Hoping to have an errant charge resolved, O'Reilly Media author Jonathan Zdziarski recently reached out to Verizon Wireless on Twitter. While Twitter support can help put a friendly face to a massive, often-times unwieldy conglomerate, anyone that has actually interacted with one of these support agents has likely found the quality of these interactions to be decidedly hit or miss. In Zdziarski's case, the Verizon Wireless support agent in question thought it would be perfectly acceptable for him to prove his identity over Twitter, since the platform is such a "secure means of communication":
Except for the fact that's not remotely true. Back in late 2013 in the wake of reports on the NSA's ballooning skulduggery, Twitter claimed they'd start encrypting direct messages, though by 2014 that initiative appears to have been forgotten. As such, what Verizon's calling a "secure means of communication" is about as secure as a safe made out of paper mache and tin foil. When pressed about this lack of secure transit for personal data, Zdziarski was apparently informed that everything was ok, because "most users are ok with it":
Verizon defended asking social security numbers over Twitter "because most customers are OK with it": teaching customers to become victims.
Of course "most users" don't know a gigabit from a garrote, so it's not entirely clear that "most people aren't bright enough to know this isn't a good idea" should be used as a security standard moving forward.
Earlier this year, the Federal Communications Commission voted to ease the way for cities to become Internet service providers. So-called municipal broadband is already a reality in a few towns, often providing Internet access and faster service to rural communities that cable companies don't serve.
The cable and telecommunications industry have long lobbied against city-run broadband, arguing that taxpayer money should not fund potential competitors to private companies.
The telecom companies have what may seem like an unlikely ally: states. Roughly 20 states have restrictions against municipal broadband.
And the attorneys general in North Carolina and Tennessee have recently filed lawsuits in an attempt to overrule the FCC and block towns in these states from expanding publicly funded Internet service.
North Carolina's attorney general argued in a suit filed in May that the "FCC unlawfully inserted itself between the State and the State's political subdivisions." Tennessee's attorney general filed a similar suit in March.
Tennessee has hired one of the country's largest telecom lobbying and law firms, Wiley Rein, to represent the state in its suit. The firm, founded by a former FCC chairman, has represented AT&T, Verizon and Qwest, among others.
James Tierney, director of the National State Attorneys General Program at Columbia Law School, said it is not unusual for attorneys general to seek outside counsel for specialized cases that they view as a priority.
Asked about the suit, the Tennessee attorney general's office told ProPublica, "This is a question of the state's sovereign ability to define the role of its local governmental units." North Carolina Attorney General's office said in a statement that the "legal defense of state laws by the Attorney General's office is a statutory requirement."
North Carolina is no exception. The state's Attorney General Roy Cooper received roughly $35,000 from the telecommunications industry in his 2012 run for office. Only the state's retail industry gave more.
If the court upholds the FCC's authority to preempt restrictions in North Carolina and Tennessee, it may embolden other cities to file petitions with the agency, according to lawyer Jim Baller, who represents Wilson and the Chattanooga Electric Power Board. "A victory by the FCC would be a very welcome result for many communities across America," said Baller.
For some residents in and outside of Chattanooga, clearing the way to city-run broadband would mean the sort of faster Internet access that others might take for granted.
For 12 years, Eva VanHook, 39, of Georgetown, Tennessee, lived with a satellite broadband connection so slow that she'd read a book while waiting for a web page to load. In order for her son to access online materials for his school assignments, she'd drive him 12 miles to their church parking lot, where he could access faster WiFi.
Charter, the local Internet service provider, declined several requests by her husband to build lines out to her home. Only last month did Charter connect her home to the Internet. "Even the possibility to jump on [the local utility's] gigabit network would blow our minds right now," VanHook said. "There is nothing faster than Chattanooga. Just through meeting them and hearing them speak and having them understand what's going on, that's the kind of place I want to do business."
from the you-knew-I-was-a-snake-when-you-picked-me-up dept
As we recently noted, New York City only just woke up to the fact that the lucrative 2008 Verizon franchise deal the city thought would bring fiber broadband to 100% of all five boroughs, has only resulted in Verizon cherry picking about half of the city's residents. Of course as we pointed out, if the city had actually bothered to read the closed-door agreement struck with former Mayor Mike Bloomberg (or listened to a few local reporters at the time), leaders could have noticed at any time that it contains oodles of loopholes allowing Verizon to wiggle over, under and around most of the obligations contained therein.
While most people know by now that taking subsidies and tax breaks for fiber that never gets delivered is Verizon's MO in Pennsylvania and New Jersey (ok, well everywhere), the city only just appears to be realizing the scope of Verizon's shenanigans. In addition to discovering that Verizon failed its build out obligations, analysis of the NYC Department of Information Technology and Telecommunications' audit (pdf) indicates that Verizon also tried to cajole landlords into exclusivity deals that may violate FCC rules:
"[T]wo of the interviewees’ statements supported the first property manager’s statement that Verizon was not completing NSIs because they wanted exclusive agreements for certain buildings before completion of the NSI," according to the audit report. "For example, one property manager from a well-known firm complained that Verizon would not complete the NSI at a building on Sutton Place unless 100 percent of the apartment dwellers committed to Verizon FiOS. This property manager also said only two of the eleven multiple dwelling properties he managed had Verizon FiOS and that installations took anywhere from six months to two years."
So yeah, in addition to pretending that homes "passed" with fiber were "served," Verizon actually refused to wire a lot of properties unless everybody in the building could be forced to only exclusively use Verizon services. This is something the FCC banned in a 2007 order (pdf) that's subsequently been held up during court challenges by cable providers. Verizon has long denied that it does this; in fact the telco has consistently tried to claim that landlords are solely to blame for the company's uneven deployment. This go-round, Verizon is blaming the city's findings on "miscommunication" (when it hasn't tried to dismiss the findings entirely as the unsubstantiated rabble rousing of labor unions).
But that's not all. In the week after the city's audit was made public, a number of competitors have come forward to complain that Verizon's been blocking access to key city infrastructure as well. In other words, Verizon's refusing to serve millions of people, but making it impossible for anyone else to do so either. If you've followed the municipal broadband debate, that's effectively the same logic the mega-ISPs have displayed on a national level, and this kind of behavior by incumbent ISPs (especially if you watched the ILEC/CLEC wars of the late 90s and early aughts) is a major contributor to the nation's utterly mediocre rankings in most broadband metrics.
Having watched telco lawyers get away with this stuff for the better part of fifteen years, it's clear to me few municipal leaders are actually reading the franchise agreements that they sign, and fewer still seem familiar with the laundry list of childhood fables warning them about just these kinds of business transactions.
While filing a net neutrality complaint is now easier than ever, actually identifying violations may not be. In the new age of interconnection, usage caps, overages, and pay-to-play zero rating deals, less technical users simply may not understand when they're being screwed by their ISP, as these violations aren't nearly as ham-fistedly obvious as outright blocking or throttling of services. That's why the Open Technology Institute’s MLAB recently introduced the Internet health test, which runs user connections through a bevy of speed and performance tests to determine whether or not ISPs are engaged in any shenanigans.
Last October, MLAB released a study (pdf) that strongly supported Netflix, Level3 and Cogent's claims that ISPs were intentionally letting peering points to transit operators saturate to try and force companies like Netflix to begin paying for direct interconnection. In short, neutrality advocates believe ISPs had moved net neutrality to the edge of the network, using interconnection to grab the pound of flesh from content companies they've long stated was their end goal.
The problem is both sides of the equation (whether that's Netflix or AT&T) keep most of their data on interconnection (and the deals they strike) private for competitive reasons, meaning that while signs (and thirty years of history) pointed to ISP skulduggery, actually proving it is difficult. It's apparently becoming less difficult with the new consumer connection data being collected by MLAB, which the Guardian this week claimed proves big ISPs are intentionally degrading network performance across some networks:
"The study, conducted by internet activists BattlefortheNet, looked at the results from 300,000 internet users and found significant degradations on the networks of the five largest internet service providers (ISPs), representing 75% of all wireline households across the US...In Atlanta, for example, Comcast provided hourly median download speeds over a CDN called GTT of 21.4 megabits per second at 7pm throughout the month of May. AT&T provided speeds over the same network of ⅕ of a megabit per second. When a network sends more than twice the traffic it receives, that network is required by AT&T to pay for the privilege."
This is, consumer advocate group Free Press claims, proof positive that ISPs are up to no good:
"For too long, internet access providers and their lobbyists have characterized net neutrality protections as a solution in search of a problem,” said Karr. “Data compiled using the Internet Health Test show us otherwise – that there is widespread and systemic abuse across the network. The irony is that this trove of evidence is becoming public just as many in Congress are trying to strip away the open internet protections that would prevent such bad behavior."
The problem? While the Guardian report references a "new study," no study has actually been released that I could find (MLAB apparently just shared some selective data with The Guardian). That brings us back to the fact that the biggest problem here continues to be a lack of transparency on the part of all the players involved. But it's pretty hard to claim a "study" proves much of anything when there's no actual study, suggesting some over-eagerness on the parts of consumer advocates here.
Shortly after the Guardian piece MLABS did post a blog entry that sheds a little more light on the data they're collecting, but it's worth noting that while MLAB engineers are confident in saying these slowdowns are due to business choices and not network capacity, they're not yet willing to definitively state why some transit routes suffer more than others:
"It is important to note that while we are able to observe and record these episodes of performance degradation, nothing in the data allows us to draw conclusions about who is responsible for the performance degradation. We leave determining the underlying cause of the degradation to others, and focus solely on the data, which tells us about consumer conditions irrespective of cause."
Still, despite some of the breathless rhetoric in the Guardian piece neutrality advocates still haven't obtained the AT&T lawyer proof silver bullet that indisputably proves large ISPs have been up to no good. I'm not entirely sure this can even be accomplished without access to raw, confidential ISP data and internal correspondence that may or may not even exist (how do you "prove" Verizon intentionally isn't upgrading a port?). Sure, most people can study AT&T and Verizon's behavior over the last thirty years and conclude that yes, this sort of thing would certainly be in their jackassery wheelhouse, but proving it is kind of important if you want these kinds of claims to be taken seriously.
Still, the fact that people are crunching and closely analyzing the data, combined with the new and novel threat of a regulator that's not asleep at the wheel, appears to have many of these companies magically and suddenly getting along famously. This suggests, contrary to broadband industry doomsday prognostications, that the net neutrality rules are having a positive impact on consumers, business interests, and the Internet at large.
Like Silicon Valley, New York City purports to be a bastion for emerging technology, yet, just like Silicon Valley, it suffers from a pitiful lack of broadband options and competition. In New York, Time Warner Cable enjoys notable market dominance, with either spotty Verizon FiOS or DSL coverage providing the barest semblance of real market competition for the cable giant. It wasn't supposed to be this way: in 2008 Verizon struck a closed-door franchise agreement with then NYC Mayor Mike Bloomberg, one which Verizon strongly implied would result in 100% FiOS coverage for all five boroughs of the city by the end of 2014.
The agreement, both Bloomberg and Verizon tried to proclaim at the time, would mean uniform fiber for the whole city, putting an end to the broadband "cherry picking" that plagued franchise agreements of years past:
"Our investment in the City is historic, which is reflected in the citywide nature of our plan," (Verizon's Monica) Azare said. "When our fiber deployment project is completed it will reach to each and every borough, neighborhood, boulevard, avenue and street, without regard to the demographics of a particular area. More importantly, City residents will be able to take advantage of the power of fiber optics delivered straight to their doors."
2014 has of course come and gone, and most estimates peg New York City FiOS penetration at somewhere between 45 and 55%, with most of the city's least affluent areas left in the broadband dark. Despite plenty of warning signs from reporters at the time, and the fact that city lawyers could have read the agreement at any time, New York City officials are only just starting to realize that the deal allowed Verizon ample room to wiggle around and under most of the uniform deployment obligations.
A new city report (pdf) released last week has found, shockingly, that Verizon went right ahead and used these loopholes to cherry pick only select neighborhoods, just as the company had intended. The biggest trick Verizon used to bluff its way past obligations was by bringing fiber somewhere close to many residences (as in buried in the street one block over), then declaring that these users could get fiber. Of course when the city began to look, they found Verizon refused to finish the job:
"As 2014 progressed, and Verizon’s (supposed) build-out approached 100 percent, DoITT began to receive anecdotal evidence, largely in the form of consumer complaints, suggesting that Verizon was simultaneously taking credit for “passing” households and declining to accept orders for nonstandard service installations from those households. The anecdotal evidence, in combination with discussions of the particular households involved with Verizon personnel, led DoITT to be concerned that these anecdotes did not reflect occasional irregularities, but possibly broader failures by Verizon to fulfill the obligations it undertook in the 2008 franchise agreement."
"We indeed have met the requirement to install fiber optics through all five boroughs," a Verizon spokesperson told Ars. "Our $3.5 billion investment and the 15,000 miles of fiber we have built have given New Yorkers added choices and a robust set of advanced, reliable, and resilient services. The challenge we have is gaining access to properties which of course would expand availability. We look forward to working with the City to seek solutions to this issue."
Verizon had been trying to blame crotchety landlords for these expected FiOS coverage gaps for some time, and while there certainly are some difficult building managers, reporters have found in many of these instances that Verizon incompetence was actually to blame. In some instances, Verizon was accused of telling building owners that it would only actually connect buildings to the FiOS network if every resident in the building was required to get service through Verizon and nobody else.
So, the better part of a decade later New York City officials are annoyed at the sweetheart deal their predecessors signed, and insist that they'll be holding Verizon's feet to the fire:
"Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,” said Mayor Bill de Blasio..."What the audit reveals is an alarming failure on the part of Verizon to deliver on its franchise agreement with the City,” said Counsel to the Mayor Maya Wiley. “Verizon must make good on its commitment and do so with transparency, accountability and better service delivery going forward. New Yorkers deserve no less."
The agreement says the city "may "seek and/or pursue money damages" if Verizon fails to live up to its side of the agreement, but the loophole-filled wording of the contract will likely make that impossible. If Verizon's business history is any indication, what will actually happen is the company's lawyers will keep the bureaucratic wheels spinning indefinitely, while the city spends another decade paying lip service to the transformative power of broadband. That New York City is at least making a stink about it is at least marginally promising; Pennsylvania and New Jersey officials threw billions of dollars at the company, let it off the hook for any and all obligations, and then just hoped nobody would notice.
As we've been exploring for some time, both AT&T and Verizon have been turning their backs on traditional copper-based phone service and DSL users they're unwilling to upgrade. Both of the companies' next-gen fixed-line broadband deployment plans (U-Verse and FiOS, respectively) have been all but frozen as the ISPs focus on notably more profitable wireless service. The shift is understandable: wireless tends to be cheaper to deploy, less unionized, and relatively less regulated, and the fact that it's usage capped in the face of soaring mobile video growth means future revenue projections are very handsome indeed.
The only problem? Tens of millions of people remain on DSL lines the companies refuse to upgrade to fiber. Many of these lines were built on the backs of billions in taxpayer subsidies -- subsidies that quite often were given for fiber upgrades that were never actually delivered. Both AT&T and Verizon are willfully trying to drive these customers away via the one-two punch of price hikes and support neglect, while going state by state lobbying for the gutting of all regulations requiring that they continue to offer service or meet base levels of service quality.
"The CWA plans to file public information requests this week with a handful of state regulators including in New York, New Jersey and Pennsylvania to see whether it can uncover data showing the extent of the problems..."Verizon is systematically abandoning the legacy network and as a consequence the quality of service for millions of phone customers has plummeted,” said Bob Master, CWA’s political director for the union’s northeastern region."
That specifically shouldn't be hard in both Pennsylvania and New Jersey, where state lawmakers handed Verizon billions in tax breaks and subsidies for symmetrical fiber lines, then more recently voted to let Verizon completely off the hook for failing to meet agreement obligations. Making things worse, states like New Jersey then let Verizon lobbyists sell them on deals that gut the company's remaining obligations to users in these states, meaning what service that remains labors under a completely deregulated environment where there's no punishment for total Verizon apathy.
So with Verizon pretty obviously neglecting its aging copper networks, it's pretty amusing to see a Verizon rep try to tell the Journal that's simply not happening:
"It’s pure nonsense to say we’re abandoning our copper networks," Mr. Young said. Mr. Young said the company is investing in its copper network, and it only offers Voice Link as a temporary replacement while repairs are being done. About 13,000 customers have decided to keep the Voice Link service, Mr. Young said."
Except it's hard to insist a claim is "pure nonsense" when anybody with eyes (or a rural Verizon DSL and phone connection) can see what Verizon's up to. Verizon's been particularly distasteful in its recent decisions to use storm damage (be it Hurricane Sandy or other major storms) to simply refuse to upgrade damaged DSL and POTS (plain old telephone service) lines, instead shoving customers toward the Voice Link service Mr. Young highlights. Except Voice Link is less reliable and provides numerous fewer features than the fixed lines it's replacing, something that has annoyed locals and municipalities.
So while the unions' arguments are obviously self-serving, they're highlighting a pretty important problem that's still managing to fly under the radar despite being a topic of great importance to millions of impacted, neglected consumers. Verizon not only took billions in subsidies and failed to deliver fiber, they're now lobbying states for the right to neglect these remaining copper-based customers they simply couldn't care less about. In short, they've shafted these users from countless directions, in countless ways, for more than a decade. For Verizon to try and claim that these easily-documented problems are "nonsense" is a heaping dose of nonsense in and of itself.
You might recall that to try and thwart the agency's new net neutrality rules, former Verizon lawyer turned FCC Commissioner Ajit Pai launched a last-minute, facts-optional war on net neutrality and neutrality supporters like Netflix. Most of his arguments were nonsensically awful, like claiming that having real neutrality rules would somehow inspire North Korea and Iran to censor the internet, or that Netflix's fairly ordinary use of a CDN suggested it was somehow a hypocrite on the idea of net neutrality and was trying to destroy the internet.
But Pai's biggest complaint about the net neutrality rules was that the FCC wasn't being transparent enough, despite countless years of conversation and fully documented public input. Pai repeatedly and often proclaimed that the entire process wasn't transparent, even going so far as to hint that the White House's public Title II support was somehow part of a secret cabal with the FCC, even though as we noted at the time no rules were broken by the White House's entirely ordinary public statement of support for Title II.
If you know telecom company lawyers, you probably were keyed in early on that Pai and his staff's breathless love of transparency was a bit of a political show pony designed to rile up the folks that believe net neutrality is some vile, secret plot by government to ruin the internet. You also likely realized early on that when the shoe was on the other foot, this love of transparency would probably magically disappear.
And that didn't apparently take long. The House has been conducting an endless stream of political show pony hearings and "investigations" into the FCC's behavior on the net neutrality front under the noble pretense of reform, when the real goal is to punish the agency for daring to stand up to ISP campaign contributors. As the House digs through documents they hope will prove that net neutrality is an unholy, big government cabal (and not, as most realize, a genuine and remarkable grass roots movement) Pai apparently refused to provide documents to the FCC's own lawyer:
"Republican FCC Commissioner Ajit Pai is refusing to make his office’s documents available to the FCC’s Office of General Counsel as part of a House investigation into the agency’s net neutrality decision. Pai has instead promised to provide documents directly to the House Oversight Committee — though a panel spokeswoman said no documents have yet been provided."
Get it? Transparency is really, really important unless it doesn't coincide with partisan patty cake efforts to shame the FCC for finally doing its job and standing up for consumers. Of course in a few years when Pai's back at a telecom company or comfortably ensconced at one of their think tanks, this will all be forgotten, but if the rules get overturned in court by Pai's friends at Verizon, consumers and small businesses will be the ones left holding the detritus from Pai's noble, totally transparent time at the Commission.
Ever since regulators blocked AT&T's acquisition of T-Mobile, T-Mobile has responded by lighting a fire under the wireless industry. With an amusing CEO and consumer-friendly policies, the company is currently adding more new subscribers per quarter than any of the other big four carriers, once again shockingly highlighting how not treating your customers like the enemy can pay notable dividends. But no matter how well T-Mobile has been doing, German owner Deutsche Telekom has made it repeatedly clear that it wants out of the U.S. market.
However, getting a sale done has proven harder than the company expected. After the AT&T deal was blocked by regulators, they also indicated they wouldn't approve a sale to Sprint, in order to keep four large, viable competitors in the market. Rumored for a while, indications now are that satellite TV provider Dish Network is in talks to acquire T-Mobile in a deal worth more than thirty billion:
"The two sides are in close agreement about what the combined company would look like, with Dish Chief Executive Charlie Ergen becoming the company’s chairman and his T-Mobile counterpart, John Legere, serving as the combined company’s CEO, the people said. Tougher questions about a purchase price and the mix of cash and stock that would be used to pay for a deal remain unresolved, the people said. One of the people characterized the talks as at “the formative stage,” and said an agreement might not ultimately be hammered out."
The deal would join a wave of consolidation in the telecom sector, including Frontier's acquisition of Verizon's California, Texas, and Florida fixed-line assets, Verizon's acquisition of AOL, Charter's acquisition of Time Warner Cable and Bright House Networks, and AT&T's acquisition of DirecTV. And while Dish is rumored to be a horrible place to work and boss Charlie Ergen has a reputation for being a pain in the ass to work with, the deal makes quite a bit of sense and should probably have no problems getting past regulators.
Whereas T-Mobile has been a thorn in the side of AT&T and Verizon, Dish has been similarly disruptive on the TV front, whether that's via its ad-skipping Hopper DVR, or the launch of its new Sling TV Internet video service. Dish has also been slowly accumulating a ton of spectrum over the last few years, insisting it was pondering a solo or joint wireless play. And while combined it's believed that the new T-Mobile under Dish would have even more spectrum than AT&T or Verizon, it wouldn't be enough to trip the FCC's "spectrum screen" used to determine competitive harm:
There had been some worry that Dish was just acquiring spectrum in order to sit on it, flipping it down the road for additional cash to AT&T and Verizon. Instead, a Dish buy could result in an even stronger T-Mobile with the spectrum and resources to shore up the one area where it still lags behind AT&T and Verizon: total network coverage. Telecom writers everywhere also win under this deal, as entertaining f-bomb dropping T-Mobile CEO John Legere is expected to remain at the helm of the new, tougher company. Should Sprint finally be able to get things together under new owner SoftBank, we might actually start seeing something vaguely resembling real, sustained price competition in the wireless sector.
The FCC's net neutrality rules don't even go into effect until June 12, but they're already benefiting consumers. You'll recall that the last year or so has been filled with ugly squabbling over interconnection issues, with Level 3 accusing ISPs like Verizon of letting peering points congest to kill settlement-free peering and drive Netflix toward paying for direct interconnection. But with Level 3 and Cogent hinting they'd be using the FCC's new complaint process to file grievances about anti-competitive behavior, magically Verizon has now quickly struck deals with Level 3 and Cogent that everybody on board appears to be happy with.
That players in the transit and ISP space are suddenly getting along so wonderfully when ISPs insisted net neutrality rules would result in the destruction of the Internet is nothing short of miraculous. It's almost as if the FCC's new net neutrality rules are already benefiting consumers, companies and a healthy internet alike!
"Until now, a variety of voluntarily negotiated, individualized arrangements have been used to exchange traffic between networks. But, under the Order, these arrangements are now part of the “telecommunications service” that broadband Internet access providers offer their retail customers, and thus broadband providers—but not their interconnecting counter-parties—are subject to the requirements of Title II. Yet again, however, the FCC did not explain what that means or how broadband providers must act."
While the FCC's rules on interconnection are a bit vague, the agency has made it clear they'll be looking at complaints on a "case by case basis" to ensure deals are "just and reasonable." Since this is new territory, the FCC thought this would be wiser than penning draconian rules that either overreach or contain too many loopholes. This ambiguity obviously has ISPs erring on the side of caution when it comes to bad behavior, which is likely precisely what the FCC intended. Still, companies with a generation of history at being bullies complain this ambiguity lets others...bully them:
"Providers are thus left to negotiate contracts subject to sweeping statutory mandates without knowing what decisions could lead to enforcement action. Already, providers face demands for significant changes to interconnection agreements. The parties making those demands are threatening to file enforcement actions if their demands are not met. This distortion in what had been a well-functioning private negotiation process is irreparable harm."
And by "well functioning private negotiation process," the ISPs clearly mean one in which they were able to hold their massive customer bases hostage in order to strong arm companies like Netflix into paying direct interconnection fees. One in which regulators were seen but not heard, while giant monopolies and duopolies abused the lack of last mile competition. Yes, the FCC's actions have been so brutish and aggressive, they've resulted in a cease fire across the interconnection front to the benefit of video customers and internet users everywhere. Will the nightmare ever end?
While there's been no limit of hand-wringing over the new net neutrality rules, much of this has been either hyberbole by giant ISPs that don't like having their anti-competitive pipe dreams quashed, or by folks who don't actually understand what the rules actually do. There are a number of smaller ISPs, partisans and tech execs that exist in the second camp, assuming in kneejerk fashion that the FCC's new rules saddle them with all manner of burdensome regulations. In reality, as we've noted several times, not much changes under the new rules -- provided you don't intend to engage in anti-competitive behavior.
Former Verizon regulatory lawyer turned FCC Commissioner Ajit Pai voted down the rules, and has been waging a bizarre, facts-optional assault on neutrality supporters like Netflix ever since. Last week Pai managed to drum up a little extra hysteria on this front by proclaiming that the new rules were crushing small ISPs with all manner of new costs. Pai trots out several small ISPs that, in filings to the FCC, take a page out of the AT&T pouting playbook and say they're freezing investment in broadband because the rules are just too damn onerous:
"KWISP President Kenneth Hohhof told Ars that his two-person company makes revenue of $250,000 to $300,000 per year, and he estimates that he’ll have to pay $20,000 in legal costs because he intends to hire a lawyer to review his business practices. Hohhof admits that he “pulled that [number] out of the air,” but given the hourly rates charged by telecom lawyers, he expects the bill to be substantial for such a small company.
...Another wireless ISP Pai described is SCS Broadband in rural Virginia, which serves 800 customers and “has already stopped investing in new rural areas because of the FCC’s decision, and it won’t resume until it can ‘determine if the additional cost in legal fees warrant such investments,’” Pai said. “And investors have already told SCS Broadband that ‘projects that were viable investments under the regime that existed before the Order will no longer provide the necessary returns to justify the investment.’"
Yes, like with any regulations, investors will need to do due diligence, and businesses need to occasionally consult attorneys to understand the market landscape in which they operate. Also, shockingly, lawyers do indeed tend to take extra advantage of people who can't be bothered to understand when their services are or aren't needed. And while it's clear the FCC could do a better job communicating the rules' impact, these problems aren't the fault of the rules themselves.
Rather amusingly, Ars Technica then proceeds to dissect most of these concerns point by point, suggesting that most of the small ISPs engaged in hysterics over the rules appear to not understand them in the slightest. As Ars notes, most of the onerous portions of Title II (rate regulation, local loop unbundling) aren't included in the rules, and most smaller ISPs are exempted from new transparency requirements. Indeed, most of the non-blocking, non-throttling, and "reasonable network management" requirements are the same, relatively-generous ones these ISPs lived under with the original net neutrality rules, which they didn't need lawyers to understand and comply with.
The bottom line: a lot of confusion and fear on the part of hysterical anti-Title II folks could be eliminated by actually reading the rules (pdf), instead of listening to incumbent ISP lawyers, former incumbent ISP lawyers like Ajit Pai, or execs like Mark Cuban. Again, many folks who actually run ISPs for a living (like Sonic.net CEO Dane Jasper) note it's only ISPs that engage in anti-competitive behavior that should worry. That's not hard to realize if you've paid attention to the FCC's recent, totally out of character, shift toward notably more consumer and competition-friendly telecom policies that are already benefiting consumers and companies alike.
Even the major ISPs that hate the idea of having their anti-competitive shenanigans policed have repeatedly and quietly admitted the rules don't impact their day-to-day business operations much. While their lawyers and lobbyists have been busy predicting business Armageddon, dozens of ISP execs have gone on record in recent months to admit the rules don't change much of anything for them operationally. And indeed, small ISPs that have bothered to pay attention to this bizarre new about-face at the FCC (like Joshua Montgomery of Wicked Broadband in Kansas) appear to understand this:
"If you're behaving in your customers' best interests and operating above the board, I don't think you have anything to be concerned about,” he said. “If you're advertising a $19 rate and then jacking people's bills up to $125 with fees and other things after six months and claiming some kind of long-term deal, yeah you're probably going to have trouble. [The FCC] made it very clear that their goal is to encourage competition, and I don't think they have their eyes on small players."
At the heart of the net neutrality opposition are very wealthy companies immeasurably angry that somebody is finally trying to stop them from aggressively cashing in on the lack of competition over the broadband last mile. At the periphery are many satellite opponents who just oppose the new rules because (certainly not without some valid historic justification) they believe all regulation is always bad, and you don't need to have an intelligent, nuanced debate on the merits of individual proposals because the fact that regulation is always, automatically bad is always true and la la la I can't hear you. The former have a pretty easy time riling up the latter, but you can go a long way toward avoiding this kind of confusion by actually reading and understanding the regulations you're busy claiming will destroy the business universe as we know it.