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
For years we've noted how 19 states have effectively let companies like AT&T and Comcast write protectionist state broadband laws to protect the status quo. Such laws usually either block or hamstring frustrated communities looking to build their own broadband networks, or in some instances from striking public/private agreements with companies like Google Fiber. Last year the FCC finally started paying attention to such bans, stating it intends to use Section 706 of the Telecommunications Act of 1996 to preempt restrictions conflicting with its Congressional mandate to ensure even broadband deployment.
The FCC's action specifically targeted bans in both Tennessee and North Carolina, both states where incumbent telecom lobbyists quite literally control state legislatures. Both states' dysfunction on this front is legendary, yet both chose to sue the FCC in court to, they claim, defend "states rights" from federal government "overreach" (defending state residents from shitty telecom law written by lobbyists isn't much of a concern).
North Carolina has been a particular joke on this front, with Time Warner Cable successfully getting its own protectionist legislation passed in 2011, after three consecutive failed attempts. The "Level Playing Field/Local Gov't Competition Act" saddled towns looking to improve local broadband infrastructure with all manner of limits on how they could build, price, and sell broadband service -- simply to protect lazy incumbent ISPs:
"Christopher Mitchell, director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance, a nonprofit economic and community development consulting group, disagreed with Avila. He said if the bill in North Carolina is signed, he’d classify it as a de-facto ban on community broadband networks, given the wide breadth of restrictions in the bill.
"I don’t believe you’ll see any community surpass the hurdles to build a network if this bill passes,” Mitchell said. “The number of barriers will make it all but impossible.”
Fast forward to this week, and North Carolina unveiled its new state broadband plan (pdf), which aims to bring "universal access" to broadband for all North Carolina residents by 2021. As we saw with our national broadband plan, such plans are historically hollow, designed to give the impression political leaders are actually bridging the digital divide, while ignoring the lack of competition that results in US broadband residents paying some of the highest rates for broadband in the developed world. The real plan for most governments? Let deep-pocketed telecom campaign contributors have everything they want.
North Carolina's plan is no different, but at several points oddly tries to applaud activism by communities sick and tired of stagnant broadband duopolies:
"Through the course of writing the plan, two common themes emerged: active and engaged communities and their partnerships with private sector internet service providers are the biggest factors in bridging existing digital divides. Therefore, the plan’s recommendations encourage communities to be active participants in the development process.
Well, unless you support state laws actively and violently preventing them from doing that, right? The plan summary at one point does point out that the state's horrible protectionist law exists, but isn't politically courageous enough to actually recommend eliminating it as a serious impediment to state improvement. The plan's executive summary continues to ignore the state's responsibility in helping to keep broadband coverage gaps intact:
"However, broadband’s benefits are not evenly dispersed and a digital divide, or “a gulf between those who have ready access to the internet and computers,”i and those that don’t, is growing. Many communities, typically in sparsely populated or economically-distressed areas lack access to infrastructure or affordable service. Additionally, broadband adoption—the proportion of citizens subscribing to internet service—is low in NC given the rate of broadband availability in the state and contributes to the widening digital divide.
In every state, there are areas where incumbent ISPs refuse to reach because it's just not profitable enough, quickly enough for investor-loyal ISPs. That's why local communities have often been forced to either build their own networks, or lean on a public/private partnership. The end result was municipal broadband networks like Greenlight out of Wilson, North Carolina, which was willing to fill in those gaps -- but found itself suddenly unable to expand and hamstrung by North Carolina's protectionist state broadband law. North Carolina's plan fails to seriously address this.
This same kind of nonsense is occurring in state after state, with politicians breathlessly declaring that even broadband deployment is a priority, then turning around and supporting protectionist laws that do little beyond keeping stagnant broadband duopolies intact. If ISPs don't want communities getting into the broadband business, they should offer better, cheaper service. And if states want to truly support even broadband deployment, step one needs to be to stop letting mega-ISP lobbyists write shitty state telecom law.
We've noted countless times how in the modern computing era, you don't really own what you think you own. You don't really own the music or books that can arbitrarily disappear on your devices, and you no longer really own a wide variety of hardware that can be dramatically changed (often for the worse) via firmware update months or years after purchase. If you're extra lucky, you'll shell out $300 for a piece of hardware that one year later simply won't work at all. With intelligent automobiles and the rise of the internet-of-not-so-smart things, that's more true now than ever.
Case in point: back in 2010 we noted how Sony issued several firmware updates for its Playstation 3 gaming console that effectively made the console less useful. One specifically (PS3 software update 3.21) removed the console owner's ability to load alternative operating systems like Linux. But tinkerers being tinkerers, some users found ways to use the feature to expand the console's functionality in all kinds of creative ways. Fearing a loss of control and potential spike in piracy, Sony decided to make the console significantly less useful.
Sony was ultimately sued via class action for the decision. After six years of litigation, Sony has agreed to settle the dispute by doling out a whopping $9 to each console owner that bought a PS3 based on Sony's promises to provide "Other OS" functionality, and $55 to each PS3 user that managed to get Linux running on the console. Like most class actions it's the attorneys who'll reap the most benefits, Sony doling out $2.25 million in attorneys' fees for the lawyers who brought suit (though it's worth noting even this wouldn't be possible today thanks to TOS mouse print banning class actions and requiring binding arbitration).
Sony's lawyers at several points tried to claim that the update was "voluntary," refusing to acknowledge that users that refused to install the firmware couldn't actually use it for much of anything:
"...Sony said the update was voluntary. However, without updating, console owners couldn't connect to the PlayStation Network, play any games online, play any games or Blu-ray movies that required the new firmware, play any files kept on a media server, or download any future updates. Before the settlement, Sony argued that its terms of service allowed it to remove the Other OS feature and that the functionality wasn't that big of a deal for most console owners."
Part of the settlement requires that PS3 owners show "some proof of their use of the Other OS functionality" -- which after six years may not be all that easy for impacted users. While it's nice to see PS3 owners get a little something after six years of litigation, the overall trend in technology remains one where consumers can't tinker with the hardware they "own," can't be sure the hardware will adhere to day one marketing promises, have no guarantees that the gear will even work even one year down the line, and can't sue if what they own is intentionally downgraded or crippled by the manufacturer. Progress!
from the what-competition-actually-looks-like dept
In 2009, the FCC funded a Harvard study that concluded (pdf) that open access policies (letting multiple ISPs come in and compete over a central, core network) resulted in lower broadband prices and better service. Of course when the FCC released its flimsy, politically timid "National Broadband Plan" back in 2010, this realization (not to mention an honest accounting of the sector's limited competition) was nowhere to be found. Since then, "open access" has become somewhat of a dirty word in telecom, and even companies like Google Fiber -- which originally promised to adhere to the concept on its own network before quietly backpedaling -- are eager to pretend the idea doesn't exist.
That's not the case for Ammon, Idaho however, where a small municipal broadband ISP is building a core broadband network that's not only embracing open access, but is developing tools that will let customers easily switch between ISPs in seconds. Even different customers in the same home can select different ISPs depending on their needs:
"Residents will get a gateway provided by the city. When they hook it up and try to surf the Web, they will be taken to the portal where they can select an ISP—very much like using the Internet in a hotel.
From that point, residents will scan the available Internet offers, purchase one, and get hooked up immediately. They could even buy two different Internet services, which might be useful for a family where a parent works at home and wants a single broadband line for a home office and a second broadband service for the rest of the home."
While only a 12 home trial at the moment, the city of Ammon is beginning expansion to 200 homes, with plans to reach all 4,500 homes and apartment buildings in time. Like most municipal broadband networks, the Ammon network was forged in the wake of resident annoyance at apathetic area incumbents CenturyLink and Cable One. Also like most municipal broadband communities, Ammon is relatively conservative, once again putting to bed the useful ISP-backed myth that municipal broadband is a partisan, political issue:
"Ammon is "a very conservative community," so creating a fiber network instead of relying solely on the private sector is not something city officials were about to do lightly, Mayor Dana Kirkham said in the video. But city officials soon figured out that they could do the initial project themselves for just $22,000 and that they could also bring Internet access to government buildings and businesses, improving the city's ability to compete in a high-tech world in a fiscally responsible manner."
Again though, open access in most areas of the country is treated like the bubonic plague. Why? Most large scale open access proposals often involve some form of local public/private partnership to ensure even coverage of what's becoming a necessary utility to lower ROI areas. The end result is any ISP lobbyists' worst nightmare: an informed, motivated public with the backing of local governments working together to improve broadband competition, instead of the current paradigm of regulatory capture resulting in government ignoring the public to maintain the duopoly status quo.
And while Ammon's approach is unlikely to be adopted on any scale here in the States, it's an interesting look at what could have been if the country wasn't quite so beholden to telecom industry campaign contributions.
For a while now we've warned how "zero rating" (letting some content bypass usage caps) is a creative way for ISPs to tap dance around net neutrality --potentially to public applause. Comcast, for example, exempts its creatively-named "Stream" streaming video service from caps, but claims this doesn't violate net neutrality because the traffic never technically leaves Comcast's network. Verizon exempts its own Go90 video service from caps as well, and to date doesn't even bother justifying the move. Both AT&T and Verizon let companies pay for cap exemption.
And while these programs all laugh in the face of neutrality, many users still tend to applaud the horrible precedent because they believe -- despite paying an arm and a leg for wireless data -- that they're getting something for free.
T-Mobile has been perhaps the most creative in exploiting this belief and implementing zero rating, now exempting some 90 video services from user usage caps and throttling these services to 1.5 Mbps (or 480p) unless a user opts out. But neutrality advocates have repeatedly noted this idea still violates net neutrality given that thousands of startups, educational orgs, and non profits still aren't whitelisted -- and may not even realize they're being discriminated against.
And while T-Mobile has done some great things for consumers the last few years, T-Mobile's response to these concerns has been relatively pathetic, vacillating between lying about how the program works, to insulting net neutrality supporters like the EFF while fighting real net neutrality rules and Title II reclassification. Yet because many in the public don't understand the horrible precedent and just think it's really groovy they're getting free stuff -- T-Mobile's Binge On, happily lives on.
But a new study out of Northeastern University doesn't have much nice to say about T-Mobile's "consumer friendly" zero rating program. The researchers found numerous problems with Binge On, including the fact that T-Mobile's promise of 480p video quality is consistently less:
"T-Mobile says that the resolution for Binge On streaming is 480p (progressive scan) or better, which is considered standard for DVD movies. However, the researchers did not find evidence to back up these claims. In their trials using YouTube, the resolution was only 360p, noticeably blurry on a modern smartphone.
They also found that T-Mobile's systems not only had trouble accurately detecting video services:
"T-Mobile’s detection methods are very simple, so there’s no way they can always be right,” he says. "That means that Binge On is likely slowing down traffic that is not video. This raises serious concerns about compliance with the Open Internet Order."
And they found that the system was manipulable by clever T-Mobile users, potentially allowing them to zero rate services not covered by the program:
"Those simple methods open the door to exploitation as well, allowing subscribers to get free data even for non-video content. The researchers developed simple software that manipulates internet traffic so that it looks like video. For example, it makes any web content—web pages, app downloads, and photos—look like YouTube traffic. “We realized we could make any network traffic zero rated by just putting the right text in the right place," says Choffnes. "That is a security vulnerability -- it's potentially an open cash register that people can take from."
So in short, the report notes that T-Mobile's Binge On isn't accurate, is exploitable, and reduces video quality more than T-Mobile claims. T-Mobile (and zero rating supporters) argue that what T-Mobile's doing is ok simply because users can opt out. But the researchers noted that putting the onus to opt out on frequently non-technical consumers doesn't somehow magically mean net neutrality isn't violated by the underlying precedent. The researchers argue that regardless of public opinion on the subject -- the T-Mobile Binge On is still a net neutrality violation however you'd like to slice it:
"The internet has been hugely successful because it enables innovation, where all new internet applications receive the same network service as incumbents -- it's a level playing field," says Choffnes. "T-Mobile’s policy gives special treatment to video providers that work with them. What if every ISP did this, but in a different way? In such a world, the next Netflix, Hulu, or Pied Piper might never get off the ground because keeping up with ISPs and their policies would leave them chasing their tails."
There's several reasons why we're not seeing the backlash to zero rating we've seen elsewhere in the net neutrality fight. One, again, consumers think they're getting something for free, and don't understand that usage caps are entirely arbitrary constructs to begin with, and not actually even useful for managing network congestion (should it even actually exist). Zero rating also is seeing support from companies that historically supported net neutrality (Google, Netflix) because these companies are benefiting from the additional traffic and ad eyeballs these programs send their direction.
But because consumers don't really understand the slippery slope they're happily having a picnic on -- and Silicon Valley companies are willing to turn a blind eye to these types of net neutrality violations because they profit off of them -- doesn't magically mean what T-Mobile is doing is a good idea.
With the FCC's net neutrality rules now on more secure footing after their major legal win, all eyes now turn to what the FCC intends to do about broadband usage caps and zero rating. While many countries (India, Japan, The Netherlands, Chile) understand the bad precedent at play here and have banned zero rating outright as anti-competitive, the FCC decided to weigh the anti-competitive impact of zero rating on a "case by case basis." And while the FCC is currently conducting a rather glacial inquiry into caps and zero rating, ISPs so far have been allowed to employ the practice with relative impunity.
In short, the FCC's failure to ban zero rating opened the door to net neutrality violations, provided an ISP is just clever about it. Without Netflix or Google's support, and with consumers believing they're benefiting from such models, the FCC is seeing notably less political pressure to act. So while it's wonderful that we've got shiny new net neutrality rules freshly upheld by the court system, they may wind up being useless as carriers and ISPs tap dance over, under and around them -- to thunderous public applause.
The cable industry is aggressively fighting the FCC's attempt to bring competition to the cable box market. So far that's been via a two-pronged approach of buying a torrent of incredibly misleading editorials by people pretending to be objective observers (including Jesse Jackson), and throwing money at politicians who oppose the plan, but pretty clearly have no goddamned idea what they're actually talking about.
Under the FCC's plan (pdf), cable providers would be required to provide their existing programming to third-party hardware vendors, creating competition and hopefully a flood of better, cheaper hardware without the need for expensive, and annoying CableCARDs. But with the average user paying $231 annually in set top box rental fees, the cable industry is pulling out all the stops to protect $21 billion in annual, captive revenues.
The cable sector's latest attempt to scuttle the FCC's plan? A voluntary counter-proposal that pretends to deliver what the FCC is asking for, but falls well short. Under the proposal unveiled during recent meetings at the FCC (pdf), the cable industry would instead provide much of its existing programming via apps. This, the cable industry claims, would somehow create competition in the third-party hardware market without FCC involvement:
This alternative could be built on enforcing an industry-wide commitment to develop and deploy video “apps” that all large MVPDs would build to open HTML5 web standards....They expressed their belief that such an approach could further advance competition for independent device manufacturers within the context of a market transformation already underway and in a manner that fully protects and respects the rights of content owners.
But while this has been portrayed as some kind of revolutionary concession by hired telecom sector policy cheerleaders and several different press outlets, it isn't much different than what cable operators offer today. Currently, most cable providers offer some of their content via apps usable on tablets, smartphones, and many streaming devices. Historically, they offer fewer features and less content than is available via full, traditional cable; little more than a token gesture toward innovation in the hopes of keeping paying customers from jumping ship to Netflix, Amazon, or a collection of other cheaper options.
Under this latest proposal, you'd be able to watch some cable content via apps, but if you wanted to, say, record via DVR -- you'd still have to sign up for old, vanilla QAM-based cable and pay for the same, old, clunky set top box. Ultimately, my guess is that these cable executives would eventually get rid of the cable box if you use their apps, but force you to pay a monthly fee for their cloud-based streaming or other services. Potentially using zero rating (exempting their services from usage caps) to ensure fealty. Slight variation on the same, existing song.
INCOMPAS, a trade association that has Google, Amazon, Netflix, and some ISPs as members (mostly telcos with no interest in selling cable TV), issued a statement pointing out that this "compromise" wasn't much of one, while reminding everyone that cable sector promises historically don't mean much:
...The cable industry is proposing competitive choice for streaming devices, but still seeks to retain a controlling grip on DVRs and recordable devices. “The cable industry has made promises before about ditching the set-top box, that have not materialized. So it is important for the FCC’s unlock the box proposal to include enforceable standards that will create a thriving market for competition, congruent with the law.
Consumer groups too were quick to point out that the cable industry's proposal is murky and falls short:
"The proposal does not allow for many features that consumers want, such as home recording, and it does not allow for true user interface competition," Public Knowledge Senior Staff Attorney John Bergmayer said in a statement sent to Ars. "Additionally, core aspects of the proposal are unclear, in particular, the precise mechanism by which MVPDs propose to provide apps for various hardware and software platforms, and whether consumers would need a broadband connection to access video programming instead of leveraging their existing pay TV connections."
While it's good this proposal at least brings the cable industry to the table, skepticism is more than warranted. This is, after all, an industry with a long, proud history of engaging in anti-competitive behavior under the auspices of phantom technical justification, with net neutrality and usage caps being only a small part of the equation. Comcast, for example, is so eager to limit streaming competition it refuses to let its broadband customers access HBO Go across a wide variety of devices, providing only fleeting, half-baked justifications for the behavior.
Make no mistake, the cable industry is absolutely terrified of not only losing tens of billions in rental fees, but of truly open hardware platforms willing to direct customers to cheaper streaming alternatives. Under this app-based approach, you can be dead certain that cable would include all manner of caveats to ensure customers still need to sign up for traditional cable or their DVR services if they want the "full TV experience." Anyone who thinks the sector's going to honestly volunteer any plan that puts its existing monopoly power at any serious risk -- simply doesn't know the cable industry.
If the FCC is truly intent on real competition to the set top box market, the cable industry may need to be dragged kicking and screaming to the finish line.
As you might have heard, New York City recently launched one of the biggest free Wi-Fi initiatives ever conceived. Under the program, some 7,500 Wi-Fi kiosks will provide gigabit Wi-Fi, free phone calls to anywhere in the country (via Vonage), as well as access to a device recharging station, 311, 911, 411 and city services (via an integrated Android tablet). The city is installing ten a day -- most at old payphone locations -- and hopes to have 500 of the kiosks in place by July. It's a pretty impressive effort, and by most measures providing fast, free connectivity to the city's five boroughs has been something to celebrate.
"...The plan badly backfired when scores of homeless men — and some schoolchildren — soon realized they could surf porn sites all day on the city’s dime using the communal Android-run tablets and gratis Wi-Fi."
Of course the Post kind of floats over the amazing fact that the kiosks let everybody in the city access any information they want at any time, but the Post also fails to really offer any evidence that there's waves upon waves of masturbating homeless brigands terrifying city residents. In fact the story proceeds to note that the company behind the initiative, LinkNYC, has already ramped up filtering of pornographic websites to at least make it a little more difficult. In fact there's really not much of any meat to the clams the city's plan "backfired" at all, outside of a quote from an indignant out of towner:
"I used to come here in the ’70s, and I remember thinking Times Square was as skeezy as you could get, but I was wrong,” said former New Yorker Richard Herzberg, 61, who now lives in Dallas, Texas. "This is as skeezy as Times Square could get. I mean, in the old days there was plenty of porn, but you could only see it behind closed doors. So at least there was that level of modesty."
While the Post would apparently prefer it if we dismantled a useful, citywide Wi-Fi network to fix a nonexistent or relatively minor problem, it's worth remembering that masturbating in public remains a criminal offense, making the fact that it's happening at a free Wi-Fi pylon somewhat irrelevant. And while there's an argument to be made for loss of city character as New York evolved from punk rock minefield to glorified shopping mall, city residents that remember the apocalyptic nature of 70s and 80s NYC likely see sporadic homeless porn consumption as the very least of the city's worries.
Last fall, we noted how New York Attorney General Eric Schneiderman's office had launched an investigation into awful broadband service quality. In and of itself that was nothing particularly interesting (especially given Schneiderman's history of grandstanding), though what made the inquiry of note is the office's hiring of Tim Wu, the Columbia Law professor who first coined the term "net neutrality" back in 2002. With Wu as the AG's "senior lawyer and special adviser," Schneiderman sent letters to NYC area broadband incumbents Verizon, Cablevision and Time Warner Cable -- questioning whether they actually deliver the speeds they advertise.
So far this inquiry doesn't appear to have culminated in much of anything beyond a recent letter sent to Charter CEO Tom Rutledge (pdf) warning him that he needs to dramatically improve the "abysmal" service offered by one of the company's recently acquired properties, Time Warner Cable. According to the AG's letter, tests conducted by volunteers show that Time Warner Cable connections consistently fail to achieve advertised data rates:
"The results we received from Time Warner Cable customers were abysmal. Not only did Time Warner Cable fail to achieve the speeds its customers were promised and paid for (which Time Warner Cable blamed on the testing method), it generally performed worse in this regard than other New York broadband providers. In short, what we have seen in our investigation so far suggests that Time Warner Cable has earned the miserable reputation it enjoys among consumers. Overcoming this history will require more than a name change; it will require a fundamental revolution in how Time Warner Cable does business and treats its customers.
This, of course, is not really a new revelation. Limited competition historically leaves large ISPs with no incentive to seriously upgrade infrastructure or customer support, resulting in the cable companies most of us know and love. And while the letter promises Charter's CEO the NY AG's office will "be in touch soon to propose next steps," the AG hasn't really offered a solution so far. And the letter comes just as New York State joins federal regulators in approving Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks, a deal most consumer advocates warn simply creates another Comcast with the size, scope and power to ensure broadband remains marginally competitive at best.
While the AG's office appears to have used a relatively simple speed test to collect the data, a far more comprehensive study by the FCC last year (using custom-firmware embedded routers in user homes) found that roughly 10% of Time Warner Cable customers got less than 80% of their advertised speeds during prime time, 15% received 80 to 95% of their advertised speeds, while 75% got more than 95% of advertised speeds. That's not perfection, but it doesn't really rise to the level of "abysmal," either.
In fact, that same FCC study found that the majority of the ISPs measured do consistently deliver advertised speeds, and since the FCC began conducting these studies -- some ISPs have even taken to offering a little more than what's advertised to avoid public shaming of this type. The problem with the AG's inquiry is that, historically, speed hasn't really been as large of an issue as horrible customer service, sneaky misleading fees and high prices, the last two of which federal and state regulators have a long, proud history of completely ignoring. And unless the AG has some magical way to address a lack of competition in the market, harsh letters stating the obvious may not really accomplish all that much.
While hardline free marketeers and incumbent ISPs often try to paint city-owned broadband networks as the pinnacle of government-sponsored disaster, Chattanooga Mayor Andy Berke this week credited the city utility's gigabit broadband service as a major contributing factor for the city's re-invention. The Chattanooga Electric Power Board (EPB) is a city-owned utility that offers broadband speeds up to 10 Gbps to locals; a recent Consumer Reports survey noting that outside of Google Fiber, EPB has the only truly positive consumer satisfaction ratings among the 30 national ISPs ranked by the magazine:
"The results were ugly for value, too, with 28 of the 30 TV service providers earning our lowest score. The two exceptions—municipal broadband company EPB Fiber Optics-Chattanooga and Google Fiber—each earned high scores from the survey respondents. Both services offer super-fast 1-gigabit-per-second (Gbps) speeds. EPB Fiber Optics-Chattanooga ranked highest in the survey for overall satisfaction, edging out Google Fiber and cable company Armstrong."
In areas where the private market has failed, public or public/private partnerships have proven to be an effective way (if designed and funded properly) in shoring up coverage gaps for what has become an essential utility. Berke this week stated that by doing what local incumbent broadband providers refused to (aka give a damn), the city has been able to attract startups, lower the city's unemployment rate, and change the city's reputation for the better. And while not all of that is solely thanks to broadband, Berke makes it very clear that EPB was a huge part of it:
"It changed our conceptions of who we are and what is possible,” Berke said. “Before we had never thought of ourselves as a technology city."...Downtown has doubled its residents and landlords often advertise gigabit speeds that are included in monthly rents.
“It’s an explosion of growth in our technology sector,” he said. “That has sparked not only this (downtown) living but restaurants and bars and music and the quality of life that truly makes a city interesting, cool, hip, vibrant and energetic."
But if you've been playing along at home, regional incumbents like AT&T and Comcast almost kept EPB's network from ever being built. In 2008 Comcast unsuccessfully sued EPB to prevent the city's plan from taking root. AT&T and Comcast are also behind a state law preventing EPB from expanding, one of nineteen such laws lobbied for by incumbent ISPs to maintain the apathetic broadband status quo.
We've noted how state leaders (like Rep. Patsy Hazlewood, a former AT&T executive) have rushed to the defense of the state's broadband duopoly and their protectionist law. The pretense usually involves these politicians insisting they're just trying to protect taxpayers from themselves, ignoring the fact that letting AT&T and Comcast lawyers literally writing bad state telecom law has resulted in Tennessee being one of the least connected states in the nation.
Tennessee's fealty to regional duopolists recently bubbled over when EPB successfully petitioned the FCC to intervene on their behalf. The FCC is currently in court trying to argue that two such laws -- in both Tennessee and North Carolina -- run in stark contrast to the FCC's stated mission of ensuring even and timely broadband deployment. The FCC hopes that the case sets a legal precedent, resulting in the elimination of similar laws (many of which ban or hinder even public/private partnerships like Google Fiber) falling like dominoes.
But here too loyal Tennessee protectors of broadband sector dysfunction like Marsha Blackburn have tried to argue the FCC is violating state law -- by telling the state which giant corporations can or can't buy protectionist legislation. It's all part of a massive joke that has repeated itself in state after state, where companies like AT&T and Comcast have such a stranglehold over the legislative process, they've effectively codified shitty, uncompetitive broadband into law.
from the informed,-empowered-consumers-cost-us-revenue dept
In addition to the $21 billion made annually by cable set top box rental fees, cable companies make untold billions from monetizing the user viewing data these boxes help collect. That captive revenue alone is the driving force behind the pay TV sectors histrionic opposition to the FCC's plan to open the sector up to third-party hardware competition. Consumer viewing and behavioral data is an immense cash cow, one the cable industry has occasionally threatened to take even further -- with patents on tech that lets the cable box literally watch or listen in on American living rooms.
While things haven't quite reached that level of total information awareness yet, consumer groups this week filed a formal complaint with both the FTC and FCC arguing that things have gone far enough. Public Knowledge, the Center for Digital Democracy and Consumer Watchdog have filed formal privacy complaints with both the FCC and FTC saying that major cable companies routinely fail to inform consumers about the degree in which their viewing data is collected, stored and monetized via ye olde cable box.
The complaints note that while most cable company privacy policies do alert consumers that they use personally identifiable information and third-party data for ads, these warnings don't go far enough to formally adhere to cable privacy rules on set-top box information:
"Federal law requires cable and satellite providers to obtain permission from subscribers prior to collecting and using their information for advertising purposes. Cable operators are also required to provide subscribers with a written statement that clearly describes the nature of the use of their personally identifiable information. Currently, cable operators obtain opt-out consent from consumers to use their information, which is insufficient to constitute prior consent under the law. And their privacy policies often fail to adequately disclose the extent to which they are sharing and combining customer data with third parties."
The complaints specifically single out Comcast, AT&T and Cablevision as "among the most egregious" when it comes to using consumer data without adequate consent. The complaint filed with the FCC (pdf) for example, notes that companies like AT&T often pull data from both the wireless and wireline empires to create mammoth databases of user behavior and personal information for targeted ads, without making the scope of this collection and usage clear to consumers or obtaining full, legal consent:
"AT&T’s TV Blueprint, for example, “gives advertisers working with AT&T the ability to reach people based on factors like device, operating system, whether or not they’re heavy data users or the status of their carrier contract,” using “sophisticated second-by-second set- top box data” and other information. AT&T pulls data “from millions of set-top boxes” and analyzes consumer viewing history and uses these data to target consumers based on their viewing profile. Companies like Cablevision leverage
granular data and precise details of household viewing behavior, and combine it with third-party data covering other intimate details of consumers’ lives to analyze and target specific individuals with video advertising across a range of screens. In their own words, “this set-top box level targeting lets marketers target customers that fit particular trends, profiles, demographics and attributes, and they can also pair the Cablevision data with their own or third-party data."
With the FCC eyeing both set top box reform and new privacy rules for broadband providers, Public Knowledge is providing the commission with a little ammunition and fuel for thought on both fronts. Historically, consumer privacy in telecom and television has been feebly protected at best, and companies like AT&T have consistently pushed the barriers in their ever-expanding quest for more marketing data, whether that's the use of modified wireless packets to track users around the Internet, or charging a steep premium to opt out of deep packet inspection and data collection.
In the not-so-competitive realm of telecom, this is about as close to "innovation" as many sector companies get.
Specifically, Public Knowledge makes it clear they'd like to see such collection be made opt in instead of opt out, and argues that opting out doesn't go far enough to count as "consent" under existing privacy law:
"...The Commission should take the affirmative step of declaring that the use of customer information requires opt-in consent and that absent such consent, cable providers violate privacy rules by collecting customer information and using it to deliver marketing tailored to those customers."
As we've seen with the do not track debate, opting in is the bane of any data hoovering operation, given an informed and empowered consumer protected by a still-clawed regulator results in an obvious dent in the profit party. As such, telecom regulators have never been keen on supporting opt in, and it doesn't seem likely they'll start doing so anytime soon, despite the groups' request.
"AT&T’s use of anonymous and aggregate set-top box information is entirely consistent with the statute. Our disclosures tell our customers exactly how we use that data and provide tools for customers to opt out. Frankly, this complaint is bogus, and seems mainly designed to distract the public from the overwhelming bipartisan opposition to the FCC’s controversial set-top box plan.
That plan itself will erode existing consumer privacy protections, not to mention its many other harms. Because the plan’s few remaining supporters have no answer to that charge, they’ve decided to invent a false privacy claim. This smacks of desperation, and it also carries the whiff of hypocrisy. It’s further proof, if any is needed, that the plan’s supporters have lost the public policy debate on this issue."
AT&T somehow forgets to mention that most of the opposition to the FCC's set top box competition plan is entirely artificial -- generated in large part by AT&T and Comcast lobbying departments -- who've been busy filling editorial pages nationwide with absurd and misleading arguments.
The genuine reason for AT&T's opposition isn't surprising or complicated: ill-informed customers in un-competitive markets trapped in walled gardens are hugely profitable. Any deviation from this standard is treated as an egregious affront. But cable ops can't just come out and admit this is simply about protecting set top box monopoly money; that's why they've created groups like the "Future of TV Coalition" to try and complain -- like AT&T briefly does above -- that actually protecting cable customer privacy -- will somehow be a privacy violation in and of itself:
"But the new AllVid-style TV regulations being proposed by the FCC this week are an assault on consumer privacy. They will strip viewers of vital safeguards for their viewing choices and add “what we watch” to the mountains of data being mined and exploited by privacy scofflaws like Google, alongside their existing files of what we search for on the Internet; what we say in our gmail at home, work, and school; what happens in our “Nest”-connected homes; and where we go using Waze and Google Maps."
Cable companies could embrace opt in as a new standard and creatively offer small discounts to users who participate, but it's much easier to whine nebulously about Google. Companies like AT&T and Comcast desperately want to be regulated exactly like "edge providers" such as Google when it comes to privacy, ignoring the fact that their stranglehold over the broadband last mile -- and the cable box -- create a scenario whereby if regulators don't make at least a token effort to protect consumer privacy, the sky will be the limit in terms of abusing these captive markets and consumer walled gardens.
from the nobody-believes-the-words-coming-out-of-your-mouth dept
We've been talking for weeks about how the cable industry has dramatically ramped up lobbying in an attempt to kill the FCC's plan to bring some competition to the set top box market. The cable industry opposes the idea for two reasons: competition would dramatically reduce the $21 billion the sector makes each year off of rental fees, but the flood of new, cheaper boxes would also likely direct users -- historically locked behind cable's walled gardens -- to a huge variety of streaming video alternatives.
But the cable industry can't just come out and admit that they're terrified of competition -- so they've been attacking the FCC's plan with a two pronged approach. One, pay for an absolute torrent of hysterically-misleading editorials that claim set top competition will hurt consumers, scare the children, ramp up piracy, and knock the planet off of its orbital axis. The other prong of their attack involves a lobbying mainstay: throwing money at politicians to take positions they don't have the slightest actual understanding of.
"Rather than applying a light regulatory touch," Senator McConnell wrote in a letter to FCC Chairman Tom Wheeler, "the FCC would require existing programming distributors to provide the copyrighted programming they have licensed from content providers to third party manufacturers and app developers, none of whom would be bound by the agreements to protect the content."
This is a line that the cable sector and its marionettes have been repeating, but it's simply not true. As the FCC's proposal outline notes (pdf), all the plan does is require that cable operators deliver the same expensive programming they do now -- using the same copy protection and business arrangements -- without requiring a CableCARD. A set top vendor can't just claim cable broadcasts as their own and ignore existing programming agreements, but that's one of several misleading arguments being put forth by the sector to kill the initiative.
Advertisers looking to protect legacy cash cow relationships have also been trying to derail the FCC's effort, claiming that the reform plan will somehow hurt consumers, violate copyright (as the EFF did a great job detailing that's not true either), and thrust the entire pay TV advertising ecosystem into "chaos":
"The current market structure for television advertising supports advertisers' ability to place their ads based on national, regional or local distribution; the type of programming or specific content; the audience composition; and the time of day or night that the ads appear," the ANA wrote. The proposed regulations could tilt that system toward chaos, it suggested."
Perhaps the ANA hadn't noticed, but the legacy pay TV advertising ecosystem already faces a wholesale revolution in terms of how consumers are served TV programming and the ads attached to them. If the existing "market structure" can't adapt behavioral and location advertising to consumers viewing TV content on a myriad of devices and hardware, they may want to change professions. In reality, advertiser opposition is based on little more than fear; fear that they may have to share revenues with new economy companies, and fear that these companies may actually give consumers what they want -- like the ability to skip ads.
But again it's not as if the FCC's proposal is even really that dramatic of an idea. It would simply act to accelerate a shift that -- thanks in large part to cable and broadcast lobbying power -- is already happening but could take another decade to fully materialize. The shift away from the traditional cable box and legacy TV is well underway, and it's hubris to think it can be stopped by pouting. Opposition to the set top box reform plan is little more than the dull creaking of yet another legacy sector behaving like a toddler because the uncompetitive markets they've built over a generation can't somehow, magically, live forever.
After months of anticipation the U.S. Court of Appeals for the D.C. Circuit has upheld the FCC's Open Internet Order, an indisputably-massive win for net neutrality advocates. The full court ruling (pdf) supports the FCC's arguments across the board, including the FCC's decision to classify internet providers as common carriers under Title II of the Communications Act. That's not only big for net neutrality, but it solidifies the FCC's authority as it looks to move forward on other pro-consumer initiatives such as the exploration of some relatively basic new privacy protections for broadband users.
Historically the DC Appeals court has been a mixed bag for the FCC, but in this instance the court declared the FCC's neutrality protections rest on solid legal ground from beginning to end, dismantling arguments by the likes of US Telecom, AT&T, and advocacy groups like TechFreedom from stem to stern. That includes industry attempts to prevent the rules from being applied to wireless networks (a split decision whereby fixed-line services were covered by wireless was not was something that had worried many telecom sector consumer advocates).
The court also repeatedly shot down ISP claims that the rules somehow violate their First Amendment rights:
"Because a broadband provider does not—
and is not understood by users to—“speak” when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules."
The court also fully supports the FCC's contention that thanks to limited competition, broadband providers have plenty of incentive to act anti-competitively against "edge" providers like Netflix, and that this threat required FCC action:
"We also determined that the Commission had “adequately supported and explained its conclusion that, absent rules such as those set forth in the [2010 Open Internet Order], broadband providers represent[ed] a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” Id.at 645. For example, the Commission noted that “broadband providers like AT&T and Time Warner have acknowledged that online video aggregators such as Netflix and Hulu compete directly with their own core video subscription service,” id.,and that, even absent direct competition, “[b]roadband providers... have powerful incentives to accept fees from edge providers, either in return for excluding their competitors or for granting them prioritized access to end users,” id.at 645–46.
Ironically, the internet has Verizon to thank for today's ruling. The telco sued to overturn the FCC's flimsy 2010 rules, which didn't cover wireless and quite by design included massive, tractor-trailer-sized loopholes. But in overturning the rules the previous court decisions gave the FCC a path forward -- in effect urging it to reclassify ISPs as common carriers under Title II. It may also be worth noting (again) that despite industry claims that this reclassification would result in telecom Armageddon, the internet and broadband investment (at least in marginally competitive areas) has rumbled along happily.
While a huge win for net neutrality fans everywhere, it's important to understand that the open internet isn't out of the woods yet. The fight could still stumble its way to the Supreme Court. The Presidential election could similarly culminate in a total dismantling of the current FCC and a restocking of the agency with ISP-allies eager to roll back the protections -- as well as the myriad other efforts the FCC's currently engaged in (cable set top box reform).
And as we've noted a few times zero rating and usage caps also play a huge role in determining what constitutes a level playing field for startups and other smaller companies, and the rules don't specifically address such concerns. In other words, we've noted that even while legally sound the FCC's rules have plenty of loopholes allowing ISPs to hinder net neutrality -- just as long as they're somewhat clever about it.
The FCC has stated they'll be looking at the potential anti-competitive ramifications of zero rating and usage caps on a "case by case basis." With the court's full support, hopefully that inquiry will culminate in a harder policy decision sooner rather than later.
As part of the conditions attached to Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks, the FCC imposed a requirement that Charter expand broadband service to another two million locations, one million of which must already be served by an ISP delivering speeds of 25 Mbps or greater. Unfortunately these kinds of conditions historically don't mean much; merger broadband expansion promises are almost always volunteered by the ISPs themselves, who already planned the expansion regardless of their merger plans.
That isn't stopping a lobbying organization representing Charter's cable competitors from crying and stomping their feet over the condition. In a filing by the American Cable Association (ACA, pdf), the organization's lawyers try to claim that not only would an influx of competition somehow harm consumers, the group claims that adding competitors to what are frequently stagnant markets will somehow "damage economic efficiency":
"That overbuild condition is unlawful. It is not tailored to mitigate a merger-specific harm or confirm a merger-specific benefit. It will exacerbate the merger harms the Order identifies, damage economic efficiency, injure small providers, and harm consumers. The condition should be stricken."
"While the commission’s intentions in proposing the buildout requirement were undoubtedly good, the reality is imposing such a condition creates artificial competition in areas that cannot support it, which will ultimately undermine, rather than further, broadband availability and affordability in higher-cost areas in particular."
When is competition "artificial?" When we say it is! The thing is, it's not really competition these companies are worried about. It's the inevitable hoovering up of their businesses by Charter down the road. Charter CEO Tom Rutledge recently made it clear at an investor conference that he won't be targeting cable companies under the condition -- rather, he'll be targeting phone companies. Why? Phone companies, usually unwilling or unable to invest in fiber, make easier targets. There's no need to compete with smaller cable operators, when you can just gobble them up at a later date:
"When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those,” Rutledge said at the MoffettNathanson event. “It’s really about overbuilding telephone companies.” “Why would we go where we could get killed,” Rutledge said.
In other words, Charter doesn't want to compete with cable companies, because the FCC would then prohibit them from merging with them later for fear of lessening competition. Instead, Charter plans to take aim at the already struggling second-tier telcos in these areas, then acquire smaller cable operators down the road. So despite the FCC's intentions, the deal creates another homogeneous giant just like Comcast with little to no real competition to keep it in check, and the conditions are little more than regulatory band-aids for what's ultimately going to end badly for every individual and organization not-named Charter.
While the FCC's conditions do include a few useful nuggets for consumers and small businesses (a ban on caps and net neutrality violations for seven years), with the pace at which the cable industry is looking to defang and hamstring the agency, it's not clear there's going to be much of an FCC left to enforce the conditions during the latter stretch of that window. While the FCC certainly tried to shine up these conditions to downplay the negative aspects of deal approval, it's still abundantly clear that giant telecom mergers like this only ultimately benefit the companies involved.
That's a lesson that for whatever reason we seem utterly unwilling to learn despite our collective disdain for the end result.
As we've noted a few times, there's really only two ways the telecom sector can successfully destroy U.S. net neutrality rules. Broadband providers could prevail on part or all of their multi-headed lawsuit against the FCC, a decision on which is expected any day now. Or the rules could be dismantled by the next President, who could repopulate the FCC with the usual assortment of revolving-door sector sycophants, reverting the agency back to its more consistent, historical role as a dumbly nodding enabler of broadband sector dysfunction.
Every other attempt to kill the rules is just politicians barking loudly for their campaign contribution dinners -- though that's not to say the barking doesn't get very loud from time to time.
The latest example is the House Appropriations Committee's 29-17 vote to approve an FCC appropriations bill (pdf), part of a larger Financial Services Bill determining the 2017 budgets for multiple agencies. The bill was passed last week with amendment language intended to hobble the FCC's net neutrality rules -- and its quest to bring competition to the cable set top box. More specifically, the bill prohibits the FCC from enforcing its net neutrality rules until the ongoing court case is settled. But it also would relegate the FCC's attempt to bring competition to the cable box to committee purgatory.
This attempt to force the FCC's cable box reform plan into a "study" that never ends -- despite an already scheduled extensive public comment period -- has been a constant drum beat among telecom lobbyists, who've masterfully enjoyed having a laundry list of Senators parrot their claims that cable set top box reform will somehow hurt consumer privacy, spike piracy rates, and even harm minorities. The real reason for the sector's opposition is the $21 billion in captive annual set top rental fees the cable sector enjoys, and the fact that more set top box competition means better, cheaper hardware that will highlight streaming alternatives to legacy television (the horror).
As is usually the case, politicians supporting the hamstringing of the FCC profess they're wasting taxpayer money and legislative time not because they're paid allies of the telecom duopolists, but because they're just breathlessly worried about the health of the nation. For example, Chairman of the Financial Services and General Government Appropriations Subcommittee, Florida Representative Ander Crenshaw, issued a statement making it abundantly clear he's not happy with a regulator actually doing its job:
"In addition, this Committee has strong concerns that the FCC seems to be prolonging their pattern of regulatory overreach with its recent set-top box proposal. And so, we include language that requires the FCC to stop and study this controversial rule before they can move any further. The telecommunications industry is more competitive than ever. And yet, the Commission has been more active than ever in trying to exert regulatory control over market innovation. To return the FCC’s focus towards mission critical work and away from politically charged rule makings, the bill requires the FCC to do less with less."
And by "mission critical work" Crenshaw means joining him in pretending that the broadband sector is actually competitive, and that forcing consumers to pay thousands of dollars for sub-standard, closed cable hardware is the pinnacle of innovation. Like past efforts of this type, the rider language won't make it very far, but it's always entertaining to see folks like Crenshaw dressing up cronyism as a noble assault on the very dysfunction he covertly enables.
It wouldn't be a month at Techdirt without one group or another engaging in a fit of moral hysteria over something they really don't need to spend precious calories worrying about. Whether it's the false claim that video games create deadly assassins, VR makes us slaves to Mark Zuckerberg, smartphones have demolished cultural civility or having Google at our fingertips makes us dumber, there's always something new to waste time having a hissy fit over.
The latest case in point is Amazon's smart home play known as the Amazon Echo, a glorified speaker PC combo that will take voice commands, play music, or tell you the weather when asked -- all useful but not exactly revolutionary fare. Still, an unspecified number of parents are apparently now worried that the Echo AI (Alexa) is turning their children into nasty little savages:
"But while artificial intelligence technology can blow past such indignities, parents are still irked by their kids’ poor manners when interacting with Alexa, the assistant that lives inside the Amazon Echo.
“I’ve found my kids pushing the virtual assistant further than they would push a human,” says Avi Greengart, a tech analyst and father of five who lives in Teaneck, New Jersey. “[Alexa] never says ‘That was rude’ or ‘I’m tired of you asking me the same question over and over again.'”
At this point a concerned parent could do several things, the most sensible being to tell their child to stop yelling at the cheap, plastic, defenseless computer. But no, apparently some parents believe something must be done -- because the cheap plastic computer doesn't say "please" often enough:
"The syntax is generally simple and straightforward, but it doesn’t exactly reward niceties like “please.” Adding to this, extraneous words can often trip up the speaker’s artificial intelligence. When it comes to chatting with Alexa, it pays to be direct—curt even. “If it’s not natural language, one of the first things you cut away is the little courtesies,” says Dennis Mortensen, who founded a calendar-scheduling startup called x.ai.
For parents trying to drill good manners into their children, listening to their kids boss Alexa around can be disconcerting."
This is, I think we can all agree, well beyond "disconcerting" and far into nightmare territory. Imagine, millions of homes in which little monsters are being created daily because Amazon didn't make Alexa...nicer and more verbose. Truly a concern for the ages:
"For parents trying to drill good manners into their children, listening to their kids boss Alexa around can be disconcerting.
“One of the responsibilities of parents is to teach your kids social graces,” says Greengart, “and this is a box you speak to as if it were a person who does not require social graces.”
It’s this combination that worries Hunter Walk, a tech investor in San Francisco. In a blog post, he described the Amazon Echo as “magical” while expressing fears it’s “turning our daughter into a raging asshole."
One, there's an assumption here that a child can't really differentiate between a computer and a human being, and that a few months with the Amazon Echo somehow demolishes all previous years of social training, which on its face is more than a little absurd. Two, if you're truly concerned that a little plastic computer is turning your child into a drunk, socially-incompetent werewolf, you could -- turn the product off? As with all moral hysteria of this type, actual parenting can go a long way toward dulling technology's clearly nefarious and diabolical influence in the home.
Yet another vehicle heavily advertised as being "smart" has proven to be notably less secure than its older, dumber counterparts. This week, researchers discovered that flaws in the Mitsubishi Outlander leave the vehicle's on-board network vulnerable to all manner of hacker attack, allowing an intruder to disable the alarm system, drain the car's battery, control multiple vehicle functions, and worse.
The app for most "smart" vehicles connects to a web-based service hosted by the manufacturer. This service in turn connects to a GSM module inside of the automobile, letting a user control the vehicle from anywhere. While convenient, this has proven to be problematic when poorly implemented -- something Nissan recently discovered after the company failed to implement any real authentication, letting an attacker use the Leaf app to track a driver's driving behavior, physically control the Leaf's heating and cooling systems, and drain the car's battery.
Analysis of the Mitsubishi Outlander's security flaw found that Mitsubishi did things differently, requiring users connect to an on-board Wi-Fi hotspot before controlling the vehicle using the associated app (presumably to save money on an online hosting service). But the researchers found that the Wi-Fi key was relatively trivial to hack:
"The Wi-Fi pre shared key is written on a piece of paper included in the owners’ manual. The format is too simple and too short. We cracked it on a 4 x GPU cracking rig at less than 4 days. A much faster crack could be achieved with a cloud hosted service, or by buying more GPUs."
Given the embedded access point has a unique SSID, an attacker can use public resources like Wigle.net to easily geolocate any Outlander PHEVs they might like to target. With the PSK and the SSID, the security firm was able to compromise the remainder of the car's rudimentary security using a man-in-the-middle attack to sniff the traffic flowing between the car and the app. Once inside, researchers noted that like the Leaf hack they could drain the car's battery, turn various vehicle functions on and off, and turn off the alarm. But they also note the vulnerability goes much deeper than with the Leaf:
"Once unlocked, there is potential for many more attacks. The on board diagnostics port is accessible once the door is unlocked. Whilst we haven’t looked in detail at this, you may recall from a hack of some BMW vehicles which suggested that the OBD port could be used to code new keys for the car. We also haven’t looked at connections between the Wi-Fi module and the Wi-Fi module and the Controller Area Network (CAN). There is certainly access to the infotainment system from the Wi-Fi module. Whether this extends to the CAN is something we need more time to investigate."
Like with so many vulnerabilities, the researchers say that when they brought the problem to the attention of Mitsubishi, the company showed "disinterest" in a dialogue. At least until they contacted the BBC, at which point Mitsubishi got chatty:
"Initial attempts by us to disclose privately to Mitsubishi were greeted with disinterest. We were a bit stumped at this point: As so often happens, the vendor takes no interest and public disclosure becomes an ethical dilemma. So, we involved the BBC who helped us get their attention. Mitsubishi have since been very responsive to us! They are taking the issue very seriously at the highest levels."
We've noted for a few years now that in-car security -- as with most products on board the "internet of things" hype train -- is aggressively atrocious. And it's not really clear it's getting any better despite several government warnings and bad press. Many car manufacturers still aren't quick to respond to disclosures, and even if they can, they often take far too long to patch problems when found. That's of great benefit to government, private or criminal entities that surely appreciate the easy new way to spy on, stall or even potentially kill via methods most police departments likely don't have the chops to adequately investigate.
Back in February the FCC voted to open up the captive cable set top box market to competition, potentially opening the door to better, cheaper hardware, but also putting an end to the $21 billion the cable industry makes annually in set top box rental fees. Shortly thereafter the cable industry responded by pushing an absolute torrent of misleading editorials in newspapers and in websites nationwide. Some of these editorials claim set top box competition will result in privacy, security, or piracy Armageddon. Most try to claim set top box competition is some kind of nefarious plan by Google to freeload on cable's "amazing history of innovation."
But the most obnoxious of these editorials have been those trying to claim that the FCC's set top box reform plan will hurt minority communities and diversity. We've long noted how one of the cable industry's favorite lobbying tricks is throwing money at minority groups so they'll parrot bad telecom policy, whether that's supporting the latest merger or opposing net neutrality. In short, many such groups are willing to support policies that actively harm their constituents -- for just the right amount of cash.
Enter Jesse Jackson, who this week penned an Op-ed over at USAToday that right out of the gate starts off on unsteady footing by mentioning the FCC's set top box reform plan in the same breath as "snarling dogs, water hoses and church bombings in the American South":
"National news coverage of the snarling dogs, water hoses and church bombings in the American South were the catalysts to exposing the ugly truths of racism and bigotry in the 1960s. Local news outlets gave new meaning to what the struggle looked like for people on its front lines.
That is why a new proposal at the Federal Communications Commission (FCC) to regulate TV “set top boxes" has raised so much concern."
Wait, what? Because history is filled with racism means the FCC's plan to open up the cable set top box market to competition raises concern? If you've actually bothered to read the FCC's proposal (pdf), all the rules would do would require cable companies to take their existing programming -- and make it available to third party hardware using the delivery methods and copy protection of the industry's choice. If anything the move would result in consumers getting access to more diverse programming options than ever before, given it would eliminate the traditional cable box walled garden, and replace it with hardware that nudges consumers in the direction of an ocean of streaming content.
Just like the cable industry (surely coincidental, right?), Jackson tries to claim that the FCC plan would let hardware vendors obtain cable programming "without any compensation":
"Essentially, the FCC is proposing that small and diverse television programmers such as Revolt and Vme TV hand over their television content to third party device manufacturers without any compensation. These companies could then pull networks apart, ignore copyright protections and dismantle the local and national advertising streams that have traditionally supported high quality, multicultural content."
Again though, that's not true. Cable customers will still pay cable companies the same high rates for the exact same content lineups using the exact same copy protection, users will just be able to access it via a wider variety of hardware. That's much like how third party hardware (like TiVO) work now, except without the costly and cumbersome CableCARD installation. Jackson (or what ever cable lobbyist ghost writer rented his name for the afternoon) preaches on -- pretending he's engaged in a brave civil rights battle:
"Diversity on television and media still matters as much as it did in the 1960s. While new video platforms and content are being developed, the promise of this new medium will not be an immediate substitute for the current range of images and voices now available on TV. Furthermore, the market is already demonstrating its own agility to change with many new devices, streaming options and services bringing traditional television and Internet video onto our screens seamlessly.
Fighting for diversity in programming and media ownership is one thing. Opposing a plan that would actually help diverse communities by making cable cheaper while delivering more diverse content than ever before is something else entirely. Jackson tries to support his shaky position by rattling off a laundry list of politicians and minority groups that oppose the FCC's plan:
"Leaders of the Congressional Black and Hispanic Caucuses have voiced opposition to this proposal; to date, over 80 House Democrats have expressed opposition or serious concerns. Major civil rights organizations, such as the National Urban League and the League of United Latin American Citizens (LULAC), have asked the FCC to pause this proceeding until more empirical data detailing the impacts on diversity is released."
And while it's possible a few members of these groups actually believe (or are mislead to believe) the FCC's plan hurts diversity, all Jackson's laundry list of such groups does is highlight just how pervasive this kind of lobbyist dreck has become. Most consumers frankly have no idea that "astroturf" of this type even exists, and as a result many will be convinced that a plan that actually helps them will do them harm thanks to Jackson's missive. Comcast has found this kind of sock puppetry so effective, it now calls its top lobbyist David Cohen the company's "Chief Diversity Officer."
And while this really is nothing short of disinformation, it speaks volumes about the quality of the cable industry's argument -- and its fear of set real top box competition -- that it needs to resort to grotesque, misleading puppetry of this type.
As we noted last October, Europe passed net neutrality rules that not only don't really protect net neutrality, but actually give ISPs across the EU's 28 member countries the green light to violate net neutrality consistently -- just as long as ISPs are relatively clever about it. Just like the original, overturned 2010 net neutrality rules in the States, Europe's new rules (which took effect April 30) are packed with all manner of loopholes giving exemption for "specialized services" and "class-based discrimination," as well as giving the green light for zero rating.
The rules are so bad, Sir Tim Berners-Lee complained at the time that they even let ISPs violate neutrality -- just by claiming they're preparing for future, phantasmic congestion:
"The proposal allows ISPs to prevent “impending” congestion. That means that ISPs can slow down traffic anytime, arguing that congestion was just about to happen. MEPs should vote to close this loophole. If adopted as currently written, these rules will threaten innovation, free speech and privacy, and compromise Europe’s ability to lead in the digital economy. To underpin continued economic growth and social progress, Europeans deserve the same strong net neutrality protections similar to those recently secured in the United States. As a European, and the inventor of the Web, I urge politicians to heed this call."
As we've seen here in the States, congestion has long been used as a bogeyman to justify anti-competitive behavior, from using the bogus "Exaflood" to imply the Internet would implode if net neutrality rules were passed, to equally false claims that usage caps and overage fees are necessary to manage network capacity.
While the rules are flimsy, the European Union's Body of European Regulators of Electronic Communications (BEREC) has been cooking up new guidelines to help European countries interpret and adopt the new rules. And while this could have been an opportunity to close a number of the loopholes in the rules, a leaked copy of the BEREC guidelines (pdf) suggests that's not really happening. While BEREC appears to have tightened some language surrounding "specialized services," most of the problems (turning a blind eye to zero rating, allowing ISPs to justify violations by claiming future congestion) appear to remain fully intact in this latest update.
Yes, the rules block ISPs from engaging in the most heavy-handed of behaviors (like blocking entire websites or services), but that's not much of an accomplishment, since no ISP was willing to commit PR seppuku in such a fashion anyway.
As in the States, the lion's share of the press doesn't appear to be really helping matters. Perusing the news wires you'll see numerous instances where the media calls these rules "tough" despite them being anything but. Anonymous telecom sources are also given ample opportunity to complain about the "uncertainty" of the rules, despite the fact that having massive, tractor-trailer-sized loopholes is the best possible outcome for them:
"Given that we do not know what specialized services may emerge in the future, NRAs should assess whether a service qualifies as a specialized service on a case-by-case basis," it adds. One industry source said that while it was a positive sign that BEREC had not created a list of what can be considered specialized services, the fact that each new application will have to be assessed individually is a source of uncertainty for operators. "With restrictive guidelines, you can forget 5G and connected cars," said another industry source."
Yes, sorry, Europe -- you're not going to get fifth-generation wireless or connected vehicles unless telecom regulators make already weak net neutrality rules -- even weaker. The guidelines were formally presented June 6 at the BEREC press conference in Brussels. They'll be adopted in August after consultation with "interested parties" (read: predominantly telecom lobbyists), giving net neutrality advocates one last shot over the summer to ensure that the EU's net neutrality rules actually defend net neutrality, instead of legalizing the abuse of the idea.
When the Nest smart thermostat was launched back in 2011, you may recall that it was met with an absolute torrent of gushing media adoration, most of it heralding the real arrival of the smart home. That was in part thanks to the fact the company was founded by Tony Fadell and Matt Rogers, both ex-Apple engineers with some expertise in getting the media to fawn robotically over shiny kit. But a parade of high-profile PR failures have plagued the effort since, including several instances where botched firmware updates briefly bricked the device, leaving even the media's resident internet of things evangelists annoyed.
Under the hood it has become increasingly clear that the company was plagued by what some cooperating companies recently proclaimed was an overall "culture of arrogance", manifested in a reputation for blaming Nest's own problems on partner companies. And being acquired by Alphabet (Google) didn't seem to help matters. Despite expanding the company's employee count from 280 to 1200 and being provided a "virtually unlimited" budget, the same press that built Nest into an internet of things god based on a single pretty thermostat design has suddenly and comically realized that Nest hasn't actually done or produced much of anything:
"In return for all this investment, Nest delivered very little. The Nest Learning Thermostat and Nest Protect smoke detector both existed before the Google acquisition, and both received minor upgrades under Google's (and later Alphabet's) wing. A year after buying Dropcam, Nest released the Nest Cam, which was basically a rebranded Dropcam. Two-and-a-half years under Google/Alphabet, a quadrupling of the employee headcount, and half-a-billion dollars in acquisitions yielded minor yearly updates and a rebranded device. That's all."
"Today though, my news is bittersweet: I have decided that the time is right to “leave the Nest.” While there is never a perfect time to transition, we’ve grown Nest to much more than a thermostat company. We’ve created a hardware + software + services ecosystem, which is still in the early growth stage and will continue to evolve to move further into the mainstream over the coming years.
Alphabet CEO Larry Page meanwhile issued a rosy statement of his own about this firing dressed up as a not firing:
"Under Tony’s leadership, Nest has catapulted the connected home into the mainstream, secured leadership positions for each of its products, and grown its revenue in excess of 50% year over year since they began shipping products. He’s a true visionary, and I look forward to continuing to work with him in his new role as advisor to Alphabet. I’m delighted that Marwan will be the new Nest CEO and am confident in his ability to deepen Nest’s partnerships, expand within enterprise channels, and bring Nest products to even more homes."
And while that's sweet and all, Fadell reportedly held an all hands Google meeting back in April after which he was pretty furiously mocked by Google employees, many of which wanted (and presumably still want) Fadell fired and Nest sold off. Google/Alphabet, meanwhile, appears to have gone full speed ahead on a variety of smart home projects that have nothing to do with Nest, including the company's Asus and TP-Link OnHub routers (which have baked in IOT functionality not fully enabled yet), and the more recently unveiled Google Home (Google's version of Amazon Echo).
Nest can certainly still turn things around whether it's sold or remains at Alphabet, and it should soon be clear just how big of a role Fadell's management style played in the company's gear grinding. But the media's manufacture and subsequent demolition of Nest is also part of a broader cautionary tale about the tech media's boundless adoration of style over substance (or, security, as "smart" tea kettles, refrigerators, TVs, and vehicles keep illustrating) when it comes to the internet of shiny things.
Time and time again, we've noted how the broadband industry's justifications for usage caps just don't hold water. And while the industry used to falsely claim that caps were necessary due to congestion or to save us all from the bullshit "exaflood," the industry has slowly but surely stopped using any justification at all for what's really just glorified rate hikes on uncompetitive markets. These days, big ISPs like AT&T and Comcast looking to impose usage caps either give no justification whatsoever, or pretend they're doing consumers a favor by providing more "choice and flexibility."
But over the last year, we've seen more and more broadband industry executives making it abundantly clear that usage caps just aren't necessary. For example, Dane Jasper, CEO of independent California ISP Sonic, this week made it clear that there's simply no good justification for caps as the cost to provide broadband services continues to drop. Apparently, you'll be shocked to learn, the "exaflood" was just a bogus bogeyman concocted to help ISPs scare regulators into turning a blind eye to price gouging:
"The cost of increasing [broadband] capacity has declined much faster than the increase in data traffic," says Dane Jasper, CEO of Sonic, an independent ISP based in Santa Rosa, Calif.
Jasper, of course, has reason to challenge his much larger rivals. However, he also backed up his argument with real numbers. A few years ago Sonic (formerly Sonic.net) spent about 20 percent of its revenue on basic infrastructure. Since then, the cost of routers, switching equipment and other related gear declined so much that Jasper says the company's infrastructure costs are now only a bit more than 1.5 percent of its revenue.
For this reason, Sonic has no plans to impose data caps, according to Jasper.
And though Sonic tends to have more consumer friendly policies overall, Jasper's not alone in admitting this. Frontier Communications, growing at an astounding rate after recently acquiring Verizon's unwanted Texas, California, and Florida broadband customers, this week stated it also has no plans to impose caps anytime soon. Why? Well one reason is they bungled the merger so badly they're walking a PR tight rope right now. But company CEO Dan McCarthy also makes it clear the cost to deliver broadband is dropping, making caps unnecessary:
"We want to make sure our products meet the needs of customers for what they want to do and it does not inhibit them or force them to make decisions on how they want to use the product. The nice part of technology and what has happened is that transport costs continue to decline and by putting in the packet optical fabric it takes away a lot of those constraints," McCarthy said. "There may be a time when usage-based pricing is the right solution for the market, but I really don't see that as a path the market is taking at this point in time."
Even companies that do plan to impose usage caps have occasionally admitted that caps are completely untethered from network or financial realities.
St. Louis-based cable operator Suddenlink has caps ranging from 250 GB to 550 GB, depending on speed. Its customers pay the increasingly-standard $10 per each additional 50 GB consumed, and have the "option" of paying an additional fee to avoid usage caps entirely. Yet outgoing Suddenlink CEO Jerry Kent made it abundantly clear on a conference call last fall that the days of investing serious amounts of capital into the network are long gone (especially for cable, where DOCSIS upgrades are relatively inexpensive). These days, the name of the game is milking your captive customers for all they're worth:
"I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down."
These are three CEO admissions worth remembering as companies like AT&T (which just started heavily capping its customers last month) and Comcast (whose usage cap "trials" expand at a rabid clip) push whatever bullshit, half-baked excuse is in vogue this month for what's effectively just a toll on captive broadband customers.
The good news for Comcast? The latest edition of the American Customer Satisfaction Index (ACSI) indicates that the nation's largest cable company actually has a slightly better customer satisfaction rating than last year. The bad news? Comcast remains among the worst-rated companies of any industry in America thanks to limited competition. According to the firm's full ratings for cable providers, Comcast saw an eight point rise in customer satisfaction, thanks in part to crazy ideas like actually showing up on time for appointments and a website that actually works.
However, Comcast's score of 62 still falls notably below the industry average score of 65, and even further below companies that people actually like -- such as Apple (81) or Amazon (83). Still, Comcast's improvement shows that the company's now annual promise to improve customer service isn't entirely hot air, even as Comcast relentlessly pursues ideas that customers loathe -- like usage caps, or the $50 per month fee Comcast now charges to avoid them.
Overall, the report notes that the cable and broadband industries continue to struggle with low satisfaction ratings due to the general lack of competition, especially in the broadband sector. And as companies (like Charter, Time Warner Cable and Bright House Networks) continue to merge, the ACSI issues a warning that things can, and usually do, get worse:
"Charter Communications and Cox Communications each fall by 5% to 60 and 59, respectively. Time Warner Cable, on the other hand, surges 16% to an ACSI score of 59. Despite this big jump, TWC’s score is still low. The Charter-TWC-Bright House merger will bring together more than 25 million customers—making the new entity the second-largest pay TV operator after Comcast. ACSI improvement notwithstanding, both Charter and TWC still lag the majority of the industry. This does not bode well for customers, especially those of Bright House, as mergers tend to cause customer satisfaction to deteriorate, at least in the short term."
And while Comcast certainly should be applauded for actually trying, a company going from incredibly awful to just really bad doesn't exactly warrant champagne.
Without improving the volume of competition Comcast faces in the lion's share of its broadband markets, there's just no real incentive to work too hard to make consumers happy or spend much more on customer support. And despite pockets of progress courtesy of municipal broadband and Google Fiber, overall things are actually getting less competitive in many areas. AT&T and Verizon continue to back away from unwanted DSL customers they refuse to upgrade, providing many cable providers with a stronger local monopoly than ever before.
"I was right, still right, and going to continue being right until we are all dead of old age, still begging for regulation, any regulation, and have faith that the very organization causing this problem will somehow solve it?"
Right, like when the FCC blocked AT&T from acquiring T-Mobile, resulting in a huge burst of new competition from the surviving T-Mobile, ultimately revolutionizing S.O.P. in the wireless sector.
Speaking of old age, "all regulation is automatically bad" is an overly-simplistic mantra that's grown long in the tooth. In the real world, people have to actually stop, think, learn, and consider the merits or drawbacks of each instance of regulation separately.
I know that's fatiguing for those looking for intellectual shortcuts, but that doesn't make it any less true.
Yes, and I think their proposal is really about rules that allow them to potentially eliminate cable boxes, while creating a future where you still have to pay your cable provider for cloud-based DVR services, or whatever other creative, broken out services they can concoct.
I tend to vacillate on this point. I do tend to agree that it may make more sense to focus on broadband competition policies, and as such I think thinks like the FCC's fight against state level municipal bans are hugely more important.
But then, if the FCC can pass policies that turns your 20 year window into a 5 year window, wouldn't everybody benefit?
Then again, the FCC may be fighting the cable industry on this for years before real rules even get passed, when they could be spending those calories, again, on broadband competition.
"The really sad part is that these fees are primarily paid for not by the prisoners, but by their families and loved ones, and those families often have the choice between bankrupting themselves or cutting off communication to their loved ones."
Silly, that's where the predatory payday loan system comes in and "helps!"
I find claims that "X" is always bad really boring.
Regulation is more complicated than it ALWAYS being bad, or always being the first solution to a problem. You have to actually stop and weigh each instance of regulation on its own merits, which is clearly too fatiguing for many.
"The Federal Communications Commission's recently proposed rules on the Competitive Availability of Navigation Devices, if adopted, will jeopardize the incredible evolution of video distribution services enabled by generally reasonable regulation."
Solid point except for that entire sentence being total bullshit.
"To all you "Pro Regulation" people. This is how regulation ALWAYS goes. There is no exception, there is no "other outcome". Regulation only provides one stop shopping for government corruption where businesses can show up and buy what they need to screw the little guy."
Like when the FCC and DOJ blocked the AT&T and T-Mobile merger, resulting in T-Mobile becoming more competitive than ever before, resulting in huge, cross industry benefits for consumers on all wireless carriers?
They never take action on broadband pricing or false advertising. Which is why you'll see ISPs consistently crow about how this sort of thing should be left to the FCC. But as the FCC has noted they do have some rate regulation authority under Title II.
Correct. On a per household level (streaming, patches, steam game downloads) we're not talking a huge allotment.
And one also needs to ask if ISPs will grow those caps alongside usage, or if they'll squeeze to make more profit from more people. As companies that need improved quarterly earnings bumps, I think the answer to that should be pretty obvious.
Brain fart, sorry. Was thinking "former Verizon regulatory lawyer" and wrote former commissioner instead. Or maybe it's wishful thinking, since I think the guy's an absolute revolving door regulation embarrassment.