AT&T, Comcast & Verizon Pretend They Didn't Just Pay Congress To Sell You Out On Privacy

from the trust-is-more-than-just-a-five-letter-word dept

Large ISPs like AT&T, Verizon and Comcast spent a significant part of Friday trying to convince the press and public that they didn't just screw consumers over on privacy (if you've been napping: they did). With the vote on killing FCC broadband privacy protections barely in the books, ISP lobbyists and lawyers penned a number of editorials and blog posts breathlessly professing their tireless dedication to privacy, and insisting that worries about the rules' repeal are little more than "misinformation."

All of these posts, in lock step, tried to effectively make three key arguments: that the FTC will rush in to protect consumers in the wake of the FCC rules being repealed (not happening), ISPs don't really collect much data on you anyway (patently untrue), and that ISPs' lengthy, existing privacy policies and history of consumer respect mean consumers have nothing to worry about (feel free to pause here and laugh).

For more than a decade, large ISPs have used deep-packet inspection, search engine redirection and clickstream data collection to build detailed user profiles, and their longstanding refusal to candidly talk about many of these programs should make their actual dedication to user privacy abundantly clear. Yet over at Comcast, Deputy General Counsel & Chief Privacy Officer Gerard Lewis spent some time complaining that consumer privacy concerns are little more than "misleading talk" and "misinformation and inaccurate statements":

"There has been a lot of misleading talk about how the congressional action this week to overturn the regulatory overreach of the prior FCC will now permit us to sell sensitive customer data without customers’ knowledge or consent. This is just not true. In fact, we have committed not to share our customers’ sensitive information (such as banking, children’s, and health information), unless we first obtain their affirmative, opt-in consent."

So one, the "commitment" Comcast links to in this paragraph is little more than a cross-industry, toothless and voluntary self-regulatory regime that means just a fraction more than nothing at all. And while Comcast insists it doesn't sell its broadband customers' "individual web browsing history" (yet), they do still collect an ocean of other data for use in targeted ads, and there's really little stopping them from using your browsing history in this same way down the road -- it may not be "selling" your data, but it is using it to let advertisers target you. Comcast proceeds to say it's updating its privacy policy in the wake of the changes -- as if such an action (since these policies are drafted entirely to protect the ISP, not the consumer) means anything at all.

Like Comcast, Verizon's blog post on the subject amusingly acts as if the company's privacy policy actually protects you, not Verizon:

"Verizon is fully committed to the privacy of our customers. We value the trust our customers have in us so protecting the privacy of customer information is a core priority for us. Verizon’s privacy policy clearly lays out what we do and don’t do as well as the choices customers can make."

Feel better? That's the same company, we'll note, that was caught covertly modifying user data packets to track users around the internet regardless of any other data collected. That program was in place for two years before security researchers even noticed it existed. It took another six months of public shaming before the company even provided the option for consumers to opt out. Verizon's own recent history makes it clear its respect for consumer privacy is skin deep. And again, there's nothing really stopping Verizon from expanding this data collection and sales down the road, and burying it on page 117 of its privacy policy.

AT&T was a bit more verbose in a post over at the AT&T policy blog, where again it trots out this idea that existing FTC oversight is somehow good enough:

"The reality is that the FCC’s new broadband privacy rules had not yet even taken effect. And no one is saying there shouldn’t be any rules. Supporters of this action all agree that the rescinded FCC rules should be replaced by a return to the long-standing Federal Trade Commission approach. But in today’s overheated political dialogue, it is not surprising that some folks are ignoring the facts."

So again, the FTC doesn't really have much authority over broadband, and AT&T forgets to mention that its lawyers have found ways to wiggle around what little authority the agency does have via common carrier exemptions. And while AT&T insists that "no one is saying there shouldn't be any rules," its lobbyists are working tirelessly to accomplish precisely that by gutting both FTC and FCC oversight of the telecom sector. Not partially. Entirely. Title II, net neutrality, privacy -- AT&T wants it all gone. Its pretense to the contrary is laughable.

Like the other two providers, AT&T trots out this idea that the FCC's rules weren't fair because they didn't also apply to "edge" companies like Facebook or Google (which actually are more fully regulated by the FTC). That's a flimsy point also pushed by an AT&T and US Telecom Op/Ed over at Axios, where the lobbying group's CEO Jonathan Spalter tries to argue that consumers shouldn't worry about ISPs, because their data is also being hoovered up further down the supply chain:

"Your browser history is already being aggregated and sold to advertising networks—by virtually every site you visit on the internet. Consumers' browsing history is bought and sold across massive online advertising networks every day. This is the reason so many popular online destinations and services are "free." And, it's why the ads you see on your favorite sites—large and small—always seem so relevant to what you've recently been shopping for online. Of note, internet service providers are relative bit players in the $83 billion digital ad market, which made singling them out for heavier regulations so suspect."

Again, this quite intentionally ignores the fact that whereas you can choose to not use Facebook or Gmail, a lack of competition means you're stuck with your broadband provider. As such, arguing that "everybody else is busy collecting your data" isn't much of an argument, especially when "everybody else" is having their behaviors checked by competitive pressure to offer a better product. As well-respected security expert Bruce Schneier points out in a blog post, these companies desperately want you to ignore this one, central, undeniable truth:

"When markets work well, different companies compete on price and features, and society collectively rewards better products by purchasing them. This mechanism fails if there is no competition, or if rival companies choose not to compete on a particular feature. It fails when customers are unable to switch to competitors. And it fails when what companies do remains secret.

Unlike service providers like Google and Facebook, telecom companies are infrastructure that requires government involvement and regulation. The practical impossibility of consumers learning the extent of surveillance by their Internet service providers, combined with the difficulty of switching them, means that the decision about whether to be spied on should be with the consumer and not a telecom giant. That this new bill reverses that is both wrong and harmful."

This lack of competition didn't just magically happen. As in other sectors driven by legacy turf protectors, the same ISP lobbyists that just gutted the FCC's privacy rules have a long and proud history of dismantling competitive threats at every conceivable opportunity, then paying legislators to look the other way. That includes pushing for protectionist state laws preventing towns and cities from doing much of anything about it. It's not clear who these ISPs thought they were speaking to in these editorials, but it's certainly not to folks that have actually paid attention to their behavior over the last fifteen years.

The EFF, meanwhile, concisely calls these ISPs' sudden and breathless dedication to privacy nonsense:

"There is a lot to say about the nonsense they've produced here," said Ernesto Falcon, legislative counsel at EFF. "There is little reason to believe they will not start using personal data they've been legally barred from using and selling to bidders without our consent now. The law will soon be tilted in their favor to do it."

Gosh, who to believe? Actual experts on subjects like security or privacy, or one of the more dishonest and anti-competitive business sectors in American industry? All told, you can expect these ISPs to remain on their best behavior for a short while for appearances' sake (and because AT&T wants its Time Warner merger approved) -- but it's not going to be long before they rush to abuse the lack of oversight their campaign contributions just successfully created. Anybody believing otherwise simply hasn't been paying attention to the laundry list of idiotic ISP actions that drove the FCC to try and pass the now-dismantled rules in the first place.

Filed Under: broadband, congress, fcc, ftc, lobbying, politics, privacy
Companies: at&t, comcast, verizon

Trump's Internet Brigades Shocked To Realize The Government Just Sold Them Out On Privacy

from the by-winning-I-mean-losing dept

ISP lobbying and policy groups were, unsurprisingly, quick to mindlessly applaud this week's decision by Congress to kill consumer broadband privacy rules. Actual consumers, however, are far from pleased about Congress' decision to take campaign contributions in exchange for selling consumer privacy rights down river. With cable providers nabbing a growing broadband monopoly, ISPs increasingly merging with giant broadcasters, and neither competition nor regulatory oversight providing much of anything in the way of checks and balances, most people realize we're in for an...interesting ride over the next few years.

Amusingly, even many of Donald Trump's most fervent online supporters were shocked by Congress' and the Trump administration's giant middle finger to consumer privacy. Over at Breitbart, traditionally not a hotbed for nuanced understanding of often-complicated tech policy, commenters were quick to cry foul over the vote to kill the FCC's rules:

Of course many Trump supporters tried to heap the entirety of the blame in the lap of the GOP, ignoring the White House's wholesale support of the killing of the protections. But it was interesting to see several others actually seeing through the broadband industry's bullshit claim that the FTC will somehow come running to magically fill in the privacy enforcement gaps (it has no real authority over broadband, and ISPs can avoid oversight via common carrier exemptions anyway):

Meanwhile, over at The_Donald subreddit, users that traditionally spend their calories happily whining about "snowflakes" and "libtards" suddenly came to the realization that the broadband market isn't competitive, and with neither competitor nor functional regulatory oversight of these ever-expanding telecom giants, the average consumer ("cuck" or not) is going to get screwed by companies like AT&T and Comcast. Repeatedly:

Gosh, it's almost as if some regulations are actually necessary, and one has to intelligently debate the subtle, often-complicated nuance of each implementation! As we've noted the rules were created for a damn good reason. Namely that the lack of competition in the broadband sector had resulted in ISPs engaging in some incredibly idiotic behavior. ISPs in recent months have charged consumers more for privacy, given low income customers even worse customer service, or covertly modified user packets to track users around the internet and build entire profiles -- without telling a single god-damned customer this was happening.

Suddenly realizing their predicament, numerous Trump supporters urged the President to immediately veto the repeal of the rules, again ignoring the fact that Trump's administration has made it repeatedly clear the push to kill the rules had the administration's full-throated support:

Of course the sudden realization that government oversight of giant, anti-competitive corporations is sometimes necessary and even good for consumers has arrived a little late for most of us. It might have been nice if a few of these folks had heeded the warning about hollow populist rhetoric before our collective privacy rights were thrown in the toilet. With the gutting of net neutrality and Trump's likely approval of the massive AT&T Time Warner merger waiting in the wings, there's some additional hard lessons looming for Trump enthusiasts that actually care about tech policy.

That said, this is another reminder of how certain issues (most notably net neutrality and privacy) have been quite intentionally shoveled into idiotic partisan grooves -- despite broad, bipartisan consumer support for both concepts. There are those that benefit by having tech policy discourse mired in such callow debate, but it isn't you or I (oh hi, didn't see you standing there, Comcast). Seeing the world entirely as a game of partisan patty cake -- waged idiotically but enthusiastically in team-colored onesies -- remains an ongoing disservice to us all.

Filed Under: broadband, donald trump, fcc, internet, privacy

FCC Boss Takes Aim At Efforts To Bring Broadband To The Poor

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

So we've noted how new FCC boss Ajit Pai has breathlessly claimed that closing the digital divide will be the top priority for his commission. But we've also noted how his actions as FCC boss have run in stark, dramatic contrast to that stated goal. Whether it's making it easier for prison phone monopolies to rip off inmate families, his decision to kill a plan to bring much-needed competition to the cable box, or his attacks on net neutrality, so far Pai has made it painfully clear that protecting AT&T, Comcast and Verizon is actually where his priorities lie.

In the last week Pai took his "love for the poor" to soaring new heights by falsely taking credit for year-old job plans at Charter Communications, and cheering as Congress dismantled consumer privacy protections at large ISP behest. But Pai also took what most analysts believe will be the opening salvo in a war against subsidized broadband service for the poor.

Last year the Wheeler-lead FCC voted to expand the Lifeline program, first created by the Reagan administration and expanded by the Bush administration. Originally, low-income homes received a $9.25 monthly credit that could be used toward wireless or traditional phone service. The 2015 changes not only gave these homes the option to use this money for broadband in an attempt to modernize the fund, but also placed the lion's share of ISP eligibility administration in the hands of the FCC in an attempt, in part, to better police fraud.

A number of states sued over the move, in part because large ISPs (which enjoy even greater regulatory capture on the state level) didn't want the federal government spending money on anything that might improve regional competition. This week, Pai issued a statement saying (pdf) that he would be killing the FCC's legal defense of the 2015 changes, and freezing all federal approval of federal provider eligibility. Why? This power belongs in the hands of the states, not the FCC, claims Pai:

"Congress established our universal service programs as a joint federal-state partnership. And through the years, many states have helped consumers and protected taxpayers by enforcing the rules of the road. As Senator Tom Udall (D-N.M.) recently observed in introducing bipartisan Lifeline legislation with Senator Deb Fischer (R-Neb.), we need to ‘return the role of state utility commissions in determining Lifeline eligibility. State utility commissions are key to policing against fraud and harmonizing federal and state initiatives that will help us close the digital divide.’ By letting states take the lead on certification as envisioned by Congress, we will strengthen the Lifeline program and put the implementation of last year’s order on a solid legal footing. This will benefit all Americans, including those participating in the program."

On a superficial level Pai does a wonderful job making this all sound perfectly reasonable, obfuscating much of the motivation for the shift as a noble quest to restore states rights (which is what most news coverage will focus on). The problem, again, is that companies like AT&T, Comcast and Verizon (a former Pai employer) have an absolutely incredible amount of control over state legislatures and regulators. It's a primary reason why more than twenty states have passed laws banning your town or city from upgrading its broadband networks -- even if nobody else will.

Pay-to-play state-level politics is also responsible for the kind of utter shitshows we've seen in states like West Virginia, where state leaders threw millions of dollars in subsidies at companies like Frontier and Verizon, then tried to bury the fact that these companies spent this money on over-priced, un-used hardware and redundant consultants, while doing little to nothing for the benefit of state residents. Tennessee Representative Marsha Blackburn is another perfect example of what state "oversight" of broadband providers looks like.

So yes, there's a reason large ISPs prefer regulatory oversight of these kinds of programs in the hands of the states, and it has absolutely nothing to do with state rights. It has everything to do with ensuring that these funds aren't used in a way that might increase competition, and decrease their bottom lines. It's simply easier, and by proxy cheaper, to accomplish via lobbying on the state level. Especially after Wheeler's FCC did an arguably-good job finally cracking down on fraud in the E-Rate and Lifeline programs (I'll note here that Pai voted against holding AT&T accountable for ripping off the program in 2015).

Granted while this reconfiguration takes place, carriers waiting to learn if they can actually service the poor will be prohibited from doing so. Those growing familiar with the arguably-massive chasm between Pai's words and his actions were quick to cry foul, stating that this is just an attempt to begin applying the death by a thousand cuts "solution" to the program. Others, like consumer advocate and former FCC staffer Gigi Sohn (who, unlike Pai, actually has a reputation for caring about low-income communities) issued fairly clear warnings:

"The Chairman is masterful in using the argument "the FCC lacks legal power" to undercut just about every pro-consumer and pro-competition policy he doesn’t like. He used this excuse recently in declining to defend the FCC rules that lowered prison phone rates, and he will certainly do the same when addressing the FCC’s privacy rules for broadband and, ultimately, its network neutrality rules.

I won’t get into the details about how Chairman Pai committed his own process foul by having his Wireline Bureau, in the order revoking the nine Lifeline designations, undercut a legal determination voted on by the full Commission in the Lifeline Modernization Order. Instead, I’ll repeat what should now be obvious – the new FCC majority fundamentally dislikes the Lifeline Program and will seek to weaken it by any means possible."

While Pai's approach is certainly eloquent and clever, the folks that have actually spent years fighting for the poor are quick to note that the claims about state rights are little more than a hollow show pony. Meanwhile, somebody might want to tell Ajit Pai that to be considered a champion of the poor, you need to start by, you know, actually being a champion for the poor.

Filed Under: ajit pai, digital divide, fcc, lifeline, poor, state's rights

Consumer Broadband Privacy Protections Are Dead

from the dysfunction-junction dept

Last week, the Senate voted 50-48 along party lines to kill consumer broadband privacy protections. That vote then continued today in the House, where GOP lawmakers finished the job, apparently happy to advertise how ISP campaign contributions consistently, directly manifest in anti-consumer policy with a 215 to 205 vote (you can find a full vote breakdown here). The rules, which were supposed to take effect this month, were killed using the Congressional Review Act -- which not only eliminates the protections, but limits the agency's ability to issue similar rules down the road.

The broadband industry's effort to kill the rules is one of the uglier examples of pay-to-play government in recent memory. The protections, originally passed last October by the FCC, have been endlessly demonized by the broadband industry, despite the fact that they're relatively straight forward. The rules would have simply required that ISPs are transparent about what they collect (and who they sell it to), and provide working opt out tools. ISPs were also required to have consumers opt in for more sensitive data collection (financial, browser history data).

Large ISPs, however, consistently whined about the rules, insisting the rules would "confuse" consumers, and hamper "innovation" in the advertising and telecom space. They also tried to claim that ISPs don't really collect much data on consumers, and what collection that does happen can be easily dodged by using a VPN (neither of which is true). ISPs also tried to claim it was unfair to saddle them with additional privacy regulations not seen by Google and Facebook, intentionally ignoring that the often stark lack of broadband competition makes this an apples to oranges comparison.

In an last-ditch attempt to try and convince the House that ISP revenues shouldn't take priority over consumer privacy, a group of around twenty smaller ISPs sent a letter to the House (clearly promptly ignored) trying to explain to them how the lack of competition in broadband made the rules necessary:

"Perhaps if there were a healthy, free, transparent, and competitive market for Internet services in this country, consumers could choose not to use those companies’ products. But small ISPs like ours face many structural obstacles, and many Americans have very limited choices: a monopoly or duopoly on the wireline side, and a highly consolidated cellular market dominated by the same wireline firms.

Under those circumstances, the FCC’s Broadband Privacy Rules are the only way that most Americans will retain the free market choice to browse the Web without being surveilled by the company they pay for an Internet connection."

And now those rules are dead, courtesy of lawmakers that put fattening AT&T and Comcast quarterly earnings above consumer privacy and the health of the entire internet.

ISPs have consistently tried to argue that killing the FCC's rules is no big deal because the FTC will somehow magically pick up the slack. But as former FCC boss Tom Wheeler recently noted, the FTC lacks rule-making authority, and ISPs know that privacy issues are going to quickly fall through the cracks at the over-extended agency. There's also rumblings that the GOP wants to push additional bills that hamstring both the FCC and the FTC consumer protection authority. If that doesn't work, they can dodge FTC oversight via common carrier exemptions patiently carved out by AT&T lawyers looking to dodge accountability for fraud.

During an early afternoon floor debate, Massachusetts Representative Michael Capuano had perhaps the most amusing and heated opposition to the effort (video here), citing his online underwear purchases while mocking the lack of public support for the rules' repeal:

...When I was growing up, one of the tents of the Republican party that I admired the most was (dedication to) privacy. Please give me one, not two, one good reason why all these people here, why all these people watching, would want Comcast or Verizon to have information -- unless they give it to them. We're talking medical information, we're talking passwords, we're talking financial information, we're talking college applications -- there is nothing in today's society that every one of us doesn't do every day on the internet -- and yet Comcast is gonna get it. Not because I said it's ok.

...Go out in the street! Please, leave Capitol Hill for five minutes -- go anywhere you want -- find three people in the street who think it's ok. And you can explain to them "ROIs, and the company has to make progress, and we have to make money." You'll lose that argument every single time, as you should. And I guarantee it you won't find anybody in your district who wants this bill passed.

It's consistently disappointing that ideas like net neutrality and privacy get mired in partisan politics, despite the broad, bipartisan consumer support both concepts enjoy. What happens next won't be pretty, regardless of your political ideology.

Congress has intentionally and repeatedly ignored the lack of broadband competition that makes net neutrality, privacy, and other bad behavior possible. Now, as cable's monopoly over broadband grows faster than ever, ISP-loyal lawmakers are rushing to strip away any and all government oversight of one of the least-liked, and most anti-competitive business sectors in American history. ISPs recently busted for covertly modifying packets to track users, charging an additional fee for privacy, or giving worse customer support based on credit score now have carte blanche to misbehave.

Thanks to a cash-soaked Congress there will be neither broadband competition, nor functional regulatory oversight of an industry with a documented history of aggressive, anti-consumer and anti-competitive behavior. What could possibly go wrong?

Filed Under: broadband, competition, congress, fcc, isps, privacy

Donald Trump Keeps Taking Credit For Tech Sector Jobs He Had Absolutely Nothing To Do With

from the taking-credit-for-the-sunrise dept

Last week, buried under the fracas surrounding the failed update to the Affordable Care Act, the Trump administration conducted an adorable little stage play few actually noticed. The Administration invited Charter CEO Tom Rutledge to the Oval Office, where the CEO -- alongside Texas Governor Greg Abbott and Energy Secretary Rick Perry, repeatedly implied that Trump's policies were somehow to thank for the creation of 20,000 jobs and $25 billion in investment at the cable giant. Press Secretary Sean Spicer was quick to applaud the "new" jobs on Twitter.

At the same time Charter issued a statement expressing "confidence in the deregulatory policies of the Administration," the President's office rushed to release a video patting itself on the back for the "landmark deal":

The FCC also quickly issued a statement by new FCC boss Ajit Pai in which he claimed FCC policies were to thank for the jobs:

I’m pleased to see that our investment-friendly policies, along with the Administration’s overall regulatory approach, are already producing results.

And Pai Chief of Staff Matthew Berry also lent a hand to help the FCC pat itself on the back for a job well done:

The problem: neither the job creation nor the investment promises are new. And neither Donald Trump nor the FCC had absolutely anything to do with them.

The 20,000 jobs in question were actually announced more than a year ago by Charter. The jobs, purportedly to be created by eliminating off-shored labor, were part of the sales pitch for its massive, $79 billion acquisition of Time Warner Cable and Bright House Networks. Like most megamerger promises, there was no real timeline affixed to the jobs, which may or may not ever actually get created. Job losses are far more common in such M&As due to the elimination of redundant positions, but holding companies accountable for false merger promises simply isn't fashionable for either major political party.

The $25 billion investment (to be made over four years) isn't new either. In fact, if you look at Charter SEC filings (page 221) from August 18, 2015, you'll note that the $25 billion is in line with what Charter pretty consistently spends over any four-year span. Some journalists on Twitter were also quick to point out that the $25 billion is actually down a bit from what Charter would have normally spent during the same period (ironic for a company that whined about net neutrality's impact on investment):

Granted, taking credit for jobs and investment he had nothing to do with has sort of become Trump's MO in his first few months in office. Sprint owner Softbank has also been letting the President take credit for job creation and investment he had nothing to do with in order to curry regulatory approval of a pending T-Moble, Sprint merger. Charter, which is rumored to be considering a possible megamerger with Verizon or T-Mobile, clearly hopes that buttering Trump up will pave the way for its own M&As.

It's a win for the companies and the administration alike: companies get to get their names in bright lights as job creators (whether it's true or not doesn't matter), and Trump gets more credit with a base that derides any contradictory evidence as fake news. The real losers remain American consumers. The deal, approved under the Obama administration, has already resulted in higher rates and even worse customer support than ever -- no small feat for an industry already ranked last in terms of customer satisfaction and support. Synergies, indeed.

Just so we're clear: the previous administration approved a deal that has already proven horrible for consumers; and the current administration is falsely taking credit for the stale and bogus job creation claims used to prop that bad deal up.

There's additional irony in that Trump ran his election based on killing megamergers of this type, promising to not only block AT&T's proposed acquisition of Time Warner, but to break up Comcast's already completed 2011 acquisition of NBC Universal. Most analysts expect neither to happen. In fact, the most likely outcome is that Trump and AT&T (the king of bogus telecom merger claims) will use the Time Warner deal to create a supernova of bogus job and investment promises the likes we've never seen before.

And while that's bad news for consumers, if you're the type that likes it when governments and companies use flimsy promises and half-cooked data to prop up bad tech policy and hollow partisan rhetoric -- you may soon find yourself in hog heaven.

Filed Under: ajit pai, donald trump, fcc, jobs
Companies: charter

Congress Just Voted To Kill Consumer Broadband Privacy Protections

from the the-almighty-dollar dept

Despite a last-ditch effort by the EFF and other consumer and privacy groups, Congress today voted to dismantle privacy protections for broadband subscribers in a 50-48 vote. The rules, passed last October by the FCC, simply required that ISPs clearly disclose what subscriber data is being collected and sold by ISPs. It also required that ISPs provide working opt out tools, and required that consumers had to opt in (the dirtiest phrase imaginable to the ad industry) to the collection of more sensitive data like financial info or browsing histories.

Another part of the rules, which simply required that ISPs were transparent about hacking intrusions and data theft, had already been killed off quietly by new FCC boss Ajit Pai.

The rules were seen as important in the face of greater consolidation in an already uncompetitive broadband market, where said lack of competition eliminates any organic market punishment for bad behavior on the privacy front (unlike the content or other industries). Now, with neither broadband competition -- nor meaningful regulatory oversight -- privacy advocates are justifiably worried about the repercussions to come.

The rules were killed by using the Congressional Review Act, which allows Congress to dismantle recently approved regulations with a simple majority vote. While the rules really were relatively straightforward, telecom lobbyists spent months deriding the rules as "onerous regulations" that would be "too confusing" for consumers, potentially stifling sector "innovation." Industry lobbyists also consistently pushed "studies" proclaiming that ISPs really don't collect much consumer data, in stark contrast to, you know, the truth.

One of the proposals sponsors, Arizona Senator Jeff Flake, went so far in a speech Wednesday night to suggest that the rules somehow "restricted constitutional rights" (of giant ISPs like Comcast, apparently):

"In a speech on the Senate floor Wednesday night, Sen. Jeff Flake (R-Ariz.), who introduced the bill, said the FCC regulations were an example of a “bureaucratic power grab.” "Passing this CRA will send a powerful message that federal agencies can’t unilaterally restrict constitutional rights and expect to get away with it,” Flake said."

ISP lobbyists had spent countless hours trying to convince lawmakers that FCC oversight of privacy was unnecessary, and that the FTC alone was well-equipped to handle consumer privacy complaints in the broadband sector. But in a recent interview, former FCC boss Tom Wheeler made it abundantly clear that this was largely bullshit -- and the goal is to shovel off privacy oversight to an FTC without rule making abilities, already overloaded by other enforcement obligations:

"It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.

So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices."

In other words, the goal is quite simply to gut oversight of one of the least competitive (and most anti-competitive) sectors in American industry. First by hamstringing the FCC's oversight of the sector, then by inevitably pushing bills that hinder the FTC's oversight as well. All told, today's vote is one of the more embarrassing examples of our broken, cash-compromised legislative process in recent memory.

Update: Here's the roll call breakdown of who voted for or against the measure, in case you're the type that actually likes accountability.

Filed Under: broadband, congress, fcc, isps, privacy

Charter's Trying To Kill Recent Merger Conditions Banning Usage Caps, Net Neutrality Violations

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

For decades now the FCC has been an expert at imposing utterly meaningless merger conditions. Usually these conditions are proposed by the companies' themselves, knowing full well these "demands" are utterly hollow -- and FCC punishment for ignoring them will be virtually non-existent. The end result has been a rotating tap dance of merger conditions that sound good upon superficial press inspection, but wind up being little more than hot air. It's a symbiotic relationship where as the telecom sector consolidates (often at the cost of less competition) the FCC gets to pretend it's not selling consumer welfare down river.

But last year something weird happened.

When Charter proposed its $79 billion acquisition of Time Warner Cable and Bright House Networks, former FCC boss Tom Wheeler brought in net neutrality advocate Marvin Ammori to help hammer out conditions that wound up actually being meaningful. Under the deal, Charter was banned from imposing usage caps, engaging in interconnection shenanigans with content providers like Netflix, or violating net neutrality (even if the rules themselves were killed) for a period of seven years. Charter was also required to expand broadband to 2 million additional locations.

Not too surprisingly, broadband providers and the new incumbent-cozy FCC are getting right to work trying to eliminate those conditions entirely. New FCC boss Ajit Pai is circulating an order that would kill requirements that Charter overbuild into competing ISP territories, something demanded recently in a letter to the FCC by the American Cable Association. As is kind of telecom sector status quo, smaller cable companies say they'll take their investment ball and go home if the threat of additional, regulator-mandated competition isn't eliminated:

"To respond to growing consumer demand for increased bandwidth, all of us have been planning to upgrade the electronics on our networks and to deploy more fiber closer to customer locations over the next five years (the lifespan of the overbuild condition). Many of us have been planning to extend our networks to serve communities adjacent to our current service territories. But we have been forced to reconsider, scale back, or halt these investments in the wake of the Commission’s order."

Of course that's not how competition works, and companies believing they get to choose when you upgrade their networks speaks to the level of competition these companies already see. Elsewhere, broadband industry-funded think tanks like the Competitive Enterprise Institute (CEI) are also pushing Pai to kill off the usage cap ban, trotting out the long-standing industry claim that usage caps are all about fairness:

"...the Order requires New Charter to refrain from imposing “data caps” or setting "usage-based prices" for its residential broadband Internet access services for seven years after the transaction closes. Given that “the record makes clear that online video places enormous demands upon the networks of Charter and Time Warner Cable and increases their capital costs,” Commissioner Pai asked a simple question in his dissent: “Who should bear those costs?" Because the Order concludes that “all customers must do so equally,” New Charter’s natural response to this condition “will be to increase prices on all consumers in order to amortize the cost of serving a bandwidth-hungry few."

Granted if you've been paying attention to the usage cap debate, you realize this is a stale canard. Industry executives have acknowledged that caps have nothing to do with network management, and aren't an effective way to police network congestion anyway. As any earnings report highlights, caps aren't a financial necessity either, since flat-rate broadband has been incredibly profitable for the industry for years.

What usage caps are is a price hike imposed on uncompetitive markets. Granted they also help ISPs protect their TV revenues from the rise of internet video by penalizing competing streaming services, while letting the incumbent's own services sail through without penalty (aka zero rating). Anybody believing that imposing caps and overage fees on all users is really about making sure a few people "pay their fair share" should steer clear of swampland and bridge salesmen.

Granted Charter's latest merger has still proven harmful for consumers, who say the company has frozen broadband upgrades and raised rates dramatically in the wake of the megamerger. If consumer welfare were truly a U.S. telecom regulatory criteria the deal likely would have never been approved at all, but the cap condition specifically at least kept things from being arguably worse in the face of limited competition. If the FCC's looking to give a middle finger to the millions of customers impacted by this deal, killing the conditions -- and requiring these users pay even more money for the same service -- is a fantastic way to do so.

Filed Under: broadband caps, data caps, fcc, merger conditions, net neutrality, usage caps
Companies: charter, time warner cable

The Ad Industry Is Really Excited About Plans To Gut Broadband Privacy Protections

from the an-informed,-empowered-consumer-costs-us-money dept

The broadband, advertising and marketing industries are absolutely thrilled about plans to kill the FCC's new broadband privacy protections for consumers. Passed last year, the rules simply require that ISPs provide working opt-out tools, go to reasonable lengths to protect data and notify users of hack attacks, and be transparent about what data they collect and who they sell to. The rules also require that ISPs obtain opt-in consent (public enemy number one for marketing folks) for the collection and sale of more personal data like financial details or browsing histories.

Given that empowered, informed consumers cost the marketing and broadband industry billions, they've been waging a massive campaign to have the rules killed -- and they're about to succeed. New FCC boss Ajit Pai quickly and covertly set about killing the rules' hacking-related requirements. Meanwhile Senator Jeff Flake and Rep. Marsha Blackburn have gotten quickly to work introducing Congressional Review Act resolutions that would kill the rest of the new rules before they're even allowed to take effect.

Needless to say, the marketing industry is pretty excited. In a joint statement by numerous ad policy and lobbying groups including the Association of National Advertisers and American Advertising Federation, the ad industry went so far as to try and claim that protecting consumer privacy was somehow "anti-consumer":

"Without prompt action in Congress or at the FCC, the FCC's regulations would break with well-accepted and functioning industry practices, chilling innovation and hurting the consumers the regulation was supposed to protect. The Congressional Review Act was designed as a common-sense check on anti-consumer regulations like this, and we are pleased that Senator Flake, Congressman Blackburn, and their colleagues are using it to such positive effect. We strongly urge Congress to support and quickly act on these Joint Resolutions."

Granted the ad and broadband industries would have you forget why the FCC crafted these "anti-consumer" rules in the first place. They were only pushed after Verizon was caught covertly modifying user wireless packets in order to track users around the internet without telling them. The FCC was similarly motivated by the fact that AT&T and Comcast were starting to show interest in charging users a premium for privacy, and the fact that companies like CableONE were proudly crowing about how they use financial data to provide worse customer service to bad credit customers.

The lack of last mile competition ensures that these companies face no organic, market-based punishment for these behaviors. And now regulatory oversight will be hamstrung as well, much to the joy of large ISPs looking to jump more heavily into the Millennial advertising business.

ISP-loyal lawmakers are selling the push by claiming that eliminating FCC oversight -- and leaving privacy in the hands of the FTC only -- will result in "more efficient" and "symmetrical" regulations in line with what Google and Facebook face (ignoring the vast, obvious differences in the internet content and broadband industries). That's something former FCC boss (and dingo) Tom Wheeler called a "fraud," specifically designed to saddle the already overextended FTC with work ISPs know will fall through the cracks. The EFF was also quick to recently debunk this and other claims over at its website:

"Unfortunately, recent court decisions have limited the FTC’s ability to enforce privacy rules on ISPs. Plus, relying on each state to enforce its own laws to protect privacy would create a terrible patchwork of mismatched regulations. You’d think with all the uncertainty and bureaucracy that would create, the ISPs would actually prefer clear, bright-line rules at the national level. But you’d be wrong: at this point, they’ll say anything to block the FCC’s privacy-protective rules."

The EFF has penned a second post discussing all of the fun things ISPs have done -- and will do -- with neither regulators nor free market competition keeping them in line. These efforts are being rushed through under the belief that bigger debates (like the Affordable Care Act) will overshadow how quickly Congress mindlessly rushed to do the bidding of companies like AT&T, Comcast, Verizon and Charter. A vote on the repeal of the rules is expected to happen as soon as Thursday, and consumer advocacy groups like Public Knowledge and the EFF are urging concerned citizens to contact their representatives.

Filed Under: ads, ajit pai, broadband, fcc, net neutrality, privacy

Charter Tries To Tap Dance Out Of Lawsuit Over Substandard Broadband

from the we-don't-have-to-care----we're-the-cable-company dept

Last month, we noted how New York Attorney General Eric Schneiderman sued Charter Communications for knowingly providing broadband service well below advertised speeds. After an initial first read I didn't think much of the lawsuit (pdf), but upon closer inspection it provides some pretty damning evidence that Charter not only knowingly failed to provide decent service (and just didn't care, since this is the uncompetitive broadband industry), but in some instances actively made connections worse for its own competitive advantage.

The AG's suit highlights how Charter manipulated data for a program run by the FCC to monitor consumer connection speeds. This program, co-operated by a UK outfit dubbed SamKnows, gives volunteers custom-firmware embedded routers to monitor connection quality and speed. The FCC was then using this data to name and shame ISPs that failed to deliver advertised speeds. The lawsuit highlights how Charter executives worked to intentionally deliver faster speeds to just these customers in order to trick the FCC into believing its network was performing better than it actually was.

The suit also seemed to confirm something that content and transit operators have been complaining about for a few years -- namely that large incumbent ISPs were intentionally letting interconnection points get saturated to extract additional fees from backbone and content providers like Netflix. This behavior quickly ended thanks in large part to the FCC's new net neutrality rules, which currently protect such interconnection relationships from abuse by incumbent telecom mono/duopolies. With these rules possibly dying this year, it's a problem you can be sure will re-emerge.

Not too surprisingly, Charter is trying to have this case thrown out. Recent court filings (pdf) indicate that the company successfully had the case moved from state to federal court, with Charter lawyers arguing that the Communications Act completely preempted claims under state law. Charter lawyers even went so far as to justify this position using the exact same 2015 FCC net neutrality rules ISPs lobbied, repeatedly, to destroy:

"Charter even went so far as quoting language from the FCC's 2015 Open Internet Order (aka the net neutrality regulations) to support the proposition that states are precluded from imposing obligations inconsistent with the FCC's regulatory regime.

According to defendants' court papers providing notice of removal, "Given the State’s distortion of the speed tests approved by the FCC and its reliance on other tests that the FCC does not require or endorse, if the 'state court vindicate[s] [the State’s claim], the relief granted would necessarily force [Defendants] to do more than required by the FCC.' The State is, in effect, 'trying to invalidate' disclosures made pursuant to the FCC’s reporting regime; its claim thus is necessarily federal."

With the new Trump FCC making it very clear that incumbent ISPs are going to get a free pass on the consumer protection front, the states (with an even more inconsistent track record on consumer protection than the federal government) may wind up being the only thing standing between you and the dubious ethics of companies like AT&T, Charter and Comcast:

"On Monday, the NY AG's office filed a motion to remand the case back to state court. The forthcoming decision could be an important one if other top legal officials in states across the nation attempt to fill the void of whatever the FCC is not doing....Schneiderman's attorneys argue that the lawsuit is "rooted entirely in the kind of consumer deception that is within the traditional purview of state law and is historically subject to enforcement in state court."

Charter's in a somewhat unique position due to conditions attached to the company's recent acquisition of Time Warner Cable and Bright House Networks. Those conditions banned the company from not only imposing usage caps, but also require it to continue to adhere to the FCC's net neutrality rules (including the interconnection provisions) for seven years -- even if they're dismantled by ISPs and loyal politicians this year. Other ISPs face no such restrictions, and depending on Charter's success here, incumbent ISPs may soon find themselves in a new golden era for anti-competitive behavior.

Filed Under: broadband, eric schneiderman, false advertising, fcc, jurisdiction, net neutrality, new york, speed tests