by Mike Masnick
Fri, Dec 2nd 2016 4:47pm
by Tim Cushing
Fri, Dec 2nd 2016 11:49am
More National Security Letters Made Public After Government Drops Its Attempt To Keep Its Gag Orders In Place
from the most-transparent-administration-still-all-about-forced-transparency dept
Thanks to the EFF's efforts, another set of National Security Letters have been published and their recipient freed to discuss them. CREDO Mobile received two NSLs in 2013 -- both accompanied with the usual indefinite gag order. The NSLs [PDF 1] [PDF 2] requested a wealth of data on three of CREDO's customers -- including all call records, financial information (credit cards used, etc.), and personal information (name, address, etc.) -- dating back to April 2008.
CREDO challenged the constitutionality of the indefinite gag orders as well as the constitutionality of the NSLs themselves.
“A founding principle of CREDO is to fight for progressive causes we believe in, and we believe that NSLs are unconstitutional. These letters, and the gag orders that came with them, infringed our free speech rights, blocking us from talking to our members about them or discussing our experience while lawmakers debated NSL reform,” said Ray Morris, CREDO CEO. “We were proud to fight these NSLs all these years, and now we are proud to publish the letters and take full part in the ensuing debate.”
CREDO's challenge to the gag order was upheld [PDF] by a federal judge in March, who struck it down when the FBI failed to show a need for the continued secrecy. This decision was held pending the FBI's appeal, but the government apparently decided this wasn't a battle it wanted to fight and dropped its appeal of the court's order.
The government's decision to drop the appeal highlights one of the (many) problems with NSLs. These are self-issued administrative orders subject to very little, if any, oversight. The FBI can issue as many of these as it wants without ever having to get a judge involved. Every one of these arrives with an indefinite gag order attached, forcing recipients to lawyer up if they want to challenge the government's demands for secrecy.
The government clearly felt it couldn't demonstrate why this gag order should still be in place. But the government doesn't have to justify its demands for secrecy at the point the NSL is issued. It only needs to do this if challenged in court. While some judges have expressed an interest in periodic reviews of NSLs to determine the need for ongoing secrecy, these conclusions are the exception rather than the rule.
That judges are the ones making this determination is another part of the problem. In response to the USA Freedom Act, the DOJ instituted a policy requiring a "periodic" review of issued NSLs. Unfortunately, that's all it does. There's no definition attached to "periodic," which means the review could happen every few years… or never.
The constitutionality of the orders themselves should still be actively challenged. While much of what is sought with these falls under the very generous definition of "third party records," the lack of any oversight or judicial review makes these the go-to tool for the FBI -- which has been known to issue NSLs when its warrant requests are turned down by federal courts. Throw an indefinite gag order on it, and the FBI can pretty much ensure complete compliance from recipients, whose only option is to fight an often-futile legal battle against the government.
by Tim Cushing
Thu, Dec 1st 2016 2:40pm
from the do-nothing-lawmakers-manage-to-accomplish-something dept
Sens. Ron Wyden (D-Ore.), Steve Daines (R-Mont.) and Chris Coons (D-Del) took to the floor and unsuccessfully asked for unanimous consent to either pass or formally vote on three bills to delay or prevent updates to the process used by law enforcement to get a warrant to hack suspects' computers.
“We simply can’t give unlimited power for unlimited hacking,” Daines argued.
But the bid to prevent the imminent changes to Rule 41 ended quickly. After Wyden spoke, Majority Whip John Cornyn (R-Texas) immediately objected to all three bills, without waiting to hear from Coons and Daines.
But Cornyn alone can't be blamed for this outcome. A vast majority of senators did nothing to prevent the proposed changes from becoming law -- even though the decision has been in their hands since the Supreme Court's approval in April.
The FBI and others will be able to take advantage of the removal of jurisdictional limits to search computers anywhere in the world using a single warrant issued by a magistrate judge. It will also be granted the same power for use in the disruption of botnets -- in essence, searches/seizures of devices owned by US citizens suspected of no wrongdoing.
Cornyn, who prevented any debate over the "updates" to Rule 41, seems closely aligned with the DOJ's views -- that these changes will have "little effect" on civil liberties because the FBI, etc. "will still have to get a warrant."
Sure, warrants are still involved, but the scope of what can be accessed with a single warrant has been expanded greatly. And the DOJ has yet to explain how it's going to prevent law enforcement agencies from shopping around for the most compliant magistrates, now that they're not required to perform searches in the issuing court's jurisdiction. The DOJ also hasn't adequately explained what sort of notification process it will use when performing its botnet cleanups.
What it has done, however, is issue a statement saying the ends justify the means.
In an effort to address concerns, U.S. Assistant Attorney General Leslie Caldwell wrote a blog post this week arguing that the benefits given to authorities from the rule changes outweighed any potential for "unintended harm."
The DOJ wanted fewer restrictions, more power, and the opportunity to treat any appearance of anonymization software as an excuse to deploy these newly-granted powers. The Senate -- for the most part -- gave it everything it wanted by doing nothing at all to stop it.
by Karl Bode
Thu, Dec 1st 2016 6:30am
from the ill-communication dept
With every indication that the government will be significantly more friendly to telecom giants in the new year, Wall Street has quickly gotten to work giddily daydreaming about mergers that were previously unthinkable in the space. Most commonly that involves predictions that Sprint will finally merge with T-Mobile (blocked under the current FCC because it would have reduced overall wireless competitors), or that Comcast and Charter will try to buy either Sprint or T-Mobile as part of a broader cable industry attempt to push into wireless.
But in a research note to investors this week, UBS analyst John Hodulik dreamed notably larger, arguing that the incoming Trump administration could possibly even allow a merger between telecom giants Comcast and Verizon:
"Densification of wireless networks required to meet the needs of video-centric subscribers increases synergies of cable-wireless combinations and provides the springboard for 5G-based services," he proclaims. "A roll-back of Title II re-classification could further increase incentives for cable," he adds, casually citing the likely dismantling of net neutrality and the FCC under Trump.While a Comcast Verizon merger may create "significant synergies" in the eyes of Wall Street, it could be downright fatal for broadband consumers. Verizon FiOS is among the only real competition Comcast sees along the east coast; so much so that the region is the only part of the country Comcast is afraid to expand its unnecessary usage caps into for fear of competitive repercussions. Eliminating that competition not only would result in caps and higher prices, but less motivation than ever for Comcast to improve its abysmal customer service.
He put forth a number of models that include Dish fusing with T-Mobile or other variations. But he noted that a Comcast or Charter merger with Verizon would create "significant synergies" and "integrated products" while being "accretive to revenue and EBITDA growth."
Now it's entirely possible that Verizon and Comcast don't want to merge, but it's clear that Wall Street sees a huge new wave of consolidation looming for the already uncompetitive broadband industry all the same. Since Trump's telecom advisors don't believe telecom monopolies exist, believe that regulatory oversight of said nonexistent monopolies should be virtually nonexistent, and can't even acknowledge that the sector's competitive shortcomings are real -- what could possibly go wrong?
Trump, of course raged, against megamergers on the campaign trail to drum up populist support, not only claiming he'd block AT&T's $100 billion acquisition of Time Warner, but claiming he'd somehow dismantle the already merged Comcast NBC Universal. Based on his telecom advisors' own words and policy positions, there's virtually no chance of either actually happening. In fact, Wall Street, Trump's own advisors, and most of the telecom sector clearly expect the exact opposite.
Between the Trump "populists" realizing they've been taken for a ride, and the net neutrality activists annoyed at the demolition of broadly-popular net neutrality rules and other broadband consumer protections, we're looking at quite a storm of megamerger dysfunction in the new year.
by Tim Cushing
Tue, Nov 29th 2016 9:37am
from the any-means-necessary dept
On the other hand, who needs to wait for the Rule 41 changes to kick in?
In January, Motherboard reported on the FBI's “unprecedented” hacking operation, in which the agency, using a single warrant, deployed malware to over one thousand alleged visitors of a dark web child pornography site. Now, it has emerged that the campaign was actually an order of magnitude larger.
No need to sit back and wait for the DOJ's proposed Rule 41 changes -- including the stripping of jurisdictional limitations for search warrants -- to default their way into adoption on December 1st. This worldwide search, performed under the authority of a single warrant issued by a single judge in Virginia, is just the FBI acting first and asking for
forgiveness codification later. From the day two transcript [PDF]:
Every time Your Honor grants a discovery request and we get new information, it's like -- to use an appropriate metaphor, like peeling an onion. There's just another layer of fact there that we did not know about. I mean, we did not know this was a truly global warrant before. There are 120 countries and territories listed outside the United States that the FBI hacked into, and they also hacked into something called a "satellite provider." So now we are into outer space as well.
It's not just the hacking of computers around the world. It's also the FBI's brief stint as perhaps the world's largest distributor of child porn. From the day one transcript [PDF]:
Your Honor, starting with Michaud, and what we know now is there was no discussion of trying to limit the distribution. There were no protocols for these agents for handling or limiting the distribution of child pornography. And the scale of the distribution now went out to at least 120 countries, at least 1 million images. And it is absolutely mind boggling, we have not seen something like this.
And for all the area covered by the investigation -- the number of computers scattered all over the world the FBI sent its NIT to -- there, so far, seems to be very little to show for the agency's efforts. Defense lawyer Colin Fieman:
We have never, in our nation's history as far as I can tell, seen a warrant so utterly sweeping. 100,000 potential targets. Something like 8700 IP addresses captured. At least 1152 open investigations. And now oddly enough only, about 214 arrests.
What's even more disturbing, even if they disagree about the efficacy of some of those methods, we now know from Agent Alfin's recent testimony which we cited, there was absolutely no discussion at the Department of Justice or the FBI about protocols in terms of handling this stuff or whether these methods of limiting, at least limiting the most egregious distribution were viable. Nobody cared.
Fieman quotes an earlier case dealing with the FBI's physical distribution of child porn in hopes of netting some arrests. The FBI actually created a child porn "catalog," mailed it to sting targets, and sent the targets the child porn they requested. The court in that case was not happy with the FBI's actions.
The Court took it upon itself to make these statements, because they were so troubled by it. So first they start "we are aware of the necessity of such tactics" -- in terms of undercover operations and baiting with contraband -- "we are aware of the necessity of such tactics in so-called victimless crimes such as drug offenses, but the use of these methods when victims are actually harmed" -- and they are talking about the children depicted in these images -- "is inexplicable."
And "moreover" -- this is again Sherman, continuing with the quote from 549 -- "the government's dissemination of the pornographic materials could hardly be described as a 'controlled' delivery." Well, if it's not a controlled delivery where they were able to send it to the defendant and it sat in his house, I think for a period of time, several weeks, and they recovered it ultimately, the scale of lack of control and heedless distribution in this case is mind boggling.
Fieman goes on to point out that on top of ignoring Rule 41 restrictions, on top of acting as child porn distribution kingpins, the FBI's prized NIT could have been delivered and executed without the collateral damage caused by the redistribution of illegal pornographic images.
One of the very troubling things here, as you know from the NIT warrant, the authorization allowed the FBI to deploy the NIT and complete their searches in a matter of a fraction of a second, at the time the targets landed on the home page. So they had authorization to collect all the information they wanted before anybody actually got the content…
Instead, the government kept the site live and not only distributed what was already hosted there, but allowed users to upload new images to be shared and redistributed.
[I] don't know the exact quantity, because all we know from the disclosure is 43 new series [of photos/videos]. But during just that window of time that the FBI was running this site, 43 new series. That means things that haven't been seen from the National Center for Missing & Exploited Children were launched onto, uploaded with the assistance of the FBI through their file hosting feature, onto the site, and have now circulated globally and will never be recovered.
So, not only was the FBI unconcerned about Rule 41, but it was also not that worried that it would be contributing to the world's child porn problem during its investigation. And, it should be pointed out that this is the second time the FBI has seized a child porn site only to keep it running. It did the same thing back in 2012, but that one flew almost entirely underneath the judicial radar.
by Tim Cushing
Mon, Nov 28th 2016 3:23am
from the answer-the-damn-question dept
The DOJ has finally responded to questions posed by several senators about its interpretation of the proposed Rule 41 changes, due to go into effect on December 1st. Arriving shortly before the deadline -- and during the Thanksgiving holiday Black Friday news rush -- the DOJ's letter [PDF] contains a few explanations of its jurisdiction limitation-stripping and roving botnet warrants.
Unfortunately, not much is clarified other than that the DOJ still feels its proposal is nothing more than Rule 41 64-bit -- an update of existing law more in line with today's connected reality. (The DOJ offers no insight on its reluctance to update other outdated laws like the CFAA…) It also appears to believe the Fourth Amendment impact of its "one warrant, thousands of searches" proposal will be minimal and that it will maintain the same level of respect it has shown for privacy protections (also minimal) under the updated rule.
Needless to say, Sen. Wyden and co. aren't impressed by the DOJ's response.
Wyden and Coons were among 11 senators and 12 House members who queried DOJ about the hacking powers expansion last month. The department’s reply, which arrived today, should be “a big blinking warning sign about whether the government can be trusted to carry out these hacks without harming the security and privacy of innocent Americans’ phones, computers and other devices,” Wyden wrote.
The DOJ is still dodging a few questions. One question in particular was completely unaddressed in the DOJ's response. Wyden and his co-signers asked what the DOJ was going to do to prevent forum shopping for compliant judges -- something that would become far more common with jurisdictional limits removed.
The letter does not recount any specific department policies or training that would prevent forum shopping. It does stress police will only be able to seek warrants in districts where activity related to a crime has occurred and that the revised rule uses the same language as existing out-of-district warrant authorities for terrorism cases.
The DOJ either can't answer this or won't answer this. In either case, the lack of response indicates the DOJ isn't interested in preventing law enforcement agencies (like the FBI) from shopping for judges. If there's nothing in place now, it's highly unlikely any guidance will be in place by December 1st. If there is something in place, it's apparently nothing more than a suggestion that law enforcement seek warrants in their own jurisdictions. If the DOJ was truly interested in shutting down forum shopping, it would have begun putting policies in place at any point over the last couple of years while it pursued this "update" of Rule 41.
The letter does say law enforcement agencies won't be able to peek at private files while mucking about the insides of citizens' computers to shut down botnets. But the letter (and the Constitution) both say a lot of things that are great in theory, but less so in practice. Fourth Amendment violations can only be cured by visits to courtrooms, but it's something that's prohibitively expensive and subject to a large number of "GET OUT OF VIOLATION" cards (good faith, plain view, close-but-no-suppression, etc.) issued by presiding judges.
The redux of the changes is still this: if anonymization efforts are made by anyone targeted in a criminal investigation, the FBI, etc. can go find the most compliant judge available to sign off on a single warrant that can be used to search thousands of computers worldwide. It can also do this under the pretext of fighting botnets, performing the same sort of limited search for identifying info, even when all the hundreds or thousands of targets are not suspected of any wrongdoing.
Pretty much the only thing standing between the DOJ's proposal and the December 1st implementation is Congressional members' decision to "opt in" to a shutdown fight -- something the DOJ is clearly hoping won't happen. Wyden's recently-introduced bill would push the adoption back until the middle of next year, but it still requires representatives to express some sort of opinion (yes/no) on rule changes that could easily coast into existence while everyone in Congress is distracted by upcoming holidays and annual budget battles.
by Tim Cushing
Wed, Nov 23rd 2016 12:59pm
from the buying-time dept
Unless someone steps up to push this off course, the DOJ's proposed changes to Rule 41 will become law December 1. That's the key part: doing something. All that has to happen is nothing for the changes to become law. The December 1st date plays right into the DOJ's hands, arriving between two major holidays when legislators have other things on their minds, including the annual Congressional fisticuffs over the federal budget.
The DOJ says the changes are no big deal. Just an "update" on outdated laws. Oddly, it's never shown any interest in updating any other outdated laws (like the CFAA) or pushed for a reconsideration of the Third Party Doctrine, which traces back nearly four decades. When it comes to expansions of power, though, it's apparently time for some "updating."
The proposed changes would allow the FBI to hack thousands of computers around the world with a single warrant, much like it already did during two child porn investigations. Unfortunately for the FBI, its warrant is being met with successful challenges because the agency clearly violated Rule 41 jurisdictional limitations.
In addition, the DOJ wants permission to break into "compromised" computers and poke around inside them without the permission or knowledge of the owners of these computers. It also wants to treat anything that anonymizes internet users or hides their locations to be presumed acts of a guilty mind. The stripping of jurisdictional limits not only grants the FBI worldwide access for digital seizures and searches, but also encourages it to go venue shopping for judicial rubber stamps.
Earlier this year, Sen. Ron Wyden introduced a bill aimed at stopping the DOJ's Rule 41 push. Not much has been heard about this bill since, so Wyden (along with Sens. Coons, Lee, Franken, and Daines) has introduced another bill seeking to prevent a "do nothing" approval of expanding hacking/search powers. The "Review the Rule Act" [PDF] is about as succinct as legislation gets. Here's the complete summary of the proposed legislation (via Naked Security):
To delay the amendments to rule 41 of the Federal Rules of Criminal Procedure.
Wyden's earlier bill hasn't gained any traction and the hopes of a complete rejection before December 1st are nearly nonexistent. So, this bill just asks for a little more time to discuss the implications of the changes. This would move the default approval date back seven months to July 1, 2017.
This would allow representatives more time to fully consider the DOJ's proposal, freed from the time crunch of major holidays and annual federal budget discussions. There's far too much at stake to simply allow the DOJ to roll its Rule 41 ball downhill and past a distracted Congress. Many legislators like procrastination as much as they like not doing anything, so signing off on this proposal shouldn't require much effort, mental or otherwise.
by Tim Cushing
Mon, Nov 14th 2016 11:56am
Court Dismisses Anti-Muslim Troll Pam Geller's Lawsuit Against The DOJ For Facebook's Moderating Actions
from the sue-better,-dumbass dept
Anti-Muslim troll and self-proclaimed First Amendment warrior Pam Geller's stupid lawsuit against the DOJ for social media companies' removal of her Islamophobic posts has reached an end (if only temporarily). DC District Court Judge James Boasberg's decision pretty much aligns with the DOJ's motion to dismiss: in short, Geller is wrong about Section 230, wrong about the DOJ's "enforcement" of this affirmative defense, and not even close to targeting the right entity(ies) in her lawsuit. (via Eric Goldman)
A very short recap: Geller routinely posted anti-Mulism content to social media platforms. These platforms would take her posts down and occasionally suspend her accounts. Geller felt this was censorship (it isn't) so she sued not Facebook, not Twitter, not any other social media service but the federal government. In her view Section 230 of the CDA is not a defense, but an excuse for social media platforms to remove her dubious contributions. What Geller ignores is that Section 230 is likely the only reason her posts stay live at any platform for any length of time, simply because it shields Facebook et al from being held civilly liable for content created by users.
Boasberg's opinion [PDF] only runs 11 pages but it's more than enough to dispense with Geller's ridiculous legal arguments. He gets right to the crux of the issue in the first paragraph.
Facebook, YouTube, and Twitter may be host to a mélange of cat videos, musings from long-lost cousins, and odes to Beyoncé, but not all content is welcome on these social-media platforms. Pursuant to their private terms of service, the companies have repeatedly taken down some of Plaintiffs’ posts criticizing Islam. Plaintiffs — two non-profit organizations and their leaders — allege that such action constitutes censorship and discrimination on the basis of content, viewpoint, and religion. Yet a quick glance at this case’s caption reveals a surprise: Plaintiffs have not named the companies as Defendants. Instead, they have sued only the United States Attorney General, alleging that a provision in a federal statute — § 230 of the Communications Decency Act — enables the companies’ censorship and discrimination and violates the First Amendment.
And nails this point home again and again.
These and other actions led Plaintiffs to conclude that Facebook, YouTube, and Twitter employ their company policies to suppress the speech and activities of disfavored speakers, including Plaintiffs, and to discriminate against “certain political parties, national origins, and religions,” particularly Israelis, Jews, and conservatives. Yet Plaintiffs have not brought this suit against the social-media companies. Instead, in July 2016, they named the United States Attorney General as the lone Defendant.
The court also addresses Geller's convoluted argument that the DOJ -- via Section 230 of the CDA -- is somehow responsible for content moderation efforts performed by Facebook and others.
[Section 230] does not grant the Attorney General any power to impose criminal or civil liability, nor to direct or forbid interactive computer services to take any particular action vis-à-vis third-party users, including deleting objectionable content. Indeed, § 230 affords Defendant no role — enforcement or otherwise — of any kind, nor does it delegate any enforcement role to any federal agency or federal official.
This brings it back to a question of standing: Geller and her co-plaintiffs have none. The attorney general has no power to enforce Section 230. Even if the court were to grant Geller standing and find her arguments actionable, the remedy Geller seeks would have zero effect on the actions she's suing over.
It would not constrain Facebook, Twitter, or YouTube from invoking § 230 as a defense to any state-law discrimination or censorship action brought against them by Plaintiffs, nor would it restore Plaintiffs’ removed content or legally prevent the social-media platforms from deleting or otherwise editing Plaintiffs’ content in the future.
And the court isn't interested in handing down orders based on Geller's theoretic extrapolations.
Plaintiffs’ argument rests on the entirely speculative implication that Facebook, Twitter, and YouTube would voluntarily change course and permit Plaintiffs’ censored content to stand were the Attorney General to declare § 230 unconstitutional. Indeed, even absent the affirmative defense supplied by § 230, the private social-media companies could argue that they cannot be compelled to publish a particular message.
Which brings this all back to the original -- and strongest -- point of this decision: lawsuits are generally more successful when they target the right defendants. [emphasis in the original]
If Plaintiffs remain unhappy with the companies’ content decisions, they can sue them and attempt to defeat any § 230 defense that is raised — e.g., by invoking the same constitutional arguments offered here.
Section 230 has been under attack recently and courts have, unfortunately, been humoring some novel legal theories. Fortunately, Geller's legal theories are far too novel to be entertained by this court. Sure, it's an attack on Section 230 protections, but only in the most abstract definition of the word. Geller's case never had a chance, and she seems -- at least to date -- unwilling to go directly at the social media platforms she feels have wronged her. But she's free to spend her money fighting pointless legal battles, just like an other US citizen.
by Tim Cushing
Tue, Nov 8th 2016 2:42pm
Unsealed Warrant Shows FBI Malware Affected Innocent Tor Users While Agency Ran More Than 20 Child Porn Sites
from the supporting-justifications-cited:-1.-the-ends dept
Thanks to the ACLU's push to unseal documents related to the FBI's targeting of TorMail users and Freedom Hosting, the warrant affidavits supporting its NIT deployment have been released by the agency. Joseph Cox of Motherboard reports:
In 2013, the FBI received permission to hack over 300 specific users of dark web email service TorMail. But now, after the warrants and their applications have finally been unsealed, experts say the agency illegally went further, and hacked perfectly legitimate users of the privacy-focused service.
“That is, while the warrant authorized hacking with a scalpel, the FBI delivered their malware to TorMail users with a grenade,” Christopher Soghoian, principal technologist at the American Civil Liberties Union (ACLU), told Motherboard in an email.
The 99-page affidavit [PDF] is lightly-redacted but contains some completely uncensored and surprising admissions from the agency. Contrary to its post-release statements about the scope of the "narrowly-tailored" warrant not being exceeded, the actual contents show the deployment of the NIT to unmask Tor users is much more aligned with Soghoian's "grenade" description.
[T]he NIT… will be deployed on the TARGET ACCOUNTS while the TARGET ACCOUNTS operate in the District of Maryland, to investigate any user who logs into any of the TARGET ACCOUNTS by entering a username and password.
In reality, the deployment occurred the moment a user landed on any site utilizing Freedom Hosting -- not just the child porn sites the FBI had taken control of. And the number of sites the FBI was running during this investigation is staggering.
According to the new documents, the NIT was used against users of 23 separate websites.
If you thought the FBI's admin efforts for two separate child porn websites (in two investigations spaced a couple of years apart) were questionable, you have to wonder about the morality (or legality) of the US government becoming one of the world's largest distributor of child pornography. Researcher Sarah Jamie Lewis notes that, according to her numbers, the FBI could have been operating close to half (if not more) of the child porn websites in existence.
And, as for the claims the FBI didn't exceed the scope of the warrant: that's clearly not true. The warrant was issued in Maryland and was delivered to users all over the world. The supporting affidavit contains descriptions of one site apparently located in Hungary, but never makes any attempt to limit the FBI efforts to within US borders, much less Maryland.
The NIT violated Rule 41 limitations and then exceeded the FBI's own assertions about targeting specific users. It continues to deploy the same malware against Tor users with a similar lack of concern for jurisdictional restrictions or its implicit invitation for foreign law enforcement agencies to engage in the same tactics against US citizens.
by Karl Bode
Thu, Nov 3rd 2016 9:33am
from the room-full-of-villains dept
Fast forward to this week, when the Department of Justice announced it was suing DirecTV for being the "ringleader" in a collusion effort involving the channel. According to the full DOJ complaint (pdf), DirecTV (now owned by AT&T), worked covertly in concert with local competitors Cox, Charter (before it owned Time Warner Cable) and AT&T (before it owned DirecTV) to coordinate a refusal to pay Time Warner Cable's high prices. The DOJ's statement notes that these companies engaged in "unlawful information exchanges" to coordinate this refusal in violation of antitrust law:
"As the complaint explains, Dodgers fans were denied a fair competitive process when DIRECTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace."Right, except calling any of this "competition" is being rather generous. It's an interesting case in that Time Warner Cable had been broadly considered the bad guy in this equation for the last three years by Dodgers fans, 70% of which couldn't watch their favorite team despite living in Los Angeles. And even after the DOJ lawsuit was filed this week, outlets like the Los Angeles Times were perfectly willing to ignore the illegal behavior, claiming that collusion was ok because it punished Time Warner Cable's cash grab to the indirect benefit (sort of) of consumers:
"At a time when there’s open rebellion against soaring pay-TV prices, these companies were clearly acting out of self-interest. The last thing they wanted was to give people another reason to cut the cord. Whatever their primary motive, though, they also were defending their customers’ interests. That’s rare and welcome behavior from an industry that all too often regards consumers as ATMs from which it can make frequent withdrawals."And while some of that may be true, collusion is still collusion, and the fact that Dodgers fans still can't watch their favorite team can hardly be seen as a win. For whatever it's worth, AT&T, currently trying to sell its $85 billion acquisition of Time Warner (not to be confused with Time Warner Cable) to regulators, was quick to remind everybody that it didn't own DirecTV at the time this occurred:
"The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to LA Dodgers baseball. We make our carriage decisions independently, legally and only after thorough negotiations with the content owner. We look forward to presenting these facts in court."It's an amazing case where in reality everybody is the bad guy, and despite companies colluding and covertly exchanging sensitive data, nobody really wound up benefiting. Well, except perhaps those that were able to cut the cord because they don't watch baseball.