Posted on Techdirt - 22 February 2017 @ 6:20am
On his first day new FCC Boss Ajit Pai repeatedly and breathlessly insisted that consumers and the digital divide would be his top priority. The problem: that dedication was directly contradicted by not only Pai's past voting record at the agency, but his first actions as agency head. Out of the gate Pai undermined an FCC legal case against prison phone telecom monopolies, scrapped an FCC plan to bring competition to the cable box, killed all ongoing zero rating inquiries and began laying the ground work for killing net neutrality, and prevented nine already-approved ISPs from helping the poor via the agency's Lifeline program.
Unsurprisingly, it didn't take particularly long for some news outlets to realize that Pai's words weren't supported by his actions. Both The Washington Post and the New York Times penned editorials blasting Pai, most notably for his ongoing disdain for net neutrality, which has broad, bipartisan support.
Driven to defend Pai's selection as FCC boss for obvious reasons, ISPs got right to work fighting back via their traditional weapon of choice: bullshitters for hire. Shortly after the Post and Times pieces surfaced, contrasting op-eds quickly popped up in newspapers and websites nationwide claiming Pai is actually an incredible boon to consumers, competition and innovation. Most of these op-eds failed to adequately disclose the authors' financial ties to large broadband providers, or the fact they take money while pretending to be objective analysts -- often including Congressional testimony.
Fred Campbell, a long-standing ISP-funded "consultant," penned a piece over at Forbes blasting the Post and Times for "doublespeak," while insisting that Pai is secretly a hero of the people:
"Doublespeak is language that disguises or even reverses the meaning of words in order to disguise the nature of the truth. A flurry of attacks on Ajit Pai, the new chairman of the Federal Communications Commission, are full of it. It’s clear that Pai is serious about closing the digital divide between those who use cutting-edge communications services and those who do not."
Ah the post-truth era, when those that spend the most time practicing doublespeak endlessly whine about doublespeak.
Look, if you actually talk to any genuine consumer advocate in the telecom space (they're easy to spot: they're the ones with limited budgets and shittier suits), they'll quickly tell you that while Pai is a nice guy -- he's a water carrier for industry, rarely if ever challenging their positions on any issue of consumer note. You only need look at his voting record, and the numerous times he not only voted down indisputably pro-consumer initiatives like net neutrality, but refused to hold companies like AT&T accountable for outright fraud -- even when that fraud involved the Lifeline program Pai professes to now adore.
Campbell's editorial was one of numerous, similar missives. Rick Boucher, one-time respected Congressional fair use champion, now works at Sidley Austin, a law firm that effectively acts as an AT&T policy arm. That direct financial tie isn't really made clear in an op-ed over at Light Reading, where Boucher informs readers that, despite his nonexistent track record on the subject, Pai will somehow be a champion of expanded broadband coverage:
"Chairman Pai recently announced the formation of the Broadband Deployment Advisory Committee, a task force that will offer "specific" recommendations to speed broadband deployment and, in his words, "close the digital divide."
Pai's action is an excellent first step towards accelerating broadband deployment (and adoption) throughout the country. Getting great minds together to hack a solution is both wise and urgent. And perhaps most important, it's a sign that fact-based decision-making is now the order of the day at the FCC."
But forming a committee to talk about the digital divide isn't an actual solution to anything -- especially expanded broadband coverage. And it certainly doesn't magically obliterate Pai's anti-consumer, and anti-startup voting record. If there's an FCC plan to actually shore up competition or bring broadband to the under-served (like the FCC's recent vote to ensure low-income users can use their $9.25 monthly Lifeline credit for broadband), you can be fairly certain Pai voted against it. It's not really something that's open to debate. Well, unless you're the type that's paid to pretend that generally-accepted facts are up for debate.
It's important to understand that broadband providers and politicians adore slathering meaningless platitudes upon the "digital divide" because it earns them cheap political brownie points without having to do much of anything. In fact that's Comcast's entire lobbying MO, and the primary reason they renamed their top lobbyist the company's "Chief Diversity Officer." It's a simple schtick: distract the public by professing your support for closing the digital divide with the bare minimum of effort, while denying the singular problem that causes broadband coverage gaps and high prices in the first place: a lack of competition.
Over at The Hill, the National Grange, one of countless organizations telecom providers pay to support megamergers and other unpopular policy, also ignores Pai's clear and obvious history, claiming he'll be an incredible boon for rural communities. Over at the telecom-industry funded Heartland Institute blog, Scott Cleland, who also takes funds from the sector while pretending to be an objective analyst, crows that Pai will "return a pro-consumer focus" to the FCC:
"Unlike the Federal Communications Commission’s previous head, new FCC Chairman Ajit Pai is putting consumers first, not net neutrality. The sad reality is that the previous FCC did the bidding of the biggest edge providers, both on the issue of net neutrality and opening up the cable box market, as I will explain."
Up is down, black is white. We've long noted how the broadband industry has tried to downplay net neutrality issues by claiming that everything is somehow Netflix's fault, and incumbent broadband providers are just misunderstood, innocent daisies. Logical cohesion is generally missing from this narrative, but Pai himself has played a starring role in claiming repeatedly that -- in stark contrast to all available evidence -- it's the edge (content and service companies not-coincidentally challenging the industry's TV stranglehold) providers that are the real internet villains.
This disconnect between reality and dollar-per-hollar rhetoric is nothing new, especially in telecom. Former FCC boss Michael Powell, now the cable industry's top lobbyist, made a career out of paying endless lip service to consumers to the acclaim of industry sockpuppets, while his actions repeatedly worked to undermine oversight of giant companies like Comcast (to obvious end). That's because the real goal for most of these folks is something you may have ferreted out already: protection of loyal campaign contributor revenues above all else. If anything, there's an active disdain for the consumer.
If Pai actually were "pro consumer," his voting record would reflect it with minimal debate. And consumer advocates (the ones that actually spend ten hours a day fighting the good fight to little acclaim or profit) wouldn't be issuing warnings about "empty rhetoric" and "Orwellian" behavior at the FCC. At the end of the day you have to wonder: if you need to covertly pay people to support your argument, what kind of argument do you actually have?
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Posted on Techdirt - 21 February 2017 @ 2:47pm
For years now, ESPN has been the perfect personification of the cable and broadcast industry's denial regarding cord cutting. Long propped up by a system that forces consumers to buy massive bundles of largely-unwatched channels, ESPN has struggled with the rise of streaming alternatives and sleeker, "skinny" channel bundles. The sports network, which has lost 7 million viewers in just a few years, has been trying to argue that these losses (which caused Disney stock to lose $22 billion in value in just two days at one point) are simply part of some kind of overblown, mass hallucination.
Last year, ESPN exec John Skipper even went so far as to suggest that these departing customers weren't worth keeping anyway:
"People trading down to lighter cable packages. That impact hasn't leaked into ad revenue, nor has it leaked into ratings. The people who’ve traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV. It remains the widest spread household service in the country after heat and electricity."
In other words, there's "nothing to see here" -- outside of the total collapse of our entire legacy business model. At one point late last year, ESPN even went so far as to make a giant (unwarranted) stink about Nielsen data showing the cable channel had lost 621,000 homes in a single month. Things still aren't looking particularly good for the company, with Disney's earnings indicating that ESPN is fairly consistently losing about 10,000 viewers per day. That's not surprising when you see surveys indicating that 56% of subscribers would drop ESPN in a heartbeat if it meant saving the $8 per user the channel is estimated to cost consumers.
Despite these numbers, Skipper and other ESPN executives have spent the last few years insisting that offering a standalone streaming app (you know, evolving for the market you're doing business in) wasn't financially viable:
"We could sell ESPN, as a standalone product, but we don't believe it to be a good business," Skipper said. "We're in 90 million homes," he added, "so no, we do not have a contemplation now that we would launch as a standalone."
That was then, this is now. And ESPN executives appear to have been overruled by Disney higher ups. Speaking on the company's recent earnings call, Disney CEO Bob Iger said that ESPN would now be conducting an about-face, and would launch a standalone streaming video service sometime in the next year or so:
"Iger affirmed that ESPN will launch a branded standalone streaming service later this year, in partnership with BAMTech, the digital technology firm in which Disney bought a $1 billion stake last year. He also talked up the prospects for ESPN to offset the industry-wide trend of declining subscriber rates via from traditional MVPDs through gains from the handful of upstart streaming channel packages that are in the works."
Necessary evolution -- how novel! Granted, ESPN's still on the hot seat. I've heard from several industry insiders familiar with ESPN's contracts with cable companies that language currently prevents cableco's from breaking ESPN out of the core channel lineup (something ESPN sued Verizon for in 2015, because of course) unless ESPN offers its own streaming service standalone. In other words ESPN's in for a rocky stretch either way.
Either the company launches a streaming video service that encourages cable companies to kick ESPN from the core bundle, further eroding ESPN's traditional cable customer totals, or they refuse to offer such a service and these users leave anyway. But when you're facing a major dismantling and reconfiguring of a legacy industry due to disruption, it's better to be out in front of it and ready to meet evolving user demand, than stumbling around blindly in denial.
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Posted on Techdirt - 21 February 2017 @ 10:51am
Last week, reports began to emerge that internet users were unable to access The Pirate Bay and other BitTorrent-focused websites. Ultimately it was discovered that this was courtesy of transit provider Cogent, which was blackholing an undetermined number of IP addresses allegedly linked to copyright infringement. The IP addresses in question didn't belong to the websites -- but to popular CDN provider Cloudflare. All told, Cogent's blockade impacted around twenty different websites -- but the impact was global, with ISP users worldwide unable to access these IP addresses if they traveled the Cogent network.
Initially, Cogent wouldn't comment whatsoever on why this was occurring, but later confirmed to Ars Technica that the company had received a Spanish court order (it's not clear if it's the same 2015 order demanding Cogent block access to music streaming website Goear.com). Cogent was vague about the order itself, but did confirm that The Pirate Bay was blocked -- despite it not being a target of the court order. Subsequent routing checks confirmed the impact was global across Cogent's footprint.
As we've seen time and time again, actual pirates with just a modicum of technical knowledge utilize a variety of tools (VPNs most specifically) to tap dance around such restrictions, making these filtering efforts ham-fisted "solutions" that cause more problems for the internet and end users than they traditionally solve. In talking to Ars, Cogent acknowledged the potential "collateral impact" that such orders and filters can cause, especially when applied globally at scale to multihosting transit operators like Cloudfare, where one IP address may be home to multiple, unrelated websites:
"Cogent went on to say that “as a general matter, courts may require Cogent, as an ISP, to take certain actions with respect to a third-party website, an IP address or block of IP addresses. If Cogent’s customer decides to commingle traffic from the website that is the target of the court order with the traffic of other websites, the other websites that point to the same block of IP addresses may be adversely affected. When a Cogent customer controls the affected IP addresses, Cogent does not have the ability to know ahead of time what other websites may be affected or to control the collateral impact on these other websites. When collateral effects occur, we do work with our customer to try and mitigate the effects on others websites."
While U.S. net neutrality rules do prohibit network providers from blocking specific websites, exceptions were carved into the rules governing copyright infringement. Cloudfare, which helps websites improve performance and fend off DDoS attacks, can manage its IP addresses in such a way to help Cogent comply with court orders more narrowly. But this becomes arguably untenable when dealing with multiple court orders, all dealing with different websites and ISPs at global scale. Take the kind of filtering collateral damage we've long seen, and apply it globally in disjointed chorus.
Cloudfare often pops up as an entertainment industry bogeyman simply because its services often obscure the real origin server from the end users. But Cloudfare's General Counsel Doug Kramer was quick to complain that these sorts of orders, especially if poorly crafted and targeting core transit networks, can have a broad impact on the general health of the internet:
"This is part of the danger you get into when you start to censor the Internet or you get orders to pull things down,” Kramer said. “It may not be so easy to limit access to a specific domain," or to make sure a block applies only in a certain country.
Cogent, and not Cloudflare, is the company that had to implement the block, but Cloudflare is “trying to set up a technical system where Cogent can respond to the order that they’ve been given, but within the narrow scope of that and not have impacts that go beyond that," Kramer said."
Kramer also pointed out that it might be important to understand how the internet works before you set about chopping giant holes in it via court order:
"It’s important for courts to understand how Internet systems work so they can write orders that don’t end up having unintended consequences,” Kramer stresses. "As a company, Cloudflare believes strongly in an open, free, and secure Internet. And it is also our policy to fully comply with legitimate court process," Cloudflare’s General Counsel says. "This can be challenging at times, especially when courts target backbone providers and don’t understand fully how they work. Cloudflare takes steps to make sure those court orders don’t lead to unintended impacts."
Take the non-transparent, ham-fisted, and ultimately futile filtering efforts we've come to know and love, and apply them at global scale, with little to no real concern about the obvious unintended impact on the health of the internet itself. What could possibly go wrong?
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Posted on Techdirt - 17 February 2017 @ 6:44am
While T-Mobile isn't without its faults (like its opposition to net neutrality, or the time its CEO mocked the EFF), there's little doubt that T-Mobile has been a good thing for the wireless industry. The company has managed to drag the industry kicking and screaming in an overall positive direction, including the elimination of the carrier-subsidized handset model, the elimination of annoying hidden fees, and the recent return to more popular unlimited data options. And its brash CEO John Legere, while sometimes teetering into absurd caricature, has at least managed to bring a sense of industry to a traditionally droll telecom sector.
And while T-Mobile had been mocking AT&T and Verizon's forays into video as "distractions," the company this week strongly hinted that it may bring a little bit of disruption to a sector that needs it most. Both Legere and T-Mobile COO Mike Sievert made numerous comments during their earnings call this week making it pretty obvious they wanted to test the market's reaction to the idea of some kind of T-Mobile video service:
"Talk about a poster child for an industry that has really kind of ignored customers and ignored customer cares and gouged at every corner,” Legere said of the pay-TV market during T-Mobile’s earnings call Tuesday. “Clearly, I salivate when I think about the possibilities of changing some of those (video) industries. And frankly, I’m fascinated with how little AT&T has done since they spent the mother lode buying DirecTV, and pretty much have let it sit on the side, and still be an old, crappy linear TV that they bundle weakly with their unlimited offer, so maybe more to come."
Subtle. Legere didn't get into specifics about how T-Mobile would enter the sector, but one possibility remains some kind of M&A with Dish Network, which has plenty of TV assets and a long-harbored desire to jump into the wireless sector (Dish has been not-so-quietly hoarding wireless spectrum for a long while). Like Legere, Sievert also spent more than a little time making fun of the cable sector, which continues to sport some of the lowest customer satisfaction ratings in any industry in America:
"The data on this is really clear. The cable industry is statistically one of the most unloved industries in the history of the consumer economy. So, obviously, it’s ripe for innovation in this area,” T-Mobile COO Mike Sievert said on the call. “I’ll tell you one thing, in 2017 we will reach the point where people have more screen time on mobile devices than on any other kind of screen, that’s really something incredible when it comes to watching their video. So we’ll see how this convergence unfolds, but in it we’re where the industry is going, not where it’s coming from, and we’ve got a brand that really resonates with people and possibly could resonate in an industry that’s even more maligned than we found ours four years ago when we got here."
A Dish M&A is one of the more palatable consolidation possibilities facing the telecom sector under what's expected to be a dramatically more M&A-friendly Trump administration. T-Mobile is also a rumored acquisition target for Comcast or Charter Communications, neither of which would be likely to continue T-Mobile's foray into price competition or disruption. Similarly, a Sprint acquisition of T-Mobile would reduce the number of overall wireless carriers in the space, reducing competition and potentially putting T-Mobile's disruptive run to an ignominious end.
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Posted on Techdirt - 16 February 2017 @ 6:45am
For years, we'ved noted how incumbent ISPs have waged a not-so-subtle war on towns and cities looking to escape from the high prices and abysmal service of the country's broadband duopoly (which is actually quietly becoming more of a cable monopoly without many noticing). Many of these cities have taken to either building fiber networks themselves -- or striking public/private partnerships with companies like Google Fiber or Ting/Tucows -- because the private sector has failed to deliver the service and connectivity they want at prices they can afford.
This kind of grassroots revolution is precisely why large ISPs like Charter, Comcast and AT&T have spent the last decade lobbying for (and in most instances directly writing) protectionist bills across twenty different states banning local citizens from making these kinds of decisions for themselves. If you want to see precisely why these regional monopolists are so afraid, you need look no further than Huntsville, Alabama.
City-owned Huntsville Utilities has been building a fiber broadband network that should service the lion's share of the city's homes and businesses over the next few years. What's more, the network will be open access -- meaning that ISPs can come in and compete with each other over the regional infrastructure. Google Fiber has already signed up to be one of at least three ISPs taking advantage of the build, and should begin offering service there by the middle of this year.
FCC data has long noted that the open access model provides consumers with better service at lower prices, thanks to the miracle of competition. Obviously that's a nightmare for large ISPs used to doing the bare minimum while charging captive subscribers the absolute maximum. As such, the federal government consistently has treated open access networks like a plague, given that regulators and lawmakers are consistently terrified of upsetting some of the biggest campaign contributors in the country. For what it's worth, Google Fiber also walked back its original promise to run its network under the open access model.
But you only need to look to what's happening in Huntsville to understand why ISPs have spent so much time and money demonizing municipal broadband. With competition looming, incumbent ISPs have miraculously wasted no time in finally delivering the speeds locals have been clamoring for. Comcast this week announced that it will soon bring its cable-based gigabit broadband service to Huntsville, the company breathlessly insisting this deployment reflects Comcast's unwavering dedication to being, well, awesome:
"This launch reflects Comcast’s ongoing commitment to offering the fastest speeds to the most homes and businesses in Huntsville,” said Comcast Regional senior VP Doug Guthrie, also in a statement. “Soon, customers will leverage a new gigabit internet service that will deliver a truly unparalleled online experience."
Yes, only coincidentally inspired by the kind of community broadband networks Comcast has spent billions trying to kill in places like Chattanooga and elsewhere. Another regional incumbent, Mediacom, this week also miraculously began offering gigabit broadband service it claims simply reflects its unwavering dedication to the consumer:
"Since 1996, Mediacom has invested over $8 billion of private capital in its national network to ensure that hard-working families throughout the smaller markets we serve receive the same advanced communications services as America’s largest cities,” said Mediacom’s Senior Manager of Area Operations, Lee Beck. “As a result of these investments, we are extremely proud to add the cities and towns we serve in the Huntsville area to Mediacom’s rapidly expanding list of true gigabit communities."
And while that's great and all, again there's no mention of why they're suddenly interested in actually giving Huntsville-area residents what they want. It's important to note that competition isn't just improving speeds and prices. Both Comcast and Mediacom have consistently (ab)used the lack of last-mile competition to impose arbitrary and unnecessary usage caps and overage fees, which you can be sure will be nowhere to be found once they're forced to keep pace with uncapped ISPs like WOW! and Google Fiber riding over the Huntsville-area network.
ISPs and the consultants, think tankers, lobbyists, and politicians who love them have spent fifteen years demonizing municipal broadband as some kind of vile socialist evil straight from the maw of hell; usually focusing on claims that these networks are inevitable fiscal disasters that need to be thwarted before the big, bad government begins monitoring your porn consumption. The focus from these folks is that they're just worried about local taxpayers. Less of a concern, apparently, is the fact that we're quite literally letting giant companies write shitty state telecom law.
But claiming that municipal broadband is spend-crazy government run amok is a violent misread of what's actually happening in these towns and cities. Municipal broadband business plans are like any other business plan; some are good, some aren't. Ideally that should be up to the locals to decide, not billionaire CEOs and grumpy armchair partisans sitting half a world away in judgement. Municipal broadband isn't the devil, it's a genuine, grassroots, local reaction to market failure; one that can be avoided by ISPs doing one thing: actually delivering the kinds of services, prices and features locals have spent fifteen years clamoring for.
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Posted on Techdirt - 15 February 2017 @ 1:42pm
So last year we noted how Verizon proposed paying $4.8 billion to acquire Yahoo as part of its plan to magically transform from stodgy old telco to sexy new Millennial advertising juggernaut, which, for a variety of reasons, isn't going so well. One of those reasons is the fact that Yahoo failed to disclose the two, massive hacks (both by the same party) that exposed the credentials of millions of Yahoo customers during deal negotiations. The exposure included millions of names, email addresses, phone numbers, birthdates, hashed passwords (using MD5) and "encrypted or unencrypted" security questions and answers.
As noted previously, Verizon had been using the scandal to drive down the $4.8 billion asking price, reports stating that Verizon was demanding not only a $1 billion reduction in the price, but another $1 billion to cover the inevitable lawsuits by Yahoo customers.
Verizon appears to have gotten at least some of what it wanted, Bloomberg reporting that Verizon has managed to shave $250 million or so off of the original price tag:
"Verizon Communications Inc. is close to a renegotiated deal for Yahoo! Inc.’s internet properties that would reduce the price of the $4.8 billion agreement by about $250 million after the revelation of security breaches at the web company, according to people familiar with the matter...In addition to the discount, Verizon and the entity that remains of Yahoo after the deal, to be renamed Altaba Inc., are expected to share any ongoing legal responsibilities related to the breaches, said the people, who asked not to be identified discussing private information."
Yahoo wasn't always incompetent when it comes to security. In fact, at one point the company was considered among the best in the business, something that only began to change when CEO Marissa Mayer decided to begin cutting security corners. This came to light a few months back via a series of insider-fueled pieces highlighting how Mayer's business decisions actively worked to make Yahoo users less secure. Mayer was concerned, apparently, that actually being transparent with Yahoo customers about their (not so) private data would result in the company losing even more customers than it already had:
"According to the former Yahoo executive that Business Insider spoke to, Yahoo's culture of secrecy and its prioritization of other business goals led to troubling security practices that made it much more difficult for Yahoo to defend from hackers.
Yahoo's security team was often denied funding and sometimes kept in the dark at Mayer's direction, as she feared more emphasis on security could potentially spur a decline in the company's user base."
But at the end of the day, transparency builds trust in the brand, resulting in more loyal customers -- something Mayer apparently didn't understand. The ironic part being that much of this shift away from security was also occurring because Mayer was busy trying to make Yahoo a sexier acquisition target. Fortunately for all of us, this deal finally puts this entire sordid affair in the real-view mirror, and Verizon executives can get back to gobbling up foundering 90s internet brands, and convincing itself it has the disruptive DNA required to take on Google, Facebook and others in the quest for Millennial ad eyeballs.
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Posted on Net Neutrality Special Edition - 15 February 2017 @ 6:27am
For years, we've noted how one of the greasier lobbying tactics in telecom is the use of minority groups to provide the illusion of broad support for what's often awful policy. Such groups are given cash for a shiny new event center in exchange for parroting any policy position that comes across their desks, even if it dramatically undermines their constituents. As a result, we've shown how time and time again you'll see minority coalitions like the "Hispanic Technology & Telecommunications Partnership" supporting awful mergers or opposing consumer-centric policies like more cable box competition or net neutrality.
And it's not just minority groups. A wide variety of groups take telecom cash to repeat whatever they're told, whether it's rural Texas school associations, the U.S. Cattlemen's Association or even "balloonists." Some of these groups are created specifically for this purpose. Other times, these groups are "co-opted" without understanding what they're actually supporting. The goal overall is simple: to create the illusion of broad support for bad ideas the actual public -- minority or otherwise -- would oppose.
With the debate over net neutrality heating up once again, ISPs have again dusted off this tried and true tactic to mislead the press, public, and politicians. As a result, we're seeing numerous civil rights groups that are more than happy to let giant corporations like AT&T and Comcast rent their identity for the weekend. This week, a coalition of such groups, including the NAACP, Asian Americans Advancing Justice, and the National Urban League, fired off a letter urging Senators to move quickly to craft "a permanent statutory solution" to "solve" net neutrality once and for all:
The issue of network neutrality and the importance of a free and open internet has been a political football. Every time the political pendulum swings, this policy debate becomes difficult, convoluted, and even condescending. One thing is crystal clear: The internet should be open and accessible.
For this reason, we support a permanent statutory solution that enshrines the basic open internet principles into law. These core principles are not controversial and should not be subject to endless litigation, regulation, and reconsideration. A statute locking in net neutrality would protect net neutrality no matter how the political winds blow.
A statutory approach also avoids the jurisdictional and classification problems that plagued the last FCC. The goal should be improvement, deployment, and adoption of the high speed networks that all Americans deserve. Legislation will provide certainty to consumers and industry for the foreseeable future.
On the surface this sounds perfectly reasonable. Until you understand what's actually happening in telecom policy and the fight for net neutrality right now.
While there's no debate that a Congress-made net neutrality law would be the ideal solution, you may have noticed that Congress is so awash in telecom campaign contributions that crafting a law not riddled with fatal loopholes has been impossible. As a result, the best path forward for those that actually care about net neutrality is to leave the existing rules and the FCC's Title II authority in place (which is what these groups should be advocating for).
But, since that's not what ISPs want, they're pushing Congress -- and their armies of dollar-per-holler policy tendrils -- to push for a new law, one that will claim to "solve" net neutrality but will actually work to kill it through "compromise."
The FCC technically could walk back net neutrality via the rulemaking process, but it would require another public open comment period. And since the 4 million comments made the last go-round broke FCC records, ISPs aren't keen on revisiting this strategy. So the strategy is this: craft a new Communications Act rewrite or other law professing to codify net neutrality into law, but bury it with so many loopholes as to make it net neutrality protection in name only. When net neutrality supporting Senators in Congress fail to come to the table, they'll be derided as being unwilling to compromise for the good of the people.
But it's not really a compromise when the end product is worse than doing nothing (read: leaving the popular rules alone).
Once you understand all of that, it becomes clearer how the broadband industry is using these groups to create bogus support for a new, much weaker net neutrality law to "avoid the jurisdictional and classification problems that plagued the last FCC." And if you follow the money behind this week's letter, you'll find that the group that coordinated it has a long, proud history of taking money from telecom companies, in exchange for coordinating civil rights group support for everything from the the latest megamerger to the assault on net neutrality:
Telecom issues, however, are a particular specialty. Last week’s letter was organized by the Multicultural Media, Telecom & Internet Council (MMTC), a group funded by the telecom industry that has previously encouraged civil rights groups to oppose net neutrality. MMTC in previous years reported receiving about a third of its budget from industry-sponsored events; its annual summit, which was held last week, was made possible by $100,000 sponsorships from Comcast and AT&T, as well as a $75,000 sponsorships from Charter Communications and Verizon.
This tactic has been so successful for Comcast, the company actually renamed their top lobbyist, David Cohen, the company's "Chief Diversity Officer." And while Comcast does indeed occasionally fund groups and events that put the needed cash and services to good work, you're supposed to ignore the fact that Comcast lobbyists are actively working to undermine the minority communities the company claims to be helping with their other hand. Whenever I point this out, Comcast yells at me for calling Cohen a lobbyist.
We've been talking about this strategy for more than a decade now and nothing really seems to change. Since this cozy quid pro quo isn't technically illegal, and is never put into writing, groups accused by reporters of selling their constituents down river either don't respond to requests for comment (as was the case in The Intercept's latest report on this subject), or they become breathlessly indignant at the very idea their integrity could be questioned. All the while, these groups' constituents are usually entirely unaware they're being used as political props -- to actively undermine our collective best interests.
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Posted on Techdirt Wireless - 14 February 2017 @ 3:20pm
While the U.S. wireless industry isn't quite as competitive as it's portrayed as (non-price competition is generally the law of the land), T-Mobile has still managed to disrupt the sector with a crazy idea: giving users what they want. That was again made evident this week when Verizon was forced to bring back sort-of unlimited data after spending the last several years telling consumers they didn't really want such simple, straightforward plans. Verizon's long-standing belief that it can tell consumers what they're supposed to want took a notable blow this week by any measure.
Shortly after Verizon announced it was returning to unlimited data, T-Mobile once again upped the ante, announcing it would no longer be charging an extra fee to stream HD video over the company's LTE Network. According to the announcement, T-Mobile not only stopped charging a premium for HD quality (the de-prioritization of which you may recall T-Mobile lied was happening at several points), but also eased up on the restrictions surrounding tethering (using your phone as a modem).
In a statement, T-Mobile CEO John Legere hinted at studies showing that Verizon has nearly lost its network size and speed edge over T-Mobile, which the company had long been using to justify its refusal to more seriously compete:
"I don’t blame Verizon for caving. They just lost their network advantage, and they know it … and more importantly, more and more customers know it. Their back’s against the wall,” said John Legere, president and CEO at T-Mobile. “This is what the Un-carrier does—drag the carriers kicking and screaming into the future. Next up, we’re going to force them to include monthly taxes and fees. Mark my words."
Granted the term "unlimited" is still being abused here, since you may find your connection throttled (technically "de-prioritized") after 28 gigabytes of consumption on T-Mobile's network, or 22 gigabytes of consumption on Verizon Wireless. And U.S. residents will still probably wind up paying significantly more money at slower speeds than most developed nations. Meanwhile, T-Mobile tells Ars Technica that video on the T-Mobile network is still throttled to 1.5 Mbps by default, with the onus placed on customers to remember to enable HD video manually or it reverts to the default, de-prioritized state:
"T-Mobile responded to our question about HD video day passes by saying, "All customers have to do to get HD is go into the app or online to turn on. It’s very easy." Customers still have to enable HD video every 24 hours or it reverts to 480p, a T-Mobile spokesperson told Ars via e-mail. However, the company's Twitter support account says it only will have to be enabled once per month. T-Mobile's press release doesn't clear things up."
Even with caveats, this is at least providing a vague resemblance of what wireless competition is supposed to look like. Given the number of customers T-Mobile is now hoovering up from AT&T, it may also force AT&T to revisit its own opposition to unlimited data plans (currently only available if you subscribe to both AT&T wireless and DirecTV). So even though the industry still struggles with the dictionary definition of unlimited, the fact T-Mobile is pushing AT&T and Verizon to actually try to compete is certainly a good thing.
The problem is that competition in the wireless space is viciously fickle, and by and large most of AT&T and Verizon's promotions remain somewhat theatrical in nature when it comes to actually lowering your overall price once various fees are factored in. And should the rumored T-Mobile and Sprint merger be approved by regulators, you can be fairly sure that even this level of more superficial competition may not be around for long.
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Posted on Techdirt - 14 February 2017 @ 6:30am
One of the hallmarks of Tom Wheeler's FCC was a renewed focus on competition at higher broadband speeds. It's one of the reasons the last FCC bumped the standard definition of broadband from a measly 4 Mbps down, 1 Mbps up, to 25 Mbps down, and 3 Mbps up. That higher benchmark allowed the FCC to point out that roughly two-thirds of American homes lack access to more than one ISP at 25 Mbps or better, highlighting a growing cable monopoly over broadband as DSL providers like AT&T and Verizon shift their attention toward giant media acquisitions and away from residential broadband.
Needless to say, large broadband providers (and the politicians paid to love them) quickly threw a hissy fit, insisting that nobody really needs that much bandwidth. This idea that you don't really need faster speeds falls in line with the industry's (and again, many politicians') ongoing refusal to acknowledge that the broadband market isn't all that competitive. After all, if you admit there's a problem, then you've admitted that somebody may just have to fix it.
FCC Commissioner Mike O'Rielly is squarely on the side of industry on this subject, having voted down the FCC's higher 25 Mbps benchmark. Even though 25 Mbps is a far from radical benchmark, and 3 Mbps upstream remains a bit of a joke, O'Rielly's dissent (pdf), made his disdain for faster speeds (and the technologies that will use them) abundantly clear:
"To justify setting the new benchmark at 25/3, as opposed to the current 4/1 or even 10/1 as several commenters suggested, the Report notes that 4K TV requires 25 Mbps. But 4K TV is still relatively new and is not expected to be widely adopted for years to come. While the statute directs us to look at “advanced” telecommunications capability, this stretches the concept to an untenable extreme. Some people, for example, believe, probably incorrectly, that we are on the path to interplanetary teleportation. Should we include the estimated bandwidth for that as well? "
Chortle! Guffaw! Of course 4K is here now, the streaming of which is already being hamstrung by ISP usage caps, even on ultra-fast connections. Now on the agency's majority, O'Rielly last week again proclaimed that the sector really needs to stop focusing on this whole ultra-fast broadband thing, since faster speeds are really just a novelty:
"The outcry for things like ultrahigh-speed service in certain areas means longer waits for those who have no access or still rely on dialup service, as providers rush to serve the denser and more profitable areas that seek upgrades to this level,” O’Rielly said. “Today, ultrafast residential service is a novelty and good for marketing, but the tiny percentage of people using it cannot drive our policy decisions."
Of course, that's not really true. Ultra-fast broadband and even consistent coverage aren't somehow mutually exclusive; we can focus on getting broadband to rural markets (first at slower speeds), and still enjoy gigabit speeds provided by the likes of Google Fiber. There's not a longer wait for broadband in Cleveland, for example, just because Google Fiber wants to bring broadband to San Antonio. As we've noted, the real reason there are stalled rural broadband deployments is a growing cable monopoly in areas that telcos are effectively giving up on. That FCC data now shows this is not somehow the fault of faster gigabit broadband itself.
The idea that gigabit is a "novelty" or unnecessary bumbles around the newswires occasionally, but originates with industry executives who don't want their own, slower speeds highlighted. But that doesn't mean ultra-fast service isn't important. Data has indicated that prices overall tend to drop in markets with ultra-fast service, which is likely a reflection of the increased competition that brought those speeds in the first place. AT&T's gigabit broadband service, for example, has been anywhere up to $50 less per month in markets where it faces competition from Google Fiber.
But even if there's a touch of marketing hype involved in the gigabit race, ISPs benefit from the fascination with faster speeds as well; numerous providers have noted that just advertising these ultra-fast connections causes consumers (most of whom have absolutely no idea what their current speed even is) to call in and upgrade to faster tiers, even if they're not the fastest options available. As Google Fiber made evident, ultra-fast broadband has captured the imagination of a public tired of overpaying for slower speeds. That excitement, and the surrounding competition, is not a bad thing.
If there's something that does get overlooked in the hype surrounding faster speeds, it's the fact that the United States still pays more for broadband service than a laundry list of developing nations, something the industry -- and O'Rielly -- also don't want highlighted in FCC policy discussions moving forward.
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Posted on Techdirt Wireless - 13 February 2017 @ 10:46am
Despite the rising competitive threat of T-Mobile, Verizon Wireless has spent the last few years simply refusing to seriously compete on price. That stubbornness has extended to the company's refusal to match T-Mobile's unlimited data plans, eliminated by Verizon back in 2011. In a truly competitive market, you're supposed to listen to your customers and try to provide whatever they're clamoring for. But Verizon's tack has been the exact opposite; the company spending the last few years trying to tell consumers they don't really want simpler, unlimited data options -- and that these plans are unnecessary and unviable.
For most of this time, Verizon Wireless' excuse du jour was that it didn't have to compete on price or service because its network was just that phenomenal. But a report last week by Open Signal found that T-Mobile, once considered an under-cooked upstart, was finally fielding a network that nearly matches Verizon in terms of both speed and overall coverage:
"Our testers were able to find a Verizon LTE signal 88.2% of the time, cementing Big Red's place at the top of our 4G rankings. But T-Mobile has been systematically closing the gap. In the fourth quarter its 4G availability was less than two percentage points below Verizon's, the closest we've seen that difference."
Initially Verizon tried to downplay the results, insisting that because Open Signal uses crowdsourced data, that the results souldn't be taken seriously. That didn't go over particularly well over at T-Mobile:
But Verizon then did a 180, announcing late last week that the company would finally be offering unlimited data again, and without throttling video, music or games as a result (which is now standard practice at both T-Mobile and Sprint). Of course the industry's definition of "unlimited" remains as murky as it has always been, with Verizon quick to note that by "unlimited," they actually mean somewhere around 22 gigabytes per month, after which your connection will likely be throttled:
"On all Verizon Unlimited plans you get our fast LTE speeds. To ensure a quality experience for all customers, after 22 GB of data usage on a line during any billing cycle we may prioritize usage behind other customers in the event of network congestion. While we don’t expect to do that very often, network management is a crucial tool that benefits all Verizon customers."
Still, a good move is a good move. And Verizon's decision will likely push AT&T (which currently only sells you unlimited data if you bundle your wireless connection a with DirecTV service) to follow suit. Granted competition in telecom is fickle and inconsistent, and non-price competition -- where theatrics trump actual value -- is generally the rule of thumb. And should rumors of a new Sprint, T-Mobile merger be accurate, we could very quickly be facing three large carriers with, once again, little to no incentive to actually give consumers what they want.
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Posted on Techdirt - 10 February 2017 @ 12:39pm
When we talk about pacemakers here at Techdirt, the focus is usually on how the devices have paper-mache grade security, allowing anybody to assassinate the cardiac-challenged with relative ease. In fact we've reached the point where the FTC had to recently issue its first ever warning against a pacemaker vendor when it announced that hackers could comprmise pacemakers made by St. Jude Medical, sending "commands to the implanted device, which could result in rapid battery depletion and/or administration of inappropriate pacing or shocks."
But your pacemaker may just betray you in other ways, too. In Ohio a man was indicted this week on arson and insurance fraud charges after his Pacemaker data contradicted the story he was telling authorities. When the man's home burned down on September 19, Middletown resident Ross Compton told authorities he quickly packed some belongings in a suitcase and some bags, broke a window with his cane, and quickly fled through the window before carrying his belongings back to the car. The man also acknowledged at the time that he had a pacemaker.
So police obtained a warrant for the data stored on the device, and doctors quickly concluded that the story the man's heart was telling didn't match the narrative coming out of his mouth:
"A cardiologist determined that it was "highly improbable," due to his medical conditions, that Compton could do all the collecting, packing and removal of items from his house and then carry them in the short period of time he indicated, according to court records. Police have said statements they received from Compton were "inconsistent" with the evidence they gathered. They also have said that he gave statements conflicting with what he had told a dispatcher, the Hamilton-Middletown Journal-News reported."
Obviously there are numerous privacy questions at play here, since we're living in an era when your car, home, phone, and implant data can not only be used to support criminal charges, but will increasingly be used by giant corporations to determine everything from your insurance rates to your qualification for health care. As such, the Electronic Freedom Foundation was quick to warn the AP about the slippery slope of having your own body's data used against you in such a fashion:
"Stephanie Lacambra, a criminal defense staff attorney with the San Francisco-based foundation, said in an email Tuesday that Americans shouldn't have to make a choice between health and privacy.
"We as a society value our rights to maintain privacy over personal and medical information, and compelling citizens to turn over protected health data to law enforcement erodes those rights," Lacambra said."
Internet-of-things devices are not only poorly secured, the privacy policies affixed to most of them are a dumpster fire. So remember folks: the next time you intend to commit a crime or apply for health coverage with a pre-existing condition, remember to wipe the data from all of your cybernetic implants -- and get the latest firmware update for your cerebral and coronary firewalls and intrusion detection systems.
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Posted on Net Neutrality Special Edition - 9 February 2017 @ 2:38pm
We've repeatedly noted how for some stupid reason, net neutrality is treated as a partisan issue in Washington -- with Democrats (generally) in support, and Republicans (generally) opposing the idea. It's an absurd, myopic paradigm given the fact that net neutrality has broad, bipartisan consumer support. Most people want the internet to function as a relatively-level playing field. Everybody wants to be able to access the content and services of their choice without interference from the likes of Comcast and AT&T, who seem hell bent on using their monopoly over the last mile to their anti-competitive advantage.
With the looming specter of a net neutrality rule repeal under Trump, the GOP, and new FCC Boss Ajit Pai, a number of Democratic Senators (including Ron Wyden and Ed Markey) held a press event (video) warning that if the GOP and FCC try to repeal net neutrality, it will result in a "political firestorm" they may not be entirely prepared for. The Senators were quick to recall that roughly 4 million consumers reached out in support of the FCC's net neutrality rules a few years ago, a number Markey proclaimed would look "miniscule" in comparison to the looming backlash against the rules' repeal.
Markey's office also issued a statement saying that he'd fight tooth and nail against repeal of the rules, in whatever form that arrives:
"Despite what the cable companies and Republicans say about net neutrality, there is nothing broken that needs fixing,” said Senator Markey, a member of the Commerce, Science and Transportation Committee. “I will oppose any regulatory efforts, including repeal, forbearance, interpretative rule, or refusal to enforce existing rules, as well as any legislative efforts to undo or roll back the Open Internet Order. We stand united in this fight to ensure that all Americans have access to a free and open Internet."
While it's true that the backlash to an attack on net neutrality could make SOPA and PIPA look like a beach-side picnic, the repeal won't arrive in the way the agency's rules first arrived. With the process of repealing the rules within the FCC's existing regulatory framework a giant bureaucratic headache that would require another very public comment process, the ISPs (and the politicians that love them) likely have another tactic in mind -- at least based on my 20 years, ten hours a day, of watching the telecom sector (and every other industry) dominate both parties of Congress.
At first, that will involve having Pai simply refuse to enforce the rules as they exist now (which we already saw with Pai's decision to scrap the FCC's zero rating inquiry). Pai's job in this stage play will be to pay empty lip service to things like the digital divide, while generally keeping the FCC focused on bland, non-controversial policies until the real hangman (a campaign-contribution soaked Congress) arrives.
From there, the GOP has quietly been making it clear they want to push a Communications Act rewrite that will focus on rolling back the FCC's classification of ISPs as common carriers under Title II, therefore obliterating not only net neutrality -- but the FCC's ability to act as broadband watchdog entirely. This being a new, charming post-truth era, this assault on net neutrality, broadband provider oversight and accountability will most likely be dressed up as a massive boon to job creation, broadband expansion, and the nation's puppies.
Expect it to be named something along the lines of The Making Broadband Great Again Act of 2017.
This bill, whether it comes as a Communications Act rewrite or some other bill, will also probably claim to put the net neutrality debate to bed by including a few net neutrality restrictions even large ISPs don't actually care about (like banning them from outright blocking websites). What it won't do is address any of the hot-button areas where the net neutrality debate is occurring right now, like zero rating, interconnection, or the use of usage caps and overage fees. Given it will certainly be written in part by AT&T, Verizon, Comcast and Charter lawyers, it will just as certainly contain other loopholes to ensure their satisfaction.
Whatever this bill winds up looking like or is called, it will be (and already is on some fronts), portrayed as a "compromise" that Democrats will be told they must support if they're to be considered "serious" in their pledge to protect net neutrality and the public at large. But given the goal of removing oversight from the likes of Comcast, the bill itself will likely hurt more than it helps, and if these Democratic Senators actually want to show they have anything resembling a spine, they'll need to stage fierce opposition to the bill to prove their dedication to a healthy internet is more than just smoke and mirrors.
In light of a Congress that long ago made it clear that it prioritizes telecom cash contributions over consumers, the best "solution" for net neutrality at this juncture would be leaving the existing rules -- and the FCC's authority over broadband providers -- intact.
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Posted on Techdirt - 9 February 2017 @ 6:39am
So we've noted a few times how former FCC boss Tom Wheeler surprised many of us (myself included) simply for basing his telecom policy decisions on actual facts. That doesn't sound like much, but for more than fifteen years, both parties had stocked the agency with a rotating crop of either sector apologists like Michael Powell (now the cable industry's top lobbyist) -- utterly incapable of even admitting the broadband industry had competition problems -- or wishy-washy folks like Julius Genachowski, who basically just told everybody what they wanted to hear, and just hoped things worked out for the best.
Wheeler wound up being a notably different animal for the FCC. He based many of his policy decisions on real-world data collected from actual customers (shocking!), repeatedly highlighted the lack of real broadband competition in many markets (blasphemy!), and, as evident on his shift toward Title II reclassification and net neutrality, actually changed his mind when confronted with evidence that challenged his world view (what insolence!).
Now that Wheeler's back in the private sector, he's unshackled himself somewhat, last week providing an interesting interview with Harvard Law Professor Susan Crawford. In it, Wheeler takes particular aim at Trump's new FCC pick Ajit Pai, noting the new FCC boss (who repeatedly complained that Wheeler left him out of key policy decisions) refused to even meet with him during the last year. Wheeler also chimes in on the subject of net neutrality, municipal broadband, and how ISPs like Comcast and AT&T have an almost nauseating amount of influence over state legislatures.
But the most important part has to do with Wheeler's take on the Trump administration's increasingly obvious plan to defund and defang the FCC as broadband watchdog. Because the industry and our new FCC boss lack the courage to just come out and say this, telecom sector lobbyists (and the various PR flacks, consultants, think tankers, and politicians paid to love them) have concocted a new narrative in which they claim they're simply "streamlining" or "modernizing" government by eliminating the FCC from the equation, and dumping all oversight of megacarriers like AT&T, Comcast and Verizon into the lap of the FTC.
Wheeler, however, was quick to point out the real goal of such a shift:
In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?
It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.
So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices.
Again, so it's clear, broadband ISPs want all oversight shifted to the FTC because they know the underfunded and overworked agency won't have the ability to actually enforce the rules currently on the books, much less craft new ones should they become necessary. With companies like Comcast facing less organic broadband market pressure than ever, less federal regulatory oversight than ever, and the ability to literally write state protectionist laws keeping your town and city from having any say over this dysfunction, you've got a disaster brewing for consumers and numerous business sectors alike.
To be clear, deregulation does help some industries -- especially those that naturally enjoy healthy competition. But with the amount of control large ISPs have over state legislatures, and the lack of competition in the last mile, the telecom sector is far from a free market. Undaunted by historical evidence of the folly of blind telecom deregulation, ISPs have long argued that if you just leave the industry completely alone, gigabit connections will miraculously sprout from sidewalk cracks and we'll all be living in a telecom utopia in no time. History has proven repeatedly this antiquated belief system is pure folly.
Just when it seemed like we were finally putting this dated fantasy in the rear-view mirror, in comes a brand new plan to effectively neuter the only regulatory agency to stand up to AT&T and Comcast in the last decade. Again, it will go something like this: first Pai and the new FCC will simply refuse to enforce the rules already on the books (net neutrality). From there, you can expect Comcast, AT&T and Verizon's Congressional allies to push for a new Communications Act rewrite that rolls back all of Wheeler's policy proposals and fits the FCC with a shiny new collar and chain.
Said Act will breathlessly profess to create jobs, increase broadband deployment, close the digital divide and finally solve net neutrality, but will do nothing of the sort. What it will actually do is contain ample loopholes ensuring that the FCC can never again actually hold massive broadband and media empires accountable to the public by cutting the agency off at the knees, in part by rolling back Wheeler's Title II classification, but also by shoveling consumer protection off to an FTC whose purview will be similarly constrained over the coming months and years.
The end result of this "modernization"? Less oversight than ever for industry giants AT&T, Comcast, Verizon and Charter. Given these companies' growing size, long and undeniable track record of anti-competitive behavior and outright fraud, what could possibly go wrong?
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Posted on Techdirt - 8 February 2017 @ 6:22am
For decades, inmate calling service (ICS) telcos have charged inmates and their families upwards of $14 per minute for phone calls without anybody giving much of a damn. Because these folks are in prison, and as we all know everybody in prison is always guilty, drumming up sympathy to convert into political momentum had proven difficult. But after decades of activism, the FCC intervened in 2013 and again in 2015, voting to cap the amount companies can charge the incarcerated for intrastate phone calls. This resulted in a firestorm of complaints from these companies, which not only get to rip off inmates, but have all too cozy and often not particularly legal relationships with law enforcement.
One of the more vocal ICS outfits, Securus, quickly sued the FCC, going so far at one point as to claim that inmates would riot if the company wasn't allowed to continue overcharging inmates and their families. Securus, Global Tel*Link and other providers challenged the FCC's intrastate rate caps in the US Court of Appeals for the DC Circuit, claiming the agency lacked the adequate authority to set caps and that the rates were too low. And for the last several years, the FCC had been working to defend its actions in court.
That all changed last month, when Donald Trump pegged Ajit Pai to head the FCC. Pai and former Commissioner Mike O'Rielly had consistently voted against defending inmates from monopoly overcharging. And just days after giving a speech in which he professed his selfless dedication to closing the digital divide, Pai effectively decided to pull the rug out from underneath FCC Deputy General Counsel David Gossett, who had been defending the FCC's action in court. In a brief filed by Gossett last week (pdf), he notes that he was ordered to no longer defend the FCC's intrastate calling cap:
"As a result of these changes in membership, the two Commissioners who dissented from the Order under review—on the grounds that, in specific respects, it exceeds the agency’s lawful authority—now comprise a majority of the Commission," Gossett wrote. Gossett is thus no longer authorized to defend the FCC's previous contention that it "has the authority to cap intrastate rates for inmate calling services" and cannot defend the FCC's assertion that it "lawfully considered industry-wide averages in setting the rate caps contained in the Order," he wrote."
Despite Pai suddenly undermining the agency's own lawyers, all is not lost quite yet:
"Gossett said he will continue to defend other parts of the commission's October 2015 order, which also lowered the price of interstate calls, those that cross state lines. Despite the FCC's various losses, a 2013 decision to set interim rate caps of 21¢ to 25¢ per minute for interstate calls has survived court challenges...The FCC's decision to stop defending the full order hurts the case for maintaining rate caps on intrastate calls in which both parties are in the same state, but it doesn't completely kill the case. The FCC is ceding 10 minutes of its allotted argument time to attorney Andrew Schwartzman, who is defending the rate caps on behalf of prisoners' rights groups."
It's worth reiterating that voice services these days cost very little to actually provide. Also keep in mind that Securus and other such companies are part of a dangerously cozy and captive market, where prisons get paid upwards of $460 million annually in "concession fees" (read: kickbacks) to score exclusive, lucrative prison contracts. In this comically absurd environment, the service pricing and quality are just about what you'd expect. Government oversight of these businesses have been virtually non-existent, in part thanks to accusations that these companies have allowed some law enforcement to monitor what should be privileged attorney client communications.
The fact that making it easier to rip off inmates was new boss Pai's first move in office should tell you plenty about just how far his dedication to "closing the digital divide" is going to go. That's before you realize that Pai's other early actions have involved preventing 9 pre-approved ISPs from helping the poor, killing an FCC plan to bring competition and cheaper rates to the cable box, and killing all FCC Net neutrality enforcement moving forward. With friends like these...
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Posted on Techdirt - 7 February 2017 @ 11:59am
Security isn't the only thing being ignored as hardware vendors rush to connect televisions, toasters, and tea kettles to the internet. Consumer privacy and data-collection transparency has also become a distant afterthought as companies rush to cash in on the ocean of data these connected-devices collect. The "smart" television sector has been notably problematic, with Samsung busted a few years back for not only recording customer living room conversations, but transmitting that data unencrypted back to the company mothership.
These are lessons that hardware vendors appear incapable or unwilling to learn. Case in point: this week the FTC announced that it had struck a $1.2 million settlement with discount TV vendor Vizio. According to the full FTC complaint (pdf), Vizio began using the company's smart televisions to track user behavior in 2014, without informing customers that this was happening. The FTC notes that Vizio for years heavily advertised a "Smart Interactivity" feature that "enables program offers and suggestions." But the complaint notes this feature never provided customers with a single suggestion.
But it did provide Vizio with a wonderful new way to collect and store a huge variety of consumer data under the pretense of adding consumer functionality. MAC addresses, IP addresses, nearby WiFi network names, metadata were all hoovered up and stored. And when the FTC says viewing data, it means that Vizio used pixel analysis to compile personal data on every program and device connected to the Vizio set:
"According to the agencies’ complaint, starting in February 2014, VIZIO, Inc. and an affiliated company have manufactured VIZIO smart TVs that capture second-by-second information about video displayed on the smart TV, including video from consumer cable, broadband, set-top box, DVD, over-the-air broadcasts, and streaming devices.
In addition, VIZIO facilitated appending specific demographic information to the viewing data, such as sex, age, income, marital status, household size, education level, home ownership, and household value, the agencies allege. VIZIO sold this information to third parties, who used it for various purposes, including targeting advertising to consumers across devices, according to the complaint."
Again, this in and of itself isn't that controversial, especially in the age of location data and cell phones. The fact that Vizio chose not to tell anyone this data was being collected is where the company ran afoul of the FTC. An FTC blog post has a little more detail on just how specific this data was, and to whom it was sold:
"And let’s be clear: We’re not talking about summary information about national viewing trends. According to the complaint, Vizio got personal. The company provided consumers’ IP addresses to data aggregators, who then matched the address with an individual consumer or household. Vizio’s contracts with third parties prohibited the re-identification of consumers and households by name, but allowed a host of other personal details – for example, sex, age, income, marital status, household size, education, and home ownership. And Vizio permitted these companies to track and target its consumers across devices."
It's here that we'll remind you that the "anonymization" of data doesn't mean much. Time and time again, studies have shown that anonymized data sets aren't really anonymous, given that it only takes a few additional contextual clues (the likes of which companies that collect this sort of data already have) to ferret out personal identities.
It's not really clear how many settlements of this type it's going to take before "smart" hardware vendors acknowledge that being transparent with consumers (which frankly is neither onerous or particularly difficult for them in the 400-page EULA era) is important. And should we continue to weaken FCC and FTC privacy oversight of ISPs and hardware vendors (as is strongly implied by both agencies), that's less likely than ever to happen anytime soon.
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Posted on Techdirt - 7 February 2017 @ 6:27am
Just last week, new FCC boss Ajit Pai made a speech in front of FCC staffers breathlessly professing his dedication (pdf) to consumers, innovation, and closing the digital divide. In a post over at Medium, the former Verizon lawyer again insisted that closing the digital divide would be the defining theme of his tenure as FCC Boss:
"I look forward to working with my fellow Commissioners on this aggressive agenda to connect Americans on the wrong side of the digital divide, to allow broadcasters to innovate and better serve viewers, and to reduce unnecessary regulations. And Groundhog Day or not, you can expect that I will return to these themes over and over and over again."
So, how is Pai doing on his promise after just a few weeks in office? Let's see. In just the last few weeks, Pai:
Began undermining FCC attempts to prevent prison phone monopolies from dramatically overcharging inmate families for phone calls.
Dropped all FCC investigations into whether or not zero rating violates net neutrality and drives up rates for streaming video consumers -- the opening salvo of what's believed to be the rollback of all net neutrality protections.
Killed an attempt by the FCC to bring competition to the cable box market, which would have threatened $20 billion in cable industry rental fee revenues.
Not to be outdone, Pai also actually made it harder for poor people to get discounted broadband by unnecessarily disqualifiying nine, already approved small ISPs (Spot On, Boomerang Wireless, KonaTel, FreedomPop, AR Designs, Kajeet, Liberty, Northland Cable, and Wabash Independent Networks) from participating in the FCC's Lifeline program. That program, founded by Reagan and expanded by Bush, doles out $9.25 per low-income household for them to use on phone or broadband service. Last year the FCC expanded it marginally so low-income homes could use that money to pay for stand-alone broadband, cellular, or fixed-line phone service (Pai, digital divide closer extraordinaire, voted down that effort).
The FCC's rushed-through late Friday order makes a big deal out of the amount of fraud occurring in the Lifeline program, ignoring that under Wheeler's watch, the agency managed to finally get a handle on much of it. Like that time AT&T was caught falsely inflating its Lifeline subscriber rolls to keep getting subsidies it didn't deserve (punishment for which, again, Pai himself voted down). But there's no evidence the nine ISPs targeted by Pai were involved in any fraudulent behavior whatsoever. And when Jon Brodkin at Ars Technica tried several times to get the FCC to clarify why these ISPs were singled out, the agency refused:
"Pai's FCC says the commission wants to implement new measures to combat fraud and waste in the Lifeline program and that revoking the Lifeline designations will provide additional time to achieve that. But none of the nine providers was accused of fraud, and the FCC already has the power to investigate and punish any provider that defrauds the program. Pai could have let these companies continue selling subsidized broadband to poor people as long as they committed no fraud, but he chose not to."
Unsurprisingly, the people out in the field actually trying to get broadband to the poor were greatly annoyed by Pai's "help." Kajeet's founder Daniel Neal finds Pai's particular version of assistance a little bit curious when asked about it by the Los Angeles Times:
"I’m most concerned about the children we serve,” Kajeet founder Daniel Neal said. “We partner with school districts — 41 states and the District of Columbia — to provide educational broadband so that poor kids can do their homework."
Consumer advocacy groups like Public Knowledge were also quick to point out how Pai broke the sound barrier in rushing to immediately undermine his own agency's promises:
"The most obvious fact in our society is that high-speed Internet is astronomically expensive for the middle class and down,” said Gene Kimmelman, president of the consumer advocacy group Public Knowledge. “So in any way limiting the Lifeline program, at this moment in time, exacerbates the digital divide. It doesn’t address it in any positive way."
So yes, when your definition of "helping the poor" includes ensuring cable boxes stay expensive and closed, allowing duopolies to abuse net neutrality and drive up service costs, protecting prison monopoly telcos that have price-gouged families for years, and preventing smaller ISPs from actually helping the poor you profess to love -- you have to wonder what it looks like when Pai actively wants to harm something.
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Posted on Techdirt - 6 February 2017 @ 1:27pm
Once exclusively the domain of hospitals with comically-bad IT support, crippling ransomware attacks are increasingly beginning to impact essential infrastructure. Just ask the San Francisco MTA, whose systems were shut down entirely for a spell last fall after a hacker (with a long history of similar attacks) managed to infiltrate their network, forcing the MTA to dole out free rides until the threat was resolved. Or you could ask the St. Louis public library network, which saw 16 city branches crippled last month by a bitcoin-demanding intruder.
We've also seen a spike in ransomware attacks on our ever-expanding surveillance and security apparatus, DC Police acknowledging this week that 70% of the city's surveillance camera DVRs were infected with malware. The infection was so thorough, DC Police were forced to acknowledge that city police cameras were unable to record much of anything during a three day stretch last month:
"Hackers infected 70 percent of storage devices that record data from D.C. police surveillance cameras eight days before President Trump’s inauguration, forcing major citywide reinstallation efforts, according to the police and the city’s technology office. City officials said ransomware left police cameras unable to record between Jan. 12 and Jan. 15. The cyberattack affected 123 of 187 network video recorders in a closed-circuit TV system for public spaces across the city, the officials said late Friday.
Brian Ebert, a Secret Service official, said the safety of the public or protectees was never jeopardized.
Right. An intruder managed to effectively blind law enforcement in the nation's capital for three straight days -- eight days before the inauguration of a new President, but hey -- no big deal. Fortunately the city was able to purge the malware and reboot the system without paying a ransom, though they still don't appear to have actually tracked down the intruder or his or her point of origin:
"Archana Vemulapalli, the city’s Chief Technology Officer, said the city paid no ransom and resolved the problem by taking the devices offline, removing all software and restarting the system at each site. An investigation into the source of the hack continues, said Vemulapalli, who said the intrusion was confined to the police CCTV cameras that monitor public areas and did not extend deeper into D.C. computer networks."
These intrusions are usually courtesy of an employee downloading something stupid, but the paper-mache grade security and default administrative credentials common on DVRs and other network-connected hardware also plays a starring role. The end result is an absolute laundry list of similar stories popping up all around the globe, from the Austrian hotel whose customers were locked inside their rooms thanks to a ransomware intruder, to the Texas police station that lost years of video evidence courtesy of poor security standards and a lack of redundancy.
And it's worth remembering that these are only the intrusions in which the intruder actually wants to make their presence known.
Overall, poorly secured internet-connected devices have not only contributed to a spike in ransomware attacks, but poorly-secured hardware is increasingly being infected and used as part of DDoS botnets, resulting in some of the largest and most devastating attacks we've seen to date. The IT security 2017 prediction du jour is a crippling attack that brings the internet to its knees sometime this year, with a loss of human life on some scale also seen as an inevitability. As several security analysts like Bruce Schneier have noted, our casual treatment of device security has created a security and privacy dumpster fire, and the spike in these DDoS and ransomware attacks is simply the check coming due.
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Posted on Techdirt - 6 February 2017 @ 10:46am
Surprising nobody, new FCC boss Ajit Pai used a flurry of late-Friday announcements to roll back a number of consumer-friendly FCC initiatives the former Verizon lawyer (and the large ISPs that already love him) didn't like. Among them was the Wheeler-led FCC's attempt to crack down on zero rating, the practice of an ISP exempting its own content from its own arbitrary usage caps, while still penalizing competitors. The former FCC had just belatedly ruled that both AT&T and Verizon's zero rating efforts were anti-consumer, anti-competitive, and dramatically damaged the open streaming video market.
That was then, and this is now.
This new, Pai-led FCC wasted no time sending AT&T, Verizon and Comcast letters (pdf) proclaiming that all FCC inquiries into the anti-competitive impact of zero rating have been dropped. In a brief statement (pdf) issued to the media, Pai went so far as to imply he was doing this not because it's what giant ISPs wanted -- but because of a selfless dedication to the poor:
"Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers' free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace.
Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings."
You'll find that taking an anti-consumer position on something, then insisting it was only done to aid the downtrodden, will be a common refrain from this new Pai-led FCC. In reality, zero rating data doesn't create "free data plans," it simply shifts the cost burden onto streaming video providers -- or more accurately, the customers of streaming video providers. Those customers suddenly face having to pay more money for competing services, which naturally funnels them to the streaming services of AT&T (DirecTV Now), Verizon (Go90), or Comcast (Stream TV).
ISPs like AT&T and Verizon had tried to argue that disadvantaging competitors in this fashion wasn't a big deal, because those companies could pay AT&T and Verizon a steep and unnecessary surcharge to cap-exempt their services too, putting themselves back on equal footing with ISPs. Given that many smaller companies couldn't afford such tolls, the former FCC's report (pdf) made it clear that this structure would be abused by giant, incumbent gatekeepers:
"Thus, it would appear that AT&T's practices inflict significant unreasonable disadvantages on edge providers and unreasonably interfere with their ability to compete against AT&T's affiliate, DIRECTV, The structure of Verizon's FreeBee Data 360 program raises similar concerns. We are aware of no
safeguards that would prevent Verizon from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to Verizon's affiliated content on a zero-rated basis.
Again, for those confused, zero rating is simply incumbent duopolists using a lack of competition in broadband to impose arbitrary and unnecessary usage caps, then (ab)using those caps to dramatically tilt the playing field in their favor. Full stop. Zero rating has absolutely nothing to do with helping "low income Americans," innovation or "expanding broadband deployment," and Pai's claims to the contrary are transparent and insulting.
There's more than a little cognitive dissonance required in insisting you're a stalwart defender of "free markets," then immediately turning a blind eye to the demolition of a level streaming video playing field by giant, lumbering monopolists. And, of course, this is just the opening salvo in the latest battle against net neutrality; while Pai gets to work refusing to enforce the agency's existing FCC rules, the GOP is getting to work on a Communications Act rewrite that will not only kill the net neutrality rules, but defang and defund the FCC as a consumer watchdog altogether.
If you actually give a flying damn about net neutrality, broadband competition and a healthy, open internet -- 2017 is going to desperately need your help.
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Posted on Techdirt - 6 February 2017 @ 6:22am
As we've been noting, broadband providers have wasted no time pressuring Congress to kill the FCC's new broadband privacy rules. These rules, passed last year, simply require that ISPs are transparent about what data they're collecting and who they're selling it to, while requiring they provide working opt-out tools. But the rules went further in requiring that broadband customers opt in to more sensitive data collection, including financial data. Given an informed, empowered consumer means less advertising revenue, ISPs quickly went to work throwing a monumental hissy fit.
This week, a coalition of broadband providers including Comcast, AT&T, T-Mobile and Verizon issued a breathless letter professing their absolute dedication to consumer privacy, apparently hoping that consumers haven't noticed they're simultaneously trying to kill the first meaningful broadband-specific privacy protections users have enjoyed in the history of the technology. As you might expect, the least-liked industry in America spends a notable part of the missive patting itself on the back for its selfless dedication to user privacy:
"ISPs understand the trust our customers place in us, and we are committed to protecting our customers’ privacy and safeguarding their information. For 20 years, we have implemented policies and practices that are consistent with the FTC’s widely respected and effective privacy framework and other federal and state privacy laws.
...We understand the importance of maintaining our customers’ trust. That is why we will continue to provide consumer privacy protections, while at the same time meeting consumers’ expectations for innovative new product solutions to enhance their online experiences.
Yeah, like that time Verizon was caught modifying user data packets to covertly track customers all around the internet without A. telling anybody or B. providing working opt out tools. Or that time AT&T began charging its broadband customers a steep premium just to protect their own privacy (something Comcast has shown repeated interest in as well). Or that time Cable One made it clear it wants to use user financial data to deliver worse customer service to low-income customers with bad credit. You can just feel the broadband industry's dedication to protecting your private data pulsing in the very wind itself!
In short the industry's trying to argue that the weaker, inconsistent privacy protections of the FTC are enough to protect consumers from wrongdoing. But as you saw in the last paragraph, the FTC (already overloaded and in constant risk of having its authority eroded) rarely has the time or interest in actually enforcing these rules anyway. The FCC's new rules were created specifically in response to these behaviors, and because the barely-competitive broadband industry creates some unique consumer protection challenges other industries and companies (like Google or Facebook, where users are free to use other services) don't face.
This idea that Congress will be somehow "streamlining" the FCC and eliminating duplicate authority will be the narrative du jour for most of this year. But in an outgoing interview with former FCC boss Tom Wheeler this week, the former dingo makes a point that's important for consumers and telecom journalists alike to understand:
"In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?
It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.
So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices.
To try and ease concerns among those that, well, have actually paid attention to the industry's bad behavior on this front, giant ISPs like Verizon and Comcast instead proposed a voluntary group of self-regulatory principles governing transparency, data security, notifications in the wake of hack attacks, and "consumer choice." The industry's promise to respect user privacy choices are framed as such:
"ISPs will continue to give broadband customers easy-to-understand privacy choices based on the sensitivity of their personal data and how it will be used or disclosed, consistent with the FTC’s privacy framework. In particular, ISPs will continue to: (i) follow the FTC’s guidance regarding opt-in consent for the use and sharing of sensitive information as defined by the FTC; (ii) offer an opt-out choice to use non-sensitive customer information for personalized third-party marketing; and (iii) rely on implied consent to use customer information in activities like service fulfillment and support, fraud prevention, market research, product development, network management and security, compliance with law, and first-party marketing."
In short, we're going to just keep doing what we're already doing, while hiding behind overlong privacy policies, "implied consent," and loopholes that broadly declare most data "non-sensitive" -- all while obfuscating the fact the FTC privacy enforcement hasn't worked. If FTC enforcement alone for broadband privacy actually worked, Verizon wouldn't have been allowed to covertly track consumers around the internet for two years before security researchers actually noticed it. If FTC oversight actually worked on this subject, AT&T wouldn't have been allowed to charge users up to nearly $800 more per month in some instances just to protect their own data.
And having a weak (and likely soon to be weaker) cop on the beat is particularly important to companies like Verizon moving forward, given it has been on a tear gobbling up failed internet brands like AOL and Yahoo as part of its master plan to shift its focus from broadband toward slinging video ads at Millennials (apparently not very well). Verizon and friends have tried to argue that the FCC's privacy rules created "asymmetrical regulation," but they consistently ignore that the lack of broadband competition creates risks you don't see in the markets inhabited by the companies Verizon's envious of (Facebook, Google).
Here's the thing. The broadband industry had it pretty good for most of the last decade in terms of doing whatever it wanted with consumer data. Regulators, regardless of party, generally looked the other way as these companies hoovered up every shred of location and browsing data -- using everything from DNS tracking to deep packet inspection -- then relied on FTC regulatory loopholes to sell this data to pretty much everybody. Only once the broadband industry began pushing its god-damned luck with incredibly stupid ideas (with ideas like charging users for their own privacy) did the FCC even feel the need to get involved.
So in short, if the broadband industry's looking for someone to blame for the FCC's relatively modest privacy rules, it should spend some time looking in the mirror. Granted that may all be a moot point now that we've decided to put a former Verizon lawyer with a disdain for facts in charge of regulating the broadband sector. Back in 2008 Verizon claimed that consumer privacy protections weren't necessary because "public shame" would keep the company honest. There's every indication we're about to truly put that theory to the test.
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Posted on Techdirt - 3 February 2017 @ 6:42am
Comcast's earnings report this week indicated that the company managed to add 80,000 basic video subscribers during the fourth quarter, and 161,000 net video customers for the full year. And while news outlets were quick to proclaim that Comcast had magically bucked the cord cutting trend, you'd be hard pressed to find a single outlet that could be bothered to actually explain how. When an explanation is given, it's usually just regurgitation of Comcast's claim that the cable giant's fending off cord cutting thanks to the company's incredible innovation in the set top box market:
"The turnaround in the cable business helped Comcast beat profit estimates for the fourth quarter. Executives attribute the momentum in their cable-TV business largely to their new video platform, called X1, which makes it easier to search for shows and movies on TV and on Netflix from their cable set-top box."
Except it's not cable box innovation that's helping Comcast fend off cord cutting, it's the company's growing monopoly over the broadband last mile.
In countless markets Comcast competes solely with AT&T and Verizon, who have made it abundantly clear they're no longer interested in the fixed-line residential broadband business. Both companies have made slinging ads and content at Millennials their primary focus, as evident by Verizon's acquisition of AOL and Yahoo and focus on creative new snoopvertising technologies. As a result, these telcos are quite literally trying to drive many of these customers away with a combination of apathy and price hikes. If these users want broadband connections any faster than 3-6 Mbps, their only option is, increasingly, Comcast.
When these users arrive at the nation's biggest cable giant, they discover that signing up for TV and broadband is notably cheaper than just signing up for broadband alone. The problem is: while many have claimed that Comcast's "bucking cord cutting," there's no evidence that many of these users are even watching the cable connections they pay for, nor that they'll stick around as a traditional television viewer long term. Many just signed up because having television was actually less expensive than getting rid of it.
But should they try and get rid of it Comcast's got that angle covered too: the company's growing monopoly means less broadband competition than ever in many of its markets, allowing it to impose draconian and unnecessary usage caps on the company's customers. Caps that apply to competing streaming services, but not Comcast's own content. All told, between bundling and usage caps, Comcast's broadband monopoly means it simply doesn't feel the pain a company would feel in the face of real competition, which is why it has little to no incentive to fix its historically bad customer service.
Often Comcast obfuscates its growing monopoly over broadband and its ham-fisted implementation of usage caps with creative claims of incredible new innovation that gets gobbled up by the press. Like the company's announcement this week that it will soon be letting customers watch Comcast cable TV on Roku devices. This new beta is Comcast's attempt to quiet criticism that emerged during the FCC's failed attempt to bring competition to the monopolized cable box. And, in obedient fashion, the press was quick to highlight the partnership as a surefire example of Comcast's incredible innovation.
But upon closer inspection the service comes with a number of caveats, including the fact that users must subscribe to Comcast cable TV and Comcast broadband, and must pay Comcast an extra fee just to use Roku hardware they already own. Also buried in the FAQ for Comcast's new Roku beta is the proclamation that this service also won't count against Comcast's usage caps:
"Will the XFINITY TV Beta app use data from my XFINITY Internet Data Usage Plan?
No. The XFINITY TV service delivered through the XFINITY TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast's private, managed cable network, so it will not count toward your XFINITY Internet Data Usage Plan. Usage of any other apps on Roku devices, including any TV Everywhere apps accessible with your XFINITY TV credentials, do use the Internet and will count against your XFINITY Internet Data Usage Plan.
Comcast is effectively arguing that this isn't a net neutrality violation (for whatever that's worth with the rules about to be deep sixed by a duopoly-adoring Congress) because the data doesn't travel over the common internet. Still, the function of these added restrictions cumulatively remains the same: to tilt the playing field and keep customers in house and away from competing services. With a growing cable monopoly and the rise of rubber-stamping regulators under Trump, Comcast will soon face less pressure than ever before to shore up its miserable customer service or to lower prices.
That's great news if you're a Comcast executive or investor, but less stellar if you're one of the countless millions of consumers or competitors already bored to tears by several decades of Comcast's anti-competitive behavior and overall dysfunction.
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