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About Karl Bode

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

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Posted on Techdirt - 27 April 2015 @ 10:28am

AT&T's DirecTV Deal Flies Under The Comcast-Hate Radar, Will Likely See FCC Approval

from the land-of-make-believe dept

With Comcast's attempted acquisition of Time Warner Cable dead and buried, telecom regulators now shift their gaze to AT&T's attempt to acquire DirecTV. Unlike the Comcast deal, AT&T's deal is in some ways worse because it actually eliminates a direct competitor in the pay TV marketplace. Still, somehow the overarching narrative is that the deal isn't nearly as bad because the final company will be only slightly less massive. As such, regulators appear poised to sign off on the deal, with insiders saying they're swayed by AT&T's claims that the deal will somehow help expand broadband services:

"The divergence in fortunes signals that regulators are more worried about providing choice in Internet access and new, online video options than they are about concentration in pay TV...The Federal Communications Commission sees the AT&T deal as helping competition and aiding the spread of broadband into rural areas that lack service, people familiar with the matter said."
The problem? AT&T's merger benefit claims have historically been even more ridiculous than Comcast's. As it stands, AT&T's current plan is to back away from DSL markets it doesn't want to pay to upgrade, leaving cable operators with greater monopoly control over dozens of markets than ever before. AT&T's then planning to run fiber to only very selective high end developments, and shovel most of its older DSL users onto notably more expensive LTE service. Outside of the potential for some satellite/wireless hybrid products, there's really nothing about the DirecTV deal that changes this.

Yet in a recent, heavily-redacted filing with regulators, AT&T promises that if it's allowed to buy DirecTV, it will expand fiber to the home service to an extra two million households. After defending its decision to skimp on network investment for a decade, AT&T's filing illustrates how the telco, unlike Verizon, chose to spend a lot less money on slower fiber to the node service, painting itself in a corner in terms of offering broadband speeds on par with cable. The filing claims that being allowed to buy DirecTV will somehow magically fix this by pushing AT&T to invest more heavily in fiber (and they mean it this time):
"Based on the expected content cost savings alone, AT&T concluded that it will have an economically viable business case to justify expanding FTTP GigaPower’s reach to at least two million additional customer locations that would not meet investment thresholds absent the merger, and AT&T has committed to do exactly that within four years of the closing of the merger. Significantly, this “lift” in the economic viability of FTTP GigaPower service from the transaction is in addition to any further expansion justified by changes in the constantly evolving competitive landscape."
There are a few problems with this scenario. One, AT&T has a long history of using phantom broadband expansion as a carrot on a stick for regulators, then failing to follow through. Whether it's the company's acquisition of BellSouth or its failed acquisition of T-Mobile, AT&T's strategy has always been to take broadband deployments it was planning to do anyway, then break them out as a pretended added expansion should its latest deal get approved. Meanwhile, AT&T's Gigapower service is, as previously noted, mostly aimed at high-end housing ("greenfield") developments. Even if real (which if history is any indication it's not), two million isn't much of an expansion when you consider how much fiber to the home service $49 billion would have purchased. Even if AT&T sees cost savings thanks to improved programming leverage, AT&T's historically the type to pocket those proceeds -- not put them back into the network.

Even M&A loving Wall Street analysts don't quite understand the point of the DirecTV deal, even though history (T-Mobile) has made it perfectly clear the telco is willing to spend tens of billions simply to reduce sector competition. Some argue that buying a satellite TV operator at a time when cord cutting is just starting to nibble at satellite's subscriber base -- and the traditional pay TV ecosystem is undergoing a seismic shift related to unsustainable pay TV rates -- just doesn't make sense. As such, the FCC may be thinking the deal may not need to be blocked, given it may just be dumb enough to be irrelevant over the long haul. It may even be able to extract some consumer-friendly conditions in the process.

Still, in the short term, AT&T's inevitable competitive-hamstringing of the traditionally more price disruptive DirecTV is troubling. It's here I'll remind folks that AT&T's attempt to nab T-Mobile was blocked, and the result was undeniably a more competitive wireless marketplace than before. Meanwhile, Comcast's deal was refused in no small part thanks to the extreme, negative public sentiment surrounding cable service and the Comcast brand. Though AT&T is every bit obnoxious and aggressively anti-competitive as Comcast, AT&T's merger has managed to fly under the public-perception radar. Should AT&T's deal (and bundled nonsensical broadband expansion plans) be approved, AT&T's certainly going to owe the folks at Comcast a very lovely "thanks for the distraction" gift basket.

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Posted on Techdirt - 23 April 2015 @ 3:22pm

Blistering Hubris, Bald-Faced Lies And Atrocious Customer Service Kill Comcast's Merger Ambitions Dead

from the end-of-the-bloviating-road dept

Comcast's week just got notably worse with the news (barring some last minute miracle) that the cable giant will likely be walking away from its $45 billion acquisition of Time Warner Cable after leaks suggested the DOJ and FCC will likely be blocking the deal. Regulatory opposition was based in part on the belated realization that Comcast had failed to adhere to the conditions set in its 2011 acquisition of NBC, despite the fact that most of the conditions were volunteered and engineered by Comcast to be as meaningless as possible. The real deal killer however? More than a year's worth of unrelenting, negative media attention for what's arguably some of the worst customer service in any industry.

Leading this latest merger sales job for Comcast was top lobbyist David Cohen, who played a starring role in getting Comcast's 2011 acquisition of NBC approved, earning him the reputation for being a telecom policy and lobbying "rock star." As any well-paid lobbyist would, when tasked with a new merger to sell, Cohen repeatedly pushed a litany of utterly unbelievable deal benefits pulled entirely out of the ether, denied absolutely every criticism as illegitimate and irresponsible, then proudly proclaimed that nobody "reasonable or knowledgeable" could possibly object to the company's merger.

Cohen's secret weapon during the NBC acquisition was something Comcast called its "Internet Essentials" program, which provides $10, 5 Mbps broadband to homes that qualify for the National School Lunch Program. Cohen consistently touted Internet Essentials as an utterly selfless, altruistic effort to close the digital divide, wholly unrelated to the company's attempt to grease the M&A rails. There's many reasons why Cohen and Comcast failed to win the hearts of consumers and regulators, but Internet Essentials perfectly exemplifies Comcast's unique brand of hubris.

The program became an absolutely massive public relations boon to Comcast, which held junket after junket at schools across the nation, patting itself on the back for being a noble corporate citizen, with Cohen and politicians endlessly photographed surrounded by smiling children as they pretended to crush the digital divide in classrooms across America. The PR success of the effort even prompted Cohen to start calling himself Comcast's "Chief Diversity Officer," despite the fact the title's real goal was to help him dodge legal lobbying restrictions on how many hours a week he can lobby.



Since it worked so well for the NBC deal, Cohen and his lobbyist team started hyping the program even more heavily for the Time Warner Cable deal. The problem was, by this point people were starting to see through the effort. The program started taking national media heat for being hard to find, hard to qualify for, rife with caveats and little more than a faux-altruistic show pony for regulators. As a result, depending on the state, only about 11 to 15% of the millions of eligible households were able to sign up for the program. Stanford Law Professor Susan Crawford recently called Internet Essentials a "customer acquisition program masquerading as a philanthropic gesture," highlighting the restrictions Comcast baked into the program to ensure it had to do as little heavy lifting as possible:
"...only low-income families with school-age children are eligible for the program. It does nothing to close the digital divide for other underserved groups like the elderly, the disabled, and low-income childless adults. Plus, it’s hard to apply: the California Emerging Technology Fund says that it takes two or three months for applications to arrive. No existing Comcast customers are eligible — no matter how “low-income” you are, you can’t decide to reduce your bill by applying for Internet Essentials instead. (Families have been told to drop their Comcast service for 90 days and then try signing up — a terrible hardship for anyone.)"
Whenever anybody pointed out that Comcast's effort was anything less than the pinnacle of nobility, Cohen trotted out a brand of snotty rhetoric that only managed to make the company seem less likable than ever. Case in point from a blog post this week, in which Cohen once again tried to "set the record straight" about the deal benefits:
"And while it may be easy for critics to do this from the sidelines, we would rather try, in the spirit of President Kennedy, to light a candle than to curse the darkness. The reality is that Internet Essentials has been one of the most successful, if not the most successful, private sector initiatives to close the digital divide ever. And it’s not just Comcast that says this; scores of credible civic and community leaders have said the same...But to those critics and business interests that want to take shots at the program, we say join us in the fight against the digital divide to make broadband a reality for all Americans, working together to do more, rather than sniping at cross purposes to run down what has been done."
To be clear here, Comcast is offering a limited number of homes a $10, 5 Mbps down, 1 Mbps up broadband service that costs the company virtually nothing to provide, then behaving as if it had just cured bowel cancer. Meanwhile, the lion's share of the "credible civic and community leaders" supporting the program are usually paid to do so. Most importantly though, Cohen ignores that these amorphous "critics" of the program are the same poor families he breathlessly claims to care so much about. Said critics had to protest in Comcast's hometown of Philadelphia to get Comcast's attention regarding the failures of the program:
"A 10-year-old back-due cable-TV bill for $180 made Hawkins ineligible for the $9.95-a-month Internet Essentials that Comcast publicized as an aid to closing the nation's digital divide - the term for the substantial number of poor people who can't afford $50-a-month Internet service. Hawkins didn't think that was right, and Comcast wouldn't agree to a payment plan. She has a son, Khyrie, then a fifth grader at L.P. Hill Elementary School on Ridge Avenue. "They opened a can of worms with me," said Hawkins, who helped organize a protest in 2012 at Comcast's Center City headquarters to present executives with bologna sandwiches that she thought represented its Internet Essentials program."
Internet Essentials was the very heart of Comcast's Time Warner Cable merger sales pitch, as it shifted the focus away from Comcast's poor customer service reputation and toward Comcast's manufactured image as a champion of diversity, propped up by a chorus of astroturfers on the Comcast payroll. Cohen pitched a laundry list of other imaginary deal benefits that were equally negligible, from hallucinated cyber security improvements to claims the deal would be a boon to creative people everywhere.

But as AT&T found out when it tried to claim that killing T-Mobile would magically increase wireless competition, there actually is a line you can cross when it comes to lobbying bullshit and blistering hubris, even in Washington DC. However, government only respects that line when consumers can be bothered to pay attention, and they were certainly paying attention here after two decades of being abused by one of the least competitive, most apathetic industries in American history.

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Posted on Net Neutrality Special Edition - 23 April 2015 @ 6:06am

Cable's Top Lobbyist Just Can't Understand Why People Like Google Better

from the King-Kong-was-misunderstood dept

Trying to justify the cable industry's latest lawsuit over net neutrality, former FCC boss turned top cable lobbyist Michael Powell has offered up an incredibly entertaining interview in which he struggles to understand why Google tends to see higher customer satisfaction ratings than the cable industry, and tries to brush away anti-competitive concerns as the ramblings of the uninformed masses who just don't understand what a sweetheart the cable industry truly is. In fact, Powell claims the entire net neutrality debate is an unfair persecution of an innocent cable industry and the wholesale hallucination of a few rabblerousers :

"There's probably a book we could write on this. A huge element that led to this decision was a well-orchestrated, dynamic movement, launched, housed and managed on the Internet, that created a myth that something was happening that wasn't actually happening. You can go look at all the materials from Free Press and others who said the cable industry is in the middle of setting up tolls on the Internet. But there is no justification that we were ever doing any of things we were alleged. In Mark Cuban's words, this is nothing but big-company bashing--the idea that cable is full of these evil corporate entities who are thinking of ways to screw you over."
One, if you're using Mark Cuban as an example of someone with a solid grasp on what the net neutrality debate is about, you're doing it wrong. Two, dismissing the entire net neutrality movement as the incoherent ramblings of Free Press is dismissive and obnoxious given the millions of individuals and companies that have made their position on the issue very clear. Three, the cable industry absolutely was engaged in bad behavior, ranging from throttling all upstream BitTorrent traffic (and lying about it repeatedly) to imposing usage caps to hinder internet video (and lying about the fact it was necessary to battle the network congestion bogeyman). That's before you even touch on the obnoxious behavior of the wireless industry, and its endless efforts to block competing technologies, apps and services.

It's clear while reading the interview that Powell has an absolutely devastating case of Google envy, caused in large part by Google's disruptive efforts related to Google Fiber. In trying to explain away Google's higher customer satisfaction ratings, Powell tries to argue that this is because the cable industry has to actually bill you and occasionally come to your house to drill holes:
"We come into your house and do the difficult work of running wires and drilling holes. And unlike Google, we have to send you a bill--a bill to pay for the broadband infrastructure that Google and others profit handsomely from, but don't support directly. Yes, they have ways they support the network, too, but they don't have to directly bill their customer for tripling and quadrupling speeds. A lot of those fantastic companies that don't have to bill you may be selling your identity up, down and sideways, which we may come to regret. But Google has an 80 percent approval rating."
Ignored in Powell's statement is the fact that the cable industry does an incredibly shitty job at billing and home installs. In fact, NCTA members Comcast and Time Warner Cable not only have the worst customer satisfaction ratings in telecom, but in any American industry. Only the cable industry finds itself in the news constantly for employees that fall asleep at customer homes, murder people, dig up the wrong yard, torture kittens, or blow up laptops, dishwashers or entire homes. Meanwhile, Powell forgets Google is now doing installs and billing under Google Fiber -- and the search engine company is doing a notably better job of it than the cable industry has despite a several-decade head start. That's just embarrassing, however Powell would like to paint it.

From there, Powell works hard to claim that it's Facebook and Google that are the diabolical "gatekeepers," and that the cable industry is just the little guy trying to make ends meet:
"Many of these tech companies are dramatically bigger than us. Comcast and Time Warner Cable pale in size when compared to Google, Facebook and Amazon. These are not multinationals. They're domestic American companies. In fact, there not even national companies--Comcast doesn't serve every customer in the United States ... We're called 'the gatekeepers' when companies that control 90 percent of the search market are not. I think this is misguided in ways that don't lead to constructive outcomes, but rather bad policy outcomes like net neutrality."
Well for one, someone forgot to give Powell the memo that Google and Facebook were notably absent from the last round of net neutrality support. Meanwhile, the fact that Google and Facebook have massive international footprints and a spotty history on privacy doesn't magically explain away why the cable industry is notably more disliked than either company. Three, Powell ignores the fact that people have the choice to use Google or Facebook. The lack of competition in broadband means that consumers are stuck with their cable provider, whether they like it or not.

Look, the reason the cable industry is so hated isn't rocket science. It's because the industry has consistently cut corners on customer service to improve quarter-over-quarter earnings, resulting in most consumers having a miserable experience every time they interact with their cable company. Meanwhile, the one-two punch of napping regulators and the lack of serious broadband competition ensures this orchestra of apathy and dysfunction never really changes. That's not really complicated. If Powell and the cable industry really care about being well-liked, they simply have to pony up the cash to provide better customer service. Of course they'd much rather put that money in the bank, then whine like a giant, wealthy baby about how nobody likes them as much as Google.

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Posted on Techdirt - 22 April 2015 @ 9:24am

Comcast Merger Chances Stall As Regulators Realize Comcast Meddled In Hulu Management, Ignored NBC Deal Conditions

from the you-made-your-bed dept

Reports have started to emerge that regulators at the Justice Department may block Comcast's proposed $45 billion acquisition of Time Warner Cable, with DOJ attorneys crossing the t's and dotting the i's before recommending a deal rejection. Comcast is apparently meeting with the DOJ this week as part of a last-ditch effort to save the deal, though leaks have suggested Comcast may walk away from the deal entirely if the merger conditions are too steep (read: actually have them do much of anything for the public interest), including requiring that Comcast sign off on Title II reclassification and the FCC's new net neutrality rules.

Apparently one of the sticking points for regulators during the review was their realization that Comcast failed to adhere to most of the conditions attached to its 2011 acquisition of NBC Universal. It's worth noting that Comcast volunteered most of the conditions attached to that deal. Even then the cable giant failed to adhere to many of them; such as the requirement that they offer and clearly advertise a 6 Mbps, $50 broadband tier for at least three years. An FCC investigation found that the company made the tier difficult to find and sign up for, so Comcast was fined the inconsequential sum of $800,000 for its behavior.

New leaked reports suggest that the DOJ was particularly ruffled by the fact that Comcast ignored NBC deal conditions related to Hulu, which Comcast acquired as part of the deal. Co-owned with Disney and 21st Century Fox, Comcast was restricted from playing a managerial role in the company for fear it would hinder the service's chances at being a truly disruptive Internet video competitor. But DOJ lawyers apparently found that Comcast largely ignored those restrictions, playing a starring role in scuttling the sale of Hulu, out of fear that it would become a more viable competitor to Comcast's services:

"Yet Comcast’s assurances at the Sun Valley meeting played a significant role in how its co-owners evaluated the sale process, people familiar with the other owners’ thinking said. Comcast told its partners it would help make Hulu the nationwide streaming video platform for the cable TV industry, which would boost the site’s growth and make it a stronger rival to Netflix. That influenced Disney and Fox’s decision to call off the sale when the conference was ending, people familiar with those companies’ thinking said. Among the top bidders for Hulu were Comcast rivals DirecTV and AT&T Inc."
We've long noted how Hulu's owners were so afraid of Hulu being truly disruptive, they've hamstrung the service at every opportunity. As such, it's long been little more than a glorified ad for traditional television, with incomplete catalogs and a preponderance of "clips" presented in such a way as to intentionally drive users back to legacy cable. Comcast's involvement post NBC deal certainly helps explain how, despite some executive decisions, the service remains in that role to this day.

It's notably amusing that Disney and Fox actually believed Comcast when it claimed it actually wanted to build Hulu into a Netflix competitor -- by shackling it to the walled-garden mindset of the cable industry. Just as amusing is that Comcast has tried to claim that Hulu is part of a "fierce competitive landscape" that will keep the company in check should regulators approve its acquisition of Time Warner Cable. In other words, Comcast is arguing that a company it intentionally sabotaged to keep from being competitive is a perfect example of the kind of competition that can keep Comcast honest moving forward.

It's possible regulators may still approve the deal, but it seems increasingly likely that if Comcast wants the deal to go through, they may have to sign off on some conditions that are more than just paper mache simulacrum.

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Posted on Net Neutrality Special Edition - 22 April 2015 @ 6:10am

Telco Trade Group USTelecom 'Supports' FCC Neutrality Rules, Just Not The FCC Actually Being Able To Enforce Them

from the I-support-you,-except-for-when-I'm-trying-to-kill-you dept

Despite the endless, breathless proclamations about "outdated, utility-style regulation" or the death of innovation, there's really only one reason ISPs don't want to be reclassified as common carriers by the FCC: the billions to be made by abusing the uncompetitive broadband last mile. The very threat of a regulator actually doing its job and establishing what are relatively thin consumer protections (just ask ISPs like Frontier, Cablevision, Sprint or Sonic.net) is really only a problem if you plan to make money off the backs of a captive audience that can't vote with its wallet.

Not too surprisingly, "we want the absolute right to aggressively abuse an uncompetitive U.S. broadband market" isn't a very sexy or compelling sales pitch. As such, ISPs have worked very hard to paint Title II as a bogeyman of mammoth proportions; an implementation of outdated regulations that will utterly demolish an amazing, hyper-competitive broadband landscape that doesn't actually exist. We've debunked these claims time and time again, but expecting to find a middle ground with lobbyists paid to be intractable is a bit like playing whac-a-mole with an army of invincible undead.

Enter USTelecom, an AT&T-dominated trade group that filed one of five lawsuits last week against the FCC's net neutrality rules. Trying to justify the group's lawsuit to the media, USTelecom boss Walter McCormick this week proclaimed that the group really was ok with the FCC's rules -- it just wasn't ok with the agency having the ability to enforce them:

"US Telecom President Walter McCormick says his association supports the substance of the FCC's new open Internet rules as outlined by the FCC and President Obama, which is no blocking or throttling or paid prioritization. He suggested in an interview on C-SPAN's Communicators series that that was not a heavy lift because his industry operates under those standards already."
Right, well, I adhere to the "standards" stopping me from claiming I'm a magic, sentient fire truck, too (do I need to mention such rules don't exist?). And as we've noted repeatedly, ISPs are smart enough to know that outright blocking of content or websites is PR seppuku, which is why ISP attention has shifted toward things like interconnection and zero rated apps -- areas where ISPs can extract their pound of flesh -- without obviously looking like they're trying to extract their pound of flesh. "We're uh, just getting our fair share from Netflix and trying to help the poor!"

Most of USTelecom's talking points are staler than three-month-old crackers, including this idea that broadband ISPs really want Congress to tackle net neutrality:
"McCormick said the government had a role in protecting the Open Internet, but he said that role should be defined by the U.S. Congress, which has not provided guidance in 20 years. "It is time for Congress to provide the commission with clear authority to guarantee an open Internet, but to prevent the commission from having to redefine the entire Internet..." McCormick insisted he was optimistic that Congress could act. "There is absolute consensus on the problem," he said, and that there is not clear authority, and that the solution is for Congress to supply that clear authority."
Of course, this burning desire to punt the issue to Congress is fueled by the knowledge that, slathered in lobbying cash, Congress either will pass bad laws that benefit USTelecom's members, or do nothing at all after being intentionally bogged down in obnoxiously-simplistic partisan discourse over an issue that isn't really partisan. Neutrality opponents Senator John Thune and Representative Fred Upton have been putting on an adorable pony show claiming they want a "bipartisan" solution to net neutrality, when all they're really trying to do is codify a law that will keep wolves in charge of policing the hen house.

The great irony, of course, is that (after fifteen years of deregulation, it should be noted) the FCC's rules don't actually change all that much -- and they certainly don't get to the core of the broadband industry's great disease -- a lack of broadband competition. The agency has made it clear it intends to forbear from the lion's share of Title II utility regulations, and if you pay attention, FCC boss Tom Wheeler has given every indication that he doesn't see things like zero rating as a big deal. Most people, and a growing number of ISPs, acknowledge you'd have to engage in some particularly idiotic, ham-fisted abuses to even get on the FCC's radar.

Still, the very notion that the FCC might shrug off lobbyist influence and do the bare minimum to actually protect consumers is the kind of "disaster" USTelecom and AT&T feel they simply can't ignore.

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Posted on Techdirt - 21 April 2015 @ 6:14am

Verizon Responds To Internet Video Competition With More Flexible Cable TV Packages, ESPN Immediately Whines

from the the-worldwide-leader-in-crying dept

Thanks to loosening broadcaster licensing restrictions, 2015 is birthing a number of more interesting Internet video platforms, including Sony's Playstation Vue and Dish's Sling TV. The latter has glacially moved the industry needle toward marginally-more-flexible cable TV pricing options, offering users a $20 base TV package that can be complemented with a variety of additional $5 "channel packs." Users are tired of bi-annual rate hikes for bloated channel budgets, and these services are only just giving an early glimpse into the more flexible programming options that will be the TV industry norm within a decade.

Better yet, they're actually forcing some pay TV companies to adapt. Verizon, for example, last week announced that the company would be offering up a variety of new channel packs and add ons that bring a little more flexibility to the telco's traditionally rigid bundles. Mirroring the Sling TV approach, Verizon now says the company will be offering users the option to buy a base TV package starting at $55 a month, after which users can tack on extra channel packs for $10 each. Here's a better idea of what it looks like:

Verizon executives have traditionally been a little more progressively-minded about cord cutting than its industry counterparts (as in, actually occasionally admitting it exists), and this is a pretty clear play to not only cash in on cable companies' inflexibility, but try and prevent cord cutting. Since you usually can't see the true cost of a cable subscription until after you've gotten your bill (and seen all of the fees and obnoxious surcharges and caveats layered upon it), it's probably premature to call Verizon's effort revolutionary. But it's at least a start for an industry that has been swimming upstream and ignoring consumer demands for more than a decade.

Interestingly, it looks like Verizon didn't bother to tell any of its broadcast partners about its plans. Those partners, notably Disney and ESPN, immediately cried foul over the plans, claiming that Verizon's offers violate existing contracts:
"Media reports about Verizon’s new contemplated bundles describe packages that would not be authorized by our existing agreements. Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package."...ESPN’s statement — which complains specifically about having its networks relegated to an optional sports tier, instead of being included in the base package — suggests that Verizon never got an agreement from the programmer before it announced its plan. A person familiar with another programmer included in Verizon’s offering said that programmer hadn’t signed off on Verizon’s plan either. That person suggested that Verizon thought its agreements allowed it to try different offerings as a limited test."
The bloated cost of sports programming is one of the biggest reasons for soaring cable bills (as if either broadcasters and cable operators need reasons at this point), and Verizon's clearly firing a warning shot over the broadcasters' bow in regards to being able to shift these costly options into add-on tiers. That's great for consumers, but it obviously lessens ESPN's out-front consumer-facing power and overall reach. ESPN would love things to remain status quo indefinitely, but that's clearly not a sustainable position. The traditional cable bundle is a burning, Hindenburg-esque cash cow that's destined to crash, and the "worldwide leader in sports" would probably be better off accelerating its adaptation to the new paradigm.

Of course that's not going to happen. Customers who don't care about sports are first in line to cut the cord, and as those users refuse to subsidize everybody else, ESPN's first impulse will be to raise rates on customers that do watch sports in order to keep the current cash cow afloat. Simultaneously you can be sure that ESPN's lawyers are huddled around the conference table as we speak, contemplating a lawsuit they believe will magically freeze time indefinitely. But if Verizon doesn't help blow up the bundle somebody else will, whether that's Internet video (where ESPN at least still gets paid) or increased sporting event piracy.

Whatever ESPN's approach (and you'd hope it would be more progressively minded), this is definitely the opening salvo in a much broader -- and necessary -- cable and broadcast industry war over breaking up the traditional cable bundle.

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Posted on Net Neutrality Special Edition - 20 April 2015 @ 10:33am

Facebook's Zuckerberg Thinks Aggressively Violating Net Neutrality Is Fine...If You Just Mean Well

from the open-your-ears-and-listen dept

As we noted last week, India is in the midst of a heated conversation about net neutrality, as the government puts out feelers to determine how best to define an "open internet." As part of this conversation, Facebook's Internet.org initiative has come under particular scrutiny; the platform offering users in some countries walled gardens to a limited crop of zero rated apps and content. While Facebook consistently emphasizes the philanthropic nature of this effort, content companies have been dropping out of the project in droves, arguing that they don't like the idea of Facebook (or an ISP) determining who does and doesn't get cap-exempt treatment (and therefore a leg up in the market).

Facebook CEO Mark Zuckerberg has since posted an interesting blog post in which he pretends to address these criticisms, but actually winds up showing he's not actually listening to what critics of the initiative are saying. As Facebook has done previously, Zuckerberg first highlights his philanthropic motivations for the Internet.org initiative with a short anecdote:

"First, I’ll share a quick story. Last year I visited Chandauli, a small village in northern India that had just been connected to the internet. In a classroom in the village, I had the chance to talk to a group of students who were learning to use the internet. It was an incredible experience to think that right there in that room might be a student with a big idea that could change the world — and now they could actually make that happen through the internet."
And that's great! If you're in a philanthropic mood, give poor nations help connecting to The Internet. But as Susan Crawford and others have pointed out repeatedly, what these zero rated efforts by Facebook and Google offer is a selective, walled garden governed by the ad-delivery ambitions of a handful of large companies. That's not the internet -- it's a fractured, tiny, Facebook-dominated version of AOL. And it's one in which innovative startups can't compete, because they can't pay off the internet access tollman. So it's a case where big players are able to pay up to effectively keep out the competition.

Zuckerberg proceeds to argue that zero rated systems are ok because some internet is better than none at all:
"We’re proud of this progress. But some people have criticized the concept of zero-rating that allows Internet.org to deliver free basic internet services, saying that offering some services for free goes against the spirit of net neutrality. I strongly disagree with this.

We fully support net neutrality. We want to keep the internet open. Net neutrality ensures network operators don’t discriminate by limiting access to services you want to use. It’s an essential part of the open internet, and we are fully committed to it. But net neutrality is not in conflict with working to get more people connected. These two principles — universal connectivity and net neutrality — can and must coexist.

To give more people access to the internet, it is useful to offer some service for free. If someone can’t afford to pay for connectivity, it is always better to have some access than none at all."
Well, no. You don't get to claim you support the open internet while at the same time building a system that is indisputably anything but. And claiming people have to choose between no internet and Facebook's vision of what its expanding international ad ambitions want the internet to look like is a false (and frankly insulting) choice. Again, if Facebook really wants to help -- help by offering the actual internet -- and all the freedom and opportunity that entails.

Zuckerberg then proceeds to take this bad logic further, by arguing that if you're fighting against zero rated apps, then you're the one hurting poor people:
"Arguments about net neutrality shouldn’t be used to prevent the most disadvantaged people in society from gaining access or to deprive people of opportunity. Eliminating programs that bring more people online won’t increase social inclusion or close the digital divide. It will only deprive all of us of the ideas and contributions of the two thirds of the world who are not connected."
While Zuckerberg claims to be fully supportive of net neutrality, someone should tell him that this bogus argument is the exact same one that anti-net neutrality folks from the big broadband companies have been making, and Zuckerberg's statement plays right into their hands. They've been arguing (incorrectly) that pro-net neutrality forces are depriving the poor of internet access. And now they can quote supposedly "net neutrality supporter" Mark Zuckerberg making their argument for them. Over and over again, the big broadband players just keep arguing that they need to violate net neutrality to provide service to people in need, and Zuckerberg is advancing that argument for them, while claiming to be supportive of the other side.

Again, there's nothing stopping Facebook from helping to finance real internet access in developing nations -- even deals in which Facebook's services and ads play a starring role (provided the internet access itself remains open). Instead, Facebook is pushing a walled garden where only Facebook exists (ridiculously under the name "internet.org" when it's anything but). Remember, Facebook's facing this backlash because India is trying to define what an open internet looks like, and consumers and content companies are making it pretty clear to Zuckerberg and the Indian government that an open internet doesn't involve Facebook deciding which services and content consumers get to view. If Facebook cares as much about an open internet as Zuckerberg breathlessly claims, he'll stop for a moment and actually listen. Internet.org can be a part of the solution, by helping to provide actual internet access, not limited walled gardens where only wealthy companies' services are available.

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Posted on Techdirt - 17 April 2015 @ 12:56pm

Details Leak From Inside Putin's 'Humourless And Draconian' Internet Troll Army

from the ministry-of-truth dept

With fifteen years under my belt writing about astroturf, think tanks, fauxcademics, and other dirty lobbying and policy tricks, I've always had a hobbyist's fascination with propaganda, especially online. When done "correctly," disinformation or guerrilla marketing is utterly invisible. When done poorly -- you get more comedic, ham-fisted attempts at information control, like Scientology's personal website's attacks on the new HBO documentary "Going Clear" or, well, ISP-paid sockpuppets who insist they fight net neutrality because they just love internet freedom so very much.

Of course, the one-two punch of violence and propaganda has for some time put Putin's Russia on another level of intellectual aggression. The Guardian recently penned a pretty fascinating interview with several members of Putin's internet troll army, paid to spam forums, websites, and social networks around the globe with pro-Putin propaganda. Working in twelve-hour shifts in a nondescript building marked "business center," hundreds of writers work in "humourless and draconian" teams dedicated toward supporting Putin's worldview for 45,000 rubles ($790) a month. And it often works:

"The scariest thing is when you talk to your friends and they are repeating the same things you saw in the technical tasks, and you realize that all this is having an effect,” the former worker said.

Marat, 40, worked in a different department, where employees went methodically through chat forums in various cities, leaving posts. "First thing in the morning, we’d come in, turn on a proxy server to hide our real location, and then read the technical tasks we had been sent,” he said. The trolls worked in teams of three. The first one would leave a complaint about some problem or other, or simply post a link, then the other two would wade in, using links to articles on Kremlin-friendly websites and “comedy” photographs lampooning western or Ukrainian leaders with abusive captions.
The staffers work around the clock creating and maintaining proxied, viable fake personas, sure to discuss their favorite music and recipes, peppered authentically with rants about the Kiev government being fascist. Hand in hand with tens of thousands of Twitter bots, they create a massive sound wall that makes Apple's reality distortion field look like a nineteenth century circus performance. The Guardian points to websites like this one set up with Internet memes to make mocking Putin opponents that much easier:
"Many of them have obvious racist or homophobic overtones. Barack Obama eating a banana or depicted as a monkey, or the Ukrainian president, Petro Poroshenko, in drag, declaring: “We are preparing for European integration.” The trolls have to post the photographs together with information they can pull from a website marketed as a “patriotic Russian Wikipedia”, featuring ideologically acceptable versions of world events."


Of course, as Glyn noted earlier this week, the Russian government has moved to "clarify" existing law and is now declaring all internet memes illegal -- unless of course you're paid by the government to twist and distort the very fabric of online reality. It probably goes without saying that the United States certainly is no saint on this front (industry astroturfing or the media coverage of the Iraq war quickly leap to mind), but Putin's frontal-assault on the internet is starting to make Orwell's darkest predictions seem like playful childhood fiction.

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Posted on Techdirt - 16 April 2015 @ 11:47am

ALEC Threatens To Sue Critics That Point Out It Helps Keep Broadband Uncompetitive

from the sloppy-denial dept

As you might have read, the American Legislative Exchange Council (ALEC) has been losing some major clients lately, including Google, T-Mobile and Microsoft. Those companies have been quietly distancing themselves from ALEC, after critics have illustrated its ties to legislative assaults on climate change science and meaningful pollution standards. Before Google announced it was leaving the group last fall, chairman Eric Schmidt went so far as to accuse the legislative grist mill of "literally lying" about its role in climate change denial. In a response letter to Google, ALEC proclaimed Google's departure was "based on misinformation from climate activists who intentionally confuse free market policy perspectives for climate change denial."

With T-Mobile, AOL, and Facebook quietly following in Google's footsteps (but not publicizing the reason for their departures), ALEC has apparently decided that its best course of action is to threaten lawsuits against those claiming ALEC denies climate change. ALEC has sent cease and desist letters (pdf) to a number of critics like Common Cause, the letters directing groups to the ALEC website where the organization insists it's not a opposed to climate change -- it's simply a "market environmentalist" dedicated to the "betterment of human health and well-being."

Apparently climate change isn't the only sensitive topic for ALEC as the outfit tries to stem the flow of client departures. The group has also been sending cease and desist letters to companies like wirelesss MVNO Credo Mobile, which in recent months has been sending its subscribers missives hammering ALEC for its role in fighting community broadband. The small company markets itself as having an activist, pro-consumer edge, and has scored exceptionally well on the EFF's privacy report card.

Credo's been busy pointing out to its subscribers how ALEC's model legislation, clearly visible on ALEC's website, has been used as the framework for roughly twenty state-level protectionist broadband bills nationwide. As we've frequently discussed, these bills are the worst sort of protectionist dreck, shoveled into the legislative bloodstream by the likes of AT&T, Comcast, Time Warner Cable and CenturyLink to protect its duopoly power from communities desperate for something better. Credo frames ALEC's participation in these efforts this way in a recent notice to subscribers:

"The American Legislative Exchange Council—a shadowy corporate front group that works to enact discriminatory voter ID laws, weaken gun safety laws and eliminate environmental regulations—is now pressuring state legislatures around the country to ban cities from offering broadband Internet access. ALEC is pushing its anti-municipal broadband agenda through model legislation it has developed, which one municipal broadband advocate described as “the kind of language one would expect to see if the goal is to protect politically powerful cable and telephone company monopolies.” Many perennial funders and members of ALEC, including AT&T, Verizon, Comcast and Time Warner [Cable], stand to gain financially from these state laws because they eliminate the possibility of competition from city-run broadband services."
In its cease and desist letter to Credo, ALEC first proclaims it's a respected think tank, not a lobbying apparatus. It also insists it doesn't "block" municipal broadband, the group simply advocates encumbering towns and cities with "certain steps," should they be interested in building their own broadband:
"We demand that you cease making inaccurate statements regarding ALEC, and immediately remove all false or misleading material from the Working Assets and Credo Action or related websites and action pages within five business days," the letter, dated March 5, reads. "Should you not do so, and/or continue to publish any defamatory statements, we will consider any and all necessary legal action to protect ALEC."

ALEC contends that it does not oppose city broadband but only advocates that certain "steps" be required before a municipality can provide telecom services. Additionally, ALEC takes issue with Credo labeling it as an organization that lobbies state legislatures at all, arguing that it is merely a "think-tank for state-based public policy issues and potential solutions."
How exactly can you claim you don't oppose municipal broadband when you've played a starring role in opposing municipal broadband? Because many of the bills ALEC helps pass don't technically "block" municipal broadband. They are however usually saddled with language by ISP lawyers that effectively does the same thing. For example most of the bills prohibit communities from getting into the broadband business if their market is "served" by an existing provider. They then go on to define "served" to include satellite and cellular connections, while using extremely generous versions of zip code coverage analysis. Similarly ALEC doesn't lobby to pass these bills directly, their incumbent ISPs client do that.

Regardless, Credo Mobile doesn't appear to be too worried about ALEC's threat, sending the organization a response letter (pdf) illustrating that not only does ALEC's own website document its opposition to municipal broadband, but so have numerous news outlets:
"Not only does ALEC attempt to influence legislative outcomes, it clearly succeeds in doing so. As recounted in a 2011 Bloomberg News article, ALEC's model legislation on municipal broadband was the principal reason why cable companies were able to block Lafayette, Louisiana from offering high speed Internet access to its citizens (editor's note: Lafayette was ultimately able to offer gigabit connections via LUS Fiber, but only after a protracted legal fight against regional incumbents Cox and BellSouth (now AT&T)).

"Under these circumstances, the language used in the statements you challenge -- "working to make sure it never happens" and "pressuring state legislatures" -- is well within the bounds of political discourse in making the point that ALEC's model legislation and positions have the intent and effect of encouraging enactment of state legislation effectively banning cities from offering broadband Internet access."
It's not entirely clear what ALEC hopes to accomplish here, as its role in both climate change and municipal broadband is pretty clearly established by documentable history, news reports, and the legislative process itself. It's kind of like the town drunk, after months of being videotaped punching clowns in the face, becoming foul-mouthed and indignant at the mere mention of the odd number of clown black eyes around town. In fact the behavior is only bringing additional critical attention to ALEC's longstanding role as an organization that's useful to corporations looking to quietly shovel bad legislation through financially compromised state legislatures with the bare minimum of fuss or actual public debate.

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Posted on Net Neutrality Special Edition - 16 April 2015 @ 6:16am

Facebook, Google's Supposed Love Of Net Neutrality Notably Absent In India

from the don't-be-evil dept

With it now relatively clear that nobody will tolerate outright throttling or blocking of services, we've noted repeatedly how ISPs have turned their gaze toward other, more subtle ways of abusing their gatekeeper mono/duopolies on the net neutrality front. The most notable being interconnection -- or intentionally degrading service to extract new tolls from content companies, and zero rated apps -- or letting some content bypass the cap if a content or service company is willing to pay ISPs a premium. Both battlefields obviously benefit the ISPs and content companies with the deepest pockets.

One of the major reasons Facebook and Google were so quiet during the latest round of the net neutrality fight is because they were happy with the original 2010 rules, given they didn't cover wireless whatsoever. But they were also happy about the loopholes regarding zero rated apps, which play a starring role in the companies' future global ambitions. Zero rating is particularly important to the companies overseas, where both offer free, walled-garden internet access where their services get preferential treatment from wireless carriers (see Facebook Zero or Google Free Zone).

With the neutrality debate taking root globally, both Facebook and Google are taking increased criticism for "supporting net neutrality in the US" (though, as we've noted, they really haven't) while pushing for zero-rated models that trample neutrality overseas. In India for example, regulators are now being bombarded with comments from a public that's realizing just how badly these models tilt the entire massive playing field toward the gaping maws of industry giants, whether that's the regional wireless company, Facebook, or both:

"Reliance’s deal with Facebook, called Internet.org, effectively gives you one social network at no cost, while forcing you to pay for others like LinkedIn. It might seem like the company being generous, but it only works because Facebook and Reliance were able to strike a deal. A smaller social networking firm that doesn’t have Facebook’s resources or influence would find it harder to build an audience, because they’re competing with a free service....Pahwa pointed out that this strategy could result in dominance of major players in the market and crowding out of others who can’t afford to “strike deals or pay up for getting access to the fast lane".
Indian Internet users aren't alone in realizing the problems inherent in zero rated apps. A growing chorus of Internet content companies have started backing away from zero rated efforts like Airtel Zero or Facebook's Internet.org deal with Reliance. The Times Group, India Today, NDTV, IBNLive, NewsHunt, and BBC have all pulled out of the initiatives citing the bad precedent set in cherry picking which content gets a free ride. Flight, hotel and travel price tracking website Cleartrip also dropped out, posting to their blog that such exclusionary practices are against the company's DNA:
"...the recent debate around #NetNeutrality gave us pause to rethink our approach to Internet.org and the idea of large corporations getting involved with picking and choosing who gets access to what and how fast. What started off with providing a simple search service has us now concerned with influencing customer decision-making by forcing options on them, something that is against our core DNA."
While the neutrality debate in India may be fresher, the public and industry there are already more in tune to the threat posed by zero rated apps than many U.S. customers and companies are. And the U.S. and India are obviously seeing more conversation on this issue than, say, markets in Africa. There, in many markets, users are happy to get access no matter what it looks like, and Google and Facebook are aggressively jockeying for pole position over billions in new advertising eyeballs. These services in particular are a two-sided coin. On the one side, both companies are correct in noting that the services deliver limited web access (and all the great things that entails) to those who currently don't have service. On the other hand, as Susan Crawford highlighted a few years ago, what these users are getting is a notable bastardization of the internet:
"For poorer people, Internet access will equal Facebook. That’s not the Internet—that’s being fodder for someone else’s ad-targeting business," she says. "That’s entrenching and amplifying existing inequalities and contributing to poverty of imagination—a crucial limitation on human life."
If you're building internet access from the ground up dominated by a few ISPs and a few content gatekeepers, it certainly makes you wonder what kind of strange monstrosities these models evolve into. When the internet starts from a place of openness, companies have a steeper uphill climb. Here in the States, both AT&T and T-Mobile have struggled to convince the public that these models heavily benefit consumers. AT&T has been setting a horrible precedent by allowing deep pocketed companies to bypass usage caps, pitching the concept as "1-800" or "free shipping" for data. T-Mobile's had better luck convincing users that exempting only the biggest music services is a consumer boon for the ages (it's not, because it puts non-profits, independents and smaller companies in an immediate competitive hole).

While zero rated apps are now banned by net neutrality rules in a growing list of countries (Chile, Slovenia, The Netherlands and Canada), the FCC's new rules appear to take a hands off approach to zero rating. That's a decision you can be sure Facebook and Google -- both still frequently praised in the media as champions of net neutrality -- had notable input on.

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Posted on Net Neutrality Special Edition - 15 April 2015 @ 6:28am

Verizon: Nobody Really Wants Unlimited Data Plans, And Those Who Do Should Ignore Such Silly 'Gut Feelings'

from the these-are-not-the-droids-you're-looking-for dept

As we've made repeatedly clear, consumers really like the ease and simplicity of unlimited data plans. Whether that's on fixed-line or wireless networks, users don't really like having to guess if they'll make it in under the wire this month, and don't particularly enjoy being socked with $15 per gigabyte overages should they stream a few extra songs or watch a YouTube clip. However, when you enjoy the kind of regulatory and market power AT&T and Verizon do, you don't have to give a flying cellular damn what your consumers actually want.

As such, both companies decided to eliminate their unlimited data plans entirely a few years ago, replacing them with shared data plans laden with caps and steep overages. And while both companies did grandfather existing unlimited users, they made life as uncomfortable as possible for those users, whether it was by secretly throttling them after a few gigabytes of usage or restricting their access to specific apps unless they "upgraded" to a shared, metered plan. Meanwhile, competitors T-Mobile and Sprint have tried to differentiate themselves by continuing to offer unlimited data options.

Continuing the proud tradition of telling users what they want instead of giving them what they want, Verizon this week offered up an amusing blog post in which an analyst paints unlimited data plans as a public menace of the highest order. To hear analyst Jack Gold tell it, we should all agree that you can't have unlimited data plans, because they'll obliterate the network and leave us all weeping over our smart devices:

"The quality of connection is important to wireless users, and when connections become slow or disconnections occur due to overcrowding, users become disappointed. Let’s face it, if everyone had unlimited data and used it fully, the performance of the networks would suffer because of bandwidth restrictions and the “shared resource” nature of wireless. The bottom line is: users agree that degrading the networks is something that they don’t want to happen."
If I only had a nickel every time the congestion bogeyman was trotted out to defend anti-competitive pricing and policies. While spectrum is certainly a finite resource, Gold intentionally ignores the fact that offering unlimited data plans doesn't mean idiotically ignoring all network management and letting your network implode. While both Sprint and T-Mobile offer unlimited data, they still implement network management and throttling practices that ensure traffic loads remain relatively balanced and the consumer experience remains consistent.

In other words, most unlimited data plans aren't really unlimited anyway, or users have to pay a steep premium for the privilege of not having to worry about data thresholds. That's because AT&T and Verizon dominate 85% of the special access and cell tower backhaul market, resulting in Sprint and T-Mobile (and most everybody else) having to pay an arm and a leg too. It's all quite by design.

Gold knows this, but it's apparently much more fun to try and argue that unlimited data plans decimate the fabric of the space-time continuum and rip the very axle of the universe from its foundation. Disagree? Verizon's analyst proceeds to imply you're simply being overly emotional:
"So, while unlimited data may sound attractive, there is no practical effect of data limits on the majority of users. Understanding this should bring rationality to a discussion that is often held on a “gut feeling” level. Keeping adequate speed and performance while allowing all users to share the limited commodity we call wireless data is the fair way to deal with wireless connectivity. And ultimately, that is what is beneficial for wireless consumers."
Just so it's clear, it's "rational" to support Verizon's vision of internet pricing, in which you pay some of the highest prices among developed nations, but it's a "gut feeling" should you start to desire a better value plan. It's never quite clear to me who these telecom blog authors actually think they're speaking to. Surely the goal is to influence an overarching policy discussion, but all they generally wind up doing is having their brand mocked mercilessly by news outlets for being painfully out of touch with what consumers actually want.

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Posted on Net Neutrality Special Edition - 14 April 2015 @ 9:58am

Wireless, Cable Industries Show Their Love Of An 'Open Internet' By Suing To Overturn Net Neutrality Rules

from the love-is-a-battlefield dept

Now that the FCC's net neutrality rules have been published in the Federal Register, the broadband industry has fired its litigation cannons and filed the expected lawsuits via all of the major trade organizations (see suits for the NCTA, ACA and CTIA, pdfs). All of the suits proclaim that the FCC's new net neutrality rules, and its reclassification of broadband providers as common carriers under Title II are an "arbitrary and capricious" implementation of "outdated utility style regulations" that will harm the greater Internet, sector innovation and industry investment (claims even the industry itself has admitted are bunk, yet never seem to go away).

The industry's statements defending the suits are a who's who of revolving door regulators. In a statement posted to the NCTA website, former FCC chief turned top cable lobbyist Michael Powell insists that the cable industry's lawsuit to destroy net neutrality rules isn't actually about net neutrality. It's about the cable industry loving the open Internet and rule of law so much, it's stepping in and doing the right thing so that a Congress awash in Comcast campaign finance cash can do its job:

"This appeal is not about net neutrality but the FCC’s unnecessary action to apply outdated utility style regulation to the most innovative network in our history,” said Michael Powell, NCTA President & CEO. “The FCC went far beyond the public’s call for sound net neutrality rules. Instead, it took the opportunity to engineer for itself a central role in regulating and directing the evolution of the Internet. We regrettably file this appeal and urge Congress to assert its role in setting national policy, by enacting legislation that fully protects the open Internet, without the harmful impact of public utility regulation."
In a similarly noble CTIA statement, the wireless industry trots out all the old familiar bogeymen, including claims that Title II will crush sector investment, harm innovation, drive up prices for consumers, and generally wreak havoc on the Internet ecosystem:
"Detailing the infirmities of the FCC's Order, Smith added: "Instead of letting consumers decide the success of new, innovative mobile services, government bureaucrats will now play that role. National, regional and rural wireless carriers will spend substantial time and resources trying to comply with the new vague and overbroad rules. CTIA's member companies should be focused on meeting consumers' growing demand for mobile data and creating new offerings."
That's particularly interesting, since CTIA member Sprint has come out in full-throated support of Title II and the agency's new net neutrality rules, all but calling their fellow CTIA members liars for drumming up innovation and investment fears. Similarly T-Mobile has proclaimed that it doesn't see the rules having a serious impact on its business one way or another, since the FCC appears eager to provide notable leeway toward controversial policies like zero rating. That's two of the CTIA's four biggest members basically telling the organization it's full of hot air.

Unlike the USTelecom lawsuit, the CTIA is taking specific aim at the inclusion of wireless services, long arguing that the wireless industry is so unique, dynamic and competitive, there's simply no need for consumer protections. That's again the gist of the argument put forward by CTIA boss Merideth Atwell Baker, who was an FCC Commissioner and a Comcast lobbyist before her stint as head of the CTIA. Baker proclaims the suit is being filed because wireless carriers just love the open Internet, and it had "no choice" but to spread this love throughout the U.S. court system like so much delicious peanut butter:
"CTIA and the wireless industry have always supported an open Internet, which is why these rules will only chill investment and innovation and increase costs for consumers. The FCC ignored that the competitive, constantly innovating mobile broadband industry provides Americans with faster networks and a wide variety of devices and service plans. Instead of promoting greater industry investment in the connected world of tomorrow, the FCC opted to resuscitate a command-and-control regulatory regime...CTIA had no choice but to seek judicial review to preserve the regulatory approach that has been instrumental in helping the U.S. become the global leader in 4G services. We are confident that the courts will reject the FCC's overreach for the third time, particularly with respect to mobile broadband services."
There's layers of irony here. One being that the FCC's 2010 rules originally didn't include wireless, and for that reason were generally liked by AT&T and Comcast. But CTIA member Verizon sued to overturn the rules anyway in the hopes of crippling the FCC's authority permanently. That didn't work, and Verizon's (and by proxy the CTIA's) behavior directly lead to the FCC shifting toward a more legally supportable Title II model.

As for loving the "open Internet," that's relatively funny for an industry whose members have lied about throttling unlimited users, blocked video services to force users to more expensive service plans, blocked competing mobile payment services in the hopes of giving their own a leg up, worked tirelessly to ensure devices remain locked and often unrootable, and fought a laundry list of technological innovations ranging from Bluetooth to tethering because they threatened their market power. If that's what loving the open Internet looks like, I wouldn't want to see the wireless and cable industries' version of hatred.

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Posted on Net Neutrality Special Edition - 14 April 2015 @ 6:22am

The Mere Threat Of Google Fiber Has Time Warner Cable Offering Speeds Six Times Faster At The Same Price

from the behold-the-magic-competition-fairy dept

Like so many other incumbent ISPs, Time Warner Cable has grown all-too comfortable with the lack of broadband competition it enjoys across most of its territory. Some markets are worse than others, usually not-coincidentally directly tied to the level of regulatory capture in a region. In the Carolinas, the company has worked tirelessly to protect its regional monopoly and duopoly, passing a bill in North Carolina (on the fourth try) preventing towns and cities from improving regional broadband. Company execs have also downplayed the rise of gigabit broadband, proudly informing users they don't really want faster, cheaper services.

Now Time Warner Cable is facing the worst-case scenario for a government-pampered duopolist. One, the FCC has moved to pre-empt Time Warner Cable's protectionist law in North Carolina, arguing it hinders the deployment of broadband services in a reasonable and timely basis. Two, Google Fiber recently announced it will be expanding $70, gigabit services (you know, the ones users don't need or want) into Raleigh, Durham and Charlotte sometime in the next year. The one-two punch of regulators thinking independently and increased competition has to be a nightmarish hellscape for company executives.

Time Warner Cable has of course responded by announcing it is increasing speeds in Charlotte and Raleigh six fold (to 300 Mbps) at no additional charge sometime this summer:

"Starting this week, customers will receive communications from TWC outlining the first phase of the project as the company begins the process of creating a 100% digital network..."With ‘TWC Maxx,’ we’re essentially reinventing the TWC experience,” said Darrel Hegar, regional vice president of operations, Time Warner Cable. “We will boost Internet speeds for customers up to six times faster, add to our robust TWC WiFi, dramatically improve the TV product and set a high bar in our industry for differentiated, exceptional customer service."
That's on the heels of an AT&T announcement that it would be offering its own $70, gigabit service in parts of North Carolina (it's $110 or more in non Google Fiber markets). Funny how this whole competition thing works, huh? Granted the whole concept of responding to price competition is new to some of these folks, so there's obviously some initial kinks to work out as these companies figure out what the concept means.

For example, Time Warner Cable's 300 Mbps down, 20 Mbps up tier will run you $65 promotional, $108 regular price -- notably slower and more expensive than Google Fiber's symmetrical 1 Gbps, $70 a month offering. Similarly, AT&T's service is very selectively deployed (mostly high-end developments) and the company is only willing to match Google Fiber's price point if you agree to deep packet inspection snoopvertising. Meanwhile, while Google Fiber pricing is generally straightforward, both AT&T and Time Warner Cable still employ a wide variety of obnoxious fees to drive up the advertised price post sale.

That's of course the best part about real broadband competition. You actually have a choice, and can respond to slow speeds, abysmal customer service, net neutrality violations and other shenanigans by voting with your wallet. The downside? Google Fiber's only available in a handful of markets, hopefully putting the onus on other companies to follow Google Fiber's lead and start lighting a fire under the posterior of a broadband industry that's just screaming for some disruption.

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Posted on Techdirt - 10 April 2015 @ 12:51am

70% Of Fans Still Can't Watch LA Dodgers Games On TV Thanks To Time Warner Cable

from the good-job,-team dept

Last year Time Warner Cable and the Los Angeles Dodgers struck a twenty-five year, $8.35 billion deal giving Time Warner Cable the exclusive broadcast rights to all Dodgers games in Los Angeles via its creatively-named regional sports network, Time Warner Cable SportsNet LA. Time Warner Cable then immediately turned around and demanded massive price hikes (rumored to be around $5 per subscriber) for any other pay TV provider that wanted to offer the channel. All of the regional cable operators (including AT&T, Cox, Dish and DirecTV) balked at the hike, resulting about 70% of fans in Dodgers territory being unable to watch the final six games of last season.

All sides had ample opportunity during the offseason to negotiate a fair price, but by all accounts Time Warner Cable simply refused to move on the price tag (though the fact it's in a holding pattern over a Comcast acquisition also likely played a role). As such, the new baseball season kicked off this week and Dodgers fans remain unable to watch their favorite team's games. Making matters worse, Time Warner Cable has refused to seriously answer questions about the logjam, offering some variation of the same statement over and over again:

"We want all Dodger fans to have access to SportsNet LA. Despite our repeated attempts, other providers are unwilling to engage in any discussions. If Dodger fans want to enjoy SportsNet LA this season, we encourage them to switch to a provider that carries the network."
The problem with that logic? Time Warner Cable is the only cable operator offering access to its own sports network, and 70% of Los Angeles lives in an area where they can't get Time Warner Cable. As such, Time Warner Cable's recommendation is not only useless, it's insulting. When that's pointed out, the company just refuses to comment. When asked why it refuses to compromise on the price, the company provides similarly epic non answers:
"SportsNet LA is available on fair terms consistent with its value. We know that the rates for the network owned by this iconic franchise are in line with what other RSN’s around the country charge, including DirecTV’s own regional sports networks."
While it's understandable that Time Warner Cable wants to recoup its investment, the total inflexibility here is pretty well in character for a company that actually has worse customer satisfaction ratings than even the much-hated Comcast. The growing cost of sports programming and the steady increase in annoying retransmission fee dispute blackouts usually help drive cord cutting, but in this case there's absolutely nowhere else to go to watch the content in question. Even over the air broadcasts aren't an option thanks to the nature of the Time Warner Cable, Dodgers arrangement.

So far, regulators have chosen to treat these kinds of programming rate standoffs as just "boys being boys," but it's unclear how much longer they're going to be willing to stand on the sidelines given how much politicians love to earn cheap, sports-related political brownie points. Last year FCC boss Tom Wheeler sent a letter to Time Warner Cable claiming that "inaction is no longer acceptable" and the FCC was "monitor(ing) this situation closely in order to determine whether intervention is appropriate and necessary." But the FCC has said little since. Given that three of the companies involved in the standoff (AT&T, DirecTV and Time Warner Cable) are awaiting merger approval, conditions might be used to force the issue over the next few weeks.

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Posted on Net Neutrality Special Edition - 9 April 2015 @ 6:21am

One ISP's Prices Are So Bad, It Refuses To Tell Anyone What They Are

from the pampered-duopolist dept

Given that the lack of competition keeps broadband prices sky high, it's really no surprise that most ISPs make their pricing as confusing as possible, either hiding what you'll pay behind a prequalification wall, or sacking users with a bevy of bizarre fees to covertly jack up the advertised rate post sale. While the industry is quick to issue a slew of press releases every time they bump their downstream speeds a few megabits, they'll usually do their best to avoid mentioning what customers pay for the honor of these faster services, well aware that they're only drawing additional attention to competitive shortcomings.

Still, even with layers upon layers of obfuscation, broadband ISPs will usually tell you what they charge users when pressed. Not so with FairPoint. When an industry outlet recently reached out to FairPoint as part of a series trying to compare prices, FairPoint actually refused to tell the news outlet how much it charges for DSL service. When pressed, the company would only provide what has to be one of the most long-winded non-answers I've ever seen:

"We offer internet access to both consumer and business customers through a variety of technologies leveraging both copper and fiber infrastructure, including digital subscriber line ('DSL'), dedicated fiber and lit buildings throughout our footprint," FairPoint said in an e-mailed statement. "Certain of these services provide speeds up to 1 gigabit per second. In select markets, we also offer cable modem internet service, 'Fiber to the Home', and wireless internet access. We sell Internet service as both a standalone, managed or packaged solution. Many customers like to simplify vendors and utilize our packaged and bundled solutions to meet their communications needs."
That's code for saying that FairPoint faces so little competition in its territories, it not only doesn't have to disclose how much it charges for service, it doesn't have to care whether you find that kind of stonewalling obnoxious. If you need FairPoint's broadband service, there's a pretty good chance that FairPoint service is your only option, so you'll have to wait until you've actually signed up to truly learn how much you'll get to pay.

Correction: In the initially published version, we accidentally called FairPoint, Frontier in some places. We apologize for the error.

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Posted on Techdirt - 8 April 2015 @ 8:12am

FCC Moves To Give Internet Video Startups The Same Protections As Cable Companies

from the actually-leveling-the-playing-field dept

While the FCC's decision to raise the base broadband definition to 25 Mbps, its ruling on municipal broadband and the agency's new net neutrality rules have seen the lion's share of media attention, there's another potentially important FCC plan underway that has largely managed to fly under the radar. The FCC has recently been fielding comments on whether the agency should reclassify linear over-the-top (OTT) Internet video providers as multi-channel video programming distributors (MVPDs), giving these companies FCC-enforced access to vertically integrated programming. The full order can be found here (pdf).

The idea is that by giving Internet video providers formal protections and the right to negotiate content deals like cable companies, we'll see a surge in Internet video service competition and a reduction in the logjam surrounding content licensing. Note that this would only really impact subscription-based, prescheduled content (live TV), and as a result wouldn't really apply to on-demand catalogs like Netflix or YouTube. Not too surprisingly, the cable industry, still sore from the FCC's Title II ruling and wary of new competitors, doesn't think modernizing cable regulations to include Internet video is a great idea:

"[H]aving recently adopted what was once understood to be the 'nuclear option' of Title II regulation of broadband Internet access service to address a hypothetical threat to the openness of the Internet," NCTA told the commission, "the Commission in this proceeding is proposing to apply an arsenal of regulations from the Cable Consumer Protection and Competition Act of 1992, purportedly to promote competition in the already competitive and well-functioning online video marketplace."
Some of the new wave of Internet video giants similarly aren't happy with the idea. Even though the rule change likely wouldn't impact the company's on-demand services specifically, an Amazon filing with the FCC argues it doesn't really want the FCC's help, either:
"In light of the excellent results achieved over the last several years, Amazon does not see why the commission would risk interfering with the OTT marketplace, which is still growing and changing, at this stage in its development," the company said. Amazon argued that services offered by Amazon, Netflix and Apple represent a whole new ballgame, not another team in the MVPD league. It said that planned services from Dish and HBO are an effort to be players in this new space, a space it and others have been building for years."
Amazon's likely wary for two reasons: the company's already seeing success and is justly nervous about regulatory good intentions, and the FCC's proposal could actually go both ways -- as in it might help cable operators looking to deploy an out-of-footprint streaming service (giving them mandated access to regional sports networks, for example), generating additional competition for Amazon. Meanwhile, broadcasters like ABC, CBS, Fox, and NBC support the measure, pleased that it would force OTT upstarts into gaining consent out of the gate for retransmitting their broadcasts (read: they think it will help thwart piracy or force the next Aereo to the negotiations table).

Consumer advocates like Public Knowledge quite like the rule change, suggesting it could ramp up competition and bring down prices "without subjecting most kinds of online video services to additional regulation." The updating of the definition of an MPVD could provide Internet video companies with protections they didn't have previously:
"That interpretation meant that none of the protections that MVPDs have against other MVPDs, and that programmers have against MVPDs, applied to online video. That means that programmers could be prevented through contracts or incentives from selling video to online services, and that programmers affiliated with cable companies could discriminate against online services. Actions like this can add up to starve online video services of content--which is why most of the most popular services offer video that is complementary to traditional MVPD service (back catalog programming, and original and user-generated content) instead of the same lineup of things like first-run shows and live sports."
For an agency that spent decades paying empty lip service to competition, the FCC's focus in this case really does appear to actually be on modernizing regulations to help foster competition and protect the smaller Internet video providers of tomorrow. Reclassifying ISPs as common carriers under Title II protects upstart companies from discrimination by broadband and cable companies, and reclassifying Internet video providers as cable companies would provide them additional protections and programming negotiations rights they don't currently have.

In short, for the first time in fifteen years or so the FCC actually appears to be focusing on competition as a real policy goal. That's in stark contrast to the expectations most people had (myself included) when we learned that a former wireless and cable industry lobbyist would be the latest to run the FCC.

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Posted on Techdirt - 8 April 2015 @ 4:12am

Weather Channel Tackles Criticism For Airing Too Much Fluff, With New Ads Attacking Competitors For Airing Too Much Fluff

from the windy-glass-houses dept

Last year, we noted how The Weather Channel's tendency to air a higher volume of fluff and nonsense was harming the company's leverage and negotiating power when demanding higher rates from cable operators. DirecTV, you'll recall, responded to The Weather Channel's demands by simply pulling the channel and replacing it with weather services that, well -- actually reported the weather. Amusingly, many users found this to be an improvement over the channel's usual approach to reporting the weather: funny pictures of buffalo, photos of "sexy beaches," or programs like "Prospectors."

Having not learned a valuable lesson, last month The Weather Channel made the same demands from Verizon, which, like DirecTV before it, simply responded by replacing the weather channel with AccuWeather and directing users to apps that actually forecast the weather. Initially, The Weather Channel tried to claim Verizon was toying with the public's safety. It then launched a website aimed at generating outrage among viewers, urging them to contact Verizon and complain.

Except, given the growing disdain consumers have for a company that has increasingly stumbled away from its core mission, none of this appears to be working. As such, The Weather Channel has come up with a great new idea: mocking other weather organizations for focusing too much on fluff, and not enough on the weather. In a letter to employees, The Weather Channel CEO David Kenny calls Verizon "reckless" and urges employees to cancel all Verizon services. He then tears into AccuWeather for focusing on hippos during a recent tornado emergency in Oklahoma:

"We saw that last Wednesday night, when we featured live coverage from Oklahoma. Interestingly, Accuweather took a shot at the NWS for calling the tornado potential “low” that day, yet the Accuweather network itself, as you can see in the image below, was not even covering weather during Oklahoma’s severe outbreak. Here’s their coverage on the left:
Yes, hippos swimming."
Yes, that's a channel that has been mercilessly mocked for years about its tendency to air fluff, attacking other channels for airing too much fluff. For good measure, The Weather Channel decided to up the ante and launch a new media and print campaign that also mocks AccuWeather for showing hippos when a tornado struck Oklahoma:
AccuWeather CEO Barry Meyers quickly responded to the ad campaign by pointing out that AccuWeather isn't offered in Oklahoma. He also ponied up some advice about stones and glass houses:
"In 168 hours of week, the amount of programming they have devoted to real weather is really small,” Myers said. “People need to judge what that means." "People need to ask themselves what The Weather Channel is so afraid of,” Myers added. “They’ve had a virtual monopoly for 30-some years. They almost lost with DirecTV , and they have lost with Verizon. Competition is good, and it offers people choice and strengthens products."
The Weather Channel does slowly appear to be learning that you don't have much negotiating leverage when nobody thinks your product is very good. Serious coverage has ramped up slightly and its website's dumbest videos now at least have some tangential connection to actual weather forecasting. Still, it would be nice if The Weather Channel could learn this lesson without the heavy dose of head-spinning hypocrisy.

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Posted on Techdirt - 7 April 2015 @ 6:06am

Comcast Deeply Offended By Claims It Pays People To Support Its Merger

from the pay-no-attention-to-the-man-behind-the-curtain dept

Comcast has consistently crowed about the volume of individuals and organizations that support the company's $45 billion merger with Time Warner Cable. Of course the company has just as consistently failed to mention how much of this "support" is from people paid to regurgitate pretty much any Comcast dreck-filled missive that comes stumbling down the road. Want funding for a new events center or a "closing the digital divide" photo op? Just leave independent thought at the door and send lawmakers a pre-written form letter with your name or organization's logo on it.

It doesn't take much sleuthing to uncover the money trail, because Comcast (and the politicians and groups beholden to it) usually (with some think tank exceptions) don't bother hiding it. They just outright deny that the money impacts policy positions whatsoever. For example, take reports this week that clearly highlight how Comcast can effectively buy a media sound wall of merger support, then pretend there's nothing untoward about an army of "consultants," minority groups, and fauxcademics all paid to effectively be glorified parrots:

"Increased Concentration Does Not Equal Anticompetitive Effect,” Mr. Manne wrote last August, summarizing his submission. He separately wrote pieces in Wired magazine, extolling the virtues of the deal, and through a separate advocacy organization he helps run, called TechFreedom, wrote a blog post that appeared the same day that the deal was announced early last year. Each time, he praised the transaction. But nowhere in these statements does Mr. Manne directly disclose that Comcast is among a small group of donors that finances his nonprofit group, a fact that Mr. Manne confirmed in response to a question late last week. "We are no value to our donors or ourselves unless we maintain our independence and academic rigor,” he said, before adding that “maybe there is some subconscious thing there."
Yes, surely Comcast's cash comes associated not with an expectation that you'll give automated and artificial justification to what's frequently very anti-consumer and anti-competitive policies, but that you'll exercise your "independence and academic rigor" and tell Comcast to piss off when you're approached to help "correct perceptions" about the latest Comcast PR campaign. You see there's nothing untoward going on here -- because we say there's nothing untoward going on here. We're all just healthy American patriots busy expressing our First Amendment rights, after all.

That logic was mirrored by Comcast's top lobbyist David Cohen -- who calls himself the company's "Chief Diversity Officer" to help skirt lobbying rules (I bring that up every time I write about Cohen because to me it just never gets old). Cohen says he's "offended" by the very idea that Comcast has to pay for its policy support:
"He did not dispute that many of the voices supporting the deal received donations from Comcast. But he said he was offended by the suggestion that their endorsements had been made in return for the financial help. "We have never provided financial support to an organization in exchange for support in a transaction,” he said. “Our support is based on the quality of the work they do in the community."
Now I'm sure that somewhere there exists a person that actually believes that, but I'd recommend not putting them in charge of your finances (or even lawn care). In Mr. Cohen's head, this is just another conspiracy contributing to the unfair overall "atmospherics" of anti-Comcast sentiment:
"The atmospherics around our customer service clearly stir some antipathy among some consumers," Mr. Cohen said. "And it does provide a basis for opponents of the transaction to gin up three-sentence, nonsubstantive communications to the F.C.C. saying that they don’t like Comcast or they don’t like Time Warner Cable."
That's a company with arguably the worst customer satisfaction ratings in any industry -- one that manufactures support for bad policies out of thin air -- trying to claim its horrible reputation is somehow manufactured. It's still not clear if regulators plan to deny the merger (or approve it with something vaguely-resembling meaningful conditions), but whatever happens it will spell the end of some fantastic entertainment that easily tops anything in Comcast's channel lineup.

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Posted on Techdirt - 7 April 2015 @ 4:10am

Fighting Toddler 'Porn Addiction,' UK Lawmakers Demand Porn Sites Include Age Checks Or Face Closure

from the you-have-no-idea-how-this-works dept

The UK's attempts to filter the Internet of all of its naughty bits are nothing if not amusing, whether it's the nation's porn filter architect getting arrested for child porn, or the complete and total obliviousness when it comes to the slippery slope of expanding those filters to include a growing roster of ambiguously objectionable material. The idea of forcing some kind of overarching structure upon porn consumption in the UK is another idea that never seems to go away, whether it's requiring a "porn license" (requiring users to clearly opt in if they want to view porn) or the latest push -- mandatory age checks.

Seemingly unaware of the way the internet (or law, or the world itself) works, some UK lawmakers are now demanding that porn websites around the world include age verification systems, or face fines or closure. How exactly the UK government plans to enforce these restrictions upon a global pornography industry isn't explained. The only thing the UK is sure of is that these restrictions are absolutely necessary for the welfare of the country's tots:

"Providers who did not co-operate could also be fined. Mr Javid said: "If you want to buy a hardcore pornography DVD in a store you need to prove your age to the retailers. "With the shift to online, children can access adult content on websites without restriction, intentionally or otherwise. "That is why we need effective controls online that apply to UK and overseas. This is about giving children the best start in life."
Well intentioned, perhaps, but it's yet another example of people not realizing how the internet genie has left the bottle, and no amount of thrashing or cajoling is going to re-imprison the agitated djinn. The UK's latest push is being propped up by a flood of recent scary headlines across the UK proclaiming that the country has a porn addiction problem among around a tenth of the nation's 12- and 13-year-olds. In fairly typical media fashion, the stories proclaiming this fact don't really bother to dissect the claims or hunt down the survey's origins.

If they had, they might discover that the survey in question was probably about as far from science as you can get without involving clowns and sacrificial altars:
"It turns out the study was conducted by a "creative market research" group called OnePoll. "Generate content and news angles with a OnePoll PR survey, and secure exposure for your brand," reads the company's blurb. "Our PR survey team can help draft questions, find news angles, design infographics, write and distribute your story." The company is super popular on MoneySavingExpert.com, where users are encouraged to sign up and make a few quid. Here's what that website says: "Mega-popular for its speedy surveys, OnePoll runs polls for the press, meaning fun questions about celebs and your love life." So the company behind these stats about porn addiction are known for their quick and easy surveys and promise to generate headline-grabbing stats. An unusual choice, perhaps, for such a sensitive subject."
While the group behind the effort (Childline) appears well intentioned, there are surely better ways to protect children than by scaring politicians into a global charade of internet booby whac-a-mole. Like, with actual parenting perhaps. Paying attention to what your kids do online, and intelligently explaining sexuality to them before they run into age-inappropriate content would be worlds more effective than demanding the globe's pornography industry capitulate to the whims of the UK's ludditical legislators.

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Posted on Techdirt Wireless - 6 April 2015 @ 1:43pm

Two And A Half Years Later, Verizon Finally Lets People Opt Out Of Its Stealth Zombie Cookie

from the that-took-a-while dept

Back in 2008, Verizon proclaimed that we didn't need additional consumer privacy protections (or opt in requirements, or net neutrality rules) because consumers would keep the company honest. "The extensive oversight provided by literally hundreds of thousands of sophisticated online users would help ensure effective enforcement of good practices and protect consumers," Verizon said at the time. Six years later and Verizon found itself at the heart of a massive privacy scandal after it began covertly injecting unique user-tracking headers into wireless data packets.

The headers not only allow Verizon to ignore browser privacy settings to track online behavior, it allows third parties to do so as well (something Verizon initially denied). Worse, perhaps, while users could opt out of the personalized ads delivered by the system, they couldn't actually opt out of having their online behavior tracked. Initially, Verizon responded to the controversy by repeatedly downplaying it, but as it became clear regulators and lawyers were contemplating action, Verizon stated in February that it would finally let users opt out.

As of last week, Verizon's mobile advertising FAQ now states that users can choose whether they want to let Verizon manipulate their traffic and spy on them:

"Verizon Wireless has updated its systems so that we will stop inserting the UIDH after a customer opts out of the Relevant Mobile Advertising program or activates a line that is ineligible for the advertising program. Government and enterprise lines are examples of ineligible lines. The UIDH will still appear for a short period of time after a customer opts out of the Relevant Mobile Advertising program or activates an ineligible line. If a customer chooses to participate in Verizon Selects, the UIDH will be present even if the customer has also opted out of the RMA program."
Users can either opt out of the company's snoopvertising via the privacy settings at the Verizon website, or by calling 866-211-0874.

So was Verizon right in that the public would keep the company honest? While that did ultimately happen here, it's worth noting that it took the nation's best security researchers two years to even notice that Verizon was embedding the headers. It took Verizon another six months (and a pretty merciless and sustained beating from the media and privacy advocates) before it finally allowed users to opt out of the traffic manipulation. And, while groups like the EFF would prefer the system be opt in, this is likely where Verizon's latest privacy scandal gets put to bed.

It makes you wonder just how long it will take the public to discover Verizon's next great innovation in snoopvertising?

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