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About Karl Bode

Karl Bode is a freelance writer living in New York that has been babbling, jabbering and prattling about technology, politics and culture professionally for more than fifteen years. Follow me on Twitter @KarlBode

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Posted on Techdirt - 12 February 2016 @ 11:39am

Dish Agrees To Cripple Its Ad-Skipping DVR To Settle Fox Lawsuit

from the negotiating-away-innovation dept

For years now, broadcasters have waged legal war on Dish network for giving consumers what they want: namely a DVR that automatically skips advertisements users weren't watching anyway. Fox, CBS and NBC Universal all sued Dish back in 2012, claiming that the ad-skipping technology embedded in its "Hopper" DVR violated copyright. Most of the lawsuits were packed with hilariously baseless claims, like Fox ignoring the Betamax case to breathlessly insist that merely recording the entire prime time lineup was making "bootleg" copies of Fox's broadcasts.

Disney and CBS' lawsuits were settled in 2014, with Dish agreeing to hamstring Hopper's skipping functionality in exchange for not only an end to legal hostilities, but access to streaming video rights for its Sling TV service. Fox however continued to push its luck in the courts with decidedly mixed results; losing on many of the copyright claims, but winning on a few contractual issues. For example, the courts agreed that Hopper's ability to download recorded content to mobile phones violated contract restrictions against the copying of programming for use outside the home.

With the arrival of 2016, however, comes word that Dish and Fox have finally ended their protracted legal battle. According to the companies' statement, Dish has, as it did with CBS and Disney, agreed to further cripple its DVR's ad-skipping functionality:

"Fox Networks Group and Dish Network L.L.C. have reached an agreement resulting in the dismissal of all pending litigation between the two companies, including disputes over Slingbox technology and the AutoHop, PrimeTime Anytime and Transfers features,” Dish said in the statement. "As part of the settlement, Dish’s AutoHop commercial-skipping functionality will not be available for owned and affiliated Fox stations until seven days after a program first airs.”
Though it's not indicated by the companies' announcement, the settlement likely also involves some broader access to Fox content for use in Dish's Sling TV service, so the deal's probably not a total evolutionary wash. Still, the end result is one of the most popular and innovative DVRs on the market being crippled just to make legacy broadcast executives feel more comfortable as their empires face earth-shaking disruption on every front.

With the exception of Comcast NBC Universal (which, not coincidentally, directly competes with Dish as a cable provider), all of the original 2012 lawsuits have now been put to bed -- but at the cost of innovation and customer satisfaction.

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Posted on Techdirt - 12 February 2016 @ 6:31am

CenturyLink Follows Comcast's Lead, To Start Charging Broadband Overage Fees

from the more-money-for-the-same-shitty-product dept

You can add CenturyLink to the growing number of ISPs charging more money for the same product thanks to limited broadband competition. The company told attendees of an earnings conference call this week that it would be following Comcast's lead and conducting a "trial" of broadband usage caps and overage fees sometime later this year. The company lost 22,000 DSL customers last quarter, and clearly believes that layering an already inferior product with new restrictions and higher prices will surely make its customers happy:

"...Regarding the metered data plans; we are considering that for second half of the year. We think it is important and our competition is using the metered plans today and we think that explore those starts and trials later this year is our expectation."
According to CenturyLink's "excessive use policy," the company has capped customers on 1.5 Mbps or slower lines at 150 GB a month. Customers on lines faster than 1.5 Mbps enjoy the luxury of a 250 GB monthly limit. And whereas ISPs used to provide bullshit justifications for such restrictions (the network congestion bogeyman! it's only fair!), as those excuses have been shown to be nonsense over the years, ISPs have just stopped offering any. Here's how CenturyLink's website justifies these glorified price hikes:
"CenturyLink is committed to providing an optimum Internet experience for every customer we serve. To accomplish this, CenturyLink needs to ensure that customers are on the rate plan that meets their data download requirements. Of the millions of CenturyLink High-Speed Internet customers, a very small fraction has exceeded the download usage limits provided with their monthly plan. It is for this reason that CenturyLink has made the decision to place download limits on residential plans.
That's not really a reason, that's just words arranged to look vaguely like sentient logic. Of course the real reason is because they can.

In most markets CenturyLink enjoys either no competition at all, or they face a cable provider that also has usage caps in place. That's why with the exception of a few cherry picked markets in places like Seattle, CenturyLink users still enjoy speeds circa 2001 or so. And why not add insult to injury, and combine pathetic last generation broadband speeds (which cost very little to actually provide already) with aggressive restrictions and cutting edge, next-generation overage fees?

Like Comcast, CenturyLink calls this a "trial" to keep regulators at bay, since "creative pricing experimentation" sounds so much better than "price gouging uncompetitive markets and erecting unnecessary obstacles to innovation and streaming competitors." Given the FCC has yet to bat an eyelash at the practice, this logic appears to be working. The FCC's also apparently blind to the fact that nobody is confirming whether usage meters are accurate, or that ISP's are now exempting their own services from unfair competitive advantage.

So while you'll hear a lot of media hype about cherry picked gigabit broadband deployments paving the way to our glorious connectivity future, a lack of competition, usage caps and zero rating are ensuring that for broadband customers in most markets, the reality is going to look decidedly less futuristic.

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Posted on Net Neutrality Special Edition - 11 February 2016 @ 9:37am

One Year Later, ISP Claims That Title II Would Demolish Broadband Investment Found To Be Total, Indisputable Bullshit

from the nostradamus-you-ain't dept

In late 2014, the Obama Administration and the FCC shocked everybody by announcing that the government would be uncharacteristically ignoring telecom lobbyists and reclassifying broadband service under Title II -- ensuring it had adequate legal foundation for tougher net neutrality rules. As you might expect, the cable and phone companies immediately set to work with a blistering public relations barrage, with think tankers, editorials, industry consultants and thousands of industry mouthpieces all making one common refrain: Title II would utterly decimate broadband sector investment and crush innovation.

Ignore that the wireless industry had been classified under Title II for the majority of explosive growth years. Ignore as well that companies like Verizon had been classifying its FiOS fiber under Title II for mammoth tax breaks with no ill effect. No, according to companies like AT&T in 2014, Title II was absolutely certain to effectively usher in a telecom investment ice age that would leave the country reeling:

"Reclassification would mire the industry in years of uncertainty and litigation, and it would abruptly stall the virtuous circle of investment and innovation that has propelled the United States to the forefront of the broadband revolution."
Comcast had its own similar predictions in 2014:
"The sheer uncertainty surrounding such a regulatory environment would produce ‘a profoundly negative impact on capital investment.’ By itself, reduced investment would inhibit job creation, hinder the deployment of broadband infrastructure, and undermine the ‘virtuous circle’ of innovation that the open Internet rules are designed to advance."
But as the last year rolled on, people who could be bothered to actually read industry CAPEX numbers found that investment -- much of it in Google Fiber markets -- was as healthy as ever, if not better. Comcast announced plans to deploy two gigabit service to eighteen million homes, more recently unveiling plans for a major gigabit cable initiative in 2016. Time Warner Cable, Comcast and AT&T all spent much of the year crowing about notable speed upgrades and improvements, from expanded gigabit fiber pushes to housing developments, to notable DOCSIS 3.1 cable and set top box upgrades.

Closing on one year after the FCC voted to enact Title II, Kate Cox at the Consumerist did an amazing job digging through the absolute mountain of misleading claims made by AT&T, Time Warner Cable, Comcast, Verizon and Charter, and comparing them to the companies' recent earnings statements and CAPEX numbers. In nearly every case, claims of the investment apocalypse were found to be utter and undeniable bullshit, with the companies repeatedly indicating that Title II didn't impact company plans in the slightest:
"By and large, the half-dozen companies representing the overwhelming majority of cable Internet and wireless broadband customers in the country, are continuing to invest. But is that just puffed-up chest-thumping to cheer up investors? Those most directly impacted by broadband investment don’t seem terribly concerned. In January, Multichannel News reported that the suppliers who make the stuff that the telecoms spend their money on aren’t losing sleep about a decrease in investment.
Shocking, right? It's almost as if think tankers, lobbyists, and other hired sockpuppets were just spouting nonsense to scare the government away from meaningful net neutrality protections. And when it became clear the data wasn't going to support their predictions, industry think tankers (and Verizon lawyers turned FCC Commissioners) concocted misleading studies claiming sector CAPEX was dropping, and are still making the same claims even now. But as we previously noted in great detail, those studies used farmed statistics and cherry picked CAPEX windows to artfully paint a picture easily disproven by spending just five minutes with any major telecom earnings report.

Of course, the fact that these companies have been proven to be lying through their teeth won't stop them from continuing their lawsuit against the FCC. If said lawsuit doesn't demolish the rules, it's entirely possible the elections will, since any Presidential victor could gut the existing FCC staff and the rules in one, fell swoop. Should that happen, the neutrality debate in the States will reset to zero, giving telecom industry disinformation artists ample opportunity to once again highlight how the broadband industry's greatest innovation isn't in broadband, but in bullshit.

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Posted on Techdirt - 11 February 2016 @ 6:30am

Disney's Iger On ESPN: We'll Disrupt When We Damn Well Feel Like It

from the worldwide-leader-in-denial dept

Last year, Disney stock took a repeated beating as Wall Street started to realize the company wasn't faring particularly well in the face of Internet video revolution. Tens of billions in stock value instantly evaporated as investors learned that ESPN had lost 7 million customers in just the last two years. Evidence suggests this was largely thanks to the fact that ESPN leadership was utterly oblivious to the cord cutting and cord trimming trend, or the fact that a growing number of customers (the majority, in fact) are simply tired of paying for a channel they don't watch, yet pay an arm and a leg for.

To try and soothe nervous investors, Disney and ESPN executives have been making the rounds lately in an attempt to "change the narrative" on cord cutting (read: pretend the company wasn't caught with its pants down). ESPN Boss John Skipper, for example, recently admitted the company is seeing subscriber losses due to users shifting to so-called "skinny" bundles, but tried to argue these were older users the company didn't really want anyway.

This week, Disney CEO Bob Iger is the one making the rounds, though you may not be able to hear what he's saying over the sound of his own denial:

"The notion that either the expanded basic bundle is experiencing its demise or that ESPN is crating in any way from a [subscribers] perspective is just ridiculous,” Iger said at one point. “Sports is too popular.”
But despite what Iger thinks, ESPN is not synonymous with sports, and cratering under the load of an evolving market is exactly what's happening. For decades, ESPN enjoyed being part of channel bundles that generated revenue regardless of whether or not consumers actually watched it. As the traditional cable bundle gets broken up, ESPN's faced with the fact that 56% of cable users no longer want to watch the channel if it means saving a little money. In response, ESPN's trying to sue companies trying to give consumers what they want, a losing proposition long term.

As alternative streaming options rise, ESPN subscribers will dip, and the company's long-term (and hugely expensive) sports programming deals are going to start feeling very heavy. ESPN could try and offer a direct streaming service, but with dropping subscribers and soaring programming costs, the numbers aren't very pretty. Just don't point any of this out, or, like pay TV analyst and frequent ESPN critic Richard Greenfield recently found out, certain media outlets may decide to set you on fire in the Hollywood town square.

Like so many legacy industries used to revenues they haven't actually had to earn in years, it's pretty clear that Iger believes that ESPN is the one that gets to decide when it gets disrupted and when it has to dirsupt:
"We’re not going to sit back and let the disrupters just disrupt,” Iger said. “We’re going to participate in some of that disruption. And we’ll decide when the time is right to be more disruptive than we have been if we really think the business model is shifting rapidly. So far we do not see that."
Like most people, ESPN execs see what they want to see. Wall Street now sees it, which is why Iger's flapping his arms and doing this particular chicken dance in the first place. It's all part and parcel of the cable and broadcast industry's sincere belief that the legacy cable TV cash cow is going to live forever -- so they really don't have to rush to adapt -- or compete on price -- any time soon. But years of denial and inflexibility are starting to catch up with executives mentally stuck in the late nineties, and if 2015 was any indication, 2016's going to demolish any lingering fantasies.

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Posted on Techdirt - 10 February 2016 @ 6:22am

Congressmen Upton, Walden Latest To Insist Nobody Needs Faster Broadband

from the please-lower-your-standards dept

A little over a year ago, the FCC voted to raise the minimum definition of broadband from 4 Mbps downstream, 1 Mbps upstream -- to 25 Mbps downstream, 3 Mbps upstream. The standard better reflects household usage in the gigabit connection and Netflix binge watching era. However, the broadband industry has been whining like a petulant child ever since, largely because the change highlights how a lack of competition and the resulting failure to upgrade networks means a huge swath of the country doesn't technically have broadband.

Outraged by the FCC's sudden decision to have standards, incumbent broadband providers convinced six Senators to write in and scold the FCC last month, arguing that 25 Mbps was just a crazy metric, and that nobody needs that kind of bandwidth:

"Looking at the market for broadband applications, we are aware of few applications that require download speeds of 25 Mbps. Netflix, for example, recommends a download speed of 5 Mbps to receive high-definition streaming video, and Amazon recommends a speed of 3.5 Mbps. In addition, according to the FCC's own data, the majority of Americans who can purchase 25 Mbps choose not to."
As we noted then, the Senators apparently don't have teenage kids (or have them and don't pay attention to what they do), since 25 Mbps is a pretty reasonable standard for a household of hungry gamers, streamers, and social media addicts. And while the Senators use Netflix HD streaming as the holy grail for what constitutes "real" bandwidth usage, they apparently didn't realize that as Netflix moves to 4K, each stream will eat 25 Mbps all by itself. In the age of Google Fiber and gigabit cable, 25 Mbps is a pretty fair per household metric; in fact the upstream standard probably isn't high enough.

But this being Congress, the technical realities don't matter nearly as much as the campaign contribution cash tied at the end of telecom talking points memo. Not to be outdone by the manufactured outrage of their friends in the Senate, Congressmen Fred Upton and Greg Walden have similarly decided to waste everybody's time with a letter of their own (pdf), which accuses the FCC of "troubling actions" that "distort – or outright ignore – the FCC’s requirements to produce honest, data-driven reports to inform policymakers and the public."

Why, the Congressmen argue, does the FCC feel the need to mess with such an obviously competitive market?:
"The Communications Act requires the FCC to assess and report on the state of broadband deployment, the level of video competition, and the level of effective competition in the nation's mobile wireless market. Since 2011, it appears that the Commission has applied inconsistent definitions and analyses in making those determinations. Those reports have then been used to justify Commission actions to intervene in seemingly competitive markets. Despite the plain language of the Communications Act, the FCC's actions seem to benefit specific classes of competitors and do not promote competition. This behavior concerns us.
Yes, that's the Chairman of the Subcommittee on Communications and Technology complaining about having standards.

Of course the only reason the markets were "seemingly competitive" is that for fifteen years, the FCC has been basing policy on flimsy standards and cherry-picked industry data. Once the FCC raised the standards and started thinking a little more independently, phone companies that were happily selling snail-esque DSL at next-generation prices were suddenly outed for not trying very hard. Under the new standard, FCC data suggests 31 million Americans don't technically have broadband, and two-thirds of homes lack access to speeds of 25 Mbps from more than one provider.

Again, the real outrage isn't really that the FCC is some kind of rogue agency setting unrealistic standards just to make giant companies cry, the real outrage stems from the fact that the new standard makes it harder than ever to pretend that the United States is a competitive broadband market.

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Posted on Techdirt - 9 February 2016 @ 9:33am

Comcast Using Minority Astroturf Groups To Argue Cable Set Top Box Competition Hurts Diversity

from the selling-you-out dept

For years one of the greasier lobbying and PR tactics by the telecom industry has been the use of minority groups to parrot awful policy positions. Historically, such groups are happy to take financing from a company like Comcast, in exchange repeating whatever memos are thrust in their general direction, even if the policy being supported may dramatically hurt their constituents. The tactic of co-opting these groups helps build the illusion of broad support for awful policy, and was well documented during AT&T's attempted takeover of T-Mobile, and Comcast's attempted takeover of Time Warner Cable.

The tactic was also a favorite among telecom lobbyists in their fight against net neutrality and Title II reclassification, with Comcast and AT&T paying a wide variety of purportedly pro-minority groups to argue that a level playing field and more consumer protections would somehow be horrible for minorities. Dozens of groups like the Hispanic Technology & Telecommunications Partnership (HTTP) frequented telecom industry events, took telecom industry funding, and were happy to repeat industry claims that net neutrality was a vile and unnecessary evil.

Fast forward to last month, when the FCC announced it would be pushing a new program aimed at bringing competition to the stagnant and captive cable set top box market. The cable industry immediately began to cry, generating a tidal wave of hand-wringing complaints about how taking aim at this $20 billion captive revenue market would raise prices, hurt puppies, damage privacy, and otherwise destroy the known universe.

But buried among the laundry list of the industry's half-cooked claims was the repeated argument that having a competitive cable set top box market would somehow hurt diversity. How having the choice of more hardware and more content than ever could possibly hurt minorities is never made clear. But the claim quickly and magically began popping up in a laundry list of editorials all over the Internet and in major papers nationwide. All of these editorials neatly parrot the cable industry's position almost verbatim, yet few if any clearly highlight any ties to the industry.

Nearly as soon as the FCC program was announced the cable industry formed the "Future of TV Coalition," something it calls a "diverse group of programmers, content creators, civic groups and television providers" who've joined forces to "celebrate and promote the thriving innovation" going on in the cable industry. And mysteriously, most of the groups taking part are the same groups that helped telecoms fight net neutrality. And many of their letters to the FCC mysteriously argue that we should leave the incredibly innovative cable set top box market alone:

"Why adopt a radical new approach and put all this innovation at risk in a market that is innovating, changing and providing so many new options already? Given the significant concerns regarding these proposed rules, and the rapid innovation occurring in the marketplace, it would be unwise to implement sweeping changes to the system currently in place. We urge the FCC to abandon these proposed new rules and protect viewer choice and diverse programming for all communities.
Funny how this adoration of cable industry "innovation" so closely mirrors blog posts by cable's biggest lobby or by cable's least liked company. The beauty of these arrangements of course is that since telecom companies aren't dumb enough to put specific quid pro quo demands in writing, most of the groups involved can breathlessly insist the telecom money they're clearly taking in no way shapes their opinions, despite the fact they'll repeatedly come down on the anti-consumer side of tech policy debates time and time again. Companies like Comcast meanwhile, lead by its "Chief Diversity Officer" (read: top lobbyist David Cohen), can highlight these partnerships as entirely altruistic endeavors.

One of the fantasy scenarios many of these groups are pushing is that a company like Google will come in, "steal" the cable industry's hard work, and then somehow remove minority programming. This forced the FCC to issue a statement saying that the proposal simply takes existing programming and lineups and funnels it to new, potentially cheaper and better hardware, and doesn't impact programming and licensing agreements whatsoever:
"This proposal aims to introduce competition and innovation into the set top box market, finally giving consumers the choice of using devices and apps to access all of the programming they pay for. When it’s easier for content creators to reach consumers, through better interfaces, menus, search functions, and improved over-the-top integration, we would expect this to lead to more diverse programming accessed more easily — especially minority and independent programming. The proposal will have no impact on distribution and programming deals."
When it comes to the cable set top box market, consumers pay $20 billion in fees a year for outdated hardware that's often worth a tiny fraction of the money being coughed up. While you can certainly argue about the best route to fix this problem, the practice itself is indefensible. Any minority or purported consumer advocacy group defending this aggressive pummeling of a captive market is actively harming its purported constituents, who may just want to rethink their cash donations to organizations with a repeated history of being cable industry parrots for hire.

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Posted on Techdirt - 9 February 2016 @ 6:23am

States Wake Up, Realize AT&T Lobbyists Have Been Writing Awful Protectionist State Broadband Laws

from the pure-protectionism dept

For more than fifteen years now, companies like Comcast, AT&T, Time Warner Cable and CenturyLink have quite literally paid state legislatures to write protectionist broadband laws. These laws, passed in around 20 states, protect the incumbent duopoly from the faintest specter of broadband competition -- by preventing towns and cities from either building their own broadband networks, or from striking public/private partnerships to improve lagging broadband networks. They're the worst sort of protectionism, written by ISPs and pushed by ALEC and ISP lobbyists to do one thing: protect industry revenues.

Despite the fact the laws strip away citizen rights to decide local infrastructure matters for themselves (because really, who better to decide your town's needs than AT&T or Comcast executives), ISPs for more than a decade managed to forge division by framing this as a partisan issue. But then something changed: companies like Google Fiber and Tucows began highlighting how public/private partnerships are actually a great way to fill in the broadband gaps left by an apathetic, uncompetitive broadband duopoly.

After fifteen years of napping, the FCC also jumped into the fray and began fighting these laws in two states (Tennessee and North Carolina), arguing they hindered the FCC's mandate to ensure even and speedy broadband deployment. The broadband industry responded by having loyal politicians like Marsha Blackburn run to defend these bills, purportedly "outraged" by the FCC's "assault on states' rights" (please note that incumbent ISPs being allowed to write horrible state telecom law did not cause the slightest offense).

And with a brighter spotlight being shined on these laws, the partisan division encouraged by the broadband industry is mysteriously beginning to fade away. In Tennessee, lawmakers have been pushing a law that would dismantle AT&T's version of the law in that state, which has stopped a popular Chattanooga municipal gigabit provider (EPB) from expanding. Lawmakers pushing the bill appear to now be realizing just how destructive AT&T's lobbying apparatus has been to broadband, and aren't mincing words:

"We're talking about AT&T," Sen. Todd Gardenhire, R-Chattanooga, bluntly told a rally of business owners, families and local officials gathered in the state Capitol. "They're the most powerful lobbying organization in this state by far." The bill has been opposed for years by AT&T, Comcast and other providers who say it's unfair for them to have to compete with government entities like EPB. But EPB, as well as some lawmakers like Gardenhire, say if the free market isn't providing the service, someone else should. "Don't fall for the argument that this is a free market versus government battle," Gardenhire said. "It is not. AT&T is the villain here, and so are the other people and cable."
AT&T's response to Tennessee's sudden realization that the company has actively worked to ensure the state remains a broadband backwater? Give a lecture on how taxpayer money is fine to throw at AT&T, but is wasteful to use on delivering broadband to areas AT&T refuses to serve or upgrade:
AT&T spokesman Daniel Hayes said in an email "it is incorrect to equate the common practice of government providing incentives to encourage private-sector behavior with the concept of direct government competition."..."Generating significant amounts of public debt to sustain municipal networks is a different animal," Hayes added. "Taxpayer money should not be used to over-build or compete with the private sector, which has a proven history of funding, building, operating and upgrading broadband networks. Policies that discourage private-sector investment put at risk the world-class broadband infrastructure American consumers deserve and enjoy today."
The problem with that argument: that "proven history" isn't real. Companies like AT&T and Verizon have taken billions in subsidies over the years from federal and local governments, then failed repeatedly to meet deployment obligations. Companies like AT&T are now focusing all their attention on wireless and, outside of high-end development communities, have frozen deployment of fixed-line broadband. In fact, these companies are looking to disconnect millions of DSL customers they don't want to upgrade, potentially resulting in greater broadband gaps than ever before. Yet here the company is, still lecturing locals desperately looking for better connectivity on how only AT&T has the solution for what ails them.

Here's the thing about municipal broadband: if broadband providers don't want towns and cities getting into the broadband business, the solution is simple: provide better, faster, and cheaper broadband. These residents and local businesses aren't jumping into often pricey and labor-intensive broadband projects because they think it's fun. They're doing so because the entrenched broadband providers are refusing to upgrade their networks, and waiting for mono/duopolies with no competitive incentive to upgrade has proven to be a fool's errand.

And while incumbent carriers for years successfully fueled partisan division to ensure nobody really stopped and thought about what companies like AT&T were doing, as the years pass and many remain stuck on last-generation DSL -- the whiff of lobbyist bullshit has begun to hang more heavily in the air. As a result, locals in many areas are finally waking up from AT&T's trance, and realizing that if they're ever going to get next-generation broadband in a market without real competition, they very well may have to be the ones to build it.

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Posted on Net Neutrality Special Edition - 8 February 2016 @ 9:34am

India Bans Zero Rating As The U.S. Pays The Price For Embracing It

from the unlevel-playing-field dept

As expected, the Telecom Regulatory Authority of India (TRAI) has passed new net neutrality rules (pdf) that specifically ban the practice of zero rating. The rules are relatively clear in that they prevent either content companies or ISPs from striking deals that exempt select content from usage caps. The ruling acknowledges that such models create an unlevel playing field for smaller companies who may not be able to pay to play:

"...differential tariffs result in classification of subscribers based on the content they want to access (those who want to access non-participating content will be charged at a higher rate than those who want to access participating content). This may potentially go against the principle of non-discriminatory tariff. Secondly, differential tariffs arguably disadvantage small content providers who may not be able to participate in such schemes. This may thus, create entry barriers and non-level playing field for these players stifling innovation. In addition, TSPs may start promoting their own websites/apps/service platforms by giving lower rates for accessing them.
The ruling effectively bans Facebook's "Free Basics" program, despite an immense amount of often misleading lobbying and marketing by the social networking company. Net neutrality advocates in India had argued that Free Basics -- which exempts Facebook "curated" content from wireless usage caps -- gave too much walled-garden power to the company, allowing it to corner India's ad and content markets for years to come. Facebook, in contrast, argued it was being entirely altruistic, solely worried about India's poor farmers.

In a statement on TRAI's decision, Facebook reiterated that it was only trying to help:
"Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. While disappointed with the outcome, we will continue our efforts to eliminate barriers and give the unconnected an easier path to the internet and the opportunities it brings."
As it stands, companies that violate the rules need to pay 50,000 rupees per day ($740), up to a maximum of 5 million rupees (an inconsequential sum to carriers and Facebook alike). The rules will be in place for two years and could be open for review at that time. As such, Facebook could still lobby to have the restriction on zero rating weakened, or could modify its Free Basics program so that it better adheres to the rules. Or, better yet, as Mozilla had suggested if Facebook really wants to help it could take all of the marketing, PR, lobbying, and design money being spent on Free Basics, and actually spend it on improving India's lagging telecom infrastructure.

India now joins The Netherlands, Japan, Chile and Slovenia in passing net neutrality rules that clearly prohibit zero rating. Contrast that to the rules here in the States, which don't specifically forbid the practice, instead ambiguously stating that services will only be examined on a "case by case" basis. But the mere act of opening the door to the precedent of zero rating already has already resulted in companies like Comcast and Verizon abusing it, both of them now exempting their own services from usage caps, while still penalizing competing services like Netflix.

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Posted on Net Neutrality Special Edition - 8 February 2016 @ 6:26am

Verizon Gives Net Neutrality A Giant Middle Finger, Exempts Own Video Service From Wireless Usage Caps

from the ill-communication dept

In 2010, Verizon successfully sued to demolish the FCC's original net neutrality rules. In 2015, Verizon joined the rest of the industry in helping launch a barrage of lawsuits to try kill and kill a more legally-sound and updated version of those same rules. While that case continues through the courts, Verizon has made it clear that 2016 will be the year the telco raises a giant middle finger to the FCC and net neutrality supporters alike.

The company sent an e-mail to Verizon Wireless customers this week informing them that using the carrier's Millennial-focused Go90 streaming video service will no longer count against the company's mobile broadband usage caps. As in, Verizon has decided to give its own streaming video service an incredibly unfair advantage over any rival services. According to an updated customer agreement website, the change in policy only occurred this week after the company updated the company's app to version 1.4:

"Beginning on or about February 4, 2016, if you are a Verizon Wireless post-paid customer and you download the current version of go90 (release 1.4), you can watch any video on go90 without incurring Verizon Wireless data usage charges so long as you are connected to LTE. Other activity that does not involve watching videos, such as downloading go90 from an app store, browsing or searching for shows, posting comments, sharing clips and viewing settings will incur data usage charges."
Verizon's decision to zero rate its own streaming video services comes on the heels of the company's launch of something it's calling "Free Bee sponsored data." Under that program, companies can pay Verizon to have specific content (like a single video) or entire websites or apps cap-exempted. Between Free Bee and this week's announcement, Verizon's apparently decided to show the public just how little of a shit it gives about net neutrality advocate concerns.

Of course Verizon's simply following on the heels of related zero rating efforts by AT&T, Comcast, and T-Mobile. AT&T's been testing a sponsored data program for a few years now. T-Mobile's Binge On service exempts streaming video services from the company's usage caps, throttling all services to 1.5 Mbps by default. Comcast's also gotten in on the game, exempting its own streaming video service from the company's slowly-expanding usage caps.

We've noted for some time how the practice of zero rating is an absolutely horrible precedent, given that by giving some deeper-pocketed services a leg up, you're automatically putting smaller companies, startups, non-profits, and educational services at a distinct disadvantage. While T-Mobile may have opened the door with a program that skirts the edges of good taste, Comcast and Verizon have walked right through the door, and are downright laughing in the face of net neutrality by exempting their own services from caps.

And again, so far the FCC has done little more than nod dumbly as companies make a mockery of the idea of an open, level Internet. While the FCC says it has fired off some "informal," low-level inquiries asking carriers for more detail, the agency has given absolutely no serious indication that it intends to thwart the practice of zero rating any time soon. The irony of course is that as Verizon's tries to shed its reputation as a stodgy old phone company by desperately wooing Millennials, it's making it abundantly clear the company just can't seem to shed Ma Bell era behavior.

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Posted on Techdirt - 4 February 2016 @ 6:25am

ESPN Gets Nielsen To Revise Its Data To Suggest Cord Cutting's No Big Deal

from the massaging-statistics dept

We've discussed for years that as an apparatus directly tied to the wallet of the cable and broadcast industry, TV viewing tracking company Nielsen has gladly helped reinforce the cable industry belief that cord cutting was "pure fiction." Once the trend became too obvious to ignore, Nielsen tried to bury cord cutting -- by simply calling it something else in reports. And while Nielsen was busy denying an obvious trend, it was simultaneously failing to track TV viewing on emerging platforms, something the company still hasn't fully incorporated.

We've also been talking about how ESPN has been making the rounds, trying to "change the narrative" surrounding cord cutting to suggest that worries about ESPN's long-term viability in the face of TV evolution have been overblown. Part of that effort this week apparently involved reaching out to Nielsen to demand the company fiddle with its cord cutting numbers, which ESPN then peddled to reporters in the hopes of creating an artificial, rosier tomorrow:

"On Thursday, ESPN reached out to reporters to let them know that cord-cutting isn’t nearly as bad as it sounds, and that the reason is the way Nielsen revised its pay-TV universe estimates. Nielsen (under client pressure) decided to remove broadband-only homes from its sample, but it didn’t restate historical data. It is now showing that, as of December, 1.2 million homes had cut the cord, a much smaller number than its earlier figure of 4.33 million homes for the year."
Isn't that handy! This of course isn't the first time Nielsen has tweaked troubling numbers on demand to appease an industry eager to believe its cash cow will live forever. The irony is that the same industry that's happy to gobble up potentially distorted data is simultaneously deriding Nielsen out of the other corner of its mouth as a company whose data is no longer reliable in the modern streaming video age. In a profile piece examining Nielsen's struggle to adapt, the New York Times (and Nielsen itself) puts the problem rather succinctly:
"Yet Nielsen is established on an inherent conflict that can impede the adoption of new measurement methods. Nielsen is paid hundreds of millions of dollars a year by the television industry that it measures. And that industry, which uses Nielsen’s ratings to sell ads, is known to oppose changes that do not favor it. “People want us to innovate as long as the innovation is to their advantage,” Mr. Hasker said.
Obviously getting a distrusted metric company to fiddle with data even further won't save ESPN. The company's SEC filings still suggest ESPN lost 7 million subscribers in the last few years alone. Some of these subscribers have cut the cord, but others have simply "trimmed" the cord -- signing up for skinny bundles that have started to boot ESPN out of the core TV lineup. Similarly, studies have recently shown that 56% of ESPN users would drop ESPN for an $8 reduction on their cable bill. This sentiment isn't going to magically go away as alternative viewing options increase.

BTIG analyst Rich Greenfield, who funded that survey and has been a thorn in ESPN's side for weeks (for you know, highlighting facts and stuff), had a little advice for ESPN if it's worried about accurate data:
"“If this is an important issue for ESPN, they should start releasing actual subscriber numbers rather than relying on third parties [Nielsen]. If they are upset with the confusion, let’s see the actual number of paying subscribers in the US over five years."
Wall Street's realization that ESPN may not fare well under the new pay TV paradigm at one point caused $22 billion in Disney stock value to simply evaporate. As a result, ESPN executives have addressed these worries in the only way they know how: by massaging statistics and insulting departing subscribers by claiming they were old and unwanted anyway. One gets the sneaking suspicion that's not going to be enough to shelter ESPN from the coming storm.

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Posted on Techdirt - 3 February 2016 @ 12:48pm

Comcast 'Only' Lost 36,000 Pay TV Subscribers Last Year, Prompting Renewed Cord Cutting Denial

from the best-bad-year-we've-ever-had dept

Despite 2015 being a banner year statistically for cord cutting, you're going to see a renewed surge in cord cutting denial over the next few weeks. Why? Cable companies like Time Warner Cable and Comcast managed to eek out modest gains in pay TV subscribers in the fourth quarter.

Comcast's earnings indicate a net gain of 89,000 pay TV users in Q4, despite seeing a net loss of 36,000 video subscribers for the year. Despite still seeing a net loss, that's the best video performance the company has seen in eight years (which in and of itself speaks volumes). Time Warner Cable's earnings (pdf) note the cable provider added 54,000 TV subscribers in the fourth quarter, while only seeing a net gain of 32,000 TV subscribers for the year. That's the best Time Warner Cable has done since 2006, and it's a stark improvement when each year's subscriber numbers are put in graphical form:



We'll ignore for a second these companies continue to see impressive subscriber and revenue growth thanks to network improvements, despite claiming Title II would destroy the known universe (that's a different blog post). But the fact that these companies finally saw a modest turnaround after years of steep video subscriber losses was quickly used as evidence by the cable industry, some investment websites and a few analysts that cord cutting is "overblown":
Except these gains don't debunk cord cutting. Many of these additions are users that had previously fled to satellite TV and phone providers. For years, cable's subscriber losses were predominately to satellite and telco TV providers, whose set top boxes were notably more innovative (Dish's Hopper, for example). In the last few years Comcast and Time Warner Cable have dramatically bumped broadband speeds and updated their own set top boxes, moves that have won some former defectors back. As a result Verizon FiOS saw its worst video subscriber additions since 2006, while AT&T and DirecTV combined saw a 54,000 broadband user net loss and a net loss of 24,000 TV customers last quarter.

That's lateral subscriber movement between legacy pay TV providers, not evidence that cord cutting isn't real. And there's absolutely nothing in those numbers that suggests the very real trend of cord cutting has been "overblown" as a broader industry phenomenon.

There's another major reason cable companies are once again adding video subscribers: their growing monopoly over broadband markets. There are now hundreds of markets in which AT&T and Verizon (now focused almost solely on more profitable wireless) are actively trying to hang up on unwanted DSL customers via a one-two punch of price hikes and apathy. Those annoyed users are being forced to flee to cable if they want current generation broadband speeds. When those users arrive, companies like Comcast and Time Warner Cable are offering them TV and broadband bundles that are cheaper than what they'd pay for broadband alone in order to boost legacy TV subscriber rolls.

As a result, many of these subscribers may not have even wanted TV, and once the promotional rate expires may decide to simply leave again. That's of course where Comcast hopes that the use of usage caps comes in. The company is now exempting its own streaming service from usage caps in the hopes of preventing TV users from cutting the cord. Should they cut the cord anyway and embrace streaming alternatives, they run face-first into usage caps and overage fees. If cable is forced to compete on price for TV, it will be sure to seek its pound of flesh from your broadband bill.

Cord cutting continues unabated in the background of this tussle, like the drip, drip, drip of a leaking faucet nobody wants to fix. And while pay TV growth remains flat or in decline, it's important to remember the overall population and the housing market continue to grow, without a corresponding uptick in cable subscribers. That's a sign that younger people and many new homeowners simply don't think traditional cable is all that important, and the slow drip of cord cutting will, over time, become something more resembling a torrent as, quite bluntly, legacy TV's older audience dies. Cable can do something about this, but it's going to require seriously competing on price above and beyond short-term, subscriber roll boosting promotions.

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Posted on Techdirt - 3 February 2016 @ 6:19am

ISPs Are Trampling Net Neutrality While The FCC Sits Boxed In By Lawsuits, Upcoming Election

from the rock-and-a-hard-place dept

While the public successfully forced the FCC to adopt net neutrality rules last year, one glaring omission may be coming back to haunt consumers and the commission alike. The FCC's open Internet rules contain three "bright-line" restrictions: no blocking, no throttling apps or traffic, and no "paid prioritization" of apps or content. Unlike neutrality rules in Japan, The Netherlands, Slovenia, and Chile however, the FCC refused to outright ban zero rating (exempting content from usage caps), instead opting to determine on a "case-by-case basis" if a carrier is violating the "general conduct" portion of the rules.

As we worried last year, this opened the door to ISPs trampling all over net neutrality -- just so long as they were marginally clever about it. And that's exactly what has happened, with AT&T, Verizon, Comcast and T-Mobile all running rough shod over net neutrality with varying degrees of obnoxiousness and success.

T-Mobile is now zero rating all the major music and video services, while throttling every video service that touches its network to 1.5 Mbps by default (and lying about it). AT&T has been charging companies for cap-exempt status for a few years now under its controversial "Sponsored Data" program, which tilts the playing field against smaller competitors and startups that may not be able to afford AT&T's toll. Verizon recently followed suit with "Free Bee" sponsored data, which lets companies pay Verizon to have their app, video, or entire website or service tagged with premiere, cap-exempt status.

In each example, carriers have injected themselves into the middle of the content stream for marketing or direct financial benefit, in the process completely dismantling the level playing field enjoyed by smaller companies, startups and non-profits. These smaller operators may not be able to pay to play, and in some instances won't even realize they're being discriminated against. And because these services are pitched as "free shipping" or "a 1-800 number for data," some consumers are applauding as the open Internet gets dismantled piecemeal, oblivious to the fact that usage caps are arbitrary constructs to begin with.

And while AT&T, Verizon and T-Mobile are at least being marginally subtle about it, Comcast simply declared "fuck it" -- first imposing completely unnecessary usage caps on millions of its broadband customers to hinder Netflix, then making its own streaming video service cap exempt. When pressed, Comcast's bullshit department proudly declared it wasn't violating net neutrality -- because its streaming video service runs entirely over "Comcast's managed network to the home." So yes, as predicted, net neutrality is crumbling under the weight of rule loopholes and immaculately-crafted bullshit.

So what is the FCC doing about it? Two years ago, FCC boss Tom Wheeler said the agency would watch AT&T's Sponsored Data carefully, but did nothing. More recently, Wheeler applauded T-Mobile's zero rating practices for being "highly innovative" and "pro-competition." Once complaints mounted, the FCC was forced to "act" in the form of a letter sent to companies late last year, asking for more detail on these programs. The FCC has been quick to repeatedly make clear this is just an "information exercise" and not a formal investigation:

Wheeler pointed out that the meetings the FCC has been holding with those companies--Comcast, AT&T, T-Mobile and likely Verizon--were at the bureau level, which he said was significant. "I am not at these meetings," he said. "Nobody from the office of the chairman is in these meetings. They're gathering information and we'll see what happens from there."
It's not really clear just how much data the FCC needs to collect. AT&T's Sponsored Data and Comcast's (ab)use of usage caps are obviously problematic, and have been in play for several years. The real problem for the FCC isn't information, it's limited time and shaky legal footing. One, the upcoming elections could result in a President that has no idea what net neutrality is, who immediately sets forth replacing Wheeler and dismantling the net neutrality rules. Two, the FCC is still waiting for the outcome of the mass-industry lawsuits against the rules, which could leave the FCC without a leg to stand on.

I asked Public Knowledge lawyer Harold Feld, who probably spends more time submerged in FCC policy than anyone, what he thought the next course of action would be at an FCC boxed in by the courts and politics. He suggested that the agency might follow the course it set on the interconnection front, which began with a few pointed inquiries and ended with incumbent providers magically ceasing shenanigans for fear of FCC enforcement. Feld posits that something similar could be applied to zero rating, finally letting companies know what is or what isn't acceptable:
The FCC has already gotten 12,000+ complaints about Comcast. It would not be hard to bump them to the top of the list. But Wheeler may not want to start an investigation when he only has a limited time left in office and a future FCC might drop the matter. Instead, Wheeler may push for some kind of Policy Statement or Enforcement Guidance. Something that would provide notice industry wide about what the FCC would consider "red lines" on data caps.

But Wheeler has been very clear that he is not promising to do anything but check under the hood. I certainly would not expect the FCC to do anything until the D.C. Circuit decides -- especially in light of the possibility that the FCC could win on wireline and lose on wireless. If the D.C. Circuit decides in the late spring or early summer, that will not leave much time for the FCC to take any kind of official action.
In other words? If you're expecting any hard enforcement from the FCC when it comes to caps or zero rating, you shouldn't hold your breath. The agency is currently boxed in by both lawsuits and the upcoming election, but had already made it clear it thinks zero rating and usage caps are just "creative pricing." Should the rules remain fully intact post lawsuit and election, political pressure might force the FCC to take action against Comcast's less-than-subtle abuse of usage caps, but things aren't looking good if you're part of the vast minority that realizes the horrible precedent zero rating represents.

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Posted on Techdirt - 2 February 2016 @ 2:05pm

Time Warner Eyes Hulu Stake, Wants Service To Remove Current Seasons Of Shows

from the don't-innovate-too-much dept

We've discussed for years now how Hulu is hamstrung by the fact that it's owned by the traditional cable and broadcast industry. Owners 21st Century Fox, Disney and Comcast/NBC have gone out of their way to ensure the service is never too disruptive -- lest it hurt the traditional cable cash cow. And that's been the cable industry's mantra for years now -- crow ceaselessly about how you're "innovating," while simultaneously trying not to innovate too much, lest your customers realize your legacy TV service is absurdly expensive, inflexible, and outdated.

As the industry has slowly realized that it can no longer just pretend cord cutting doesn't exist -- things have improved slightly, with Hulu making a renewed effort to invest in original programming and dramatically broadening its content catalog to better compete with Amazon and Netflix. The company has also listened to consumer complaints and now offers an ad free version -- while placing fewer ads in the ad supported option. Hulu is also attracting new investors, with reports that Time Warner is looking to give a $2 billion cash infusion in exchange for a 25% stake.

But while Time Warner isn't making it a condition of the deal, the company is making it clear that it would like to see Hulu pull current seasons of shows in a misguided belief that it can turn back time:

"Time Warner believes that the presence of full, current seasons on Hulu—or anywhere else outside the bounds of pay-TV—is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or "cutting the cord." In the discussions about taking a 25% equity stake in Hulu, Time Warner has told the site's owners that it ultimately wants episodes from current seasons off the service, at least in their existing form, although that is not a condition for its investment, according to the people familiar with the discussions.
The problem is that Time Warner would join Comcast in sharing the delusion that you can be both simultaneously disruptive and innovative on the streaming side, while still magically preventing traditional cable customers from noticing and cutting the cord. Comcast was barred from meddling in matters of Hulu management as a condition of its acquisition of NBC, but it's a condition Comcast largely ignored. It's also a seven year condition that will expire shortly after Time Warner seals its new ownership stake, meaning a double dose of myopic, backward-looking leadership at Hulu at precisely the wrong time.

Though many in the insular cable industry ecosystem like to pretend otherwise, it's simply no longer a debate: consumers are increasingly cutting the cord and migrating to cheaper, more flexible viewing options. Traditional TV customers get 194 channels, but they only watch, on average, about 17 of them. 16% of consumers cut the cord last year, while 23% of consumers engaged in "cord-trimming" (reducing their overall cable package) in some way. 57% of those asked, unsurprisingly, say that price is the biggest reason they're looking to shake things up.

It's not an enviable position for the traditional TV industry to be in. To seriously combat cord cutting, it needs to offer a more flexible product at a lower cost -- something that (with a few "skinny bundle" exceptions) it absolutely refuses to do. What we get instead is turf protection (broadband usage caps), a boat load of denial and failed "me too" services like Comcast Streampix that, thanks to fear of cannibalizing the legacy cash cow, are neither here nor there. The problem is, if Hulu isn't willing to offer what consumers want, Netflix, Amazon, or some other company certainly will.

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Posted on Techdirt - 2 February 2016 @ 6:22am

The Cable Industry Is Absolutely Terrified Of Set Top Box Competition

from the hey-we're-innovatin'-over-here dept

Last week, we noted that the FCC has proposed new guidelines that would bring some much-needed competition to the cable TV set top box market. Data shows that 99% of consumers pay something on average to $230 a year in set top box rental fees, despite much of this dated hardware being worth little to nothing. Collectively, the cable industry pulls in around $20 billion annually in set top box rental fees, which are fairly consistently increased once or twice a year. Unsurprisingly, whenever the FCC has tried to do something about this proprietary, captive market, the industry becomes downright hysterical.

That was exemplified last week when the FCC simply proposed requiring cable operators deliver programming data to third-party hardware using any accepted standard they choose. Cable operators can still provide the traditional set top box (and consumers can still rent them), the industry would simply suddenly face competition for what's been captive income. But with $20 billion in annual revenues at risk, the industry quickly got to work trying to argue that the FCC's plan would demolish the very fabric or time/space and result in no limit of untold harm to consumers.

Despite the reality that most cable boxes (and many executives) are outdated relics of a dying era, the cable industry stuck to one central theme last week: the FCC's plan is "big tech's" attempt to thwart all of the amazing innovation occurring in the cable industry. A "diverse" group of cable companies and broadcasters calling itself the "Future of TV" coalition quickly launched to deride the FCC's "attack on innovation," with one press release circulated by the group going so far as to suggest that Google has been holding secret meetings at the FCC that undermine the cable industry's relentless thirst for...diversity:

"...Secrecy and subterfuge shouldn’t be tolerated and professional staffers who know the ropes and are unlikely to be swayed by a flashy demo and a Golden Ticket. The AllVid scheme being flogged by Google and the FCC is unfair and destructive to values held far too dearly on Capitol Hill – undermining free market competition and putting a government thumb on the scale for powerful incumbents like Google, and making it harder for those serving communities of color and providing diverse and independent programming to make the video ecosystem work.
There's no secret cabal in the fact that Google, Apple, Roku, TiVo and countless other companies have lobbied for years for an open cable set top box market. But the cable industry has lobbied ferociously to dismantle any attempt to bring this goal to fruition (including CableCARD). So to mock Google for "secretly" lobbying for broader competition is both strange and hilarious. The argument that more robust set top box competition will somehow hurt diversity is equally absurd (more choice and lower product cost is good for diversity), yet it seems to pop up all over the Internet in mysteriously placed editorials.

But credit the cable industry for one thing, it knows how to rally around a central message, even if that message is absolute bullshit. The central theme of this blog post by the industry's biggest lobbying organization (the NCTA) was cable's amazing knack for innovation:
"We see these innovations almost daily, which is why it’s so strange that government feels compelled to insert itself in the mix in order to do Big Tech’s bidding. By forcing new government mandates on network providers and content creators, the FCC may intend to reward Google handsomely, but in the process it will ignore contractual freedoms, weaken content diversity and security, undermine important consumer protections like privacy, and stall the creative and technical innovation that is driving positive changes in today’s TV marketplace.
Likewise, a blog post by Comcast largely involves the company patting itself on the back for being incredibly, awesomely innovative:
"Comcast is responding with our innovative X1 platform, and enabling access on a growing array of devices. Like other traditional TV distributors, online video distributors, networks, and sports leagues, Comcast is using apps to deliver its Xfinity service to popular customer-owned retail devices. These apps are wildly popular with consumers. Comcast customers alone have downloaded our apps more than 20 million times. This apps revolution is rapidly proliferating, and we are working with others in the industry and standards-setting bodies to expand apps to reach even more devices.

Given these exciting, pro-consumer marketplace developments, it is perplexing that the FCC is now considering a proposal that would impose new government technology mandates on satellite and cable TV providers with the purported goal of promoting device options for consumers.
Oooh, step back FCC, Comcast is developing apps! The problem is, and the insular cable industry forgets this constantly, that absolutely nobody likes or believes the cable industry outside of the cable industry. Cable providers continue to have the worst customer satisfaction and support ratings of any U.S. industry or government agency (no small feat). So when "big cable" breathlessly insists it's just trying to protect its monopoly over cable set top hardware to the benefit of minorities and puppies, it's unclear who the hell would be daft enough to actually take them seriously.

Here's the thing: if the cable industry's existing set top box systems are as "innovative" as the industry claims, surely competition will bear that out? When faced with a myriad of new hardware options, customers will clearly want to continue paying Comcast a significant amount of money for a traditional cable box, right? If the cable industry is half as adaptive as it claimed last week, surely this sudden influx of competition will be like a gnat at the ear of a god of innovation. Unless of course this prattling on about innovation is just the insecure braying of an industry absolutely terrified by the foreign specter of real competition?

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Posted on Net Neutrality Special Edition - 1 February 2016 @ 2:05pm

India Set To Ban Zero Rating As Facebook's Misleading Lobbying Falls Flat

from the phony-altruism dept

Apparently the millions Facebook has been spending on advertisements, lobbying, marketing and spamming the Indian government will be for naught. The Telecom Regulatory Authority of India (TRAI) appears poised to ban the practice of zero rating as part of its new net neutrality rules, effectively killing Facebook's controversial Free Basics zero rating program once and for all in the country. According to the Times of India, TRAI is expected to deliver the death blow to Facebook's world-domination ambitions within a week:

"Trai will issue an order to this effect within a week, top sources told TOI. The order is also expected to bar free or subsidised data packages that offer access to only a select services, such as Facebook, Twitter or WhatsApp messenger. "These are discriminatory and are against the concept of digital democracy. We will not allow them," a source said. The regulator's stand will clear the confusion over net neutrality. There were apprehensions over the manner in which free Internet was being offered, after the introduction of some zero-rated platforms with preferential treatment to a few websites for a fee."
India would join Japan, The Netherlands, Chile and Slovenia in banning zero rating entirely, based on the idea that cap exemption gives some companies a leg up, and unfairly distorts the inherently level Internet playing field.

That's something the FCC refused to do here in the States, and as a result we're witnessing telecom carriers rushing toward who can be the most "innovative" in the zero rating space. AT&T and Verizon are now formally charging companies for premium, cap-exempt status, T-Mobile is throttling every shred of video that touches its network to 1.5 Mbps (and lying about it), and Comcast is now exempting its own streaming video service from usage caps, much to the chagrin of smaller streaming competitors. So far, the FCC's response has been to nod dumbly.

In India, Facebook (lead by former FCC boss and neutrality waffler Kevin Martin), has been engaged in a blistering media and lobbying campaign to convince India that a curated walled garden run by Facebook was a great way to help the nation's poor farmers. Indian activists and critics like Mozilla disagreed, arguing that the company was simply hiding its lust to control emerging ad markets under the banner of altruism, and if Facebook really wanted to help India's poor, it should focus on improving the country's actual Internet infrastructure.

Facebook's initial response was to call critics of the company's program extremists who were hurting the poor (despite many of the critics being local Indian activists who've dedicated a lifetime to that task). When that didn't work, Facebook changed the name of the program, and filled local newspapers with full-page editorials by CEO Mark Zuckerberg declaring the company's sole interest was poor farmers, not cornering developing ad markets. When people didn't buy that, Facebook tried tricking its users (including those in the U.S. and UK) into spamming the Indian government.

It appears to be that last effort that may have pushed TRAI over the edge (you can read TRAI politely trying to ask Facebook (pdf) to prove the 11 million bogus supporters of Free Basics actually exist). Assuming TRAI follows through on reports, Facebook's now forced to do what many critics wanted all along: actually put all of the money spent on lobbying and marketing Free Basics -- into actually helping shore up India's lagging telecom infrastructure.

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Posted on Techdirt Wireless - 27 January 2016 @ 3:33pm

After Aereo's Collapse, Founder Hopes To Disrupt Wireless Broadband Market With 'Starry'

from the good-luck-out-there dept

You'll of course recall that Aereo founder Chaitanya Kanojia's attempt to disrupt the TV industry ran face-first into an army of broadcaster lawyers and a notably ugly ruling by the Supreme Court. Undaunted, Kanojia has returned with a new plan to try and disrupt the frequently pricey wireless broadband industry. Kanojia's trying to do this via a new startup named "Starry," unveiled at a launch event this week in New York. Starry is promising to offer users uncapped, gigabit speeds at prices less than most people pay their incumbent broadband provider.

Kanojia claims that the service will deliver this ultra-fast connectivity via what it's calling the country's "first millimeter active phased array technology." FCC documents suggest that Starry will utilize spectrum in the 38 GHz band to deliver broadband to urban areas via hundreds of rooftop nodes scattered around the city. Users are given both a "Starry Point" antenna that sits outside their window, and need to buy a fancy $350 router called a "Starry Station" to connect to their various Wi-Fi devices. Kanojia tells TechCrunch that the technology will only cost around $25 per home to deploy:

"It costs the cable guys around $2,500 per home to deal with the construction costs of laying down cable,” said Kanojia on a phone call, setting the scene for his next big unveil. “And beyond cost, there are regulatory hurdles that slow down the process. We can deliver faster broadband with no regulatory wait time and it will cost us only $25 per home.” Kanojia won’t disclose pricing but says that the service will offer various tiers based on speed (up to 1GB up and down) and that it will be “orders of magnitude cheaper” than current broadband providers like Comcast and Time Warner Cable."
The catch? One, nobody really knows specifically how well Starry's phased array technology is going to work (especially in regards to line of sight), and Starry isn't offering much hard technical detail right now beyond a YouTube video. If it does work, millimeter wave technology will still require the deployment of hundreds if not thousands of nodes across a city, distance limitations restricting its use to only denser urban areas. The broadband landscape is littered with the corpses of thousands of urban WISPs, which still rely on incumbent bandwidth, and still require slow, cumbersome deployment of a sizable amount of gear.

And while real-world disruption of national incumbents will probably be minimal, it's still refreshing and absolutely necessary to see somebody try (and fortunately there's spectrum available to try with). According to Starry, users can pre-order the self-install kits at the Starry website, after which they'll be made available at Amazon and other retailers. The service will launch first in Boston in March. Variety got wind of the fact that around fifteen cities should be unveiled as launch markets sometime this year, including Los Angeles, San Francisco, Detroit, Washington D.C., Seattle and Denver.

And while nobody actually knows whether Starry will really work, with no real regulatory or legal hurdles in its path, Kanojia's latest attempt at disruption -- at the very least -- shouldn't wind up face down and unconscious at the Supreme Court.

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Posted on Techdirt - 27 January 2016 @ 2:03pm

FCC Takes Aim At The Pathetic Lack Of Cable Set Top Box Competition

from the killing-sacred-cash-cows dept

The FCC has formally declared war on the outdated, over-priced traditional cable box. The agency has put forth a new proposal (pdf) for guidelines intended to bring much-needed competition to the cable set top box market. As recently noted, data collected from the top ten biggest cable companies found that 99% of cable customers still rent a cable box, paying $231 in fees annually for often-outdated hardware that's frequently worth very little. This cozy little captive market nets the cable industry roughly $20 billion in rental fees every year.

In a public sales pitch for the proposal over at Recode, FCC boss Tom Wheeler invokes the spirit of ma bell to highlight the absurdity of the cable industry's continued control over the set top box market:

"Decades ago, if you wanted to have a landline in your home, you had to lease your phone from Ma Bell. There was little choice in telephones, and prices were high. The FCC unlocked competition and empowered consumers with a simple but powerful rule: Consumers could connect the telephones and modems of their choice to the telephone network. Competition and game-changing innovation followed, from lower-priced phones to answering machines to technology that is the foundation of the Internet."
The FCC wants to design a software-based solution that lets consumers access cable content via the hardware of their choice. Hardware that, thanks to competition, would be better, cheaper and faster than the clunky old cable boxes we all know and love. The FCC's careful to state it's not mandating a specific standard by which cable operators have to provide programming data to these devices, stating they simply need to adhere to "any published, transparent format that conforms to specifications set by an independent, open standards body."

This isn't the FCC's first attempt to force competition on the set top box market. CableCARD was the agency's earlier, ineffective attempt to mandate a standardized card for use in third-party set tops. CableCARD regulations were well-intentioned but cumbersome, and frequently left unenforced. The cable industry also went out of its way to avoid pitching the cards to consumers, and often made the installation process as cumbersome and nightmarish as possible. When meager CableCARD stats were released annually, the cable industry would then collectively shrug and insist low adoption reflected a genuine lack of interest in the idea of better third-party devices.

With $20 billion in set top box revenues on the line, the cable industry has spent the better part of a decade fighting tooth and nail to kill this FCC proposal and anything like it. Opponents including AT&T, the MPAA, and the cable industry's biggest lobbying organization today formed what they're calling the "Future of TV Coalition," which argued in a release that greater set top box competition will kill diversity programming, hurt consumer privacy, embolden pirates, and generally just destroy the known universe:
"Many parties, including 30 members of the Congressional Black Caucus, have warned this would unravel the modern TV ecosystem, doing particular damage to small, independent, and diverse programmers and the communities they serve. AllVid would also undermine vital privacy and other consumer protections that apply to pay-TV providers but not the tech firms advocating adoption of AllVid. And it would erode protections against video piracy, rendering programming less secure."
Of course that's bullshit, and what the industry's really afraid of is seeing a cornerstone of its uncompetitive walled-garden empire demolished by real competition. Granted it's worth noting that the FCC's proposal doesn't prevent customers from keeping their existing cable boxes, nor does it stop cable providers from providing them. In other words, if the cable industry wants to retain customers on its systems, all it has to do is innovate and compete.

All of that said, you can't begrudge those who look at the CableCARD fracas of the last decade and legitimately wonder whether the FCC has the chops to actually implement and enforce such guidelines with an election (and potential FCC shuffle) looming. It's also worth asking if another multi-year enforcement fight is worth it with the cable industry on a collision course with Internet video and irrelevance anyway. Whatever happens, it's at the very least amusing to see a former cable lobbyist nobody expected much from plunge a dagger into one of the cable industry's largest and most sacred cash cows.

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Posted on Techdirt - 27 January 2016 @ 3:29am

Nest Thermostat Goes From 'Internet Of Things' Darling To Cautionary Tale

from the benefit-of-dumb-devices dept

Back when the Nest thermostat was announced in 2011, it was met with waves of gushing adoration from an utterly uncritical technology press. Much of that gushing was certainly warranted; Nest was founded by Tony Fadell and Matt Rogers, both former Apple engineers, who indisputably designed an absolutely gorgeous device after decades of treating the thermostat as an afterthought. But the company also leaned heavily on the same media acupressure techniques Apple historically relies on to generate a sound wall of hype potentially untethered from real life.

Courtesy of marketing and design, Nest slowly but surely became the poster child for the connected home. Over the last year or so however things have changed, and while now Alphabet-owned Nest remains an internet of things darling, the unintended timbre of the message being sent is decidedly different. For example, Nick Bilton recently wrote a piece in the New York Times noting how a glitch in the second generation of the supposedly "smart" product drained the device battery, resulting in numerous customers being unable to heat their homes just as a cold snap hit the country:

"The Nest Learning Thermostat is dead to me, literally. Last week, my once-beloved “smart” thermostat suffered from a mysterious software bug that drained its battery and sent our home into a chill in the middle of the night. Although I had set the thermostat to 70 degrees overnight, my wife and I were woken by a crying baby at 4 a.m. The thermometer in his room read 64 degrees, and the Nest was off."
Again, that's the poster child of the so-called "smart" device revolution failing utterly to complete a task thermostats have been successfully accomplishing for a generation. Other tech reporters like Stacey Higginbotham reported the exact opposite. As in, her Nest device began trying to cook her family in the middle of the night, something Nest first tried to blame on her smart garage door opener, then tried to blame on her Jawbone fitness tracker (Nest never did seem to pinpoint the cause). Her report suggests that an overall culture of "arrogance" at Nest shockingly isn't helping pinpoint and resolve bugs:
"One Nest partner, who declined to be named to preserve his business relationship with the company, said that Nest being quick with the blame didn’t surprise him, citing a culture of arrogance at the company. When something went wrong during integration testing between his device and Nest’s, problems were first blamed on his servers and team."
And fast-forward to last week, when researchers putting various internet of thing devices through tests found that the Nest thermostat was one of many IOT devices happily leaking subscriber location data in cleartext (with Nest, it's only the zip code, something the company quickly fixed in a patch). Granted Nest's not alone in being an inadvertent advertisement for a product's "dumb" alternatives. In 2016, smart tea kettles, refrigerators, televisions and automobiles are all busy leaking your private information and exposing you to malicious intrusion (or worse).

It's a fascinating, in-progress lesson about how our lust for the sexy ideal of the connected home appears to be taking a brief pit stop in reality, where sexy doesn't matter if the underlying product, person or device remains inherently dysfunctional. As a result, dumb and ugly technology is poised to make a dramatic comeback.

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Posted on Techdirt - 26 January 2016 @ 8:33am

AT&T CEO Thinks You're A Forgetful Idiot, Hilariously Gives Apple Encryption Advice

from the glass-skyscrapers dept

You really can't find a pair of cozier bosom buddies than AT&T and the NSA. Long before Snowden, whistleblowers like 22-year AT&T employee Mark Klein highlighted (pdf) how AT&T was duplicating fiber streams, effectively providing the NSA with its own mirror copy of every shred of data that touched the AT&T network. More recent documents have also highlighted AT&T's "extreme willingness" to help, whether that involves having its employees act as intelligence analysts themselves, or giving advice to the government on the best ways to skirt, dance around, or smash directly through privacy and surveillance law.

So it was a little bit amusing last week when AT&T CEO Randall Stephenson thought it would be a good idea to chime in on the encryption debate. In a back-rubbing, feel good interview with the Wall Street Journal, Stephenson had the stones to actually suggest the company's unprecedented, disturbing ties to the NSA were all but fantasy:

"The AT&T chief said his own company has been unfairly singled out in the debate over access to data. “It is silliness to say there’s some kind of conspiracy between the U.S. government and AT&T,” he said, adding that the company turns over information only when accompanied by a warrant or court order."
Omitted of course is that for much of the last fifteen years AT&T did nothing of the sort, working in tandem with the NSA, FBI, and every other government agency to hoover up U.S. citizen data with minimal oversight and virtually no regard for the law. When busted, AT&T had enough political power to get the government to give its telco partners retroactive immunity. To brush this documented and disturbing history aside like cracker crumbs in bed gives you a pretty good idea of Stephenson's hubris. It also shows you what the CEO has learned after fifteen years of unprecedented scandal.

Stephenson then apparently thought it would be a good idea to start giving lectures to companies that actually give a shit about the privacy of their customers. According to Stephenson, companies like Apple and Google shouldn't be embracing encryption, because that's something that should only be acted on by our stalwart representatives in Congress:
"I don’t think it is Silicon Valley’s decision to make about whether encryption is the right thing to do. I understand Tim Cook’s decision, but I don’t think it’s his decision to make,” Mr. Stephenson said...“I personally think that this is an issue that should be decided by the American people and Congress, not by companies,” Mr. Stephenson said.
Of course Stephenson's intentionally ignoring the fact that companies like Apple and Google are now rushing to embrace encryption because that's what consumers want. Much like AT&T did with net neutrality, it's also urging that the issue be left to Congress, because it knows Congress is either too cash-compromised or incompetent to do the right thing. For some time, it hasn't been entirely clear where AT&T as a company ends and the nation's intelligence services begin, so giving any advice on "the right thing to do" in regards to surveillance and privacy is utterly adorable.

AT&T certainly has ample credibility, just not on the encryption front. AT&T's the company you go to if you want advice on how to, say, defraud programs designed to help the hearing impaired or low income Americans. AT&T's the company you go to when you want advice on how to rip off consumers with fraudulent services. AT&T's also the foremost authority on effectively buying state legislatures and convincing them to write abysmal, protectionist laws to demolish competitive threats. But advice on the "right thing to do" when it comes to encryption? Thanks, we'll pass.

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Posted on Techdirt - 25 January 2016 @ 11:40am

Senators Whine About FCC's 25 Mbps Broadband Standard, Insist Nobody Needs That Much Bandwidth

from the lowering-the-bar dept

Just about a year ago, the FCC voted to raise the base definition of broadband from 4 Mbps downstream, 1 Mbps upstream -- to 25 Mbps downstream, 3 Mbps upstream. This, of course, annoyed the nation's mega providers, since the higher standard highlights the lack of competition and next-generation upgrades in countless markets. It especially annoyed the nation's phone companies, given that the expensive, sub-6 Mbps DSL foisted upon millions of customers can no longer even technically be called broadband.

Fast forward a year and the broadband providers' favorite politicians in the House are still whining about the improved definition. In a letter sent to the FCC last week (pdf), the six senators complained that the FCC is on a mad power grab, using a crazy and arbitrary new definition to saddle broadband providers with all manner of onerous regulations. Besides, argued the six Senators, 25 Mbps is more than any American consumer could ever possibly need:

"Looking at the market for broadband applications, we are aware of few applications that require download speeds of 25 Mbps. Netflix, for example, recommends a download speed of 5 Mbps to receive high-definition streaming video, and Amazon recommends a speed of 3.5 Mbps. In addition, according to the FCC's own data, the majority of Americans who can purchase 25 Mbps choose not to."
Focusing on the fact that a single Netflix stream eats just 3.5 to 5 Mbps ignores the fact that broadband connections serve an entire house of hungry users, many of whom will be gobbling significantly more bandwidth using any number of services and connected devices. It's also worth pointing out that a single Netflix Ultra HD stream can eat 25 Mbps all by itself. And on the upstream side of the equation, the FCC's definition of 3 Mbps remains relatively last-generation and arguably pathetic. Similarly, many consumers may not buy 25 Mbps because the lack of competition can result in high prices for faster tiers.

In other words, claiming 25 Mbps is some kind of "arbitrary," pie-in-the-sky standard is absurd.

Of course, the Senators don't really care about technical specifics, they're just blindly echoing the broadband industry's annoyance that the FCC is now actually highlighting the lack of broadband competition in the market. They're specifically bothered by this recent FCC study, which notes that two-thirds of U.S. households lack the choice of more than one ISP at speeds of 25 Mbps or greater. Companies like AT&T and Verizon also don't like how this data highlights the fact they're giving up on rural America and many second- and third-tier cities, freezing broadband deployments and in some cases even refusing to repair aging infrastructure.

And while it's certainly true the higher standard helps prop up the FCC's Congressional mandate to ensure quality broadband is deployed in a "reasonable and timely" basis (and by proxy its Title II reclassification), a lot of the FCC's efforts have quietly involved eliminating regulation, ranging from streamlining tower placement and pole attachment regulations, to eliminating the kind of awful state level protectionist laws that keep municipal and public/private broadband networks from taking root in incumbent duopolist territories.

At the end of the day, incumbent providers and the politicians who love them are simply annoyed that the FCC has any standards whatsoever, since that makes it immeasurably harder to pretend that the nation's broadband competition and connectivity issues don't exist.

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