Senator Doesn't Buy FCC Justification For Killing Popular Net Neutrality Protections

from the repetition-forges-reality dept

So we've noted for years now how incumbent ISPs love to breathlessly insist that net neutrality protections "stifled broadband industry investment," despite the fact that publicly-available SEC filings, earnings reports, and the ISPs' own public statements on this subject have repeatedly proven this claim false. Traditionally, large ISPs like AT&T, Verizon, Comcast and Charter have employed industry-friendly economists to massage and cherry pick the data until it looks like a slowdown occurred. But every few months or so a journalist will painstakingly document how this slowdown claim is complete and total bullshit.

But this being the broadband industry, and lobbyists being lobbyists, the repeated debunking of their claims never seems to matter. In large part because they know that if they repeat this claim often enough, repetition will forge reality in the minds of people who don't know any better. That's why, several times a week for years, you'll see either editorials like this one by Montana State Senator Doug Kary or claims from organizations that pretend not to take money from the telecom industry, insisting that net neutrality rained all over their investment parade.

Ajit Pai once again trotted out this bogus claim during a hearing last week before the Senate Commerce Committee, a move that appeared to annoy Senator Ed Markey:

"Markey asked Pai what problem he is trying to fix by repealing net neutrality rules. Pai responded, "One of the concerns we have raised is these regulations might be dampening infrastructure investment."

"They might be, but there's no evidence of it," Markey fired back.

Pai continued, saying, "There has been evidence raised, and that is part of the reason why we are testing this proposition... we wanted to test this proposition in an open and public process."

Pai continues to pretend that he has an open mind and is "just testing stuff out," and not grotesquely dismantling popular consumer protections to the sole benefit of a handful of telecom and media conglomerates. And again, we appear to be stuck in a game of existential patty cake, where people pushing an agenda friendly to these duopolists hope repetition forges reality. Even though major ISP executives have made numerous public statements acknowledging this is all a bluff. Wyden was also quick to highlight these ISPs have never once informed investors of this apparent problem, as required by law:

"Publicly traded companies are required by law to provide investors accurate financial information, including reporting any risks or financial burdens. However, I have found no publicly traded ISP that has reported to its investors by law that Title II has negatively impacted investment in their networks. Many, in fact, have increased deployment and investment."

Wyden also was quickly to highlight that absent this bogus claim about sagging investment, there's really no sensible justification for killing net neutrality rules:

"I feel that the evidence [to repeal the rules] right now is not there and if it was, the broadband companies themselves would have in fact been providing that evidence to their investors in their filings, and they have not done so. Anecdotal evidence is not evidence. There is no factual basis for that change [proposed by the FCC]."

We all know (or should know by now) that Comcast, AT&T, Verizon and Charter want the rules dead simply so they can make more money. They know that with neither organic market competition nor functional regulatory oversight they'll have a green light to abuse this lack of competition in a rotating array of obnoxious and creative new ways. Of course they can't just admit this or they'd be laughed out of town, so we get to instead engage in this endless, idiotic game of "is not, is too," while they pretend removing oversight of some of the most anti-competitive companies in America is somehow economically essential.

Filed Under: ajit pai, ed markey, fcc, investment, net neutrality, ron wyden, title ii

It's Time For The FCC To Actually Listen: The Vast Majority Of FCC Commenters Support Net Neutrality

from the the-will-of-the-@#!$-public dept

The vast majority of consumers (from both parties) support net neutrality. This has been supported repeatedly not only by independent polls, but even the cable industry's own surveys.

Yet for most of the last decade, ISP lobbyists and think tankers have managed to frame the subject in the media as a partisan one -- quite successfully using the country's deep political divisions to fuel disagreement and stall real progress. In reality, our collective disdain for growing monopolies like Comcast (and the high prices and abysmal customer service that result) tends to burn through partisan myopia. As a result, most people realize that in the absence of real competition you need some basic rules of the road to protect consumers and Comcast competitors alike.

That's why, when the FCC passed relatively basic net neutrality protections in 2015, the vast majority of the record 4 million public comments filed with the FCC supported the creation of these rules. And again, data analysis of the comments filed so far show massive opposition to dismantling those same rules. Data scientist Jeffrey Fossett managed to dig through the more than 1.5 million comments filed with the FCC so far and found that -- once you exclude form letter submissions (in common use by both sides), 97% of the remaining comments support keeping the rules intact:

We recently discussed how some unidentified group or individual isn't happy with the fact that the rules have broad support, and has begun using a bot to stuff the comment section with entirely fake net neutrality opposition. According to Fossett's analysis, a whopping 40% of the 1.5 million comments are courtesy of this bot, which appears to just have pulled names from a hacked database somewhere to craft its phony opposition. You can leave it up to your imagination as to which groups, companies or individuals might benefit by such a massive fabrication, but Fossett makes the impact obvious:

At the moment, the FCC has frozen all public comments for what's known as a "sunshine period," a bit of bureaucratic prattle during which the FCC is supposed to avoid being lobbied and seriously reflect upon all of the input they've received so far. And Fossett suggests that the FCC may just want to actually listen to what the public (the non-bots among us, anyway) are telling them:

"The FCC has now entered a “Sunshine” period for docket 17-108, during which it will not consider new comments. Given the magnitude of filings (~695,000 if you exclude the anti-NN spam) and the balance of opinion expressed (97% in favor of net neutrality or 59% if you include the spam), this analysis suggests that the FCC should reconsider its position on net neutrality during this period of reflection."

While FCC boss Ajit Pai has breathlessly claimed he'll be reflecting very deeply on the public's input, there's every indication he intends to ignore the public and push forward with dismantling the rules anyway. In fact, instead of seriously contemplating the public's support for the rules, the FCC spent a large amount of the sunshine period trying to portray net neutrality supporters as unhinged, unreasonable and racist. And when the FCC votes on Thursday to begin rolling back the rules (with a final killing vote likely later this year), you can be damn sure that Pai will lecture everyone on how he's gutting oversight of some of the least competitive and least liked companies in America -- for the immense benefit of the American people.

Filed Under: ajit pai, fcc, net neutrality, public comments, title ii

Cisco And Oracle Applaud The Looming Death Of Net Neutrality

from the friends-like-these dept

Both Oracle and Cisco (not coincidentally major ISP vendors) have come out in full-throated support of the FCC's plan to kill net neutrality. FCC boss Ajit Pai has been making the rounds the last few weeks in Silicon Valley and elsewhere, trying to drum up support of his attack on broadband consumer protections. Pai met with Cisco, Oracle, Facebook and Apple in a number of recent meetings, but so far only Oracle and Cisco have been willing to enthusiastically and publicly throw their corporate fealty behind Pai's extremely-unpopular policies.

In its letter, Oracle (which also supported the recent dismantling of consumer broadband privacy protections) is quick to trot out the stale and debunked canard that net neutrality stifled telecom investment:

"From our perspective as a Silicon Valley technology company, what should have been a purely technological discussion of managing traffic on internet networks has inexplicably evolved into a highly political hyperbolic battle, substantially removed from technical, economic, and consumer reality. Further, the stifling open internet regulations and broadband classification that the FCC put in place in 2015 – for just one aspect of the internet ecosystem – threw out both the technological consensus and the certainty needed for jobs and investment."

If you're playing along at home, you should, by now, realize this is bullshit. Once again, public SEC filings, earnings reports, and ISP executive statements contradict this claim. Killing net neutrality and broadband privacy protections is about one thing: letting giant incumbent ISPs make more money by abusing the lack of competition in the broadband last mile. And while that's good for ISP vendors like Oracle, that's not so great for the smaller companies that need a healthy, level playing field to do business. That's why over 800 startups have come out in opposition to the FCC plan.

Like Oracle, Cisco was similarly eager to ignore the vast negative repercussions of the FCC's plan in a statement over at the company's website. In its statement, Cisco also falsely claims that net neutrality stifled investment:

"The proposal will review what is needed to protect consumers and prevent anti-competitive behavior, while rolling back Title II reclassification, which has inhibited investment. The balanced approach Commissioner Pai unveiled will encourage new investments in broadband networks and speed the development of innovative services, including Internet of Things technologies, telemedicine, distance learning, emergency services, and mobile 5G."

As we've noted, Pai's "balanced approach" involves first gutting all FCC authority over broadband, then shoveling the remaining, paltry authority back over to an already limited FTC authority that AT&T lawyers have demostrated they're able to tap dance around. Both Cisco and Oracle are well aware that the goal here isn't "balanced" regulations or "protecting consumers"; the goal is to turn a blind eye to the lack of competition in the broadband space (a disease for which neutrality violations are just one symptom) for the sole benefit of their clients at AT&T, Comcast, Verizon and Charter.

Oracle and Cisco's vocal support of the killing of net neutrality comes as former net neutrality supporters like Netflix and Google have remained notably silent this go-round. Contrary to some media narratives, Google hasn't really been a vocal net neutrality supporter since 2010, and its interest in protecting an open internet has waned exponentially after launching an ISP (Google Fiber) and jumping into wireless. Netflix has similarly toned down its rhetoric to aid its lobbying under the Trump administration, while shifting its overall focus toward international expansion.

That has left startups, consumers, smaller companies (like Roku and Mozilla) under-funded and under-gunned as they fight to keep the internet resembling something vaguely like a level playing field.

Filed Under: fcc, net neutrality, title ii
Companies: cisco, oracle

ISPs Get Right To Work Pushing For Elimination Of New FCC Broadband Privacy Rules

from the snoopvertising-supernova dept

So we've noted that killing net neutrality isn't the only goal for large ISPs in the new year. Trump's top telecom advisors have all made it abundantly clear they'd like to defang and defund the FCC as a consumer watchdog entirely, and roll back the decision to classify ISPs as common carriers under Title II. This would not only dismantle net neutrality, but it would also eliminate the relatively basic broadband privacy rules the FCC recently passed. Those rules, in short, require that ISPs not only clearly disclose what's being sold and who it's being sold to, but also require they also provide working opt-out tools.

Unsurprisingly, ISPs made quite a stink about the "draconian" nature of the rules, and sector lobbyists are getting a running head start in dismantling them. After all, informed customers with the tools to protect their own privacy could cost them billions of dollars annually. Especially since the rules require that consumers opt in to collection of more sensitive financial data.

The cable industry's largest lobbying and trade organization, the Internet & Television Association (NCTA), is urging the FCC to eliminate the rules entirely, claiming they simply weren't necessary:

"They are unnecessary, unjustified, unmoored from a cost-benefit assessment, and unlikely to advance the Commission’s stated goal of enhancing consumer privacy,” wrote the Internet & Television Association, known as NCTA."

Except if you've tracked why the rules were created, you'd know that's simply not true. The FCC acted after security researchers discovered that Verizon Wireless was modifying user data packets to track consumers around the internet, without informing them or providing working opt out tools. The FCC was also concerned that some ISPs (Comcast, AT&T) had begun exploring charging users a steep premium if they wanted to actually protect their own privacy. Similarly, the FCC acted after some ISPs claimed they'd started providing worse customer service depending on a customer's credit score.

That alone should show you two truths: one, the broadband industry's claim that it can self-regulate on privacy issues is a joke. Two, the lack of competition in the broadband space opens the door to abuses you won't see in the broader, more competitive content markets Verizon, Comcast and AT&T are interested in rushing toward. These ISPs have long tried to claim that placing additional regulatory burdens on them is unfairly "asymmetric" because Google, Facebook and friends don't face them. But Google, Facebook and friends don't operate in a competitive vacuum thanks to a generation of lobbying, dysfunction, and regulatory capture, something these ISPs would prefer we all ignore.

Like the NCTA, the industry's biggest telco lobbying organization (US Telecom), had plenty to say about the new privacy rules. In its own filing with the FCC (pdf), the group urges the FCC to "modify key elements" of the privacy rules (read: all the ones that mean anything) right after it gets done eliminating net neutrality. The organization actually tries to claim at one point that privacy protections for consumers aren't necessary because ISPs don't really know all that much about you and hey, if you really don't like it you can always encrypt your data:

"...the Order ignores the record facts when it predicates this scheme of asymmetric regulation on the premise that ISPs are nearly omniscient and have greater visibility into consumer data than any other Internet company. That premise is false, as Commissioners Pai and O’Rielly and many commenters have explained. Given the recent rise of encryption and multiple ISP connections per user, any given ISP has rapidly declining visibility into the details of consumers’ Internet usage and, in some respects, less visibility than leading social media platforms, search engines, and data brokers."

This idea that ISPs aren't actually information super vacuums has been used consistently by dollar per hollar telecom sector think tankers, and it's nonsense. As exposure of deep packet inspection and Verizon's stealthy super cookies shows, incumbent ISPs do have nearly "omniscient" awareness of everything a consumer sees, watches, hears, or does. And encryption isn't a privacy panacea; ISPs can still observe user online behavior based on overall traffic patterns and volume, unencrypted portions of communications, and the growing volume of unencrypted Internet of Things traffic. And a VPN is no guaranteed blockade to ISP snooping either, since again IoT devices won't use VPN, and ISPs can often still monitor user behavior via DNS anyway.

Large ISPs could have avoided these regulations by making sound, reasoned policy choices. Instead, they chose to hoover up every shred of data they could find and sell everything that wasn't nailed down, making consumer choice and transparency a distant afterthought. And thanks to limited competition, broadband consumers have no way of "voting with their wallet" to avoid many of these practices, which is why the FCC crafted them in the first place. You either need to fix broadband competition, or impose rules protecting consumers from the symptoms of that particular disease (net neutrality and privacy violations).

So far, there's every indication that the new, incoming FCC intends to do neither.

Filed Under: broadband, fcc, isps, net neutrality, privacy, title ii
Companies: ncta

Altice Promises Massive New Fiber Network, Again Proving Net Neutrality Didn't Stifle Broadband Investment

from the if-you-build-it-they-will-come dept

You might recall that during the fight over net neutrality rules, giant legacy ISPs (and the armies of think tankers, lobbyists and consultants paid to support their often flimsy arguments) repeatedly insisted that if net neutrality rules were passed, tubes would clog, innovation would die, and investment in broadband networks would shrivel up completely. There was no subtlety to these claims; ISP-loyal politicians and hired economists time and time again breathlessly insisted that net neutrality would be a disaster because nobody would be willing to keep building broadband networks.

In the year plus since the rules were passed, we've noted repeatedly how the ISPs' own earnings reports indicate this was never really true. Investment (at least in more competitive) areas has clicked along happily, and you'd be hard pressed to find a single major ISP that has refused to upgrade its network because of "regulatory uncertainty" surrounding the FCC's net neutrality rules. Granted, there are still major market problems caused by cable's growing monopoly in the wake of telcos leaving the rural broadband market, but these problems have absolutely nothing to do with net neutrality.

In fact, in some areas, we're seeing more investment than ever. Wireless providers certainly aren't restricting their spending as they buy spectrum and prepare to deploy massive fifth generation (5G) wireless networks. French ISP Altice has also been spending billions to gobble up ISPs here in the US (Cablevision, Suddenlink), and last week it issued a surprise announcement indicating that it planned to bypass less expensive DOCSIS 3.1 cable broadband upgrades -- and instead deploy fiber to the home service to the lion's share of the company's new American footprint:

"The company’s five-year deployment schedule will begin in 2017, and the company expects to reach all of its Optimum footprint and most of its Suddenlink footprint during that timeframe. Initial rollout markets will be announced in the coming months. In addition to delivering a superior customer experience for the long term, the new architecture will result in a more efficient and robust network with a significant reduction in energy consumption. Altice expects to reinvest efficiency savings to support the buildout without a material change in its overall capital budget."

So again, if net neutrality had made the US broadband regulatory environment so damn unpalatable, why would a French ISP be investing billions to upgrade its network to fiber to the home? Why would Comcast be happily deploying gigabit broadband across its entire footprint? Why would Verizon be promising to deploy FiOS to Boston? Why would Google and Facebook be investing in all manner of alternate broadband delivery ranging from millimeter wireless to drone?

Because the ISPs and their loyal PR foot soldiers were lying through their teeth about net neutrality's impact on broadband investment. Granted this may all be a moot point thanks to an incoming Trump-controlled FCC that wants to gut net neutrality rules entirely, but these distortions and falsehoods are worth remembering the next time we inevitably find ourselves back here once again trying to defend basic rules of a fair and open internet.

Filed Under: broadband, fiber, investment, title ii
Companies: altice

FTC Warns AT&T Court Victory On Throttling Could Screw Consumers For Decades

from the not-so-free-markets dept

AT&T stopped selling unlimited wireless data plans back in 2011, and instead started pushing more expensive capped and metered plans. Existing unlimited users at the time were "grandfathered," but AT&T went out of its way to make life as unpleasant as possible for these users, ranging from blocking them from using Facetime unless they subscribed to metered plans, to throttling these "unlimited" users after only consuming a few gigabytes of data. Ultimately AT&T faced a $100 million fine by the FCC (currently being contested by AT&T), and a 2014 lawsuit by the FTC for misleading consumers and dramatically changing the terms of service while users were under contract.

But AT&T being AT&T, its lawyers got right to work contesting the FTC lawsuit, arguing that the very Title II common carrier FCC classification it had been fighting tooth and nail against exempted it from the FTC's jurisdiction. As it turned out, AT&T didn't need to engage in this Schrodinger-esque legal tap dance at all, with a court ruling back in August that the FTC never truly had authority over AT&T in the first place:

"The common carrier exemption in section 5 of the FTC Act carves out a group of entities based on their status as common carriers. Those entities are not covered by section 5 even as to non-common carrier activities. Because AT&T was a common carrier, it cannot be liable for the violations alleged by the FTC. The district court’s denial of AT&T’s motion to dismiss is reversed, and the case is remanded for entry of an order of dismissal."

The FTC isn't particularly pleased with this ruling, and this week it filed a petition for a rehearing in which it stated that the ruling could potentially let any company dodge FTC authority -- just as long as some component of its business has common carrier status. This could, the FTC warns, result in companies buying select companies they may not even want just to avoid regulatory scrutiny:

"The panel’s ruling creates an enforcement gap that would leave no federal agency able to protect millions of consumers across the country from unfair or deceptive practices or obtain redress on their behalf. Many companies provide both common-carrier and non-common-carrier services—not just telephone companies like AT&T, but also cable companies like Comcast, technology companies like Google, and energy companies like ExxonMobil (which operate common carrier oil pipelines). Companies that are not common carriers today may gain that status by offering new services or through corporate acquisitions. For example, AOL and Yahoo, which are not common carriers, are (or soon will be) owned by Verizon. The panel’s ruling calls into question the FTC’s ability to protect consumers from unlawful practices by such companies in any of their lines of business."

And again, while light touch regulation may work in healthy markets, that's simply not the case in telecom, where AT&T all but owns state legislatures and the lion's share of Congress, and the lack of last-mile competition leaves regulators as the last defense for frustrated consumers stuck in monopoly or duopoly markets. The FTC continues to warn that this new enforcement gap, if allowed to become precedent, could have a notable impact on user privacy:

"The FTC is the nation’s primary protector of consumer data privacy, but under the panel’s ruling it could be powerless against any company that provides a common-carrier service. Consumers would have no protection from breach or misuse of their personal information or practices like false advertising or improper billing."

And that's kind of a big deal for an industry in which misleading billing and sneaky fees are already a huge problem. And while the FCC is considering some basic new privacy rules for broadband subscribers, the collective lobbying power of the telecom, advertising, and content industries (Google is also quitely opposing the FCC's new rules), there's not a great chance that they ever see the light of day while retaining any teeth. No regulatory oversight is a problem in a sector where ISPs are flirting with charging users more just to protect their own privacy.

The FTC argues that the appeals court panel ruling conflicts with prior decisions of the 9th Circuit and other appeal courts. But should these efforts fail, one of the least ethical companies in telecom in one of the least naturally competitive industries in America could suddenly face less regulatory oversight than ever before. And while those that falsely believe telecom is a free market and all regulation is inherently bad may applaud that outcome, the resulting regulatory capture AT&T would enjoy would be almost total, resulting in higher prices, worse service, and potentially more anti-consumer behavior than ever before.

Filed Under: broadband, competition, fcc, ftc, oversight, regulation, throttling, title ii