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Posted on Techdirt - 18 October 2019 @ 6:28am

AT&T Jacks Up Broadband Rates With Misleading 'Property Tax' Fee

from the america's-greediest-network-is-also-the-sneakiest dept

For years we've talked about how the broadband and cable industry has perfected the use of utterly bogus fees to jack up subscriber bills, a dash of financial creativity it adopted from the banking and airline industries. Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate -- then sock you with a higher rate once your bill actually arrives. Despite this being false advertising, regulators have chosen to look the other way for decades.

Last week, a new study highlighted how nearly 25 percent of your cable bill is comprised of bullshit fees, netting $28 billion annually from such surcharges. This week, AT&T is under fire for a new wrinkle on an old game. The company has started raising its customers' broadband prices by as much as seven percent to help offset the company's property taxes. In this case, customers who thought they were signing up for fiber broadband at a fixed, locked rate were suddenly informed they needed to pay 7% more to help pay off AT&T's tax burden:

Effective October 1, 2019, there will be an increase in the AT&T Cost Assessment Charge used to recover AT&T property taxes. The monthly rate will change from 2.92% to 7.00% of your total AT&T Business Internet, Phone and/or U-verse TV monthly charges. This charge is not a tax or fee that the government requires AT&T to collect from its customers.

Again there are several problems here. One, advertising one rate then charging something else is false advertising. Two, AT&T's property taxes are the cost of doing business, and should be included above the line. Three, these users were locked in at a "fixed, guaranteed rate," then AT&T simply ignored the promise.

AT&T's practice of adding its property taxes appears to have begun sometime in 2017. But there's no indication that the rates being paid actually, realistically reflect AT&T's property tax burden:

AT&T has been charging the property-tax fee to business customers since at least mid-2017. An AT&T business DSL customer in Oklahoma complained about it on Reddit at the time, saying the then-new fee was 1.08% of the monthly bill.

In January 2019, an AT&T customer complained in a DSLReports forum that the property-tax fee was raised from 2% to 6.69%. "So I gotta ask—did their 'property taxes' increase by 335%?" the customer wrote, noting the greater-than-three-fold increase.

In a functional market either competition would kick in to punish companies for this kind of behavior in the form of subscriber exodus, or a regulator would step in to, at the very least, warn the company away from such misleading predatory behavior. But this being the United States, where the FCC just effectively neutered itself at lobbyists' behest, based on entirely manufactured justifications, and vibrant competition remains a pipe dream, we get neither option. Enjoy.

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Posted on Net Neutrality Special Edition - 17 October 2019 @ 6:37am

States Rush To Protect Net Neutrality On Heels Of Court Ruling

from the round-and-round-we-go dept

Despite the obvious fraud and false data used to prop up the move, a court recently backed much of the Ajit Pai's repeal of net neutrality. But it wasn't all champagne and roses for Ajit Pai and his friends in the telecom sector. The court also shot down the FCC's attempt to ban states from protecting net neutrality themselves, pointing out that when the FCC obliterated its Title II authority over broadband providers (at lobbyist behest) it also eliminated any potential right to tell states what they can or can't do.

As such, states are rolling forward with exploring new rules and finally enforcing existing ones. More than two dozen states have examined some form of net neutrality protections in the wake of the repeal. Most notable are California and Washington State. California has been sued by the DOJ (not coincidentally run by former Verizon lawyer Bill Barr) for trying to protect consumers, an effort complicated by this court ruling. Washington wasn't sued, and is moving full speed ahead when it comes to implementing the rules:

"Broadband users in Washington State can file net neutrality complaints against ISPs using this general consumer complaint form, a spokesperson for Washington Attorney General Bob Ferguson told Ars. The AG's office said it wouldn't comment on whether there are any pending net neutrality investigations. The text of the Washington law is available on the state's website here. Violations of the law are punishable under Washington's Consumer Protection Act."

We've noted a few times how folks crowing about how net neutrality must not have mattered because the internet didn't explode are only advertising their own ignorance. For one, the repeal did much more than just kill net neutrality. It effectively gutted the FCC's authority over telecom giants, shoveling any remaining responsibility to an FTC that lacks the authority or resources to stand up to giants like AT&T and Comcast (that was the entire point of the gambit).

As such, crowing that the internet didn't implode ignores how a void in federal oversight will make a wide variety of non-net-neutrality related issues (high prices, sneaky fees, misleading coverage maps, anti-competitive behavior) worse. Some otherwise bright folks remain under the false impression that eliminating telecom oversight magically results in connectivity Utopia. But when the FCC abdicates its authority over natural monopolies like Comcast and AT&T, existing problems simply get worse. There are decades of data (and endless customer satisfaction surveys) making this point.

Most ISPs (with some notable exceptions) have been hesitant to start screwing users and competitors for fear of running afoul of state laws. And as more states (like Minnesota) contemplate tougher rules to fill the void, that's going to continue. Industry lobbyists love to complain about the "fractured regulatory obligations" they now face, but that was a product of their own creation when they decided to spend millions to kill fairly modest (by international standards) consumer protections. The telecom industry made this mess, and now it gets to stew in it until either Congress or the FCC restores federal guidelines.

That's why, just as we're seeing on the privacy front, the big industry push moving forward will be to express phony support for a federal net neutrality law their lawyers will write. A law they pretend is a "solution" to the problem but contains so many loopholes as to be effectively worthless. Its only real purpose? To pre-empt tougher federal or state guidelines.

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Posted on Techdirt - 16 October 2019 @ 1:39pm

New Bill Would Force Hardware Makers To Disclose Hidden Mics, Cameras

from the watching-you-watching-me dept

Back in February, you might recall that Google took some heat from owners of their Nest home security platform, after they suddenly discovered that the Nest Secure home security base station contained a hidden microphone the company had never publicly disclosed. The reveal came via a Google announcement sent to Nest customers informing them the hidden mic would soon be turned on, allowing the integration of Google Assistant on the platform. Given tech's shaky history on privacy, some folks were understandably not amused:

While Google ultimately admitted the "error" and updated its hardware spec sheet, the episode did a nice job illustrating the fact that whether we're talking about products getting better or worse, you don't really own the products you buy, and your agreement with the manufacturer in the firmware-update era can pivot on a dime, often with far less disclosure than we saw here, or none whatsoever. When it comes to privacy (especially given the flimsy security in many IOT devices), that's kind of an important conversation to be having.

Likely responding to the resulting fracas, Senator Cory Gardner has introduced the Protecting Privacy in our Homes Act, which would require tech companies to include a label on products disclosing the presence of recording devices. Gardner's been trying to shore up the internet of broken things for a few years now, though the efforts usually stall in process and his IOT Cybersecurity Act, introduced last Spring, has struggled to gain much traction in a distracted and well lobbied Congress. Says Gardner of this latest effort:

"Consumers face a number of challenges when it comes to their privacy, but they shouldn’t have a challenge figuring out if a device they buy has a camera or microphone embedded into it. This legislation is about consumer information, consumer empowerment, and making sure we’re doing everything we can to protect consumer privacy."

Outside of legislation, there's not a whole lot being done to ensure the millions of devices we've connected to the internet annually have reasonable security and privacy safeguards in general. Like so many issues, the IOT industry doesn't much care -- they're on to selling the next greatest thing and have little interest in retroactive security and privacy updates. Consumers often don't care -- in part because they're completely clueless to the scope of the problem (especially if functionality is hidden). And lobbying ensures government usually doesn't much care either.

That has left much of the problem in the laps of consumer groups, researchers, and activists, though many of these efforts (like Consumer Reports quest to shame companies for bad security and privacy practices in product reviews) can only accomplish so much without industry and government's help. Ultimately this just means we're going to see a lot more hacking, privacy violations, and related scandals (and even potentially tragedies) before we start taking the problem of IOT privacy, security, and transparency seriously.

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Posted on Techdirt - 16 October 2019 @ 10:44am

Low Cost Phones Are Turning Privacy Into A Luxury Option

from the ill-communication dept

Even when you're shelling out thousands of dollars for the latest smartphone and an "unlimited" data plan for it to run on, that cost expenditure still puts you at great privacy risk. Wireless carriers, for years, have collected and sold your location and other data to a long line of dubious middlemen, and despite a lot of sound and fury on this subject, few (outside of maybe the EFF) are really doing much about it. And with the FCC recently having self-immolated at lobbyist request and any new meaningful privacy protections derailed by bickering, that's not changing anytime soon.

Less discussed is the privacy nightmare you'll find in "discounted" phones designed to help "bridge the digital divide." While numerous vendors and tech giants have cooked up lower-cost Android phones with marketing focused on helping the poor, a new study by advocacy group Privacy International found that the privacy trade offs of these devices are... potent. Not only do they usually come with outdated OS' opening the door to hackers, the phones have locked down user control to such a degree they're unable to remove apps that may also pose security risks:

"The MYA2 also has apps that can’t be updated or deleted, and those apps contain multiple security and privacy flaws. One of those pre-installed apps that can’t be removed, Facebook Lite, gets default permission to track everywhere you go, upload all your contacts, and read your phone’s calendar. The fact that Facebook Lite can’t be removed is especially worrying because the app suffered a major privacy snafu earlier this year when hundreds of millions of Facebook Lite users had their passwords exposed. Facebook did not respond to request for comment."

It's part of a broader issue in telecommunications where privacy has become a luxury available only to those who can afford it. Some telecom giants like AT&T have tried to push the barrier even further, only letting users opt out of online snoopvertising if they're willing to pay $500 more annually for telecom services. Between the apps, the phone, hackers, and your wireless carrier tracking, hacking, and monetizing your every waking moment, it's a privacy and security minefield out there for even affluent smartphone buyers.

Studies suggest low income users realize that in the modern telecom landscape there are stark privacy penalties for being poor, yet feel they have no real power in the equation:

"Yet millions of Americans who can’t afford to buy a computer or install broadband internet at home often have no choice but to use such devices, which become their sole means of accessing the internet. If they want to enjoy the same basic conveniences that people in higher socioeconomic tiers have—such as transportation directions, online bill pay, and email—they may have to give up their privacy in exchange."

The market won't stop the practice because it's profitable to hoover up every shred of data. The government won't stop this process because Congress is slathered with mountains of cross industry campaign contributions that eliminate any motivation to craft meaningful privacy guidelines with any real teeth. With 3.7 billion users expected to have their only online access come via smartphone by 2025, that might just be a problem, and making privacy a "luxury feature" will only make said problem worse.

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Posted on Free Speech - 15 October 2019 @ 7:33pm

Blizzard's Face Plant Creates Marketing Opportunity For Companies With A Spine

from the one-man's-bumble-is-another-man's-boon dept

Blizzard's decision to pander to the Chinese government is a PR headache that simply isn't going away. Last week, games giant Blizzard stepped in a minefield when it severely punished a Hearthstone player for supporting the protests in Hong Kong during a championship live stream. The reaction was swift, justified, and severe, with everyone from gamers to Blizzard employees accusing the company of prioritizing profits over principles.

After days of silence, Blizzard ultimately issued a statement on the decision and, while public backlash forced it to retreat from some of the player's more severe punishments, the company doubled down on its decision to censor players for political opinions, ignoring most of the criticisms leveled by human rights organizations like Access Now. It also tried to claim with a straight face that its financial interests in China played no role in the decision:

The specific views expressed by blitzchung were NOT a factor in the decision we made. I want to be clear: our relationships in China had no influence on our decision. We have these rules to keep the focus on the game and on the tournament to the benefit of a global audience, and that was the only consideration in the actions we took.

Sure, Jan. While the gamer violated tournament rules by injecting political opinion, Blizzard's over-reaction (the gamer lost all awards and prizes and faced a one year ban from competition) showcased a company absolutely terrified of losing out on Chinese cash. It could have adhered to its rules by applying a more modest punishment. Instead it behaved in a way that made it clear to everybody that Blizzard's principles like Every Voice Matters--etched at the base of a statue at the company's headquarters--couldn't hold a candle to the potential money to be made in China.

But one company's disastrous face plant is another company's marketing opportunity. Fortnite developer Epic Games utilized the PR fracas to proclaim that it would not censor gamers simply for having political opinions, insisting companies can walk (embrace fundamental human rights) and chew gum (make a living selling games and game stream ads) at the same time:

Fortnite developer Epic Games said in a statement that it will not ban players or content creators for political speech. The message comes after Blizzard caught fire this week for banning a professional Hearthstone player for shouting a statement associated with Hong Kong protesters.

“Epic supports everyone’s right to express their views on politics and human rights. We wouldn’t ban or punish a Fortnite player or content creator for speaking on these topics,” an Epic Games spokesperson told The Verge.

That statement came despite the fact that Chinese tech giant Tencent has held had a 40 percent stake in Epic since 2011. In contrast, Riot Games, developer of League of Legends, is now 100 percent owned by Tencent. On Friday it effectively sided with Blizzard, proclaiming that broadcasters should "refrain" from discussing "sensitive topics" during game streams. Because, you know, god forbid some kid playing a game express something akin to empathy, while an authoritarian government threatens to "crush the bodies and shatter the bones of Hong Kong residents":

"As a general rule, we want to keep our broadcasts focused on the game, the sport, and the players,” John Needham, the global head of League of Legends e-sports said in a statement. “We serve fans from many different countries and cultures, and we believe this opportunity comes with a responsibility to keep personal views on sensitives issues (political, religious, or otherwise) separate."

Upsetting China's authoritarian government means potentially losing billions for companies dreaming of international expansion, so, more often than not, cutesy purported principles like "every voice matters" are going to hold up like tissue paper in a thunderstorm. Still, there's a marketing opportunity here for companies interested in showing how having a spine and respecting basic human rights isn't inherently "bad for business." Either way, with protests planned for Blizzard's BlizzCon convention early next month, this was an unforced error that's not going away anytime soon.

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Posted on Techdirt Wireless - 15 October 2019 @ 6:19am

Wireless Industry Is Trying To Hide Where 5G Is Actually Available

from the ill-communication dept

Buried underneath the blistering hype surrounding fifth-generation (5G) wireless is a quiet but growing consensus: the technology is being over-hyped, and early incarnations were rushed to market in a way that prioritized marketing over substance. That's not to say that 5G won't be a good thing when it arrives at scale several years from now, but early offerings have been almost comical in their shortcomings. AT&T has repeatedly lied about 5G availability by pretending its 4G network is 5G. Verizon has repeatedly hyped early non-standard launches that, when reviewers actually got to take a look, were found to be barely available.

There's a solid chasm between where carriers say they offer 5G, and where 5G is actually available. And there's every indication that mobile carriers are working overtime to make sure that chasm isn't obvious to consumers.

As the FCC finally buckles to pressure to fix the US's comically inaccurate broadband availability maps, both AT&T and Verizon are trying to ensure that 5G is excluded from these efforts. The FCC has been widely ridiculed for blindly relying on overly-generous ISP data indicating where wireless and wired broadband exists. The FCC has long declared that an entire census tract is technically "served" with broadband if just one home in that tract has service. After massive bipartisan political pressure, the FCC recently announced it would at least take a look at using more accurate geospatial data to pinpoint broadband availability.

But in letters to the FCC, the wireless industry declares that 5G should be excluded from these mapping improvements because it might reveal ambiguously "sensitive" information:

"It would be premature for the Commission to require wireless providers to submit coverage maps for 5G service at this time," AT&T said, stating that "requiring 5G coverage maps in this early stage of 5G deployment could reveal sensitive information about cell site locations and even customer locations."

The CTIA, the wireless industry’s top lobbying organization, mirrored those claims in its own filing, insisting that while the organization “supports efforts to monitor 5G deployment,” it is “premature to propose standardized service requirements” for mapping 5G availability.

The broadband industry has historically lobbied against any real effort to improve broadband mapping. Why? Better public data would only more clearly highlight the country's broadband availability gaps and lack of competition, and might result in somebody, you know, actually trying to do something about it. In this case, the industry isn't keen on having its rosy 5G availability promises exposed as a marketing farce:

"Right now, 5G is the technological equivalent of the emperor's new clothes,” she said. “It's the finest new technology, but no one can see it. Without maps that clarify where 5G service is offered at particular service standards, carriers have few checks on their claims about 5G's current reach and capabilities.”

The Trump FCC has used the promise of looming 5G availability as partial justification for obliterating countless consumer protections (read: you don't need oversight of a historically predatory industry because 5G competition will drive amazing innovation!). But there's every indication that, like 4G, 5G will be spotty in areas where the industry has skimped on deploying fiber because it's not profitable enough, quickly enough, for Wall Street. As such, knowing where the emerging standard is actually available is going to be kind of important.

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Posted on Techdirt - 11 October 2019 @ 10:42am

'The Irishman' Ban Once Again Shows Hollywood's Disdain For Netflix is Stupid & Counterproductive

from the what-exactly-are-you-doing-here dept

For years Hollywood has seen Netflix as a mortal enemy because of the company's interest in disrupting the entertainment industry. Hollywood has been particularly vocal about how Netflix is "destroying" the traditional, sticky-floor, brick and mortar theater business because it wants to modernize antiquated release window rules from a bygone era. For example, Netflix content was banned from Cannes last year largely because the company wouldn't adhere to France's absurd cultural exception law that requires a 36-month delay between theatrical release and streaming availability.

Hollywood theater chains' disdain for Netflix bubbled up again this month, with the news that Netflix's latest exclusive, the new Martin Scorsese film "The Irishman," would be banned from being shown at a number of major theater chains. Apparently this was intended as some kind of "punishment" for Netflix, though the company quickly spun the narrative on its head. Like "Roma," "The Irishman" needs at least some major theater time to be considered for Oscar contention, so Netflix has decided to screen the film at the Shubert Organization’s historic Belasco Theatre on Broadway.

It's the first time a traditional film has been shown there in the theater's 112 year history, drawing more public attention to the film's release:

"The unusual arrangement – hailed by the preservation-minded Scorsese as a way to showcase his film in the type of ornate theater in which New Yorkers could once routinely view films – will be the first film screening ever in the Belasco’s 112-year history (the theater was an NBC studio for several years in the early 1950s). Netflix will provide what it describes as state-of-the-art equipment for the screenings."

The film (featuring Joe Pesci, Robert DeNiro, and Al Pacino in a purported return to bygone efforts) will be shown at the theater through the month of November, before it arrives on Netflix November 27. Brick and mortar theaters apparently think they're somehow stopping Netflix from disrupting the industry, but it's hard to see how that's actually going to be successful. Netflix simply turned the snub into a new way to promote the film, and the industry loses any revenue from airing a film that many fans of older Scorsese mob films are going to want to see. It's all a sort of incompetent seppuku.

The biggest issue? The brick and mortar theater worry that Netflix will "kill theaters" has never been proven by any substantive data. Last year a study indicated that Netflix certainly isn't killing movie theaters. In fact, EY’s Quantitative Economics and Statistics group (funded by the National Association of Theater Owners) found that consumers who visited theaters nine times or more in the last 12 months consumed more streaming content than consumers who visited a movie theater only once or twice over the past year:

"The message here is that there’s not a war between streaming and theatrical,” said Phil Contrino, director of media and research at NATO. “People who love content are watching it across platforms and all platforms have place in consumers’ minds."

In other words, the claims that Netflix keeps people at home and out of theaters isn't true, yet it's the cornerstone of all of these efforts. Much in the way that pirates buy more programming on all platforms than other users, users who stream a lot still like to go to the theater because they really enjoy movies. Streaming and theaters can have a synergistic relationship where everybody benefits, yet instead we get whatever this is.

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Posted on Techdirt - 11 October 2019 @ 6:22am

After Jack Hack, Government Starts Taking Wireless 'SIM Hijacking' Seriously

from the yeah-maybe-get-on-that dept

Wireless carriers have been under fire for failing to protect their users from the practice of SIM hijacking. The practice involves posing as a wireless customer, then fooling a wireless carrier to port the victim's cell phone number right out from underneath them, letting the attacker then pose as the customer to potentially devastating effect. Back in February, a man sued T-Mobile for failing to protect his account after a hacker, pretending to be him, ported out his phone number, then managed to use his identity to steal thousands of dollars worth of cryptocoins.

Like the ongoing wireless industry's location data scandals, the FCC has so far refused to utter so much as modest condemnation of carriers that have failed to protect users.

But with Twitter CEO Jack Dorsey having his Twitter account recently hijacked thanks to SIM hijacking, the government appears to have finally gotten the message that we have a bit of a problem.

For example, the FBI issued a warning last month to its private industry partners, noting that two-factor authentication can be bypassed thanks to the hacks:

"The FBI has observed cyber actors circumventing multi-factor authentication through common social engineering and technical attacks," the FBI wrote in a Private Industry Notification (PIN) sent out on September 17. The FBI made it very clear that its alert should be taken only as a precaution, and not an attack on the efficiency of MFA, which the agency still recommends. The FBI still recommends that companies use MFA.

Carriers, for their part, don't much like to publicly talk about the problem. In part because it's frequently their employees who are helping to facilitate the scams for a little money on the side. Identity thieves use SIM hijacking to do everything from cleaning out bank accounts, to stealing valuable Instagram usernames and selling them for Bitcoin. The process isn't particularly complicated, and more often than not involves the social engineering of a cellular carrier's support employees. Until the Dorsey hack, their refrain has been this is a small problem that's very unique. It's not.

There are some steps users can take, including changing passwords frequently. T-Mobile users can also, for example, call 611 from your cellphone (or 1-800-937-8997), then tell a support staffer that you want to create a “port validation” passcode (here's a guide for other carriers). Still, like the SS7 wireless exploit that has been in the wild for years, it's clear wireless carriers might want to spend a little less time on mindless mergers and consolidation, killing net neutrality, and jacking up prices, and a little more time training their employees and protecting their customers from security threats.

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Posted on Techdirt - 10 October 2019 @ 6:06am

Whoops, Twitter The Latest To Use Two Factor Authentication Phone Numbers For Marketing

from the yeah-maybe-stop-doing-that dept

When you sign up for security services like two-factor authentication (2FA), the phone number you're providing is supposed to be explicitly used for security. You're providing that phone number as part of an essential exchange intended to protect yourself and your data, and that information is not supposed to be used for marketing. Since we've yet to craft a formal privacy law, there's nothing really stopping companies from doing that anyway, something Facebook exploited last year when it was caught using consumer phone numbers provided explicitly for 2FA for marketing purposes.

It's not only a violation of your users' trust, it incentivizes them to not use two-factor authentication for fear of being spammed, making everybody less secure. As part of Facebook's recent settlement with the FTC the company was forbidden from using 2FA phone numbers for marketing ever again.

Having just watched Facebook go through this, Twitter has apparently decided to join the fun. In a blog post, the company this week acknowledged that participants of the company's Tailored Audiences and Partner Audiences advertising system may have had their phone numbers used for 2FA used for marketing as well:

"We cannot say with certainty how many people were impacted by this, but in an effort to be transparent, we wanted to make everyone aware. No personal data was ever shared externally with our partners or any other third parties. As of September 17, we have addressed the issue that allowed this to occur and are no longer using phone numbers or email addresses collected for safety or security purposes for advertising."

Security conscious folks had already grumbled about the way Twitter sets up 2FA, and those same folks weren't, well, impressed:

While it's nice that Twitter came out and admitted the error, you have to think it's unlikely this would happen were there real federal penalties for being cavalier about user privacy and security.

Last year, the company admitted to storing passwords for 330 million customers unencrypted in plain text, and a bug in the company's code also exposed subscriber phone number data, something Twitter knew about for two years before doing anything about it. Earlier this year Twitter acknowledged that another bug exposed the location data of its users to an unknown partner. And of course Jack's own account was hacked thanks to an SMS hijacking problem agencies like the FCC haven't been doing much (read: anything) about.

While there's understandable fear about the unintended consequences of poorly crafted privacy legislation, having at least some basic god-damned rules in place (including things like penalties for storing user data in plaintext, or using security-related systems like 2FA as marketing opportunities) would likely go a long way in deterring these kinds of "inadvertent oversights." Outside of the problematic COPPA (which applies predominately to kids), there are no real federal guidelines disincentivizing the cavalier treatment of user data, though apparently we're going to stumble through another 10 years of daily privacy scandals before "conventional wisdom" realizes that's a problem.

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Posted on Techdirt - 9 October 2019 @ 6:23am

The Cable Industry Makes $28 Billion Annually In Bullshit Fees

from the false-adverting-by-another-name dept

Last week we highlighted a study showing that your cable bill can be as much as 45 percent higher than the advertised price thanks to bullshit fees. Now a new study by Consumer Reports shows that up to 24 percent of your monthly cable bill is comprised of said bullshit fees. The fees are designed specifically for one purpose: to let companies falsely advertise one rate, then charge you significantly more money. It's effectively false advertising, but efforts to rein in the practice are fleeting to nonexistent, because creatively fleecing American consumers is just so hot right now.

Consumer Reports examined 787 consumer cable bills from 13 top cable providers and found that while the average user paid around $156.71 per month for cable TV, users in reality paid $217.42 a month once fees were included. As such about 24 percent of your cable TV bill each month ($37.11) is made up of fees and hidden surcharges, generating about $450 per year per consumer for the industry, or about $28 billion in total.

The report is quick to highlight how some of the bullshit fees (like the "regulatory recovery fee") are named in such a way to trick the consumer into blaming government. The group reached out to 74 consumer reps posing as a customer and found that support reps are pretty clearly trained to create that impression:

"Often these fees are misleadingly portrayed by cable providers as government-mandated surcharges so that consumers blame the government instead of cable providers. One such fee is the “regulatory recovery fee,” specifically named for just this purpose.

Consumer Reports researchers say they posed as consumers and called 74 customer service representatives (CSR), who routinely tried to blame government for excessive surcharges.

"At least one CSR of every major provider that our secret shoppers contacted misstated that fees were mandated by the government, without a clear distinction made between company-imposed fees and regulatory pass-through fees," the report said.

One of the industry's favorite, more recent fees is the "Broadcast TV fee," which we've hammered on previously. This fee simply involves taking a portion of the cost of programming and burying it below the line as an itemized fee, again with an eye on falsely advertising a lower rate. Thanks in part to a government that can't be bothered to protect consumers from said false advertising, Comcast has quietly been jacking up this fee for the better part of the last decade with zero repercussions whatsoever:

"The study found that in 2015, Comcast started charging consumers a $1-a-month Regional Sports Fee and $1.50-a-month broadcast TV fee ($2.50 per month). By 2019 those fees had ballooned to $18.50 a month, or a 600 percent increase in just four years."

Cool. While some bills have been proposed to rein in the practice, they routinely go nowhere thanks to our campaign contribution slathered Congress. And the FCC just neutered much of its authority over broadband and cable TV providers at lobbyist behest. Good times, yeah?

Keep in mind this is how the cable TV industry behaves when competition from streaming alternatives is steadily driving customers to cut the traditional cable TV cord, illustrating how organic competition isn't always enough to prevent entrenched predatory monopolies from behaving badly. Cable giants figure that sure, they may lose some TV subscribers by being predatory bastards, but they'll just recoup those costs by raising the costs of broadband (where they hold a more solid natural monopoly, another problem we apparently don't want to do anything about).

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Posted on Net Neutrality Special Edition - 8 October 2019 @ 6:21am

Former FCC Boss Wheeler Says New Court Ruling Won't Stop Net Neutrality

from the it-ain't-over-'til-it's-over dept

Obama's first FCC boss Julius Genachowski was a bit of a wishy washy mess, supporting any number of conflicting ideas at any given time depending on the audience he was talking to. And while his second term pick, Tom Wheeler, initially raised eyebrows given his history of lobbying for early-era telecom companies, he wound up being one of the better FCC bosses in agency history. Granted telecom giants like AT&T and Comcast might disagree, since he was one of the only FCC bosses in recent history actually willing to stand up to them in any meaningful way.

Last week, a court (mostly) sided with the FCC in its repeal of Wheeler-era net neutrality rules. That said, the court also blocked FCC attempts to ban states from passing their own net neutrality rules, meaning the fight has simply shifted to the state level. In an overlooked piece over at the NY Times, Wheeler (who has been relatively quiet post tenure as his efforts are slowly demolished one by one in the Trump era) notes how ISPs will likely try to behave so long as the threat of state action remains:

"But the ruling did keep net neutrality alive — by overruling the agency’s claim that it could pre-empt state governments from setting out their own net neutrality requirements. The decision opens the doors for states to fill the regulatory void. Internet service providers should be quaking in their boots: As of today, they run the serious risk that they’ll have to follow a patchwork of different state requirements. The companies may not have liked the previous administration’s decision to classify them as common carriers, but that at least provided them with a uniform national policy. That is now gone."

ISPs really enjoy complaining (and will certainly be doing a lot more of it in the future) that they now have to adhere to a universe of state-level protections. But the reality is they created the problem by lobbying to kill pretty modest federal guidelines (using fraudulent data and bogus people, it should be noted). Now instead of a unified set of FCC rules (which didn't even ban problematic behavior like the abuse of usage caps as a competitive weapon), they'll have to adhere to tougher guidelines in states like California.

The FCC ban on state efforts was an integral part of Comcast/AT&T/Verizon's dream of zero meaningful oversight and, without it, it's not much of an actual victory, notes Wheeler's former advisor Gigi Sohn:

As such, the court ruling leaves the door open to net neutrality in several ways. One, states can now jump in and protect consumers. Two, the court ruling made it clear the FCC was within its authority to both pass the 2015 rules and repeal them, meaning a future FCC can simply pass the same (or better) rules all over again. And while it's unlikely under this current telecom-cash-slathered Congress, a future Congress could pass legislation (like the 3 page Save the Internet Act, which simply restores the FCC's 2015 rules) that puts meaningful rules in place permanently.

In other words, it ain't over until it's over. And every survey in existence shows that US consumers want some kind of protections in place. Disdain for anti-competitive giants is bipartisan and fairly universal. Eventually big ISPs like Comcast and AT&T won't be able to help themselves (AT&T's already quietly pushing its luck on this front), and their behaviors will only lead to even more public support for meaningful open internet rules.

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Posted on Techdirt - 4 October 2019 @ 6:21am

Surprise! Buzzfeed Links Bogus Net Neutrality Comments Directly To Broadband Industry

from the fake-plastic-trees dept

We've long discussed how the Pai FCC's net neutrality repeal was plagued with millions of fraudulent comments, many of which were submitted by a bot pulling names from a hacked database of some kind. Millions of ordinary folks (like myself) had their identities used to support Pai's unpopular plan, as did several Senators. Numerous journalists like Jason Prechtel have submitted FOIA requests for more data (server logs, IP addresses, API data, anything) that might indicate who was behind the fraudulent comments, who may have bankrolled them, and what the Pai FCC knew about it.

Those efforts have slowly been paying off. Back in January, Gizmodo linked some of the fake comments to Trump associates and some DC lobbying shops like CQ Roll Call. This week, Buzzfeed went even further, drawing a direct line between the fake comments and the broadband industry:

"A BuzzFeed News investigation — based on an analysis of millions of comments, along with court records, business filings, and interviews with dozens of people — offers a window into how a crucial democratic process was skewed by one of the most prolific uses of political impersonation in US history. In a key part of the puzzle, two little-known firms, Media Bridge and LCX Digital, working on behalf of industry group Broadband for America, misappropriated names and personal information as part of a bid to submit more than 1.5 million statements favorable to their cause."

Broadband For America, who we've discussed previously, pretends to be a coalition of "consumer groups" and other interests "dedicated to protecting a free and open internet for all Americans." But it's little more than a cut out for Comcast, AT&T, Verizon, and other industry giants. Via a slow and painstaking FOIA process, Buzzfeed ultimately linked many of the stolen identities to major data breaches like the hack of modern business solutions by matching the fraudulent names via the hack database at HaveIBeenPwned.

Just in case the lede gets buried here: the broadband industry hired shady goons to use stolen data to create fake public support for anti-consumer tech policy. And nobody (especially the FCC) has done a damn thing about it.

Granted the net neutrality repeal is just one of many examples of lobbyists polluting regulatory comment periods (usually the only time consumers are allowed to give feedback on policy decisions) with fake people, and both Media Bridge and LCX Digital appear to have other clients beyond just the broadband sector:

"The anti–net neutrality comments harvested on behalf of Broadband for America, the industry group that represented telecommunications giants including AT&T, Cox, and Comcast, were uploaded to the FCC website by Media Bridge founder Shane Cory, a former executive director of both the Libertarian Party and the conservative sting group Project Veritas. Cory has claimed credit for “20 or 30” major public advocacy campaigns in recent years, including, he says, record-setting submissions to the IRS, Environmental Protection Agency, Bureau of Land Management, Bureau of Ocean Energy Management, and “probably a handful of others."

Classy! Given that both the DOJ and the NY Attorney General are (supposedly still) conducting ongoing inquiries into the fake net neutrality comments, this may not be the last time you'll see these lobbying shops' names in lights. Meanwhile it's rather ironic that the same week a court ruling comes down supporting (mostly) the FCC's repeal, a big chunk of the "public support" for the repeal -- and the FCC's primary justification for it (that the rules stifled broadband investment) -- were clearly proven to be fraudulent. So far, one gets the sneaking suspicion the US legal system may just be broken.

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Posted on Techdirt - 3 October 2019 @ 6:38am

Yet Another Study Shows The Internet Of Things Is A Privacy Shitshow

from the dysfunction-junction dept

Day in and day out, it's becoming increasingly clear that the smart home revolution simply isn't all that smart.

Security analysts like Bruce Schneier have been sounding the alarm bells for years now about the lax to nonexistent security and privacy standards inherent in the internet of broken things space. From refrigerators that leak your Gmail credentials to Barbie dolls that can be easily hacked to spy on kids, it's increasingly clear that dumber technology is often the smarter solution. Not only do many of these devices actually make us less secure, their lack of real security has resulted in their use in historically large DDoS attacks.

As if the point hadn't been made clear enough, a new joint study between Northeastern University and Imperial College London took a closer look at 81 popular smart door bells, dongles, TVs, and other gear, and came away notably unimpressed. The study, the biggest ever of its kind, found that the lion's share of such devices routinely share an ocean of data (your IP address, MAC address, location info, viewing preferences) with a massive array of third parties. Worse, many of these transfers were not properly secured, meaning they could be intercepted by another party:

"In a series of 34,586 experiments, the study found that 72 of the devices made contact with someone other than its manufacturer. In many instances, these transfers “expose information to eavesdroppers via at least one plaintext flow, and a passive eavesdropper can reliably infer user and device behavior from the traffic,” the researchers said."

One popular camera studied by the researchers pinged 52 different IP addresses every time it phoned home. And while some of the contact points were largely innocuous (cloud service providers, etc.), many of these devices were happily providing usage data to a wide variety of marketers and third parties without making those data transfers clear to the end user. Often many of the devices were routinely providing this data to companies like Netflix even if the end user didn't have a Netflix account. Much of this data is being used with other data sets to build complex behavioral profiles, again without this always being clear to users (a notable point of contention in the smart electricity meter space).

On the plus side, a number of high-profile wrist slaps on this front (like the $17 million paid by Vizio for spying on its users for 3 years, or the bad press Samsung got when its smart TVs were shown to be transmitting viewer voice data unencrypted to the cloud) have at least resulted in these companies beefing up their use of encryption, though that's a mixed blessing for those trying to study what data is being sent between your smart fridge and third parties:

"Choffnes told me that while the high profile wrist slaps of recent years have resulted in an increase in the use of encryption by vendors, that poses a double edged sword for researchers “One of the biggest challenges we face is that the same encryption that protects users' data from eavesdroppers also prevents us researchers from seeing what is inside,” he said."

Studies in both the UK and the US continue to highlight how privacy and security are just distant afterthoughts in the rush to sell more kit. Many of these devices aren't just overly chatty, they're extremely hackable. As security expert Bruce Schneier has long noted, there's no market solution to this problem because neither the hardware vendors nor the consumers actually care, given the privacy and security shortcomings (usually) only harm other people:

"The market can't fix this because neither the buyer nor the seller cares. The owners of the webcams and DVRs used in the denial-of-service attacks don't care. Their devices were cheap to buy, they still work, and they don't know any of the victims of the attacks. The sellers of those devices don't care: They're now selling newer and better models, and the original buyers only cared about price and features. There is no market solution, because the insecurity is what economists call an externality: It's an effect of the purchasing decision that affects other people. Think of it kind of like invisible pollution."

He's also long made the point that none of this is going to get fixed until there's some kind of massive calamity that makes the broader public finally take the problem more seriously. And with businesses and consumers attaching easily-compromised devices to their network at the rate of millions per year, it's a day that doesn't seem too far over the horizon.

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Posted on Techdirt - 2 October 2019 @ 3:43pm

Nonprofit TV Service Locast Accuses Big Four Broadcasters Of Collusion

from the dysfunction-junction dept

Locast, a New York based nonprofit that offers viewers access to over-the-air (OTA) broadcasts via the internet, has accused the big four broadcast networks of colluding to restrict consumer access to those broadcasts. As we noted recently, Locast was custom built to test the copyright legal minefiled created in the wake of the Aereo ruling, which made made numerous dubious assumptions and provided zero guidance for companies that wanted to enter the space but comply with the law. Enter former FCC lawyer and media executive David Goodfriend, who effectively created Locast specifically in the hopes the industry would sue.

Last month Goodfriend got his wish, with ABC, CBS, Comcast/NBC, and Fox all filing suit, claiming the video nonprofit (which currently offers the service in 13 markets) is "illegally using broadcaster content." Locast in turn has now responded in a court filing (pdf), alleging that the broadcast networks have unfairly colluded to restrict public access to OTA broadcasts:

Plaintiffs have colluded to limit the reasonable public access to the over-the-air signals that they are statutorily required to make available for free, and have opted instead to use their copyrights improperly to construct and protect a pay-TV model that forces consumers to forgo over-the-air programming or to pay cable, satellite, and online providers for access to programming that was intended to be free. A large portion of the fees paid by the public is then handed over to Plaintiffs in the form of retransmission consent fees.

Broadcast TV networks are available using both an inexpensive antenna and airwaves that are technically owned by the public. But, given broadcast networks collected $10.1 billion in retransmission fees for these channels in 2018 from cable TV operators looking to include them in their cable lineups, they're obviously not keen on outfits looking to disrupt their profitable, existing models. Locast currently streams these channels in 13 markets but doesn't charge users for access, only taking donations as a nonprofit. Its lawyers say the existing broadcast model is little more than a complicated con:

This is classic copyright abuse. By limiting access to the over-the-air signals that Plaintiffs have committed to make freely available, and simultaneously using the copyrights in their programming to drive revenue for the local programming that consumers cannot now effectively receive over the air through their pay-TV model, Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The payTV providers get rich. Plaintiffs get rich. The public gets fleeced.

In addition to engaging in what Locast's lawyers call a "a sham copyright infringement claim," they state that the broadcast networks have been working in concert to threaten retaliation against any additional partners beyond AT&T and Dish:

Plaintiffs’ bad faith litigation is part of a broader coordinated campaign to undermine Defendants’ business dealings and chill financial support among potential donors, including with direct threats of retaliation or baseless litigation against them. These threats have harmed competition and will continue to do so until stopped by this Court.

The broadcasters' lawsuit was filed in US District Court for the Southern District of New York against Sports Fans Coalition New York (SFCNY), the organization that technically runs Locast. The broadcasters continue to argue that the outfit is not only illegal, but that it's not eligible for non-profit status because it's funded, in part, by Dish and AT&T, two companies both trying to make inroads in the streaming TV space.

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Posted on Techdirt - 2 October 2019 @ 6:11am

Comcast Apparently Feels Qualified To Give Google Lectures On Monopoly Power

from the ill-communication dept

For several years the telecom sector has been quietly trying to spur additional regulation of Silicon Valley. Why? As giants like AT&T and Comcast increasingly push into the online advertising arena, they're keen on having competitors saddled with regulation, while they successfully eliminate oversight of their own problematic monopolies. Given the FCC (now headed by a former Verizon lawyer) just effectively neutered itself at telecom lobbyist behest while the DOJ (now headed by a former Verizon lawyer) goes the extra mile to vilify Facebook, you'd have to consider the gambit fairly successful so far.

To be clear, there are plenty of problems with Google, Facebook, Amazon, and other Silicon Valley giants that require attention and intelligent solutions by objective experts. And while a huge chunk of the animosity toward Silicon Valley giants is entirely genuine and well deserved, a lot of the "big tech" hyperventilation among lawmakers like (longtime AT&T ally) Marsha Blackburn is largely theatrical in nature and being driven by the telecom sector. Ferreting out which is which isn't easy, but looking at campaign contributions can certainly help.

The mainstream press, for its part, has been oddly unaware of how much of the animosity against "big tech" has been co-opted and amplified by telecom for what should be obviously selfish reasons. For example, telecom (hand in hand with Rupert Murdoch) has been making the rounds trying to suggest that Google's support of encrypted DNS somehow runs afoul of antitrust guidelines (it doesn't). And Reuters, for example, ran a story this week suggesting that Comcast had suddenly emerged as a "new antitrust foe" for Google, levying criticism at the company's ad business for the "first time":

"Comcast, one of America’s largest media and communications companies, is wading into the epic regulatory pile-on against big tech companies such as Google, according to people familiar with the matter...Comcast may be drawing a line in the sand and wants to avoid letting Google do to the video ad business what it has done to the online ad market. It is the first time one of the most powerful companies in the United States, with its own muscular lobbying apparatus in Washington, is taking sides in the antitrust battle looming over the world’s largest seller of online ads.

So for one thing, Comcast's efforts to push for a regulatory and antitrust crackdown of Google isn't "new." The cable industry's top lobbying organization, the NCTA (whose primary backer is Comcast) has been pushing for a crackdown on Silicon Valley for several years now. Former FCC boss Mike Powell, now the cable industry's top lobbyist, had this to say at an industry show in March of last year. Take special time to note how every criticism levied at Silicon Valley giants applies equally to telecom providers:

"Our governmental authorities need to get a handle on what kind of market power and harm flow from companies that have an unassailable hold on large pools of big data, which serve as barriers to entry, allowing them to dominate industries throughout the economy. For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging. They dominate their core business, and rarely have to foreclose competition by buying their peers. Competition policy must scrutinize more rigorously deals that allow dominant platforms to kill competitive technologies in the cradle."

While there's plenty of individuals, groups, and companies that can provide helpful insight on the problems in "big tech," Comcast isn't among them. In large part because it's guilty of nearly all of the criticisms it levies at Google. After convincing the FCC to effectively neuter itself recently, Comcast has been enjoying a growing broadband monopoly across huge swaths of the country as the nation's telcos give up on upgrading aging DSL networks. Comcast then uses that monopoly to jack up prices, erect arbitrary barriers for competitors, and stifle emerging technologies (like better cable boxes).

And while Comcast tries to get DC lawmakers to impose all manner of new restrictions on Google, with its other hand it has successfully convinced DC (and a lot of policy folks who should know better) to ignore the problems with telecom entirely. Comcast has largely been criticizing Google via its advertising subsidiary Freewheel, and via its policy and lobbying extension organizations, while leaning on politicians like Marsha Blackburn whose sudden, breathless concern about tech monopolies mysteriously omits some of tech's worst offenders: telecom providers.

Yes, countless experts have noted for a decade than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech." That said, if we're looking for expert insight into the genuine problems posed by "big tech," maybe skip taking advice from natural telecom monopolies whose only real motivation here is to elbow in on Silicon Valley advertising revenues while saddling competitors with layers of new regulation.

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Posted on Net Neutrality Special Edition - 1 October 2019 @ 10:50am

Court Says FCC Can't Stop States From Protecting Net Neutrality

from the ill-communication dept

Today a federal appeals court delivered a decidedly mixed decision in the FCC's ongoing quest to kill net neutrality and telecom sector oversight. On the one hand, the new 2-1 ruling by the US Court of Appeals for the District of Columbia Circuit backs much of the FCC's Orwellian-named "Restoring Internet Freedom" order, which not only repealed the FCC's 2015 net neutrality rules, but gutted much of the agency's authority over broadband providers. That decision shoveled any remaining telecom oversight to an FTC that experts say lacks the authority or resources to actually police giants like AT&T, Verizon, and Comcast (the whole point).

But the ruling wasn't without a few notable catches. The court was quick to kick several aspects of the agency's order back to the FCC for revision. The court noted the FCC failed completely to explore how the repeal would harm public safety and efforts like the FCC's Lifeline program, which doles out a modest $9 monthly subsidy to low-income users to be used on wireless, phone, or broadband service (they have to choose one). Pai's been trying to undermine this Reagan-era program for several years, so the fact his FCC didn't think about the impact gutting FCC authority would have isn't surprising.

The biggest part of the court's ruling is that it shot down the FCC's attempt to stop states from protecting net neutrality. In the wake of the FCC's repeal, 29 states have proposed their own state-level net neutrality rules, one of the biggest reasons ISPs haven't been pushing their luck. Some of these efforts, like California's SB822, actually go further than the FCC's 2015 rules did in policing things like zero rating (ISPs using usage caps as an anti-competitive weapon, something they're already doing).

But the court found that if the FCC is going to void its authority over ISPs, it can't then turn around and try to pre-empt states from protecting consumers themselves:

"We uphold the 2018 Order, with two exceptions. First, the Court concludes that the Commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the Commission “repealed or decided to refrain from imposing” in the Order or that is “more stringent” than the Order. 2018 Order ¶ 195. The Court accordingly vacates that portion of the Order. Second, we remand the Order to the agency on three discrete issues: (1) The Order failed to examine the implications of its decisions for public safety; (2) the Order does not sufficiently explain what reclassification will mean for regulation of pole attachments; and (3) the agency did not adequately address Petitioners’ concerns about the effects of broadband reclassification on the Lifeline Program.

ISPs have, and will continue to, whine incessantly about the perils of having to adhere to dozens of state-level net neutrality laws, but that's a problem of their own making. While large ISPs (and the Pai FCC) have tried to frame the FCC's 2015 rules as hugely draconian and restrictive, in reality they were fairly modest by international standards. And while the Trump DOJ (now not coincidentally run by former Verizon General Counsel Bill Barr) sued California for trying to protect consumers, this new ruling will likely complicate those efforts.

The court ruling supporting the majority of the FCC's repeal remains a bit surprising. Under the Administrative Procedure Act, a regulator has to base major policy decisions on solid justifications and hard data. But the FCC not only failed utterly to show that industry changes warranted such a reversal, its primary justification for repeal (that net neutrality rules stifled industry investment) has been repeatedly proven false. In reality the FCC effectively neutered itself at the behest of largely predatory telecom monopolies, at times using outright fraud to accomplish the goal. And so far, our courts are cool with it, apparently feeling constrained by previous Brand X court declarations (something made clear by Judge Patricia Millett):

"I join the Court's opinion in full, but not without substantial reservation. The Supreme Court's decision in [the Supreme Court's Brand X decision] compels us to affirm as a reasonable option the agency's reclassification of broadband as an information service based on its provision of Domain Name System ("DNS") and caching. But I am deeply concerned that the result is unhinged from the realities of modern broadband service."

No shit. A good chunk of the ruling goes well out of its way to support the FCC's reasoning, especially as it relates to the FCC contention that the broadband sector is competitive (if you're new to US telecom, it's not):

So yeah. As usual, what the courts declare to be valid, and what's actually intellectually and ethically valid are entirely different things. While you'll see a lot of bickering over the legalese in this decision, don't forget what really happened here: telecom lobbyists convinced the FCC to effectively neuter itself, using bogus data, massaged economic analysis, and fraud to accomplish it against the will of the the bipartisan majority of the public. And again, the United States legal system, at least up to this point, is largely cool with that.

While the appeals court ruling could still make its way to the Supreme Court (a major reason ISPs backed Kavanaugh), there are still several other paths for net neutrality supporters here. One, the state laws should work to help rein in some of the industry's worst impulses. But the ruling could also foster support for the three page Save The Internet Act, which would fully restore the 2015 FCC rules as an act of Congress. That bill passed the House last year but was blocked by McConnell in the Senate, one of a million considerations up for voter contemplation during the looming elections.

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Posted on Techdirt - 1 October 2019 @ 6:16am

Hidden Fees Mean US Cable & Broadband Bills Can Be 45% Higher Than Advertised

from the ill-communication dept

For years we've talked about how the broadband and cable industry has perfected the use of utterly bogus fees to jack up subscriber bills, a dash of financial creativity it adopted from the banking and airline industries. Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate -- then sock you with a higher rate once your bill actually arrives. These companies will then brag repeatedly about how they haven't raised rates yet this year, when that's almost never actually the case.

Despite this gamesmanship occurring for the better part of two decades, nobody ever seems particularly interested in doing much about it. The government tends to see this as little more than creative marketing, and when efforts to rein in this bad behavior (which is really false advertising) do pop up, they tend to go nowhere, given this industry's immense lobbying power. And given the US broadband sector remains painfully uncompetitive in most markets, actually voting with your wallet is often impossible.

How bad is the problem, really? A new study by GlobalData found that what you'll actually pay to your cable TV or broadband provider can often be upwards of 45 percent higher than the advertised price:

"In some cases, the final cost is as much as 45% over the advertised rate. For example, Xfinity’s $40 ‘Starter Internet plus Basic’ TV bundle jumps to $58 per month once the additional $18 in equipment costs are added. Prices can also vary based on location.”

According to GlobalData’s research, Verizon had the highest additional costs in August at $24 per month, followed closely by Frontier and Optimum with around $17-$18 in additional equipment fees. AT&T and Google Fiber offered the most cost transparency in bundle price with zero additional equipment or technology fees.

AT&T is let off the hook here and they shouldn't be. This is a company that recently tried to charge its broadband customers upwards of $500 more a year if they simply wanted to opt out of snoopvertising and online data tracking. The broadcast and cable fee problem isn't a subtle one. Companies like CenturyLink have gotten so cocky they've charged their broadband users a "internet cost recovery fee," which it claims helps the ISP "defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network." Except that is, in case you didn't know, what the rest of your damn bill is for.

Of course it's a problem that's everywhere, and not just in the telecom sector. Hotels routinely still charge users obnoxious "resort fees" (legislation to hamper those efforts exists but faces an uphill climb against lobbyists), and airlines and banks have of course perfected the nuisance as well. But both parties appear to have embraced the practice as a form of capitalistic creativity, despite the fact that when you strip away the bullshit justifications, it's little more than false advertising. And, apparently, most US regulators and lawmakers are cool with that.

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Posted on Techdirt - 30 September 2019 @ 6:39am

Massive Study Proves Once And For All That No, Net Neutrality Did Not Hurt Broadband Investment

from the ill-communication dept

The biggest study (pdf) ever of its kind has found that net neutrality rules had absolutely no impact on broadband investment whatsoever. The study took an incredibly detailed look at CAPEX data for more than 8,577 different companies (270+ of which were telecom providers) and concluded:

"The results of the paper are clear and should be both unsurprising and uncontroversial. The key finding is there were no impacts on telecommunication industry investment from the net neutrality policy changes. Neither the 2010 or 2015 US net neutrality rule changes had any causal impact on telecommunications investment."

Since the very beginning of the net neutrality debate, ISPs have repeatedly proclaimed that net neutrality rules (read: stopgap rules crafted in the absence of competition to stop giant monopolies from abusing their power) utterly demolished broadband sector investment. It was a primary talking point during the battle over the 2010 rules, and was foundational in the Ajit Pai FCC's arguments justifying their hugely unpopular and fraud prone repeal.

Time after time after time, big ISPs and the politicians paid to love them insisted that the rules had crushed sector investment, and repealing them would result in a massive spike in broadband investment. It was a line repeated again last year by Pai during an FCC oversight hearing (for those interested he wasn't under oath, which applies only to Judiciary hearings):

"Under the heavy-handed regulations adopted by the prior Commission in 2015, network investment declined for two straight years, the first time that had happened outside of a recession in the broadband era...we now have a regulatory framework in place that is encouraging the private sector to make the investments necessary to bring better, faster, and cheaper broadband to more Americans.

It didn't matter that several studies had shown this wasn't true. It didn't matter that journalists who had reviewed public earnings data found no evidence whatsoever to support the claim. It didn't even matter that CEOs for numerous ISPs were clearly on record telling investors the claim wasn't true. It was repeated over and over and over again by the telecom sector and loyal politicians like Pai in the hopes that repetition would somehow forge an alternative reality where what net neutrality opponents felt in their guts would become the indisputable truth.

Throughout the repeal, the Pai FCC repeatedly cited data from telecom lobbying firm US Telecom as gospel, at one point even directing reporters with questions directly to US Telecom lobbyists (that's bad, in case you're wondering). Last year, the group pushed a "study" proclaiming broadband investment had exploded in the wake of the repeal, somehow failing to even notice their study had a fatal flaw:

"Last year, telecom lobbying group US Telecom released a study it claimed showed that broadband investment had spiked dramatically in 2017 thanks to “positive consumer and innovation policies” and a “pro-growth regulatory approach” at the FCC.

The problem? The FCC’s net neutrality rules weren’t formally repealed until June of 2018.

The entire mess speaks plainly to how lobbyists and the lawmakers who love them use repetition, friendly media outlets, and massaged industry-sponsored lobbyist and economist analysis to construct alternate realities that support anti-consumer, anti-innovation policies (like say, letting lumbering, anti-competitive telecom giants do whatever the hell they'd like). As we've noted a few times, it's important to understand that the "net neutrality repeal" didn't just kill net neutrality rules, it all but obliterated the FCC's ability to hold ISPs accountable for much of anything, which was the entire point.

And while the industry may have scored a victory on the front end, the choices made could still come home to roost. Three different major FCC policy efforts have been shot down by the courts in as many months for failing to provide hard evidence actually supporting the decision. Given 23 state AGs have sued the FCC claiming the net neutrality repeal was similarly flawed, plenty of folks are curious if the FCC's net neutrality repeal will soon share a similar fate.

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Posted on Techdirt - 27 September 2019 @ 1:30pm

Yahoo Hack Victims Line Up To Get $100 (Or Less) For Historic Hack

from the timid-and-pointless dept

It seems like only yesterday that we learned of the historic hack of Yahoo, resulting in the leaked data of more than 500,000 subscribers. Granted, like most hack stories, it didn't take long before we learned that the impacted number of subscribers was far far larger, with in fact several different hacks resulting in the leaked data of roughly 3 billion potential users, or pretty much everybody that had ever used the service.

Granted like other similar hacks, the $117.5 million settlement "holding Yahoo accountable" didn't do anything of the sort. The settlement website has gone live, and is informing impacted users that they may be entitled to $100 as a result of the breach. Of course, just like the flimsy Equifax hack and settlement, users are also being told that they shouldn't actually expect to get that money depending on the number of folks interested in actually being compensated:

"Settlement Class Members are encouraged to submit a claim to receive a minimum of two years of future Credit Monitoring Services. If you already have Credit Monitoring Services, you may still sign up for this additional protection. Alternatively, if you verify that you already have a credit monitoring service that you will keep for at least one year, you may submit a claim for a cash payment of $100.00 instead of receiving Credit Monitoring Services through the Settlement. Payment for such a claim may be less than $100.00 or more (up to $358.80) depending on how many Settlement Class Members participate in the Settlement."

That $358 tally is never going to happen given people like free money. Much like the "historic" settlement in the Equifax case, users are being promised either free credit reporting software or a cash payout the settlement isn't robust enough to actually support. But as we've noted previously, credit reporting is largely a useless perk; it's already been given away free as the result of an endless series of previous similar hacks, and it's usually only included in these kinds of cases to give the illusion of a fatter pot, letting feckless regulators proclaim "record" settlements.

At least in this case, the Yahoo settlement makes it clear you probably won't be getting that full $100, something the Equifax settlement administrators and the FTC only revealed after the fact while proclaiming "surprise" at the number of people eager to be modestly compensated.

As it stands, the option to nab either worthless credit monitoring (or cash you probably won't actually see) is available to US or Israeli residents who had a free Yahoo account at any time between January 1, 2012 and December 31, 2016. Like the Equifax settlement users may also be eligible for up to $25,000 if they can prove the hack directly resulted in financial harm via identity theft (no easy feat). The settlement is still pending final approval, but impacted users must make their claim for free credit monitoring or a cash payout by July 20, 2020.

Ultimately, no matter how many times regulators proclaim these kinds of settlements involve "record" financial tallies, they're doing little to nothing to either aid users, or hold companies accountable for making securing private user data an afterthought.

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Posted on Techdirt - 27 September 2019 @ 6:30am

Sprint Busted For Allegedly Defrauding The FCC Lifeline Program

from the whoops-a-daisy dept

For years, big cellular carriers have been busted defrauding the FCC Lifeline program, a fund that's supposed to help subsidize telecom connectivity for low income users. Started by Reagan and expanded by Bush, the fairly modest program doles out a measly $9.25 per month subsidy that low-income homes can use to help pay a tiny fraction of their wireless, phone, or broadband bills (enrolled participants have to chose one). While the program (which you pay into via your telecom bills) has been a subject of fraud, the agency has done some solid work under both parties trying to rein in abuse of the program.

This week, the Pai FCC brought the hammer down on Sprint, alleging that the company has been collecting monthly subsidies for roughly 885,000 Lifeline customers who were no longer actually using the company's services. From the FCC announcement (pdf):

"The Federal Communications Commission has learned that Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service. That would be a violation of a key rule—the “non-usage” rule—designed to prevent waste, fraud, and abuse in the Lifeline program. The 885,000 subscribers represent nearly 30% of Sprint’s Lifeline subscriber base and nearly 10% of the entire Lifeline program’s subscriber base.

These kinds of "errors" aren't uncommon in the subsidy-slathered telecom sector. AT&T was forced to pay $11 million in 2015 by the previous, Tom Wheeler FCC because it "forgot" to remove nonexistent subsidy recipients from its rolls. In this case, the Pai FCC makes it clear the discovery will lead to a broader investigation and at least some kind of fine for Sprint, which has been working overtime to gain approval for its $29 billion merger with T-Mobile.

Historically, the Lifeline program has seen pretty broad, bipartisan support. After improving reporting requirements to thwart fraud, the FCC under Tom Wheeler slightly expanded the program to include broadband. Pai voted that expansion down, and has been criticized for slowly attempting to kneecap the program. The courts however have argued that a number of Pai's efforts to hamstring the program (like taking away subsidies from tribal residents) haven't been supported by factual evidence.

To be clear, this is a good move by Pai. That said, Pai has been a bit discordant on this subject. He'll profess his top priority is "closing the digital divide," but will then either ignore issues at the root of the problem (limited broadband competition, high prices), or attempt to scale back programs like Lifeline that actually attempt to do something about it. With Sprint, Pai is back again insisting that Lifeline is something important that needs protecting, something his policy proposals don't always reflect given his numerous attempts to neuter the program:

"Lifeline is an important component of our efforts to bring digital opportunity to low-income Americans, and stopping waste, fraud, and abuse in the program has been a top priority of mine since I’ve been at the Commission,” Chairman Pai said. “It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers. I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy."

Despite Pai's wishy washy positioning on whether we should help poor people get and stay connected, the crackdown is welcome and long overdue. That said, the fact that Sprint was likely defrauding the government isn't likely to change the FCC's decision to approve the Sprint T-Mobile merger; consolidation consumer groups say will only amplify many of the pricing and competition problems that make telecom services expensive for low-income users in the first place.

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