Verizon's Media Failure Is Complete As Company Eyes AOL/Yahoo Sale

from the bumblin'-and-stumblin' dept

Back in 2014, Verizon decided it wanted to get into the media business. So it launched a website dubbed "Sugarstring." It didn't go very well. The website immediately gained attention for the fact that Verizon informed new journalist hires that they couldn't write about surveillance or net neutrality, two subjects Verizon is intimately involved in. The backlash was immediate, employees realized it was a shitshow and headed for the exits, and the whole thing was quickly shut down. But it was a good indication of what was to come.

Years later, Verizon moved on to an equally ill-fated effort, the acquisitions of both AOL (bought for $4.4 billion in 2015) and Yahoo (bought for $4.48 billion in 2017). Apparently, the executive brain trust at Verizon thought it would be a great idea to buy two sharply declining 90's media brands and mush them together, hoping this would allow them to magically elbow in on the Google ad revenues they'd coveted for so long. Of course that didn't go particularly well either.

There was the huge Yahoo hack, a massive privacy scandal where Verizon was busted modifying wireless data packets to track them around the internet without telling them (whoops!), and then of course the face plant by Go90, Verizon's attempt to rebrand itself as a sexy, Millennial-friendly streaming video service. Despite making a great stink about rebranding its AOL/Yahoo media and ad empire "Oath," by late 2018 Verizon was forced to acknowledge the whole thing was effectively worthless.

In 2019, Verizon wound up selling Tumblr to WordPress owner Automattic at a massive loss after a rocky ownership stretch. Last year it offloaded the Huffington Post. And this week, somebody leaked word to the press that Verizon was finally considering selling the whole mess, now creatively dubbed "Verizon Media Group":

"Verizon Communications Inc. is considering selling its media division, according to people familiar with the matter, as the telecommunications giant seeks to unload once high-flying dot-com brands such as Yahoo! and AOL. The company is talking to Apollo Global Management Inc. about a deal, they said. It couldn’t immediately be learned how a deal would be structured or if other suitors may emerge.

While whoever leaked word of the sale suggests the deal could come in around $5 billion, given the history of these assets I'd say it's probably a good bet the final sale figure could be dramatically less. Even calling Yahoo and AOL "once high-flying dot-com brands" seems generous in the TikTok, Facebook era. Verizon will now slink back to its core competences: running and building networks, and lobbying the federal government to prevent broadband competition.

As we've long noted, companies like AT&T and Verizon have spent the better part of a generation as government-pampered, natural monopolies. As such, creativity, competition, innovation, and adaptation are alien constructs. They're just not built for the kind of competition you see in markets like adtech or short-form online video. And when they do try to compete, that usually involves throwing money at often mindless acquisitions (see AT&T's $200 billion TV sector face plant). But despite billions of dollars, an ocean of regulatory favors, and endless hype, the end result has been a massive parade of stumbles.

Filed Under: advertising, failures, media
Companies: aol, verizon, yahoo

New Ebook On Zeran v AOL, The Most Important Section 230 Case

from the read-it,-understand-it dept

Section 230 has become a mainstream discussion topic, but unfortunately many discussants don’t actually understand it well (or at all). To address this knowledge gap, co-editors Profs. Eric Goldman (Santa Clara Law) and Jeff Kosseff (U.S. Naval Academy) have released an ebook, called “Zeran v. America Online,” addressing many aspects of Section 230. You can download the ebook for free at:

• SSRN
• SCU Digital Commons
• Google Play

Zeran v. AOL is the most important Section 230 case of all time. The Zeran case was the first federal appellate decision interpreting Section 230, and its breathtakingly broad sweep turbocharged the rise of Web 2.0–with all of its strengths and weaknesses.

In recognition of Zeran’s importance, in 2017, Profs. Goldman and Kosseff helped assemble an essay package to honor the case’s 20th anniversary. They gathered two dozen essays from some of the most knowledgeable Section 230 experts. The essays address the case’s history and policy implications. Initially, Law.com published the essay package but then unexpectedly paywalled the essays after 6 months.

The new Zeran v. America Online ebook restores the 2017 essay package into a new and easy-to-read format. Together, they are a great entry point into the debates about Section 230, including how we got here and what’s at stake.

To supplement the essay package, the ebook compiles an archive of the key documents in the Zeran v. AOL litigation (with bonus coverage of Zeran’s case against radio station KRXO). Many of these materials have not previously been publicly available in electronic format. The case archives should be of interest both to historians and students of precedent-setting litigation tactics.

Section 230 will likely remain hotly debated, but the debates won’t be productive until we develop a shared understanding of what the law says and why. Ideally, this ebook will advance those goals.

Filed Under: ebook, intermediary liability, ken zeran, section 230, zeran
Companies: aol

The First Hard Case: Zeran V. AOL And What It Can Teach Us About Today's Hard Cases

from the congress-and-the-courts-got-it-right dept

A version of this post appeared in The Recorder a few years ago as part of a series of articles looking back at the foundational Section 230 case Zeran v. America Online. Since to my unwelcome surprise it is now unfortunately behind a paywall, but still as relevant as ever, I'm re-posting it here.

They say that bad facts make bad law. What makes Zeran v. America Online stand as a seminal case in Section 230 jurisprudence is that its bad facts didn’t. The Fourth Circuit wisely refused to be driven from its principled statutory conclusion, even in the face of a compelling reason to do otherwise, and thus the greater good was served.

Mr. Zeran’s was not the last hard case to pass through the courts. Over the years there have been many worthy victims who have sought redress for legally cognizable injuries caused by others’ use of online services. And many, like Mr. Zeran, have been unlikely to easily obtain it from the party who actually did them the harm. In these cases courts have been left with an apparently stark choice: compel the Internet service provider to compensate for the harm caused to the plaintiff by others’ use of their services, or leave the plaintiff with potentially no remedy at all. It can be tremendously tempting to want to make someone, anyone, pay for harm caused to the person before them. But Zeran provided early guidance that it was possible for courts to resist the temptation to ignore Section 230’s liability limitations – and early evidence that they were right to so resist.

Section 230 is a law that itself counsels a light touch. In order to get the most good content on the Internet and the least bad, Congress codified a policy that is essentially all carrot and no stick. By taking the proverbial gun away from an online service provider’s proverbial head, Congress created the incentive for service providers to be partners in achieving these dual policy goals. It did so in two complementary ways: First, it encouraged the most beneficial content by insulating providers for liability arising from how other people used their services. Second, Congress also sought to ensure there would be the least amount of bad content online by insulating providers from liability if they did indeed act to remove it.

By removing the threat of potentially ruinous liability, or even just the immense cost arising from being on the receiving end of legal threats based on how others have used their services, more and more service providers have been able to come into existence and enable more and more uses of their systems. It's let these providers resist unduly censoring legitimate uses of their systems in order to minimize their legal risk. And by being safe to choose what uses to allow or disallow from their systems, service providers have been free to allocate their resources more effectively to police the most undesirable uses of their systems and services than they would be able to if the threat of liability instead forced them to divert their resources in ways that might not be appropriate for their platforms, optimal, or even useful at all.

Congress could of course have addressed the developing Internet with an alternative policy, one that was more stick than carrot and that threatened penalties instead of offering liability limitations, but such a law would not have met its twin goals of encouraging the most good content and the least bad nearly as well as Section 230 actually has. In fact, it likely would have had the opposite effect, eliminating more good content from the Internet and leaving up more of the bad. The wisdom of Congress, and of the Zeran court, was in realizing that restraint was a better option.

The challenge we are faced with now is keeping courts, and Section 230’s critics, similarly aware. The problem is that the Section 230 policy balance is one that works well in general, but it is not always in ways people readily recognize, especially in specific cases with particularly bad facts. The reality is that people sometimes do use Internet services in bad ways, and these uses can often be extremely visible. What tends to be less obvious, however, is how many good uses of the Internet Section 230 has enabled to be developed, far eclipsing the unfortunate ones. In the 20-plus years since Zeran people have moved on from AOL to countless new Internet services, which now serve nearly 90 percent of all Americans and billions of users worldwide. Internet access has gone from slow modem-driven dial-up to seamless always-on broadband. We email, we tweet, we buy things, we date, we comment, we argue, we read, we research, we share what we know, all thanks to the services made possible by Section 230, but often without awareness of how much we owe to it and the early Zeran decision upholding its tenets. We even complain about Section 230 using services that Section 230 has enabled, and often without any recognition of the irony.

In a sense, Section 230 is potentially in jeopardy of becoming a victim of its own success. It’s easy to see when things go wrong online, but Section 230 has done so well creating a new normalcy that it’s much harder to see just how much it has allowed to go right. Which means that when things do go wrong – as they inevitably will, because, while Section 230 tries to minimize the bad uses of online services, it’s impossible to eliminate them all—we are always at risk of letting our outrage at the specific injustice cause us to be tempted to kill the golden goose by upending something that on the whole has enabled so much good.

When bad things happen there is a natural urge to do something, to clamp down, to try to seize control over a situation where it feels like there is none. When bad things happen the hands-off approach of Section 230 can seem like the wrong one, but Zeran has shown how it is still very much the right one.

In many ways the Zeran court was ahead of its time: unlike later courts that have been able to point to the success of the Internet to underpin their decisions upholding Section 230, the Zeran court had to take a leap of faith that the policy goals behind the statute would be born out as Congress intended. It turned out to be a faith that was not misplaced. Today it is hard to imagine a world without all the benefit that Section 230 has ushered in. But if we fail to heed the lessons of Zeran and exercise the same restraint the court did then, such a world may well be what comes to pass. As we mark more than two decades since the Zeran court affirmed Section 230 we need to continue to carry its lessons forward in order to ensure that we are not also marking its sunset and closing the door on all the other good Section 230 might yet bring.

Filed Under: intermediary liability, ken zeran, section 230
Companies: aol

If You're Surprised By Verizon's AOL, Yahoo Face Plant, You Don't Know Verizon

from the yet-another-face-plant dept

So for years we've been pointing out that Verizon's attempt to pivot from grumpy old telco to sexy new Millennial ad brand hasn't been going so well. Oddly, mashing together two failing 90s brands in AOL and Yahoo, and renaming the coagulated entity "Oath," didn't really impress many people. The massive Yahoo hack, a controversy surrounding Verizon snoopvertising, and the face plant by the company's well-hyped Go90 streaming service didn't really help.

This week, Verizon was forced to acknowledge that Oath was now effectively worthless, at least in full context of what Verizon paid for it, and the company's past claims that the company would be taking on Facebook and Google in the online advertising wars for a generation to come:

"Verizon announced Tuesday that it would take a $4.6 billion writedown on its the media unit, which includes Yahoo and AOL. Oath's brand value is now worth just $200 million, according to Verizon. That's a stunning decrease in value since it formed in 2017. Verizon said Oath's brand was worth $4.8 billion when it last accounted for the company's goodwill valuation. With virtually no goodwill brand value, Oath's overall value (assets and goodwill) is now worth half of what it was a few years ago.

While some folks reacted with "shock" on Twitter, none of this should really have been a surprise to anybody who has watched Verizon do business over the last decade or two.

Pretty much every time Verizon wanders outside of its core competencies (operating admittedly excellent networks, lobbying to hamstring competition, being misleading about net neutrality), Verizon falls flat on its face. Whether it's the company's failed Go90 platform, failed video joint venture with RedBox, failed news website Sugarstring (which you may recall tried to ban reporters from talking about surveillance or net neutrality), its app store, its "me too" VCAST apps, or any of a dozen other countless efforts to expand into less familiar territory, Verizon failed. Usually semi-spectacularly.

This happens because having spent the better part of a generation engaged in turf protection and lobbying, telcos really can't innovate. We've known this for more than a decade, yet somehow, each time Verizon announces some new pivot, we forget. Telecom executives tend to think they can overcome this character flaw via megamerger, which usually just saddles the company with oodles of additional debt, but doesn't really address any of the sector's core shortcomings, built on the back of being largely government-pampered natural monopolies for the better part of a generation.

A big part of Verizon's attempted pivot to Millennial video ads was courtesy of former CEO Lowell McAdam, who left the company last summer. His predecessor, Ivan Seidenberg, believed that Verizon should remain focused on what it does best (sometimes): building better, faster networks. Seidenberg was a big reason for the company's $24 billion push into pure fiber with "FiOS." McAdam came in, froze most of those deployments, then tried to turn a legacy telco into Google. It didn't work, and anybody who is surprised by that hasn't watched Verizon do business.

All of that said, a company SEC filing effectively blamed McAdam and his team for the failure. As of this writing, that appears to have been enough to satisfy the company's investors, who are clearly eager to ride the hype waves emanating from Verizon's next big unfulfilled promise.

Filed Under: internet, media, telcos, writedowns
Companies: aol, oath, verizon, yahoo

Verizon Dinged Again For Privacy Violations, This Time For Slinging Personalized Ads To Kids

from the what-privacy-law? dept

Oh Verizon. For years we've noted how the company's consumer privacy practices are utterly abysmal. Like that time in 2016 when Verizon was fined a relative pittance by the FCC for modifying user wireless packets so it could covertly track users around the internet (beyond cookie, clickstream, or even deep packet inspection data). This being Verizon, it didn't bother to tell anybody that this was happening. As a result, it took two years for security researchers to even notice what the company was up to, and another six months of media yelling before the company was willing to even let consumers opt out of the data collection.

Fast forward to this week, and Verizon has been busted once again on the privacy front, this time for slinging behavioral advertisements at kids in violation of the Children’s Online Privacy Protection Act (COPPA). According to an announcement by acting New York Attorney General Barbara Underwood, Verizon's Oath operations (the mash up of its Yahoo and AOL acquisitions) routinely auctioned off ad space and placed ads on websites the company knew targeted kids -- without parental consent. As a result, Verizon's being hit with the biggest fine in the history of COPPA:

"The Attorney General’s Office found that AOL conducted billions of auctions for ad space on hundreds of websites the company knew were directed to children under the age of 13. Through these auctions, AOL collected, used, and disclosed personal information from the websites’ users in violation of COPPA, enabling advertisers to track and serve targeted ads to young children. The company has agreed to adopt comprehensive reforms to protect children from improper tracking and pay a record $4.95 million in penalties, the largest penalty ever in a COPPA enforcement matter in U.S. history."

But much like the company's fine for its earlier scandal, the fine itself is likely a small fraction of the money made during the time AOL spent intentionally turning a blind eye as behavior ads were aimed at kids and kid-frequented websites. The AG's report notes that until late last year (presumably as a result of realizing the AG inquiry existed), AOL's systems ignored any information that it received from an ad exchange indicating that the ad space was subject to COPPA, so the website routinely ignored the law in general. It's worth noting that the full settlement has not yet been released.

There's no indication from the NY AG (I've reached out for more detail) how long this was going on, but it's fairly obvious the income AOL made from ignoring COPPA (there were 1.3 billion auctions of display ad space) outweighs any penalty it's facing, however historic. COPPA is one of the few privacy regulations currently in place, and even then, Verizon/AOL/Oath's decision to just ignore the law speaks pretty broadly as to how even the privacy laws we do have are inconsistently enforced. Especially when we're talking about deep-pocketed telecom giants, who have openly flirted with the idea of charging users even more money for privacy without regulators so much as batting an eye.

As we sit down and begin the long, difficult conversation about what a real internet-era privacy law should look like, the lion's share of the focus remains (quite justly given the Cambridge Analytica scandal) on Facebook. But it can't be understated how the telecom industry has historically been even worse -- especially given they're effectively bone-grafted to the nation's intelligence surveillance apparatus. That these are the companies that will have the biggest impact on the crafting of privacy laws should terrify anyone interested in getting meaningful privacy legislation right.

Filed Under: barbara underwood, coppa, new york, parental consent, privacy, targeting kids
Companies: aol, oath, verizon, yahoo

Verizon's Pivot From Stodgy Old Telco To Sexy Millennial Ad Brand Isn't Going So Well

from the you're-not-built-for-this dept

We've noted for some time now how Verizon desperately wants to pivot from dull old broadband provider to sexy, Millennial-focused video advertising juggernaut. To accomplish this task, Verizon acquired both Yahoo and AOL, smushed them together, then hoped this would be enough to compete with the likes of Google and Facebook. The effort distracted the company from upgrading or repairing much of its fixed-line broadband footprint, since investing in networks isn't profitable enough, quickly enough, for many on Wall Street.

But Verizon's pivot hasn't been going so well. The company's Go90 video platform, which was supposed to be the cornerstone of the company's effort, recently fell flat on its face after Verizon spent $1.2 billion on the effort. And the company's Oath ad network, the combination of AOL and Yahoo, hasn't been doing much better, with Tim Armstrong (formerly of AOL) now heading for the exit (warning: annoying paywall):

"Mr. Armstrong, who came to Verizon in 2015 when it acquired AOL and helped steer its purchase of Yahoo two years later, had tried to combine the two internet companies to challenge Google and Facebook Inc. in digital advertising. But those efforts so far have failed to generate much growth or make the unit, called Oath, more than a side note in the wireless giant’s earnings."

Everyone (including Verizon) tends to forget that Verizon usually fails when it wanders outside of its core competencies (read: running networks and lobbying to kill consumer protections and hinder competitive threats). From the company's arguably terrible VCAST services to its failed app store, Verizon has long engaged in "me too" efforts that don't last because they're simply not good. And they're generally not good because, as a government-pampered telecom monopoly, Verizon simply isn't good at innovation, creativity, competition, disruption pr actually listening to your users. They're alien concepts to most Verizon executives.

The company's failed streaming partnership with RedBox was another such example, and who can forget the company's attempt to launch a news website dubbed Sugarstring that collapsed in embarrassment after critics pointed out Verizon tried to ban writers from talking about net neutrality or surveillance.

Ironically though, part of the reason given for Verizon's problems getting Oath off the ground (at least according to the Wall Street Journal's sources) is that the company wasn't willing to be snoopy enough:

"Verizon and Oath executives, however, have disagreed over what some employees within the digital ad unit see as an overly conservative approach to using wireless subscriber data to boost Oath’s advertising revenue, people familiar with those discussions say.

Senior executives within Verizon are wary of potentially alienating lucrative wireless customers in the name of adding incremental advertising revenue, these people said. Oath contributed less than $4 billion in revenue during the first half of the year, compared with the wireless business’s $44 billion.

Verizon agreed to share with Oath anonymous information on subscribers’ age, gender, phone language, and data plan size, for example. But these people say the carrier refused to share information on the apps customers used and their web browsing activity unless users explicitly opted in.

Verizon, you'll recall, was one of the key players responsible for killing FCC broadband privacy rules last year. It also faced a major privacy scandal after it was found the company was covertly modifying user wireless packets to track users around the internet without telling them or providing working opt out tools. It took security researchers two years to even discover this was happening, and another six months of public shaming before Verizon made it possible to opt out.

Gun shy from that experience, and wary of courting additional scandal as it rushed to kill consumer oversight (both on the national and state level), Verizon subsequently made Oath's snoopiest systems opt in. And the result pretty clearly highlights why ISPs and marketing folks hate the entire opt in paradigm:

"Given the choice, most of Verizon's 116.5 million wireless subscribers decided not to take the deal. Just 10 million of them have opted into the data-sharing program, known as Verizon Selects, according to the Journal."

Again, it's pretty ironic that Verizon only went the opt in route because it was wary of courting additional scandal after it was caught spying on all of its wireless users without its permission. But it really also can't be over-stated at how terrible government-pampered monopolies are at actually building innovative and competitive products. You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at, be it running wireless networks, or lobbying the government to screw over competitors and consumers.

Filed Under: advertising, internet, portals, tim armstrong
Companies: aol, oath, verizon, yahoo

Celebrate The 20th Anniversary Of A Seminal Section 230 Case Upholding It With This Series Of Essays

from the Internet-enabling-cases dept

We have been talking a lot lately about how important Section 230 is for enabling innovation and fostering online speech, and, especially as Congress now flirts with erasing its benefits, how fortuitous it was that Congress ever put it on the books in the first place.

But passing the law was only the first step: for it to have meaningful benefit, courts needed to interpret it in a way that allowed for it to have its protective effect on Internet platforms. Zeran v. America Online was one of the first cases to test the bounds of Section 230's protection, and the first to find that protection robust. Had the court decided otherwise, we likely would not have seen the benefits the statute has since then afforded.

This Sunday the decision in Zeran turns 20 years old, and to mark the occasion Eric Goldman and Jeff Kosseff have gathered together more than 20 essays from Internet lawyers and scholars reflecting on the case, the statute, and all of its effects. I have an essay there, "The First Hard Case: ‘Zeran v. AOL’ and What It Can Teach Us About Today’s Hard Cases," as do many other advocates, including lawyers involved with the original case. Even people who are not fans of Section 230 and its legacy are represented. All of these pieces are worth reading and considering, especially by anyone interested in setting policy around these issues.

Filed Under: cda 230, intermediary liability, zeran
Companies: aol

Some Of The Best Net Neutrality Reporting Is... Coming From Sites Owned By Verizon?

from the well,-that's-cool... dept

You may remember, a few years ago, Verizon attempted to start its own tech blog, called "SugarString," where the founding editor they hired was telling potential reporters they couldn't write about net neutrality. After that got mocked around the web, the whole idea of SugarString faded away. However, these days, Verizon actually owns a ton of content sites. It bought AOL in 2015, which already owned the Huffington Post, Techcrunch, Engadget and more. More recently, of course, it bought Yahoo as well. Suddenly, Verizon owns a ton of tech reporting.

And here's the amazing thing: some of the best reporting about how awful Ajit Pai's net neutrality proposal is... is coming from those sites now owned by Verizon. For example, over at Yahoo News, Rob Pegoraro has been doing a great job debunking many of Ajit Pai's claims about the history of the internet. In particular, Pai and his supporters keep insisting that the move by then FCC boss Tom Wheeler in 2015 to reclassify broadband under Title II upset a consensus going back to the Bill Clinton years that broadband was not under Title II. Except that's... just wrong:

Pai led off with a dubious recap of history. In his telling, broadband thrived from the passage of the Telecommunications Act of 1996 until Pai's predecessor, former FCC chair Tom Wheeler, forced through today's net-neutrality rules that subject internet providers to phone-company "common carrier" regulations dating back to the 1930s that require the equal treatment of customers' traffic.

"Two years ago, the federal government's approach suddenly changed," Pai said. "The FCC, on a party-line vote, decided to impose a set of heavy-handed regulations upon the internet."

But as the FCC's own site shows, the commission didn't reclassify cable providers to lift them out of the common-carrier bucket until March 14, 2002, not 1996.

That's when the commission reclassified cable providers from open-ended "telecommunications services" to "information services" — a term that as, described in the 1996 law, better fits proprietary online services like floppy-disk-era AOL.

The commission didn't extend the same treatment to phone-based providers until 2005.

There's a lot more in that piece as well, correcting the blatant factual errors in Ajit Pai's claims about net neutrality.

Of course, you might claim that Verizon just purchased Yahoo, so perhaps word had not yet filtered down. But let's shift over to TechCrunch, which has been on the AOL banner for years, and the Verizon/AOL banner for quite some time as well. Over there, a reporter by the name of Devin Coldewey has written a series of truly excellent articles about the FCC's plans to roll back net neutrality. Those pieces are thorough, detail-oriented and not prone to the sorts of hyperbole that (unfortunately) have been seen on both sides of the net neutrality debate. For example, look at his article from last week that carefully goes through the arguments against net neutrality that people are making, and then carefully debunks each one. The piece is so damn good, I wish we ran it ourselves. For example, here's just one of the eight separate arguments that he debunks:

We’re not trying to remove net neutrality rules, just Title II

TL;DR: Removing the rules is literally in the proposal

It is frequently said that the point is not to remove the rules themselves, just change the authority to something a little less heavy-handed.

This is a puzzling assertion to make when the proposal itself asks over and over again whether the “bright line” rules of no blocking, no throttling, etc should be removed. It’s pretty clear that proponents don’t think the rules are necessary and will eliminate them if they can. Just because they frame their preference in the form of a question doesn’t make it any less obvious.

A sort of corollary to this argument is that internet providers will voluntarily adhere to suggested practices. This is a pretty laughable suggestion, and even if it were true, it self-destructs: if companies have no problem subjecting themselves to these restrictions, how can they be as onerous as they say?

Then, this week, once the rules were actually released, Coldewey absolutely destroys the key argument that Ajit Pai's FCC is making about the rules, noting that it appears to be a deliberate misrepresentation of how the internet works:

The first point the FCC makes is regarding the text of the 1996 Telecommunications Act, and how it defines “telecommunications service” (how broadband is currently defined, allowing net neutrality rules to be effected) and “information service” (how it was before the net neutrality rule).

Now, I’m going to list the two definitions. Which one do you think sounds like what a broadband provider does?

1. “The offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system.”
2. “The transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.”

Take your time.

...

Okay. Number 2, right? Because your ISP doesn’t store the data you post on Facebook, or the address you look up on Google Maps, or the Pope you read about on Wikipedia. It’s edge providers like the ones I just mentioned that do all the “generating, acquiring, storing,” and so on. ISPs just transmit the information, don’t they?

Perhaps it would surprise you, then, to hear that the FCC has the exact opposite idea of how the internet works!

This is good stuff. Thorough, careful, and detailed facts that totally undermine Ajit Pai and the FCC's arguments. And it's coming from a site owned by Verizon. Now, obviously, the good news out of this is that it appears that Verizon is not interfering with editorial on these sites. That's actually encouraging (though I do wonder if the company will push to have "the other side" heard on these sites as well). Honestly, though, the links above are to three of the best pieces I've seen on net neutrality and how the arguments being made by Ajit Pai are either faulty, bogus or, at the very least, misrepresent reality. It's just icing on the cake that they happen to be on sites owned by Verizon, a company that has been at the center of the fight to kill net neutrality, and even had to drum up a fake journalist to talk to one of its execs, who insisted that the company really loved net neutrality (note: it does not).

Filed Under: devin coldewey, fcc, net neutrality, reporting, rob pegoraro
Companies: aol, verizon, yahoo

Verizon Buys Yahoo In $4.8 Billion Attempt To Bore The Internet To Death

from the hip-to-be-square dept

Remember when Yahoo rejected a $44.6 billion offer by Microsoft? Good times. After months of redundant rumors about the bidding process, Verizon has confirmed that it has acquired Yahoo in a $4.8 billion all cash deal. According to Verizon's press announcement, the acquisition of Yahoo's stumbling empire will position Verizon as a superpower in the new media age, helping the formerly stodgy telco in its pivot toward slinging ads at Millennials. As you might expect, the press release trots out AOL boss Tim Armstrong to sell a dull deal he claims will finally let poor Yahoo shine:

"We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers."

Verizon executives have acquired Yahoo and AOL in the belief they can pivot from a government-pampered telco mono/duopoly to a Facebook and Google-esque advertising juggernaut. And while there is little doubt that the advertising technology acquired from these deals will be useful in Verizon's quest to monetize the company's 140 million mobile subscribers, there's been little to no evidence that Verizon is actually competent enough to execute its own game plan.

Verizon's jumping into the media and advertising game because mobile and fixed broadband subscriber growth is slowing to a point where it's incredibly profitable, but just not profitable enough for Wall Street. And if you've followed the net neutrality fights, you're probably aware that most telcos believe they're absolutely entitled to a larger share of ad revenues -- simply because they built the networks these services run over. The problem (for these telecom companies) is that most of them have spent so long as government-pampered duopolies focusing on lobbying and turf protection, innovation and competition are alien concepts.

As a result, pivoting from stodgy telco to hip Millennial-focused ad empire has had an almost comical learning curve for Verizon execs. You might recall it began with Verizon launching its own tech blog dubbed Sugarstring, where its reporters weren't allowed to even mention subjects like net neutrality or surveillance. As that effort was busy imploding, Verizon's advertising arm was busted covertly modifying wireless user data packets to track consumer behavior around the Internet. This is of course all while Verizon was busy trying to deliver a killing blow to net neutrality; not exactly endearing itself to its target audience.

After several years of stumbling, Verizon launched a new, hip streaming video service Go90, which by most measurements has been a disappointment, despite Verizon's anti-competitive practice of zero rating the service. Now we're to believe that the combination of multiple, marginal 90s brands will somehow be the missing ingredient needed to transform Verizon into a media and advertising god, despite the fact Verizon has shown minimal competence and an aggressive, active disdain for the users it's trying to target. Good luck with that, Verizon.

Filed Under: advertising, mergers, search
Companies: aol, verizon, yahoo

AOL CEO Promises 'The Market' Will Keep Verizon, AOL Honest About Sleazy New Stealth Cookies

from the trust-us,-we're-the-phone-company dept

If you recall, Verizon has been under fire for much of the last year for the company's new stealth "cookies," which involve modifying user traffic to inject a unique identifier traffic header (UIDH) into each packet. This header allows Verizon and other companies to track a user's online behavior and build complete online user profiles, and can't be disabled via the traditional browser settings. Verizon initially tried to claim this unencrypted data attached to packets couldn't be used to build profiles by third parties, right before a third party showed just how easy it was to apparently do so.

As we recently noted, Verizon's new UIDH system has now made its way to the AOL empire after Verizon acquired the company for $4.4 billion earlier this year. The fracas was "covered" by Verizon-owned TechCrunch (bonus points: try to find one sentence in this article that describes the potential downside of what Verizon/AOL are doing), which quoted AOL CEO Tim Armstrong as declaring that "the market" will somehow protect you, the consumer:

"He said the market would prevent companies from abusing the swaths of data they collected. "If consumers don’t trust you it’s not worth whatever you’re going to do with the data,” Armstrong said. “Verizon is probably more sensitive to data than most Internet companies.” Armstrong said he would not want to be at a company in the future that had the opportunity to gather and optimize data and didn’t use it. “Data is oil for this economy,” Armstrong said. “Oil can be used really well, and oil can be used really poorly."

Yeah, here's the thing, Tim. Nobody trusts Verizon. Whether it's the company's relentless attacks on net neutrality, its ripping off of countless towns, states and cities, or Verizon's ham-fisted belief in closed networks and locked-down devices, "trust" isn't a word anybody really associates with Verizon. And no, Verizon isn't "probably more sensitive to data" than other companies, as the millions of users who've had their data shoveled over to the NSA can attest. If there's a company in the United States that's likely to use data irresponsibly and "really poorly," there's a pretty damn good chance it's going to be Verizon.

Remember, it took security researchers two years to even discover what Verizon was doing to user traffic. It took another six months of relentless media criticism for Verizon to even let users opt out of the practice. Does that sound like a company that's using user data responsibly? Does it sound like a company that's "more sensitive to data" than most Internet companies?

Meanwhile, this idea that magic market forces will somehow keep data-collection parasites honest is something Verizon's been arguing for years. Back in 2008, while trying to shoot down improved user privacy protections, Verizon insisted that public shame would keep the company honest:

"A couple of years back during the debate on net neutrality, I made the argument that industry leadership through some form of oversight/self-regulatory model, coupled with competition and the extensive oversight provided by literally hundreds of thousands of sophisticated online users would help ensure effective enforcement of good practices and protect consumers."

And yet "hundreds of thousands of sophisticated users" had no idea Verizon was secretly modifying their user traffic for two full years, so how exactly did that work out for end users? Yes, there are times you should trust in the ability of "the market" to sort itself out, especially if dealing with fragile emerging ecosystems. But in this case it seems abundantly clear that what "the market" wants is for consumers to be docile cash cows who nod dumbly as every shred of data is collected and monetized, and their personal privacy preferences are utterly ignored.

Filed Under: advertising, stealth cookies, tim armstrong, tracking
Companies: aol, techcrunch, verizon