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Posted on Techdirt - 27 June 2017 @ 6:25am

Cable Industry Quietly Shelves Its Bogus Plan To Make Cable Boxes Cheaper, More Competitive

from the misbehaving-without-a-baby-sitter dept

Last year, the cable industry quietly launched one of the most misleading and successful lobbying efforts in the industry's history. The target? A plan concocted by the former FCC that would have let customers watch cable programming without having to rent a cable box or use a CableCARD. Given the industry makes $21 billion annually in rental fees off of this entrenched hardware monopoly, the industry got right to work with an absolute wave of disinformation, claiming that the FCC's plan would confuse customers, increase piracy, and was (with a little help from Jesse Jackson) somehow even racist (seriously).

At one point, the industry even managed to grab the help of the US Copyright Office, which falsely claimed that more cable box competition would somehow violate copyright. Of course the plan had nothing to do with copyright, and everything to do with control, exemplifying once again that for the US Copyright Office, public welfare is often a distant afterthought.

As part of this stage show, the cable industry also created a group specifically tasked with attacking the proposal. Dubbed the Future of TV Coalition, the group set forth to not only attack the FCC's plan, but to propose its own counter proposal it claimed made any cable box reform efforts at the FCC unnecessary. Dubbed the "ditch the box" proposal, the cable industry and the Future of TV Coalition breathlessly stated the industry (pdf) was already cooking up ways to help consumers avoid rental fees have greater choice, and that these efforts were already well underway:

"This new “Ditch the Box” approach calls for binding, enforceable obligations for major TV providers to allow customers to ditch their set-top boxes and access live and on demand programming via boxless apps compatible with a wide range of retail devices, including smart TVs, game consoles, streaming devices, laptops, tablets, phones, and more...Providers will have two years to fully implement the new requirements – and many are already racing to do so sooner."

That was then, this is now. Shortly after Trump's election win, the new Ajit Pai led FCC quickly moved to scuttle the plan. And not too surprisingly, the cable industry's counter plan to make lives better for consumers never actually materialized, and appears to have been mothballed:

"The Future of TV Coalition has gone silent — it last tweeted Nov. 28 — the cable industry’s trade group NCTA hasn’t had much to say about it either. NCTA spokesman Brian Dietz wrote in an e-mail that Ditch the Box was pitched as “an “alternative” to the Wheeler’s original proposal. Without the FCC’s acceptance of Ditch the Box, that plan got ditched."

So without somebody actively pressuring an uncompetitive sector to stop being uncompetitive, they continue to be uncompetitive. Who could have possibly predicted that? Of course the cable industry continues to pay empty lip service to the idea of choice and freedom, all the while continuing efforts to make actual consumer choice on this front as difficult and expensive as ever (see Comcast's decision to charge users a completely unnecessary fee just to use a Roku as a cable box, or cross-industry efforts to use unnecessary broadband usage caps and overage fees to drive up the cost of streaming via their competitors).

The cable industry falsely believes this is all an ingenious plan to keep its traditional cable TV cash cow alive indefinitely. But as the continued and accelerating rate of TV cord cutting illustrates, the cable sector isn't going to be nearly as impervious to market evolution as it likes to believe.

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Posted on Techdirt - 26 June 2017 @ 11:54am

AT&T May Soon Return To Charging Broadband Subscribers More For Privacy

from the privacy-is-now-a-luxury-option dept

Last year, you might recall that AT&T came up with an ingenious idea: to charge broadband customers significantly more if they actually wanted to protect their own privacy. It basically worked like this: users ordering AT&T's broadband service could get the service for, say, $70 a month. But if that user wanted to opt out of AT&T's Internet Preferences snoopvertising program (which used deep packet inspection to study your movement around the Internet down to the second) users were forced to pay upwards of $800 more each year. With its decision, AT&T effectively made user privacy a premium service.

AT&T backed off this idea after massive backlash, in part because the former, Wheeler-run FCC had started raising a stink about the practice, but also because it wanted regulatory approval for its $85 billion acquisition of Time Warner.

But after successfully lobbying the GOP to kill FCC broadband consumer privacy protections (which would have let the FCC crack down on these kinds of practices on a case-by-case basis), AT&T is apparently considering bringing the program back.

Speaking last week on C-SPAN's The Communicators program, AT&T Senior Vice President Bob Quinn acknowledged that AT&T's first attempt to charge more for privacy didn't go over all that well:

Quinn suggested that the company may try again to roll out that type of pricing structure. "We got an enormous amount of criticism from privacy advocates when we rolled out, in Austin, Texas, an ad-supported Internet service... Privacy advocates screamed about that," Quinn said.

But that was then, and this is now. With FCC privacy protections dead, AT&T lobbyists have shifted their gaze toward killing net neutrality, and shoveling all regulatory oversight of broadband duopolies to an over-extended and ill-equipped FTC. An FTC, we should reiterate, AT&T lawyers have been making very clear they believe has no real authority over AT&T's businesses.

With pesky regulatory oversight now likely out of the way, Quinn makes it clear in the interview he'd like to now revisit the idea of a privacy surcharge, which he claims would somehow provide users with more control over their privacy:

"He added, however, that he believes attitudes will change in the future. "As the privacy revolution evolves, I think people are going to want more control, and maybe that's the pricing model that's ultimately what consumers want."

Right, except again, consumers have made it repeatedly clear they don't want this. AT&T has consistently tried to claim that this is all just "ad-supported internet service" and that charging users more money to protect their privacy was somehow a "discount," since users who were opted in to snoopvertising by default ultimately paid less than consumers that didn't. But as people noted at the time, finding the option to opt out was obnoxiously cumbersome, and the fact you'd pay $800 just to not be tracked was heavily obfuscated by the company.

Yes, many consumers would likely happily pay less money for broadband if ISPs offered a genuine discount for being tracked and monetized. But that's never been what AT&T offered, and since it faces limited competition in many markets -- it has minimal incentive to actually offer it. What AT&T is effectively doing here is making privacy protection a luxury option. And with every indication that AT&T's about to face weaker regulatory oversight than ever -- there's zero incentive for AT&T to offer any program that truly provides consumer benefits. It should, however, be amusing to watch AT&T try and pretend otherwise.

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Posted on Techdirt - 23 June 2017 @ 11:57am

Frontier Communications Caught (Again) Ripping Off West Virginia Taxpayers

from the your-estimates-seem-a-little-high dept

So (for good reason), we keep noting that if you want to see how the American broadband market really works, you should take a close look at West Virginia. As in most states, a lack of competition keeps broadband prices high and speeds slow, with far too many consumers forced to pay a tidy sum for DSL speeds circa 2002. But the state has also been embroiled in scandal after scandal involving Frontier Communication's mismanagement of taxpayer subsidies that were intended to try and resolve this problem.

Local Charleston Gazette reporter Eric Eyre has quietly done an amazing job the last few years chronicling West Virginia's immense broadband dysfunction, from the State's use of broadband stimulus subsidies on unused, overpowered routers and overpaid, redundant consultants, to state leaders' attempts to bury reports supporting allegations that Frontier engaged in systemic, statewide fraud on the taxpayer dime.

Eyre is back again directing readers to a new report by the US Commerce Department's Office of Inspector General (pdf) which found that Frontier pretty consistently tried to game the subsidy system, imposing various "loading" and "invoice processing" fees -- outlawed by federal grant rules governing stimulus funding -- on to invoices submitted to the state. Frontier consistently used these fees to pad their bills to the tune of $4.7 million, and internal memos feature employees clearly demonstrating that Frontier saw this bill padding as a way to glean some additional profit on the taxpayer's dime:

The scathing, 31-page report declared the payments "unreasonable" and "unallowable." Meanwhile, Frontier saw the tacked-on charges as a “revenue opportunity,” according to an internal company email cited in the report. Frontier employees referred to the extra fees as “markups” and “profit."

Keep in mind Frontier had already been fighting a lawsuit alleging that it used a wide variety of tricks to both jack up its original estimates for broadband deployment -- and ensure any subsidies would only be used to shore up Frontier's internal networks, and not to improve overall broadband penetration and competition in the state. This new report notes that one of the tricks used by Frontier was to order and store a massive amount of unused fiber for future "repairs," allowing it to bill more than projects actually cost:

"What’s more, Frontier misled the public about the amount of unused fiber cable — called “maintenance coil” — the company installed across the state, according to the report. The extra fiber, which is stored at public facilities and used for repairs, drove up the broadband expansion project’s cost. Frontier wound up placing 49 miles of spooled-up, unused fiber across West Virginia — four times the amount the company had disclosed to state officials, according to the report.

Unsurprisingly, Frontier insists it has done nothing wrong, despite years of similar allegations across the state. This is the same Frontier that just got done firing a seven year employee because, at his part-time job as West Virginia senate leader, he voted for a new law that would actually help improve broadband penetration and competition in the state. Oddly, state officials (many of the same ones that tried to bury reports alleging the same sort of thing earlier) aren't commenting on the report's findings.

It should be noted that this is how state politics has worked for years for the likes of AT&T and Verizon, who long found it easy to gobble up subsidies and tax breaks, then pay state lawmakers and regulators to look the other way when it came time for accountability over how subsidies are spent. More often than not, these companies are simultaneously being allowed to quite literally write state telecommunications law ensuring that competition in the broadband sector remains muted. All while everybody in the chain professes their unwavering dedication to free markets and consumer welfare.

But Frontier has neither the competency nor the legal and accounting firepower of its larger counterparts, and as it has stumbled closer to bankruptcy courtesy of some questionable business decisions over the last few years, keeping formerly loyal state politicians and regulators consistently looking the other direction has proven increasingly difficult. Still, believing that this ends with anything even remotely resembling accountability and justice remains a very risky wager.

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Posted on Techdirt - 23 June 2017 @ 6:10am

Wall Street Is Starting To Get Very Nervous About Cable TV Cord Cutting

from the from-denial-to-hyperventilation dept

Wall Street is finally starting to realize there's a storm brewing on the horizon for the nation's biggest cable companies. Cable stocks took a notable dip this week after MoffettNathanson analyst Craig Moffett downgraded the entire cable sector because of worries surrounding cord cutting and streaming video competition. Moffett, who not that long ago used to mock cord cutters for being irrelevant basement dwellers, has seen the light -- more recently noting that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record.

And in a lengthy research note to investors this week, the analyst warned that the cable industry's approach to cord cutting (raising rates and offering horrible customer service while hoping it all works out) simply isn't going to cut it given the competitive threats to come:

"Broadband growth will inevitably slow, and it will likely do so at precisely the same time that video growth rates also come under pressure from OTT substitution," Moffett said in his Tuesday-morning note. "And while cable operators have the pricing power to offset these headwinds via their broadband business, we believe it is likely that investors will (appropriately) apply a somewhat lower terminal growth rate assumption to a business that is achieving its growth through pricing rather than unit growth."

Wall Street and the cable sector's optimism in the face of a massive sector (r)evolution is running out of oxygen, Moffett insists:

"The cable stocks have climbed a wall of worry to get here," Moffett wrote to clients. “But as any mountain climber knows, the higher you go, the thinner the air."

It's an interesting position for Moffett to take, given the fact that for years the analyst breathlessly supported broadband usage caps and overage fees as a fail-safe solution to this problem, once going so far as to declare usage caps "the next generation of communications." Arbitrary and utterly unnecessary usage caps are one trick Comcast has been using to hamstring streaming competitors, while raising prices on broadband to counter any potential TV revenue loss.

For the moment, Comcast has been cushioned from the cord cutting threat by its growing monopoly over fixed-line broadband service. Companies like AT&T and Verizon have shifted their attentions to media and advertising, and other major telcos like Windstream, Frontier, and CenturyLink lack the courage, money or incentive to upgrade their aging DSL lines at any real scale. So in many markets, customers looking for next-gen broadband speeds only have one option: cable. And when they show up, they're forced to sign up for TV services they may not want.

You'd think that a growing broadband monopoly, usage caps, and the government's decision to gut most meaningful oversight of one of the least-competitive sectors in America would have Wall Street stock jocks pretty damn excited. The fact that many of them are still very worried about the cord cutting threat to come -- despite Comcast's immense position of power -- tells you precisely what kind of threat we're looking at.

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Posted on Net Neutrality Special Edition - 22 June 2017 @ 6:25am

Tumblr Goes Radio Silent On Net Neutrality After Verizon Acquisition

from the leashed-and-muzzled dept

Back when Verizon first began expressing interest in pivoting from broadband duopolist to media and advertising, you might recall that it launched a short-lived technology blog named Sugarstring. Sugarstring quickly made headlines for all the wrong reasons however, after it was revealed that Verizon was banning any new hires from writing about hot-button subjects like net neutrality, or the fact that companies like Verizon and AT&T are now bone-grafted to the nation's intelligence and surveillance apparatus.

Sugarstring is long-since dead, replaced in large part by Verizon's acquisitions of Yahoo and AOL, which also brought Huffpo, Engadget, and Techcrunch under the Verizon umbrella. And while Verizon itself has been busy using fake reporters to blatantly lie about the company's ongoing role in killing net neutrality, there's no indication (yet) that the company has pressured any of its own news outlets to quiet down on the subject. In fact, we've noted previously that some of the best reporting on net neutrality in recent months has originated at TechCrunch (this piece in particular is worth a read).

But while Verizon hasn't yet tried to get its own news outlets to quiet down on net neutrality, other now-Verizon-owned companies that used to be very active on the subject have gone dead quiet. Case in point: Tumblr, which was an integral ally in the SOPA/PIPA fight and an outspoken protector of net neutrality, is now utterly radio silent as FCC boss Ajit Pai attempts to kill the popular consumer protections. Insiders at the company this week expressed their concern to the Verge that Verizon is pressuring CEO David Karp to keep his mouth shut on the subject:

"Now, multiple sources tell The Verge that employees are concerned that Karp has been discouraged from speaking publicly on the issue, and one engineer conveyed that Karp told a group of engineers and engineering directors as much in a weekly meeting that took place shortly after SXSW. “Karp has talked about the net neutrality stuff internally, but won’t commit to supporting it externally anymore,” the engineer said. “[He] assures [us] that he is gonna keep trying to fight for the ability to fight for it publicly.” Karp did not respond to four emails asking for comment, and neither Yahoo nor Tumblr would speak about the matter on the record."

Granted Karp may just have toned down the company's rhetoric voluntarily to avoid ruffling feathers during the transition. And obviously any time a smaller company gets acquired by a larger conglomerate (especially from the historically droll and stodgy telecom sector) you'll see a major culture shift that often isn't for the better. Still, Verizon's positions on subjects like net neutrality are so hostile, Tumblr employees have grown increasingly uneasy in recent weeks, which could lead to an exodus of talent at the company:

“Some of our previous stances on issues that are really important to Tumblr employees and its community are being silenced,” said the former employee. “We've been really noisy about things like net neutrality in the past. We asked the new Head, Simon Khalaf, about it in an all-hands a few weeks ago and he said it was ‘not his problem’ and ‘above his pay grade.’” A current employee and another former employee corroborated this account."

It's unfortunate to have lost Tumblr's voice in the net neutrality fight, especially given that other industry giants like Google and Netflix have similarly gone mute on the subject, leaving consumers and small businesses increasingly alone in fighting for something vaguely resembling an open and healthy internet. And while you'd like to think Verizon is above trampling the editorial independence of former AOL and Yahoo news outlets, Verizon's Sugarstring experiment should make it pretty clear that ham-fisted attempts at censorship aren't exactly out of character for the telco.

For now, however, Verizon appears content to try and use entirely fake journalists like "Jeremy" to spread misinformation on net neutrality, as evident by this recent, comically misleading video by the company:

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Posted on Techdirt - 21 June 2017 @ 9:37am

Verizon Bucks AT&T And Comcast, Supports Utility Pole Reform For Faster Fiber Deployment

from the bureaucratic-bumbling dept

In addition to high costs and the slow pace of digging up streets, one of the reasons Google Fiber is contemplating a pivot from fiber to next-gen wireless broadband is the boring old utility pole. As it stands now, new market competitors often have to navigate an archaic, elaborate and expensive process to attach fiber to poles. Quite often, attaching fiber requires having any other ISPs in the area notified in writing, then waiting for each one to move their own equipment piecemeal, one of several bureaucratic processes incumbents have long abused to slow down the arrival of new competitors.

When Google Fiber began more seriously deploying fiber, it proposed new "one touch make ready rules" in many municipalities. Under these revised rules, a licensed, insured third-party contractor is allowed to move any equipment on utility poles with owner approval. In many instances, these contractors are the very same ones used by large ISPs themselves. The regulatory reform is estimated to streamline the pole attachment process by six months to a year.

But because this regulatory reform would make it easier for broadband competitors to come to market, large ISPs like AT&T, Comcast and Charter (Spectrum) decided to sue cities like Louisville and Nashville for proposing such reforms. Of course these regional mono/duopolies can't admit they're predominately motivated by anti-competitive reasons, so they've tried to argue they're simply worried that the reform will cause rampant outages (again, these are licensed, insured contractors already employed by many ISPs). Charter even tried to claim the reforms violated its First Amendment rights.

But something shifted this week in this long-standing, if under-noticed and important debate. Verizon has decided to buck AT&T and Comcast, and has published a blog post throwing its full-throated support behind Google's one touch utility pole reform (though you'll note they're careful not to mention their arch-nemisis Google by name). Verizon is quick to highlight the often-absurd bureaucracy at the heart of this process:

Under the current system, a new attacher must contact a pole owner to get permission to attach, wait for a survey, and then, wait some more as each existing attacher moves or adjusts their attachments – a process called “make-ready” (literally, making-the-pole-ready for the new attachment). Right now, this often proceeds sequentially, with multiple reviews and truck rolls for each of the providers already attached to the pole. It can take six months to a year – and piles of paperwork – to get a new attachment approved and placed on a pole.

Having deployed $25 billion or so in fiber to the home, the company proceeds to note that it, if anyone, should know a little something about this process. As such, it notes that a streamlined pole attachment process would bring a lot of efficiency to the entire affair, helping to speed up broadband deployment nationwide:

Instead of the current ungainly process, there would be one truck roll to make all of the adjustments to existing attachments and to add the new attachment. Just one disruption to traffic instead of multiple trucks. And to care for legitimate concerns about protecting networks and ensuring safety, the FCC could limit participation to qualified, licensed contractors who are approved by pole-owners, agree to abide by all applicable safety standards, and who, along with the new attacher, will indemnify pole owners and existing attachers if things go wrong.

The question of the hour is: why isn't Verizon siding with AT&T, Comcast and Charter out of a desire to protect itself from added fixed-line broadband competition? Verizon no longer cares about fixed-line broadband competition. As we've long noted, Verizon's FiOS expansion is all but frozen, and it's been selling off its unwanted fixed-line customers and networks piecemeal. Verizon's plan now is to gobble up AOL and Yahoo, and become an advertising and media company like Google -- but one that controls the conduit and the message via its nationwide wireless network.

And most of the current hotbeds for fiber deployment (pretty much everywhere but Verizon's territory in the Northeast) won't impact Verizon's remaining fixed-line infrastructure. But these fiber deployments outside of Verizon's territory will help fuel Verizon's fifth-generation (5G) expansion plans, which is why, for once, Verizon is actually on the right side of the issues -- instead of trying to keep the bureaucratic status quo intact.

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Posted on Techdirt - 21 June 2017 @ 3:12am

Cable Lobbyists Try To Scuttle State Inquiries Into Shitty Broadband Service, Slow Speeds

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

Whether it's rolling back already agreed upon merger conditions, killing net neutrality, or eliminating broadband privacy protections, giant ISP lobbyists are having a field day under the Trump administration, slowly but surely stripping away oversight of one of the least competitive -- and most anti-competitive -- sectors in American industry. We've noted repeatedly that as giant cable providers like Comcast nab an ever larger monopoly over next-gen broadband services, the end result of this myopic pursuit will be even higher rates -- and even worse customer service -- for everyone.

But there's a problem in this quest to create a new, golden era of telecom sector monopoly dysfunction: individual states.

In the wake of the attack on the FCC privacy rules, more than a dozen states have rushed to enact new privacy protections for consumers, requiring that ISPs are very clear about what data they're collecting and who they're selling it to. And in the wake of federal apathy to consumer complaints about some of the worst customer service in any industry, individual states have also started pushing back, as evidenced by New York Attorney General Eric Schneiderman's lawsuit against Charter Communications for advertising speeds company execs knew they couldn't deliver.

Ironically, cable lobbyists (and the politicians, sock puppets, think tankers and policy wonks paid to love them) have quickly rushed to defend "states' rights!" when it comes to giant ISPs' ability to write protectionist state laws that hamper broadband competition. But now that several states are actually passing legislation that might help consumers, the broadband industry and current FCC have launched a concerted effort to keep states from meddling in their attempts to build utterly-unaccountable media, advertising, broadband and television conglomerates.

Case in point: the FCC is already making noise about their plans to somehow prevent states from passing consumer broadband privacy laws. And last week, cable industry lobbyists began petitioning the FCC in the hopes of making it much more difficult for states to investigate claims of substandard broadband service and speeds, allowing them to hide behind the "up to" marketing language most of us are familiar with:

"NCTA-The Internet & Television Association and USTelecom, lobby groups for the cable and telecom industries, last month petitioned the Federal Communications Commission for a declaratory ruling that would help ISPs defend themselves against state-level investigations. The FCC should declare that advertisements of speeds "up to" a certain level of megabits per second are consistent with federal law as long as ISPs meet their disclosure obligations under the net neutrality rules, the groups said. There should be a national standard enforced by the FCC instead of a state-by-state "patchwork of inconsistent requirements," they argue.

While there are valid concerns that individual state requirements could make life more complicated for large ISPs, ignored by the NCTA is the fact that their efforts to gut meaningful federal oversight of telecom providers is the primary reason that's happening in the first place. And a bipartisan filing by 34 state attorneys general (pdf) points out that this effort has nothing to do with wanting to avoid "inconsistent requirements," and everything to do with wanting to dodge accountability for poor service on both the state and federal level:

"[I]t appears that the petition is really seeking to alter disclosure obligations under state law, including state consumer protection laws’ prohibitions on false and misleading statements and material omissions in consumer-facing advertisements," they wrote. "Such a ruling would plainly exceed the scope of the Commission’s authority granted by Congress, and would be improper." There is also "no factual basis" to determine that ISPs' speed disclosures meet the FCC's "just and reasonable" standard, they argued. "The request is plainly seeking a factual finding, despite the complete lack of any factual record to support such a conclusion," they wrote."

It's worth reiterating: when states have come under fire for letting ISP lobbyists directly write horrible protectionist legislation that hamstrings local community rights and hinders broadband competition, cable lobbyists are quick to rush to the defense of state rights. When those states actually try to hold these same broadband providers accountable for substandard service courtesy of a lack of competition, it's suddenly all a bridge too far. Meanwhile, those that still believe that blindly deregulating the telecom market will somehow magically make Comcast behave, are in for a nasty surprise over the next decade.

Again, deregulation can help competitive markets thrive. But the telecom sector, as we've long illustrated, is neither competitive nor that simple. In fact, earlier efforts to blindly deregulate an uncompetitive, utterly-dysfunctional, taxpayer-subsidized broadband industry is the precise reason most of you are currently stuck on hold with Comcast in the first place. And the sooner we collectively realize that giving some of the least ethical companies in America carte blanche doesn't magically result in connectivity Utopia, the sooner the quest for cheaper, better, and more broadly-available broadband will be fulfilled.

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Posted on Techdirt - 20 June 2017 @ 6:45am

Broadband ISP CenturyLink Accused Of Wells-Fargo-Esque Scam That Bilked Millions From Customers

from the the-height-of-creativity dept

If there's any real creativity in the broadband sector, it often has little to do with the actual products and services offered. More often than not, the real creativity in the sector involves finding ingenious new ways to bilk consumers out of additional money, or charge them significantly more money for the exact-same service. Whether talking about hidden below the line fees or arbitrary and unnecessary usage caps, the lack of real broadband competition has resulted in a gold rush -- at least when it comes to creatively-misleading charges.

CenturyLink (the end product of a series of telecom sector mergers involving Embarq, Qwest and CenturyTel) has already pursued usage caps and overage fees, as well as an incredibly misleading, unnecessary and nonsensical "Internet cost recovery fee" it tacks on to the bottom of every broadband bill. But the company is now being accused of taking things notably further. One former employee has filed suit in Arizona, accusing the company of signing up subscribers for a rotating crop of services they didn't want and didn't order -- simply to help company reps meet sales targets.

Former customer service agent and case plaintiff Heidi Heiser says she and other support reps began noticing that consumers were being signed up for lines or services they didn't order, and that company higher ups didn't seem to much care:

"When a customer complained about an unauthorized charge, customer service and sales agents like Heiser were directed “to inform the complaining customer that CenturyLink’s system indicated the customer had approved the service,” according to the complaint, and as a result “it was really the customer’s word against CenturyLink."

In telecom these kinds of high-pressure sales tactics aren't particularly uncommon. T-Mobile was accused of turning a blind eye to a similar tactic last December. AT&T and Verizon have been similarly charged with turning a blind eye to third party "cramming" -- or signing consumers up for often fraudulent services consumers didn't order -- because carriers have consistently received a cut of the revenues. AT&T, in fact, was busted actively making its bills harder to understand to help obfuscate the scams and keep the money from them rolling in.

In this case, the CenturyLink whistleblower says she was fired shortly after drawing attention to the tactic on an internal company message board. Rather unsurprisingly, CenturyLink -- which is currently trying to close a merger with Level 3 Communications -- was quick to insist they'd done nothing wrong:

"CenturyLink "holds itself and its employees to the highest ethical standards" and has "an Integrity Line in place, 24 hours a day, seven days a week," Mark Molzen, a spokesman, said in a statement. "This employee did not make a report to the Integrity Line and our leadership team was not aware of this matter until the lawsuit was filed. We take these allegations seriously and are diligently investigating this matter."

But Heiser, who says she began getting increasingly uncomfortable as the Well Fargo scandal unfolded late last year, notes that she did bring the tactic to CenturyLink executives' attention -- but was allegedly told to "stay positive and not to mention her concerns again."

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Posted on Techdirt - 19 June 2017 @ 10:43am

GOP Data Firm Left The Personal Data Of 198 Million American Voters On Openly-Accessible Amazon Server

from the whoops-a-daisy dept

A GOP data firm has accepted responsibility for leaving the personal data of 198 million Americans (aka: most of the country's voting populace) openly accessible on an Amazon server in the biggest voter data leak in global history. Deep Root Analytics, the owner of the data, has long been contracted by the Republican National Committee to measure voter opinions on a wide variety of issues, from health care to gun control. As part of their contract with the RNC, the group pulls voter information from a wide variety of sources, ranging from Reddit to the Karl Rove super PAC American Crossroads.

This data, which includes religious affiliation and ethnicity, is then utilized to help craft PR efforts and other messaging, as well as to determine turnout and voter preferences. And, according to analysis of the data and previous profiles of the company like this one over at Ad Age, this firm was hugely influential in getting Donald Trump's "populist" message out to voters during the last election cycle.

But last week, UpGuard cyber risk analyst Chris Vickery discovered that Deep Root had been storing a massive amount of this data on Amazon servers, publicly accessible via the internet, with absolutely no apparent security precautions whatsoever:

The data repository, an Amazon Web Services S3 bucket, lacked any protection against access. As such, anyone with an internet connection could have accessed the Republican data operation used to power Donald Trump’s presidential victory, simply by navigating to a six-character Amazon subdomain: “dra-dw”.

Vickery frequently hunts for misconfigured data sources on behalf of UpGuard's Cyber Risk Team, often finding everything from military engineering plans to lists of potential terrorists -- simply sitting out in the open. Vickery had recently exposed a top defense contractor for doing something similar, albeit on a notably smaller scale. In this instance, the openly-accessible data included names, addresses, birthdates, phone numbers, troves of stored online user posts, collected over the better part of the last decade:

"Within “data_trust” are two massive stores of personal information collectively representing up to 198 million potential voters. Consisting primarily of two file repositories, a 256 GB folder for the 2008 presidential election and a 233 GB folder for 2012, each containing fifty-one files - one for every state, as well as the District of Columbia. Each file, formatted as a comma separated value (.csv), lists an internal, 32-character alphanumeric “RNC ID”—such as, for example, 530C2598-6EF4-4A56-9A7X-2FCA466FX2E2—used to uniquely identify every potential voter in the database. These RNC IDS uniquely link disparate data sets together, combining dozens of sensitive and personally identifying data points, making it possible to piece together a striking amount of detail on individual Americans specified by name."

One segment of the files contained modeled data about each individual voter's likely positions on 46 different issues. Other portions of the data detail whether voters are registered, and whether they are currently on the federal "Do Not Call" list (you may recall that the RNC is currently supporting a proposal that would let them spam your voicemail inbox without your phone ringing). Collectively, this data was collected and used by a massive number of Republican outfits, including Americans for Prosperity, market research firm TargetPoint, Causeway Solutions, and more.

The security faux pas is considered one of the most monumental ever documented in any country. The 198 million American voters exposed by this screw up dwarves the previous biggest leak -- a leak of the voting data of 93.4 million Mexican citizens -- as well as the now-third biggest leak of this kind ever -- the exposure of the data of 55 million voters in the Philippines. On the plus side, a statement being provided by Deep Root to the media takes ownership of the screw up, without too much of the couching you often see after such breaches:

"We have engaged Stroz Freidberg to conduct a thorough review, and that process is underway. Based upon this review we have determined that the access that was made without our knowledge happened because of a change that was made in the files’ asset access protocols. We are in the process of determining how that change was made and take full responsibility for the change, but suffice to say we have updated the settings to prevent further access. We believe the change that was made happened post June 1 2017, which was when we last evaluated and updated our security settings. We do not believe that our systems have been hacked. To date, the only entity that we are aware of that had access to the data was Chris Vickery."

Still, it's not exactly a confidence builder to witness the largest leak of voter data in global history as we're busy trying to ascertain just how secure our clearly dysfunctional voting systems are to malicious outside influence -- and debating the slow-but-steady erosion of consumer privacy protections being spearheaded by the GOP.

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Posted on Techdirt - 19 June 2017 @ 6:15am

80% Of Cord Cutters Leave Because Of High Cable TV Prices, But The Industry Still Refuses To Compete On Price

from the it's-not-a-problem-if-we-ignore-it,-right? dept

A new study from Tivo (pdf) notes that nearly half of current pay TV subscribers are considering cutting the cord this year. That's not particularly surprising given the fact that the first quarter set cord cutting records, and the second quarter is expected to be significantly worse. Similarly unsurprising is the fact that of these defecting customers, roughly 80% of those departing say they're doing so because traditional cable TV service is simply too expensive:

37.1% of respondents spent at least $101 per month on cable TV, with some spending upwards of $150 per month, with trends only aiming higher. While cable providers often pay ample lip service to "providing value," the entire cable and broadcast sector continues to believe that it can simply refuse to compete on price with a growing roster of streaming competitors now arriving at the gates of their beloved cash cow.

Case in point is Charter Communications, which after a recent acquisition spree has been raising TV rates upwards of 40% despite the supposed bump in competition. Charter CEO Tom Rutledge, who was deemed to be the highest paid executive in the United States last year at $98 million, has insisted that these customers were simply "mispriced" under previous ownership and needed to be nudged in the "right direction" (read: paying even more money for the same service they already thought was too expensive):

"It’s a difficult thing to model. But we’re coming at it both ways, both from creating a value proposition in the pricing and packaging we have, and doing those smart things that you can do with an existing customer base that’s been mispriced to move them in the right direction."

That's gibberish, and shockingly, this kind of tone deafness to the overall trajectory of the cable sector is only causing a spike in cable TV defections at the company, which lost more than 100,000 cable TV subscribers last quarter. Tivo makes it clear that the cable industry can't continue the ongoing head-in-the-sand approach to dealing with the rise of cord cutting and streaming competition:

When the increase in monthly bills is coupled with the fact that 81.4% of unsatisfied respondents selected “Too expensive/increase fees for cable/satellite service,” it becomes evident that something must be done about this group. With more options than ever for TV in 2017, consumers continue to get smarter about their TV options, and many have discovered ways to access TV for far less than $100 a month. Skinny buddle offerings have increased, too, and options include Dish Networks’ SlingTV, DIRECTV NOW and Sony’s PlayStation Vue.

Instead of competing on price and package flexibility, most large cable companies (like Comcast) have responded to cord cutting by not only raising TV rates, but ramping up deployment of arbitrary and unnecessary broadband usage caps and "overage fees", allowing them to counter any lost TV revenues with broadband price hikes, and punish folks looking to wander away from Comcast's own TV walled garden. But Charter is prohibited from using caps for another six years as a condition of its recent megamerger, conditions the FCC has started to slowly but surely nibble away at.

Still, the cable industry has at least progressed in one meaningful metric: a few years ago it denied any of this was happening whatsoever.

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Posted on Techdirt - 16 June 2017 @ 9:46am

Russia Stumbles Forth In Quest To Ban VPNs, Private Messenger Apps

from the feel-safer-yet? dept

Last year we noted how Russia had introduced a new surveillance bill promising to deliver greater security to the country. Of course, like in so many countries, the bill actually did the exact opposite -- not only mandating new encryption backdoors, but also imposing harsh new data-retention requirements on ISPs and VPN providers. As a result, some VPN providers like Private Internet Access wound up leaving the country after finding their entire function eroded and having some of their servers seized.

This year, Russia hopes to deliver the killing blow to the use of VPNs and other privacy-protection tools.

The Duma's (the lower house of the Russian parliament) Information and Technology Committee has approved controversial draft legislation that would ban anonymity on messenger apps entirely. It's part of a crackdown on anonymous journalists that have (stop us if this sounds familiar) been leaking details on many of the sordid occurrences inside the often-corrupt Russian political machinery. Expected to take effect in 2018, the new law would require messenger users to verify their identities using their phone numbers, with Russian mobile phone operators expected to assist the government with this effort.

In concert, a bill has been submitted attempting to effectively ban VPN use entirely. In Russia, broadband users have increasingly turned to VPNs to avoid the growing-list of censored websites. To help thwart such usage, the bill would not only impose steep fines on VPN providers that don't agree to block blacklisted websites, but would require ISPs terminate these companies connection to the internet should they not comply:

"As it stands, the bill requires local telecoms watchdog Rozcomnadzor to keep a list of banned domains while identifying sites, services, and software that provide access to them. Once the bypassing services are identified, Rozcomnadzor will send a notice to their hosts, giving them a 72-hour deadline to reveal the identities of their operators.

After this stage is complete, the host will be given another three days to order the people running the circumvention-capable service to stop providing access to banned domains. If the service operator fails to comply within 30 days, all Internet service providers will be required to block access to the service and its web presence, if it has one."

In short: help us censor the internet or you won't be allowed to do business in Russia. 100 VPN providers are already blocked in Russia for one reason or another, and Opera scaled back its Russian operations last November after Russian telecom regulator Roskomnadzor pressured it to include website filtering in the integrated VPN (now included in its Opera browser for free). The bill would also levy additional penalties on Russian search engines, forcing them to remove all links to sites Rozcomnadzor determines to be ban-worthy.

Like countless similar efforts across numerous countries, this is all framed as an utterly necessary step to thwart piracy, combat extremism and ensure the safety and security of the Russian people. But as with comparable proposals in the States and elsewhere, these proposals undermine encryption and essential security and privacy tools, making the general public notably less secure. They're also an expensive game of Whack-a-Mole as users looking for privacy simply flee to services like Tor or Zeronet, ensuring these services will be the demonized bogeymen of tomorrow.

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Posted on Techdirt Wireless - 16 June 2017 @ 6:32am

Wall Street Still Annoyed That Competition Forced Wireless Carriers To Bring Back Unlimited Data Plans

from the I-hate-competition dept

T-Mobile's loopy idea to try and treat wireless subscribers better (well, if you exclude their attacks on the EFF and net neutrality) has been a great thing for American consumers and wireless sector competition. Thanks to more consumer-friendly policies, T-Mobile has been adding more subscribers per quarter than any other major carrier for several years running. This added competitive pressure recently resulted in both AT&T and Verizon being forced to bring back the unlimited data plans the companies had been insisting for years consumers didn't actually want.

The problem, if you're a wireless carrier or investor, is that AT&T and Verizon are making slightly less money now that they're unable to sock consumers with restrictive caps and overage fees. In fact, wireless sector revenues dipped slightly in the first quarter for the first time in seventeen years, as T-Mobile competition forced carriers to engage in a little more than theatrical non-price competition. Keep in mind these companies are still making some fairly-incredible profits, and their expansion into areas like smart cities and the IOT give them ample opportunity for new revenue streams.

But unlimited data plans returned at the start of the year, and Wall Street firms still can't quite let go of the fact that these industry giants might just have to make a little less money. Cowen and Company Equity Research analyst Colby Synesael simply isn't very happy about this whole competition thing:

"The first quarter of unlimited for all four carriers left much to be desired. Both AT&T and Verizon incurred postpaid losses for the first time on record, a trend that could continue. Verizon specifically had its worst quarter in recent memory with a lackluster performance on nearly all sub metrics. Even T-Mobile’s guidance included a ‘less great’ postpaid net add increase of just +250,000. Combined with continued pricing pressure, AT&T and Verizon are pivoting to new avenues of growth such as Mexico, content, media, IoT and 5G, all of which can’t come soon enough."

Mike McCormack of Jefferies shares similar worries about how the elimination of often-arbitrary usage caps and overage fees means precious wireless industry giants now have to more seriously compete:

"The resurgence of unlimited plans is likely to delay more meaningful ARPU stabilization for multiple quarters due to the loss of overages and plan rightsizing. Impacts to ARPU on an incremental basis (i.e. for new subscribers) will depend on the number of accompanying lines activated. Our analysis suggests a willingness to use price with the hopes that multiline subscribers will churn less frequently. The move to unlimited also diminishes the ability to monetize growing data usage, removing an important lever of growth."

Poor darlings, having to actually compete on price and listen to consumers!

But worry not. Wall Street and these wireless companies have an ingenious solution to the sudden influx of T-Mobile competition: reduce competition through additional sector mergers and acquisitions. Wall Street analysts have been relentlessly fanning the flames of a Sprint acquisition of T-Mobile, which would eliminate one of four major competitors in the space. Sprint owner Softbank has been buttering up the Trump administration for much of the year in the hopes he'll approve a deal that was blocked by regulators in 2014 because it would have reduced competition.

Sprint CEO Marcelo Claure spent this week insisting such a union would create "enormous" synergies, and the fusion of the two companies would let the merged company battle more effectively with the likes of AT&T and Verizon Wireless. Granted if you've spent five minutes with a history textbook (especially one governing the telecom sector), you'll find that these megamergers almost always kill jobs, reduce overall competition, and reduce incentive for consumer service and network improvements. Meaning that if this merger is approved, bringing back unpopular usage caps and overage fees will be a top priority.

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Posted on Techdirt - 15 June 2017 @ 6:23am

Verizon Gets A Wrist Slap For Years Of Neglecting Its Broadband Networks In New Jersey And Pennsylvania

from the I-get-200-kbps-when-it-rains dept

For much of the last decade we've noted that Verizon received billions in tax breaks and subsidies for fiber optic networks that were only partially deployed. From New Jersey to Pennsylvania, from New York City to Philadelphia, newswires the last few years have been filled with complaints from consumers and governments who say the company didn't finish the job it was handsomely paid to complete, leaving a patchwork of spotty next-gen broadband availability, and entire cities filled with customers still paying an arm and a leg for circa 2002 DSL speeds.

And the problem isn't just that Verizon didn't upgrade its networks, it's that the company has been neglecting the aging DSL network equipment already in place. In 2015, for example, frustrated Verizon union employees submitted a complaint to the Pennsylvania Public Utility Commission highlighting just what Verizon's network hardware currently looks like in many parts of a state that was supposed to have been upgraded to fiber years ago:

The same can be said for a wide variety of instances where Verizon couldn't really be bothered to work particularly hard at utility pole repair:

Given Verizon's political stranglehold over federal and local regulators and legislators, efforts to hold the company accountable on this front have been decidedly mixed. The company has often added insult to injury by insisting these complaints are either "pure nonsense," or at times by trying to claim that people who would like their phone and DSL lines to be upgraded (or hey, to simply work) are just being archaic Luddites because they refuse to sign up for significantly more expensive wireless service that in many areas may not be available anyway:

"This is a classic example of how some people fear new technology so they reactively reject it instead of accepting it, no matter how irrational that fear may be," Gierczynski said. Verizon opponents believe it plans to offer non-FiOS neighborhoods what they said is inferior wireless or Voice Link services once the firm's aging, deteriorating copper wire lines stop working altogether.

"I think people are going to look back and laugh (at copper landline proponents) ... just like (those) who were part of the Anti-Digit Dialing League," he added, referring to people who resisted the seven-digit phone numbers that began in the late 1950s.

Yes, hilarious. The goal for both AT&T and Verizon over the last few years has been to effectively let these unwanted DSL customers rot on the vine, until company lobbyists can convince state regulators to purge regulations requiring they continue to serve these users, many of which are elderly. This has been done (as evident above) by suggesting that killing off fixed-line DSL networks and shoving these users to wireless is all part of a miraculous "IP transition" that will deliver untold, amazing technological advancements to local communities.

Complications arise from the fact that wireless (especially in rural areas) isn't yet a viable alternative to fixed lines. Many of these lines were also taxpayer subsidized, and are still very much in use. Not to mention the fact that Verizon took billions more from these communities to deliver fiber upgrades never delivered. That said, there has been some modest traction in recent weeks after Verizon was forced by Pennsylvania regulators to at least repair some of the worst parts of its neglected network:

"The telecom giant will repair the worst of its legacy copper network in areas without FiOS and replace 15,000 unsightly and dangerous “double poles” on Pennsylvania roadsides, according to the deal between the company and the company’s Pennsylvania unionized workers who are part of the Communications Workers of America."

The agreement falls well short of requiring Verizon to admit fault of any kind, or forcing Verizon to upgrade these networks to fiber as per a 1993 agreement with the state -- that critics say was supposed to result in uniform fiber coverage statewide. But Verizon has also been forced to strike a similar deal by the New Jersey Board of Public Utilities, who found that, again, Verizon neglected its fixed-line networks to an almost comical degree. It won't, however, be forced to upgrade the state to fiber:

"But the telecom giant won’t be wiring a wide swath of Cumberland, Burlington, Salem, and Atlantic Counties with the high-speed Fios service that has been extended to millions of residents in other parts of New Jersey, according to a settlement among state officials, Verizon, and 17 towns that complained about substandard phone service. Fios is Verizon’s branded service for internet, television, and voice services, delivered over fiber lines.

In late 2015, the 17 towns, mostly in Cumberland County, complained to the state Board of Public Utilities about downed phones and bad or no internet. Service has been particularly unreliable on rainy or damp days, which result in buzzing water-soaked copper phone lines because of their age and rundown condition, local residents and officials say."

These are important wins, but in full context they're a drop in the bucket. Time, and time, and time again communities have tried to hold the telco accountable for taking taxpayer funds, then failing to upgrade essential infrastructure. Verizon's attentions meanwhile are elsewhere. The company recently acquired AOL and Yahoo in the hope of pivoting from neglecting running fixed-line networks to becoming a major media and advertising competitor to Google and Facebook (success on that front has been decidedly mixed).

It's abundantly clear that Verizon executives are done with these communities, but these communities also have made it abundantly clear (as New York City's recent lawsuit against the telco will attest) -- they're not quite yet done with Verizon.

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Posted on Techdirt - 14 June 2017 @ 6:20am

Cable Lobby Again Makes It Clear That Net Neutrality Didn't Hurt Broadband Investment

from the have-your-cake-and-eat-it-too dept

So we've long noted how giant ISPs like Comcast have repeatedly tried to claim that the FCC's fairly modest 2015 net neutrality rules utterly devastated broadband industry investment. The problem for Comcast is that any time a journalist takes the time to review publicly-available SEC filings and earnings reports, that claim is proven indisputably false. Yet, no matter how many times this complete and total fabrication is pointed out by the media, broadband industry lobbyists simply continue to repeat the claim, hoping lazy reporters regurgitate it (which still somehow happens more often than not).

Not only does the broadband sector continue to repeat this claim, they contradict themselves on pretty much a monthly basis.

The latest case in point: the cable industry's top lobbying organization, the NCTA, this week published a blog post patting itself on the back for the amazing improvements and investments made in the sector in recent years. The group cites a recent report by Akamai (pdf), which notes the United States is now tenth worldwide in terms of average broadband speeds. The NCTA is quick to applaud itself for the industry's "aggressive deployment of new technologies" by the cable sector:

"This near quadrupling of internet speeds in just five years is the result of constant innovation cycles and aggressive deployment of new technologies across the country. Thanks to the constant process of growth and improvement, Gigabit cities are springing up across the country in both urban and rural communities, further driving average speeds into the stratosphere."

Most of the sector improvements are courtesy of either scattered fiber deployments -- or cable DOCSIS 3.1 upgrades, which allow for gigabit speeds over cable. That said, the fact that many telcos have given up on the residential fixed-line broadband market means the cable sector has established a fairly impressive monopoly over next-generation broadband speeds, allowing it to ignore customer service, raise prices, and expand unpopular usage caps and overage fees. It's part of the reason why speeds (or investment) alone shouldn't be used to determine the health of the telecom market.

Regardless, over on Twitter, the NCTA is again quick to use these upgrades as a shining example of the cable industry's ongoing commitment to investing in upgrades:

The problem, of course, is that the NCTA has consistently argued that this kind of investment wasn't happening due to net neutrality protections. That's one of the central, repeated, unyielding justifications for the FCC's decision to try and kill the agency's net neutrality rules this summer. Jon Brodkin at Ars Technica is quick to highlight the raging inconsistency of this position:

"As we can see, the NCTA has flexible messaging and applies conflicting arguments to different situations. When the NCTA tells the Federal Communications Commission that it should roll back net neutrality regulations, the association says that the rules harm investment and raise prices on consumers. But when trying to convince the public that US broadband is a marvel of innovation and that we should all be grateful to cable companies, the NCTA says speeds are soaring and that customers are paying less."

In short when the cable lobby wants to market its incredible "innovation" -- it points out all of the investments into next-gen broadband speeds it has been making. When it wants to kill FCC rules protecting consumers from growing monopoly behavior, suddenly all these investments magically disappear.

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Posted on Techdirt - 13 June 2017 @ 6:37am

TV Cord Cutting Poised To Smash Records During Second Quarter

from the inevitable-(r)evolution dept

So we've already noted that with the rise of streaming video competition, more people cut the TV cord last year than any other time in history. MoffettNathanson analyst Craig Moffett has noted that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year. And once you factor in the fact that people are buying and moving to new homes without signing up for cable, the full numbers are actually worse.

And things are only going to accelerate as companies like Dish (Sling TV), Sony (Playstation Vue), Google (YouTube TV), Amazon and others flood the market with cheaper, more flexible, streaming alternatives.

Pay TV providers already lost roughly 789,000 subscribers this year. Wall Street analysts expect the second quarter to see more than 1 million subscriber defections away from cable. The second quarter is already historically the worst of the year for cord cutting, as college students cancel school service and pad the defections. This year, however, the belated rise in real streaming competition means things will be arguably worse:

"Pay TV providers could lose more than a million subscribers in the current period, a team of analysts at UBS led by John C. Hodulik wrote in a research note distributed Tuesday. "That would be the worst result on record and equate to a 2.5% annual decline," compared to 2.1% last quarter, the analysts wrote.

And things for the industry could only get worse, the analysts wrote.

"We estimate this will put the industry on pace for a 3.3% decline in 2017 and 4.0% in 2018," they said in their note.

You might just notice a bit of a trend after UBS put its estimates into visual form:

As we've long noted, none of this will be fatal for industry giants like Comcast, who plan to counter lost TV revenues by jacking up broadband prices via arbitrary and otherwise unnecessary usage caps, using bundled pricing to force people to take TV bundles they may not even want. The broadcast and cable TV sector could also easily counter these losses by doing something uncharacteristic and unthinkable for the sector: listening to these defecting customers and actually competing on price and package flexibility.

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Posted on Net Neutrality Special Edition - 12 June 2017 @ 9:25am

Wisconsin Senator Johnson Calls Net Neutrality 'A Slogan,' Laments The Lack Of 'Fast Lanes'

from the take-the-slow-lane-to-common-sense dept

Apparently hoping to generate some support for his unpopular plan to gut oversight of one of the least competitive business sectors in America, FCC boss Ajit Pai left DC last week to do a tour of some midwestern states. During that tour he stopped in Milwaukee to talk about net neutrality with Wisconsin Senator Ron Johnson on WTMJ Radio (you can listen to the full interview here). During the interview, Pai proclaimed that the entire concept of net neutrality is little more than a "slogan," and that nobody should want government "dictating how the internet is run":

"It’s a great slogan," FCC Chairman Ajit Pai said, when asked by a radio host what net neutrality is. "But in reality what it involves is Internet regulation, and the basic question is, 'Do you want the government deciding how the Internet is run?'"

You'll note that this is a guy that has repeatedly tried to claim he's approaching all of this with an open mind, and would let the evidence and public feedback dictate the agency's course. Given comments like this, and the fact that net neutrality has overwhelming bipartisan majority support, it's pretty clear that won't be happening. The interview, which offered no counter-opinion from anybody supporting (or even understanding) net neutrality, proceeded with Senator Johnson parroting what Pai had suggested:

"As chairman Pai said, net neutrality is a slogan," Johnson said. "What you really want is an expansion of high-speed broadband, and in order to do that you have to create the incentives for those smaller ISPs to invest. They don’t really control their own fiber if the government tells them exactly how they’re going to use their investment."

Huh. So was it a "slogan" to dislike Verizon and AT&T's decision to block people from using competing mobile payment platforms to try and give their own effort a leg up? Was it a "slogan" to oppose AT&T's decision to block people from using Facetime just to drive them to more expensive data plans? And is it a "slogan" to oppose Comcast's use of unnecessary and arbitrary data caps and overage fees to not only jack up the price of broadband service in already-uncompetitive broadband markets -- but to give its own streaming services an unfair market advantage?

Suggesting it's a "slogan" to worry how limited broadband competition leads to this kind of anti-competitive behavior is about as reasonable as suggesting that not wanting to be punched in the jaw is a "jingle." It makes no coherent sense.

And that's the biggest problem with Pai's decision to ignore the broad support the rules have and dismantle them anyway. His arguments in favor for killing the rules either make no coherent sense (like that time he suggested net neutrality rules embolden North Korean and Iranian dictators), or they're long-debunked talking points that have been floating around the internet for the better part of the last decade. Like when Johnson continued the interview by proclaiming that we must kill net neutrality rules -- or people may die!:

"Johnson thinks ISPs should be able to sell "fast lanes" to websites and online services that are willing to pay for quicker access to customers. "Chairman Pai just mentioned medical diagnostics," Johnson said. "You might need a fast lane within that pipeline so those diagnoses can be transmitted instantaneously and not be held up by, I don't know, maybe a movie streaming."

So one, the current net neutrality rules carve out plenty of exceptions that let ISPs, companies and networks prioritize essential communications like medical technology. That's never, ever been a real issue, and anybody claiming otherwise is lying to you. Like Pai's former employer Verizon did in 2014, when it tried to claim that net neutrality rules should be killed because they'd stop deaf, blind and disabled people from getting access to essential services. In fact, this argument has been stumbling around in anti-net-neutrality circles for the better part of the last decade, and it doesn't magically become any less of a lie with age.

Given the rules didn't hurt investment, actually helped sort some anti-competitive behavior, and again have broad, bipartisan support, those looking to kill them have few viable arguments left to fall back on. As such, they're apparently reduced to a winning combination of incoherence and outright lying. One more time with feeling: net neutrality is a good thing for companies and consumers alike. If you haven't learned that yet, and the efforts to repeal the rules succeed, you may soon be getting a pretty nasty crash course as to precisely why.

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Posted on Techdirt - 9 June 2017 @ 7:39pm

How The Death Of Net Neutrality Could Hamstring The Internet Of Things

from the Comcast-certified-and-approved-devices-only,-sorry dept

So we've already spent a lot of time talking about how underneath the hype, the "internet of things" is a bit of a shitshow. A lack of device security and a general apathy toward anything resembling privacy standards has resulted in an absolute torrent of new attack vectors being introduced into millions of homes and devices nationwide. Many of these devices are being quickly compromised in a matter of minutes for use in historically massive DDoS attacks, and most security analysts believe it's only a matter of time before they contribute to an attack on essential infrastructure putting notable lives at risk.

But the internet of things segment is facing another threat: the looming death of net neutrality.

We've already watched as large ISPs have used their market power to force you to upgrade to more expensive broadband tiers if you want certain services (like Facetime) to actually work. We've watched as ISPs have imposed completely arbitrary and unnecessary usage caps and overage fees, then used those punitive limitations to give their own streaming services a leg up on smaller competitors. And we've watched as Comcast simply refused to let its broadband customers use the hardware of their choice, using a rotating crop of faux-technical, nonsensical justifications.

So as the FCC looks to effectively strip away most meaningful oversight of these broadband duopolies, what will stop these massive companies from expanding these behaviors into the internet of things realm as they try to corner the home automation and security market? If your answer is "jack shit," you win!

Several startups and former FCC boss Tom Wheeler warned Wired this week that the kind of anti-competitive incumbent ISP behavior we've seen already well documented in other segments will be certain to manifest itself in the IOT space, eventually. Why wouldn't companies with thirty years of documented anti-competitive behavior use the death of net neutrality to give their own (or paying partner) IOT products, a leg up?:

"For example, imagine Comcast or Verizon partnering with a few select internet connected smoke detector companies and then delaying notifications from smoke detectors made by other companies. New companies could not meaningfully enter the market without partnering with these major internet service providers. After all, who wants a slow smoke detector? "The future could end up being controlled by four companies," Wheeler says. "That's why open networks are important."

Given what we've seen from ISPs so far, there's really not much reason to doubt they'd also try to implement new pricing paradigms that somehow require additional payments to connect "formally approved" devices to the network to ensure the best security and "optimal performance":

"Without the FCC's net neutrality rules, providers might also be free to force you to rent a cable modem or WiFi router the same way you already have to rent a cable box, or even to charge you for each computer, tablet, or IoT gadget you connect to the web. Instead of one flat fee for an internet connection that supports all your gadgets, you could end up having to manage multiple subscriptions."

This isn't just some hyperbolic, overly-dramatic parade of potential horribles. We've already watched these very same companies block mobile payment companies they didn't want to compete with. And we've watched as they've fought tooth and nail to prevent consumers from being able to buy and use the cable boxes of their choice. Why wouldn't these giant ISPs press their advantage after spending millions in lobbying? Especially when the FCC is clearly signaling that we're entering an era of zero accountability for some of the least liked companies in America?

To be clear, even if the FCC does kill net neutrality rules later this year, large ISPs likely won't engage in this behavior right away. AT&T has a Time Warner merger to get approval for, and Verizon, Comcast and Charter will want to make it appear like blindly gutting oversight of the uncompetitive sector isn't going to be the epic shitstorm most of us know it will be. But sooner or later, without adequate safeguards, the lesser angels of these companies well-documented natures will shine through, and that could spell significant trouble for consumers and startups alike that run afoul of massive duopolies' IOT, home automation, and home security ambitions.

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Posted on Techdirt - 9 June 2017 @ 6:24am

Mozilla Poll Again Shows Net Neutrality Has Broad, Bipartisan Support

from the not-really-that-divided-after-all dept

So we've noted for a long time that while net neutrality is framed as a "partisan" issue, it really isn't. Data has consistently shown overwhelming, bipartisan public support for the concept and the rules, in large part because of the way most people have been treated by marginally-competitive TV or broadband providers. But to help sow dissent among the public, large ISP lobbyists (and the lawmakers paid to love them) have been immensely successful in framing this as a hotly contested subject, usually by portraying the effort, incorrectly, as a "government takeover of the internet."

A new survey from Mozilla and IPSOS once again highlights this cap between reality and common media and policy wisdom. The survey found, unsurprisingly, that over three quarters of Americans (76%) support net neutrality. When it comes to the supposed "partisan division," the survey also found that 81% of Democrats and 73% of Republicans are in favor of it:

So again, this narrative that countless, angry Americans see net neutrality as "Obamacare for the internet" or "incredible government over-reach" tends to be the pervasive wisdom you'll see in the press and in most ISP policy rhetoric, but it's simply not accurate. Most people, across parties, realize the importance of a healthy and functioning internet. And, as the survey makes pretty clear, wanting to prevent giant companies like Comcast from using massive gatekeeper power to anti-competitive advantage against consumers and smaller companies isn't really all that complicated.

"Americans view net neutrality as having a positive impact on most of society. Respondents said it is a “good thing” for small businesses (70%), individuals (69%), innovators (65%) and ISPs (55%), but fewer think that it will benefit big businesses (46%)."

Or, put more simply by the folks at Mozilla:

"At Mozilla, we believe net neutrality is integral to a healthy Internet: it enables Americans to say, watch and make what they want online, without meddling or interference from ISPs (Internet Service Providers, such as AT&T, Verizon, and Time Warner). Net neutrality is fundamental to free speech, competition, innovation and choice online."

It's clear that most people understand that net neutrality is just a symptom of a lack of competition in the broadband market, something that has proven endlessly frustrating to consumers and entrepreneurs alike for going on two decades now. Fix the lack of competition, and you fix not only many net neutrality issues, but countless other problems -- from privacy violations. Even the cable industry's own polls reflect this reality.

But it's also clear that the current FCC not only has no real plan to fix or really even acknowledge these competitive shortcomings, but also wants to replace the already-fairly flaccid oversight of the sector with the technology policy equivalent of damp cardboard. All while ignoring the massive, overwhelming support for the rules piling up in their own proceeding's comment section. What's more, they seem to be under the impression that there will be zero repercussions for giving the public a giant, obnoxious middle finger on this subject. One would like to think they're wrong on all fronts.

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Posted on Techdirt - 8 June 2017 @ 1:23pm

Reddit, Amazon Push For 'Day Of Action' On July 12 To Protest The Killing Of Net Neutrality

from the something-vaguely-resembling-accountability dept

So as we've been noting, a lot of people remain under the impression that companies like Google and Netflix still support net neutrality, and they'll be rushing in any moment now to help thwart the FCC's latest attempt to kill the rules. In reality, Techdirt readers know that Google hasn't actually supported net neutrality since around 2010 or so. Netflix, also perceived as a consumer ally on the subject, made it clear recently that it no longer sees the need to fight for net neutrality now that it's an international video powerhouse. The company's shift from disruption engines to slightly myopic legacy turf protectors should surprise nobody.

That said, Google and Netflix's departure from the conversation left many net neutrality advocates wondering if any bigger companies would be willing to lend a hand in the latest chapter in the debate. Amazon managed to answer that question this week by throwing its weight behind a July 12 "Day of Action" being coordinated by consumer advocacy group Fight For the Future. According to the group's website, Amazon will join Reddit, Etsy, the ACLU, California ISP Sonic, Mozilla, Kickstarter, BitTorrent, Github and Vimeo for a day of protest -- both online and off -- against the FCC's plan to gut the popular consumer protections.

The plan appears to be to mirror the Internet Slowdown Day back in 2014. You'll recall that that effort, which involved numerous major websites warning their visitors about the threat to net neutrality via site banners, helped convince Tom Wheeler to stop half-assing things, and classify ISPs as common carriers under Title II of the Communications Act (giving them the adequate legal authority to enforce the rules). His decision was subsequently supported by the courts.

The problem, of course, is that Tom Wheeler was a bit of a rare bird in technology government policy circles. In that when presented with quality evidence that conflicted with his world view, he was actually willing to change his position and do the right thing -- even in the face of giant ISP lobbying pressure. It's part of the reason that Wheeler went from dingo to internet hero in relatively short order, breaking free of a long line of timid, bipartisan telecom industry sycophants heading the agency. There's zero indication so far that new FCC boss Ajit Pai has any of the qualities that made Wheeler popular.

Still, the companies and consumer advocacy firms hope the effort can still generate something vaguely resembling SOPA-esque accountability for Pai's plan to ignore the public interest and kill the rules:

"The effort is led by many of the grassroots organizations who have organized the largest online protests in history including the SOPA blackout and the Internet Slowdown," notes Fight the Future. "The day of action will focus on grassroots mobilization, with public interest groups activating their members and major web platforms providing their visitors with tools to contact Congress and the FCC."

The FCC is fielding comments on its plans to kill net neutrality until August 18, ahead of a finalizing vote to kill the rules later this year.

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Posted on Techdirt - 8 June 2017 @ 6:42am

Frontier Fires State Senate Leader (Who Also Worked For Frontier) For Supporting Attempts To Improve Broadband Competition

from the fighting-broadband-competition-at-any-cost dept

If you want to see what the US broadband sector really looks like, you should take a look at West Virginia -- a state where regional incumbent Frontier Communications holds so much sway over the state legislature, efforts to improve connectivity in the state have spent a decade in the gutter. Local Charleston Gazette reporter Eric Eyre has quietly done an amazing job the last few years chronicling West Virginia's immense broadband dysfunction, from the State's use of broadband stimulus subsidies on unused, overpowered routers and overpaid, redundant consultants, to state leaders' attempts to bury reports highlighting how a cozy relationship with companies like Frontier, Verizon and Cisco has led to what can only be explained as systemic, statewide fraud on the taxpayer dime.

But things haven't been going all that well for Frontier lately. Frustrated customers are leaving in droves (assuming they have the option) after the company bungled an acquisition of Verizon's unwanted DSL customers in Florida, Texas and California. It's also now saddled with debt from that deal, which prioritized growing bigger over commen sense. And employees say morale at the company is at an "all time low" after executives slashed all bonuses and merit pay increases -- but only for lower-level employees.

There's some indication that these problems are loosening the telco's traditionally iron grip on the West Virginia legislature. House Bill 3093, recently signed into law by West Virginia Governor Jim Justice, aims to improve broadband competition in the state through a combination of utility pole reform, and efforts to encourage local broadband community co-ops. Since it would have boosted competition in the state, Frontier obviously lobbied against the measure, hoping to keep its geographical fiefdom intact. It failed.

Eyre at the Gazette now notes that Frontier has responded by firing a six-year company executive and West Virginia Senate President (yes, at the same time) Mitch Carmichael for voting in favor of the measure.

So you should get a sense of what things are like in West Virginia just by the fact that Carmichael was deciding major state telecom issues while being a full-time employee of Frontier Communications. And Carmichael had been deciding on telecom-related issues for years with nobody apparently thinking that his recusal from some of these issues might just be a good idea.

This is so crazy that we should repeat it just so it sinks in: Carmichael was both a full-time employee of Frontier while also being the President of the state Senate, and constantly pushing for policies that favored his employer. And few, if any, state leaders apparently thought this was a problem. And it has been: Carmichael has long been an opponent of community run, municipal broadband, and had also recently voted down an effort that would have created a statewide broadband internet network, one that would have dramatically impacted Frontier's business interests.

Carmichael had just gotten a raise as well after almost being lured away by a Frontier competitor, so the firing surprised him. Carmichael says he also refused to sign an NDA demanded of him by the company to prevent him talking about his termination:

"Frontier Communications has laid off West Virginia Senate President Mitch Carmichael, a six-year Frontier executive who noted Monday that his dismissal follows his refusal to torpedo a broadband internet expansion bill that the company vigorously opposed...Carmichael said Frontier has asked him to sign a “nondisclosure” agreement that would prohibit him from talking about his dismissal. He said he refused to sign it. As senate president, Carmichael was Frontier’s most powerful ally in the Legislature.

Apparently, public annoyance at Frontier and the sorry state of broadband in the state (West Virginia is not-coincidentally ranked 45th in broadband connectivity) forced Carmichael to actually do the right thing:

"The one thing I’m not going to do here as Senate president is advance special interests,” Carmichael said. “It was obvious the body [Legislature] wanted that bill, and I wasn’t going to stand in the way of it."..."This was not something I wanted at all,” he said. “They had a bad year, from a legislative perspective. They severed ties from me."

To be clear, Carmichael had been willing to "advance special interests" previously, but Frontier's financial footing is so shaky -- and public annoyance at a lack of broadband competition was so severe -- he was forced to actually listen to what the public wanted. Now, courtesy of Frontier's waning influence, new West Virginia law allows 20 families or businesses to form nonprofit co-ops in areas shunned by traditional ISPs. The bill also authorizes up to three cities or counties to band together and build broadband networks in areas incumbents like Frontier have long refused to.

Meanwhile there are growing indications that Frontier, a company that has made a career out of trying to prevent real broadband competition in its territories at any cost, may at some point be looking at bankruptcy sometime in the next few years.

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