We've noted how AT&T and Verizon investors and executives have been terrified for some time that they would have to (gasp) compete on price as T-Mobile continues to disrupt the market with its consumer-friendly, faux-punk rock behavior. Ever since the AT&T deal was blocked by regulators, T-Mobile has been mercilessly (but entertainingly) mocking both companies, offering a bevy of promotions while eliminating a lot of "pain points" for consumers (like overage fees). It's working: T-Mobile's now signing up more subscribers each quarter than Sprint, AT&T or Verizon -- just by treating consumers well.
So far, outside of a few very time-limited promotions, Verizon's been unwilling to compete on price, insisting the company's high prices are justified by a "premium network experience." Verizon also recently tried to shoot down the appeal of T-Mobile's unlimited data offerings by insisting that nobody really wants unlimited data plans, they're just being driven by "gut feelings." With T-Mobile just having one of its most successful quarters ever, Verizon's increasingly under pressure to compete on price, yet the telco continues to proclaim it doesn't have to:
The company reported on Tuesday that it had lost 138,000 postpaid customers in the last three months. Francis Shammo, Verizon’s chief financial officer, apparently won't be missing customers who, he says, value price over quality. "If the customer who is just price-sensitive and does not care about the quality of the network—or is sufficient with just paying a lower price—that’s probably the customer we’re not going to be able to keep," he said in the company’s quarterly earnings call."
It shows you just what kind of competition Verizon's historically used to if the company honestly believes you have a choice of when you get to compete on price. And while the company is busy telling investors that it's not feeling any heat from T-Mobile, the growing, magenta-hued (TM) threat has Verizon simultaneously testing a number of new price promotions it hopes will help tip the subscriber scales back in its favor. Smelling blood, T-Mobile this week launched a new promotion that specifically takes aim at these "price sensitive" customers Verizon apparently doesn't want any more:
Of course Verizon's not entirely wrong. The company does come in first place pretty consistently in most customer service and network performance studies. Verizon's also well aware it enjoys an 80+% retail market share with AT&T, and an 85% market share of the special access (cell tower backhaul) market. The two companies also enjoy an estimated $171 billion in combined spectrum holdings, which certainly helps keep other competitors from market. Still, this belief that the company doesn't have to compete on price in the face of increased price competition seems like a pipe dream narrative they'll only be able to push for so long, especially if Sprint can manage to get out of its own way, fix its lagging network, and become a viable fourth wireless competitor.
It's no secret that ISP support reps will consistently tell you whatever you'd like to hear when trying to sell you on more expensive packages, even if the claims are miles from reality. Sometimes that's just a support rep going rogue to meet numbers and try to make a sale, and sometimes it's part of a consistent, scripted effort to mislead the consumer. Frost and Sullivan analyst Dan Rayburn says he ran into the latter recently when he called to renegotiate his FiOS triple play bundle rate with the telco, and was informed, repeatedly, that he needed to upgrade his speed from 50 Mbps to 75 Mbps if he wanted Netflix to stream properly.
That wasn't the brightest move on Verizon's part, since Rayburn covers the streaming video sector for a living. Rayburn was quick to highlight that Ookla data shows that the average bitrate delivered to a Verizon customer last month was around 3.5 Mbps. Even in a household full of streaming video fanatics, there's really not much that 75 Mbps will provide that 50 Mbps won't. And while Rayburn warns that uninformed users can easily fall into Verizon's trap, it should only take the average consumer about five minutes of Google use to avoid this pitfall.
Netflix's website informs users the company's standard definition streaming service eats about 1 GB of data per hour per stream of standard def video, and Netflix recommends roughly 3 Mbps for standard def content. High definition video meanwhile consumes around 3 GB per hour, per stream, with Netflix recommending 5 Mbps for HD video. Even if you're part of the tiny number of people with a 4K set looking to stream Ultra HD, you'll only need a connection of around 25 Mbps, according to Netflix. Of course this requires the average consumer to know what a gigabyte is, which is no safe bet.
Rayburn proceeds to document that this wasn't just a one-off situation, but that Verizon lied about his need for 75 Mbps to obtain "smoother" Netflix streaming numerous times:
"While some might want to chalk this us to an isolated incident, or an over zealous sales rep, that’s not the case at all. I called in three times and spoke to three different reps, plus one online and got the same pitch. Clearly this sales tactic is being driven by those higher up in the company and isn’t something a sales rep made up on their own. And two years ago, Verizon tried to pitch me the exact same story, promising better quality Netflix streaming if I upgraded my Internet package."
The biggest irony here, unmentioned by Rayburn, is that he's consistently been one of only a few analysts on Verizon's side during the company's recent interconnection scuffle with Netflix, blaming Netflix, not giant ISPs, for most of the congestion issues that magically started popping up over the last year or so as ISPs like Verizon started pushing Netflix for direct interconnection fees. In other words, Verizon not only tried to bullshit someone who spends their life discussing streaming issues, but it managed to annoy one of the company's few allies on the net neutrality and interconnection front. That's quite a double play.
A little over a year ago, Level 3 was busy accusing Verizon of intentionally letting its peering points get congested in order to degrade Netflix streaming performance, by proxy forcing Netflix to pay Verizon for direct interconnection if it wanted to remedy the situation. According to arguments by Netflix, Level3 and Cogent, big ISPs like Verizon, Comcast and AT&T decided to move the net neutrality debate out to the edge of the network, obtaining their pound of flesh by eliminating settlement-free peering and demanding new charges just to access last mile customers.
To hear AT&T, Verizon, and Comcast tell it, the fight was all just a big misunderstanding, and what was occurring was just run of the mill peering disputes. Meanwhile, their army of fauxcademics, astroturfers, lobbyists, consultants and think tankers were busy telling anyone who'd listen that Netflix was trying to destroy the Internet.
But in a series of blog posts from last year, Level 3 content and media VP Mark Taylor continued to argue that there was a major anti-competitive cabal afoot, with only the biggest ISPs holding network performance (and their own users) for ransom in a quest for more revenue:
"All of the networks have ample capacity and congestion only occurs in a small number of locations, locations where networks interconnect with some last mile ISPs like Verizon. The cost of removing that congestion is absolutely trivial. It takes two parties to remove congestion at an interconnect point. I can confirm that Level 3 is not the party refusing to add that capacity. In fact, Level 3 has asked Verizon for a long time to add interconnection capacity and to deliver the traffic its customers are requesting from our customers, but Verizon refuses."
The problem, as we noted at the time, is that with peering arrangements entirely confidential, it was impossible for any researcher to fully prove incumbent ISPs were up to no good, even if the context of thirty years of anti-competitive behavior -- and scattered glimpses of limited data sets -- suggested the Netflix and Level 3 narrative might just be true. As such, the FCC announced it would begin collecting internal company data on interconnection to determine who, exactly, was telling the truth.
Even Cogent founder and CEO Dave Schaeffer, one of the most vocal executives in regards to these interconnection feuds, seems happy to have struck a no-payment deal with Verizon. According to Schaeffer, the FCC's new neutrality rules helped bring Verizon to the table, since Level 3 and Cogent had hinted they might complain to the FCC:
"Schaeffer told Ars that it did not have to pay Verizon to get the deal signed. "We have never paid for peering, and we continue to never pay for peering," he said today. Schaeffer said the FCC's rules "probably influenced the timing" of the agreement. He believes Verizon was also motivated to settle because Verizon's own EdgeCast content delivery network will benefit from distributing traffic through Cogent's network. But there is still work to do to make sure performance improves. "The degradation exists right now, the ports are massively oversubscribed and our initial fix is going to dramatically increase the connectivity," Schaeffer said. "The parties agreed to make sure this doesn’t become a problem going forward."
While the net neutrality rules don't technically take effect until June 13, apparently the mere threat of a regulator actually doing its job was enough to bring Verizon to the negotiations table. That's not to say there won't be problems going forward; there needs to be much more transparency surrounding interconnection agreements to protect consumers and competitors alike. Schaeffer is quick to highlight continued problems with AT&T, Time Warner Cable and CenturyLink (though he also points out that Comcast has suddenly become more amicable as well). Meanwhile, the FCC's neutrality rules obviously will need to withstand the full frontal legal assault of the entire broadband industry to remain useful.
Still, if you were paying attention, you might actually start to doubt the claims on several fronts that Title II will destroy the internet as we know it. Comcast's busy deploying two gigabit fiber to 18 million homes despite claiming Title II would demolish sector investment. Executives from Frontier, Cablevision, Sprint, Sonic and even Verizon have all publicly admitted Title II doesn't really hurt them in the slightest. And now Verizon, Level 3 and Cogent appear to have settled their differences thanks, in part, to the mere threat of actual FCC anti-competitive policing. Yeah, so far our new net neutrality rules seem like a real disaster for consumers and internet health alike.
Having written about the FCC for most of my adult life, I've grown cynically accustomed to an agency that pays empty lip service to things like consumer welfare and the painful lack of broadband competition. It doesn't matter which party is in power; the FCC has, by and large, spent the lion's share of an entire generation ignoring last mile competitive problems and the resulting symptoms of that greater disease. When the agency could be bothered to actually address these issues, the policies were so tainted by the fear of upsetting campaign contributors (read: regulatory capture) they were often worse than doing nothing at all (see our $300 million broadband map that hallucinates speeds and ignores prices or 2010's loophole-filled net neutrality rules co-crafted by Verizon and Google).
Whether it was former FCC boss turned cable lobbyist Michael Powell's claims that massively deregulating the sector would magically result in telecom Utopia (tip: that didn't happen) or Julius Genachowski being utterly terrified of taking any meaningful stand whatsoever, the broadband industry has spent decades governed by an agency that, at its best, is too timid to do its job, and, at its worst, is an obvious revolving-door lap dog to an industry it's supposed to regulate.
So in 2013 when it was announced that a former lobbyist for both the wireless and cable industries would be the next FCC boss, the collective, audible sighs of disgust unsurprisingly rattled the Internet. I, like many others, believed we were bearing witness to a twisted culmination of decades of regulatory capture, a giant, living, breathing middle finger to a public hungry for a more consumer and innovator-friendly FCC. John Oliver even put Wheeler's name in lights when he infamously compared hiring the former cable lobbyist to employing a dingo as a babysitter:
Most people (with a few notable industry exceptions) believed Wheeler was the final nail in a grotesque, campaign-cash stuffed telecom coffin long under construction. We were painfully, ridiculously wrong.
In fact, if you read profiles on Wheeler, he's turned out to be a complete 180 from the thinking of a traditional revolving-door regulator, basing his decisions on all available information -- even if that data conflicts with previously-held beliefs (a unique alien indeed in 2015). And while it's true that massive grass roots advocacy helped shift Wheeler's thinking on issues like Title II, his embrace of issues like municipal broadband required little to no shoving, since the lion's share of the public had no idea the issue existed. One of the biggest reasons Wheeler's willing to stand up to the broadband industry? He's 69, and no longer biting his tongue and biding his time for the next cushy lobbyist or think tank gig. Perhaps we should make a rule that all future FCC bosses must be on the brink of retirement to avoid what we'll henceforth call Michael Powell syndrome.
Still, watching Wheeler fills me with cognitive dissonance, as if my frequently-disappointed brain isn't quite sure what to do with an FCC Commissioner capable of objective thought free of AT&T, Comcast and Verizon lobbyist detritus. As a sure sign of the looming apocalypse, last week I watched an FCC Commissioner issue a statement about protecting competition -- and actually mean it:
"Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services."
Though his tenure's unfinished, it may not be a stretch to say that a man most of us believed would be the epitome of revolving door dysfunction has proven to be one of the most consumer- and startup-friendly FCC Commissioners in the agency's history. Granted that may not be saying much; caring more about consumers than Martin, Powell and Genachowski is like getting an award for beating a handful of lobotomized ducklings at a hundred yard dash. And none of this is to classify Wheeler as a saint -- the agency's net neutrality rules have some very concerning loopholes and the FCC still refuses to talk much about pricing, whether that's the problems inherent in usage caps, unreliable meters, or sneaky below the line fees.
Still, it's a lesson learned in letting your mind run on cynicism autopilot, and it's a reminder that even our very broken, campaign-cashed soaked government can still occasionally manage to give birth to consumer-friendly policies. So in short, the tl;dr version is this: I apologize to you, Tom Wheeler, for believing you were a mindless cable shill. I was wrong.
Comcast/NBC, Fox and Disney/ESPN have been throwing a hissy fit in the week since the new options were announced, claiming that the new offerings violate existing contracts. It's not too surprising; breaking a channel like ESPN out of the core channel bundle immediately reduces ad impressions and overall marketing footprint, even if it's unfair for consumers to pay for incredibly-expensive content they have absolutely no interest in.
ESPN has now filed suit, issuing a summons (pdf) to Verizon (the actual complaint is still being redacted and hasn't been made public yet), stating that Verizon is in breach of contract. ESPN is requesting an immediate injunction and a financial penalty of $500,000. In a statement, ESPN argues that the channel really loves "innovation," except when it doesn't:
"A statement from the network explains that “ESPN is at the forefront of embracing innovative ways to deliver high-quality content and value to consumers on multiple platforms, but that must be done in compliance with our agreements. We simply ask that Verizon abide by the terms of our contracts."
Would that be the same contract that ESPN believes prevents innovative ways of delivering high-quality content? As 2015 becomes the year that Internet video finally starts to see some interesting but imperfect new options, ESPN's swimming upstream if it hopes to sue its way toward keeping cable permanently stuck in 2003. Consumers are increasingly making it clear that soaring programming rates simple aren't tenable, and they intend to cut the cord or flee to piracy if the cable industry wants to continue stumbling drunkenly down the current path.
If ESPN wants to get out ahead of it all, the company might want to focus on actually being at the forefront of developing "innovative ways to deliver high-quality content and value to consumers," in lieu of suing the limited number of cable companies actually trying to do this. Instead, like so many legacy giants, it will sue to try to stop the disruption, push even larger rate hikes on all of the remaining sports customers in the belief that the current cable TV cash cow will live forever, then act disoriented and stupid in a few years when the company finds itself behind the sports programming innovation eight ball.
Thanks to loosening broadcaster licensing restrictions, 2015 is birthing a number of more interesting Internet video platforms, including Sony's Playstation Vue and Dish's Sling TV. The latter has glacially moved the industry needle toward marginally-more-flexible cable TV pricing options, offering users a $20 base TV package that can be complemented with a variety of additional $5 "channel packs." Users are tired of bi-annual rate hikes for bloated channel budgets, and these services are only just giving an early glimpse into the more flexible programming options that will be the TV industry norm within a decade.
Better yet, they're actually forcing some pay TV companies to adapt. Verizon, for example, last week announced that the company would be offering up a variety of new channel packs and add ons that bring a little more flexibility to the telco's traditionally rigid bundles. Mirroring the Sling TV approach, Verizon now says the company will be offering users the option to buy a base TV package starting at $55 a month, after which users can tack on extra channel packs for $10 each. Here's a better idea of what it looks like:
Verizon executives have traditionally been a little more progressively-minded about cord cutting than its industry counterparts (as in, actually occasionally admitting it exists), and this is a pretty clear play to not only cash in on cable companies' inflexibility, but try and prevent cord cutting. Since you usually can't see the true cost of a cable subscription until after you've gotten your bill (and seen all of the fees and obnoxious surcharges and caveats layered upon it), it's probably premature to call Verizon's effort revolutionary. But it's at least a start for an industry that has been swimming upstream and ignoring consumer demands for more than a decade.
"Media reports about Verizon’s new contemplated bundles describe packages that would not be authorized by our existing agreements. Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package."...ESPN’s statement — which complains specifically about having its networks relegated to an optional sports tier, instead of being included in the base package — suggests that Verizon never got an agreement from the programmer before it announced its plan. A person familiar with another programmer included in Verizon’s offering said that programmer hadn’t signed off on Verizon’s plan either. That person suggested that Verizon thought its agreements allowed it to try different offerings as a limited test."
The bloated cost of sports programming is one of the biggest reasons for soaring cable bills (as if either broadcasters and cable operators need reasons at this point), and Verizon's clearly firing a warning shot over the broadcasters' bow in regards to being able to shift these costly options into add-on tiers. That's great for consumers, but it obviously lessens ESPN's out-front consumer-facing power and overall reach. ESPN would love things to remain status quo indefinitely, but that's clearly not a sustainable position. The traditional cable bundle is a burning, Hindenburg-esque cash cow that's destined to crash, and the "worldwide leader in sports" would probably be better off accelerating its adaptation to the new paradigm.
Of course that's not going to happen. Customers who don't care about sports are first in line to cut the cord, and as those users refuse to subsidize everybody else, ESPN's first impulse will be to raise rates on customers that do watch sports in order to keep the current cash cow afloat. Simultaneously you can be sure that ESPN's lawyers are huddled around the conference table as we speak, contemplating a lawsuit they believe will magically freeze time indefinitely. But if Verizon doesn't help blow up the bundle somebody else will, whether that's Internet video (where ESPN at least still gets paid) or increased sporting event piracy.
Whatever ESPN's approach (and you'd hope it would be more progressively minded), this is definitely the opening salvo in a much broader -- and necessary -- cable and broadcast industry war over breaking up the traditional cable bundle.
from the these-are-not-the-droids-you're-looking-for dept
As we've made repeatedly clear, consumers really like the ease and simplicity of unlimited data plans. Whether that's on fixed-line or wireless networks, users don't really like having to guess if they'll make it in under the wire this month, and don't particularly enjoy being socked with $15 per gigabyte overages should they stream a few extra songs or watch a YouTube clip. However, when you enjoy the kind of regulatory and market power AT&T and Verizon do, you don't have to give a flying cellular damn what your consumers actually want.
As such, both companies decided to eliminate their unlimited data plans entirely a few years ago, replacing them with shared data plans laden with caps and steep overages. And while both companies did grandfather existing unlimited users, they made life as uncomfortable as possible for those users, whether it was by secretly throttling them after a few gigabytes of usage or restricting their access to specific apps unless they "upgraded" to a shared, metered plan. Meanwhile, competitors T-Mobile and Sprint have tried to differentiate themselves by continuing to offer unlimited data options.
Continuing the proud tradition of telling users what they want instead of giving them what they want, Verizon this week offered up an amusing blog post in which an analyst paints unlimited data plans as a public menace of the highest order. To hear analyst Jack Gold tell it, we should all agree that you can't have unlimited data plans, because they'll obliterate the network and leave us all weeping over our smart devices:
"The quality of connection is important to wireless users, and when connections become slow or disconnections occur due to overcrowding, users become disappointed. Let’s face it, if everyone had unlimited data and used it fully, the performance of the networks would suffer because of bandwidth restrictions and the “shared resource” nature of wireless. The bottom line is: users agree that degrading the networks is something that they don’t want to happen."
If I only had a nickel every time the congestion bogeyman was trotted out to defend anti-competitive pricing and policies. While spectrum is certainly a finite resource, Gold intentionally ignores the fact that offering unlimited data plans doesn't mean idiotically ignoring all network management and letting your network implode. While both Sprint and T-Mobile offer unlimited data, they still implement network management and throttling practices that ensure traffic loads remain relatively balanced and the consumer experience remains consistent.
In other words, most unlimited data plans aren't really unlimited anyway, or users have to pay a steep premium for the privilege of not having to worry about data thresholds. That's because AT&T and Verizon dominate 85% of the special access and cell tower backhaul market, resulting in Sprint and T-Mobile (and most everybody else) having to pay an arm and a leg too. It's all quite by design.
Gold knows this, but it's apparently much more fun to try and argue that unlimited data plans decimate the fabric of the space-time continuum and rip the very axle of the universe from its foundation. Disagree? Verizon's analyst proceeds to imply you're simply being overly emotional:
"So, while unlimited data may sound attractive, there is no practical effect of data limits on the majority of users. Understanding this should bring rationality to a discussion that is often held on a “gut feeling” level. Keeping adequate speed and performance while allowing all users to share the limited commodity we call wireless data is the fair way to deal with wireless connectivity. And ultimately, that is what is beneficial for wireless consumers."
Just so it's clear, it's "rational" to support Verizon's vision of internet pricing, in which you pay some of the highest prices among developed nations, but it's a "gut feeling" should you start to desire a better value plan. It's never quite clear to me who these telecom blog authors actually think they're speaking to. Surely the goal is to influence an overarching policy discussion, but all they generally wind up doing is having their brand mocked mercilessly by news outlets for being painfully out of touch with what consumers actually want.
Last year, we noted how The Weather Channel's tendency to air a higher volume of fluff and nonsense was harming the company's leverage and negotiating power when demanding higher rates from cable operators. DirecTV, you'll recall, responded to The Weather Channel's demands by simply pulling the channel and replacing it with weather services that, well -- actually reported the weather. Amusingly, many users found this to be an improvement over the channel's usual approach to reporting the weather: funny pictures of buffalo, photos of "sexy beaches," or programs like "Prospectors."
Having not learned a valuable lesson, last month The Weather Channel made the same demands from Verizon, which, like DirecTV before it, simply responded by replacing the weather channel with AccuWeather and directing users to apps that actually forecast the weather. Initially, The Weather Channel tried to claim Verizon was toying with the public's safety. It then launched a website aimed at generating outrage among viewers, urging them to contact Verizon and complain.
Except, given the growing disdain consumers have for a company that has increasingly stumbled away from its core mission, none of this appears to be working. As such, The Weather Channel has come up with a great new idea: mocking other weather organizations for focusing too much on fluff, and not enough on the weather. In a letter to employees, The Weather Channel CEO David Kenny calls Verizon "reckless" and urges employees to cancel all Verizon services. He then tears into AccuWeather for focusing on hippos during a recent tornado emergency in Oklahoma:
"We saw that last Wednesday night, when we featured live coverage from Oklahoma. Interestingly, Accuweather took a shot at the NWS for calling the tornado potential “low” that day, yet the Accuweather network itself, as you can see in the image below, was not even covering weather during Oklahoma’s severe outbreak. Here’s their coverage on the left:
Yes, hippos swimming."
Yes, that's a channel that has been mercilessly mocked for years about its tendency to air fluff, attacking other channels for airing too much fluff. For good measure, The Weather Channel decided to up the ante and launch a new media and print campaign that also mocks AccuWeather for showing hippos when a tornado struck Oklahoma:
AccuWeather CEO Barry Meyers quickly responded to the ad campaign by pointing out that AccuWeather isn't offered in Oklahoma. He also ponied up some advice about stones and glass houses:
"In 168 hours of week, the amount of programming they have devoted to real weather is really small,” Myers said. “People need to judge what that means." "People need to ask themselves what The Weather Channel is so afraid of,” Myers added. “They’ve had a virtual monopoly for 30-some years. They almost lost with DirecTV , and they have lost with Verizon. Competition is good, and it offers people choice and strengthens products."
The Weather Channel does slowly appear to be learning that you don't have much negotiating leverage when nobody thinks your product is very good. Serious coverage has ramped up slightly and its website's dumbest videos now at least have some tangential connection to actual weather forecasting. Still, it would be nice if The Weather Channel could learn this lesson without the heavy dose of head-spinning hypocrisy.
Back in 2008, Verizon proclaimed that we didn't need additional consumer privacy protections (or opt in requirements, or net neutrality rules) because consumers would keep the company honest. "The extensive oversight provided by literally hundreds of thousands of sophisticated online users would help ensure effective enforcement of good practices and protect consumers," Verizon said at the time. Six years later and Verizon found itself at the heart of a massive privacy scandal after it began covertly injecting unique user-tracking headers into wireless data packets.
The headers not only allow Verizon to ignore browser privacy settings to track online behavior, it allows third parties to do so as well (something Verizon initially denied). Worse, perhaps, while users could opt out of the personalized ads delivered by the system, they couldn't actually opt out of having their online behavior tracked. Initially, Verizon responded to the controversy by repeatedly downplaying it, but as it became clear regulators and lawyers were contemplating action, Verizon stated in February that it would finally let users opt out.
As of last week, Verizon's mobile advertising FAQ now states that users can choose whether they want to let Verizon manipulate their traffic and spy on them:
"Verizon Wireless has updated its systems so that we will stop inserting the UIDH after a customer opts out of the Relevant Mobile Advertising program or activates a line that is ineligible for the advertising program. Government and enterprise lines are examples of ineligible lines. The UIDH will still appear for a short period of time after a customer opts out of the Relevant Mobile Advertising program or activates an ineligible line. If a customer chooses to participate in Verizon Selects, the UIDH will be present even if the customer has also opted out of the RMA program."
Users can either opt out of the company's snoopvertising via the privacy settings at the Verizon website, or by calling 866-211-0874.
So was Verizon right in that the public would keep the company honest? While that did ultimately happen here, it's worth noting that it took the nation's best security researchers two years to even notice that Verizon was embedding the headers. It took Verizon another six months (and a pretty merciless and sustained beating from the media and privacy advocates) before it finally allowed users to opt out of the traffic manipulation. And, while groups like the EFF would prefer the system be opt in, this is likely where Verizon's latest privacy scandal gets put to bed.
It makes you wonder just how long it will take the public to discover Verizon's next great innovation in snoopvertising?
As part of a last ditch effort to derail the FCC's net neutrality rules, you might recall that Senator John Thune and Representative Fred Upton earlier this year pushed an amendment to the Communications Act that they professed would codify net neutrality into law as part of a "bipartisan" proposal crafted after a painstaking public conversation. What the ISP-dictated amendment actually did was effectively gut FCC authority, pushing forth net neutrality rules significantly weaker than the already-flimsy 2010 rules Verizon sued to overturn.
Thune, Upton and the mega ISPs hoped their effort would go something like this: table some incredibly weak net neutrality rules under the pretense of consumer welfare, make a few minor concessions, then pass a still-flimsy amendment that would have killed the Title II push in the cradle. The problem is that most neutrality supporters in Congress saw this fairly-shallow ploy for what it was (or at the very least feared the wrath of a SOPA-fueled internet grassroots community). As such, Thune and Upton have had trouble getting neutrality supporters to sign off on the idea -- especially without the help of fellow Senate Commerce Committee member Bill Nelson:
"On Wednesday, (Nelson) reiterated what he's been saying for weeks: That he's open to working with Republicans on a "truly bipartisan" bill aimed at preventing Internet providers from speeding up, slowing down or blocking Web sites. But he'll only cooperate, he said, "provided such action fully protects consumers, does not undercut the FCC's role and leaves the agency with flexible, forward-looking authority to respond to the changes in this dynamic broadband marketplace."
Except that's not happening, because a flexible, empowered FCC is precisely what Thune and friends don't want.
Enter Verizon, who like AT&T and Comcast, has been desperately trying to gut FCC authority for years (and had been succeeding until recently). While Verizon did sue to overturn the 2010 rules, it wasn't the rules themselves the telco was taking aim at (after all, it co-wrote them, and the rules had the full support of companies like AT&T and Comcast). Verizon hoped a legal win would not only gut the rules, but also FCC authority moving forward. That backfired spectacularly, given the FCC only shifted to Title II after Verizon's lawsuits repeatedly showed you can't regulate ISPs like common carriers -- without first declaring they're common carriers. The entire shift to title II is, quite literally, thanks to Verizon.
Fast forward to this week, and Verizon CEO Lowell McAdam fired off a letter to Thune, Upton and the other leaders of the House and Senate Commerce committees (pdf), urging Congress to take the reins and punish the FCC for standing up to wealthy broadband companies begin updating "outdated and broken" telecom law. To hear Verizon's version of history, everything was going great until the FCC came along and decided to destroy the Internet:
"The broadband and mobile markets are America's greatest ongoing success stories: 20 years of bipartisan light-touch policy consensus has led to more than $1.2 trillion in private investment, resulting in a transition from 128 kilobit dial-up connections and analog wireless voice networks in the late 1990's to today's near-ubiquitous 4G mobile data coverage and fixed broadband networks capable of streaming simultaneous HD movies. The FCC claimed it was addressing concerns about an open Internet, something that Congress could and can - address with clarity and finality in a two-page bipartisan bill. Instead, the FCC went far beyond open Internet rules, engaging in a radical and risky experiment to change the very policy that resulted in the United States leading the world in the Internet economy."
Like Thune and Upton, McAdam continues to bandy around the word "bipartisan" when what they're actually pushing is anything but. In short, Verizon wants the FCC's authority gutted and all policy making moving forward under the authority of a Congress slathered in telco lobbying cash. Not only does McAdam want Congress to push flimsy net neutrality rules, Verizon is pushing hard for a total rewrite of the 1996 Telecom Act -- because the Title II rules Verizon's successfully used to build a massive wireless empire are "outdated and broken":
"At its root, these are all symptoms of a problem: the existing legal regime and its accompanying regulatory processes are outdated and broken. Congress last established a clear policy framework almost 20 years ago, well before most of today's technology was even developed. As a result, regulators are applying early 20th century tools to highly dynamic 21st century markets and technologies. Inefficiencies and collateral damage are inevitable. It is time for Congress to re-take responsibility for policymaking in the Internet ecosystem."
And by "take responsibility," Verizon actually means it's time for Congress to take Verizon campaign contribution cash and write new laws ensuring that broadband industry regulators have the strength of babies, the freedom and authority of an asylum inmate, and the budget of a high-school prom committee.
The real irony of course is that regulators wouldn't keep intervening in Verizon's market if the telco didn't consistently engage in behavior that made it necessary. Again, the FCC only shifted to Title II after Verizon sued to overturn its 2010, industry-friendly net neutrality rules. Similarly, the entire net neutrality conversation wouldn't be happening if Verizon didn't have a long, proud history of trying to block every technological innovation it deemed a threat. If Verizon's honestly looking to affix blame for the regulatory policy chaos of the last few years, it doesn't have to look very far.