such a ridiculous argument remains in circulation (and that many press outlets don't debunk the concept as painful nonsense). If electric companies went to AT&T or Telefonica to inform them that they wanted a cut of revenues on top of payment for electricity "just because" -- they'd be laughed out the building. Yet somehow we're supposed to take phone companies seriously, when in reality they're simply repeating total nonsense in the hopes that repetition will magically make it true.

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Once Again, FBI Caught Breaking The Law In Gathering Phone Call Info; But Real Issue Is Why Telcos Let Them

Mike Masnick — Tue, 19 Jan 2010 11:25:00 PST

A few years back, we found out that the FBI regularly violated the Patriot Act, issuing "National Security Letters" to access information that they had no right to access. So it should come as no surprise that during that same period, the FBI was also regularly violating the law to get phone call records without following the proper procedures, even beyond the problem with the NSLs. In fact, it appears the FBI may have violated the law in about half of all of these cases. Basically, it sounds like the FBI just went to phone companies, said the magic word ("terrorism!!") and the phone companies just handed over records -- even without using NSLs, but instead using an "exigent circumstances letter," which could be used even more easily than an NSL, but which required an NSL to follow it up eventually. The FBI is now basically admitting to screwing up and that using these "ECLs" without followup NSLs almost certainly violated the Electronic Communications Privacy Act. The FBI's excuse? They're claiming that the process was "good-hearted but not well-thought-out." Doesn't that make you feel better?

The story heads into Keystone Kops territory, as some in the FBI pushed for actually following up the ECLs with real NSLs, but the FBI was pretty slow. Eventually, someone signed a "blanket NSL" supposedly to cover all of the previous ECLs that never had a followup NSL -- except the guy who signed the blanket NSL later claimed that he couldn't recall ever signing anything, and insisted that NSLs should be for specific cases only. Oops.

Of course, lost in all of the attention over the FBI's process is the rather serious unanswered question of why the telcos didn't seem to push back when handed a bogus demand to hand over records that did not match the official process and violated the law. Shouldn't the telcos have some responsibility for actually making sure that a random FBI agent yelling "terrorism" has some sort of official basis to get information out of the them?

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Bush Administration Was Afraid It Would Have To Admit Telcos Helped With Warrantless Wiretaps To Get Immunity

Mike Masnick — Mon, 16 Nov 2009 08:32:00 PST

With the EFF finally successful in getting the federal gov't to hand over some lobbying documents involved in the process of granting telcos total immunity in lawsuits over warrantless wiretapping, the press is starting to go through the documents. Wired digs in and finds that the Bush administration was worried it would have to admit that the telcos had actually broken the law in order to get immunity -- but were able to route around that by having the Attorney General "submit a certification to the district court that the carrier defendant either did not provide the assistance as alleged, or did so in connection with a counter-terrorism program authorized by the president and pursuant to written assurances of legality." In other words, by doing a "this" OR "that," they could claim some sort of plausible deniability for the gullible.

Of course, the whole thing is silly. Why would the telcos need immunity if they hadn't broken the law? The only reason to push for immunity was because they obviously had broken the law. The entire push for immunity was never really about protecting the telcos, but about protecting the federal government from having to admit that it clearly broke the law as stated concerning oversight of wiretaps.

The other interesting element in the Wired report is that the Bush administration was worried that future administrations would reverse the immunity -- something it doesn't seem to have to worry about considering that the Obama administration has happily continued to hold the same position on warrantless wiretaps. However, the administration was unable to get anything put in the bill that would prevent future administrations from changing the immunity -- so, perhaps there's still some hope.

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Canada Decides That Canadian Ownership Is More Important Than Real Telco Competition

Mike Masnick — Thu, 29 Oct 2009 20:19:08 PDT

The biggest problem in the telco world is the lack of competition. Most of the worst abuses by various telecom providers is because there really isn't enough competition to make it worthwhile to treat customers better. The best thing that governments can do to encourage better broadband/telco services is to encourage competition. Apparently, Canada has different priorities. A new mobile firm was set to open up shop in Canada, called Globalive. However, Canada apparently has some rules about how telcos need to have Canadian ownership. And while Globalive was originally judged to meet the criteria in bidding on spectrum, a different government bureaucracy has now said that it doesn't meet the Canadian ownership requirements. In other words, to the Canadian government, having local ownership is more important than real competition. This is basically a form of protectionism that (like most forms of protectionism) ends up harming consumers.

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