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Posted on Techdirt - 18 December 2018 @ 6:27am

Mystery Lobbying Group Using Huawei Security Hysteria To Target Sprint, T-Mobile Merger

from the ill-communication dept

So a few months back, a group mysteriously calling itself "Protect Amerca's Wireless" popped up on the internet and began attacking the Sprint, T-Mobile merger. The campaign, which has all the usual signs of astroturf, takes particular aim at both companies' use of Huawei network hardware -- gear that the organization insists "could give countries like Saudi Arabia, China, Germany, and Japan direct access to our networks through the use of foreign-made networking equipment and billions of foreign money."

In short, the mystery group is piggybacking on the recent hysteria surrounding Huawei to try and scuttle the merger, which is certainly a problematic merger, but largely for employment and competition reasons.

Like most policy and political influence efforts, the campaign doesn't list its funders on its website, simply insisting it's an organic coalition of a few think tanks and some "foreign policy and national security professionals." I reached out to the group for more details on its financing, and was told (falsely) that the group couldn't tell me who finances it because as a 501(c)(3) it's prohibited by law from doing so.

So we've noted for a while that while some of the criticism of Huawei has been justified, much of it has been manufactured by Huawei competitors like Cisco.

And while recent allegations that Huawei may have tap-danced around Iranian sanctions may or may not be true, the claims that the company routinely spies on Americans for the Chinese government has never been publicly proven. In fact, an 18 month study by the White House in 2012 (the last time this hysteria crested) found no evidence supporting such allegations. Germany just this week stated it wouldn't join the Huawei vilification party until somebody provides, you know, actual evidence.

US press coverage of the Huawei story usually fails to mention any of this. Nor is it mentioned that the United States has routinely been busted doing far worse. The Snowden docs, for example, showed how the NSA broke into Huawei, stole source code, and implanted backdoors, something that seems kind of important in conversational context. It's a solid example of how the US tech press isn't particularly keyed into its own nationalistic myopia. It also exemplifies the States' bad habit (both by government and the press) of pushing the idea that dubious and unethical behavior is only okay when we do it.

I'm still digging into who runs Protect America's Wireless (it's worth at least noting that former Rep. Mike Rogers, now an AT&T consultant, was at the outfit's launch). In the interim, it looks like both Sprint and T-Mobile believe are being told by the government that they'll likely have their competition-eroding merger approved if their owners (Deutsche Telekom and Softbank) are willing to remove all Huawei gear from their network and stop using the supplier moving forward:

"T-Mobile US Inc and Sprint Corp believe their foreign owners’ offer to stop using Huawei Technologies equipment will help with the United States clearing their $26 billion merger deal, sources said, underscoring the lengths to which Washington has gone to shut out the Chinese company."

Having watched the Trump FCC's other efforts to help blacklist Huawei, I'd be willing to bet that one of their only meaningful conditions affixed to their gushing approval of the deal will be promises by T-Mobile and Sprint that they won't use Huawei gear (omitted: the fact that neither currently does). This will help the FCC pretend that it hasn't abdicated its role as watchdog, with national security chatter obfuscating many of the terrible aspects of the deal (like the 30,000 potential job losses or the dramatic reduction in overall competition).

The duo get their unpopular merger, Cisco gets more business thanks to facts-optional protectionism, and consumers get bupkis. See how this game works?

Given all of the legitimately dubious things China routinely does, defending Huawei isn't exactly a hill I'm excited to die on. Still, I've been absolutely fascinated by the selective reasoning and hypocrisy as Huawei is increasingly blacklisted. It's particularly odd since the lax security in the internet of things and consumer network hardware space -- arguably just as big of a threat to national security -- receives only a tiny fraction of the same breathless attention by many of these same folks.

Huawei gets oddly singled out as some kind of unique bogeyman. In reality most major telecom operators, including US operators like AT&T, are every bit as sketchy as the allegations levied at Huawei. Dubious lobbying efforts? Check. Illegal and unethical efforts to screw consumers? Check. Massive corruption scandals? Check. Massive, legally-dubious wholesale domestic spying operations? You betcha. Most major telecom operators are government-pampered natural monopolies that don't have to play by the rules and more often than not win the most lucrative government contracts, thanks to their cozy relationship with intelligence.

Huawei may or may not have actually been involved in spying. Maybe someday somebody will actually provide public evidence proving they do. In the interim, it's pretty clear a sizable chunk of the current Huawei hysteria is being generated by the same companies that don't want to compete with Huawei, a layer of protectionism the press should at least mention in passing during the next round of pearl clutching.

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Posted on Free Speech - 17 December 2018 @ 10:44am

FCC's O'Rielly Keeps Claiming, With Zero Evidence, That Community Broadband Is An 'Ominous' Threat To Free Speech

from the misdirection dept

So back in October, we noted how FCC Commissioner Mike O'Rielly attended an event where he falsely claimed that towns and cities that decide to build their own broadband networks (usually due to market failure) were somehow engaged in an "ominous" assault on free speech. The only "evidence" O'Rielly provided was that community ISPs include language in their terms of service preventing users from being hateful shits online, the same exact language you'll find in the TOS' from any number of private ISPs, from Comcast to AT&T.

There's absolutely no evidence that any of the 750 towns and cities that have tinkered with this idea ever trampled anybody's free speech rights.

Yet after being criticized by several press outlets (including this one), O'Rielly apparently decided his best bet would be to... double down on his false claims. In a new blog post over at the FCC website, O'Rielly again tries to insist that community broadband is a giant threat to free speech, but this time he attempts to vastly expand his argument in a bid to make it sound more logical. The tap dancing around his lack of evidence in his original claim is particularly amusing:

Bizarrely, my critics further responded that I had failed to provide historical “evidence” of First Amendment mischief by muni networks. Perhaps they were confused about how a constitutional violation works. A state action or law can violate the First Amendment as applied or on its face. In the case of the latter, the law or act is always unconstitutional, and in the case of the former, it is only unconstitutional to the extent of a particular application. My argument was not based on as-applied historical instances of censorship, but on facial grounds. That is, certain terms in the muni broadband codes I cited facially violate the First Amendment.

That's a misdirection and a dodge, though putting evidence in quotes is a nice touch.

O'Rielly's right on one point: some fully government-owned community ISPs could face legal challenge for trying, as government operators, to censor hate speech via mouse print. As government operators, community ISPs actually have a greater Constitutional burden to avoid censoring content online than their private counterparts (a major reason, you'll note, that none have actually tried). That said, as local operations that have to be voter approved, community ISPs also have more direct accountability to the communities they serve. Certainly more than a company like Comcast or AT&T.

O'Rielly's problem is he then takes his core tenet to make a false claim: that because some community ISP mouse print isn't legally sound, allowing community broadband to exist threatens free speech.

Recall, O'Rielly's original speech argued that these ISPs have "have engaged in significant First Amendment mischief." And again, that never happened. It might also be worth noting that one of the ISPs O'Rielly singled out was Chattanooga's EPB, the government utility and broadband ISP Consumer Reports just rated the best broadband provider in America. Throughout eighteen paragraphs, O'Rielly still can't provide a single instance of hard evidence to support his original claim.

There's also a lot of components to the community broadband conversation O'Rielly's rambling post makes it clear he'd rather not talk about.

The biggest thing O'Rielly would prefer people not understand is that community broadband is an organic response to market failure. It's a group of angry voters, after decades of being ignored by private ISPs like Comcast, deciding to either build a broadband network themselves, or strike a public private partnership with a company like Tucows or some other private operator. Obviously giant, entrenched incumbent ISPs have never much liked this threat of added competition. Neither have the lawmakers and politicians that generally act as a rubber stamp to those interests.

As such, demonizing such operations as "government run amok" -- as opposed to real human beings with legitimate grievances expressing their democratic rights -- has long been the fashion trend among folks like O'Rielly. And you certainly shouldn't point out to O'Rielly that studies show such community-run networks tend to offer better service, lower prices, and more transparency in billing than most incumbent ISPs. Dismissing this entire trend as "a perverse form of socialism" shows a painful misunderstanding of what's actually happening.

And the biggest thing O'Rielly would rather nobody talk about is his and Ajit Pai's proposed "solution" to this "problem": protectionism. For the better part of two decades, ISPs have literally written and purchased more than 21 state laws that either outright ban, or greatly hinder, the ability for towns and cities to build their own networks or strike creative broadband solutions like public/private networks. Both Pai and O'Rielly have breathlessly supported such laws, in pretty stark contrast to traditional Conservative claims of adoring "state rights" and disliking unnecessary regulatory market intervention.

Again, O'Rielly's just engaged in fear mongering in a bid to scare folks away from an organic, democratic response to decades of sketchy broadband availability and limited competition. Communities aren't getting into the broadband business because they think it's fucking fun, they're doing so because of market failure. If ISPs want to stop the rising tide of community broadband, the solution is simple: offer better, cheaper, more widely available broadband. They don't want to do that, so instead you get ample misdirection from the issue at hand, and a bizarre demonization of folks who are actually trying to fix the problem.

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Posted on Techdirt - 14 December 2018 @ 1:30pm

FCC Does Wireless Carriers Another Favor By Reclassifying Text Messages

from the who-needs-oversight dept

The FCC this week voted yes on a new proposal the agency says will help combat the scourge of robocalls, but critics and consumer groups say opens the door to wireless carriers being able to censor text message campaigns they don't like, or SMS services that may compete with their own offerings.

In a 3-1 party line vote, the FCC approved (pdf) redefining text messages as an "information service," therefore freeing such services from FCC oversight. In its announcement, the agency was quick to insist that this was done specifically to help carriers better fight robocalls and robotexts without worrying about running afoul of government rules:

"In today’s ruling, the FCC denies requests from mass-texting companies and other parties to classify text messaging services as “telecommunications services” subject to common carrier regulation under the Communications Act—a classification that would limit wireless providers’ efforts to combat spam and scam robotexts effectively. Instead, the FCC finds that two forms of wireless messaging services, SMS and Multimedia Messaging Service (MMS), are "information services" under the Communications Act. With this decision, the FCC empowers wireless providers to continue taking action to protect American consumers from unwanted text messages.

Critics, however, charge that this was another example of the FCC's motives not being made entirely clear to the public at large.

As we've noted previously, this particular debate over text message classification began some time back, after Verizon decided to ban a pro-choice group named NARAL Pro-Choice America from sending text messages to Verizon Wireless customers that had opted in to receiving them. Ever since then, consumer groups, worried that cellular carriers would use their power as gatekeepers to stifle certain voices, have been urging the FCC to declare text messages a “telecommunications service," making it illegal for carriers to ban such select SMS services.

This being the Ajit Pai FCC, the agency went the complete opposite direction in a move that largely benefits wireless carriers. The fight somewhat mirrors the net neutrality battle involving whether to classify ISPs themselves as "information services" under the telecom act (freeing them from significant oversight), or "telecommunications services"--keeping them locked into oversight by the FCC. Consumer groups like Public Knowledge were quick to issue statements pointing out this had everything to do with ensuring telecom giants are less accountable, and little to nothing to do with actually combating robocalls and robotexts:

"No one should mistake today’s action as an effort to help consumers limit spam and robotexts. There is a reason why carriers are applauding while more than 20 consumer protection advocates -- along with 10 Senators -- have cried foul. This decision does nothing to curb spam, and is not needed to curb spam. It is simply the latest example of Chairman Pai’s radical agenda that puts companies ahead of consumers. We urge members of Congress to overturn this decision and ensure that wireless carriers cannot block or censor personal text messages."

Those concerns were mirrored by FCC Commissioner Jessica Rosenworcel in her lone dissent:

Like net neutrality, gutting oversight of companies with decades of anti-competitive behavior under their belts (not to mention flimsy and dwindling organic free market pressure to behave) generally doesn't work out very well for end users or those looking to compete with these entrenched network operators. It's worth noting the ruling doesn't apply to the next-generation texting standard, RCS, though carriers like Verizon have already called for that to occur in future orders; something Ajit Pai is likely to approve as well.

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Posted on Techdirt - 14 December 2018 @ 6:46am

Big Telecom Wants To Tax Netflix To Pay For Broadband Upgrades ISPs Refuse To Deploy Themselves

from the ride-my-pipes-for-free dept

Last year, FCC boss Ajit Pai repeatedly hyped the creation of a new "Broadband Deployment Advisory Council" (BDAC) purportedly tasked with coming up with creative solutions to the nation's broadband problem(s). Unfortunately, reports just as quickly began to circulate that this panel was little more than a who's who of entrenched telecom operators with a vested interest in protecting the status quo. The panel has yet to really offer up a meaningful proposal, but it has been rocked by several resignations due to cronyism, and at least one member who was arrested for fraud.

As the FCC looks to expand the council's charter for another few years, the panel itself has been pushing a plan that pretty clearly highlights the cronyism intentionally inherent in its design. More specifically, the panel has been pushing the FCC to adopt a new system that urges states to tax Netflix and Google to fund rural broadband deployment:

"A Federal Communications Commission advisory committee has proposed a new tax on Netflix, Google, Facebook, and many other businesses that require Internet access to operate. If adopted by states, the recommended tax would apply to subscription-based retail services that require Internet access, such as Netflix, and to advertising-supported services that use the Internet, such as Google and Facebook. The tax would also apply to any small- or medium-sized business that charges subscription fees for online services or uses online advertising."

To be clear, this is extremely unlikely to come to pass, even in the most myopic of states. Still, if you're playing along at home, this is just an extension of a multi-decade effort by ISPs to force somebody else to pay for network upgrades they refuse to fund, despite having received countless billions to accomplish this goal. In fact this push to have content companies pay for ISP network upgrades is really what began the net neutrality fight back in 2003 or so, when former AT&T CEO Ed Whitacre proclaimed that Google should pay him an additional troll toll just to access his network. You know, just because.

This mantra was long rooted in telecom envy of Silicon Valley online ad revenues, and a belief by telecom executives that they're somehow "owed" a cut of those revenues. Over time it evolved into endless claims by telecom sector allies, think tankers, and other cronies that companies like Google and Netflix were somehow getting a "free ride" on incumbent ISP networks, despite having invested billions into their own global transit and network operations. Over time it became a global telecom executive mantra of sorts, even if it never made coherent sense.

People forget, but it's this telecom industry attempt to "double dip" that truly launched the modern net neutrality debate just about fifteen years ago. That point has gotten lost as ISP efforts to extract unearned rents have gotten more elaborate over the years, but at its heart the fight has always been about monopoly ISPs trying to offload network construction and operation costs off to somebody else, while already earning fat revenues thanks to limited competition.

Of course AT&T, who generally drives most dubious DC telecom policy moves and would reap the lion's share of said tax, had originally tried to insist that the panel's recommendations (and the proposed tax) should apply to pretty much all traffic that touches the internet:

"An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. The committee ultimately adopted a slightly more narrow recommendation that would apply the tax to subscription services and advertising-supported services only."

The real problem here (or one of many) is that companies like AT&T and Verizon were already given billions upon billions in taxpayer dollars to fund these upgrades years ago. American history is filled with examples of these companies getting massive tax cuts or subsidies to deploy fiber, then using their lobbying prowess to wiggle out from under the obligations after the fact. Had the government ever conducted any real audit, you'd likely find American taxpayers have paid to upgrade the country with fiber several times over, yet still somehow often only have access to pricey, sluggish DSL.

That, nearly two decades later, AT&T's still running a lame variation of the same ploy is equal parts frightening and sad, but seems to be par for the course for a country that refuses to learn from history, and an FCC that has made it abundantly clear it's a glorified rubber stamp for lumbering natural monopolies and their very worst instincts.

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Posted on Techdirt - 13 December 2018 @ 12:03pm

FCC Says It Will Finally Investigate Nation's Bullshit Broadband Availability Maps. Maybe.

from the rose-colored-glasses dept

For years we've noted how the FCC's broadband availability maps are just comically bad. If you'd like to confirm that take, you can just plug your home address into the agency's $350 million broadband availability map and watch as entire ISPs and speed availability are largely hallucinated. This is a problem that never gets fixed, largely because the nation's entrenched broadband providers (and the politicians paid to love them) have a vested interest in pretending that the US broadband industry isn't just an aggressive hodge-podge of broken monopolies and duopolies nickel-and-diming the hell out of captive customers.

Senators have been bitching about the maps a little more lately as states vie for FCC Mobility Fund Phase II Auction subsidies, which will dole out $4.5 billion to under-connected states over the next decade. Back in August, Montana Senator Jon Tester went so far as to suggest that said maps "stink" and that somebody should have their "ass kicked" for the terrible data the FCC uses for both subsidies and policy.

Last Friday the Sisyphean quest to stop our maps from sucking turned an interesting corner, when the FCC announced (pdf) it was finally launching an investigation into whether "one or more" mobile carriers submitted false coverage data to the FCC. The FCC appears to be responding to a complaint (pdf) filed earlier this year by the Rural Wireless Association (RWA), which stated that Verizon was "grossly overstating" the company's 4G LTE broadband coverage in its filings with the FCC.

FCC boss Ajit Pai likes to talk a lot about how he's "closing the digital divide," despite the fact his policies (like killing net neutrality or weakening the very definition of the word "competition") generally tend to make problems of broadband availability and affordability worse. But the pressure coming from states as they clamor for their chunk of subsidies appears to have finally forced Pai (whose post-FCC political aspirations are fairly obvious) to take action:

"My top priority is bridging the digital divide and ensuring that Americans have access to digital opportunity regardless of where they live, and the FCC’s Mobility Fund Phase II program can play a key role in extending high-speed Internet access to rural areas across America,” said Chairman Pai. “In order to reach those areas, it’s critical that we know where access is and where it is not. A preliminary review of speed test data submitted through the challenge process suggested significant violations of the Commission’s rules. That’s why I’ve ordered an investigation into these matters. We must ensure that the data is accurate before we can proceed."

Those concerns were mirrored by Pai's fellow Commissioner Brendan Carr:

"It is deeply concerning that FCC staff's preliminary analysis of the challenge data shows that one or more major carriers potentially violated the Commission's MF-II mapping rules and submitted incorrect maps. Today's announcement aligns with concerns I shared with Chairman Pai, and I look forward to working with him and our able staff to complete this investigation."

A big part of the Mobility Fund Phase II subsidy process involves incumbent carriers like Verizon providing accurate broadband availability maps to determine which areas are in most dire need of subsidized help. But because companies like Verizon don't want to both advertise their network shortcomings or help drive funds to would-be competitors, they tend to overstate coverage of both mobile and fixed-line networks. Last August, Verizon denied to Ars Technica that its broadband availability data was inaccurate after the data was called a "sham" by the RWA.

This rose-colored glasses approach to broadband mapping is decades old, so any surprise you're hearing from government probably isn't all that authentic. As such, any applause should be held until actual action is taken and the companies involved are adequately punished (especially given Verizon used to be Pai's employer). Still, it's great to see Pai and the FCC at least pay some attention to a problem that has plagued the telecom sector for years, allowing it to paint an inaccurate picture of broadband availability and competition, thereby hampering any efforts to actually do something about it.

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Posted on Techdirt - 13 December 2018 @ 6:28am

Big Telecom Claims Oversight & Accountability Violates Its First Amendment Rights

from the do-not-pass-go,-do-not-collect-$200 dept

The Ajit Pai FCC's attacks on net neutrality have received ample attention. Less talked about is the fact that the attack on net neutrality was just one part of a much broader effort to eliminate what was already pretty tepid oversight of one of the least liked and least competitive tech sectors in America.

The Pai FCC's Orwellian-named "Restoring Internet Freedom" order not only killed net neutrality rules, it dramatically rolled back FCC authority over big ISPs like Comcast, shoveling any remaining authority to an FTC ISP lobbyists know full well lacks the authority or attention span for telecom oversight. In addition to that, the FCC (again at big telecom's behest) has set about trying to claim states can't protect consumers either. With neither competition nor state or federal oversight keeping natural monopolies in line, it shouldn't take a degree in genetics to ferret out the potential pitfalls.

One of the key arguments underpinning most of the telecom sector's lobbying shenanigans of late involves one central claim: that state or federal efforts to hold giant ISPs accountable somehow violates Comcast and other ISPs' First Amendment rights. You'll recall ISPs tried to claim that net neutrality somehow violated ISPs' free speech rights, despite the fact that as simple conduits they don't engage in "editorial" decisions, making the argument rather silly.

The courts didn't agree with broadband providers then, but in his dissenting opinion during those earlier court battles new Supreme Court Justice Brett Kavanaugh did. Susan Crawford over at Wired offers up a solid piece explaining why, with Kavanaugh now positioned in the highest court of the land, ISPs are very eager to start pushing this argument more forcefully in the months and years to come:

"The addition of Justice Brett Kavanaugh to the Supreme Court roster gives the industry a significant boost. In a 2017 DC Circuit dissenting opinion, Justice Kavanaugh made it clear that he supports giving internet access providers "speaker" privileges, saying that "the First Amendment bars the Government from restricting the editorial discretion of Internet service providers."

She goes on to explain how the perils of embracing this argument opens the door to a future where little to nothing constricts Comcast's worst impulses:

"Treating the transmission of data as "speech" will make it virtually impossible for the government to say anything at all about internet access. If the government tries to regulate someday, you can be confident that the industry will make a lot of noise in the form of lawsuits focused on cable's First Amendment rights to carry out its "editorial discretion," in hopes that Justice Kavanaugh will get a chance to lock in the industry's status as a member of the press. The "speech" of a handful of giant companies will be privileged over the ability of all Americans—including all other American businesses—to communicate."

Again, the lower courts so far haven't much agreed with ISP arguments on this front. The claim was shot down during several court rulings and appeals during the net neutrality fight, and shot down again recently when Charter tried to wiggle out of allegations of racially-motivated treatment of a minority-owned broadcast channel Charter booted from its cable lineup. Charter (aka Spectrum) has also flirted with the argument unsuccessfully in its ongoing battle with New York State over years of poor service and violated merger obligations.

Again, ISPs are simply conduits to information, not acting as editors, making the whole thing a rather stupid argument. But it's a stupid argument being made in an era when stupidity is decidedly en vogue; and ISPs' very much hope to use it as a blunt weapon should any of these fights stumble their way to the Supreme Court over the next few years.

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Posted on Techdirt - 12 December 2018 @ 1:31pm

The FBI Is Now Looking Into Those Bogus Net Neutrality Comments

from the ill-communication dept

So we already knew numerous reporters, the GAO, and the New York State AG's office are already looking into who was behind the millions of bogus comments that plagued the FCC's net neutrality repeal. And we've already noted how the Ajit Pai FCC has been trying its very best to hinder those inquiries, whether we're talking about the way that it has been blocking and stalling on journalist FOIA requests, or actively ignoring numerous, previous inquiries from law enforcement.

The FCC's efforts to obfuscate the culprit by refusing to share data on this subject may have just become more... complicated. Over the weekend, Daily Beast reporter Kevin Collier noted that two additional AG's offices (Massachusetts and Washington, DC) -- and the FBI -- have also started digging into those fake comments as well:

"The Justice Department is investigating whether crimes were committed when potentially millions of people’s identities were posted to the FCC’s website without their permission, falsely attributing to them opinions about net neutrality rules, BuzzFeed News has learned. Two organizations told BuzzFeed News, each on condition that they not be named, that the FBI delivered subpoenas to them related to the comments."

New York's AG began its investigation last year, but stated in a public letter a year ago that the FCC had actively blocked all efforts by the AG to obtain server, API, and other data that could help identify who was behind the fraudulent comments, some of them mysteriously made by dead people. The AG's office stated Pai's office ignored nine inquiries over a period of five months for more details:

"We made our request for logs and other records at least 9 times over 5 months: in June, July, August, September, October (three times), and November.

We reached out for assistance to multiple top FCC officials, including you, three successive acting FCC General Counsels, and the FCC’s Inspector General. We offered to keep the requested records confidential, as we had done when my office and the FCC shared information and documents as part of past investigative work.

Yet we have received no substantive response to our investigative requests. None."

According to the NY AG's office, about 9.5 million of the more than 22 million comments filed with the FCC during the repeal's open comment period were filed using peoples' names without their consent (including my own and those of two Senators). Last October, the New York AG announced they had expanded their probe, issuing subpoenas to both numerous ISP-linked lobbying and policy organizations (like the industry's dubious Broadband for America policy vessel) as well as a few pro net neutrality consumer groups.

Last week, numerous outlets falsely reported that "Russia" was behind these comments. There's no actual evidence of that (500,000 Russian email addresses were used, but that doesn't mean Russia itself was involved). As we've seen during the similar bogus comments plaguing other US government proceedings in recent years, the usual culprit is almost always the companies that stand to benefit from the regulatory efforts in question, since there's several DC policy shops that apparently sell these kinds of services (read: bogus support for terrible policies) as a value added service.

And while it's pretty clear that the Ajit Pai FCC doesn't want anybody knowing which firm tried to stuff the ballot box and who was funding the initiative, the involvement of the DOJ and several additional AG offices means hiding the truth just got immeasurably more difficult. And depending what investigators find, that could seriously complicate next February's opening arguments in the net neutrality lawsuit against the FCC, which, if the FCC and its ISP allies lose, could end with the restoration of the FCC's 2015 rules, bringing us fill circle.

If it turns out the broadband industry or some proxy organization paid a DC lobbying firm to stuff the ballot box (which has always seemed the most likely explanation given historical precedent), such a self-inflicted wound would be utterly legendary.

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Posted on Techdirt - 12 December 2018 @ 6:24am

If You're Surprised By Verizon's AOL, Yahoo Face Plant, You Don't Know Verizon

from the yet-another-face-plant dept

So for years we've been pointing out that Verizon's attempt to pivot from grumpy old telco to sexy new Millennial ad brand hasn't been going so well. Oddly, mashing together two failing 90s brands in AOL and Yahoo, and renaming the coagulated entity "Oath," didn't really impress many people. The massive Yahoo hack, a controversy surrounding Verizon snoopvertising, and the face plant by the company's well-hyped Go90 streaming service didn't really help.

This week, Verizon was forced to acknowledge that Oath was now effectively worthless, at least in full context of what Verizon paid for it, and the company's past claims that the company would be taking on Facebook and Google in the online advertising wars for a generation to come:

"Verizon announced Tuesday that it would take a $4.6 billion writedown on its the media unit, which includes Yahoo and AOL. Oath's brand value is now worth just $200 million, according to Verizon. That's a stunning decrease in value since it formed in 2017. Verizon said Oath's brand was worth $4.8 billion when it last accounted for the company's goodwill valuation. With virtually no goodwill brand value, Oath's overall value (assets and goodwill) is now worth half of what it was a few years ago.

While some folks reacted with "shock" on Twitter, none of this should really have been a surprise to anybody who has watched Verizon do business over the last decade or two.

Pretty much every time Verizon wanders outside of its core competencies (operating admittedly excellent networks, lobbying to hamstring competition, being misleading about net neutrality), Verizon falls flat on its face. Whether it's the company's failed Go90 platform, failed video joint venture with RedBox, failed news website Sugarstring (which you may recall tried to ban reporters from talking about surveillance or net neutrality), its app store, its "me too" VCAST apps, or any of a dozen other countless efforts to expand into less familiar territory, Verizon failed. Usually semi-spectacularly.

This happens because having spent the better part of a generation engaged in turf protection and lobbying, telcos really can't innovate. We've known this for more than a decade, yet somehow, each time Verizon announces some new pivot, we forget. Telecom executives tend to think they can overcome this character flaw via megamerger, which usually just saddles the company with oodles of additional debt, but doesn't really address any of the sector's core shortcomings, built on the back of being largely government-pampered natural monopolies for the better part of a generation.

A big part of Verizon's attempted pivot to Millennial video ads was courtesy of former CEO Lowell McAdam, who left the company last summer. His predecessor, Ivan Seidenberg, believed that Verizon should remain focused on what it does best (sometimes): building better, faster networks. Seidenberg was a big reason for the company's $24 billion push into pure fiber with "FiOS." McAdam came in, froze most of those deployments, then tried to turn a legacy telco into Google. It didn't work, and anybody who is surprised by that hasn't watched Verizon do business.

All of that said, a company SEC filing effectively blamed McAdam and his team for the failure. As of this writing, that appears to have been enough to satisfy the company's investors, who are clearly eager to ride the hype waves emanating from Verizon's next big unfulfilled promise.

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Posted on Techdirt - 11 December 2018 @ 6:28am

Mobile Location Scandals Keep Making Facebook's Privacy Flubs Look Like Child's Play

from the ill-communication dept

We've noted a few times now that while Facebook gets a lot of justified heat for its privacy scandals, the stuff going on in the cellular data and app market in regards to location data makes many of Facebook's privacy issues seem like a grade-school picnic. That's something that was pretty well highlighted by the recent Securus and LocationSmart scandals, which showcased perfectly how cellular carriers and location data brokers routinely buy and sell your daily travel habits with only a fleeting effort to ensure all of the subsequent buyers and sellers of that data adhere to basic privacy and security standards.

Over the weekend, the New York Times had an interesting read that offers some fresh insight into just how commonly your daily location data is traded and shared without much in the way of meaningful protection or oversight. There's a certain naive shock by both the Times authors and its subjects as they suddenly realize that apps on mobile devices routinely hoover up users' daily movement patterns, often without anything in the way of real consent or transparency, then sell that valuable data to every Tom, Dick, and Harry in a bid to monetize it:

"The app tracked her as she went to a Weight Watchers meeting and to her dermatologist’s office for a minor procedure. It followed her hiking with her dog and staying at her ex-boyfriend’s home, information she found disturbing.

“It’s the thought of people finding out those intimate details that you don’t want people to know,” said Ms. Magrin, who allowed The Times to review her location data.

The Times investigation found that at least 75 companies routinely receive anonymous, precise location data from apps that collect location data but fail to clarify how that data is used. Several of the firms tracked by the Times note they routinely collect data on more than 200 million mobile devices; data that in many instances is so granular it's updated as many as 14,000 times a day. Of course if you've been paying attention, location data has been a gold mine for cellular carriers (and everybody in the chain) for the better part of the last decade as it's sold to everyone from city planners to shopping malls.

And while carriers and those handling this data routinely insist there's no harm because this data is "anonymized," reports have repeatedly shown that this kind of data isn't really anonymous, especially if it can be linked with other private data (obtained by hackers, leaked, or already in the wild). That's something you can feel the Times reporters realizing as the story proceeds:

"Businesses say their interest is in the patterns, not the identities, that the data reveals about consumers. They note that the information apps collect is tied not to someone’s name or phone number but to a unique ID. But those with access to the raw data — including employees or clients — could still identify a person without consent. They could follow someone they knew, by pinpointing a phone that regularly spent time at that person’s home address. Or, working in reverse, they could attach a name to an anonymous dot, by seeing where the device spent nights and using public records to figure out who lived there."

Curiously, the Times doesn't even mention the cellular carriers' role in this problem, insisting that location data sales "began as a way to customize apps and target ads for nearby businesses." In reality, cellular carriers have been tracking and selling your location data before the concept was even a twinkle in many app makers' eye, and as the recent LocationSmart scandal (which exposed the personal data of nearly every mobile customer in North America) made very clear, this data is sold to dozens of third-party location data brokers and their sales partners -- without much, if any, effort to ensure it's being protected down the chain.

In other words, app location data sharing is just a smaller part of a massive problem. A problem that started with telecom operators and our total unwillingness to hold them accountable for similar behavior. Politically powerful cellular carriers who repeatedly insisted we didn't need any meaningful privacy rules of the road because "public shame" would keep the industry honest. That promise has never really worked out that well.

Multiple ISPs were accused years ago of collecting and selling consumer clickstream data. When they were pressed for details, many simply either denied doing it or refused to respond. Collectively, we decided that was fine. As more sophisticated network gear like deep-packet inspection emerged, ISPs began tracking and selling online browsing habits down to the millisecond, some even charging users extra if they wanted to protect their own privacy. Wireless only made things worse, some carriers even going so far as to modify your very data packets to glean additional insight without your knowledge or consent.

That initial attitude has subsequently infected every other ecosystem on the network as countless industries ran toward the location data cash cow, utterly apathetic to the slow but steady erosion of consumer trust and privacy. There's an endless list of points of failure here by self-interested companies eager to prioritize growth over all things, from the carriers themselves to the app store approval process. As such, the focus specifically on apps--or Facebook--tends to miss the bigger picture: that this sort of behavior is now the norm across all of tech, not some errant anomaly.

That said, the Times piece is still full of some entertaining revelations on app privacy specifically, like the fact that even some of the companies involved don't understand why the hell they even have access to all of this customer location data:

"To evaluate location-sharing practices, The Times tested 20 apps, most of which had been flagged by researchers and industry insiders as potentially sharing the data. Together, 17 of the apps sent exact latitude and longitude to about 70 businesses. Precise location data from one app, WeatherBug on iOS, was received by 40 companies. When contacted by The Times, some of the companies that received that data described it as “unsolicited” or “inappropriate.'

Currently, outside of a week of bad press that's quickly forgotten (see: Equifax), there's really no penalty for even the most mammoth of privacy abuses (aside from the occasional wrist slap for violating kid specific privacy laws like COPPA). This apathy and incompetence was rooted in the cellular and telecom industry, and has since spiraled outward, infecting every app and internet ecosystem as numerous industries ran to feed at the unsupervised trough. The fact that we're still so collectively naive to the scope of the problem a decade or two later is utterly mind boggling in and of itself.

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Posted on Techdirt - 10 December 2018 @ 6:40am

AT&T Finds Yet Another Way To Nickel-And-Dime Its Broadband, TV Customers

from the innovation! dept

While AT&T's marketing wing often likes to pat itself on the back for "innovation," the company's real skill set revolves around finding creative and ways to nickel-and-dime its own customers. Like the multiple times the company was caught aiding drug dealing directory assistance scammers, IP Relay credit card scammers, or crammers because it was getting a cut of the profits. Or the time the company started charging everybody more money for broadband if they wanted to protect their own personal privacy. Or the company's well-documented net neutrality shenanigans.

This week, AT&T's under fire yet again for some new bill changes that will, once again, result in users paying the company significantly more money. More specifically, the company has announced that it will now keep broadband and TV customers' money if you cancel in the middle of a billing cycle:

"AT&T will start charging customers for the full month after they cancel TV or Internet service, ending its customer-friendly practice of providing a prorated credit for the final month. Even if you cancel on the first day of a new billing period, you'll be charged for the full month and service will continue for the rest of the month whether you want it or not. To avoid paying for a month of service you don't want, you'd need to cancel by the last day of the previous billing period. The change will take effect on January 14, 2019 and apply even when a customer is paying on a month-to-month basis and no longer under contract.

Interestingly, the same company that has whined fairly incessantly about the logistical impossibility of adhering to state level privacy or net neutrality rules in the wake of federal repeals (a problem its own lobbyists created), isn't imposing the new rate system on users in states with tougher consumer protection standards:

"The new policy of charging for the full final month does not apply to any accounts in California, Illinois, and New York. The change also doesn't apply to "U-verse TV, AT&T Phone, or AT&T Internet accounts in Michigan," AT&T said.

AT&T is applying different policies in those states in order to comply with local regulations. “A limited number of customers will continue to receive prorated credits, either as a result of local or state regulations or for other specific reasons," AT&T told Ars.

Standing alone this may not be that big a deal, but cumulatively AT&T's nickel-and-diming matters very much to consumers.

You'll recall AT&T just got done jacking up streaming TV prices on the heels of its massive merger with Time Warner, just like deal critics had warned. AT&T then quickly doubled an already bogus "administrative fee" on the company's wireless customers, alone netting AT&T an additional estimated $800 million per year. AT&T's now hinting it will raise streaming prices even higher (AT&T's version of competition). This is of course on top of existing TV and broadband rate hikes, usage caps, hidden fees, and other soaring consumer costs.

Most of this is occurring for two reasons. One, AT&T's desperately trying to bounce back from the utterly massive debt load it incurred from the one-two punch of the DirecTV and Time Warner mergers. As is usually the case, the one paying for our mindless merger mania is usually... you. Two, because AT&T and other telecom and media giants have been on a tear effectively neutering all federal oversight of their efforts, there's nobody really in power interested in doing much about it. The above example makes it pretty clear why AT&T and Ajit Pai have also tried to neuter state consumer protection authority.

Getting ripped off in this fashion is the price tag for the nation's mindless obsession with merger mania, and the entirely false, yet oddly persistent, dogma that blindly deregulating the telecom sector somehow creates a free market connectivity Utopia. After several decades of this approach clearly not working in telecom you'd think more people would be keyed into the fact that letting natural monopolies dictate policy only really benefits investors and executives. But our collective, almost willful ignorance on this subject is nothing if not stubbornly persistent.

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Posted on Techdirt - 7 December 2018 @ 10:42am

Contrary To Media Claims, There's No Evidence Russia Was Behind Fake Net Neutrality Comments

from the a-game-of-telephone dept

Earlier this week we noted how the Ajit Pai FCC again shot down journalist FOIA attempts to find out who was behind the millions of bogus comments that plagued the agency's net neutrality repeal. The move prompted one of the agency's commissioners, Jessica Rosenworcel, to accuse her own agency of a coverup--since Pai refuses to work with either journalists or law enforcement investigations trying to uncover the truth of who was behind the comment fraud.

In an uncharacteristically snarky statement (pdf) issued the same day, Pai attempted to dismiss the criticisms as purely partisan attacks. But he also acknowledged something we already knew...that 500,000 or so of the email addresses used in the FCC's comment form came from users purportedly on Russian ISPs. From his statement:

"...one finds the now-standard overheated rhetoric about “net neutrality” (omitting, as usual, the fact that the half-million comments submitted from Russian e-mail addresses and the nearly eight million comments filed by e-mail addresses from e-mail domains associated with FakeMailGenerator.com supported her position on the issue!)."

So this is nothing new. Media reports had noted previously how 444,938 of the millions of bogus comments happened to have Russian email addresses. The New York Times' FOIA-focused lawsuit against the FCC also specifically highlights these addresses (many of which actually supported retaining net neutrality), likely in the hopes this would lend a little extra gravitas to court consideration.

Yet in the modern news media cycle, which can often resemble a game of telephone, numerous media outlets somehow rushed to the conclusion that Pai had "confirmed" that Russia must have been behind the efforts to stuff the ballot box at the FCC. Just a smattering of examples from this week:

That's fairly remarkable, given that's not what Pai said, nor is there any proof that "Russia" itself interfered with the net neutrality public comment period.

While many of these stories were more nuanced than the headlines (which writers often don't get to pick), the reality is the headlines are all a pretty large majority of people read. The Daily Dot report in particular was a huge hit on Reddit, upvoted more than 66,000 times and circulated far and wide. Not too surprisingly, the media's collective headline errors quickly drove many on Twitter to accuse Pai of being a Russian agent himself in dire need of prosecution:

Even Tim Wu, the Columbia law professor who coined the term net neutrality, circulated one of the headlines claiming Russia itself had been "linked" to the comment fraud:

Here's the problem: while these 500,000 email addresses used in the FCC's form appear to be Russian, that may not mean all that much.

Whoever stuffed the FCC comment section with farmed support (and in some cases opposition) for the repeal used all kinds of tricks to generate the bogus identities, including a bot that pulled names alphabetically from a hacked database of some kind. Many of the names used were dead people. Anybody could have plugged Russian email addresses into some of these form-generated responses, without actually representing the Russian government or even Russian people, thanks largely to an FCC website that didn't even remotely try to ferret out spam or bullshit.

Putin's adoration of hacking and disinformation is a legitimate problem, even if many may disagree on the breadth of the impact the Russian leader's digital dick waving has had on the real world and elections. And while it's certainly possible that Russia's attempts to pour gasoline on our already napalm-esque levels of dysfunction extended to the net neutrality fight, there's simply no evidence actually supporting that claim right now. Nor did Pai state that there was.

In similar cases, the evidence that inevitably appears usually points to a more obvious culprit: industry. These kinds of fake comments have been plaguing multiple US government agencies and proceedings in the states over the last few years, from proceedings at the Labor Department trying to rein in financial fraud, to efforts at the Consumer Financial Protection Bureau aimed at thwarting payday loan fraud.

More often than not it's the companies that benefit from the shenanigans that are found to be behind gamesmanship like this, since more than a few DC policy shops now offer this kind of greasy bullshit as an added value service for clients hoping to shape or influence public perception and government policy. The goal is usually to not just to create bogus support for bad policy, but to help undermine trust in the public comment process--often the only chance many Americans have to voice their thoughts on these decisions. Using Russian email addresses in bulk certainly would go a long way toward achieving that goal.

In the case of net neutrality, whoever was behind the fake comments was obviously keen on trying to downplay and discredit the millions of bipartisan Americans pissed off by the FCC's blatant handout to giant ISPs like AT&T, Verizon, Comcast, and Charter (Spectrum). Numerous investigations (at the GAO and NY AG, for example) and next February's net neutrality court battle are likely to, sooner or later, shed light on who carried out this operation, who funded it, and why Pai's FCC is trying so hard to keep most of these investigations from getting to the truth.

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Posted on Techdirt - 7 December 2018 @ 6:33am

FCC Tries to Bury Report Showing Many Broadband Users Still Don't Get The Speeds They Pay For

from the hiding-it-won't-make-it-go-away dept

So every year like clockwork since 2011 the FCC has released a report naming and shaming ISPs that fail to deliver advertised broadband speeds. The Measuring American Broadband program, which the FCC runs in conjunction with UK firm SamKnows, uses custom-firmware embedded routers in subscriber homes to collect data on real-world speeds (an improvement from years past when the FCC would just take ISPs' at their word).

In the years since, the program has been an effective way to name and shame ISPs that fail to deliver speeds promised to consumers. For example, in the first report, the FCC announced that some ISPs, like New York's Cablevision, had delivered just 50% of advertised speeds during peak hours. By the next report Cablevision had moved to fix its under-provisioning issues, and the FCC found that the company was now offering more bandwidth than advertised at peak hours. In the absence of more competition, simply using real data was a useful way to motivate apathetic regional monopolies to try a little harder.

Of course last year that all changed under Ajit Pai, when the FCC boss refused to release the report at all. After being pressured by telecom beat reporters to explain why, the FCC this week finally released some of the data... buried in the appendix of a much larger report (pdf) few will actually read. The data again showcases how many broadband providers -- mostly telcos selling aging, slow and pricey DSL -- routinely fail to deliver speeds consumers are paying for:

In the years since the program launched, many cable providers have been successfully nudged toward over-provisioning their lines to remain on the FCC's good side (though it should be noted that one cable provider, Charter Spectrum, was busted by the NY AG contemplating ways to game the system). This wasn't particularly hard; DOCSIS 3.1 cable upgrades are relatively inexpensive anyway, and have helped the cable sector deliver gigabit speeds (at least downstream).

The problem is that cable is slowly but surely securing a monopoly over these next-gen speeds because the nation's phone companies no longer really want to be in the fixed-line broadband business. AT&T and Verizon have shifted their focus to wireless, video, and ads, and providers like CenturyLink have shifted their focus to enterprise. As a result, millions of customers are stuck on aging, expensive, (and often unnecessarily usage capped) DSL lines nobody really wants to upgrade because the return on investment is too slow for Wall Street's liking.

The result: less competition, higher prices, slower speeds, and worse customer service as cable secures a monopoly over high speeds. And no, 5G wireless is not going to magically fix these problems, as we've explored previously.

Of course because the Measuring American Broadband program highlighted these issues via a very clear stand alone report, it seems fairly likely that broadband providers didn't much like this. Like so much Pai does (like killing net neutrality rules), burying the report was framed by the FCC head as a noble effort to simply improve agency efficiency. But in a statement to Ars Technica's Jon Brodkin, Pai's fellow Commissioner Jessica Rosenworcel seemed unsold on that explanation:

"We're all frustrated when our broadband speed doesn't live up to what was promised," FCC Commissioner Jessica Rosenworcel, the FCC's only Democrat, said in a statement to Ars today. "So it's downright unacceptable that the FCC—which has been collecting data on broadband speeds nationwide—is slow to make this information public and, when it does so, buries it in the appendices to a larger report. This is essential data for every consumer in the digital age. The public deserves better."

The attempt to bury belated data in a study appendix nobody will read is just another example of Pai's largely blind fealty to the industry he's supposed to be holding accountable. From the attacks on net neutrality and FCC oversight to his efforts to literally weaken the very definition of competition, Pai continues to be the very best friend any lumbering telecom monopoly could ask for. After all, if you can manipulate or obscure data showing just how broken the US broadband industry is, it's far easier to justify your complete and total apathy toward actually doing anything about it.

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Posted on Techdirt - 6 December 2018 @ 10:44am

The TV Sector's Latest Bad Idea: Ads That Play When You Press Pause

from the more-and-more-ads dept

The TV industry is certainly skilled when it comes to ignoring the will of the customer. You'll recall that as the cord cutting and ratings free fall began, the sector's very first impulse was to double down on a lot of bad ideas, from mindlessly raising rates, to editing down programs or speeding them up to shove more ads into each viewing hour. And as new innovations like ad skipping DVR technology emerged, the industry's very first impulse was to first sue companies in a bid to ban the tech, then "innovate" by charging users more if they did want to skip ads.

This week, both AT&T and Hulu (which AT&T now owns a chunk of via its Time Warner merger) unveiled their latest "innovation" in delivering ads that users don't want: ads that run when you press pause and leave the room. According to AT&T, the tech should emerge sometime next year for its DirecTV and IPTV (formerly branded U-Verse) TV customers:

"AT&T also has hopes to use the pause to lend new momentum to TV advertising. The company, which owns DirecTV and U-verse, expects to launch technology next year that puts a full-motion video on a screen when a user decides to take a respite. “We know you’re going to capture 100% viewability when they pause and unpause,” says Matt Van Houten, vice president of product at Xandr Media, AT&T’s advertising division. “There’s a lot of value in that experience."

Said "value" will certainly be in the eye of the beholder. Consumers that have made it clear they don't want to pay an arm and a leg for traditional TV and watch ads aren't going to be particularly thrilled to engage in another, entirely new layer of ads. And the "value" of layering more ads when users press pause and (usually) leave the room certainly isn't going to be any kind of panacea for the problems that plague the sector (high prices, too many ads, terrible customer service, bloated & inflexible pay TV lineups, and sagging ratings).

For its part, AT&T makes the case that you'll need some additional advertising in streaming because low subscription prices aren't enough to pay for content development in the streaming era:

"At a September conference held for advertisers, AT&T executives made the case that even new forms of video entertainment – including streaming – require ad support. “If we are to continue this pace of developing content of this quality in these volumes, then we need advertising to pay for some of the content,”said Brian Lesser, chief executive of the company’s Xandr unit, while speaking to reporters at the event. “I don’t believe – nor does anybody on the team believe – that subscription video on demand services could possibly pay for all the content being developed” without relying on money from advertising."

While that might be true, it's worth noting that AT&T's not trialing this technology on its streaming platforms (like DirecTV Now), it's implementing it on its traditional IPTV and satellite TV services, which usually cost consumers (on average) upwards of $100+ per month. Forcing additional advertising on customers already annoyed by high prices isn't the path to winning back frustrated customers. Meanwhile, AT&T has no problem raising subscription rates on streaming anyway; the company just got done implementing a streaming price hike before the ink on its last merger was even dry, and is already hinting at another round of hikes.

When you face real competition (something that's a little alien to AT&T), you don't get to choose when you compete on price and features. That's why some wings of the cable and broadcast sector have finally started actually lowering the ad load in a bid to keep people from switching to streaming alternatives to heading to piracy. And while it's true the sector needs to innovate around advertising, hitting already frustrated users with even more ads (when they're probably not even in the room) doesn't seem like the best path forward.

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Posted on Net Neutrality Special Edition - 6 December 2018 @ 6:14am

Telecom's Top Lobbying Arm Oddly Keeps Undermining The Industry's Own Claims About Net Neutrality

from the ill-communication dept

The telecom industry (and by proxy Ajit Pai's) primary justification for killing net neutrality -- and FCC authority over ISPs in general -- was that sector oversight was stunting network investment. Of course repeated analysis of the data shows that simply isn't true, but that hasn't stopped telecom lobbyists and the lawmakers who love them from repeating those claims in the hopes that repetition forges reality.

And while telecom lobbying organizations like US Telecom continue to cling tight to this false narrative, the "science" they've been shoveling out in recent months to try and "prove" these claims leaves a little something to be desired. Last October, for example, US Telecom released a study it claimed somehow proved that the Ajit Pai's attacks on net neutrality had boosted broadband investment:

"Broadband investment rebounded in 2017, as a series of positive consumer and innovation policies and a pro-growth regulatory approach helped reverse the industry’s previous spending pullback, according to new research released today by USTelecom."

The problem: net neutrality wasn't actually repealed until June of 2018.

This week, US Telecom released another study crowing about what's some fairly modest recent broadband deployment growth. As part of the report, the industry highlights how US fiber deployment jumped from 21 to 29% of US homes between 2015 to 2017, a period when the FCC's classification of ISPs as Title II common carriers (purportedly an investment killer) was in effect:

"In just a year and a half, from the end of 2015 to mid-2017, U.S. fiber deployment grew from 21 percent to 29 percent of homes and competitive availability of wired broadband at 25 megabits per second (mbps) download and 3 mbps upload increased from 31 percent to 55 percent. At lower speed tiers, and if fixed wireless is included, competitive availability is even greater: 77 percent at 10 mbps download and 1 mbps upload; and 91 percent at any speed. By mid-2017, broadband at 100 mbps download was available to 89 percent of Americans, compared to 10 percent in 2010. Moreover, fiber deployment and competitive availability of broadband at higher speeds continue to grow rapidly today, driven by competitive upgrades."

So one, it should be noted that this growth is solid but not spectacular by any means; it would likely be significantly higher if one of US Telecom's top missions wasn't to try and stifle meaningful sector competition at every conceivable opportunity. Still, this period -- from 2015 (when the FCC created its latest net neutrality rules) to 2017 -- was the exact period in which the industry keeps telling us it suffered from "unprecedented" and "heavy handed regulation" like net neutrality that stifled industry investment. And yet here US Telecom is insisting that the exact period exhibited "rapid" growth "driven by competitive upgrades." Why it's almost as if the telecom sector's top lobbyists aren't ideologically or ethically consistent.

Of course the firm then proceeds to proclaim that if we want this growth (that wasn't supposed to exist) to continue, we need to double down on policies that embrace an "investment-friendly environment" that will allow this growth to continue. Oh, and more subsidies for US Telecom's client companies who've already received billions, of course:

"Therefore, it will remain imperative for policymakers to maintain an investment-friendly environment for broadband deployment, including providing additional financial support in areas that need it. Governments should target support to specific areas where the economics do not support deployment or upgrades, and funding must be dedicated and direct, using a mechanism like the Connect America Fund."

As we've been noting, said "investment-friendly environment" includes effectively neutering the FCC's ability to police bad behavior in telecom, then shoveling all remaining responsibility to an FTC that lacks the authority, willpower, or desire to actually police giant ISPs like AT&T, Verizon, and Comcast (the entire point). Said "investment-friendly environment" also currently involves trying to ban states from protecting broadband consumers from false advertising and fraud.

Granted, nobody actually reads reports by groups like US Telecom outside of a few execs, consumer groups, and beat reporters, but the "science" they shovel forth does often tend to cement itself into the base layers of more policy conversations than you'd prefer. Still, after the last few months of exceptionally flawed efforts at "science," perhaps US Telecom should spend less time accidentally emailing us their talking points, and more time pursuing something vaguely resembling intellectual consistency.

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Posted on Techdirt - 5 December 2018 @ 11:54am

Verizon Dinged Again For Privacy Violations, This Time For Slinging Personalized Ads To Kids

from the what-privacy-law? dept

Oh Verizon. For years we've noted how the company's consumer privacy practices are utterly abysmal. Like that time in 2016 when Verizon was fined a relative pittance by the FCC for modifying user wireless packets so it could covertly track users around the internet (beyond cookie, clickstream, or even deep packet inspection data). This being Verizon, it didn't bother to tell anybody that this was happening. As a result, it took two years for security researchers to even notice what the company was up to, and another six months of media yelling before the company was willing to even let consumers opt out of the data collection.

Fast forward to this week, and Verizon has been busted once again on the privacy front, this time for slinging behavioral advertisements at kids in violation of the Children’s Online Privacy Protection Act (COPPA). According to an announcement by acting New York Attorney General Barbara Underwood, Verizon's Oath operations (the mash up of its Yahoo and AOL acquisitions) routinely auctioned off ad space and placed ads on websites the company knew targeted kids -- without parental consent. As a result, Verizon's being hit with the biggest fine in the history of COPPA:

"The Attorney General’s Office found that AOL conducted billions of auctions for ad space on hundreds of websites the company knew were directed to children under the age of 13. Through these auctions, AOL collected, used, and disclosed personal information from the websites’ users in violation of COPPA, enabling advertisers to track and serve targeted ads to young children. The company has agreed to adopt comprehensive reforms to protect children from improper tracking and pay a record $4.95 million in penalties, the largest penalty ever in a COPPA enforcement matter in U.S. history."

But much like the company's fine for its earlier scandal, the fine itself is likely a small fraction of the money made during the time AOL spent intentionally turning a blind eye as behavior ads were aimed at kids and kid-frequented websites. The AG's report notes that until late last year (presumably as a result of realizing the AG inquiry existed), AOL's systems ignored any information that it received from an ad exchange indicating that the ad space was subject to COPPA, so the website routinely ignored the law in general. It's worth noting that the full settlement has not yet been released.

There's no indication from the NY AG (I've reached out for more detail) how long this was going on, but it's fairly obvious the income AOL made from ignoring COPPA (there were 1.3 billion auctions of display ad space) outweighs any penalty it's facing, however historic. COPPA is one of the few privacy regulations currently in place, and even then, Verizon/AOL/Oath's decision to just ignore the law speaks pretty broadly as to how even the privacy laws we do have are inconsistently enforced. Especially when we're talking about deep-pocketed telecom giants, who have openly flirted with the idea of charging users even more money for privacy without regulators so much as batting an eye.

As we sit down and begin the long, difficult conversation about what a real internet-era privacy law should look like, the lion's share of the focus remains (quite justly given the Cambridge Analytica scandal) on Facebook. But it can't be understated how the telecom industry has historically been even worse -- especially given they're effectively bone-grafted to the nation's intelligence surveillance apparatus. That these are the companies that will have the biggest impact on the crafting of privacy laws should terrify anyone interested in getting meaningful privacy legislation right.

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Posted on Techdirt - 5 December 2018 @ 6:21am

FCC Commissioner Accuses Her Own Agency Of A Net Neutrality Cover Up

from the ill-communication dept

We've long discussed how the Pai FCC's net neutrality repeal was plagued with millions of fraudulent comments, many of which were submitted by a bot pulling names from a hacked database of some kind. Millions of ordinary folks (like myself) had their identities used to support Pai's unpopular plan, as did several Senators. Numerous journalists have submitted FOIA requests for more data (server logs, IP addresses, API data, anything) that might indicate who was behind the fraudulent comments, who may have bankrolled them, and what the Pai FCC knew about it.

But the Pai FCC has repeatedly tried to tap dance around FOIA requests, leading to several journalists (including those at the New York Times and Buzzfeed) suing the FCC. Despite the Times' lawyers best efforts to work with the FCC to tailor the nature of their requests over a period of months, the agency continues to hide behind FOIA exemptions that don't really apply here: namely FOIA exemption 6 (related to protecting privacy) and 7E (related to protecting agency security and law enforcement activity).

And while the Times and Buzzfeed had appealed the FCC's ruling, the FCC this week released a memorandum and order formally denying those requests. In it, the FCC doubles down on the claims that it's simply blocking the release of this data because it's super worried about the privacy of FCC commenters (though again, if you actually read the Times lawsuit, you'll note the FCC was utterly inflexible in terms of narrowing down the scope of requests).

FCC lawyers also try to make the amusing claim that the press really doesn't need this data because there's other investigations (including one at the GAO) trying to get to the bottom of the scandal:

"Confessore proffers a putative public interest in understanding the integrity of the Commission’s comment process. This question, however, is being or has already been examined by other press outlets,51 Commission staff, and the Government Accountability Office, among others. Confessore has not provided us with any reason to believe that his review of this data would significantly advance any public interest beyond the investigations that are already underway."

Of course this is the same FCC that has also actively blocked law enforcement efforts to get to the bottom of the scandal, refusing nine inquiries from the NY AG over a period of five months for additional data. So while the Pai FCC breathlessly claims it's all about transparency and integrity, their actions on this subject (and that whole fake DDOS attack they concocted in a weird bid to downplay public backlash) tend to undermine these claims.

Meanwhile, Pai's fellow Commissioner, Jessica Rosenworcel, has certainly taken off the gloves in recent weeks. She hit Twitter and issued a statement that effectively accused her own agency of engaging in a cover up of fraudulent activity:

Her full statement (pdf) is also worth a read, and doesn't pull any punches:

"Instead of providing news organizations with the information requested, in this decision the FCC decides to hide behind Freedom of Information Act exemptions and thwart investigative journalism. In doing so, the agency asserts an overbroad claim about the security of its public commenting system that sounds no more credible than its earlier and disproven claim that the system was the subject of distributed denial of service attack. It appears this agency is trying to prevent anyone from looking too closely at the mess it made of net neutrality. It is hiding what it knows about the fraud in our record and it is preventing an honest account of its many problems from seeing the light of day.

Pai's justification for the FOIA blockade tries very heavily to insist this is all just unfair partisan gamesmanship. But at this juncture his FCC's record when it comes to transparency, blatant telecom sector cronyism, and bizarre scandals has pretty much been established. This is an agency that not only used bullshit telecom lobbyist data to undermine policies that had broad, bipartisan public support, it has been rocked by scandal after scandal, fought tooth and nail against real transparency on numerous fronts, and has refused to give any real weight to the will of the tech-savvy public.

Pai comes off as an unwavering ideologue who truly seems to believe he's doing an incredible job of "unleashing innovation" despite every shred of evidence to the contrary (not unlike the man who appointed him to the position). Unfortunately for Pai, whose post-FCC political ambitions couldn't be any more obvious, his legacy will likely be the giant middle finger he's given to tech-savvy Millennials. As for the fake comments specifically, they're likely to play a starring role in next February's net neutrality lawsuits, which will look to prove the agency violated the Administrative Procedure Act by ignoring the will of the public as it rushed to give AT&T, Verizon, and Comcast a sloppy kiss for the ages.

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Posted on Techdirt Wireless - 4 December 2018 @ 12:03pm

Wireless Carriers Won't Comment On 5G's Most Important Question: How Much Will It Cost?

from the meet-the-new-boss dept

We've noted a few times that while fifth-generation wireless (5G) will certainly improve the speed, reliability, and latency of existing networks, it's being pretty painfully overhyped by hardware vendors and cellular carriers. Telecom industry marketing folks spend countless hours insisting that the smart cities and smart cars of tomorrow are only possible with 5G, the sort of claims countless online outlets will repeat utterly unquestioningly. More often than not these claims are based on nothing close to reality (like this one claiming 5G will somehow result in four day work weeks).

While 5G will result in faster, more resilient networks, it doesn't magically somehow unleash additional innovation for tech that already largely works on existing 4G networks (smart cars, smarter cities). And while carriers have begun testing and hyping various incarnations of 5G, broad phone availability on broadly-deployed 5G networks remains years away as companies hammer out battery life issues (Apple isn't releasing a 5G iPhone until 2020, or potentially later) and push 5G upgrades to rural and less affluent cities these companies routinely don't care much about. .

While most media articles on 5G are little more than blind stenography of wireless marketing claims, Sean Hollister at The Verge did a good job last week breaking down 5G's promises, laying down the real-world impact and deployment schedules. More importantly, he narrows in on what's probably the most important question for 5G carriers don't want to answer: how much will 5G cost?

"Consider me a wee bit concerned that on the eve of AT&T’s launch, neither AT&T nor Verizon was willing to talk about how much, how often, how fast, nor answer what’s probably the most burning question: whether we should expect to pay more, less, or the same for 5G connectivity. (Because 5G’s inevitable, right? You’ll be paying for it sooner or later.)

For that matter, neither carrier would even tell me whether today’s data caps might get larger to account for the tremendous amount of data we’ll supposedly be using on 5G. I figured that would be a softball question, but they deflected anyhow.

That question, in turn, is being very directly shaped by the attack on net neutrality:

"I do wonder how the death of net neutrality will embolden the carriers to do things that would have been unthinkable before. One of the reasons carriers argued for the end of net neutrality was to open up “innovative” business models, and it’s possible they’ll look at bundling their own services, or those of partners, with free or discounted 5G connectivity."

Since most of these services aren't launching until next year, it's not surprising they're not able to comment on pricing yet. That said, if the history of telecom is anything to go by, you can be sure of two things related to 5G pricing: it won't be cheap, and (like we're seeing with "unlimited" packages) will be saddled with all manner of caveats designed to nickel-and-dime you just for using it. As such, any evolutionary gains made in network advancement could easily be hamstrung by bad tech policy dictated by mobile carriers.

The problem for carriers: they're not really sure how much nickel-and-diming they can actually get away with, since a lot of that depends on whether the FCC and its ISP BFFs win next February's looming net neutrality lawsuit against the FCC. If the plaintiffs (23 State AGs, Mozilla, and consumer groups) win that case, the FCC's 2015 net neutrality rules should be restored, dramatically impacting 5G pricing and plans. Should they win, there's not much (outside of a future FCC or Congress passing new rules) preventing the wireless industry from upping the ante in terms of nickel-and-diming consumers in a wide variety of ways.

That means a lot more of the kind of dubious stuff we're already seeing on 4G networks, such as throttling all video then charging consumers a premium to get around restrictions that shouldn't exist in the first place. So while 5G will be a step forward in many ways, the death of net neutrality will have a lot to say about how much value consumers (both consumer and enterprise) see from 5G. And of course this is before you factor in in the looming Sprint, T-Mobile merger, which will reduce the overall number of competitors, and any real incentive to compete on price.

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Posted on Techdirt - 4 December 2018 @ 6:20am

UK ISPs Demand Ad Watchdog Crack Down On 'Fake Fiber' Broadband

from the ill-communication dept

A few years back, we noted how a growing number of US broadband providers (particularly telcos) were trying to obscure their network upgrade failures. How? By only partially upgrading their networks then over-stating their customers actual access to real fiber broadband. AT&T, for example, likes to upgrade only a few developments in a city then breathlessly declare the entire city served with fiber. AT&T and other telcos often only upgrade part of the path to the users' home (fiber to the local node, aka FTTN) instead of running fiber to the home.

It's well in line with the problem we've seen in both the UK and US with ISP's advertising "up to" broadband speeds (usually an indicator you won't get the actual speed advertised. Needless to say, this collectively creates a lot of confusion among customers who often don't know if fiber is actually available, or if they're being sold either empty promises, or some inferior version of marginally upgraded DSL that isn't fiber (usually made most obvious by pathetic upstream speeds).

In the United States regulators couldn't care less about this. Both parties have long turned a blind eye to such creative marketing, in much the same way we've turned a blind eye to the fact our terrible broadband maps routinely over-state broadband availability over all. Apathy to this kind of creative marketing is also common in the UK, where the Advertising Standards Authority recently declared it was no big deal if a broadband provider wants to sell inferior broadband service (with speeds much slower than real fiber) as "fiber" broadband.

Three of the UK's actual fiber providers have joined forces in a bid to try and force the ASA to retreat from the decision:

Three of the UK’s most pioneering providers’ of ultrafast “full fibre” (FTTP/H) broadband – Gigaclear, Cityfibre and Hyperoptic – have today called on the Advertising Standards Authority to stop rivals from using the term “fibre” to advertise services delivered over slower copper wires...“Consumers are increasingly being provided with a choice; to rely on traditional broadband services delivered over outdated copper wires and cables, or to connect to a new generation of full fibre networks offering the vastly improved speeds and reliability essential to a modern-day home or business."

This seems like semantics, but when you're trying to upgrade a country to actual broadband... it matters. DSL lines remain highly distance constrained, and (again) tend to offer paltry upstream speeds. So when you're trying to determine whether a city has been upgraded to real broadband -- or substandard broadband -- it's kind of an important difference. Granted ISPs in both the UK and US that don't want to meaningfully upgrade their networks (or let anybody else do so either) would prefer it if they could continue calling a Honda Civic a Bugatti for what should be obvious reasons.

It should be noted that the FCC's 2015 net neutrality rules had some transparency requirements insisting that ISPs be entirely clear about what kind of connection they're buying. Requirements that, with the rest of the rules, were stripped away by the FCC's Ajit Pai in his quest for "internet freedom" (or whatever he's calling it these days).

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Posted on Techdirt - 30 November 2018 @ 6:26am

Senators Continue To Point Out Our Broadband Maps Suck

from the do-not-pass-go,-do-not-collect-$200 dept

For a country that likes to talk about "being number one" a lot, that's sure not reflected in the United States' broadband networks, or the broadband maps we use to determine which areas lack adequate broadband or commpetition (resulting in high prices and poor service). Our terrible broadband maps are of course a feature not a bug; ISPs have routinely lobbied to kill any efforts to improve data collection and analysis, lest somebody actually realize the telecom market is a broken mono/duopoly whose dysfunction reaches into every aspect of tech.

If you want to see our terrible broadband maps at work, you need only go visit the FCC's $300+ million broadband availability map, which is based on the Form 477 data collected from ISPs. If you plug in your address, you'll find that not only does the FCC not include prices (at industry behest), the map hallucinates speed and ISP availability at most U.S. addresses. Part of the problem is that the FCC declares an entire region "served" with broadband if just one home in a census tract has service. Again, ISPs fight efforts to reform this in a bid to protect the status quo.

Only when states are jockeying for broadband subsidies is this problem even brought up in DC, so as states vie for $4.7 million in wireless broadband subsidies via the FCC's Mobility Fund Phase II, the problem has been seeing renewed attention.

Back in August, Montana Senator Jon Tester took these criticisms to a new level, bluntly insisting the FCC's maps "stink" and that we really have "got to kick somebody's ass" to get the problem fixed. Like Tester, West Virginia Senator Joe Manchin also isn't impressed and has been trying to challenge the FCC's historically terrible coverage maps. This week Manchin again pointed out that our US broadband maps are terrible, while noting he was the only member of Congress to actually formally challenge them:

"Manchin argued the map does not accurately show broadband coverage in West Virginia, leaving some out of receiving reliable and affordable broadband. Rural areas were getting screwed, and all of West Virginia was getting screwed because these big-time carriers were showing, ‘Oh, this is our area. We’ve got it taken care of, don’t worry. They’re only going to go into areas where they know that they’re going to have a return on an investment. It’s no different than electricity back in the 1930s."

Therein lies the problem. Incumbent ISPs see no reason to deploy broadband into countless areas (rural and urban) country wide because they either don't see a good return on the investment, or the unyielding need for quarterly improvements mean they don't see a return quickly enough for Wall Street's liking. And while that's certainly understandable, at the same time incumbent ISPs do everything in their power to prevent cities from wiring themselves either, most notably via the 21 protectionist laws ISPs have quite literally written and purchased that ban towns and cities from exploring more creative solutions.

That's particularly true in Manchin's West Virginia, which we've long noted is the poster child for US broadband corruption and dysfunction, thanks in large part to regional incumbent telco Frontier Communications.

Last year, the ISP fired a seven year employee because, at his part-time job as West Virginia senate leader (note how nobody in the state thought that was a conflict of interest), he voted for a new law that would actually help improve broadband penetration and competition in the state. Frontier has also been under fire for the better part of the last decade over allegations that the ISP routinely rips off taxpayers and has wasted millions in past subsidies by intentionally misrepresenting how that money was spent.

So while it's great that Manchin is the only Senator that actually cares about the country's broadband maps, terrible broadband maps are just a symptom of a much broader problem Manchin tap dances around: corruption and cronyism. Even the most well-intentioned US lawmakers routinely let some of the least popular, monopolistic companies in America dictate both federal and state telecom policy, then stand around with an idiotic look on their faces as they wonder what could have possibly gone wrong.

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Posted on Techdirt - 29 November 2018 @ 4:56am

ESPN Has Lost 14 Million Viewers In 7 Years Thanks To Cord Cutting

from the swimming-against-the-tide dept

ESPN has long personified the cable and broadcast industry's tone deafness to cord cutting and TV market evolution. Executives not only spent years downplaying the trend as something only poor people do, it sued companies that attempted to offer consumers greater flexibility in how video content was consumed. ESPN execs clearly believed cord cutting was little more than a fad that would simply stop once Millennials started procreating, and ignored surveys showing how 56% of consumers would ditch ESPN in a heartbeat if it meant saving the $8 per month subscribers pay for the channel.

The penalty for ESPN's failure to adapt has been severe. Disney's recent earnings revealed that ESPN lost another 2 million regular viewers this year. And while ESPN still has 86 million regular viewers, that's a 14 million regular viewer dip from the 100 million regular viewers it enjoyed in 2011. Those 14 million lost users generated around $1.44 billion per year for the "worldwide leader in sports," which is still saddled with the severe costs of set redesigns and sports licensing contracts the company struck while it was busy not seeing the massive locomotive of market change bearing down upon it.

While some of these wounds are inevitable due to shifting markets, many were self-inflicted. ESPN execs often tried to shoot the messengers instead of listening to the message. And once the damage was done, ESPN decided to fire hundreds of longstanding sports journalists and support personnel, but not the executives like John Skipper (since resigned for other reasons) whose myopia made ESPN's problems that much worse in the first place.

Ultimately, ESPN and Disney figured out that streaming was the future. In response, it launched a new direct-to consumer app dubbed ESPN+ that sort of provided users what they wanted, but not really. The $5 per month service basically took much of the fare available on ESPN's lesser-watched channels and offered it over the internet. But there were caveats; such as the service didn't really offer users what they really wanted (just a streaming version of ESPN's core channel) unless you subscribe to traditional cable, part of the "TV Everywhere" mindset cable execs can't seem to move past.

While ESPN's losses are the most notable, other Disney properties continue to see sharp viewership declines in the cord cutting era:

"Disney Channel has also seen its subscribers ebb to 89 million, down from 92 million in fiscal 2017. Freeform fell by 2 million to the 90 million mark. Disney Junior (69 million) and Disney XD (71 million) both lost 3 million subs. The numbers, attributed to Nielsen Media Research estimates, indicate that the growth of virtual MVPDs such as YouTube Live and Hulu’s package, are still not enough to offset a net decline in the subscribers from the traditional pay-TV world."

Again, many cable and broadcast industry executives are under the mistaken impression they get to choose when to adapt to the markets shifting around them. In reality they only have two choices. One, get out ahead of the shift toward streaming video by giving consumers what they actually want, even if that means losing some money in the short term. Or, refuse to adapt, double down on the belief that traditional cable TV is a cash cow that will never die, and watch as smaller, more flexible outfits continue to steal your massive subscriber base out from beneath your feet.

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