Massive Study Proves Once And For All That No, Net Neutrality Did Not Hurt Broadband Investment

from the ill-communication dept

The biggest study (pdf) ever of its kind has found that net neutrality rules had absolutely no impact on broadband investment whatsoever. The study took an incredibly detailed look at CAPEX data for more than 8,577 different companies (270+ of which were telecom providers) and concluded:

"The results of the paper are clear and should be both unsurprising and uncontroversial. The key finding is there were no impacts on telecommunication industry investment from the net neutrality policy changes. Neither the 2010 or 2015 US net neutrality rule changes had any causal impact on telecommunications investment."

Since the very beginning of the net neutrality debate, ISPs have repeatedly proclaimed that net neutrality rules (read: stopgap rules crafted in the absence of competition to stop giant monopolies from abusing their power) utterly demolished broadband sector investment. It was a primary talking point during the battle over the 2010 rules, and was foundational in the Ajit Pai FCC's arguments justifying their hugely unpopular and fraud prone repeal.

Time after time after time, big ISPs and the politicians paid to love them insisted that the rules had crushed sector investment, and repealing them would result in a massive spike in broadband investment. It was a line repeated again last year by Pai during an FCC oversight hearing (for those interested he wasn't under oath, which applies only to Judiciary hearings):

"Under the heavy-handed regulations adopted by the prior Commission in 2015, network investment declined for two straight years, the first time that had happened outside of a recession in the broadband era...we now have a regulatory framework in place that is encouraging the private sector to make the investments necessary to bring better, faster, and cheaper broadband to more Americans.

It didn't matter that several studies had shown this wasn't true. It didn't matter that journalists who had reviewed public earnings data found no evidence whatsoever to support the claim. It didn't even matter that CEOs for numerous ISPs were clearly on record telling investors the claim wasn't true. It was repeated over and over and over again by the telecom sector and loyal politicians like Pai in the hopes that repetition would somehow forge an alternative reality where what net neutrality opponents felt in their guts would become the indisputable truth.

Throughout the repeal, the Pai FCC repeatedly cited data from telecom lobbying firm US Telecom as gospel, at one point even directing reporters with questions directly to US Telecom lobbyists (that's bad, in case you're wondering). Last year, the group pushed a "study" proclaiming broadband investment had exploded in the wake of the repeal, somehow failing to even notice their study had a fatal flaw:

"Last year, telecom lobbying group US Telecom released a study it claimed showed that broadband investment had spiked dramatically in 2017 thanks to “positive consumer and innovation policies” and a “pro-growth regulatory approach” at the FCC.

The problem? The FCC’s net neutrality rules weren’t formally repealed until June of 2018.

The entire mess speaks plainly to how lobbyists and the lawmakers who love them use repetition, friendly media outlets, and massaged industry-sponsored lobbyist and economist analysis to construct alternate realities that support anti-consumer, anti-innovation policies (like say, letting lumbering, anti-competitive telecom giants do whatever the hell they'd like). As we've noted a few times, it's important to understand that the "net neutrality repeal" didn't just kill net neutrality rules, it all but obliterated the FCC's ability to hold ISPs accountable for much of anything, which was the entire point.

And while the industry may have scored a victory on the front end, the choices made could still come home to roost. Three different major FCC policy efforts have been shot down by the courts in as many months for failing to provide hard evidence actually supporting the decision. Given 23 state AGs have sued the FCC claiming the net neutrality repeal was similarly flawed, plenty of folks are curious if the FCC's net neutrality repeal will soon share a similar fate.

Filed Under: ajit pai, broadband, competition, fcc, investment, net neutrality, study

Sprint Busted For Allegedly Defrauding The FCC Lifeline Program

from the whoops-a-daisy dept

For years, big cellular carriers have been busted defrauding 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, the agency has done some solid work under both parties trying to rein in abuse of the program.

This week, the Pai FCC brought the hammer down on Sprint, alleging that the company has been collecting monthly subsidies for roughly 885,000 Lifeline customers who were no longer actually using the company's services. From the FCC announcement (pdf):

"The Federal Communications Commission has learned that Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service. That would be a violation of a key rule—the “non-usage” rule—designed to prevent waste, fraud, and abuse in the Lifeline program. The 885,000 subscribers represent nearly 30% of Sprint’s Lifeline subscriber base and nearly 10% of the entire Lifeline program’s subscriber base.

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. In this case, the Pai FCC makes it clear the discovery will lead to a broader investigation and at least some kind of fine for Sprint, which has been working overtime to gain approval for its $29 billion merger with T-Mobile.

Historically, the Lifeline program has seen pretty broad, bipartisan support. After improving reporting requirements to thwart fraud, the FCC under Tom Wheeler slightly expanded the program to include broadband. Pai voted that expansion down, and has been criticized for slowly attempting to kneecap the program. The courts however have argued that a number of Pai's efforts to hamstring the program (like taking away subsidies from tribal residents) haven't been supported by factual evidence.

To be clear, this is a good move by Pai. That said, Pai has been a bit discordant on this subject. He'll profess his top priority is "closing the digital divide," but will then either ignore issues at the root of the problem (limited broadband competition, high prices), or attempt to scale back programs like Lifeline that actually attempt to do something about it. With Sprint, Pai is back again insisting that Lifeline is something important that needs protecting, something his policy proposals don't always reflect given his numerous attempts to neuter the program:

"Lifeline is an important component of our efforts to bring digital opportunity to low-income Americans, and stopping waste, fraud, and abuse in the program has been a top priority of mine since I’ve been at the Commission,” Chairman Pai said. “It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers. I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy."

Despite Pai's wishy washy positioning on whether we should help poor people get and stay connected, the crackdown is welcome and long overdue. That said, the fact that Sprint was likely defrauding the government isn't likely to change the FCC's decision to approve the Sprint T-Mobile merger; consolidation consumer groups say will only amplify many of the pricing and competition problems that make telecom services expensive for low-income users in the first place.

Filed Under: fcc, fraud, lifeline
Companies: sprint

Courts Shoot Down Yet Another FCC Proposal For Being Factually Sketchy

from the facts-and-stuff dept

As the net neutrality fracas made clear, Ajit Pai's FCC has been widely criticized for playing a bit fast and loose with the facts (read: disregarding facts entirely) as it rushes to eliminate most meaningful oversight of media and telecom giants (and the arguably broken markets they inhabit). For example, the net neutrality repeal was based in large part on bogus data directly copied from telecom lobbyists with zero real effort to disguise that fact.

And while that's not a big deal to Pai or the kind of partisan true believers who see no problem with Pai pandering to telecom and media giants, the courts have tended to see things differently. For example, Pai's attempts to strip away broadband subsidies for tribal residents was recently shot down by the courts for failing to provide any real supporting justification whatsoever. The courts also recently shot down most of an FCC wireless proposal that attempted to eliminate local authority (including things like environmental impact review) over cellular tower placement. Here too the courts found the FCC failed utterly to provide actual data supporting its policy shift.

Fast forward to this week and one begins to sense a bit of a theme. This week the U.S. Court of Appeals for the Third Circuit issued a ruling (pdf) shooting down the Trump FCC's attempt to obliterate media ownership limits to aid giants like Sinclair Broadcasting, who've had an eye on cornering the already semi-lobotomized local broadcasting sector.

Throughout much of 2017, the FCC worked overtime to eliminate decades-old media consolidation protections designed to prevent any one broadcaster from dominating the media space. Historically these rules have had broad bipartisan support, given smaller right and left wing outlets alike worry about being crushed by media monopolies who've cornered local TV markets. But the court ruled that the FCC completely ignored the impact mindless media consolidation would have on the quality of local journalism, the public, or women and people of color:

In a 2-1 new ruling, the U.S. Court of Appeals for the Third Circuit forced the FCC to go back to the drawing board in its quest to make life easier for media giants, arguing the agency “did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities."..."[the court stated] that FCC analysis justifying its decision was “so insubstantial that it would receive a failing grade in any introductory statistics class."

That's, you know, not subtle. The data on this subject is pretty clear. As Media broadcast giants hoover up local broadcast stations and eliminate quality local newsrooms, they're replacing quality, more culturally diverse local journalism with homogenized, mindless prattle. This lower quality "journalism" not only opens the door to less transparency and more corruption, but it results in more partisan, tribal political coverage that erodes nuance. In turn, data shows the public ends up less informed and more divided than ever, a measurable shift that can be profound enough to sway elections.

A lot of the FCC's movements on this front were framed as "modernization" of media regulations, though the real goal appears to have been to help Sinclair Broadcasting and its attempted merger with Tribune. But while the FCC spent much of 2017 chipping away at these rules to seemingly aid Sinclair, the deal ultimately had to be scrapped anyway after Sinclair was ironically caught allegedly lying to the FCC and engaging in a number of shell games to give the illusion that the deal would fall under the media ownership cap.

The FCC's continued failure to support its policies with actual data is a bit of a trend, as former FCC lawyer Gigi Sohn suggests:

"In his desire to destroy as many protections for consumers, diversity, competition and democracy as quickly as possible, the Chairman has forgotten one of the core tenants of administrative law; that an agency must adequately justify its decisions based on the record before it,” Sohn said."

Again, while making up facts may play well to Pai's partisan supporters and feel good to folks who think with their gut, it's not working out particularly well in the courts. And given Pai's net neutrality repeal (which not only gutted net neutrality but FCC authority) is based on a long list of provably false claims, there's a sense that Pai's attack on net neutrality could soon share a similar fate.

Filed Under: 3rd circuit, ajit pai, arbitrary and capricious, evidence, fcc, media ownership, statistics
Companies: sinclair broadcasting

The FCC Doesn't Actually Know How Many People Have Broadband

from the busted-data dept

For a country that likes to talk about "being number one" a lot, that's sure not reflected in the United States' broadband networks, or the broadband maps we use to determine which areas lack adequate broadband or competition (resulting in high prices and poor service). Our terrible broadband maps are, of course, a feature not a bug. ISPs have routinely lobbied to kill any efforts to improve data collection and analysis, lest somebody actually realize the telecom market is a broken mono/duopoly whose dysfunction reaches into every aspect of tech.

While these shaky maps have been the norm for several decades, recent bipartisan pressure by states (upset that they're not getting their share of taxpayer subsidies because we don't actually know where broadband is) has finally forced even the Ajit Pai FCC and the telecom industry to take some modest action.

US Telecom, a lobbying org largely backed by AT&T, has been conducting trials in Missouri and Virginia that utilize a new broadband mapping system that integrates hundreds of millions of data points, statistical scoring, and managed crowdsourcing to get a far more accurate assessment of broadband availability. The results? A huge chunk of the areas the FCC has long claimed have broadband, don't:

"In Missouri and Virginia, up to 38% of rural homes and businesses that the FCC counts as having broadband access actually do not, the new research found. That's more than 445,000 unconnected homes and businesses that the FCC would call "served" with its current system.

Given that the new research covered just two states with a combined population of 14.6 million (or 4.5% of the 327.2 million people nationwide), it's likely that millions of homes nationwide have been wrongly counted as served by broadband. A full accounting of how the current data exaggerates access could further undercut FCC Chairman Ajit Pai's claims that repealing net neutrality rules and other consumer protection measures have dramatically expanded broadband access."

Granted most of this is due to the flawed Form 477 data the FCC collects from ISPs. Historically, nobody has confirmed that the data ISPs provided is really accurate, letting ISPs spend years falsely overstating broadband availability. The FCC's methodology had long made the problem worse by determining an entire census blocked "served" with broadband if just one home in that zone had broadband.

The industry has long opposed more accurate mapping because it would only serve to highlight the industry's coverage and competitive shortcomings. That's a major reason why the FCC's $350 million broadband map omits pricing data and largely hallucinates both availability and speeds. And the industry is only finally buckling to pressure now because it knows better mapping efforts are inevitable, and they want to be the ones in control of the data. Some consumer advocates are understandably concerned that less transparency into the raw data may be the industry's broader goal.

Whether the FCC will adopt US Telecom's approach is unclear. But what is clear is that the agency tasked with improving broadband deployment in the US doesn't actually know who has broadband and hasn't for the better part of the last decade. What's also fairly clear is that the Pai FCC's claims that gutting consumer protections (like net neutrality) have dramatically boosted broadband availability, are routinely not supported by, you know, facts. It's kind of hard to claim your policies are having a profound impact on broadband availability when you don't actually know where broadband's available in the first place.

Filed Under: ajit pai, broadband, competition, fcc, mapping

FCC Does Something Right: Proposes Making Suicide Prevention Hotline A Three Digit Number

from the good-for-them dept

We give FCC chair Ajit Pai a lot of grief (to be fair: we've given basically every FCC chair a lot of grief over the years). However, when he does something right we should give him credit. And he's now embraced a plan to give the National Suicide Prevention Lifeline its own 3 digit number, likely to be 988. This is one of those simple plans that just makes sense. Thankfully, there's been a lot greater awareness over the past few years concerning the hotline and suicide prevention in general -- but you still need to remember the phone number. Most people don't (it's 1-800-273-8255 (TALK), in case you don't know). Moving it to a simple three digit number is a good idea that should save lives.

The FCC staff studied several options for the dialing code before going forward with proposing the 9-8-8 number, including repurposing of some of the existing three-digit codes that end with 1-1. The report also explains why directing suicide hotline calls through the existing 9-1-1 infrastructure could be unworkable.

“For example, calls to 911 average 2 minutes or less, and 911 call-takers focus on identifying the nature of the emergency and the caller’s location to enable prompt dispatch of appropriate emergency response. Thus, the 911 system is not well-suited to provide suicide prevention counseling or to respond to calls that can be handled through conversation with a trained mental health professional rather than dispatching first responders,” the report said.

Kudos to Pai and the FCC for moving forward on this.

Filed Under: 988, ajit pai, fcc, national suicide prevention lifeline, suicide prevention