The Cable Industry Is Quietly Securing A Massive Monopoly Over American Broadband

from the nobody-is-paying-attention dept

Cable providers like Comcast and Charter continue to quietly secure a growing monopoly over American broadband. A new report by Leichtman Research notes that the nation's biggest cable companies added a whopping 83% of all net broadband subscribers last quarter. All told, the nation's top cable companies (predominately Charter Spectrum and Comcast) added 2.7 million broadband subscribers in 2017, while the nation's telcos (AT&T, Verizon, CenturyLink, Frontier) saw a net loss of 625,000 subscribers last year, slightly worse than the 600,000 subscriber net loss they witness in 2016.

A pretty obvious pattern begins to emerge from Leichtman's data, and it's one of total and absolute cable industry dominance:

"The top broadband providers in the US added nearly 4.8 million net broadband subscribers over the past two years," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. "The top cable companies accounted for 130% of the net broadband additions in 2017, following 122% of the net adds in 2016."

Oddly Leichtman can't be bothered to explain why the cable industry has become so dominant: a total refusal by the nation's phone companies to upgrade their networks at any real scale. Verizon years ago decided that residential broadband wasn't profitable enough quickly enough, so it froze its FiOS fiber deployments to instead focus on flinging video advertisements at Millennials.

You'll note from the chart above that the only telcos still adding subscribers are those that are actually tryiing to upgrade to fiber to the home (AT&T, Cincinnati Bell). Even then, while AT&T is upgrading some areas to fiber, actual availability remains spotty as the company largely focuses on developments and college campuses where costs are minimal. There's still millions of customers in AT&T territories stuck on DSL straight out of 2003, and they won't be getting upgraded anytime soon.

Other American telcos, like Frontier, Windstream and Centurylink, have effectively refused to upgrade aging DSL lines at any real scale, meaning they're incapable of even offering the FCC's base definition of broadband (25 Mbps down, 3 Mbps up) across huge swaths of America. Frontier in particular has been a bit of a shitshow if you've followed the often comic corruption and cronyism they've fostered in states like West Virginia. Other telcos (like CenturyLink) now don't see residential broadband as worth their time, so they've shifted much of their focus to enterprise services or the acquisition of transit operators like Level 3.

The result is a massive gap between the broadband haves and the broadband have nots, especially in rural markets and second and third tier cities these companies no longer deem worthy of upgrading (they will, however, back awful protectionist state laws banning towns and cities from serving themselves, even when no incumbent ISP wants to).

This is all wonderful news for natural monopolies like Comcast, who now face less competitive pressure than ever. That means a reduced incentive to lower prices or shore up what's widely considered some of the worst customer service in any industry in America. It also opens the door wider to their dream of inundating American consumers with arbitrary and unnecessary usage caps, which not only drive up the cost of broadband service, but make shifting to streaming cable alternatives more costly and cumbersome.

While many people like to argue that wireless (especially fifth generation, or 5G) will come in and save us all with an additional layer of competition, that ignores the fact that wireless backhaul services remain dominated by just a few monopolies as well, ensuring competition there too remains tepid and often theatrical in nature. And with many cable providers now striking bundling partnerships with wireless carriers, the incentive to actually compete with one another remains notably muted, as nobody in the sector wants an actual price war.

This of course is all occurring while the Trump administration attempts to gut most meaningful oversight of the uncompetitive broadband sector, meaning neither competition nor adult regulatory supervision will be forcing improvement any time soon. With the death of net neutrality and broadband privacy protections opening the door to even more anti-competitive behavior than we've grown accustomed to, what could possibly go wrong?

Filed Under: broadband, cable, competition, monopoly
Companies: charter, comcast

Verizon Forced To Briefly Give A Damn About Its Neglected Broadband Networks

from the almost-accountability dept

Several years back Verizon paused all serious residential fiber deployment to shift its focus to slinging video ads at Millennials, an effort that isn't going all that well. While Verizon was busy attempting to pivot from stodgy protectionist telecom monopoly to sexy new media brand, one of its core legacy businesses (fixed line broadband) was simply allowed to wither and die on the vine. As such, the company has spent the last few years bombarded with complaints up and down the east coast about how it neglected repairs and upgrades across a massive swath of its telecom empire.

One one hand, Verizon's disinterest in residential broadband has resulted in a growing cable broadband monopoly as frustrated users flee to their only option for current-generation speeds. That in turn results in less competitive pressure than ever, resulting in higher prices, worse service, and the slow but steady deployment of arbitrary and punitive usage caps across the board. Meanwhile, customers on aging DSL lines who stick with Verizon face repair delays and higher prices as Verizon literally tries to drive away customers it simply no longer has a genuine interest in serving.

Despite the fact that many of these lines were taxpayers subsidized, occasionally Verizon's behavior results in something vaguely resembling a wrist slap. Case in point: after highlighting the massive state of disrepair of Verizon's network in New York, the Communications Workers of America this week managed (with the help of the NY Public Service Commission) to force Verizon to upgrade a notable chunk of its neglected networks across the state. An announcement by the CWA notes that Verizon not only has to repair neglected infrastructure, but expand real, fiber broadband in New York City:

"In a big victory for New York consumers, the Communications Workers of America has reached a settlement with Verizon that will require the company to repair 54 central offices across the state, replace bad cable, defective equipment, faulty back-up batteries, and to take down 64,000 double telephone poles. The agreement also includes increased broadband buildout to major apartment buildings in New York City and more than 30,000 homes across the state."

That last bit is of particular note, given that New York recently sued Verizon for taking taxpayer subsidies for fiber deployments only partially completed, something that's also an undeniable trend for the telecom giant. As they did in Pennsylvania, the union simply had to share photos showcasing the abysmal disrepair across Verizon's network, part of a three-year effort to hold the company accountable:

"The settlement is the result of a CWA campaign to pressure the New York Public Service Commission (PSC) to require Verizon to upgrade and repair the legacy telephone network and to expand consumer access to broadband. In 2015, CWA, 20 allied organizations, and 70 legislators filed a request for an investigation, providing substantial documentation of Verizon’s failure to maintain its copper network. In April 2016, the PSC opened a formal proceeding with extensive discovery and evidence collection. CWA and Verizon agreed to a settlement, which has been endorsed by the PSC staff. The PSC must approve the final settlement."

Granted in most states, Verizon has so much political power that complaints about failing infrastructure or subsidized-yet-unfinished deployments have been largely ignored. Verizon's response has generally been to make fun of these users, or promise them that wireless broadband will somehow make all of these concerns moot-- ignoring that the company's wireless network is more expensive, frequently unavailable, and often less robust than the fixed, taxpayer-subsidized infrastructure it's supposed to be replacing.

Filed Under: broadband, fiber, neglect, new york
Companies: communications workers of america, cwa, verizon

Cable's Top Lobbyist Again Calls For Hyper Regulation Of Silicon Valley

from the Google-is-the-real-villain dept

For years telecom monopolies have downplayed the lack of competition in the broadband sector, and the chain reaction of problems this creates for everybody (from privacy infractions to net neutrality violations). At the same time, large ISP lobbyists (and the regulators, politicians and policy flacks paid to love them) have insisted that it's Silicon Valley companies the public really need to worry about. As a result, ISPs like Comcast and AT&T routinely insist that we need new regulations governing companies like Google and Facebook, but entrenched natural monopolies should be allowed to do pretty much whatever they'd like.

This of course requires you ignore a few things. One, that the lack of competition in broadband makes the two sectors an apples to oranges comparison. Customers frustrated by Facebook's bad behavior can vote with their wallets, something most Comcast customers can't do. You're also supposed to ignore the fact that large ISPs are simply trying to saddle Google and Facebook with additional regulation because they're increasingly trying to challenge them for advertising revenue in the video and media space.

This underlying narrative is constant, whether it's FCC boss Ajit Pai weirdly demonizing Netflix, to telecom-industry funded smear campaigns that try to suggest Google is a nasty freeloader that doesn't pay for bandwidth. Speaking at a sector trade show in Ireland this week, former FCC boss turned top cable lobbyist Michael Powell dusted off this rhetoric and turned up the volume. He began by insisting the quest for a healthy and open internet was "irrelevant" because the real villains are Silicon Valley companies hungrily gobbling up "mindshare":

"Michael Powell, president of NCTA-The Internet & Television Association, told the crowd at a Cable Congress Dublin event in Ireland Tuesday (March 6) that the network neutrality debate sucks up money, resources and "mindshare," but is increasingly an irrelevant discussion.

What isn't irrelevant, he suggested, is for governments in the U.S. and abroad to start looking at tech companies/edge providers like Facebook, their size and power, and the harm they can do to mental health by keeping consumers chasing the dopamine rush of "likes" and "streaks" as a way to glue them to devices.

Right. So again, notice how some of the most despised and least competitive companies in America aren't a problem and should be free from regulation, but Facebook and Google (which again, consumers can choose not to use) require vast expansions in regulatory oversight. Powell, whose tenure at the FCC consisted of comically denying any competition issues whatsoever, repeatedly called out Apple, Facebook and Google as the worst sort of villains; villainy that somehow, magically, makes the whole net neutrality conversation moot:

"They have the size, power and influence of a nation state. Antitrust policy has barely begun to address how to check this power to protect consumers and healthy competition."...He called the net neutrality debate "mindless trench warfare" and said that, as in the First World War, Democratic and activist cries that the battle for an open internet was a war to end all wars would prove wrong.

"Net neutrality policy does not remotely address the issues companies and consumers are facing today and likely will face in the future," Powell said. "Put simply, net neutrality is deeply rooted in engineering, consumer expectations, corporate business models and the norms of internet activity. It is firmly entrenched, and I don’t believe the open internet experience will change, whatever the outcome of the current debate."

So one, Comcast owns NBC and is considering a $31 billion acquisition of European satellite TV provider Sky, so it's not clear Powell's the guy to turn to when talking about media consolidation worries. Two, the idea that the "open internet experience" won't change if ISPs are successful in their current bid to gut FTC, FCC and state authority over natural monopolies is simply comical. History is filled with endless examples of how a lack of competition or reasonable regulatory oversight of natural monopolies results in higher prices and worse service. In telecom this lack of competition is already profound, routinely exemplified by everything from privacy violations to net neutrality infractions.

That's not to say that companies like Facebook and Google don't have their own universe of issues. Both were totally absent from the latest net neutrality fight as they slowly but surely shift from innovation and disruption to turf protection. And there's countless conversations to be had regarding their privacy practices and the country's ugly little disinformation problem.

But despised monopolists like Comcast calling for hyper-regulation of companies they're trying to compete with is pretty damn hard to take seriously. When Powell wasn't busy trying to insist that companies like Facebook were to blame for the nation's mental health issues, he was was hypocritically giving the audience lessons on anti-competitive behavior and a respect for consumer privacy:

"Our governmental authorities need to get a handle on what kind of market power and harm flow from companies that have an unassailable hold on large pools of big data, which serve as barriers to entry, allowing them to dominate industries throughout the economy," he said. "For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging," he said. "They dominate their core business, and rarely have to foreclose competition by buying their peers. "Competition policy must scrutinize more rigorously deals that allow dominant platforms to kill competitive technologies in the cradle," he added.

If you've watched the companies Powell represents do business, that's pretty funny. As is Powell's claim that Silicon Valley giants have too much influence over government, a claim made just a few months after revolving door regulators sold out the public on net neutrality:

"We have reached a point where governments can no longer coddle and cater to tech companies," he said. "They have become too large, too influential and too indispensable to live above regulatory scrutiny. As a start, we need to reject the 'do no evil' fairytale." These companies must be brought back down to earth and regulators must recognize them for what they are: profit-maximizing corporations that have a strong incentive and ability to pursue their own self-interest over the interests of society and consumers."

Oh no! You mean just like Comcast, and Charter Spectrum? In the heads of many telecom executives, the quest for net neutrality (despite having massive support from the public) was all one mean cabal by Google designed to ruin their good time. But despite this breathless concern for consumer and market welfare, this hysteria serves only one real purpose: to saddle companies Comcast wants to challenge for advertising "mindshare" with numerous additional regulations, while leaving entrenched telecom monopolies free to run amok.

Filed Under: antitrust, broadband, competition, michael powell, net neutrality, regulation
Companies: at&t, comcast, facebook, google, ncta

Oregon Winds Up Giving Comcast A Huge Tax Break For Doing Nothing Differently

from the great-work-everybody dept

A well-intentioned effort in Oregon to drive more competition to the broadband market has instead netted Comcast a $15 million annual tax break for effectively doing nothing differently.

Back in 2014 the Oregon State Supreme Court issued a hugely-controversial ruling that allowed companies to be taxed based on "intangible" assets such as the value of their brands. Lobbied by Google, the state in 2015 signed a new law rolling back those assessments to try and incentivize competitors looking to deploy faster broadband networks. But in 2015, Google was quick to point out that the sloppily-worded bill actually exempted it from gleaning any tax breaks for deploying gigabit broadband:

"SB611 offers an exemption from the state's tax methodology to companies with the capacity to offer Internet service of "at least one gigabit." Google Fiber offers speeds "up to a gigabit" per second - that's 1,000 megabits per second, 25 times faster than the current broadband standard. So the law, as written, would make Google Fiber ineligible for the tax exemption."

In other words, a well-intentioned bill intended to incentivize deployment of next-generation broadband actually exempted the one company actually promising to do so.

Oddly, this was only the start of the problem. Google Fiber had spent several years promising Portland locals that gigabit fiber would be deployed to the city. This promise was at the heart of the entire state-level legislative tax adjustments in the first place. But by late 2016, Google Fiber had indicated that it was getting bored by the whole broadband disruption thing, and had decided to put its fiber expansion plans on hold. Needless to say Portland, one of several cities that had been strung along as potential launch markets, wasn't impressed.

But wait: it gets better. Comcast, which had already been planning to deploy gigabit broadband service via relatively inexpensive DOCSIS 3.1 upgrades, was quick to take full advantage of a law intended to bring more competition to bear on the incumbent giant. Its lawyers quickly got to work successfully arguing that its modest and already-planned cable-based upgrades qualified it for $15 million in annual tax breaks. But because Comcast's gigabit service costs $300 per month and came with a $1000 installation fee (plus usage caps), lawmakers were quick to argue that this massive Comcast gift wasn't what they had intended:

"Comcast argues it qualifies, too, by virtue of its obscure new service. Oregon cities are crying foul, but the staff of the Oregon Public Utility Commission says Comcast meets the letter of the broadly written law - even if hardly anyone signs up for a service critics say would cost subscribers $4,600 in the first year alone."

Since Comcast technically adhered to the letter of the law (even if the service it was deploying was already planned and priced uncompetitively), it was able to begin enjoying the huge tax break. So was Frontier Communications, a company under fire in other states for being almost as large of an anti-competitive shitshow as Comcast. And while Oregon lawmakers tried to reboot the whole mess and repeal the law last week, procedural missteps and Comcast's lobbying influence over state leaders made sure that wasn't successful:

"Count Comcast among the big winners in this year's legislative session in Salem.

Efforts to repeal a tax break worth millions of dollars a year to big internet companies faltered at the last minute Thursday during the Oregon Legislature's short session.

"I'm really disappointed we weren't able to get that one over the finish line," said Senate Majority Leader Ginny Burdick, D-Portland, who chairs the rules committee where House Bill 4027 died. She said the measure didn't clear the House early enough to avoid a potential Republican slowdown, and with the Legislature set to adjourn Saturday or Sunday she said the clock ran out on the bill.

Just so we're clear: a well-intentioned bill designed to improve competition in the state simply wound up giving Comcast $15 million annually in taxpayer funds for doing nothing differently. Funds that could have otherwise gone to local schools and other essential services. All, ironically, while Comcast faced heat in numerous communities for all manner of billing hijinks and anti-competitive behavior across the state. And this was a state where lawmakers really were trying to do the right thing. In countless other states, where those good intentions don't exist (like West Virginia), things are often even more ridiculous.

This state level corruption, dysfunction and absurdism, as they say, really is why we can't have nice things.

Filed Under: broadband, competition, gigabit fiber, oregon, tax breaks
Companies: comcast, google

Sprint's CEO Thinks This Whole Killing Net Neutrality Thing Is Pretty Nifty

from the with-friends-like-these... dept

So when the FCC's 2015 net neutrality rules were passed, we warned how the agency's failure to include zero rating (exempting an ISP's own content or the content of a deep-pocketed partner) was going to let ISPs creatively engage in anti-competitive behavior. And sure enough, companies like Verizon and AT&T began exempting their own content from usage caps, giving them a leg up in the market. Carriers like Sprint similarly began to fracture the internet experience, at one point charging users more money if they wanted to enjoy music, video and games without having their connection throttled.

T-Mobile pushed these creative barriers further with its Binge On offering, which exempted only the biggest and most popular video services from the company's usage caps. This automatically put thousands of smaller video providers, non-profits, educational institutions and startups at a notable market disadvantage, but by and large nobody outside of the EFF and academia gave much of a damn because a) ill-informed consumers are happy laboring under the illusion that they're getting something for free and b) the public (and by proxy media) was lazy and tired of debating net neutrality.

Just as the Wheeler FCC realized the error of their ways and began showing signs of cracking down on carriers that use usage caps and zero rating as an anti-competitive weapon, Trump won the election and Ajit Pai's FCC began dismantling the rules entirely. You know, for "freedom." As the U.S. moved further away from a truly open internet, regulators in other countries (like India) moved to prohibit ISPs from using usage caps or zero rating as an anti-competitive bludgeon against smaller operators, startups and non-profits.

With the rules now on the chopping block, and ISPs successfully gutting FCC and state oversight of ISPs, zero rating is going to be the least of our problems. We're back to now worrying about things like "paid prioritization," or the ability of ISPs to give their own video content (or the content of the deepest-pocketed companies) priority treatment on the network. And ISPs that were previously against such deals are now walking back their promises at an unsurprising pace.

Throughout all of this, carriers like Sprint repeatedly professed their breathless dedication to net neutrality while they continued to implement policies that made consumer connectivity less transparent, more expensive, and less open. And speaking at the Mobile World Congress this week, Sprint CEO Marcelo Claure made it clear that the company doesn't think this whole paid prioritization thing is that big of a problem, either:

"I don’t think there’s anything wrong for you to eventually charge a higher price for a faster access to your network,” Sprint CEO Marcelo Claure said during a keynote discussion here at the Mobile World Congress trade show. “You have this anyway. In the United States in many roads you drive, you have a faster road and you pay more. There’s nothing wrong with that. We’re still determining what is going to be the price for 5G and how we’re going to charge you, but the economics say, consumers are willing to pay more for a better service and are willing to pay less for a different type of service."

Except net neutrality rules have always carved out massive exemptions for prioritization (medical services, high-end VOIP service, etc.). It's only the anti-competitive paid prioritization deals the rules hamstrung. ISP executives know this, they just like to conflate the two to justify their quest to turn the internet into the modern equivalent of mid nineties walled gardens like AOL. Claure proceeded to imply that past net neutrality rules didn't let the company "manage its networks," which was never the case:

"We’re big believers in the open internet,” Claure said. “I believe there needs to be some light regulation, and it needs to be very light, in order for us to manage our networks."

Added Claure: “We need to manage our networks … That’s the most important thing to us."

Again though, the FCC's net neutrality rules never stopped Sprint from "managing its networks." In fact it took years of hashing out specifics in the rules to ensure that would never be a problem. Meanwhile, you don't get to proclaim you're "big believers in the open internet," while at the same time pushing for changes that could completely tilt the whole god-damned thing on its axis by letting giant companies (often a company's own subsidiaries) pay for lower latency, higher priority, and better service -- leaving startups, non-profits and educational institutions in the dust.

Just a few years ago we were concerned that loopholes in the 2015 rules would result in caps, overage fees and zero rating being used anti-competitively (and they were and are). Now, with the FCC's rules officially slated to expire in April, most of those problems are going to appear god damned quaint in comparison with the nonsense awaiting all of us just over the horizon.

Filed Under: ajit pai, broadband, competition, fcc, marcelo claure, net neutrality, wireless, zero rating
Companies: sprint

Charter Spectrum Fails To Wiggle Out From Under State Lawsuit For Crappy Service

from the fat-lady-has-yet-to-sing dept

Early last year, Charter Spectrum was sued by New York Attorney Eric Schneiderman for selling broadband speeds the company knew it couldn't deliver. According to the original complaint (pdf), Charter routinely advertised broadband speeds executives knew weren't attainable -- while simultaneously refusing to upgrade their network to handle added consumer demand (a problem that only got worse in the wake of its merger with Time Warner Cable and Bright House Networks despite promises of ample "synergies"):

"The AG’s investigation also found that Spectrum-TWC executives knew that the company’s hardware and network were incapable of achieving the speeds promised to subscribers, but nevertheless continued to make false representations about speed and reliability. The investigation further revealed that while Spectrum-TWC earned billions of dollars in profits from selling its high-margin Internet service to millions of New York subscribers, it repeatedly declined to make capital investments necessary to improve its network or provide subscribers with the necessary hardware."

But the lawsuit also exposed how Charter was gaming an FCC program that uses routers with custom firmware to track real-world ISP performance. The lawsuit also hints at the fact that Charter executives toyed with intentionally creating congestion at peering points in order to extract additional money out of content and transit companies, something you'll recall was at the heart of an industry battle with Netflix a few years ago. Those problems miraculously disappeared with the passage of net neutrality rules that governed interconnection (read: expect this problem to resurface with the elimination of the rules).

Charter, unsurprisingly, has argued that the lawsuit is without merit. It also tried to have the lawsuit dismissed, claiming that the FCC's recent repeal of net neutrality includes a provision (lobbied for by ISPs) that prohibits states from trying to hold ISPs accountable for service shortcomings, be they privacy infractions or net neutrality violations. Fortunately for broadband users stuck under cable's growing U.S. broadband monopoly, New York State's Supreme Court last week shot down that argument (pdf) in a ruling.

The court argued repeatedly that despite the FCC attempts to pre-empt state authority over broadband ISPs, both the FCC repeal and existing federal law make it clear states still have a role to play in holding ISPs accountable for consumer protection:

"Spectrum-TWC fails to identify any provision of the FCA (Federal Communications Act) that preempts state anti-fraud or consumer-protection claims, or reflects any intention by Congress to make federal law the exclusive source of law protecting consumers from broadband providers' deceptive conduct."

Schneiderman's office was quick to applaud the ruling in a statement:

"This decision ensures that our office can continue to hold Charter-Spectrum to account for its failure to deliver the reliable internet speeds it promised consumers. The allegations in our lawsuit confirm what millions of New Yorkers have long suspected — Charter-Spectrum has been ripping you off, promising internet speeds it simply could not deliver."

As we've been noting, Charter, Comcast, AT&T and Verizon lobbyists have been busy trying to gut all state and federal oversight of broadband ISPs in an effort that goes well beyond just killing net neutrality. That should be an obvious problem, given that the combination of limited competition and regulatory capture tends to not end particularly well for American consumers historically (Comcast being exhibit A). But with this ruling and the 26 states busy passing their own net neutrality rules in the wake of the federal repeal, that's going to be a steeper and more expensive uphill climb than many ISP lobbyists anticipated.

Filed Under: broadband, competition, consumer protection, eric schneiderman, false claims, new york
Companies: charter spectrum

The FCC's 'New' Broadband Availability Map Hallucinates Broadband Competition

from the rose-colored-glasses dept

A few years back the FCC (under Obama's first FCC boss Julius Genachowski) spent around $300 million on a broadband availability map that did a crap job actually measuring broadband availability. As we noted at the time, the map tended to hallucinate both available competitors and the speeds they could deliver to any address, providing a completely bogus sense of the nation's competitive options. It also failed utterly to include pricing data at ISP behest, lest somebody actually look at the data and realize that a lack of competition drives high prices and abysmal customer service from coast to coast.

After efforts to further fund the inaccurate map stalled (you can find the old map sitting unused here), Ajit Pai's FCC this week stated they've dusted off and relaunched the map as part of Pai's purported dedication to the digital divide (the new version is available here for your perusal). An FCC press release (pdf) said the new map offers better data at a lower price than the original:

"As it works to close the digital divide, the Federal Communications Commission has updated and modernized its National Broadband Map so the map can once again be a key source of broadband deployment information for consumers, policymakers, researchers, and others. The new, cloud-based map will support more frequent data updates and display improvements at a far lower cost than the original mapping platform, which had not been updated in years."

The FCC also took to Twitter to insist this new map will be the cornerstone of his office's noble quest to close the digital divide:

Except the "new" map appears to be a half-hearted reboot that shares all the problems of the original map. Were you to actually use the map to determine where coverage caps exist, you'd walk away thinking there is no digital divide. In that sense, the map is doing the exact opposite of what the FCC is claiming.

Both the old and new iterations of the map all-but hallucinate available options out of whole cloth while vastly over-stating the speeds available to American consumers. That's because it relies on ISP data provided the FCC via the Form 477 process; data that's routinely taken at face value without any real independent analysis or confirmation by objective third parties. Data provided by companies with a vested interest in actively hiding deployment and competitive shortcomings for what should be obvious reasons. The same ISPs that lobby relentlessly to kill efforts at more accurate mapping.

For example, I can only get access to one ISP (Comcast) at my residence in Seattle, purportedly one of the nation's technology leaders. Yet the FCC's new map informs me I have seven broadband options available to me. Two of these options, CenturyLink DSL and CenturyLink fiber are somehow counted twice despite neither actually being available. Three others are satellite broadband service whose high prices, high latency and low caps make them unsuitable as a real broadband option. The seventh is a fixed-wireless option that doesn't actually serve my address:

Again, only one of those is actually available or can be considered broadband, and it's being delivered by a company with arguably the worst customer satisfaction and service scores of any company in America. Four of them don't even meet the FCC's own definition of broadband (25 Mbps down, 3 Mbps up). Looking at the world through rose-colored ISP glasses isn't "closing the digital divide." In fact the perpetuation of inaccurate data makes the problem worse by convincing the public it's not a real problem at all.

Of course if you've watched Ajit Pai repeatedly proclaim his breathless dedication to closing the digital divide while dismantling broadband programs for the poor this probably isn't too surprising. Nor is it surprising if you're familiar with Pai's attempts to distort, twist, and manipulate data until the nation's broadband competition issues magically disappear. After all, if the data clearly shows that American broadband is expensive and patchy due to limited competition among regional mono/duopolies with a stranglehold over state and federal lawmakers, somebody might just get the crazy idea to actually do something about it.

Filed Under: broadband, broadband map, competition, fcc

FCC Broadband Availability Data Derided As Inaccurate, 'Shameful'

from the rose-colored-glasses dept

We've long-noted how the government doesn't do a very good job tracking broadband availability and pricing, in large part because incumbent ISPs like Comcast, Verizon and AT&T don't want them to. ISPs (and the lawmakers paid to love them) whined incessantly about the last FCC's efforts to raise the standard definition of broadband, given it only highlighted the fact that two-thirds of Americans can't get "broadband" (25 Mbps) from more than one ISP. ISPs also fight revealing pricing data, which is why our $300 million broadband availability map doesn't contain any price data whatsoever.

ISPs have also routinely lobbied against efforts to improve broadband availability mapping, since more clearly highlighting competition and deployment shortcomings might result in somebody actually doing something about it. As a result, government reports on the health of the clearly-dysfunctional U.S. broadband market tend to have a decidedly unrealistic and rosy timbre, which is often worse if the regulators in question are of the revolving door variety (as we're currently seeing under current agency boss Ajit Pai).

And while Pai is busy insisting that he's all about transparency, hard economics, and "closing the digital divide," his policies repeatedly and consistently undermine those claims.

Case in point: folks in West Virginia have complained about particularly awful broadband for years. The state is the poster child for what horrible broadband (and the corruption that helps protect it) looks like. Verizon neglected the state's infrastructure for years, then offloaded its unwanted DSL customers to Frontier Communications, who not only bungled the acquisition, but has been caught repeatedly ripping off taxpayers thanks to regulatory apathy. The end result has been millions of state residents who either can't get broadband at all, or are forced to pay an arm and a leg for sub 3 Mbps DSL straight from 1999.

So when a recent FCC broadband availability report tried to claim the state was awash in broadband availability, the people who actually live there were understandably annoyed:

"Numbers in a federal report about West Virginians who have access to broadband internet services are “not even close to being correct,” the chairman of the state’s broadband council said Thursday. The Federal Communications Commission released the report last week. It claims, among other things, that seven West Virginia counties have 100-percent access to a fixed broadband connection.

"To me, this goes beyond having inaccuracies,” Hinton said. “It’s just disappointing. That’s all it is. At what point next year are they going to say West Virginia has 100 percent coverage?" "It’s shameful,” Hinton said. “It’s just disappointing that moving forward, this is the kind of data that will dictate where we can invest infrastructure dollars."

Again, this kind of errant data isn't a mistake, it's intentional. ISPs spend millions of dollars annually to ensure broadband availability and pricing data isn't particularly accurate. And while they claim providing more accurate data than currently obligated under the form 477 process would be expensive and "burdensome," the reality is they don't want anybody pointing out that these companies enjoy vast last-mile monopolies across huge swaths of the country. And, thanks to many telcos refusing to upgrade aging DSL lines the problem is getting notably worse in many areas.

Again, were government mapping efforts to provide a more accurate understanding of competition and deployment shortcomings, it might result in somebody pushing policies that actually do something about it, and we most certainly wouldn't want that.

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

Trump's FCC Pats Itself On The Back For A Historically Stupid Year

from the mission-accomplished dept

If you've been playing along at home, Trump's FCC hasn't been particularly kind to consumers, competition, or the health of the internet. It has, however, been a massive boon to major ISPs terrified of disruption and competition, especially those looking to forge new media monopolies where they dominate both the conduit -- and the content -- coming to the home.

Under Pai, the FCC has gutted broadband programs for the poor, protected the cable industry's monopoly over the cable box from competition, made it easier for prison phone monopolies to rip off inmate families, dismantled generations old media consolidation rules simply to aid Sinclair Broadcasting's merger ambitions, killed meaningful broadband privacy protections, tried to weaken the standard definition of broadband (to help hide competition gaps) and weakened rules preventing business broadband and backhaul monopolies from abusing smaller competitors, hospitals, or schools.

And that's before you even get to Pai's attack on net neutrality, potentially one of the least popular tech policy decisions in the history of the modern internet. That entire calamity is a universe unto itself, with the FCC currently under investigation for turning a blind eye to identity theft and fraud during the open comment period, as well as for bizarrely making up a DDOS in a ham-fisted attempt to downplay the public's disdain for Pai's agenda. It will take many years and numerous lawsuits for the problems with Pai's rushed repeal of the rules to fully materialize.

With Pai's tenure seen as a shitshow in the wake of the net neutrality repeal, the FCC recently tried to undertake an image reclamation effort. That came in the form of a press release (pdf) lauding what the FCC calls a "year of action and accomplishment" in terms of "protecting consumers," "promoting investment," and "bridging the digital divide." You just know the FCC under Pai is doing a good job because, uh, graphics:

Amusingly, the lion's share of the agency's listed "accomplishments" were noncontroversial projects simply continued from the last FCC under Tom Wheeler. That includes efforts to open additional spectrum for wireless use, attempts to speed up cell tower placement, or ongoing efforts to reduce robocalls (the impacts of which aren't apparent). Many of the listed efforts are just the FCC doing its job, ranging from conducting an investigation into the recently botched Hawaii ballistic missile snafu, to "approving new wireless charging tech" that nobody thought should be blocked anyway.

Elsewhere, the agency's accomplishment list engages in willful omission. For example, while the FCC pats itself on the back for creating a "broadband deployment advisory council," it ignores the fact that said counsel is plagued by allegations of cronyism and dysfunction in the wake of recent resignations. The FCC similarly pats itself on the back for the agency's Puerto Rico hurricane response, despite the fact that locals there say the federal government and the FCC failed spectacularly in its response to the storm.

But it's the agency's claims of consumer protection that continue to deliver the best unintentional comedy. As you might expect, Pai's FCC continues to claim that killing net neutrality rules was a good thing because the rules devastated sector investment, a proven lie the agency simply can't stop repeating:

"Voted to restore the longstanding, bipartisan light-touch regulatory framework that fostered rapid Internet growth, openness, and freedom for nearly 20 years. This action reversed the FCC’s 2015 imposition of heavy-handed Title II utility-style government regulation on Internet providers that discouraged investment in next-generation networks.

Another "accomplishment" cited by the FCC is its decision to kill a net neutrality investigation into AT&T and Verizon's abuse of zero rating (exempting select content from usage caps if companies pay more). The previous FCC was just about to ding both companies for exempting their own content from usage caps, having noted how caps can be used as an anti-competitive weapon, driving up costs for consumers and competitors alike. Trump's FCC is not only proud to have killed that inquiry, but insists doing so helps the nation's poor:

"Free Consumer Data—Ended a 2016 investigation into wireless carriers’ free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace."

The accomplishment list pays heavy lip service to the agency's efforts to "close the digital divide," a goal we've repeatedly noted is consistently undermined by other agency policies like killing net neutrality or the FCC's privacy rules (which could have prevented ISPs from charging you more for privacy). For example Pai's FCC is slowly dismantling Lifeline, a modest $10 per month telecom subsidy for poor people begun by Reagan and expanded under Bush Jr. The FCC is also working overtime to protect the sector from competition on both the business and residential sectors.

Over and over, the FCC's accomplishment list conflates cronyism with consumer welfare. For example, the FCC's self-congratulatory missive crows about the agency having:

"Adopted an order relieving unnecessary regulation in areas where business data services are delivered competitively in order to promote facilities-based investment."

What the FCC actually did is notably different. In reality, the FCC eliminated price caps for broadband data services (BDS), where AT&T and Verizon enjoy a monopoly over the bandwidth used to feed everything from ATMs to cell towers. Not only that, Pai's FCC weakened the definition of "competitive" in this sector to aid these monopolies, declaring a business served by "competitive broadband" if there's one ISP within a half mile. The end result? Higher prices than ever for the small businesses, schools, hospitals and others left without affordable connectivity options.

The FCC's accomplishment list routinely and repeatedly dresses up industry cronyism as progress and transparency. And it dresses up its complete disdain for objective data as a devotion to hard science. For example, the FCC praises itself for the creation of a new "Office of Economics and Analysis" it claims will help "restore the place of economic analysis at the FCC." But as we just got done noting this is the same FCC that just got done ignoring all objective science in its rush to repeal net neutrality, making Pai's purpoted dedication to objective economics laughable.

Fortunately for us, historians, not Ajit Pai, will have the final say on Ajit Pai's accomplishments. And if year one is anything to go by, cronyism, disinformation, a lack of transparency and hubris will be this agency's historical legacy.

Filed Under: ajit pai, broadband, competition, fcc, net neutrality, wireless