Despite Gigabit Hype, U.S. Broadband's Actually Getting Less Competitive Than Ever

from the beneath-the-hype dept

Despite government programs, national broadband plans, billions in subsidies and a lot of recent hype paid to gigabit services like Google Fiber, U.S. broadband is actually getting less competitive than ever before across a huge swath of the country. Companies like AT&T and Verizon have been backing away from unwanted DSL networks they simply don't want to upgrade. In some cases this involves selling these assets to smaller telcos (who take on so much debt they can't upgrade them either), but in many markets this involves actively trying to drive customers away via either rate hikes or outright neglect.

As an end result, the nation's biggest cable companies are enjoying a larger monopoly in many markets than ever before as they hoover up those fleeing customers. According to the latest postmortem of 2015 subscriber totals, the seventeen largest broadband providers acquired 3.1 million broadband subscribers last year. But if you look at the numbers more closely, you'll notice that nearly all of them were acquired by the cable industry: In fact, cable added 97% of the 6.1 million subscribers added in the last two years. Phone companies, meanwhile, lost about 185,000 subscribers last year -- the first time in the history of broadband that they saw a net loss. Again, that's because many of these companies either no longer want to be in the fixed-line broadband business because they're focusing on wireless (AT&T, Verizon) or they're growing just for growth's sake (Frontier, CenturyLink), acquiring neglected AT&T and Verizon assets, but saddling themselves with so much debt in the process they can't afford necessary upgrades.

That's great news for cable. Less fixed-line competition means they can charge higher prices, yet have less incentive to improve what's arguably already the worst customer service in the history of industry. More importantly, the cable industry can begin experimenting with usage caps and metered billing without the pesky threat of a customer being able to leave. Of course, if you ask cable providers, they'll be quick to assert they face greater competition than ever before -- but the reality is in many markets they either face no real competition or a sagging telco trying to push 3 Mbps DSL as the pinnacle of innovation.

And indeed, recent FCC data suggests that two-thirds of homes currently only have the choice of one ISP (cable) that's capable of providing speeds that even meet the new standard FCC broadband definition of 25 Mbps. ISPs and loyal Congressional allies have been whining about this higher standard precisely because it only highlights the markets slow transition to cable broadband monopoly.

That's not to downplay the impact of efforts like Google Fiber, which are going a long way to spur competition in select markets. But Google Fiber is really only focusing on a dozen or so profitable markets, and in some ways our gigabit obsession has overshadowed the fact that the majority of towns and cities are facing a stronger cable broadband monopoly (and therefore higher prices for the kinds of speeds people actually use) than ever before. That's something Tucows/Ting executive Elliot Noss touched on briefly in an interesting bit over at Medium talking about the company's own piecemeal broadband improvement efforts.

It's understandable that any given week the media would prefer to talk about the feel-good aspects of the gigabit economy, but the reality is that, thanks to telco apathy, Congressional incompetence and cable consolidation, we've quietly built a bigger, bolder cable broadband monopoly. The solution? Either waiting for wireless to mature as a fixed-line alternative (which, given current LTE usage caps and prices, could be quite a wait), or eliminating the state-level barriers erected by local duopolists, designed to prevent grass root efforts to kick-start something vaguely resembling real broadband competition.

Filed Under: broadband, cable, competition, dsl, fiber

Broadband Industry Has A Hissy Fit As FCC Unveils Some Fairly Basic New Broadband Privacy Protections

from the sky-is-falling dept

As had been hinted at for months, the FCC formally unveiled its plans to apply some relatively basic privacy protections for broadband service. And while you'll likely see the broadband industry bitching up a storm over the next few months, none of the requirements are particularly onerous (and many are things ISPs are doing already). The agency's full announcement (pdf) notes the rules will require that ISPs are a) transparent about what they're doing, b) have basic systems in place to protect collected data and alert users in case of data breach and c) provide users with opt out technology that actually works.

When the FCC reclassified ISPs as common carriers under Title II, ISPs were automatically subjected to Title II’s Section 222 privacy protections regarding "customer proprietary network information" (CPNI). But because those rules were largely designed for ye olde phone company, the FCC is updating them to become very basic rules of the road for handling customer data. ISPs have been quick to complain that they shouldn't face privacy protections that go beyond what Apple and Google deal with, but the FCC correctly argues that the lack of broadband competition make ISPs a unique animal:

"A consumer’s relationship with her ISP is very different than the one she has with a website or app. Consumers can move instantaneously to a different website, search engine or application. But once they sign up for broadband service, consumers can scarcely avoid the network for which they are paying a monthly fee."

ISPs have also argued for the better part of a decade that they should be allowed to self-regulate on the privacy front, but their behavior has repeatedly indicated they're not actually capable of this. Verizon, for example., was caught last year modifying user packets to track users around the Internet and build detailed subscriber profiles. The company engaged in this behavior for two years before it was even discovered by security researchers. It took another six months of public and FCC pressure for Verizon to even provide working opt-out tools.

Preparing for the FCC's announcement the broadband industry has been pushing a number of "studies" trying to argue that broadband privacy protections also aren't necessary because users can protect themselves with encryption or VPNs. But plenty of household data isn't encrypted (including most IOT devices), and the FCC is quick to note that the lack of broadband competition makes the sector notably different from say, search engines:

"Even when data is encrypted, broadband providers can still see the websites that a customer visits, how often they visit them, and the amount of time they spend on each website. Using this information, ISPs can piece together enormous amounts of information about their customers – including private information such as a chronic medical condition or financial problems."

In short what the FCC's doing is again relatively straightforward, basic, and most ISPs will be doing this stuff anyway. But that didn't stop AT&T from taking to its policy blog to complain that the modern broadband industry is just too damned evolved for privacy protections:

"In the 1980’s telecommunications industry, when companies were required by law to stay in their lanes, it might have made sense to have rules that applied only to one set of providers in an industry. But that was 30+ years ago, and we are long past that stage in U.S. communications policy...Limiting ISPs’ ability to compete with ad supported business models – which are overwhelmingly favored by consumers – is bad for consumers and ultimately bad for broadband investment in this country."

Except you should stop and take a look at what AT&T's vision of modern broadband privacy standards looks like. The company has been using deep packet inspection to track its U-verse broadband customers for years. But instead of making it easy and transparent to opt out, AT&T requires that its broadband customers not only jump through a number of confusing hoops, but it actually charges customers upwards of $60 per month to do so. When you understand that AT&T's vision of the broadband privacy future involves making actual privacy a cumbersome paid luxury, you can understand why companies like AT&T are opposed to even the most basic protections.

The FCC's also making it very clear it's not thwarting "innovation" in the user-tracking space, or seriously hindering the cash cow that is tracking users online. That was illustrated with the company's recent settlement with Verizon over the afore-mentioned stealth trackers; the settlement lets Verizon happily continue fiddling with user traffic for the benefit of tracking them, just as long as the company's clear about what's happening and provides working opt-out tools. That's really not a big deal by any standard.

So while you're going to see ISPs and friends bitch endlessly about this being "yet another heavy-handed FCC power grab" and the like, there's really not much here to be afraid of. It's also worth remembering that ISPs like AT&T and Verizon had every opportunity to preempt privacy regulations by showing they were capable of self-regulating, but failed repeatedly and painfully at the task.

Filed Under: broadband, fcc, privacy
Companies: at&t, verizon

Broadband Industry 'Studies' Claim Users Don't Need Privacy Protections Because ISPs Are Just Harmless, Innovative Sweethearts

from the watching-the-watchers dept

With few protections in play, most of the last decade broadband ISPs have collected any and every shred of data about their customers' online behavior. It began with clickstream data, which ISPs sold to third parties, then either refused to comment on or outright lied about. Since then, more intelligent network hardware has let ISPs use deep packet inspection to track and monetize user online behavior down to the second. In wireless, carriers like AT&T and Verizon not only collect and sell user online behavior and location data, but now embed stealth packet headers to track and profile users across the entire Internet.

It was that last decision that raised eyebrows at the FCC, prompting the agency recently to consider whether it should use its new Title II authority to build at least some basic rules of the road regarding broadband user privacy. This has, of course made the broadband industry rather nervous. After all, the telecom industry has grown very comfortable with the fact that nobody has bothered to give half a damn about broadband privacy for the better part of a generation.

Enter the telecom-industry funded Information Technology and Innovation Foundation, which has released a new "study" (pdf) that argues no privacy protections are necessary because you can trust broadband providers to do the right thing. The report starts off on a highly scientific note, insulting those who'd like some basic broadband privacy protections as "broadband populists" that are pushing an agenda that will -- you guessed it -- will hurt puppies, innovation, broadband deployment, and tear giant holes in the time-space continuum.

Amusingly, the report claims that basic privacy protections would prevent ISPs from providing "numerous benefits" to consumers. The report also tries to claim that basic privacy protections will somehow stop ISPs from properly managing their networks:

"Limiting the use of broadband data...would constrain broadband providers’ ability to provide numerous benefits to consumers. Analyzing data is essential for ISPs to understand patterns and trends in Internet traffic and allows for informed adjustments to network functions and capacity, both in the long and the short term. Customer data is also important to help diagnose problems within the network and facilitate responses to customer requests for assistance with various issues."

The report goes on to claim consumers really don't need privacy protections because they have the option of using VPNs and encryption to hide their traffic from ISPs. But Nick Feamster over at Freedom to Tinker does a nice job explaining why it's not really that simple. ISPs can still observe user online behavior based on overall traffic pattern and volume, unencrypted portions of communication, 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 the VPN, and ISPs can often still monitor user behavior via DNS anyway.

To be clear, what the FCC is proposing isn't particularly heavy-handed, nor would it stop ISPs from managing their networks or even profiting from snoopvertising. With the FCC's recent Title II move, ISPs are now subject to Title II’s Section 222 privacy protections regarding "customer proprietary network information" (CPNI). But since those rules were crafted for older phone companies, the FCC's looking to modernize them for the modern era. We're talking about relatively basic protections, such as requirements that you inform customers if you're tracking them and selling their data, and give them opt out tools that actually work.

Given the billions everyone is happily making hoovering up user data from Silicon Valley to K Street, there's really no serious political motivation to go beyond that, "populist" outcry or not. But the report argues that broadband users don't need privacy protections at all because hey, ISPs don't actually know much about you and industry "self regulation" works exceptionally well to thwart bad behavior:

"The privacy policies of operating systems like Apple’s OS X and Google Android are also subject to FTC enforcement if they misrepresent how they use their users’ personally-identifiable information. This is the model for a well-functioning, self-regulatory environment that maintains the flexibility needed for rapid innovation and experimentation with welfare-enhancing business models. Broadband providers should not face steeper burdens for implementing advertising than already exist.

Except not. One, broadband is notably different from Apple and Google because telecom operators hold a monopoly over the last mile. Whereas an Apple smartphone customer annoyed at Apple's privacy policies can migrate to Android, or a Google search customer can pick a new engine, most broadband customers don't have a real choice of providers. Meanwhile, the FTC has proven all but useless in telecom privacy enforcement, and the self-regulatory approach has worked about as well in telecom as it has in the banking industry thanks to generations of cronyism and dysfunction.

For years, Verizon repeatedly stated that more meaningful privacy protections weren't necessary for broadband providers because "public shame" would keep the company honest. Verizon-owned AOL recently parroted that idea when it insisted "the market" would keep companies on their best behavior. How does that actually work in practice? As we've seen with Verizon's "zombie cookies," not at all.

In fact, it took months for security researchers to even realize that Verizon was embedding user wireless packets with stealth tracking technology. It took another six months of public pressure before Verizon even gave users the option to opt out. The self-regulatory approach just doesn't work in telecom. What we get in reality are companies like AT&T that are now charging broadband users a $60 premium if they want to opt out of invasive snoopvertising, then calling that innovation.

Alongside the ITIF report, the industry is pushing a second report this week (pdf), funded by telecom-industry lobbying group "Broadband for America." While most people familiar with sockpuppetry and astroturf will disregard these reports as the conflicted proxy musings of the telecom industry, the press usually isn't so savvy. In fact, ReCode ran an article on the study with a headline informing readers that ISPs know "less than you might think" about them, and an opening paragraph claiming ISPs "have limited access to consumer data." Only in a later update at the bottom of the story did ReCode disclose the study was funded by AT&T, Comcast and Verizon.

It's clear the broadband industry is now engaged in a full court press to derail rules that might take a small bite out of billions in user-tracking revenues. And in typical telecom-industry fashion, that involves creating a sound wall of fauxcademics, fake consumer advocates, third-party consultants and other mouthpieces who will be spending the next six months informing you that ISPs are utter angels when it comes to respecting and protecting consumer privacy, and that the status quo (read: no real privacy protections whatsoever) is good enough.

Filed Under: broadband, fcc, privacy, studies
Companies: itif

Comcast Nabs Huge Oregon Tax Break Thanks To Loophole Intended For Google Fiber

from the unintended-consequences dept

For a few years now, the city of Portland and the state of Oregon have been jumping through hoops to try and make Portland as attractive as possible for Google Fiber. That has involved rewriting city ordinances so that Google can place its utility cabinets along public rights of way, something previously banned in the city.

But the state of Oregon also notably reworked state tax law to provide Google with significant tax breaks. But the effort turned into a comedy of errors after initial rewrites technically disqualified Google Fiber (the revision said companies only qualified for tax breaks if they offered broadband speeds of at least 1 Gbps, while Google offers speeds "up to" 1 Gbps). But after several years of back and forth, the state this week moved to finalize the changes and craft a special Google Fiber loophole:

"An unusual Oregon tax may be the major factor that delayed the company's Portland rollout. The Oregon Supreme Court ruled in 2014 that cable TV and Internet companies are subject to "central assessment," a rare practice dating to the 19th Century that levies property taxes based partly on the value of certain companies' brands. Applying the tax to Google would have added millions of dollars – perhaps tens of millions of dollars – to its annual operating costs, and the company threatened to drop its Portland plans if Oregon lawmakers didn't exempt it from the tax."

But while Google Fiber has yet to even start construction, Comcast has already rushed in to nab the tax incentives. You see, Comcast offers something it calls "Gigabit Pro," a two gigabit per second service it has been offering to select areas since last year. The service promises 2 Gbps fiber to housing developments and other easy-to-wire locations, though the availability of the offering has been murkily defined at best. It's also aggressively expensive: in contrast to Google's $70 1 Gbps offering, Comcast's Gigabit Pro costs $300 a month, plus $1000 in installation and activation fees (and a $1000 ETF for good measure).

Ironically, Comcast has been trying to get out of paying Oregon's central assessment tax for years, only to be defeated before the Oregon Supreme Court in 2014. But thanks to the city and state tripping over themselves to please Google Fiber, Comcast gets a major tax break while the state takes a notable income hit:

"If the application is approved, schools, libraries and local governments across the state would receive significantly less revenue," wrote Mary Beth Henry, director of Portland's Office of Community Technology, in a letter to state regulators. "This application was not the kind anticipated by the Legislature."

Comcast, in other words, is now enjoying rich new tax breaks despite offering a service four times more expensive than Google Fiber -- which few people in Oregon will actually be able to afford. And while few people actually like Comcast or its business practices, it's hard to fully fault the company for simply taking advantage of law rewrites the state of Oregon apparently didn't fully think through.

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

Google Fiber Expanding Faster, Further -- And Making Comcast Very Nervous

from the blow-up-the-status-quo dept

While Google Fiber was originally seen as an adorable little experiment primarily designed to bring PR attention to a lack of broadband competition, over the last six months Wall Street has woken up to the fact that Google Fiber isn't playing around. While the number of customers that can actually sign up for Google Fiber remains in the several hundred thousand range, Google's announcements to tackle sprawling areas like Atlanta, San Antonio, Chicago, and Los Angeles has many Wall Street analysts changing their tune.

In 2012 or so, Wall Street analysts proclaimed it would just be too expensive to deploy Google Fiber at any scale. Fast forward to 2016, and you'll notice that a very different tune is being sung:

Although Google’s announcement is just that, could lead to nothing, and requires minimum capital commitment by Alphabet at this stage, it increases on the margin the likelihood that Google Fiber will pass a large number of locations within five years. Correspondingly, it increases the chances that we will see Alphabet’s capex in the non-core businesses, or what the company has referred to as “Other Bets,” increase significantly. Indeed, if Google Fiber were to build out in Chicago and/or Los Angeles and their surroundings, it could precipitate increased interest from other major metro areas, making it easier for Fiber to scale up. Our high end estimate of 20-25 million homes passed by Google Fiber may prove less aggressive than we thought.

Google Fiber has learned some hard lessons in trying to build a broadband network from scratch, so it has started leaning more heavily on existing builds (or plans to build). This week for example Google Fiber announced in a blog post it would be riding on a planned open access municipal broadband network being built by the city of Huntsville, Alabama. This comes on the heels of the company's announcement it's also riding on existing apartment fiber builds in Atlanta to speed up availability there:

To date, we’ve built the majority of our Google Fiber networks from scratch. But over the past five years, we’ve repeatedly seen that every city is unique. So in order to bring Fiber to more people, we’ve taken different approaches in different places. In Provo, Utah, our Google Fiber service is being delivered over a network we purchased from the city. In Atlanta, Georgia, we’re both constructing our own network, and using existing fiber to provide Google Fiber to some apartment buildings. And now, due to the leadership of the Mayor and Huntsville Utilities CEO Jay Stowe, we’ll be working with a muni-owned network to bring our high speed service to Huntsville.

There's every indication that Huntsville's network will be open to any other ISP competitors, an idea Google Fiber originally trumpeted then backed off from. So, yes, while Google Fiber still has a small footprint now as it labors to dig fiber trenches (Austin, Kansas City, Provo), the sheer number of builds in progress or close to finalization is starting to become mammoth (Louisville, Salt Lake City, Portland, Phoenix, San Antonio, San Diego, San Jose, Charlotte, Nashville...). In other words, by 2020 or so things should start to look notably different: Broadband ISPs, much like Wall Street, generally thought Google Fiber would never be big enough to seriously impact their bottom line. But as Google Fiber pushes into Comcast territories like Atlanta, flyers being handed out by the cable giant make it abundantly clear it's getting nervous about having to face real competition: Unfortunately for Comcast, Atlanta is one of the many markets where Comcast is engaged in usage cap and overage fee "trials," which oddly is omitted in the company's attempt to deflate Google Fiber "hype." Most of Comcast's flyer claims are either misleading (WiFi is as fast as the router you buy) or just not very interesting (wow, video on demand?). Few if any of Comcast's claimed advantages are going to be much help against a patient company actually willing to compete on price.

Filed Under: broadband, competition, expansion, google fiber
Companies: comcast, google

AT&T, Time Warner Cable Hope Incessant Whining Will Keep Google Fiber From Louisville

from the protecting-the-status-quo dept

For fifteen years now, companies like AT&T and Time Warner Cable (and their various PR and policy tendrils) have whined incessantly about the "burdensome regulations" that saddle the U.S. broadband industry. Less regulation, they argue, will pave the path to broadband nirvana, opening the door to immense innovation and more competition in the sector. So Louisville recently set about reworking its city broadband ordinances to streamline both the pole attachment and franchise agreement processes dramatically, something you'd assume would thrill both companies.

Yet both companies have spent the last month whining incessantly about the move. Why? Because it will open the door to competition from Google Fiber:

"Time Warner is also questioning if the city has the legal authority to regulate equipment attached to utility poles, saying that power is given to the Kentucky Public Service Commission. Gillespie adds the city would also be violating Time Warner's constitutional rights by allowing others to take possession of their property...In a separate letter sent Thursday morning, AT&T Kentucky President Hood Harris also said the measure infringes their agreement and “would likely disrupt the service our customers receive.” The vast majority of utility poles in the city are owned by either AT&T or Louisville Gas & Electric."

As it stands, it can take up to six months to get these companies to sign off on letting a competitor access city poles (AT&T owns around 40% of them in Louisville) and move (sometimes a matter of inches) equipment if necessary. That can create the perfect opportunity for an incumbent carrier to intentionally stall a competitors' plans, something Google Fiber says it has experienced in a number of markets. In fact Google Fiber has argued that Title II, held up by carrier lobbyists as the pinnacle of "burdensome regulation," helps speed up pole attachment disputes in many markets.

The new proposal now lets any company (including Time Warner Cable and AT&T) sign a single franchise agreement, replacing the 80 different cross county agreements needed previously. Louisville's new proposal also streamlines the entire pole attachment process to around 30 days and, to counter any ISP concerns about equipment damage, requires that Google Fiber be held financially liable for any problems. Eager for something vaguely resembling competition, the city has voted 23-0 on the proposal over the continued objections of Time Warner Cable and AT&T:

"The ordinance is simply unworkable," said Gardner Gillespie, an attorney who is representing Time Warner. "It does not provide any meaningful way for TWC to know what changes have been made to its existing facilities or to assure any damage is promptly cured." AT&T added the plan violates their union agreements with workers on who has a right to install or alter their equipment but members said they believe allowing for an easier installation process will result in more jobs for those type of workers."

In short, both companies threw every legal argument they could at the city council in the hopes of thwarting Google Fiber's expedited arrival in the city. And while historically whining and campaign contributions have been enough to keep status-quo-protecting regulations in place, the desperate desire for better broadband is finally breaking the stranglehold these companies have enjoyed over local government. As a result, Louisville's now going to get gigabit broadband from a third provider, and AT&T and Time Warner Cable find themselves on unfamiliar ground: having to actually compete on speed, customer service, and price. Terrifying.

Filed Under: broadband, competition, google fiber, louisville, pole attachments
Companies: at&t, google, time warner cable

AT&T Makes It Clear: It Bought DirecTV So It Doesn't Have To Upgrade Its Lagging Networks

from the decidedly-last-generation dept

When AT&T originally announced the company wanted to spend $69 billion on a satellite TV company on the eve of the cord cutting revolution, even M&A bullish Wall Street thought AT&T was a little nuts. After all, AT&T's refusal to seriously upgrade its aging DSL networks to full fiber have left it at a serious disadvantage to faster cable broadband. Given Verizon's FiOS fiber build clocked in somewhere around $24 billion, the $69 billion AT&T spent on DirecTV could have gone a long way toward bringing those customers into the modern fiber to the home era.

But AT&T has made it abundantly clear for some time that it doesn't really care about fixed-line broadband when wireless usage caps and overage fees are much more profitable. That was reiterated this week with the news that AT&T has stopped building set tops for its IPTV over U-Verse (fiber to the node) service, and is now actively pushing those customers to satellite:

The biggest U.S. pay TV provider has stopped building U-verse set-top boxes and is nudging prospective customers toward its satellite unit, which has lower hardware and programming costs. The shift is the first stage of a plan to create a “home gateway” within three years that will consolidate all AT&T services and act as a central hub to deliver video to any device...“AT&T is going to actively get out of the U-verse business,” said Chris Ucko, an analyst with CreditSights Inc.

What's AT&T thinking? Instead of upgrading its DSL lines, the company hopes to offer customers in these un-upgraded markets a home gateway that can connect to satellite TV and AT&T wireless networks (which explains why AT&T is whining so intensely about the FCC's plan for new open set top box competition). Existing U-Verse customers will be able to connect to the devices as well, but with AT&T now pushing all new customers to DirecTV, it's not entirely clear AT&T has much of an interest in keeping these users around. But according to AT&T, this is all about meeting consumer needs:

“To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV,” said Brad Burns, an AT&T spokesman. “However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options.”

Here's the thing the press won't remember, and won't make a sexy-enough headline to warrant mention. To get into the U-Verse TV business a decade ago, AT&T and Verizon went state by state pushing TV franchise "reform" bills written by telco lobbyists and lawyers. AT&T effectively promised states that if they passed these bills they'd be awash in new television competition and lower prices. Of course real competition never came, prices went up anyway, and people started noticing that in many states these bills were little more than legislative wish lists that gutted any number of existing consumer protections.

So those awful laws remain intact, but the next-generation service AT&T promised was never actually delivered. Why? AT&T never wanted to spend the money necessary to really offer video over fiber, much less real next-generation broadband speeds. And while the company makes a lot of noise about its plans to deploy gigabit fiber, those announcements are largely theatrical in nature (focused largely on the occasional development community). In reality, AT&T's fixed-line broadband CAPEX continues to drop as lobbyists go state by state, gutting regulations so AT&T can hang up on unwanted DSL customers for good.

In short, AT&T promised a broadband and television revolution, and instead it's offering expensive, capped wireless broadband and good old satellite TV. Are we feeling the amazing merger synergies yet?

Filed Under: broadband, competition, dsl, infrastructure, satellite tv, tv, upgrades
Companies: at&t, directv

Broadband Industry Getting Nervous That The FCC Might Actually Protect User Privacy

from the actually-doing-your-job dept

Back in 2008, Verizon proclaimed that broadband services didn't need additional consumer privacy protections because "public shame" would keep the broadband industry honest. But in late 2014, Verizon found itself at the center of a privacy scandal after security researchers discovered the company was embedding stealth tracking technology in every packet sent by the company's wireless users. These "stealth cookies" were being used by Verizon for two years before they were even discovered, and it took another six months of public and press outrage for Verizon to let users opt out.

In other words, public shame didn't work, because even security researchers weren't able to detect what Verizon was doing. Verizon's behavior specifically prompted the FCC to use its new Title II authority to begin crafting marginally-tougher consumer privacy protections. Under Title II, ISPs are now subject to Title II’s Section 222 privacy protections regarding "customer proprietary network information" (CPNI). But since those rules were crafted for older phone companies, the FCC's looking to modernize them for the smartphone and "Internet of Things" age.

This has, as you might expect, been met with renewed annoyance by the broadband industry. Most of the broadband industry's major lobbying organizations have fired off a letter to the FCC (pdf) that basically urges the FCC to pass rules that aren't all that clear or tough, since tough rules might just hurt the industry's incredible love of innovation and competition:

If the courts determine that the FCC has authority to regulate broadband privacy, we encourage you to develop a framework that offers consumers robust privacy protection, while at the same time allowing broadband providers to continue to innovate and compete...Our member companies recognize that ensuring robust privacy protection is important and have devoted substantial capital, resources and personnel to develop, maintain, and enhance meaningful data privacy and security programs. Indeed, our companies have strong incentives to earn and maintain their customers’ loyalty by protecting their data.

Except that hasn't really proven to be the case.

Verizon's incentive certainly wasn't consumer loyalty when it designed a super cookie that ignored all consumer privacy preferences and browser settings. And that kind of thinking has been more the norm than aberrant behavior, given that ISPs have been selling user clickstream data for more than a decade (and lying about it). Similarly, the kind of "innovations" consumers have grown used to have included being forced to pay a premium for privacy, such as how AT&T forces U-Verse broadband customers to pay $44 to $64 more per month if they want to opt out of AT&T's deep packet inspection snoopvertising.

And that's just fixed-line broadband. Privacy essentially doesn't exist when it comes to wireless, where both usage and location data is shared with absolutely anybody ready to write the major wireless carriers a check. And as the major broadband players push into smart home, security, automation, connected vehicle and other fields, you can be absolutely sure that their total lack of privacy principles will be coming along for the ride. That's why more than fifty privacy-focused groups including the EFF sent their own letter (pdf) to the FCC last month urging it to become a "brawnier cop on the beat" on broadband privacy.

And while the broadband industry's myriad of mouthpieces are sure to whine incessantly about "over regulation" here, the industry had absolutely every opportunity over the last decade to self-regulate and avoid "tougher" (read: any) privacy protections. Instead, as Verizon's super cookies perfectly exemplify, the industry thought that lifting a giant middle finger to consumers was the smarter option.

Filed Under: broadband, cpni, fcc, privacy

CenturyLink Follows Comcast's Lead, To Start Charging Broadband Overage Fees

from the more-money-for-the-same-shitty-product dept

You can add CenturyLink to the growing number of ISPs charging more money for the same product thanks to limited broadband competition. The company told attendees of an earnings conference call this week that it would be following Comcast's lead and conducting a "trial" of broadband usage caps and overage fees sometime later this year. The company lost 22,000 DSL customers last quarter, and clearly believes that layering an already inferior product with new restrictions and higher prices will surely make its customers happy:

"...Regarding the metered data plans; we are considering that for second half of the year. We think it is important and our competition is using the metered plans today and we think that explore those starts and trials later this year is our expectation."

According to CenturyLink's "excessive use policy," the company has capped customers on 1.5 Mbps or slower lines at 150 GB a month. Customers on lines faster than 1.5 Mbps enjoy the luxury of a 250 GB monthly limit. And whereas ISPs used to provide bullshit justifications for such restrictions (the network congestion bogeyman! it's only fair!), as those excuses have been shown to be nonsense over the years, ISPs have just stopped offering any. Here's how CenturyLink's website justifies these glorified price hikes:

"CenturyLink is committed to providing an optimum Internet experience for every customer we serve. To accomplish this, CenturyLink needs to ensure that customers are on the rate plan that meets their data download requirements. Of the millions of CenturyLink High-Speed Internet customers, a very small fraction has exceeded the download usage limits provided with their monthly plan. It is for this reason that CenturyLink has made the decision to place download limits on residential plans.

That's not really a reason, that's just words arranged to look vaguely like sentient logic. Of course the real reason is because they can.

In most markets CenturyLink enjoys either no competition at all, or they face a cable provider that also has usage caps in place. That's why with the exception of a few cherry picked markets in places like Seattle, CenturyLink users still enjoy speeds circa 2001 or so. And why not add insult to injury, and combine pathetic last generation broadband speeds (which cost very little to actually provide already) with aggressive restrictions and cutting edge, next-generation overage fees?

Like Comcast, CenturyLink calls this a "trial" to keep regulators at bay, since "creative pricing experimentation" sounds so much better than "price gouging uncompetitive markets and erecting unnecessary obstacles to innovation and streaming competitors." Given the FCC has yet to bat an eyelash at the practice, this logic appears to be working. The FCC's also apparently blind to the fact that nobody is confirming whether usage meters are accurate, or that ISP's are now exempting their own services from unfair competitive advantage.

So while you'll hear a lot of media hype about cherry picked gigabit broadband deployments paving the way to our glorious connectivity future, a lack of competition, usage caps and zero rating are ensuring that for broadband customers in most markets, the reality is going to look decidedly less futuristic.

Filed Under: broadband, broadband caps, competition, dsl, net neutrality, overage fees
Companies: centurylink, comcast