Another Day, Another Telecom Giant Caught Taking Taxpayer Subsidies They Didn't Deserve

from the ill-communication dept

For decades, big and small telecoms alike have abused the FCC Lifeline program, a fund that's supposed to help subsidize telecom connectivity for low income users. Started by Reagan and expanded by Bush, the fairly modest program doles out a measly $9.25 per month subsidy that low-income homes can use to help pay a tiny fraction of their wireless, phone, or broadband bills (enrolled participants have to chose one). While the program (which you pay into via your telecom bills) has been a subject of fraud, enforcement of abuse hasn't always been consistent.

Back in September, the FCC noted that Sprint had been taking taxpayer funds for roughly 885,000 Lifeline customers who were no longer actually using the company's services. The FCC stated that it would be investigating the potential fraud, but hasn't yet announced any actual penalty. This week the Wall Street Journal raised the ante, issuing a report (non-paywalled alternative here) that took a closer look at Sprint documents and found that the problem went much further -- and has been going on for much longer -- than the FCC acknowledged:

"Sprint also made mistakes in tallying how many subscribers were using their Lifeline service in 2013 and 2014, documents obtained by the Journal through a public information request show. Because of an error in how it counted usage at the time, spam texts could keep dormant accounts live and allow Sprint to continue to collect subsidies for those customers, the documents show. In one case, the phone of an Oregon woman who died months earlier was still deemed active.

In Oregon alone, correcting that mistake at the time triggered the loss of more than 4,600 Lifeline subscribers for the company, according to the documents. “The failure was systemic and not confined to Oregon,” a then-senior counsel at Sprint wrote in a September 2014 email to officials at the state Public Utility Commission who asked about the matter.

It remains unclear just how big the problem at Sprint actually was, a task now in the hands of an FCC with a fairly... lacking record when it comes to holding telecoms accountable. These kinds of "errors" aren't uncommon in the subsidy-slathered telecom sector. AT&T was forced to pay $11 million in 2015 by the previous, Tom Wheeler FCC because it "forgot" to remove nonexistent subsidy recipients from its rolls. The Lifeline system is pretty routinely gamed by big and small players alike, though it's usually only the smaller, weaker culprits that see any serious penalty.

And while bigger carriers always insist that these issues are always inadvertent errors, this is a sector with a thirty year history of taking billions upon billions in subsidies in exchange for networks that routinely only wind up half deployed. Context probably matters.

Error or not, the ball now lies in the lap of an Ajit Pai FCC that hasn't done much (read: anything) to seriously hold bigger telecom companies accountable for fraud or bad behavior. You'd think that figuring out the scale of Sprint's unearned subsidies would be something the agency would want to get to the bottom of before approving Sprint's $26 billion merger with T-Mobile, yet somehow these inquiry settlements always arrive a day late and a dollar short.

Filed Under: fcc, lifeline, scams
Companies: sprint

Ajit Pai Does a Good Thing As He Pushes For Public C Band Auction

from the faster,-better,-more dept

You may have read something of late about the battle over so-called "C Band spectrum," the wireless frequencies that lie between 3.7 GHz and 4.2 GHz. This spectrum will be hugely beneficial for deploying 5G wireless, and wireless carriers and activists alike have been pressuring the FCC for years to repurpose much of it for 5G. How this should be done has been a point of contention, however. And given there's upwards of $60 billion to be made off of auctioning this spectrum, the typical alliances you'll see in telecom have been more complicated than usual.

Consumer advocates want the spectrum auctioned off publicly by the FCC, allowing it to be transparently bought by folks in rural areas eager to use it for point-to-point backhaul and rural broadband expansion. Satellite providers, unified under the C-Band Alliance, have been opposed to public auction and instead want the spectrum auctioned off behind closed doors, promising they'd then kick back some of the money to the FCC (read: American taxpayers, who technically own the airwaves in question). Incumbent wireless carriers have split opinions on how to proceed, with T-Mobile backing a public auction.

While this sort of stuff usually is ignored by Congress, the fact this spectrum could net upwards of $60 billion has driven some politicians, like Louisiana Senator John Kennedy, to push for public auctions where the government receives bids (and money) semi-transparently, instead of, as Kennedy has complained, this money being shoveled off privately to satellite providers in "Luxembourg." That money in turn can be used for any number of efforts; in Kennedy's case, a big impractical wall. Kennedy recently met with Trump to try and pressure the FCC, a move that appears to have worked.

Pai, who had seemingly been teetering toward the idea of a private auction, came out this week in favor of a more transparent, public auction of the C Band spectrum instead:

Granted there will still be a fight over how the money is spent. Groups like the EFF want it spent on finishing US fiber deployments incumbents stopped caring about years back as they shifted their focus to digital ads. Politicians in turn will want to use the fund for an array of pet projects like the border wall. Still, the move pleased consumer advocacy firms like Public Knowledge, who issued a statement saying a public auction should be more transparent, legally sound, faster, and more likely to result in benefits to the public:

“Importantly, today’s decision places the Commission on sound legal footing, and ensures that making C-Band spectrum available for wireless use is not unnecessarily delayed. Additionally, the public will benefit from a FCC-led auction that will likely return tens of billions of dollars of proceeds to the Department of Treasury. Congress can then allocate those funds to projects that help close the digital divide by making broadband universally available and affordable, and promoting digital equity."

It's rare you'll find consumer groups and Pai on the same page, so this is probably a moment that should be savored. Harold Feld, who probably knows more about US wireless policy than anybody, has a long but good primer for those interested in understanding the fight in more detail. Granted now the heavy lifting begins; the auction in question isn't expected to happen until next year, after which this valuable spectrum can finally be put toward its goal of faster, better, more uniformly available wireless internet.

Filed Under: 5g, ajit pai, auction, c-band, fcc, wireless

Congress Says The FCC Is Trying To Run Out The Clock On Wireless Location Data Scandals

from the whoo-needs-accountability dept

US wireless carriers have spent much of the last year under fire for hoovering up your location data, then selling that data to any nitwit with a nickel. More recently they've been busted even selling access to E-911 location data, which is increasingly even more accurate in tracking users than traditional GPS. We've noted repeatedly that lax ethical standards result in this data often being abused by dubious third parties, or used illegally by law enforcement or those pretending to be law enforcement.

Throughout these evolving scandals, the Trump FCC hasn't done anything to ensure the public this is being adequately looked into. There's been no critical statement about this practice issued by the FCC, and despite some early hints at a potential investigation, there's been zero public traction of any kind. Last week, some lawmakers wrote to the FCC boss Ajit Pai calling him out for doing nothing in response to the scandal:

"We write regarding our growing concern that the Federal Communications Commission (FCC) is failing in its duty to enforce the laws Congress passed to protect consumers’ privacy. This Committee has repeatedly urged you to act quickly to protect consumers’ privacy interests, and unfortunately you have failed to do so."

The apathy is particularly interesting given the Trump administration's frequent hyperventilation on privacy when it's Facebook or some other, large Silicon Valley giant in the crosshairs. Given the FCC hasn't done much of anything about other major scandals haunting the telecom sector (like SIM hijacking leading to cryptocurrency theft), this kind of apathy toward telecom misbehavior isn't surprising. But when it comes to the location data scandals, lawmakers suggest the FCC is trying to run out the clock so that wireless carriers can't be held accountable under FCC guidelines:

"Despite announcing that it began an investigation into the wireless carriers after being made aware of the allegations in 2018, the FCC has failed, to date, to take any action. And now time is running out since the statute of limitations gives the FCC one year to act.

We write regarding our growing concern that the Federal Communications Commission (FCC) is failing in its duty to enforce the laws Congress passed to protect consumers’ privacy. This Committee has repeatedly urged you to act quickly to protect consumers’ privacy interests, and unfortunately you have failed to do so."

While wireless carriers have insisted they've stopped collecting and selling this data, nobody has bothered to actually independently confirm that. Nobody's really been able to answer what happens to the troves of location data these companies have been collecting for the better part of the last decade, either. Have carriers really stopped monetizing your every waking movement? Are they still monetizing a decade's worth of your daily habits? ¯\_(ツ)_/¯

Like so many tech policy issues (net neutrality comes quickly to mind), this will be idiotically framed as a "he said, she said" partisan issue by lawmakers and many media outlets, resulting in the Republican FCC only doubling down on what they'll insist is "unfair partisan criticism." But that doesn't really address the fact that we're doing little to nothing about one of the biggest privacy scandals in the last decade. Nor does it really speak to the fact that when it comes to consumer privacy, the telecom sector is every bit as terrible as giants like Facebook -- which now enjoy a myopic level of consternation in the DC policy space to the exclusion of all else.

Filed Under: ajit pai, fcc, location data, privacy

'Unlimited' Data Plans With Very Obvious Limits Are Only Getting More Confusing

from the this-is-not-the-future-I-was-promised dept

Back in 2007, Verizon was forced to strike an agreement with the New York State Attorney General for marketing data plans as "unlimited" when the plans had very clear limits. Twelve years later and it's not clear the industry has learned much of anything.

After their efforts to strictly monetize usage didn't go well with consumers, wireless carriers around 2012 or so returned to offering unlimited data plans. But much like the unlimited data plans of old, these plans have all manner of bizarre restrictions. Verizon, for example, bans users from even watching videos in HD unless they sign up for more expensive plans. Carriers also throttle usage after you reach a certain amount of data for the remainder of your billing cycle. There are also limitations on how frequently you can use your phone as a tethered modem or hotspot.

AT&T's latest updates to its "unlimited" wireless data plans are no exception, and require an industry-lingo decoder ring and a few hours of fine print reading to actually understand. Here, for example, is how CNET framed the changes:

"Those looking for a mobile hotspot will need to jump to AT&T's Unlimted Extra Plan, which runs $40 per line, per month for a family of four. This plan adds 15GB of mobile hotspot per line and you won't have your data slowed until you've already used 50GB in a month and are in "congested" areas like a stadium (the Starter plan will slow down data if you're in a congested area and have passed 22GB).

There is no HD streaming on the Extra plan or Watch TV. While the Extra plan is $5 cheaper per line than Verizon's recently updated Play More and Do More unlimited plans, AT&T still does not offer the ability to choose individual plans for each line. Instead, if you want mobile hotspot for one line all of your lines will need to have the Unlimited Extra plan. Verizon's Play More plan also includes Apple Music and HD streaming.

The idea that a busy family looks at these caveats and actually has any real understanding of what they're buying is fairly hard to believe.

Granted wireless carriers implement this level of annoying complexity intentionally; they want to confuse users so they'll sign up for costlier plans they might not need in a bid to avoid the annoyances that have been intentionally created (upselling). Such annoyingly confusing caveats also make direct comparisons between wireless carrier pricing all but impossible. And, as usual, it makes it all but impossible to know what you'll actually pay for service until you get your bill, letting companies falsely advertise a lower rate.

And it's a problem that's going to get worse in light of the telecom sector's successful bid to have the FCC effectively self immolate at industry's behest. Killing net neutrality rules didn't just kill net neutrality rules. It weakened the FCC's authority over telecom entirely, and obliterated transparency requirements mandating that ISPs be very clear about what kind of connection you're buying. Anybody who thinks telecom's response won't be even more elaborate and bizarre nickel-and-diming restrictions hasn't been paying attention.

Filed Under: customer confusion, fcc, ftc, limits, truth in advertising, unlimited
Companies: at&t, verizon

FCC Freaks Out About Huawei, But Ignores The Internet Of Broken Things

from the ill-communication dept

Despite a lack of public evidence proving Huawei spies on American citizens (the entire justifying cornerstone of the effort), the FCC this week just dramatically escalated the Trump administration's blackballing of Chinese telecom firms. In a fact sheet circulated by the agency, the FCC says it will vote in November on a new rule that would ban US companies from receiving taxpayer subsidies if they use Huawei, ZTE, or other Chinese gear in their networks. This could be followed later with additional rules requiring that companies rip Chinese gear from their networks and replace it with presumably US alternatives, the FCC says.

To hear FCC boss Ajit Pai tell it, the blackballing effort will protect US national security and protect us as we nobly endeavor to win the "race to 5G":

"When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best. We need to make sure our networks won’t harm our national security, threaten our economic security, or undermine our values. The Chinese government has shown repeatedly that it is willing to go to extraordinary lengths to do just that.

And Chinese law requires all companies subject to its jurisdiction to secretly comply with demands from Chinese intelligence services. As the United States upgrades its networks to the next generation of wireless technologies—5G—we cannot ignore the risk that that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks. "

Again, while neither Huawei nor China are innocent angels by any measure, this blackballing effort continues to have some problems. One being that the United States, with its history of spying on Huawei and using AT&T to spy on everybody else, we're not exactly treading the moral high ground on this subject. But there's also plenty of questions as to whether these efforts are above board, and whether they'll have their intended impact.

One, public evidence still seems like it's an afterthought. An eighteen month investigation by the White House in 2012 (the last time we had a bout of hyperventilation on this subject) showed there was no evidence of Huawei actively using its gear to spy on Americans. Other data indicates that much of the pearl clutching here is driven by giants like Cisco who just don't want to compete with cheaper Chinese gear. That's not to say there's no legitimate security worries here, just that protectionism is playing a role. How much a role is hard to determine without public evidence of Huawei spying.

Even then, there's questions as to whether this kind of blackballing would even accomplish its stated objective without causing additional problems. A lot of smaller, more rural-focused US companies have stated they will be financially harmed by eliminating their access to cheaper Huawei gear. The $8.5 billion Universal Service Fund (USF) has already been under fire by the Trump administration, and further curtailing what gear companies operating on tight budgets face could constrain efforts to improve America's woefully mediocre broadband infrastructure, including the so-called "race to 5G."

Meanwhile, our cybersecurity pearl clutching seems inconsistent. We're imposing vast new complicated rules on China while ignoring basic election security improvements. And while Chinese gear in telecom networks results in no limit of consternation, nobody at the FCC seems all that concerned with the millions of cheap-ass Chinese-made IOT gear we're affixing to our home and business networks. That tech, replete with flimsy security and privacy, creates a wonderful opportunity for foreign countries like China to spy on American residents and industry through everything from their "smart" TV to internet-connected tea kettle, yet government is doing bupkis about it.

Which leads one to wonder how much of the blacklisting of companies like Huawei is rooted in genuine cybersecurity concerns, and how much is being waged as leverage in Trump's counterproductive trade war? How much is cybersecurity fear being exploited to the benefit of Cisco? It's not clear, which is why countries like Germany have balked at US requests and responded by saying they'll simply adhere to existing security standards and practices. If it's a provably insecure router or other piece of gear, it doesn't get put onto the network. A broader blackballing could prove to create more problems than it solves.

Filed Under: ajit pai, china, fcc, infrastructure, iot, security
Companies: huawei