This Week In Techdirt History

from the hindsight-is-20-20 dept

Let's embark on another look back through Techdirt's history:

Five Years Ago

This week in 2009, there was a lot of wrangling over royalties and rates. YouTube convinced PRS in the UK to slash its streaming royalties by reminding them just how much they rely on YouTube for an audience. Meanwhile, ASCAP was pushing for videogame sellers to pay performance rights to songwriters. A Swedish indie label operator asked whether $1 per song still make sense in the age of iPods, and a Canadian lawyer was demonstrating the absurdity of Canada's copyright levy system. eMusic had just raised prices after signing Sony to its service — a terrible PR move that the company appeared to be trying to sweep under the rug. In the background of all this was a discussion about the rise and future of internet radio, now a massive royalty battleground all its own.

Five years ago, the RIAA was six months into pushing an earlier version of its voluntary "strikes" plan for ISPs, but none had signed on. Meanwhile, the British government was rejecting the whole notion of "three strikes". On the ISP side, Verizon wasn't counting strikes but it was pitching a screwball argument that US broadband is really competitive.

The USTR had just launched a new website with promises of transparency, and we all know how that went. Also, the Supreme Court had just announced that it would hear the Bilski case, giving it a chance to rule firmly on the question of software and business model patents — which it decided not to do, offering an extremely narrow ruling instead.

Ten Years Ago

In 2004, the CAN-SPAM act was still reasonably young, and we were grappling with its impact. We noted that, as predicted, it increased the amount of spam. It created a whole new service industry for spam detectives, and some major issues like nefarious use of the required 'unsubscribe' button. And of course, companies were rushing to patent anti-spam technology.

Several new tech trends were emerging or taking shape this week in 2004. The public was growing increasingly comfortable with online news, while experts were discussing the future of security and the need to adopt two-factor authentication. The online storage revolution sparked by Gmail was picking up steam with 1gb storage offerings transforming from "news" to "the norm". There was a lot of buzz (and a lot of questions) about the move to 64-bit systems. And we took a look at the youth of the digital age's very own musical art form: circuit bending.

Fifteen Years Ago

It was a quiet week (remember those?) in 1999. We were surprised and a bit dismayed by the sales of Sony's silly $2000 robot dog, excited about the possibility of fiber to the house (before Google would have been anywhere on anyone's list of companies that might offer such a thing), and curious but unsure about the idea of sending exobits per second of data through power lines.

Some traditional companies and retailers were going web-only, and one particularly weird company was offering to write complaint letters for you, for a fee.

519 Years Ago

Over half a millennium ago, in a wonderful and timeless act of innovation, a friar distilled the first-ever batch of Scotch whisky at the Lindores Abbey in Scotland. The order came down this week, on June 1st 1495, from the Exchequer Rolls of Scotland, along with the necessary supplies: "To Friar John Cor, by order of the King, to make aqua vitae, VIII bolls of malt."

Filed Under: history, look back, royalties, spam, ustr
Companies: ascap, riaa, verizon

Yes, Verizon Is At Fault In Netflix Dispute; It's Not Delivering What It Sold Customers

from the a-dose-of-reality dept

We wrote about the latest Netflix/Verizon dispute over who's to blame for poor quality movie streaming. Netflix has chosen to pin the blame on the ISPs when there's network congestion, while Verizon angrily hit back at this "PR stunt," claiming that it was actually Netflix's fault for not doing a better job routing its traffic. Except... that's not true. As we've been pointing out for the better part of a decade, this is all about the broadband companies trying to double charge. Tim Lee, over at Vox, summarizes the point nicely:

Verizon's customers have paid Verizon for the service of delivering content to them. But rather than simply performing the service Verizon's customers have paid it to perform, Verizon sees an opportunity to get paid twice: in addition to charging its own customers for connectivity, Verizon hopes to also charge Netflix to deliver its content to those customers.

Verizon is effectively using its own customers' poor experience as leverage. Verizon has been threatening Netflix that if they don't pay up, Netflix customers (who are also Verizon customers) will get frustrated and cancel their Netflix service. Of course, that threat is a lot more powerful because most customers don't have many alternatives to Verizon service.

And yes, I know that some big broadband defenders will immediately trot out the usual defense: that Verizon sold its network in a way that it never actually expected subscribers to use -- but it's difficult to see how that's everyone else's fault. If anything, it raises some questions about whether or not the FTC might want to step in and look at whether or not Verizon, AT&T and Comcast totally misrepresented what they were selling consumers.

As for the bullshit claim that Netflix is to blame because it sends Verizon more traffic and thus the "traffic ratios are unbalanced," well, Lee points out that this is actually Verizon's fault as well.

But this argument doesn't make sense. Verizon customers aren't just paying Verizon to send traffic to Netflix, they're also paying Verizon to deliver Netflix (and other) traffic to them. And there's no reason to think that carrying traffic from Netflix to Verizon customers is more expensive than carrying traffic in the other direction.

Indeed, there's a simple reason that Verizon's network receives more traffic than it transmits: that's how Verizon set it up. All of Verizon's standard FiOS packages provide dramatically more bandwidth for downloading than uploading. The entry-level service, for example, is 15 Mbps downstream and 5 Mbps upstream. The fastest package is even more lopsided: 500 Mbps downstream and 100 Mbps upstream. If Verizon builds a network that's optimized for downloading, it can't complain that its customers use it to download stuff.

And, of course, Verizon can squawk all it wants about this, but it's not going to change the fact that it's the problem here. Yes, Netflix delivers a lot of data. But if Verizon can't handle it, it shouldn't have sold it to consumers.

Filed Under: broadband, disputes, double charging, interconnection, net neutrality, peering, streaming
Companies: netflix, verizon

Verizon Sends Netflix A Cease & Desist, Saying It Can't Blame Verizon For Clogged Networks

from the really,-now? dept

So, yesterday, some of the tech blogosphere blew up over the fact that Netflix had started blaming Verizon for network congestion: Netflix claimed it had actually been testing this for a few weeks now, and others have seen it on AT&T networks as well. Verizon was, to put it mildly, not happy about all of this. It quickly told reporters that the whole thing was a "PR stunt" and pushed out an angry blog post, saying that it was all Netflix's fault for the way it routed traffic to Verizon's network. Notably, just about a month ago, Netflix had agreed to an interconnection deal, similar to the one that Netflix famously did with Comcast, but it's possible that the new ports aren't fully operational yet.

Either way, I was going to ignore this latest round of little stupid spats that have been going back and forth -- except that now it appears that Verizon has taken it up a level and actually issued a cease and desist to Netflix sayng it should no longer blame Verizon when the network is clogged. I'm not sure what actual legal basis Verizon thinks it has to do this, and wonder if Netflix will just cave in and stop with the messages. But, it certainly would create quite the interesting lawsuit if Verizon decided to go to court about this. Update: Netflix has indicated that it won't stop.

Either way, it's pretty clear that even once Netflix has signed an interconnection agreement with them, these ISP's are still not at all happy about the situation.

Update: Added an embed of the actual letter below.

Filed Under: arguments, broadband, cease and desist, interconnection, net neutrality, streaming, threats
Companies: comcast, netflix, verizon

Verizon Begs To Be Classified Under Title II For Subsidies; Screams About Parade Of Horribles Any Other Time

from the title-ii-shell-game dept

If you've been paying any attention at all to the whole net neutrality fight, you'd know that the key issue is whether or not broadband services should be reclassified under Title II of the Telecom Act. In the early to mid-2000s, the FCC declared both cable and DSL broadband to be information services under Title I, rather than telecommunications services under Title II. This basically means they are not subject to common carrier rules, including non-discriminatory rules that are the key issue around net neutrality. And, of course, the telcos are putting up a big fight over this, listing out a supposed parade of horribles that would happen if they were reclassified under Title II.

There's just one big problem with this: those very same telcos with those very same networks are begging to have them classified under Title II at other times. Basically, the telcos absolutely love Title II when it gives them all sorts of subsidies and tax breaks.

Here, for example, you can see Verizon making it quite clear that its FiOS fiber service should be classified under Title II in New Jersey. They've done the same elsewhere. Here they are in DC. The reasoning here is simple to understand. For all the talk of why they hate Title II, Verizon (and AT&T) know that Title II gives them tremendous subsidies in the form of access and rights of way. Basically, the only way they can get the right to rip up the ground or access existing conduits and electrical poles to lay all that fiber -- is to be classified as a common carrier under Title II. So a bunch of Verizon's applications concerning its FiOS service are entirely about why they should be classified as Title II.

But here's the little dance move they pull. They claim that this infrastructure must be considered Title II, in order to get those subsidies, tax breaks and rights of way. And they insist that it's proper to classify it as Title II because it offers voice service over those lines. But, at the very same time, they claim that all other services that they provide, must be classified under Title I.

Oh, and it gets better: they claim that in order to pay for all of this (even though they're getting all these breaks and subsidies), they have to raise the prices on telephone service -- which they've done at a fairly astounding rate.

And, we're not done with the scam yet. As we've been describing for years, part of this shell game is that Verizon promises that, under Title II, it will install this fiber to everyone -- and then never delivers. And then, for the final kick in the gut, after it fails to deliver on those promises, it gets local politicians to drop the requirements it agreed to in order to get the subsidies.

And... this doesn't even touch on the issue of "IP transition," where after they get all these tax breaks and subsidies based on the claims of providing (increasingly expensive) "voice" services under Title II, the very same telcos will want to turn off that voice service, in favor of voice service over the internet. Now, voice services are clearly moving to the internet, and that's reasonable. But this is part of the telco shell game. Get all these tax breaks and subsidies by pretending all of that fiber was a Title II service, but then shut down the Title II covered-telco service the first chance they get, and shift it to an "information" service under Title I. Voila: they get all the tax breaks and benefits of Title II for installing the infrastructure, but then don't have to meet the obligations of a common carrier which they promised to meet in order to get those subsidies.

It's almost astoundingly brilliant if we weren't all left paying the (increasingly larger) bill for worse service.

Either way, whenever you see the telcos listing out the parade of horribles under Title II, it might be worth reminding them that they, themselves, were the ones who insisted on classifying their own networks under Title II because of all the "benefits" it brought.

Filed Under: access, broadband, fcc, fiber, fios, net neutrality, rights of way, subsidies, title ii
Companies: verizon

John Oliver: Stop Calling It Net Neutrality; It's 'Preventing Cable Company F**kery'

from the a-bit-more-on-target dept

In last night's John Oliver show (technically "Last Week Tonight"), his "top story" was all about net neutrality. This is both surprising (because the issue has received little mainstream attention) and awesome, because it needs much more mainstream attention. Not surprisingly, it's both insightful and hilariously funny. He mocks how the FCC has made the issue sound incredibly boring. He mocks telco industry lawyers claiming it's "not about fast lanes and slow lanes" but "fast lanes and hyperspeed lines." Oliver summarized that quote simply as "bullshit." He shows this graphic of Netflix's speed on Comcast before and after it agreed to pay up, and directly compares it to a mafia shakedown. He highlights how the broadband companies (though he unfortunately lumps telco companies in as "cable companies") have basically bought off Washington DC, amusingly comparing an FCC run by a former lobbyist regulating the cable industry to an Australian couple hiring a dingo to babysit.

And, finally, he has an amusing call to action for "internet commenters" who he suggests have been training their whole lives for this moment, when the FCC has asked people for comments on its proposal. It's just too bad he pointed them directly at the confusing FCC.gov site, rather than the EFF's much better interface at DearFCC.org.

Either way, it's great to see Oliver take on this issue in an amusing way -- and hopefully it will spur more people to speak up on the issue.

Filed Under: broadband, cable companies, fast lanes, john oliver, lobbying, net neutrality, open internet, politics
Companies: at&t, comcast, time warner cable, verizon

Google Fiber: You Know How Comcast Is Making Netflix Pay Extra? We Don't Do That Kind Of Crap

from the good-for-them dept

The folks behind Google Fiber have fired a not-so-subtle shot at Comcast and Verizon for their recent efforts to make companies like Netflix pay extra. As we've noted, the big last mile access broadband access providers have realized that they can effectively get companies to pay twice by clogging certain points in the network. Even more nefarious, they're able to do this without violating a narrow view of "net neutrality" because net neutrality is focused on the last mile, rather than interconnection and peering. It's a really scammy process, which is part of those big broadband providers' attempts to extract monopoly rents out of their control over the last mile.

Google Fiber has stayed out of this debate for a while, but just fired a clear shot in the fight, with a blog post that never mentions Comcast, but more or less screams: You know that bullshit that Comcast and Verizon are pulling? We don't do that. Instead, they note two important things: (1) contrary to the claims of Comcast, online video traffic is in no way overwhelming the network, and (2) it's easy to help upgrade the setup for Netflix and others for free:

We have also worked with services like Netflix so that they can ‘colocate’ their equipment in our Fiber facilities. What does that mean for you? Usually, when you go to Netflix and click on the video that you want to watch, your request needs to travel to and from the closest Netflix data center, which might be a roundtrip of hundreds or thousands of miles. Instead, Netflix has placed their own servers within our facilities (in the same place where we keep our own video-on-demand content). Because the servers are closer to where you live, your content will get to you faster and should be a higher quality.

We give companies like Netflix and Akamai free access to space and power in our facilities and they provide their own content servers. We don’t make money from peering or colocation; since people usually only stream one video at a time, video traffic doesn’t bog down or change the way we manage our network in any meaningful way — so why not help enable it?

But we also don’t charge because it’s really a win-win-win situation. It’s good for content providers because they can deliver really high-quality streaming video to their customers. For example, because Netflix colocated their servers along our network, their customers can access full 1080p HD and, for those who own a 4K TV, Netflix in Ultra HD 4K. It’s good for us because it saves us money (it’s easier to transport video traffic from a local server than it is to transport it thousands of miles). But most importantly, we do this because it gives Fiber users the fastest, most direct route to their content. That way, you can access your favorite shows faster. All-in-all, these arrangements help you experience the best access to content on the Internet — which is the whole point of getting Fiber to begin with!

So, what's Comcast and Verizon's excuse?

Filed Under: buffering, google fiber, interconnection, peering, streaming
Companies: comcast, google, netflix, verizon

On Second Thought: Why Was Verizon's Challenge To Bulk Phone Records Collection So Weak?

from the you-can-do-better-than-that dept

On Friday we wrote about an unnamed phone company apparently challenging the FISA Court's order to hand over certain phone records on basically every phone call, noting that the FISA Court shot down that challenge. The phone company was not identified, but the Washington Post says that people have confirmed that it's Verizon. That isn't all that surprising. As far as we know, the Section 215 bulk phone record orders are mainly used on Verizon and AT&T, but not other, smaller phone companies.

In our post, we suggested the nameless telco deserved kudos for actually challenging the order, but in retrospect, the company only deserves very partial kudos. First, assuming it's Verizon, the company has been receiving these orders every three months for something close to eight years. And it just challenged them now? Second, the challenged relied entirely on Judge Richard Leon's ruling from December that found the Section 215 program unconstitutional. Verizon did not make any specific statutory or constitutional challenges itself to the order. It just pointed to Judge Leon's ruling and said that, based on that ruling, it was questioning the order. In fact, it's not even clear if Verizon was actively challenging the order, or just asking for clarification based on Judge Leon's ruling.

That's a fairly weak challenge, and allowed FISC judge Rosemary Collyer to just handwave away Judge Leon's arguments, without Verizon having to present any real arguments itself. It's a challenge, certainly, but a rather weak one that Verizon had to know it would lose, and which didn't require much effort at all.

Filed Under: fisa court, fisc, richard leon, rosemary collyer, section 215
Companies: verizon

Verizon Knows You're A Sucker: Takes Taxpayer Subsidies For Broadband, Doesn't Deliver, Lobbies To Drop Requirements

from the haven't-we-heard-this-story-before? dept

Ten years ago (!?!) we wrote about how Verizon conned Pennsylvania taxpayers out of billions of dollars. Verizon predecessor Bell Atlantic had cut a deal with the state to wire up every home in the state with symmetrical fiber. That didn't happen. And while Verizon's former CEO Ivan Seidenberg did, in fact, make a big bet on fiber with FiOS, Wall Street hated it and kept punishing the company for daring to do something so stupid as investing in the future. This is a quarter-to-quarter world, and spending on capital improvements that would bulk up the entire economy over the long haul is not a bet that Wall Street folks want to make, since it doesn't pay off in a few months. So, it was no surprise that once Seidenberg was out of the picture, it basically dropped all plans to expand FiOS -- and then started looking to push its DSL users to cable providers, so it could focus on the wireless business instead.

A few months ago, we wrote about the same basic story happening in New York City. Verizon made a deal with the city to get all sorts of subsidies and benefits, in exchange for wiring up the entire city with FiOS. That didn't happen. Verizon weasled out of the deal by saying the legalese in the contract didn't actually mean that every home had to get fiber, but just that they had to "pass all households." As in look outside and wave at all that broadbandy goodness passing you by without stopping.

The latest is that Verizon has been able to wiggle out of similar promises in New Jersey. The New Jersey promise was just like the Pennsylvania one, coming back in the early 90s with a promise to wire up the entire state with symmetrical fiber by 2010. Stop me if you've heard this before: that didn't happen. Instead, Verizon flooded the New Jersey Board of Public Utilities with bogus astroturf comments, which it pushed its own employees to send, arguing that the NJBPU should drop that fiber requirement -- and the NJBPU dutifully complied, ridiculously claiming that Verizon's limited, capped, expensive slow wireless LTE service (which comes nowhere near the fiber promises it made) qualifies for meeting the contract terms.

The NJBPU claims that this "settlement," which doesn't appear to involve Verizon paying back any of the rebates, subsidies or fees it received, is a good thing since it will "avoid what could have been years of litigation over enforcement of Verizon's broadband agreement." In other words, Verizon gets to take your money, deliver not very much, and keep it all, because, gee, it would be a real pain to take them to court.

Remember all this as we continue to discuss this new "anti-net neutrality" offering today. Because the telcos have a long history of insisting that if you just give them the regulatory regime they want (which always involves giving them ways to get a lot more money), then they'll deliver the kind of broadband found throughout the rest of the world. Then, they never deliver. Though, they do keep the money.

Filed Under: broadband, fiber, new jersey, njbpu, promises
Companies: verizon

Yet Another Copyright Troll Thinks It's Found The DMCA Subpoena Loophole That Slammed Shut Years Ago

from the that's-not-how-it-works dept

Over a decade ago, when the RIAA first decided to start going after its biggest fans for sharing music online, one of the biggest challenges it faced was -- of all companies -- Verizon. The RIAA started sending "DMCA subpoenas" to Verizon demanding the names of its customers without filing a lawsuit and without any judicial review. Verizon vigorously fought back, claiming that such subpoenas were unconstitutional and violated its customers' anonymity rights. After some back and forth Verizon prevailed in the DC Circuit appeals court, and the Supreme Court refused to take the RIAA's request to hear the case. Since that time, it's been pretty well established and accepted that you can't use DMCA subpoenas to get info out of ISPs like that. That's not what they were ever intended for, and they go against the basic First Amendment protections for anonymity (which allow people to be revealed, but not solely on the basis of a subpoena with no judicial review). That milestone victory by Verizon is what eventually lead the RIAA to actually filing lawsuits against thousands of unnamed fans, as opposed to just getting their info and threatening them.

Anyone who's spent even just a little bit of time studying copyright law is familiar with this case. A decade ago, it was one of the key copyright legal battles. But, it seems that every few years, some copyright troll lawyers who really have no understanding of copyright law at all "rediscover" DMCA subpoenas and think that they've found some amazing loophole that lets them get user info without judicial review. Three years ago, copyright troll Evan Stone was all excited that he'd discovered this amazing subpoena provision, gleefully telling reporters that it was going to be the key to keeping his copyright trolling going. Instead, he got hit with sanctions for abusing subpoena powers.

So it seems a bit bizarre that another operation, "Rightscorp" thinks that it's discovered some amazing "loophole" to get information on alleged infringers without judicial review (also, odd that Torrentfreak suggests this is a new development, since it also reported on Evan Stone claiming to have found that same "loophole" that doesn't exist). The TorrentFreak article does ask Rightscorp's CEO about the Verizon case, and he insists that it was decided incorrectly. That's a... risky proposition at best. While he's technically correct that the Supreme Court hasn't decided this issue, it has been ruled on in both the DC Circuit (that Verizon case) and the 8th Circuit (similar case, similar ruling) and no one has challenged it for a decade. The interpretation of DMCA subpoenas is pretty widely accepted across the board. If this actually got to court, Rightscorp would find it pretty difficult to prevail and upend rulings that have been considered established law for a decade.

But despite the bluster, it seems quite unlikely that Rightscorp really wants to test this in court. Torrentfreak also notes that "Rightscorp is avoiding any of the major Internet providers." That's clearly a conscious choice, knowing that the legal teams for these smaller ISPs probably are unfamiliar with the details of DMCA subpoenas and how they don't apply. Indeed, it appears that Rightscorp's strategy to date has been somewhat successful, as clueless ISPs are handing over info on their customers that they should not be handing over under the law. I'm wondering if those ISPs, who are violating their customers' privacy (potentially in violation of their own terms of service), may come to regret that decision (and the fact that their legal departments seem unaware of how DMCA subpoenas work). Also, hopefully a little publicity will help those ISPs to quickly study up on DMCA subpoenas and why they don't apply here.

Filed Under: 512h, copyright, copyright trolls, dmca subpoenas
Companies: riaa, rightscorp, verizon

Wireless Carriers Quietly Admit New 'Price War' With T-Mobile Doesn't Really Exist

from the sorta-kinda-competition dept

A lot has been made about the wireless industry's recent bout with price competition, most of it courtesy of T-Mobile. Through a number of more consumer-friendly programs ranging from the elimination of device subsidies to offering free international data, T-Mobile has started finally getting larger carriers like AT&T and Verizon to respond ever-so-slightly on price (not without ample hand wringing and consternation of investors). With CEO John Legere mocking companies like AT&T almost every day on Twitter, the overall narrative is that the wireless industry is seeing an intense, fresh burst of competitive energy and that consumers are reaping the rewards through cost savings, right? Not so much.

In reality, prices steadily continue to go up as carriers cut prices on some services, but raise prices elsewhere or redesign pricing entirely to recoup any losses. While you might now save money on voice and text under AT&T and Verizon's new shared data plans, for example, you'll now pay more money for data and to simply connect your phone to the network. While you'll no longer pay a subsidy on your phone or sign a contract, you might wind up paying more for one of the carriers' new handset early upgrade programs or get dinged by a random new fee. That's not to say that a lot of what T-Mobile is doing competitively doesn't benefit users, but price competition is still intentionally being kept to a minimum by all parties involved in contrast to the press narrative.

As such, it's amusing to see T-Mobile's CEO busily playing rock star and professing to love cutting prices, while the company's CFO quietly admits they're not actually interested in a price war:

"T-Mobile raised the cost of its core unlimited data plan on Friday. The carrier says it has been competing more effectively by doing away with subscriber "pain points" like service contracts and international data fees. But its executives have also been signaling that they don't plan to start a price war. "When you really analyze a lot of the pricing moves that have been made, there has not been a significant repricing," (T-Mobile) Chief Financial Officer Braxton Carter said at a Morgan Stanley conference last week."

And Verizon, despite T-Mobile's supposed waves in the sector, similarly admits they're not really seeing things all that differently:

"I think it is interesting given my years in the industry, how you hear things like price war and all that being kicked around in the media today and this is really nothing different than we have seen over the last couple of decades," Verizon Chief Executive Lowell McAdam said on a conference call last month."

That's not too surprising, as Verizon has a vested interest in assuring stockholders things are fine, and they've long argued their superior network is ample justification to refuse to compete on price. In contrast, T-Mobile wants investors to see the company as disruptive, but investors also know that a price war will greatly hamper efforts to improve T-Mobile's greatest weakness: much smaller overall network coverage.

Still, the fact companies are allowed to pick and choose when they actually get to engage in a price war is pretty telling about the state of competition in wireless. Despite the ample press coverage T-Mobile is generating, AT&T and Verizon together control about two-thirds of the retail market (and the resulting profits), they've cornered most of the available spectrum, and they control roughly 80% the "special access" market (they lease point to point connections that power all other services). Carriers have enjoyed some absolutely amazing profit margins on wireless for years (SMS, which costs carriers virtually nothing to provide, being just one example), and absolutely nobody wants to kill the cash cow.

Filed Under: competition, mobile operators, price war
Companies: at&t, t-mobile, verizon