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About Karl Bode

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

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Posted on Net Neutrality Special Edition - 26 August 2016 @ 11:51am

How Is This Not A Net Neutrality Violation, Sprint?

from the so-much-for-net-neutrality dept

While the United States' net neutrality rules are certainly better than nothing, we've noted a few times how they contain enough loopholes (and ignore enough hot button topics) as to be more than a little problematic. More specifically, they contain so much wiggle room they let ISPs of all stripes violate net neutrality -- just so long as they're a bit more creative about it. Verizon and Comcast were quick to highlight this when they began cap-exempting their own content, while still penalizing their competitors (without so much as a real peep from the FCC).

T-Mobile pushed these creative barriers further with Binge On, which exempts only the biggest and most popular video services from the company's usage caps (aka "zero rating"). This automatically puts thousands of smaller video providers, non-profits, educational institutions and startups at a notable market disadvantage, but by and large nobody outside of the EFF and academia seems to give much of a damn because a: ill-informed consumers are happy laboring under the illusion that they're getting something for free and b: the public (and by proxy media) is lazy and tired of debating net neutrality.

But the door being opened here leads to a monumental, potentially dangerous shift not only in how broadband service is purchased and sold, but in just how open the internet of the future is going to be.

Last week T-Mobile moved the bar even further with its new T-Mobile One plan, which provides 'unlimited' data, voice and text messaging for $70 per month. Users generally don't like the plan because it's technically more expensive than T-Mobile's previous plans. But it's also saddled with caveats, such as the fact that tethering (using your phone as a modem or hotspot) is throttled to 128 kbps, 'unlimited' technically means 26 GB, and by default all user video is throttled to 480p or 1.5 Mbps by default. Unless users pay T-Mobile a $20 monthly surcharge for HD quality.

Emboldened by T-Mobile and an utterly comatose FCC, Sprint has taken this idea even further, last week unveiling its own not-really-unlimited "Unlimited Freedom" plan with its own set of annoying caveats. Tethering is forbidden, "unlimited" actually means about 23 GB before your full connection is throttled, and by default all video is throttled to 1.5 Mbps, all games are throttled to "up to 2mbps" and all music streams are throttled at "up to 500kbps." That's a god-damned generous definition of unlimited by any measure.

But rejoice, this week Sprint came up with a "solution" for customers who, you know, would like all the services they use to actually work. The company has announced a new "Unlimited Freedom Premium" plan that raises all these arguably arbitrary limits -- if you're willing to shell out an additional $25 per month:

"This plan provides a premium quality mobile streaming experience with HD streaming videos at up to 1080p+, HD music streaming at up to 1.5 Mbps and streaming gaming at up to 8 Mbps."
Again, so we're clear: this is an ISP forcing users to pay more money if they want the services they consume to actually work properly. That's the exact sort of thing net neutrality rules were supposed to prevent. Yet here we are, dancing on a slippery slope, staring down an incredibly fractured, confusing, and potentially exploitable new paradigm for the already uncompetitive broadband sector. And frankly, nobody seems to give all that much of a shit. Either because they're bored of paying attention, or they can't see a few plays ahead on the chess match between net neutrality advocates and large ISPs.

If Sprint and T-Mobile can charge users premium to avoid video, game and music throttling, what prevents Comcast from charging users a premium if they want 4K video streaming to actually work? What stops AT&T from charging users a premium if they want their Steam games to download at full speed? The answer? Nobody, apparently, since the FCC has made it abundantly clear it believes that usage caps, zero rating, and pay-to-avoid-throttling schemes are just creative market experimentation. Except the only creativity on display here involves marketers convincing consumers to root against their own best, self interest.

As noted above, net neutrality violations are still perfectly legal here in the States, you just need a little creative showmanship when shafting the consumer. The FCC's Open Internet Order (pdf) is chock-full of "rules" that don't apply if you provide a bullshit-laden technical justification about how you're only throttling "for the health and security of the network." But congestion has always been used by the telecom industry to justify all manner of bad behavior, including unnecessary usage caps on captive customers. And regulators and the press can rarely be bothered to fact check these congestion claims (remember the exaflood?).

And while spectrum constraints on wireless networks are certainly real, that's no justification for the sea change. If your network can't actually handle unlimited data? Either raise prices transparently to pay for the necessary upgrades, or stop marketing "unlimited" services. What we don't want is the telecom sector with a generation of documented anti-competitive behavior under its belt dictating just how well services perform based on how much users are willing to pay. Because make no mistake, without vibrant, organic market competition (which is only marginally better in wireless) they will abuse the concept like an insatiable swarm of termites.

Initially, I assume both T-Mobile and Sprint will try to argue that this isn't that big of a deal, because users can always switch to metered plans that don't involve charging you more money for un-throttled services. At least until those other plans quietly disappear over a period of months, and paying a premium to actually use content the way it was intended is all the consumer has to choose from. And given that the majority of the public has no idea what a gigabyte even is, these new caveats and the horrible precedent they set will fly (and are clearly flying) right over their collective heads.

I understand that net neutrality is a convoluted and hyperbole-heavy debate that has gone on for more than a decade. As such there's clearly plenty of people happy to labor under the illusion that last June's FCC net neutrality win was the end of the conversation and they can take a nap. It's not, and they can't. We'll be fighting for an open internet for as long as ISPs keep trying creative ways to abuse the lack of last-mile broadband competition. In other words, forever.

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Posted on Techdirt - 25 August 2016 @ 6:37am

Comcast/NBC Tone Deafness, Not 'Millennials' To Blame For Olympics Ratings Drop

from the we'll-adapt-when-we-damn-well-feel-like-it dept

Olympics watchers repeatedly begged Comcast for live opening ceremonies, more live events, less host prattle, and fewer ads ahead of the recent games in Rio. What did Comcast deliver instead? A smorgasbord of abysmal bloviation, tape delays, and so many advertisements that many people stopped watching in disgust. As a result, the Rio Olympics were the lowest rated Summer Olympics since 2000, with average viewership down 17% and an overall audience that was 25% smaller than 2012 in the 18-to-49 demo.

We've already noted how a big reason was Comcast/NBC's absolute refusal to actually listen to paying customers and heed lessons from the cord cutting era. But a Bloomberg headline this week proudly crowed that Millennials were somehow to blame for the slide. Amusingly, the piece cites a comment from NBC exec Steve Burke, who last June described a scenario he said would be a "nightmare":

"We wake up someday and the ratings are down 20 percent,” the chief executive officer of NBCUniversal said at a conference. “If that happens, my prediction would be that millennials had been in a Facebook bubble or a Snapchat bubble and the Olympics have come, and they didn’t know it."
That is, so we're clear, an NBC exec predicting that if NBC's Olympics ratings dropped, it would be the fault of Millennials living in a bubble -- not possibly due to anything NBC did. And with ratings dropping from 17 to 25%, Burke's nightmare scenario effectively came true. NBC is quick to point out that streaming was actually up, but that wasn't able to help an overall dive in ratings. And while Comcast/NBC is quick to insist it's adapting to consumer demand, people young and old found Olympic streaming to be an annoying and cumbersome experience littered with paywalls, delays, authentication issues, and other headaches:
"I’m sure NBC were patting themselves on the backs for how easy it would be to watch online this year, but that’s only true for cable subscribers, a slowly shrinking percentage of the US population, especially for Millennials. The reason NBC is losing Millennials to other platforms for entertainment is because all of those platforms have lowered the barriers to enjoy the programming. I can sign up for Hulu, Netflix, and HBO nearly in an instant. Oh, and did I mention they’re all ad free (with a premium on Hulu)?

Had NBC offered the entire Olympic Platform for a small fee (less than $10), they probably would have seen their Millennial numbers skyrocket. Hell, they could have charged $5 more for an “Ad Free” presentation and padded their pockets even more. But instead, they relied on the old dying models of traditional broadcast network and revenue models of years past, and it bit them in the ass.
Why is streaming so clunky and difficult? Because most cable industry streaming efforts are designed to give the illusion of innovation, flexibility and adaptation, without actually providing any of these. Why? Because offering a truly easy, inexpensive online streaming service (Olympics or otherwise) would cannibalize the traditional cable TV cash cow. As such, easy, flexible and inexpensive streaming remains an intentional afterthought, and will until cord cutting finally reaches critical mass. In short, like so many legacy industries, pay TV won't truly adapt until the house is fully engulfed in flames.

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Posted on Techdirt - 24 August 2016 @ 10:36pm

Engineers Say If Automated Cars Experience 'The Trolley Problem,' They've Already Screwed Up

from the I'm-sorry-I-can't-do-that,-dave dept

As self-driving cars inch closer to the mainstream, a common debate has surfaced: should your car be programmed to kill you if it means saving the lives of dozens of other people? This so-called "trolley problem" has been debated at universities for years, and while most consumers say they support automated vehicles that prioritize the lives of others on principle, they don't want to buy or ride in one, raising a number of thorny questions.

Should regulations and regulators focus on a utilitarian model where the vehicle is programmed to prioritize the good of the overall public above the individual? Or should self-driving cars be programmed to prioritize the welfare of the owner (the "self protective" model)? Would companies like Google, Volvo and others prioritize worries of liability over human lives when choosing the former or latter?

Fortunately for everybody, engineers at Alphabet's X division this week suggested that people should stop worrying about the scenario, arguing that if an automated vehicle has run into the trolley problem, somebody has already screwed up. According to X engineer Andrew Chatham, they've yet to run into anything close to that scenario despite millions of automated miles now logged:

"The main thing to keep in mind is that we have yet to encounter one of these problems,” he said. “In all of our journeys, we have never been in a situation where you have to pick between the baby stroller or the grandmother. Even if we did see a scenario like that, usually that would mean you made a mistake a couple of seconds earlier. And so as a moral software engineer coming into work in the office, if I want to save lives, my goal is to prevent us from getting in that situation, because that implies that we screwed up."
That automated cars will never bump into such a scenario seems unlikely, but Chatham strongly implies that the entire trolley problem scenario has a relatively simple solution: don't hit things, period.
"It takes some of the intellectual intrigue out of the problem, but the answer is almost always ‘slam on the brakes’,” he added. “You’re much more confident about things directly in front of you, just because of how the system works, but also your control is much more precise by slamming on the brakes than trying to swerve into anything. So it would need to be a pretty extreme situation before that becomes anything other than the correct answer."
It's still a question that needs asking, but with no obvious solution on the horizon, engineers appear to be focused on notably more mundane problems. For example one study suggests that while self-driving cars do get into twice the number of accidents of manually controlled vehicles, those accidents usually occur because the automated car was too careful -- and didn't bend the rules a little like a normal driver would (rear ended for being too cautious at a right on red, for example). As such, the current problem du jour isn't some fantastical scenario involving an on-board AI killing you to save a busload of crying toddlers, but how to get self-driving cars to drive more like the inconsistent, sometimes downright goofy, and error-prone human beings they hope to someday replace.

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Posted on Net Neutrality Special Edition - 24 August 2016 @ 6:29am

One More Time With Feeling: Net Neutrality Didn't Hurt Broadband Investment In The Slightest

from the dollar-a-holler-science dept

You'll recall that ISPs (and the lobbyists, think tanks, politicians, and consultants paid to love them) argued incessantly that if we passed net neutrality rules, investment in broadband infrastructure would grind to a halt, leaving us all weeping gently over our clogged tubes. ISPs like Verizon proudly proclaimed that net neutrality rules would "jeopardize our investment and the development of innovation in Broadband Internet and related services." ISP-tied think tanks released study after statistically-massaged study claiming that net neutrality (and the reclassification of ISPs as common carriers under Title II) would be utterly catastrophic for the broadband industry and its consumers alike.

But as time wore on it became abundantly clear that these warnings were the empty prattle of a broken industry, using a thick veneer of bunk science to defend its monopoly over the uncompetitive broadband last mile.

Since net neutrality was passed there has been absolutely no evidence that a single one of these claims had anything even remotely resembling merit, with broadband expansion pushing forward at full speed, constrained only by the ongoing lack of competition in many markets. We've watched as outfits like Google Fiber continue to expand its footprint. We've watched as Verizon suddenly promised to deploy fiber to cities long neglected. We've watched as Comcast and AT&T rushed to try and keep pace with gigabit investments of their own. In short, nothing changed, and things may have even improved.

And now companies like Comcast, AT&T and Verizon are doling out what could be as much as $86.4 billion in what may be the most expensive spectrum auction ever:

"The FCC’s forward auction headed into Round 8 on Monday with a total of more than $11.5 billion in bids, according to the auction dashboard. The figure was up from just $8.5 billion in auction proceeds from the first round of bidding last week. Demand appeared to be holding strong...Forward auction bidders are striving to hit an $86.4 billion price target set by broadcasters in the reverse auction. If demand does not reach supply, then a second reverse auction will be held with a lower clearing target of 90 MHz, the FCC has said.
You'd think that carriers tripping over themselves to pursue fifth-gen (5G) wireless alone would be enough to put onerous claims about the negative impact of net neutrality rules to bed. But you'd be wrong. Revolving door regulators like Verizon lawyer turned FCC Commissioner Ajit Pai have consistently tried to claim that net neutrality somehow stifled investment, we just apparently didn't notice. Other sector chicken littles have turned to citing unrelated business downturns to try and obfuscate how full of crap the lion's share of these organizations and consultants were on the subject of net neutrality.

Tech Freedom, for example, spent some time last week rewteeting claims that Cisco's decision to lay off an estimated 5,500 employees was somehow thanks to net neutrality:
Except Cisco's global layoffs have nothing to do with some relatively simple net neutrality rules passed in the States. Cisco is downsizing because of the rise in virtualization and the company's shift from its hardware roots into a software-centric organization, something the company itself admits, and something you'd think an economist would understand. This conflation attempt isn't unique. Industry-tied think tanker Hal Singer has done yeoman's work the last year or two trying to claim networking investment is down despite all evidence pointing to the contrary.

Singer, whose study played the starring role in the industry's manufactured denial, continued to beat the same drum beat on Twitter last week:
But as noted previously Singer's 8% stat comes from his own study. A study repeatedly criticized for cherry-picking unrelated data to intentionally indicate a network investment downturn that doesn't exist. In many instances he included companies whose CAPEX was dropping because they'd just finished major deployments (Charter's finished deployment of new digital set top boxes, for example). Elsewhere, Singer and other think tankers have tried to claim that CAPEX reductions and cost savings due to the rise in software-defined networking (SDN) and network function virtualization (NFV) were actually caused by net neutrality.

Ironic, then, that Singer took to The Hill to pen an op-ed accusing the FCC of playing fast and loose with empirical evidence when it comes to efforts like net neutrality or cable box reform:
"It is simply irresponsible for regulators to rely on gut feelings – or political pressure or public opinion polls. Rather they should be guided by empirical evidence, rigorous analysis of regulatory costs and benefits and basic economic principles taught on every college campus across the country together. What matters most is not the sheer number of docketed public comments or the enthusiasm of those blockading of the Chairman’s driveway, but instead a sober analysis of the need for regulation in light of proven market failures."
Again, that's an ISP-funded think tanker, freshly proven incredibly, repeatedly, and quite-possible intentionally wrong across numerous fronts, blasting the FCC for ignoring actual economic data. Gosh, it's almost as if these folks are paid to be as intellectually rigid as possible, utterly immune to any attempts at honest discourse when presented with conflicting evidence. Do you get to give people lectures on economics and integrity when your bunk studies are used repeatedly to smear net neutrality rules designed to aid consumers, startups and small businesses nationwide? Apparently.

In short, ISPs and their "dollar-a-holler" think tankers used crap science and economics to intentionally mislead the public on net neutrality, but their predictions have been proven repeatedly and painfully wrong. But instead of acknowledging error and moving on to the next misleading argument, they've decided to double down and promote a broadband investment cataclysm that never actually happened.

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Posted on Techdirt - 23 August 2016 @ 4:26pm

The EFF Calls Out Microsoft's Ongoing Bullshit On Windows 10 Privacy Concerns

from the talking-out-of-both-sides-of-your-mouth dept

While Windows 10 is generally well-liked by reviewers and users, it's relatively clear that it's not the OS to choose if you actually want to control how much babbling your OS does over the network. While a lot of complaints about Windows 10 have been proven to be hyperbole or just plain wrong (like it delivers your BitTorrent behavior to Hollywood or it makes use of menacing keyloggers), Windows 10 is annoyingly chatty, sending numerous reports back to Microsoft even when the operating system is configured to be as quiet and private as possible.

While Microsoft has been criticized for this behavior for some time now, the general response out of Redmond has been to tap dance over, under and around most of the key complaints.

Enter the Electronic Frontier Foundation, which last week effectively called on Microsoft to stop bullshitting everybody in terms of what gets collected and why. The EFF does a good job reiterating how Microsoft used malware-esque tactics to get users to upgrade, then once installed, Windows 10 collects user location data, text input, voice input, touch input, web browsing history, and general computing telemetry data, including which programs you run and for how long -- which would be arguably less of an issue if you had full control over how much of this data was collected and funneled back to the Redmond mothership.

Microsoft has made some modest changes to address ballooning concern about user privacy over the last year, but the EFF notes that the company continues to tap dance around how much data is collected, what the company is doing with it, and why users can't have full privacy control over an OS they purportedly own:

A significant issue is the telemetry data the company receives. While Microsoft insists that it aggregates and anonymizes this data, it hasn’t explained just how it does so. Microsoft also won’t say how long this data is retained, instead providing only general timeframes. Worse yet, unless you’re an enterprise user, no matter what, you have to share at least some of this telemetry data with Microsoft and there’s no way to opt-out of it.
Microsoft has tried to argue that Windows Update won't work if telemetry reporting is minimized and user privacy and preferences are actually protected. In short, Microsoft has tried to claim that giving users broader control puts the user at risk by hamstringing security updates. That's something the EFF is quick to call bullshit on, calling it a "false choice" that's "entirely of Microsoft's own creation." What Microsoft should do if it truly values its customers, the EFF argues, is dramatically ramp up company transparency and finally offer a meaningful, simple opt-out functionality:
Microsoft should come clean with its user community. The company needs to acknowledge its missteps and offer real, meaningful opt-outs to the users who want them, preferably in a single unified screen. It also needs to be straightforward in separating security updates from operating system upgrades going forward, and not try to bypass user choice and privacy expectations.
In response to the EFF, Microsoft has continued to do what it has always done: pretending that nothing is wrong, customer control and privacy are the company's highest priorities, and these privacy concerns are overblown because, shucks, most people really like the OS:
Microsoft is committed to customer privacy and ensuring that customers have the information and tools they need to make informed decisions. We listened to feedback from our customers and evolved our approach to the upgrade process. Windows 10 continues to have the highest satisfaction of any version of Windows.
Granted that may say more about past interactions of Windows than of Windows 10. Even then, because people generally like the core OS experience Windows 10 offers doesn't magically dismantle concerns that Microsoft still, more than a year after launch, isn't actually listening to its customers when it comes to privacy and control.

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Posted on Techdirt - 23 August 2016 @ 6:32am

Your 'Smart' Power Outlets Are Now Botnets Thanks To The Internet Of Broken Things

from the I-just-hacked-your-stapler dept

Making fun of the Internet of Things has become a sort of national pastime, made possible by a laundry list of companies jumping into the space without the remotest idea what they're actually doing. When said companies aren't busy promoting some of the dumbest ideas imaginable, they're making it abundantly clear that the security of their "smart," connected products is absolutely nowhere to be found. And while this mockery is well-deserved, it's decidedly less funny once you realize these companies are introducing thousands of new attack vectors in every home and business network the world over.

Overshadowed by the lulz is the width and depth of incompetence on display. Thermostats that fail to heat your home. Door locks that don't protect you. Refrigerators that leak Gmail credentials. Children's toys that listen to your kids' prattle, then (poorly) secure said prattle in the cloud. Cars that could, potentially, result in your death. The list goes on and on, and it grows exponentially by the week.

The latest gift of the Internet of Things industry, revealed last week by security researchers at Bitdefender, is smart electrical sockets that can be hacked to hand over e-mail credentials, create a botnet, or (potentially) burn your house down by firing up connected appliances. The devices are sold as an amazing new tool to help create a connected home, allowing users to manage any device plugged into them via a smartphone and/or the internet. The problem, as usual, is an (unspecified) company that treated security as an afterthought. From the full Bitdefender research paper:

"Bitdefender researchers observed that the hotspot is secured with a weak username and password combination. Furthermore, the application does not alert the user to risks associated with leaving default credentials unchanged. Changing them can be done by clicking ‘Edit’ on the name of the smart plug from the main screen and choosing a new name and a new password.

Secondly, researchers noticed that, during configuration, the mobile app transfers the Wi-Fi username and password in clear text over the network. Also, the device-to-application communication that passes through the manufacturer’s servers is only encoded, not encrypted.
That's not just bad security, that's yet another company that's not even trying. And not even trying, it should be added, despite a constant flood of news reports that have demolished an endless list of different brands for failing to embrace things like fundamental encryption. We're building a mansion out of flammable toothpicks and empty promises, and as Bruce Schneier recetly noted, it's really only a matter of time before the check comes due on a fairly massive scale.

And while security is a big part of the problem, equally troubling is the rise of "smart" products that stop working once the company's manufacturer gets bored or sold. Like, you know, connected light bulbs that no longer really connect to much of anything:
"Earlier this month, our colleague and Consumerist reader Michelle spotted a great deal on some Connected by TCP smart lightbulbs she’d been eyeing for her home. Before buying, she checked to see if they’d be compatible with her Amazon Echo or Wink app, and it’s good that she checked first. As it turns out, those bulbs are no longer compatible with any device, app, or hub, because TCP pulled the plug on their server as of June 1.
Whoops, sorry! Not only is the Internet of Things a total shit show when it comes to security and privacy, you also don't really own the things you buy, creating a universe of new possibilities when it comes to dysfunction, fraud, and misleading advertising promises. There are plenty of reasons why this incompetence is coming home to roost, though the simplest is that many companies were just too cheap and lazy to invest in quality kits, research and technology, and most IOT "evangelists" were too focused on self-promotion to much care about the fact that they were selling us an industrial-grade disaster.

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Posted on Net Neutrality Special Edition - 22 August 2016 @ 8:35am

T-Mobile, Sprint Tap Dance Over, Under, And Around Net Neutrality

from the bad-precedent dept

For some time now T-Mobile has been accused of violating net neutrality by exempting the nation's biggest video services from its usage caps, and throttling all video on the network by default to 1.5 Mbps or 480p. Net neutrality advocates have repeatedly warned that giving some content or companies a leg up and fiddling with service quality sets a horrible precedent, and research has shown T-Mobile's system to be unreliable and exploitable. Still, T-Mobile has so far received applause from many regulators, media outlets and customers operating under the belief consumers are getting something for free.

As such, however bad the precedent being set here, there's no real political pressure on the FCC to act since consumers are effectively applauding what many believe to be a net neutrality violation. The FCC's net neutrality rules don't specifically prohibit zero rating, something we've long argued opens the door to creative abuses of net neutrality to thunderous applause, which is effectively what's happening here. The rules do require the FCC to explore whether zero rating is anti-competitive on a "case by case" basis, but so far, outside of a few letters, the FCC doesn't seem particularly pressed to take action.

Last week, T-Mobile introduced a new wrinkle to the entire saga by unveiling a new plan named T-Mobile One. Under T-Mobile One, users get "unlimited" data (technicaly 26 GB, after which you're throttled to 128 kbps), text and voice for $70 per month. But under this new plan, users find all video services throttled by default to 1.5 Mbps or 480p. If you want to stream video at any higher rate, you'll need to pony up an additional $25 per month. Groups like the EFF were quick to argue that the new plans still violate net neutrality:

"From what we’ve read thus far, it seems like T-Mobile’s new plan to charge its customers extra to not throttle video runs directly afoul of the principle of net neutrality," said EFF senior staff technologist Jeremy Gillula.
Right, but violating net neutrality principles and net neutrality rules is not the same thing. It's generally believed the FCC didn't crack down on T-Mobile's original plans because the FCC's Open Internet Order (pdf) not only didn't ban zero rating, but it stated that some throttling is ok if it's "a choice made by the end user." Because users could opt out of T-Mobile programs Binge On and Music Freedom, T-Mobile had creatively managed to inhabit an area not really outlawed by the agency's net neutrality rules.

But the EFF argues elsewhere that T-Mobile's decision to specifically discriminate against a particular type of traffic (in this case video) could ultimately violate the FCC's net neutrality rules:
...Gillula argues that the throttling of all video might violate the rule, despite the option to pay for high-speed video. He pointed to a sentence later in the same paragraph that says, "if a broadband provider degraded the delivery of a particular application (e.g., a disfavored VoIP service) or class of application (e.g., all VoIP applications), it would violate the bright-line no-throttling rule."

"If you just substitute 'video' in for 'VoIP,' it's pretty clear that the FCC's intent was to prevent discriminatory throttling, even if the user could pay to avoid it," Gillula told Ars. "In other words, the FCC (and EFF) are just fine with ISPs offering different tiers of service, as long as the tiers don't discriminate against different types of content. But that's precisely what T-Mobile is doing here—discriminating against data based on its content."
Given past statements one gets the sense that the FCC isn't all too worried about the obvious, problematic impact usage caps and zero rating may have on the open Internet. But we're quickly getting to the point where the FCC needs to at least help detail where the line is drawn, one way or another. T-Mobile's experiments last week resulted in Sprint unveiling similar "unlimited" data plans of their own, which also throttle all video to 480p by default unless you pay a premium for higher resolution. But you'll note Sprint goes even further:
Unlimited Freedom utilizes optimization for streaming video, gaming and music, delivering a high-quality viewing experience for mobile devices with video streams of up to 480p resolution, gaming up to 2mbps and music streams at extreme quality of up to 500kbps.
If you'll pause with me at the very top of this long and slippery slope and look down, folks with even the faintest tea leaf reading ability should be able to envision one possible future where all broadband access is fragmented and fractured in just this fashion, users paying more or less for varying qualities of different content and services. This was, if you'll recall, the sort of thing net neutrality rules were designed to help us avoid. T-Mobile opposed Title II and real net neutrality rules for obvious reasons, and groups like the EFF (quite correctly) worry T-Mobile is now happily chipping away at the very foundation of an open internet...to thunderous public applause.

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Posted on Techdirt - 18 August 2016 @ 10:47am

Allegations Of Dysfunction Continue To Plague FirstNet, Our $47 Billion (And Growing) National Emergency Network

from the history-repeats-itself-history-repeats-itself dept

When first responder communications networks failed after 9/11, the government decided to build a nationwide wireless emergency communications network that would actually work. It took a decade of general histrionics and dysfunction by Congress, but in 2012 the Middle Class Tax Relief and Job Creation Act formally created the First Responder Network Authority (FirstNet). FirstNet is an entirely new federal agency tasked with coordinating the build of a 700 MHz LTE-based coast-to-coast emergency broadband network.

But since its creation the effort (tell us if you've heard this one before) has been plagued with dysfunction, allegations of incumbent carrier cronyism, and stories of people getting paid a significant sum of money despite not actually producing anything of note. Fifteen years after 9/11 and four years after FirstNet was formally created, the program is showing only modest signs of progress. According to a new report in The Atlantic, completion projections for the project are now reaching $47 billion, without much of anything to show for it so far:

"It took FirstNet two years just to recruit a skeleton staff, only to be hit by an inspector general’s report that found potential conflicts of interest and problems with the awarding of initial consulting contracts. It then took another two years to issue a request for proposal (RFP) asking contractors to bid on the work to build and operate the system."
That RFP finally emerged in January, with the two most likely contenders being AT&T and Verizon, both already firmly entrenched in our domestic intelligence gathering efforts:
"The FirstNet RFP, which finally emerged in January, seeks one company to operate the nationwide system. (Verizon, AT&T, and one or more firms that would gather dozens of regional partners into a consortium are the likely players.) The bidders have to offer to pay FirstNet at least $5.6 billion spread over 25 years in return for the bandwidth that FirstNet would make available to them.

The winner (presumably, whichever company bids the most above $5.6 billion, while also demonstrating it can do the job) can then sell the FirstNet network to police and fire departments, hospitals, and other first responders, one by one."
If you've been playing along at home, you'll recall that both AT&T and Verizon have a long, proud history of taking billions in subsidies and tax breaks for next-generation networks repeatedly left half completed. AT&T, as we've well documented, has a prodigious history of fraud, whether it's ripping off low-income families, the hearing impaired, various school districts or the company's own customers. While the nation's top two wireless carriers make sense as the best positioned to win the contract, they're also the most likely to milk the program for every extra penny it's worth while doing the bare minimum required.

Not too surprisingly, the Atlantic article has reportedly upset those working on FirstNet, even though it's far from the first report of this kind. The above-cited report by the Office of Inspector General of the Department of Commerce initially found numerous conflicts of interest on the FirstNet board, with many board members playing fast and loose with conflict reporting rules. It's worth noting that many of these original board members (like FirstNet GM and former Verizon exec Bill D'Agostino) have already moved on, but these problems set the stage for the kind of dysfunction we've seen time and time again in telecom.

Estimates suggest the contract will be worth around $100 billion to the company that wins it, with the winner grabbing not only the lion's share of fees paid by state customers, but the right to sell off excess capacity to private companies and consumers. Winners are expected to be announced in November. And while the project may be well-intentioned and even necessary, it's painfully unclear if the U.S. government is actually capable of completing it without giving a master class in telecom waste, fraud and abuse. History, quite simply, just isn't on the project's side.

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Posted on Techdirt - 18 August 2016 @ 9:36am

DirecTV Faces RICO Class Action For Bungling Business Installs, Then Demanding $15,000 For Theft Of Service

from the thieves-and-liars dept

For several years now DirecTV (now owned by AT&T) has been the focus of a series of lawsuits focused on the NFL's Sunday Ticket exclusive arrangement. More specifically, the lawsuits have claimed that the exclusive arrangement violates antitrust law, resulting in a monopoly that charges often absurd prices to small businesses. Sports bars in particular have to shell out payments of up to $122,895 per year for NFL Sunday Ticket, while those same bars pay significantly less for Major League Baseball's comparable offering.

But a new lawsuit filed against DirecTV this week accuses the company of something notably different. Doneyda Perez, owner of Oneida's Beauty and Barber Salon in Garden Grove, has filed a RICO class action against DirecTV for intentionally selling businesses residential-class TV service, then hitting these customers with penalties of up to $15,000 several years later for failing to subscribe to business-class service. There's a lot to go through in this case, but before we start, it's at least worth pointing out that RICO class action cases are almost always ridiculous -- even if there does appear to be questionable behavior here.

Since at least 2013 customers have complained that DirecTV salesmen and installers visit what they clearly see are businesses, sell them residential TV service, and don't even mention that DirecTV offers anything else. Then, a few years later, "investigators" employed by DirecTV show up snooping around, without making it particularly clear who they are or what they're doing. This was documented in a different 2013 Dallas Morning News Story about the same practice:

"The man sitting at the counter at Zeke’s Kitchen restaurant in Garland is acting suspicious. He doesn’t want any food but takes a glass of water. He says he’s waiting on a friend, but no one shows up. He asks that the channel be changed on the restaurant TV. Then the man steps outside and begins taking pictures of the restaurant. When owner Brandon “Zeke” Roberson asks him what he’s doing, the man runs off. Roberson’s wife, Julie, thinks it’s suspicious enough that she makes a note of it on the restaurant office’s calendar: “Very strange acting man. Ran off when Brandon asked why he was taking pictures outside."
Only later do the businesses realize that the investigator works for DirecTV, which then demands huge payments for unpaid back bills from what are often small and struggling companies:
"The man is a fraud investigator for DirecTV, sent to find out if the Robersons are TV signal thieves. Did they sign up for a residential TV account but use it at their commercial establishment? In June, DirecTV cuts off the restaurant’s service. Then DirecTV’s collection lawyers notify the Robersons that they owe $15,000 in back bills. It’s the darkest day in the restaurant’s history. So much so that the couple have to close the place to catch their breath."
Their lawyers dig in only to find this is a pretty common occurrence nationwide, citing "hundreds" of similar occurrences -- something seemingly supported by this latest class action. While it's possible that poorly trained subcontracted installers are playing a role in not adequately informing businesses of their options (one installer admits as much), DirecTV consistently decides to pursue massive penalties anyway. And AT&T, which bought DirecTV for $69 billion last year, isn't exactly trying hard to make things right, informing the media this week that this is just an issue of "basic fairness":
"This is a matter of basic fairness for all of our customers,” AT&T said to FierceCable in a statement. “Businesses that are not paying commercial rates for programming are taking unfair advantage of neighboring businesses that do. We are confident these claims will be rejected."
So yes, it's just "basic fairness" to sell a business one class of service, then turn around and demand they need to shell out $15,000 because your salespeople and installers are at worst part of a plan to defraud paying consumers, and at best clueless about the product they're selling.

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Posted on Techdirt - 18 August 2016 @ 8:36am

Remember Claims That Cord Cutting Was On The Ropes? It's Actually Worse Than Ever

from the numbers-don't-lie dept

Despite the obvious realities that ratings are down and consumers are cutting the cord, there's a vibrant and loyal segment of executives and analysts who still somehow believe cord cutting is a myth. Every few months, you'll see a report about how cord cutting is either nonexistent or overstated. Earlier this year, these voices were quick to argue that the industry had cord cutting on the ropes because several of the biggest cable providers saw modest subscriber gains in the fourth quarter (ignoring several that saw net subscriber losses for the year).

Those folks have been pretty damn quiet the last few weeks as second quarter earnings show cord cutting is worse than ever.

A new report by Leichtman Research notes that the pay TV industry collectively lost about 665,000 net video subscribers last quarter, a number some other analysts say was closer to 757,000. Dish Network alone lost 281,000 subscribers, while the new, larger Charter (after acquiring Time Warner Cable and Bright House Networks) lost 143,000 subscribers. "Phone" companies were hit particularly hard, telcos alone losing 500,000 subscribers in just one quarter. In fact, with AT&T and DirecTV now being one company, every single pay TV provider saw a net loss in TV subscribers during Q2:



It's kind of hard to spin this kind of bloodshed, so cord cutting denialists are likely to remain quiet -- at least for a few months.

Most analysts believe that these losses are due in large part to folks that are moving to a new home or apartment, and not bothering to sign back up for cable when they do. But if you factor in that these numbers aren't scaling alongside housing growth, things are even uglier than the numbers indicate. But because companies like Comcast occasionally see quarters with very modest subscriber gains (thanks in part to their monopoly over broadband and bundling), you'll still somehow see folks trying to argue that cord cutting is either non-existent or an over-hyped fad.

But occasionally somebody will step back and take an intelligent big picture look at the numbers, making the overall trend pretty damn apparent:
None of this is to say that cable providers couldn't quickly change the entire narrative by simply competing more seriously on TV service price (at the cost of higher broadband bills, of course). But instead, most cable sector executives still desperately cling to the narrative that cord cutting is a fad that stops once Millennials procreate. This is, they clearly believe, just a touch of cash cow indigestion that will magically resolve itself, so there's no reason to stop hitting consumers with biannual rate hikes for bloated bundles of unwatched channels.

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Posted on Techdirt - 18 August 2016 @ 6:33am

Think Tank Argues That Giving Up Privacy Is Good For The Poor

from the hurting-the-poor-helps-the-poor dept

With ISPs like AT&T now charging broadband customers a steep premium just to protect their own privacy, the FCC has begun looking at some relatively basic new privacy protections for broadband. This has, as you might expect, resulted in a notable bump in histrionics from the industry. Comcast, for example, quickly tried to inform the FCC that charging users a surcharge for privacy was ok because it would somehow magically lower broadband prices, and banning them from this kind of behavior would do a tremendous disservice to the internet at large.

Anybody even marginally aware of the lack of competition in broadband understands this is just another attempt to take advantage of captive customers in a broken market. But the broadband industry quickly doubled down, using the usual assortment of payrolled think tanks to pollute the discourse pool. The Information Technology & Innovation Foundation (ITIF), for example, was quick to try and claim that charging all broadband users steep premiums for privacy would generate huge benefits for the entire "internet ecosystem," and that anybody who couldn't see the genius of such a practice was an "absolutist."

But a think tank by the name of the Technology Policy Institute has doubled down on the already dumb double down, with an op-ed at the Hill that tries to claim that such a privacy surcharge would actually help the poor:

"'Pay-for-privacy' plans disproportionately benefit lower-income individuals. Indeed, the notion that offering an additional option would be detrimental to any consumers, whatever their income, is misguided..."A plan that offers a discount in exchange for data may enable a lower-income consumer both to have internet service and pay for groceries. Depriving the consumer of that choice may put the internet connection out of reach."
Pause with me to understand what's being claimed here for a moment. Mr. Thomas M. Lenard is actually trying to claim that adding a privacy surcharge to what's already some of the most expensive broadband in the developed world will somehow help the poor buy groceries. I've seen a lot of nonsense in sixteen years writing about telecom, but this latest storm of disinformation surrounding the FCC's new privacy push should qualify for some kind of award.

Like AT&T and Comcast, these think tanks are violently misrepresenting what's actually happening here. AT&T charges its U-Verse broadband customers $528 to $792 more every year (up to $62 more per month) to opt out of the company's Internet Preferences program, which uses deep packet inspection to track your online behavior -- down to the second. Not only is that not anything close to a discount, but AT&T makes opting out as cumbersome as possible. The hope is to heavily penalize opting out and to actively punish broadband users that protect their own privacy.

ISPs consistently try to argue that they shouldn't be regulated differently from Google and Facebook on privacy, and that argument surfaces again here:
"AT&T is giving the subscriber the opportunity to allow advertisers to pay part of the subscription fee. What would be the rationale for allowing Google to offer advertising-supported service but not AT&T?
(Raises hand) Because AT&T and Comcast enjoy a duopoly or monopoly over the last mile? Google or Facebook customers unhappy with their privacy policies can simply stop using these services (imagine the exodus by customers of either company if they tried to charge money to opt out of select privacy practices?). Broadband customers, in contrast, have nowhere to flee if one or both of their broadband options engages in hostile privacy practices the likes of which we're seeing here. Because AT&T, Verizon and Comcast are pushing harder into content and online ads doesn't change this underlying reality.

Between privacy surcharges, Verizon's getting busted for covertly modifying user packets to track user behavior, and cable companies bragging how they provide worse customer service for low credit customers, most people should be able to understand why the FCC thinks it may be time for some basic broadband privacy rules. Given that an informed broadband subscriber with the tools to protect their privacy could potentially cost these companies billions, it should also be easy to understand why think tanks and the ISPs that fund them have ratcheted up attempts to derail the effort using some of the most ridiculous arguments imaginable.

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Posted on Techdirt - 17 August 2016 @ 4:20pm

NPR The Latest Website To Prevent You From Commenting Because It Simply Adores 'Relationships' And 'Conversation'

from the this-muzzle-represents-my-love-for-you dept

For several years now we've documented the rise in websites that shutter their comment sections, effectively muzzling their own on-site communities. Usually this is because websites are too lazy and cheap to moderate or cultivate real conversation, or they're not particularly keen on having readers point out their inevitable errors in such a conspicuous location. But you can't just come out and admit this -- so what we get is all manner of disingenuous prattle from website editors about how the comments section is being closed because they just really value conversation, or are simply trying to build better relationships.

NPR appears to be the latest in this trend du jour, with Managing Editor of digital news Scott Montgomery penning a new missive over at the website saying the comments are closing as of August 23:

"After much experimentation and discussion, we've concluded that the comment sections on NPR.org stories are not providing a useful experience for the vast majority of our users. In order to prioritize and strengthen other ways of building community and engagement with our audience, we will discontinue story-page comments on NPR.org on August 23."
Again, nothing says we "love and are engaged with" our community quite like preventing them from being able to speak to you on site (this muzzle represents my love for you, darling). The logic is, as Montgomery proceeds to proclaim, that social media is just so wonderful, on-site dialogue is no longer important:
Social media is now one of our most powerful sources for audience interaction. Our desks and programs run more than 30 Facebook pages and more than 50 Twitter accounts. We maintain vibrant presences on Snapchat, Instagram and Tumblr. Our main Facebook page reaches more than 5 million people and recently has been the springboard for hundreds of hours of live video interaction and audience-first projects such as our 18,000-member "Your Money and Your Life" group.
And while those are all excellent additional avenues of interaction and traffic generation, it's still not quite the same as building brand loyalty through cultivating community and conversation on site. By outsourcing all conversation to Facebook, you're not really engaging with your readers, you're herding them to a homogonized, noisy pasture where they're no longer your problem. In short, we want you to comment -- we just want you to comment privately or someplace else so our errors aren't quite so painfully highlighted and we no longer have to try to engage you publicly. All for the sake of building deeper relationships, of course.

Montgomery talked a little more about NPR's decision on Twitter, where Mathew Ingram (one of roughly three writers I've found who gives two flying damns about the negative impact of this trend) politely pondered if NPR really tried all that hard before giving up:
Except, as we've noted time and time again, studies show that it's not really that hard to cultivate a healthier on-site comment section simply by showing up. Just having a writer or editor show up and treat readers like human beings dramatically improves the overall tone of the conversation. This isn't something that requires all that much time and effort. But because editors can't clearly quantify the benefits of giving a damn in this fashion, they've decided it's easier and cheaper to just give up.

Elsewhere on NPR's website user reaction to the news has been overwhelmingly negative, with many users saying they don't have social media accounts and appreciated the on-site ability to have vaguely intelligent conversation. Says one user:
They're getting rid of a great community of discussion. It's the best forum I've known, with people from all walks of life discussing the news with a moderate amount of intelligence, and a healthy dose of wit. I'm pretty upset. After the comments go, I won't visit NPR much anymore. There's not much content compared to other sites. It was the discussion that kept me coming back.
Another reader offers a more blunt take:
And the "public" in public radio goes away, except for the pleas for money. There's no interaction any more, emails are ignored, Twitter is useless, and Facebook is a gross invasion of privacy. Sad NPR. And worse that the supposed advocate for the listener backs the decision. Perhaps if NPR had actually involved itself with the commenting instead of isolating and offshoring it, you would have found that things would have worked better for you.
Sadly, like Bloomberg, Recode, Reuters, Popular Science, and other sites, NPR and Montgomery round out the announcement by claiming that muzzling your community somehow illustrates a love of "deeper relationships" and "conversation":
In the eight years since NPR first launched its online comment section, the world of social media has changed dramatically, as has NPR's digital presence. We're constantly asking ourselves where we can create the best dialogue with you and how we can deepen that relationship. It's a question we will keep asking because the way we communicate online will keep changing. We're looking forward to continuing the conversation.
That sounds so much lovelier than "nobody in our writing or editorial staff wants to take the time to cultivate local on-site community," "we're lazily cutting corners" or "we don't like having our mistakes highlighted publicly right below our articles," don't you think?

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Posted on Techdirt - 17 August 2016 @ 6:50am

Comcast Fancies Itself The Tesla Of Cable

from the we're-innovative-if-we-say-we-are dept

Despite offering some of the worst customer service ever documented, Comcast has been busy lately trying to convince anybody who'll listen that it's on the cusp of becoming a Silicon-Valley-esque innovation giant. That's an uphill climb for those familiar with the company's often biannual TV rate hikes, attacks on net neutrality, or the company's ongoing quest to sock uncompetitive markets with usage caps. High prices aren't just a result of Comcast's monopoly domination, you see, they're reflections of the incredible value being delivered unto consumers by an innovation engine, the likes of which the universe has never seen.

This argument that high cable and broadband prices reflect premium quality is an idea the cable industry has used for years. Before the company was acquired, Time Warner Cable CEO Rob Marcus tried to proclaim that the company's high prices were because it was the "Mercedes" of cable. Continuing this metaphor, Comcast recently told its hometown paper that it too only charged so much because it sees itself as the Mercedes or Tesla of the cable industry:

"We kind of don't want to be Netflix. We don't want an $8 or $9 product," said Sree Kotay, Comcast's former chief software architect and now chief technology officer and executive vice president in the cable division.

"Not to knock them or anything, but we want to be a Tesla or a Mercedes and be a premium product," Kotay said. "The point of empowering our product and development teams is fundamentally not just about direction and ambition, it's also about tapping into their creativity, and that's how you make great products."
Yeah, not to knock a Silicon Valley company that has actually been innovative, but we're a luxury brand worth every penny because we say so. Obviously, reality doesn't work that way. Companies that deliver premium product also deliver premium support. Take a look, for example, at Comcast's rating on the American Customer Satisfaction Index (59), and then compare it to companies like Apple (81) or Amazon (83). Even the IRS scores higher than Comcast ever has. And that's thanks, of course, to Comcast having among the worst customer support in the history of modern American industry.

Still, the Philadelphia Inquirer proceeds to do yeoman's work insisting that Comcast's now a hipper, riskier, more innovative company. Why? Because it now has foosball tables and its pricey, locked-down cable boxes suck slightly less than they used to:
"It's part of a big transformation taking place at Comcast: converting a suit-and-tie cable company into a risk-taking Silicon Valley-like tech company that can drive revenue growth outside the cable bundle."
Except so far there's no indication that's actually true. While Comcast continues to claim its new, modestly successful X1 cable box is the evidence of a profound sea change at the company, Comcast continues rumbling along with a primary focus on turf protection and harming companies actually busy disrupting.

The cable giant has been fighting tooth and nail against the FCC's quest to bring more competition to the cable box, delivering cheaper, better set tops to all. It has been working tirelessly at capping and metering its broadband customers so that Netflix streaming is more cumbersome and costly. It lobbies for state laws that hamstring innovative public/private solutions to rural broadband gaps. It uses disgusting tactics to fight net neutrality rules protecting startups and consumers from entrenched monopolists. This is a company that thinks it has a right to charge broadband users more for basic privacy.

But yes, other than historically low satisfaction ratings, violent disdain for its customers, and a well-documented history of screwing real innovators and disruptors at every conceivable opportunity, Comcast is just like any other, hungry and innovative Silicon Valley startup. Congratulations, Comcast.

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Posted on Techdirt - 16 August 2016 @ 4:22pm

Google Fiber Hasn't Hit A 'Snag,' It's Just Evolving

from the disruption-ain't-easy dept

When Google Fiber jumped into the broadband market in 2011, the company knew full well that disruption of an entrenched telecom monopoly would be a slow, expensive, monumental task. And five years into the project that's certainly been true, the majority of Google Fiber launch markets still very much under construction as the company gets to work burying fiber across more than a dozen looming markets. Wall Street, which initially laughed at the project as an experiment, has been taking the project more seriously as Google Fiber targets sprawling markets like Atlanta, Chicago, and Los Angeles.

This week however things took an interesting turn with the news that Google Fiber was pausing deployments in Silicon Valley and Portland, Oregon, to take stock of possible wireless alternatives. Neither deployment was formally official (both cities were listed as "potential" targets); and Google Fiber execs are simply considering whether or not it makes financial sense to begin using some fifth generation (5G) technologies to supplement existing fiber deployment.

This isn't really surprising; Under the guidance of former Atheros CEO Craig Barratt, Google has filed applications with the FCC to conduct trials in the 71-76 GHz and 81-86 GHz millimeter wave bands, and is also conducting a variety of different tests in the 3.5 GHz band, the 5.8 GHz band and the 24 GHz band. The company also recently acquired Webpass in the hopes of supplementing fiber with ultra-fast wireless wherever possible. Wireless has been on Google's radar for several years. It's a great option in cities where construction logistics are a nightmare, or in towns where AT&T's using regulations to hinder fiber deployment.

Oddly though, as the week wore on, the narrative in the press began to mutate from one focusing on Google Fiber's evolution, to one suggesting that Google Fiber was somehow in trouble. Reports sprung up arguing that Google Fiber was somehow shocked by the steep costs of deploying broadband, ill-prepared for the realities of the telecom market (certainly a narrative incumbent ISP competitors would prefer). Certain stock jocks were quick to proclaim that Google Fiber was somehow backtracking on the initiative:

"Some analysts see the delays as indications that Google Fiber is more strategy than product -- an attempt to get competitors, cities and other service providers to install fiber networks that would foster faster and more widespread consumption of Google's online offerings. "It's not clear (Google was) ever all that serious about doing this at any real size," said MoffettNathanson Research analyst Craig Moffett.
While Google Fiber was initially seen as a creative way to light a PR fire under lazy broadband incumbents (and that certainly is part of the goal), ongoing construction in Charlotte, San Antonio, Austin, Kansas City, Raleigh, Nashville, Atlanta and countless other markets is continuing slowly but largely as normal, with Google Fiber simply getting more bullish on wireless as the technology evolves. That's not really a "snag," especially if you consider that Google Fiber has been making its interest in wireless as a supplemental technology clear for several years now.

Most of the narratives that Google Fiber is somehow in trouble appear to have originated with a Wall Street Journal story suggesting that Google Fiber was in over its head:
"Google parent Alphabet Inc. is rethinking its high-speed internet business after initial rollouts proved more expensive and time consuming than anticipated, a stark contrast to the fanfare that greeted its launch six years ago."
Except Google Fiber isn't "rethinking" the entire business, nor has it hit a "snag." It's simply riding the evolutionary currents, realizing that it needs to embrace multiple concurrent solutions if it wants to get many of these cities up and running sometime this century. In addition to wireless, Google Fiber has embraced a number of other new efforts for the ISP, such as its plan to offer service over a planned municipal fiber build in Huntsville, Alabama, or its plan to begin offering service in Atlanta and San Francisco over existing fiber networks.

Building a nationwide network from the ground up in the face of regulatory capture is hard as hell, and only companies with Alphabet's deep pockets and lobbying muscle are even willing to try at any real scale. Incumbent ISPs certainly benefit from the narrative that the company is in well over its head, but at the moment Google Fiber's simply trying multiple concurrent solutions to see what works. And while it's certainly possible that Alphabet will someday get bored and sell the entire project off to the lowest bidder, at the moment the goal remains the same: deliver a swift kick in the ass to one of the least competitive markets in America.

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Posted on Techdirt - 16 August 2016 @ 6:31am

Broadband Industry Think Tank Claims Comcast Plan To Charge More For Privacy 'Pro Consumer'

from the nonsense-for-hire dept

Earlier this month Comcast told the FCC that the cable company wanted to be able to charge broadband customers a premium for privacy, and that blocking the ISP from doing so would hurt broadband adoption, raise broadband prices, and harm consumers. While Comcast was justly mocked for this position, many didn't realize that this is something AT&T has been doing for years, the ISP charging its U-Verse broadband customers $30 to $50 more every month if they want to opt out of "AT&T Preferences," a deep packet inspection snoopvertising service that tracks user behavior all around the Internet.

Prompted by Verizon's use of stealth tracking technology and this new troubling plan to make privacy a luxury option for consumers, the FCC has been cooking up some new, relatively basic broadband privacy protections. To derail these plans, AT&T and Comcast have turned to what I affectionately refer to as fauxcademia, or industry-funded think tanks specifically designed to pee in the public discourse pool influence regulatory policy under the guise of objective science.

Enter the Information Technology & Innovation Foundation (ITIF), which in a new report tries to argue that forcing broadband consumers to pay more to protect their privacy is secretly a "pro consumer" position that will bestow countless, miraculous benefits to the internet at large. The ITIF's Doug Brake actually goes so far as to try and argue that only "absolutists" could possibly oppose paying their ISPs even more money just to keep their data from being collected and sold:

"Consumers derive significant value from broadband service plans that offer discounts for data. Policymakers should allow providers to continue the practice,” said Doug Brake, telecommunications policy analyst at ITIF, who authored the report. “Privacy advocates have tried to tar any such business model as ‘pay-for-privacy,’ but they represent a small minority of absolutists. Prohibiting data-based price differentiation for the majority of consumers who are far more pragmatic would be terrible policy and a remarkably paternalistic departure from a common practice that is widely accepted throughout the economy."
That charging users more money to protect their own privacy is somehow a "discount" is the same bullshit narrative not-coincidentally trotted out by AT&T to justify these glorified price hikes. But it's worth understanding that in AT&T's case, users not only have to pay a steep premium ($528 to $792 more every year) to opt out of being spied on, they have to navigate an intentionally confusing series of menus to complete the deal. AT&T's not offering a discount; it's actively deterring the majority of consumers from opting out, knowing full well most have only AT&T and Comcast to choose from.

There's nothing remotely noble about what AT&T (and potentially Comcast) is doing here, and the ITIF's claim that only "absolutists" are bothered by the idea is embarrassing. Meanwhile, the study's "evidence" of the benefits of a new ISP privacy surcharge is a rotating crop of marginally related insights and citations to the ITIF's own work on the broadband privacy front, most of which has been equally laughable.

Like when the think tank argued no broadband privacy rules are needed because ISPs have time and time again shown themselves to be nothing more than harmless sweethearts that don't really collect user data anyway. Ignore, of course, that Verizon and AT&T were found sneakily modifying user packets to track consumers around the Internet for two years before the practice was even discovered by security researchers, initially with no real warning or functional opt out tools. Incapable of justifying this behavior, the ITIF just keeps recycling the same, lazy argument with slight variation:
"These price-differentiation models allow service providers to offer cheaper broadband Internet to those who choose to allow their data to be used in machine-based analytics that enable things like better ad targeting,” said Brake. “Discounts also put downward pressure on prices even for consumers who choose not to take the discount, and they help add users to the broadband ecosystem."
Right, except that doesn't happen. You'll never find a broadband provider offering a discount below existing market pricing to users opting in to data collection, because without real broadband competition, there's simply no incentive to. Granted the ITIF is the type of for-hire nonsense factory that can't even admit that the U.S. broadband market isn't very competitive, so if you're wading into the "research paper" (read: a collection of spurious ISP claims scotch taped together under the pretense of real science) looking for valid supporting evidence, you'll be sorely disappointed.

No, all we've got here is a broadband-industry tied think tank arguing that adding a steep privacy fee to what's already among the most expensive broadband in the developed world (OECD data) will somehow miraculously make the world better for everyone. To obfuscate the fact that the think tank is incapable of actually supporting such an absurd conclusion, it leans heavily on straw man arguments like the idea that critics of pay-for-privacy plans just don't want to pay their fair share for broadband:
"Advocates calling for a ban want to have their cake and eat it too,” Brake noted. “They want ubiquitous, undifferentiated service for everyone, but they don’t want to pay for it. They bemoan the price of high-speed broadband as too high for low-income Americans. Yet they want to close off opportunities to lower prices. It makes no sense."
Bullshit. Broadband prices remain high because of regulatory capture, too few broadband options, revolving door regulators, and a culture that prioritizes for-hire policy sockpuppetry over honest conversation. This collective dysfunction has spawned yet another attempt to hammer consumers with additional surcharges, and if the best supporting argument the ITIF can come up with is that raising broadband prices will magically lower broadband prices, it may want to give up on policy-for-hire and take up watercolors.

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Posted on Techdirt - 11 August 2016 @ 6:23am

Like The Rest Of The Internet Of Things, Most 'Smart' Locks Are Easily Hacked

from the dumb-is-the-new-smart dept

Smart refrigerators that leak your e-mail credentials. Smart TVs that collect but then fail to secure your living room conversations. Smart thermostats that can be loaded with ransomware. Smart vehicles that can be hacked and potentially kill you. This is the end result of "Internet of Things" evangelists and companies that for the last half-decade put hype and profit (the cart) well ahead of consumer privacy and security (the horse), in the process exposing us all to thousands of new attack vectors in homes and businesses around the world.

Not a week now goes by without the Internet of Things revealing a new layer in the dysfunction onion. The latest: researchers have discovered that the majority of Bluetooth-enabled smart locks include broken security, free of charge. Researchers Anthony Rose and Ben Ramsey recently tested 16 Bluetooth smart locks, and found that 12 of them opened when attacked. Like so many IoT products, the companies building these devices failed to take even standard precautions to protect user security:

"The problems didn't lie with the Bluetooth Low Energy protocol itself, Rose said, but in the way the locks implemented Bluetooth communications, or with a lock's companion smartphone app. Four locks, for example, transmitted their user passwords in plaintext to smartphones, making it easy for anyone with a $100 Bluetooth sniffer to pluck the passwords out of thin air. "
And when manufacturers could be bothered to use encryption, they didn't do a very good job of it:
"Other lock manufacturers said they encrypted the user password for Bluetooth transmissions, Rose said. Technically, they did. But with at least one, Rose discovered that he could simply grab the encrypted password out of the air, then send it back to the lock — and the lock would unlock without the password ever being decrypted."
The hackers, which demonstrated the attacks at Defcon, noted that owners can help protect themselves by turning off Bluetooth on their smartphones when not in use (or revert to higher quality "dumb" locks). But it's worth noting that forgetting to include basic security on your device is one thing. But time and time again when these companies are informed of the vulnerabilities in their products, they double down on their incompetence and apathy, making it abundantly clear that they don't actually care if their security products are actually secure:
"We figured we'd find vulnerabilities in Bluetooth Low Energy locks, then contact the vendors. It turned out that the vendors actually don't care," Rose said. "We contacted 12 vendors. Only one responded, and they said, 'We know it's a problem, but we're not gonna fix it.'"
It's worth reading that last bit again, so when Bruce Schneier's Internet-of-Things-induced cyber apocalypse occurs we can't pretend we weren't warned.

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Posted on Techdirt - 10 August 2016 @ 1:04pm

Appeals Court Strikes Down FCC Attempt To Eliminate Protectionist State Broadband Laws

from the you-can't-build-it,-and-they-won't-come dept

For years we've discussed how incumbent broadband providers protect their duopoly by writing and lobbying for awful protectionist state laws. These laws, passed in nineteen different states, either significantly hamstring or outright ban towns and cities looking to build their own networks, or strike public/private partnerships with companies like Google Fiber. In most instances, these towns and cities only jumped into the broadband business after being under-served for a decade -- if they were able to get broadband in the first place.

While it was overshadowed by the net neutrality vote at the time, back in February the FCC voted 3-2 to try and take aim at the most restrictive parts of these laws. The FCC argued that it could use its authority under Section 706 of the Communications act -- which requires the FCC to ensure "reasonable and timely" deployment of broadband access -- to pre-empt these restrictions working in contrast to that goal. But North Carolina and Tennessee quickly sued, arguing that preventing them from letting AT&T and Comcast write awful state laws violated their state rights.

In a huge blow to the FCC, the US Court of Appeals for the Sixth Circuit (pdf) has ruled that the FCC's pre-emption of these state restrictions must be reversed, because Section 706 doesn't clearly provide the FCC with the proper authority. While the FCC may have been well intentioned, all three Judges noted that the law simply doesn't give the FCC the authority to strip out chunks of state law:

"Section 706 does not contain a clear statement authorizing preemption of Tennessee’s and North Carolina’s statutes that govern the decisions of their municipal subdivisions. Section 706(a) instructs the FCC to utilize “measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.” Subsection (b) is a similar but broader instruction—it directs the FCC to “remov[e] barriers to infrastructure investment and . . . promot[e] competition in the telecommunications market."
The ruling continues, reiterating that the Communications Act language is simply too murky to be applied by the FCC in this fashion:
"Remove barriers to infrastructure investment” is unclear regarding whether it applies to public and private infrastructure investment or only private infrastructure investment. “Infrastructure,” by itself, is not specific to the public sphere. Furthermore, nowhere in the general charge to “promote competition in the telecommunications market” is a directive to do so by preempting a state’s allocation of powers between itself and its subdivisions."
While the FCC may have gotten too creative under the scope of the law, the end result of the ruling is unfortunate all the same.

For more than a generation, phone and cable companies like AT&T and Comcast have all but owned many state legislatures, who in turn make it their unrelenting mission to protect regional, geographical monopolies (duopolies, if you're "lucky") from any evolution or competition whatsoever. And while Tennessee and North Carolina were quick to breathlessly accuse the FCC of violating states rights, state leaders haven't been concerned in the slightest that letting AT&T and Comcast write bad state laws consistently hurts consumers, businesses, and the state itself.

Tennessee remains a broadband backwater for just this reason, so this shouldn't be a ruling anybody in the state (or in policy circles) is popping champagne corks over. It remains unclear what the FCC will do now, though in a statement FCC boss Tom Wheeler said he intends to continue fighting these restrictions, one way or another:
"In the past 18 months, over 50 communities have taken steps to build their own bridges across the digital divide. The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price. The FCC’s mandate is to make sure that Americans have access to the best possible broadband. We will consider all our legal and policy options to remove barriers to broadband deployment wherever they exist so that all Americans can have access to 21st Century communications.

"Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice. Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice."
The agency could appeal, could try its luck in a different jurisdiction and hope for better results, or it could wait on Congress to properly give it the authority it needs to fight broadband corruption and dysfunction of this type (chortle, guffaw). Unfortunately for consumers, Wheeler's running out of time if, as tradition encourages, he's going to step down with the election of a new President. While we wait, the onus once again rests squarely on the shoulders of voters to be informed, and to kick cash-compromised telecom sector sycophants out of office.

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Posted on Techdirt - 10 August 2016 @ 8:34am

Hulu Ditches 'Free' Model Without Giving It A Chance To Succeed

from the the-illusion-of-disruption dept

For years we've noted how as a product of the cable and broadcast industry, Hulu has often gone out of its way to avoid being truly disruptive. Owners 21st Century Fox, Disney and Comcast/NBC have worked hard to ensure the service is never too interesting -- lest it cannibalize the company's legacy cable TV cash cow. So Hulu has been doomed to walk the halls of almost but not quite compelling purgatory, a rotating crop of execs for years trying to skirt the line between giving consumers what they actually want -- and being a glorified ad for traditional cable television.

Fast forward to this week, when Hulu announced that the company is backing away from free as a core component of its business model. While Hulu began as a free option, it has slowly but surely been making free content harder to come by. Instead, users now have the option of paying either $8 per month for a streaming service with ads, or a $12 per month service (mostly) free of advertising. As such, the company proclaims that offering anything for free is no longer part of the company's vision of the ideal "Hulu experience":

"For the past couple years, we’ve been focused on building a subscription service that provides the deepest, most personalized content experience possible to our viewers,” Hulu senior VP and head of experience Ben Smith said in a statement. “As we have continued to enhance that offering with new originals, exclusive acquisitions, and movies, the free service became very limited and no longer aligned with the Hulu experience or content strategy."
Instead, Hulu intends to focus on its subscription services, and the launch of a live TV subscription platform sometime in early 2017. It will offer some free content 8 days after a program's air date, but only via a new Yahoo/Verizon web portal that may or may not even exist next year at this time. Thanks to intentional release delays, a shrinking catalog of free options and other restrictions you'll note Hulu can't specifically claim that the free business model failed, because it was never truly given a chance to succeed.

And because this is the cable and broadcast industry, Hulu's "content strategy" will remain hamstrung by all manner of unnecessary restrictions. Time Warner, which recently paid $583 million for a 10% stake, has been pushing to pull all current seasons of shows from the service. It's also worth remembering that the 2011 NBC Universal merger conditions blocked Comcast from meddling in Hulu management (not that this always stopped Comcast) to prevent anti-competitive shenanigans. But those restrictions will sunset in early 2018, at which point ownership pressure to ensure Hulu isn't too disruptive will only grow.

So on one side, you have Hulu claiming it wants to become disruptive and profitable. On the other side, you have its owners intentionally doing things to ensure it never becomes too disruptive and profitable. And offering free services as part of your business model certainly doesn't line up with the goal of keeping the legacy cable industry cash cow happily mooing for another decade. As we've long noted, most cable and broadcast companies think this whole cord cutting thing is a fad that ends when Millennials start procreating. As such the focus is on the illusion of innovation while they wait for the storm to pass.

While ditching free may not be a great idea, the real threat to the viability of a streaming revolution remains exclusive licensing and fractured content availability. As broadcasters increasingly focus on their own streaming services, exclusive arrangements (like CBS with Star Trek) are flourishing. In Hulu's case, it means losing access to the CW network, now exclusive to Netflix. It also means losing access to the Criterion Collection of films, now the streaming exclusive of a new Turner-owned streaming platform called Filmstruck. This fractured availability only frustrates and confuses customers, many of which will simply return to piracy.

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Posted on Techdirt - 9 August 2016 @ 9:36am

AT&T Fined For Turning A Blind Eye As Drug Dealers Ripped Off Its Customers

from the telecom-free-for-all dept

While Comcast gets the lion's share of the public's loathing, there's an argument to be made for AT&T actually being a worse company. Think Comcast, but with slower broadband speeds, more dubious executive ethics, and an even greater disdain for its paying customers. In just the last few years AT&T has been: fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; and fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills.

In every instance AT&T was either busy ripping off customers directly, or turning a blind eye to fraud aimed directly at AT&T customers -- because in most instances AT&T got a cut of the profits.

Fast forward to this week, when the FCC announced it would be fining AT&T another $7.7 million (pdf), this time for actively helping drug dealers rip off paying AT&T customers. According to the full FCC order (pdf), AT&T turned a blind eye to two bogus Cleveland companies, Discount Directory, Inc. (DDI) and Enhanced Telecommunications Services (ETS), which had been billing AT&T phone customers $9 per month for a "directory assistance service" that didn't actually exist. These bogus companies were originally only uncovered during a DEA drug investigation:

"In May 2015, while investigating the Companies’ principals for drug-related crimes and money laundering, the United States Drug Enforcement Administration uncovered that DDI and ETS were sham operations that never provided any directory assistance service to the customers billed by AT&T. The Companies’ principals told law enforcement that they submitted fake service charges for thousands of AT&T customers (mostly small businesses) over a multiyear period."
The complaint proceeds to suggest that AT&T was aware of these charges (as with previous cramming settlements), but turned a blind eye because it took a cut of each fraudulent charge:
"Although it bore ultimate responsibility for the charges placed on its customers’ bills, AT&T never required proof from the Companies that they obtained customer authorizations to be billed for their service and the record shows that the Companies never obtained any such customer authorizations. In addition, AT&T ignored a number of red flags that the charges were unauthorized, including thousands of charges submitted by the Companies for nonexistent, disconnected, or otherwise “unbillable” accounts."
As per the settlement, AT&T will issue $6,800,000 in refunds to all current and former consumers charged for the sham directory assistance service, and a $950,000 fine to the U.S. Treasury. AT&T's also been forced to cease billing for nearly all third-party products and services for wireline customers (now that few use wireline anyway), adopt policies requiring express informed consumer consent before such charges can be reapplied, and revise its billing systems so that such charges are easier to find.

While these fines are puny and belated, keep in mind that until the last few years regulators did little to nothing whatsoever to hold larger telecom companies accountable for their role in perpetuating that kind of fraud -- making this a step up from the apathy of decades' past. Still, AT&T consistently gets to pay settlements that are likely only a small fraction of the money collected over the years, its lawyers and accountants already busy cooking up the fraudulent efforts we'll surely get to read about in 2022.

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Posted on Techdirt - 9 August 2016 @ 6:26am

Your 'Smart' Thermostat Is Now Vulnerable To Ransomware

from the the-Jetsons-this-ain't dept

We've noted time and time again how the much ballyhooed "internet of things" is a privacy and security dumpster fire, and the check is about to come due. Countless companies and "IoT" evangelists jumped head first into the profit party, few bothering to cast even a worried look over at the reality that basic security and privacy standards hadn't come along for the ride. The result has been an endless parade of not-so-smart devices and appliances that are busy either leaking your personal details or potentially putting your life at risk.

Of course, the Internet of Things hype machine began with smart thermostats and the sexy, Apple-esque advertising of Nest. The fun and games didn't last however, especially after several botched firmware updates resulted in people being unable to heat or cool their homes (relatively essential for a thermostat).

Not quite the future that was advertised. And things are about to get notably more interesting with the news that hackers have figured out a way to load smart thermostats with ransomware. Security researchers Andrew Tierney and Ken Munro demonstrated their thermostat ransomware proof-of-concept at the hacking conference Def Con on Saturday, using the opportunity to highlight how many of these devices aren't transparent and fail utterly at giving users any real control of what's happening on their home network:
"We don’t have any control over our devices, and don’t really know what they’re doing and how they’re doing it,” Tierney told Motherboard. “And if they start doing something you don’t understand, you don’t really have a way of dealing with it."
And again, as we've seen with everything from smart refrigerators to Wi-Fi embedded tea kettles, companies get so excited about the IoT marketing and revenue possibilities, they fail to embed even basic security in supposedly intelligent devices:
"The thermostat in question has a large LCD display, runs the operating system Linux, and has an SD card that allows users to load custom settings or wallpapers. The researchers found that the thermostat didn’t really check what kind of files it was running and executing. In theory, this would allow a malicious hacker to hide malware into an application or what looks like a picture and trick users to transfer it on the thermostat, making it run automatically."
So yeah, imagine waking up one morning to this:
Yes, this is just one thermostat and a proof-of-concept, but worries about the IoT industry's total failure to include security on "smart" devices should not be confused with scaremongering or hyperbole. As Bruce Schneier recently warned, the IoT explosion has resulted in the introduction of thousands of new attack vectors in homes, businesses and vehicles across the country, with vendors and Luddite consumers often ill-prepared to quickly update these products when vulnerabilities are exposed. If smart technology doesn't get smarter soon, the future of smart technology...is going to be dumb technology.

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