FCC Uses Cherry-Picked Stats To Justify Giving Consumers A Giant Middle Finger

from the ill-communication dept

One of the fundamental cornerstones of disinformation and propaganda is repetition. As in, if you state something often enough, the idea gets lodged in the recipient’s head and becomes truth by an act of sheer will. It’s called the ?illusory truth effect,? and it’s been essential across most of the Trump administration as it attempts to convince the public that up is down, and black is white. It has been absolutely essential at the Trump FCC, where the agency has worked tirelessly to convince the nation that kissing the ass of the biggest telecom operators is intelligent policy.

You’ll of course recall that one of the FCC’s key justifications for killing consumer protections like net neutrality is that the modest rules stifled industry investment. Objective data from a litany of different sources has confirmed that’s simply not true, including SEC filings, earnings reports, and the statements of countless industry CEOs. That hasn’t stopped Ajit Pai, major telecom providers, or the litany of their dollar-per-hollar consultants and think tankers from making the claim anyway.

As required by Congress, the FCC periodically releases a Broadband Deployment Report indicating whether affordable, fast broadband is being deployed in a “reasonable and timely” fashion. This week, the FCC circulated a draft order of the initial report among Commissioners. It wasn’t made public, but a statement by the agency (pdf) offered up a few choice statistics to imply that its attacks on consumer protections is having a miraculous impact on the telecom market. The FCC’s chosen metrics are very…specific:

  • The number of Americans with access to 100 Mbps/10Mpbs fixed broadband increased by nearly 20%, from 244.3 million to 290.9 million.
  • The number of Americans with access to 250 Mbps/50 Mbps fixed broadband grew by over 45%, to 205.2 million, and the number of rural Americans with access to such service more than doubled.
  • What the Pai FCC doesn’t tell you is these numbers have absolutely nothing to do with its policies. One, this data is only current up to late 2017, when net neutrality wasn’t even repealed until June of 2018. In other words, this growth occurred while net neutrality regulations were technically still active. That didn’t stop a lot of outlets from unquestioningly parroting the FCC’s claims that this growth was somehow thanks to killing net neutrality or other “burdensome red tape.”

    A huge chunk of this growth in 100 Mbps connections is simply thanks to the cable industry’s deployment of faster DOCSIS 3.1 coaxial technology. Those deployments began before Pai came to office, and were fairly quickly rolled out because they cost the industry relatively little to deploy. Again, these upgrades have absolutely nothing to do with his actual policies. This growth would have occurred had Pai done absolutely nothing.

    What’s more important is what the Pai FCC doesn’t talk about. While cable giants like Comcast and Spectrum have been deploying these upgrades, the nation’s phone companies have effectively stopped upgrading their DSL lines. That’s providing cable giants with a monpoly over broadband across countless markets, resulting in higher rates and less incentive than ever to improve the industry’s Achilles’ heel: utterly atrocious customer service.

    None of this prevented Ajit Pai from enjoying a victory lap:

    ?For the past two years, closing the digital divide has been the FCC?s top priority,? Chairman Pai said. ?We?ve been tackling this problem by removing barriers to infrastructure investment, promoting competition, and providing efficient, effective support for rural broadband expansion through our Connect America Fund. This report shows that our approach is working. But we won?t rest until all Americans can have access to broadband and the 21st century opportunities it provides to communities everywhere.

    Pai likes to present himself as a hero to rural America and consumers. And he likes to repeat the idea that mindless “deregulation” (which in telecom parlance means killing consumer protections) provides untold benefits to the public. But you’d be hard pressed to find a single consumer group (you know, the people paid a pittance to try and protect consumer rights) that supports his policies. And when you go into many rural markets (and tribal lands), you’ll be quickly told that many of his industry-favored policies are actually hurting these communities, driving up costs, and making the problem worse.

    Another metric the FCC throws around as evidence that its “deregulatory” strategy is working is the claim that 2018 saw record growth in fiber deployments:

    The private sector has responded to FCC reforms by deploying fiber to 5.9 million new homes in 2018, the largest number ever recorded. And overall, capital expenditures by broadband providers increased in 2017, reversing declines that occurred in both 2015 and 2016.

    Except the FCC just issued a separate report stating that fiber deployment “appears to have slowed recently,” largely thanks to US telcos that are refusing to upgrade or even repair aging DSL lines. More importantly, at least 3 million of those locations only occurred because the previous FCC required AT&T to expand its fiber deployment to an additional 3 million homes each year, which is the opposite of deregulation, and once again, had absolutely nothing to do with Pai’s industry-cozy policies. Other reporters have noted this period’s growth was about even with, and in some instances slower than past reports.

    It apparently doesn’t matter how many times you repeat the fact that net neutrality didn’t stifle CAPEX or deployment. It doesn’t matter how many times you point out that CEOs themselves have admitted this claim isn’t true to investors (who, by law, they can’t lie to). It simply gets repeated over and over again. Legit condemnation is routinely ignored, no matter how factually sound. This repetition is an attempt to use the illusory truth effect to forge a new reality: one where sucking up to entrenched monopolies and ignoring both consumers and a broken market somehow results in near-magical outcomes.

    You’ll notice that Pai’s FCC goes comically out of its way to avoid talking about the one thing that probably matters most to American consumers: broadband pricing.

    It’s a subject they avoid because it’s an argument they know they can’t win, even with repetition. Americans continue to pay some of the highest prices for broadband in the developed world thanks to limited competition and market failure. And thanks to the cable industry’s growing monopoly, that problem’s only getting worse. But instead of actually pushing an agenda that truly drives more competition to market, the Pai FCC is burying its head in the sand, parroting whatever Verizon and Comcast tell them to say, and trying to sell it to you, the American public, as adult policy.

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    Comments on “FCC Uses Cherry-Picked Stats To Justify Giving Consumers A Giant Middle Finger”

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    Anonymous Coward says:

    For future generations, Regulatory Capture in action.

    Since this site is part of what will be preserved for all time, Regulatory Capture, according to Wikipedia, is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.

    This article is a perfect example of this happening in the real world.

    teb says:

    is a form of government failure

    so here " Pai’s FCC " failure is repetively focused on Pai the person, but not really upon the FCC institution nor flawed Federal regulatory ideology.

    The implied solution here is to just jettison Pai and replace him with an "enlightened" FCC Chairman who loves Net Neutrality and strong FCC control of private industry.

    Severe problems of regulatory-capture and constant counter-productive government market interventions are discussed but largely ignored as practical solutions.

    Anonymous Anonymous Coward (profile) says:

    Re: is a form of government failure

    "Severe problems of regulatory-capture and constant counter-productive government market interventions are discussed but largely ignored as practical solutions."

    You need to read more. Not only are regulatory capture and constant counter productive government market interventions discussed often, but with the exception of a few severely uniformed folk they are considered a significant part of the problem, not as part of any solution. In fact removing those is thought to be first steps toward solutions, and that more than just that is needed.

    teb says:

    Re: Re: is a form of government failure

    … i clearly said these issues were discussed

    ["In fact removing those is thought to be first steps toward solutions…"]

    … i certainly don’t see that as the primary day to day solution focus here. Hammering Pai personally seems the favored drumbeat. Forget Pai; he’s just another worthless and very tempiorary bureaucrat.

    Anonymous Coward says:

    Re: Re: is a form of government failure

    This is what a lot of people in NY did.. they denied Spectrum their patronage. Zero zilcho dinaro. People have the power to bring these companies crawling on their knees. Why don’t they use it? Its a little trickt explaining to their 4 & 5 year olds why they can’t what Mr Choo Choo on tv anymore?

    Bamboo Harvester (profile) says:

    Re: Re: Re: is a form of government failure

    Hmm… they’re on the road to becoming a "Life Necessity" according to the NY welfare system.

    What part of "nothing to replace Spectrum with" is giving you difficulty?

    I use the internet for all kinds of business and personal work daily. Spectrum owns that market in NY, not "just" cable TV.

    James Burkhardt (profile) says:

    Re: Re: is a form of government failure

    So, they didn’t throw spectrum out. They did not revoke their ‘charter’ our whatever its called, the ability for Spectrum to transmit in the state.

    Its true there is no replacement. How to handle the infrastucture and get a new operator in the state i think lead to the decision to not throw them out.

    James Burkhardt (profile) says:

    Re: is a form of government failure

    "Pai’s FCC" refrences the current FCC. It allows us to identify the collection of Policies and viewpoints we are discussing. As Pai is the head of the FCC, it makes sense, much as we talk about the Trump White House/Trump Administration.

    We can then compare and contrast the Wheeler FCC or the Obama White House/Obama Administration. There are people shared. There are people different. It involved for more than the one person we name.

    We in fact do this in the private sector as well. We compare the Steve Jobs Apple with the Tim Cook Apple. The Gates Microsoft with the Ballmer Microsoft with the Nadella Microsoft. Lots of employees are often shared over these different CEOs, given the way Tech refused to poach, but we can compare each era as defined by the decisions of the CEO.

    Because of this, the use of "Pai’s FCC’, particularly when discussing the statements of the FCC that directly support Pai’s positions, is appropriate.

    As for this statement:

    Severe problems of regulatory-capture and constant counter-productive government market interventions are discussed but largely ignored as practical solutions.

    I’ll give you editing mistakes, and assume that you mean that fixing the problems are largely ignored as solutions. And I drop the practical weasel word Because whenever fixing the issues you discuss are brought up, the practicality of solving them seems to be the core question.

    This very article is questioning deregulation, which Pai presents as solving "counter-productive government market interventions", if in different words. The article, combined with other articles on the topic, widely discuss the viewpoint that just because a regulation exists, doesn’t mean it is counter productive.

    I have not seen a practical solution to the issue of regulatory capture in the broadband space that also addresses the concerns of consumer protection, expanding broadband to low ROI areas, and oversight of the use of government subsidies. Competition is the real solution, it would seem. That is not in debate. But the practicality of using deregulation or shuttering the FCC entirely to encourage the entry of competition is certainly in question.
    Removal of the regulatory agency just perpetuates the complaints with the current actions of the regulatory agency, while not significantly lowering the barriers to market entry, namely time, cost, and property rights in utility pole ownership and cable ownership. Deregulation doesn’t solve any of these issues (except perhaps property rights, but I don’t think you want to dismantle those). Google Fiber was not burdened by cost or regulation. Google Fiber was burdened by time, time which kept being a greater and greater cost because of bad faith actions employing property rights to tie up deployment. Removing the FCC doesn’t fix that equation.

    You question why they aren’t seen as practical solutions? Because solutions involving deregulation to improve the market not tied to real-world market analysis and the way the market operates in practice run on a faith based assumption that the regulations are the only barrier to entry.

    Techdirt supports removing restrictions on community funded broadband, restrictions which are largely industry bought regulatory capture. That is a practical solution allowing smaller, low ROI communities to develop public or private/public partnership networks that could potentially better serve their community. But that requires allowing municipal governments to intervene in the market, which gets a bit awkward.

    You use mitigating phrases like ‘practical’ and ‘counter productive’ and ‘constant’ in your comments, but Techdirt discusses the practicality of solutions, and calls for large market interventions only after years of failures for the market to correct. You provide no examples to properly discuss what you consider practical or counter productive. You will likely claim I misrepresented your opinions. But with you having not presented any specifics, I have to assume some to debate with any clarity.

    oneny says:

    Re: Re: Re:government failure

    "the way the market operates in practice run on a faith based assumption that the regulations are the only barrier to entry."


    Nonsense. Market participants are keenly aware of the daily real world factors of production & exchange AND the heavy hand of government politicians.
    Yours is the faith-based-assumption that deregulation is reckless.

    "community funded broadband" is largely a government, tax subsidized effort. It means more government intervention, not less. It is not a solution to the broadband mess created by government.

    cattress (profile) says:

    Re: is a form of government failure

    I’m a libertarian and I agree that the government usually doesn’t perform as well as private industry, and often market interventions only serve to pick winners and losers for political reasons. However, phone and cable providers, who now provide broadband, have never been free market industries. The government took control of phone service pretty much in the beginning. We don’t know if phone service would have proliferated as quickly, or even more quickly, if the government didn’t intervene because it’s never been a free market. Even when Make Bell was broken down into 7 regional private companies, they ended up merging back together to become At&T and Verizon. And cable service was rolled out by private companies, which local governments gave monopoly permissions to do so. Few places allowed competing franchises, and private companies merged to become today’s cable giants. Ultimately we have mostly mega corporations, with regional concentration that don’t compete in a meaningful way. Now, to deal with the lack of market forces we can break all these mega corporations down through antitrust laws, even into 2 or 3 companies per region. But that’s going to chase away investors, and probably would reek havoc on the stock market, and nothing prevents them from merging back into mega corporations just like before. Or, we can introduce some reasonable regulations, like net neutrality, and maintain the FCC regulatory authority. (And personally I think it’s better to have a professional agency like the FCC making the rules because Congress doesn’t understand technology, takes too long to act, never repeals anything, and won’t be able to adjust law to keep up with innovation. The administrative state needs to be brought under tighter control of elected officials, but has useful professional expertise that should guide specifics)
    Perhaps as technology changes we can get away from government interventions, but there’s just no real way of handling legacy industry power that we have today.

    cattress (profile) says:

    Re: Re: Re:2 Re:government failure

    Thank you. I consider myself a realist, and while I can wax on about a utopian world near anarchy, I know it’s an impossible fantasy. I acknowledge where we as a society stand today and as of today we have a government enabled oligopoly where there is no meaningful competition on a utility service. There is no likelihood of one, let alone many, competitors entering at any scale because aside from investment costs, there are too many local level government regulations to battle legally and Congress is never going to create superceding federal legislation to get rid of all those laws. And as of today, Congress is so ignorant about technology that it is painful to watch them attempt to discuss it at any level. And the agility that this industry needs with respect to the laws and regulations that they are bound to is not conducive to legislative process. As 5G gains significant deployment, as consumers demands shift, be it streaming or connected cars or telecommuting, because we have that crazy brilliant Elon Musk guy always tinkering with new projects, a professional agency, that answers to our legislators and has limited powers makes sense.

    Anonymous Coward says:


    The speed is meaningless without knowing about data transfer caps. Way back in 2002, Bell Canada put a 5 GB monthly cap on their DSL connections, which was less than a third of what I transferred over dialup every month. It’s similarly ridiculous to apply a 1 TB/month cap to anything over about 10-20 Mbps. At 100 Mbps it could last less than a day.

    Jedi Grand Master says:

    Re: Do NOT call us "consumers".

    I’m sorry, what would you prefer to be called then? Buyers? Shoppers? Users? What else do you propose to call human beings who consume products and services?

    Also, nothing in the definition of the word consumer implies that that is "your only task in life" or that you are "feudal serfs and corporate slaves".

    But as long as we’re being silly, I now want all of you to refer to me as a "Jedi Grand Master". Don’t lump me in with all you non-Force sensitive people.

    Jedi Grand Master says:

    Re: Re: Re: Do NOT call us "consumers".

    But I’m not people. I’m a Jedi Grand Master. Being called a person, or lumped in with a group of "people" is offensive to me. It makes it seem like I am just a regular human being going through life. I’m not, and it’s offensive to me that you would just automatically assume that I am.

    A descriptive term about certain actions people take is not offensive. People are also drivers, workers, walkers, runners, fliers, etc… If you start just calling all of them people, how the hell are you supposed to know that you’re only referring a specific subset of people? Should we start saying "people who drive"? Well those are drivers. Same with "people who consume", they are consumers. Also, some people PREFER to be referenced by those terms and it’s offensive to them to just be generalized.

    Uriel-238 (profile) says:

    Re: Consumers, serfs, proletariat

    The concern is that institutions think of us in terms of our roles as consumers or serfs, proletariat or whatever. They forget that there are human beings attached to these roles and that dehumanizing policy causes suffering.

    I take offense at how our consumers, serfs and proles are treated by our institutions. Treat us as human beings with rights and needs, and they can call us whatever they want.

    For now, though, we are an expendable resource like water or coal they will spoil and discard without concern.

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