Move Over, Series Of Tubes, The Internet Is Now A Bridge Over A Creek For A Dozen People?

from the senators-say-the-darnest-things dept

What is it about Senators and their awful internet analogies around net neutrality? It's been just over a decade since the late Senator Ted Stevens gave his infamous "series of tubes" analogy in which he tried to explain the internet and net neutrality. Remember?

"I just the other day got, an internet was sent by my staff at 10 o'clock in the morning on Friday and I just got it yesterday. Why? Because it got tangled up with all these things going on the internet commercially... They want to deliver vast amounts of information over the internet. And again, the internet is not something you just dump something on. It's not a truck. It's a series of tubes. And if you don't understand those tubes can be filled and if they are filled, when you put your message in, it gets in line and its going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material."

Given how viral that went, and how widely mocked Stevens was, you'd think that any competent Senate staffer would prepare their bosses not to make a similarly idiotic statement. But, no. Not the staffers of Senator Ron Johnson. They sent him out to a hearing with the current FCC commissioners... and had him say that the internet is like a bridge between neighbors. Or something. I've watched this clip over and over again and I'm still trying to figure this one out:

Let's break this down, because the level of wackiness is hard to comprehend without exploring each and every beautiful inane thing said. First, the transcript of Johnson's key "analogy":

We all agree that we want greater innovation. We want expansion and greater access to high speed broadband. I think one of the things that inhibits that is all the rhetoric and slogans and buzzwords and I want to cut through a little bit. I know net neutrality sounds great. And in trying to convey why that harms investment and innovation, I've come up with analogy. I kinda want to run this by you and see if this is pretty accurate.

Let's say a group of neighbors want to build a bridge over a creek so they can cross over and talk to each other a lot, so it's really for a neighborhood, maybe a dozen people. But then they find out that the local government is going to require that that bridge is open to the entire community of a million people, no prioritization whatsoever. They don't get to cross first to go see their neighbor. A million people can come onto their property, ruin their lawns, and walk over that bridge.

Isn't that kind of a similar analogy, is that a pretty good analogy in terms of what net neutrality is all about, not allowing for example a company that is going to invest billions of dollars in the pipeline, not allow them to sell a prioritized lane, for, oh, I don't know, doctors who want to prioritize distant diagnostics? They're going to have to share that same pipeline, no prioritization, with for example people streaming illegal content or pornography? Tell me where that analogy is maybe not accurate.

Whoo boy. For someone who wants to "cut through" the "rhetoric and slogans and buzzwords" he sure chose to come up with what may be the dumbest analogy for the internet so far. It actively makes people less informed on the issues. It's that bad. Literally nothing about the analogy is even remotely accurate. This isn't a situation where a small community is building a tiny community bridge and is suddenly overwhelmed with millions of people "ruining their lawns" without allowing the little community over the bridge. None of that makes any sense at all.

Net neutrality is about how massive, giant internet access providing monopolists and duopolists want to double dip and double charge for the value provided at the endpoints, rather than being satisfied with getting paid for the value they provide in connecting the end points. The issue has nothing to do with millions of people rushing through a "pipeline" that was built for "maybe a dozen people" and somehow "ruining lawns" (?!?) while doing so. Nothing in net neutrality has anything to do with over-clogging local pipes. In fact, it allows for standard network management. And again, going back years and years and years, internet backbone experts have pointed out that there's capacity to spare. There are no ruined lawns. There are no distraught home owners wishing to "talk a lot" to their 11 closest neighbors, dismayed that a million people are trampling their lawns.

A more correct analogy is that the government granted some private companies land and rights of way and massive subsidies in terms of grants and tax rebates to build giant highways. And to pay for those roads, they could charge tolls to get on the road. So far, so good. But then, after the highways were built, the corporate owners of these highways saw that others were using the roads themselves to make money. They saw lots of UPS trucks and FedEx trucks. And they decided that it "wasn't fair" that UPS and FedEx got to make money by delivering stuff, even though each UPS and FedEx truck was paying the proper toll to enter the road. So they decided that from now on they'd cut deals. Maybe, FedEx would have to pay double. Or maybe FedEx would have to cough up a piece of the cost of every package delivered to the road company -- let's call it the American Road and Runway company (AR&R for short). Or, maybe, AR&R would decide to just buy up one of those companies, like UPS, and allow it to travel on the roads for free, while telling FedEx, it couldn't travel along those roads at all. Or maybe it wouldn't let FedEx off the road at prime locations where most of its deliveries were targeted. Or maybe it would let UPS use faster lanes while telling FedEx it could only ride on the shoulder.

All net neutrality did was say, "hey, you can't do that." If you're building a road, especially, with all this government support, you have to provide it equally to everyone. You can't pick and choose which companies to favor. And you can't block some companies from getting on the road because they compete with some other business you have.

As for the whole telemedicine vs. pornography thing, that's just pure bullshit. Someone fed Senator Johnson that line and him repeating it is basically proof he has absolutely no clue what he's talking about. Because the very FCC net neutrality rules that he's attacking, explicitly say he's wrong. As Jon Brodkin over at Ars Technica points out:

there is a way for telemedicine offerings to get paid prioritization under the FCC’s existing rules. The FCC distinguishes between “Broadband Internet Access Service (BIAS),” the usual type in which all Internet content shares the same network capacity and “Non-BIAS data services,” which are given isolated capacity to ensure greater speed and reliability. VoIP phone offerings, heart monitors, and energy consumption sensors qualify for this category, which is exempt from net neutrality rules. Telemedicine (another word for remote medical diagnosis) can also be exempt if it’s delivered over the network in the same way.

“We note that telemedicine services might alternatively be structured as ‘non-BIAS data services,’ which are beyond the reach of the open Internet rules,” the FCC’s net neutrality order said. The FCC reserved the right to scrutinize non-BIAS services to ensure that they don't harm competition, but the specific reference to telemedicine indicates that the FCC would not oppose isolated network capacity for remote medical diagnosis. The FCC did not provide any similar allowance for pornography.

Isn't this the kind of thing that a sitting Senator discussing net neutrality is supposed to know? Or is quoting from the actual FCC order that "rhetoric, slogans and buzzwords" Johnson was talking about?

Now, here, was a point in which FCC Chair Ajit Pai had the chance to show some intellectual honesty. I know that we've criticized Pai a lot in the past, but I genuinely think that he's a smart and knowledgeable guy who isn't some clueless drone. I've met him a few times and always found the conversations thoughtful and enlightening. But he blew it here. Big time. He could have, and should have, noted that while he dislikes the current net neutrality rules, the analogy presented is not an accurate description of the issue at all. Instead, he says:

I think you put your finger on one of the core concerns...

But, uh, he didn't. He made up a silly analogy that has nothing, whatsoever, to do with the debate at hand. But, okay, go on...

... which is that all of us favor a free and open internet, where consumers can access lawful content of their choice.

And what does that have to do with the inane analogy that Johnson put forth? Absolutely nothing. Yes, I know, Pai is being political here and it's not a good idea to tell a sitting Senator who has oversight powers that his analogy may be the dumbest thing you've ever heard about net neutrality. But, we're not done yet. Pai jumps to his easily debunked talking points about net neutrality decreasing investment:

We also want to incentive the construction of these networks, which requires massive capital expenditures -- especially as we go into the future with 5G networks and the like. How to balance those concerns is something I think people of goodwill can disagree on. But our goal is obviously, to make sure -- to use your analogy -- that those bridges continue to be built. That they continue to be maintained and upgraded as traffic modernizes over time.

Except that wasn't Johnson's analogy. In Johnsonland, twelve neighbors get together to build a bridge, and net neutrality brings a horde of millions to trample their lawn. That's not about getting more bridges built or maintaining them. These things have nothing to do with one another.

But Johnson's not done yet:

Yeah, in my example, I don't think too many neighbors would chip in to build that bridge, when they realize, we're not ever going to be able to use it, or certainly not get priority on it.

(That last half of the sentence didn't make it into the video clip above, but that's what he said). But, that's... just wrong. Again. First of all, nothing about net neutrality says that the people building the network can't use it. What the hell does that even mean? I mean, you could just as easily turn much of this analogy around on Johnson and argue that it's him expressing strong support for municipal broadband -- something I'd almost guarantee he's against. Indeed, Johnson signed a letter slamming municipal broadband not too long ago. And that's even though it's basically what he's describing: a group of neighbors getting together to build their own bridges to the internet.

But getting back to the net neutrality argument, Johnson's statements are ludicrous. The "bridges" he's discussing aren't being built among neighbors. What's happening is that the giant companies (AR&R from above) have already built the bridges, and are telling the neighbors that FedEx won't be able to deliver to them any more in a convenient, timely or cost effective way... unless FedEx agrees to pay up (meaning that the community will have to pay more since the costs will be passed on). And, again, his claim that investment would go down under his analogy that has nothing to do with net neutrality is just... factually wrong because all of the big broadband providers are public companies where their capital expenditure data is public. And it shows that they've increased spending on their networks with the open internet rules, rather than the opposite.

How is it that a sitting Senator can make statements so ridiculously wrong and no one calls him on it?

Filed Under: ajit pai, congress, fcc, net neutrality, ron johnson, series of tubes, ted stevens

In Dodging FCC Review, AT&T's Time Warner Mega-Merger Just Got Much Easier Under Trump

from the merge-ALL-the-things! dept

There are about 100 AT&T lobbyists currently making the rounds in Washington, trying to convince regulators and the press that the deal will provide an incredible boon to consumers. The folks who actually try to protect consumers aren't so sure, arguing that a larger combined company could make it harder than ever for streaming competitors to license the content they need to compete with AT&T (and its own streaming service, DirecTV Now). And that's before you even get to the fact that AT&T's using usage caps to give its own services an unfair leg up in the market (aka zero rating).

But AT&T's path toward deal approval just got notably easier. While the deal will be reviewed by the DOJ, AT&T and Time Warner are configuring the deal so that it doesn't trigger any of the requirements for FCC review. As it stands, the FCC's jurisdiction would only extend to the deal with the transfer of certain spectrum licenses, or one of Time Warner's TV stations in Atlanta. But Time Warner just got done stating they'd be selling that station ahead of the merger. And new FCC boss Ajit Pai says he doesn't see the need for FCC involvement in the review process:

"Pai said that because the transaction will involve no license transfers, the merger would not come before the FCC. Last week, Time Warner said that it would sell its sole broadcast station, WPCH in Atlanta, to Meredith Broadcasting for $70 million. "That is the regulatory hook for FCC review. My understanding is that the deal won’t be presented to the commission.” Pai’s remarks came at the Mobile World Congress on Monday."

That, of course, leaves whether AT&T's latest mega-merger gets approved solely in the hands of the DOJ, with Trump as the wildcard. There's a certain segment of analysts that still thinks that Trump's disdain for Time Warner-owned CNN's news coverage could kill the deal (the President repeatedly promised to reject the deal on the campaign trail). But it's not clear these analysts quite understand the "synergies" this merger will provide AT&T (historically a pro at making bogus merger promises) and Trump (also an apparent expert at taking credit for job creation he had nothing to do with).

Trump and AT&T would be like a 70s supergroup -- with bullshitters instead of musicians. As such, I'd imagine the deal gets approved by the DOJ, but under an absolute cavalcade of public relation bloviation the likes of which we've never seen before -- all promising that the deal will create jobs, protect the nation's children, expand broadband deployment, and save the planet from potential alien invasion. AT&T, for its part, continues to promise in letters to concerned Senators (pdf) that this latest mega-merger is all "about giving consumers what they want":

"Put simply, this merger is about giving consumers what they want. Together, AT&T and Time Warner will create exciting new ways for consumers to enjoy video anytime, anywhere, and on any device, with unprecedented levels of customization and interactivity. The merger will allow us to offer customers more attractive bundles of broadband and video services, prodding cable companies and other competitors to respond by improving their own services. And the merger will further incentivize AT&T and other wireless carriers to deploy lightning-fast 5G wireless technology faster and deeper in their networks. As a result, this deal will increase competition and accelerate the innovation/investment cycle, all to the benefit of American consumers."

Doesn't that sound lovely? While reports still seem to suggest Trump personally opposes the deal, he's been appointing regulator chiefs at most key agencies that pride themselves on a "light regulatory touch," and for whom blocking such a deal would be dramatically out of character. Ultimately, it's likely that the opportunity for bogus job creation claims will be too hard for Trump to ignore, resulting in some cognitive dissonance gymnastics among those Trump supporters who actually took his campaign pledges to thwart harmful media consolidation seriously.

Filed Under: antitrust, doj, fcc, mergers
Companies: at&t, time warner

Senator Thune Begins Pushing A 'Net Neutrality' Bill That's Likely To Kill Net Neutrality

from the with-friends-like-these dept

While Trump, the GOP and new FCC boss Ajit Pai really want to kill net neutrality protections for AT&T, Comcast and Verizon, it likely won't happen at the FCC. As it stands, rolling back the rules via the same FCC process that birthed them would require showing the courts that things have dramatically changed since the FCC's major court win last year. Such a process would also involve another lengthy public comment period, during which the record-setting four million public comments filed during the rule creation could appear diminutive.

So if you're an ISP lobbyist looking to kill net neutrality rules, how do you accomplish this without causing a massive public shitstorm? Why you table ghost write (corrected, thanks commenters) a bill that pretends to save and protect net neutrality, while wording it to do the exact opposite, of course!

It's widely believed that the GOP intends to table a net neutrality bill sometime this year, either as a standalone bill or part of a Communications Act rewrite (with a heavy emphasis on killing the FCC's consumer-protection authority). The man likely to lead that effort is Senator John Thune, who last week took to the op-ed pages of Ars Technica to begin making his public case for such a proposal. Thune begins his sales pitch with, unfortunately, a lie:

"I am quite confident that the online experience for the overwhelming majority of users has not really changed for better or worse because of the new regulations. The Internet’s future, however, is uncertain because of ideological bureaucrats at the FCC who adopted a misguided regulatory approach that has chilled investment and offers no protections against excessive bureaucratic interference in the years ahead.

...These regulations are already having a negative impact on Internet infrastructure. While not a problem in places like Silicon Valley or New York City, 34 million Americans today lack access to broadband services at home, and there is evidence that the FCC’s onerous regulations have chilled the capital investments that are needed to deploy broadband throughout the country."

As we just got done saying, the claim that net neutrality "chilled investment" simply isn't true, no matter how many times large ISPs (and the politicians that love them) claim otherwise. Data showing growing CAPEX and earnings are all public, so it's not really particularly debatable (The Consumerist just got done doing a fantastic job once again debunking this canard). After starting with a repeatedly-debunked lie, Thune proceeds to his real goal, selling people on the idea of a new net neutrality law built by Congress:

"While the FCC’s 2015 rules may soon be consigned to the dustbin of history, the last few months have shown us all that political winds can and often do shift suddenly. The only way to truly provide certainty for open Internet protections is for Congress to pass bipartisan legislation. Rather than heavy-handed and open-ended regulations that stifle the Internet, we need a statute offering clear and enduring rules that balance innovation and investment for all parts of the Internet ecosystem."

So yes... in a perfect world, Congress would simply pass a net neutrality bill and enshrine the concept into law, avoiding the partisan pattycake that plagues the FCC with every administrative shift. But this world not being ideal, and one where companies like Comcast, AT&T and Verizon have incredible power over lawmakers, the chance of Congress passing useful net neutrality protections is virtually non-existent. Thune, as a major recipient of telecom industry cash, of course knows this. But Thune dismisses this reality to insist he's nobly prepared to spearhead a legislative effort to save neutrality once and for all:

"The certainty of bipartisan law transcends administrations. Over the past few months, many of my Democrat colleagues have grown to appreciate this more. Regardless of what happens at the FCC with the 2015 rules, I again stand ready to work on legislation protecting the open Internet that sets forth clear digital rules of the road for both the Internet community and government regulators."

You shouldn't buy it. Thune previously tried to kill the FCC's tougher rules with a similar proposal last year -- one that professed to "enshrine net neutrality into law," but which was so intentionally saddled with loopholes as to be useless. In fact such proposals are worse than useless in that they pre-empt the existing, more effective rules, cover only some net neutrality violations (outright blocking of entire websites, something no ISP intends or wants to do anyway), while ignoring the myriad of fronts where the real neutrality fights are happening now (zero rating, interconnection, usage caps and overage fees).

The plan is to introduce a new net neutrality law that kills net neutrality while professing to save it. When lawmakers point out that the bill does more harm than good, they'll likely be derided for refusing to "compromise." Granted with the ACA and other Congressional kerfuffles currently taking priority, this bill may take some time before large ISP lobbyists and lawmakers can finally table such legislation. But those of you that care about net neutrality need to understand one thing: net neutrality's death will come disguised as a 2017 bill pretending to save it. Likely with Thune leading the parade.

Filed Under: ajit pai, congress, fcc, john thune, net neutrality

FCC Partially Kills Rules Requiring ISPs Be Clear About Usage Caps, Hidden Fees

from the all-about-helping-the-little-guy dept

FCC boss Ajit Pai made it clear that overturning net neutrality would be the new FCC's top priority (apparently right behind paying lip service to the poor), and his behavior is making it very clear that wasn't an empty promise. Pai recently killed the FCC's inquiry into Verizon and AT&T's zero rating, which lets both companies use arbitrary usage caps to give their own content an unfair market advantage. The previous FCC argued both ISPs were violating net neutrality and engaged in anti-competitive behavior. The new FCC, in contrast, now says zero rating "enhances competition in the wireless marketplace."

Now Pai's chipping away at the transparency portion of the FCC's net neutrality rules as well, insisting they're little more than "excessive reporting obligations." The transparency requirements, originally passed in 2010, required that ISPs make the following items perfectly clear when selling service to consumers:

Price -- the full monthly service charge. Any promotional rates should be clearly noted as such, specify the duration of the promotional period, and note the full monthly service charge the consumer will incur after the expiration of the promotional period.

Other fees -- all additional one-time and/or recurring fees and/or surcharges the consumer may incur either to initiate, maintain, or discontinue service, including the name, definition, and cost of each additional fee. These may include modem rental fees, installation fees, service charges, and early termination fees, among others.

Data caps and allowances -- any data caps or allowances that are a part of the plan the consumer is purchasing, as well as the consequences of exceeding the cap or allowance (e.g., additional charges, loss of service for the remainder of the billing cycle)."

The FCC estimated that it should take ISPs about 6.8 hours per year to adhere to these requirements, which have an obvious benefit to consumers. But because some ISPs repeatedly complained that the requirements were "too onerous" (without ever really supporting that claim with data), the FCC temporarily exempted ISPs with fewer than 100,000 subscribers from the rules. But last week, the FCC not only extended the rules, but expanded them claiming this would let ISPs "allocate scarce resources toward expanding modern networks that bring economic opportunity, job creation and civic engagement to all Americans."

But lone dissenting FCC commissioner Mignon Clyburn was quick to point out that under the surface, this had little to do with helping small ISPs (again, given the small burden of 6.8 hours in extra work per year), and everything to do with slowly-but-surely rolling back oversight of larger companies utilizing smaller holding companies:

"Many of the nation’s largest broadband providers are actually holding companies, comprised of many smaller operating companies," Clyburn said. "So what today’s Order does is exempt these companies’ affiliates that have under 250,000 connections by declining to aggregate the connection count at the holding company level."

The original exemption for ISPs with 100,000 or fewer subscribers was applied to the aggregated total of subscribers "across all affiliates," so that small ISPs owned by big holding companies wouldn't be exempt. That changed today, according to Clyburn.

Consumer group Public Knowledge quickly issued a statement questioning the wisdom of making often convoluted and misleading broadband bills more difficult to understand:

"Yet again, Chairman Pai has acted to weaken consumer protections at the FCC. Today’s action means that more ISPs could withhold essential information about their broadband pricing and service, making it harder for many more subscribers to make informed decisions and hold their providers accountable. How can it be good for consumers if companies conceal anything about the price, speed, and data caps for their broadband service?"

If you hadn't noticed already, easing government and public oversight of one of the least popular and least competitive markets in America -- then pretending it's either for the poor or for "modernization's" sake is new FCC boss Pai's modus operandi. It doesn't matter whether we're talking about Pai's decision to help prison telco monopolies overcharge inmate families, his decision to kill plans for more cable box competition, or the recent efforts to dismantle net neutrality piecemeal, this is all being set to the backdrop of bogus empathy for the little guy. And this is just his first month in office.

As we noted previously, Pai won't repeal net neutrality via FCC process because it would open the door to a public-comment period during which his decision would be quite-justly lambasted. Instead, the plan is to chip away at the rules bit by bit until the GOP pushes either a Communications Act rewrite or other legislation that puts net neutrality -- and likely the FCC's entire authority over broadband ISPs -- to bed permanently. If you really like the end result of having large ISPs and revolving door regulators dictate internet policy (read: Comcast), you should be pretty excited about what the future has in store.

Filed Under: ajit pai, broadband, fcc, hidden fees, usage caps

FCC Boss Calls Net Neutrality A 'Mistake,' Repeats Debunked Claim It Stifled Broadband Investment

from the truth-is-whatever-I-say-it-is dept

So for several years now, the broadband industry (and the politicians, think tankers, and policy folk paid to love them) has desperately tried to claim that the FCC's net neutrality rules killed investment in broadband networks, clouding the entire telecom market in a dark shroud of "regulatory uncertainty." And it doesn't matter how many times we (and others) debunk this claim, it just keeps popping up like an undead groundhog. The reality is this: net neutrality had zero negative impact on the CAPEX, growth, or financials of major broadband providers. It simply isn't true.

And yet this narrative was front and center in a speech given this week by FCC boss Ajit Pai at the Mobile World Congress in Barcelona. At the event, Pai reiterated his disdain for net neutrality, claiming the rules were a "mistake" that caused, you guessed it, a massive network investment decline:

"Two years later, it has become evident that the FCC made a mistake. Our new approach injected tremendous uncertainty into the broadband market. And uncertainty is the enemy of growth. After the FCC embraced utility-style regulation, the United States experienced the first-ever decline in broadband investment outside of a recession. In fact, broadband investment remains lower today than it was when the FCC changed course in 2015. And we have seen much concern about whether the FCC would permit or ban service plans."

It's nonsense. And repetition doesn't magically forge reality. Pai has made this claim numerous times, but based his claims on broadband industry-tied think tank data from the likes of Hal Singer, who cherry picked and massaged data. If you look at actual SEC filings, earnings reports, stock trajectories and other public data, it's painfully obvious this dead duck of a talking point still isn't true. Consumerist's Chris Morran did a phenomenal job doing just that this week, first noting that this lack of growth due to "uncertainty" is a bogus canard:

"Since Feb. 26, 2015, the day that the FCC voted to approve the neutrality rules, AT&T’s share price has increased by more than 20%, Comcast’s is up 26%. Verizon’s stock price is at the same level as it was, though it has fluctuated as much as 15% in either direction since then. Charter’s share price is up 40%, after the FCC allowed it to acquire Time Warner Cable and Bright House in 2016. The only major broadband provider whose stock has fallen dramatically in the last two years is CenturyLink, whose share price has sunk around 50% in that time."

So yes, if you're going to claim that "uncertainty is the enemy of growth," and there's a hell of a lot of growth, you should be able to do the rest of the logical math. Morran also looked at CAPEX at most of these ISPs, and found that too is soaring (in large part due to ongoing investment in business services and wireless broadband):

"Likewise, AT&T said it its most recent earnings that it spent $22.9 billion on capital investment in 2016, up from $20.7 billion in 2015. Granted, the 2015 number was slightly down from the $21.4 billion spent in 2014, but it’s higher than the $19.7 billion or $20.2 billion spent in 2012 or 2011, respectively, seeming to undercut Pai’s claims of historic low levels of investment.

Because of the massive merger with Time Warner Cable, there’s no apples-to-apples comparison to be made. However, Charter did spend $7.5 billion on capital expenditures in 2016, 85% of that on expanding and building out its network. That appears to more than the combined investment by Charter and TWC in capital expenditures during the pre-merger years.

Even Verizon, which has not seen the same growth as the other companies is spending more on capital expenditures than it did before the neutrality rules were put in place. In 2015, the year where Pai contends investment sunk to levels unseen outside of a recession, Verizon spent $17.8 billion on capital investments, more than in any other year since the U.S. came out of the recession."

In other words growth is up, CAPEX is up, and these companies are all hugely profitable. It's not a debate. So where is Pai getting his contradictory data from? ISP lobbyists, of course:

"So what is Pai’s justification for this claim? According to a rep at the FCC, the Chairman’s comment was based on data provided by USTelecom, the industry’s lobbying arm that is actively pushing for the FCC and Congress to roll back net neutrality and privacy regulations on broadband providers. The FCC has not responded to our query as to why Chairman Pai would use data provided by industry lobbyists over the actual numbers these companies are providing publicly."

I'd recommend not holding your breath while you wait. Of course, Morran's takedown of Pai's bogus claim is just one of countless similar stories published every few months eviscerating this idea that net neutrality was an innovation, investment and growth killer. Yet this being the post-truth era, where truth is apparently defined not by hard data but by bluster and bullshit, there's apparently zero repercussions for repeatedly lying.

And it's probably about to get worse. Pai and the FCC know that rolling back net neutrality via FCC process is difficult if not impossible. It would require convincing the courts that things have changed substantially since the recent FCC court win, and involve another lengthy public comment period. Given a record 4 million consumers spoke out the last go round (largely in favor of the rules), that's not something the GOP, Pai and Trump want to repeat. As such, their plan will be to pass new legislation (possibly a Communications Act rewrite) that kills FCC authority generally and the rules specifically.

At the heart of the sales pitch for this "modernization" of the FCC and killing of net neutrality rules? An ocean of farmed industry data insisting that net neutrality protections stifle broadband investment, damage the self-esteem of children, harm puppies, and threaten to rip the Earth off of its orbital axis. All magically fixed, of course, if we free some of the least-liked and most anti-competitive companies in America from regulatory oversight and public accountability.

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

FCC Boss Falsely Claims His Attacks On Net Neutrality Have Already Made The Wireless Sector More Competitive

from the up-is-down-black-is-white dept

Last week we watched as Verizon, a company that spent years telling users they didn't want or need unlimited data, was forced to bring back unlimited data. AT&T quickly followed suit with similar plans of its own, despite having spent years waging a not so subtle war on grandfathered unlimited connection customers. The reason for this sudden collective about-face? The continued rise of T-Mobile, which has increasingly brought something vaguely resembling competition to the wireless sector (even if non-price, often superficial competition remains the predominant law of the land).

While this was happening, we've been noting how new FCC boss Ajit Pai has been taking an axe to consumer protections, moving to gut broadband privacy rules, making it easier for prison telco monopolies to rip off inmate families, and killing efforts to bring competition to the cable box. Pai also recently killed off the FCC's inquiry into zero rating, after the former FCC stated Verizon and AT&T were using usage caps to give their own content an unfair market advantage.

If you ask industry lobbyists, this behavior makes Pai an incredible consumer champion. Apparently that narrative is very much alive in Pai's head as well. In a speech this week at the Mobile World Congress in Barcelona, Pai was quick to proclaim that he's simply returning to an era of "light-touch" regulation of telecom, one that will result in massive, unspecified benefits to all:

"We are confident in the decades-long, cross-party consensus on light-touch Internet regulation—one that helped America’s digital economy thrive. And we are on track to returning to that successful approach.

In telecom, "light-touch regulation" is code for letting AT&T, Verizon, Comcast and Charter do whatever the hell they'd like. The narrative usually goes something like this: if you free giant ISPs from the burdens of "onerous federal regulation" (like net neutrality), Utopia magically springs from the sidewalks. But as we saw during Michael Powell's tenure, this narrative is flimsy, and the blind federal deregulation of telecom only makes things worse. Why? When you let revolving door regulators like Pai and Powell run the show, their breathless dedication to industry means they intentionally overlook the lack of competition in the sector.

Eliminate functional regulatory oversight and refuse to address limited competition? The end result is... Comcast Corporation and its record-shatteringly-bad customer service, high prices, and usage caps.

But Pai took things further in his speech, actually claiming that his refusal to enforce the agency's net neutrality rules somehow resulted in a flurry of competition and a return to unlimited data:

"Earlier this month, for example, we ended the FCC’s investigation into so-called “zero-rating,” or free-data offerings. Free-data plans have proven to be popular among consumers, particularly those with low incomes, because they allow consumers to enjoy content without data limits or charges. They have also enhanced competition. Nonetheless, the FCC had put these plans under the regulatory microscope. It claimed that they were anticompetitive, would lead to the end of unlimited data plans, or otherwise limit online access. But the truth is that consumers like getting something for free, and they want their providers to compete by introducing innovative offerings. Our recent decision simply respected consumers’ preference.

The best evidence of the wisdom of our new approach is what happened afterward. In the days following our decision, all four national wireless providers in the United States announced new unlimited data plans or expanded their existing ones. Consumers are now benefiting from these offers—offers made possible by a competitive marketplace. And remember: Preemptive government regulation did not produce that result. The free market did.

That's an incredible load of nonsense. T-Mobile only still exists because federal regulators blocked AT&T from acquiring it. So in reality, it was government intervention that allowed T-Mobile to continue to exist, with the resulting competition driving AT&T and Verizon to adopt all manner of more consumer-friendly positions. It's hard work, but one needs to weigh each instance of government regulation on its merits. Insisting all regulation is good or bad is just lazy thinking, and the idea that gutting all consumer protections magically results in the telecom equivalent of Smurf village is utterly nonsensical given the industry's history.

We've also noted how zero rating has nothing to do with giving consumers "free data," though carriers have certainly conditioned consumers to think as much. Usage caps are entirely arbitrary, and are completely untethered to real-world network congestion or financial necessity. Caps and overage fees are simply glorified price hikes, and they exist as a symptom of limited competition. As competition increased, it became untenable for AT&T and Verizon to continue ignoring consumer demands, especially once T-Mobile began adding significantly more mobile subscribers than any other carrier every quarter.

The irony, of course, is that Pai was in favor of the AT&T and T-Mobile merger, which would have killed off T-Mobile's disruption entirely. He's also never seen an incumbent ISP policy idea he didn't like, and his voting history suggests he'll happily vote to approve what many expect is a looming Sprint acquisition of T-Mobile. When the resulting diminished competition from that deal results in higher prices, what's the over/under on Pai blaming himself or his love of a "light touch?"

Filed Under: ajit pai, data caps, fcc, net neutrality, unlimited data, zero rating

FCC Boss Moves To Kill Broadband Privacy Protections. You Know, To Help The Little Guy.

from the Comcastic dept

New FCC boss Ajit Pai, apparently taking a break from paying empty lip service to the poor, has quietly announced the FCC will be killing consumer broadband privacy protections before they even have a chance to take root. Hoping the news would get lost in the pre-weekend hustle, the FCC quietly circulated an e-mail on Friday stating that the agency would be moving to kill the rules before they arrive March 2, just as large ISPs had demanded.

The FCC statement starts by implying that eliminating FCC oversight of broadband privacy (leaving the FTC as the lone cop on the beat) is more consistent and efficient:

"Chairman Pai believes that the best way to protect the online privacy of American consumers is through a comprehensive and uniform regulatory framework. All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, he has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for others in the digital economy. Unfortunately, one of the previous administration’s privacy rules that is scheduled to take effect on March 2 is not consistent with the FTC’s privacy standards. Therefore, Chairman Pai is seeking to act on a request to stay this rule before it takes effect on March 2."

This idea that the FTC should be the only regulator overseeing ISP privacy comes from the telecom industry itself, which has repeatedly tried to claim it's unfair to "burden" ISPs (many of which are trying to get into the ad and media industry) with FCC regulations not faced by the likes of Google and Facebook. The problem: they're ignoring the fact that while users can switch search engines or services if they're unhappy with Google or Facebook's privacy practices, a lack of competition often means users have no such luxury when it comes to broadband ISPs. Thus, specific rules large ISPs pretend they don't see the reasoning for.

Meanwhile, the big push to have the FTC alone oversee broadband privacy is rooted in the knowledge that the FTC is (a) overworked and underfunded, and (b) has no rule-making authority. Now ex-FCC boss Tom Wheeler had this to say about this GOP and Trump FCC "modernization" effort in a recent, candid interview:

"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 pretense for Pai and friends is "efficiency," when the reality, as has long been the FCC's overarching MO, is to protect large ISPs like Comcast, Verizon and AT&T from real accountability and oversight. That's a problem when it comes to an uncompetitive industry where the nation's biggest carriers have no organic checks and balances on their increasingly unethical privacy practices. You need either real competition or reasonable regulators, and as these ISPs' historical behavior makes clear, you run into problems when revolving-door regulators want neither.

The FCC rules themselves were passed last year and are relatively simple; ISPs must disclose what data they're gathering and who they're selling it to. In a few instances, users need to opt in if ISPs want to share more personal financial data. The telecom and ad industries whined about the rules, but the FCC only acted to create the rules after Verizon was caught covertly modifying user packets in order to track user behavior (without informing them or providing working opt-out tools), and AT&T and Comcast began making it clear they wanted to charge users a premium for privacy.

The telecom industry had its chance to self-regulate on the privacy front, and showed repeatedly it wasn't capable of actually doing so. Repeal the FCC's privacy rules, and there's literally nothing standing between you and Comcast when it comes to privacy except an overworked (and likely to be similarly and intentionally hamstrung) FTC incapable of picking up the slack. That's certainly great for Comcast. It's less great if you're a broadband consumer actually looking to have some amount of control over how your personal data is collected and shared in the gigabit era.

Filed Under: ajit pai, broadband, fcc, ftc, privacy

If New FCC Boss Ajit Pai Is So 'Pro Consumer,' Why Does The Telecom Industry Need To Pay People To Say So?

from the dollar-per-holler dept

On his first day new FCC Boss Ajit Pai repeatedly and breathlessly insisted that consumers and the digital divide would be his top priority. The problem: that dedication was directly contradicted by not only Pai's past voting record at the agency, but his first actions as agency head. Out of the gate Pai undermined an FCC legal case against prison phone telecom monopolies, scrapped an FCC plan to bring competition to the cable box, killed all ongoing zero rating inquiries and began laying the ground work for killing net neutrality, and prevented nine already-approved ISPs from helping the poor via the agency's Lifeline program.

Unsurprisingly, it didn't take particularly long for some news outlets to realize that Pai's words weren't supported by his actions. Both The Washington Post and the New York Times penned editorials blasting Pai, most notably for his ongoing disdain for net neutrality, which has broad, bipartisan support.

Driven to defend Pai's selection as FCC boss for obvious reasons, ISPs got right to work fighting back via their traditional weapon of choice: bullshitters for hire. Shortly after the Post and Times pieces surfaced, contrasting op-eds quickly popped up in newspapers and websites nationwide claiming Pai is actually an incredible boon to consumers, competition and innovation. Most of these op-eds failed to adequately disclose the authors' financial ties to large broadband providers, or the fact they take money while pretending to be objective analysts -- often including Congressional testimony.

Fred Campbell, a long-standing ISP-funded "consultant," penned a piece over at Forbes blasting the Post and Times for "doublespeak," while insisting that Pai is secretly a hero of the people:

"Doublespeak is language that disguises or even reverses the meaning of words in order to disguise the nature of the truth. A flurry of attacks on Ajit Pai, the new chairman of the Federal Communications Commission, are full of it. It’s clear that Pai is serious about closing the digital divide between those who use cutting-edge communications services and those who do not."

Ah the post-truth era, when those that spend the most time practicing doublespeak endlessly whine about doublespeak.

Look, if you actually talk to any genuine consumer advocate in the telecom space (they're easy to spot: they're the ones with limited budgets and shittier suits), they'll quickly tell you that while Pai is a nice guy -- he's a water carrier for industry, rarely if ever challenging their positions on any issue of consumer note. You only need look at his voting record, and the numerous times he not only voted down indisputably pro-consumer initiatives like net neutrality, but refused to hold companies like AT&T accountable for outright fraud -- even when that fraud involved the Lifeline program Pai professes to now adore.

Campbell's editorial was one of numerous, similar missives. Rick Boucher, one-time respected Congressional fair use champion, now works at Sidley Austin, a law firm that effectively acts as an AT&T policy arm. That direct financial tie isn't really made clear in an op-ed over at Light Reading, where Boucher informs readers that, despite his nonexistent track record on the subject, Pai will somehow be a champion of expanded broadband coverage:

"Chairman Pai recently announced the formation of the Broadband Deployment Advisory Committee, a task force that will offer "specific" recommendations to speed broadband deployment and, in his words, "close the digital divide."

Pai's action is an excellent first step towards accelerating broadband deployment (and adoption) throughout the country. Getting great minds together to hack a solution is both wise and urgent. And perhaps most important, it's a sign that fact-based decision-making is now the order of the day at the FCC."

But forming a committee to talk about the digital divide isn't an actual solution to anything -- especially expanded broadband coverage. And it certainly doesn't magically obliterate Pai's anti-consumer, and anti-startup voting record. If there's an FCC plan to actually shore up competition or bring broadband to the under-served (like the FCC's recent vote to ensure low-income users can use their $9.25 monthly Lifeline credit for broadband), you can be fairly certain Pai voted against it. It's not really something that's open to debate. Well, unless you're the type that's paid to pretend that generally-accepted facts are up for debate.

It's important to understand that broadband providers and politicians adore slathering meaningless platitudes upon the "digital divide" because it earns them cheap political brownie points without having to do much of anything. In fact that's Comcast's entire lobbying MO, and the primary reason they renamed their top lobbyist the company's "Chief Diversity Officer." It's a simple schtick: distract the public by professing your support for closing the digital divide with the bare minimum of effort, while denying the singular problem that causes broadband coverage gaps and high prices in the first place: a lack of competition.

Over at The Hill, the National Grange, one of countless organizations telecom providers pay to support megamergers and other unpopular policy, also ignores Pai's clear and obvious history, claiming he'll be an incredible boon for rural communities. Over at the telecom-industry funded Heartland Institute blog, Scott Cleland, who also takes funds from the sector while pretending to be an objective analyst, crows that Pai will "return a pro-consumer focus" to the FCC:

"Unlike the Federal Communications Commission’s previous head, new FCC Chairman Ajit Pai is putting consumers first, not net neutrality. The sad reality is that the previous FCC did the bidding of the biggest edge providers, both on the issue of net neutrality and opening up the cable box market, as I will explain."

Up is down, black is white. We've long noted how the broadband industry has tried to downplay net neutrality issues by claiming that everything is somehow Netflix's fault, and incumbent broadband providers are just misunderstood, innocent daisies. Logical cohesion is generally missing from this narrative, but Pai himself has played a starring role in claiming repeatedly that -- in stark contrast to all available evidence -- it's the edge (content and service companies not-coincidentally challenging the industry's TV stranglehold) providers that are the real internet villains.

This disconnect between reality and dollar-per-hollar rhetoric is nothing new, especially in telecom. Former FCC boss Michael Powell, now the cable industry's top lobbyist, made a career out of paying endless lip service to consumers to the acclaim of industry sockpuppets, while his actions repeatedly worked to undermine oversight of giant companies like Comcast (to obvious end). That's because the real goal for most of these folks is something you may have ferreted out already: protection of loyal campaign contributor revenues above all else. If anything, there's an active disdain for the consumer.

If Pai actually were "pro consumer," his voting record would reflect it with minimal debate. And consumer advocates (the ones that actually spend ten hours a day fighting the good fight to little acclaim or profit) wouldn't be issuing warnings about "empty rhetoric" and "Orwellian" behavior at the FCC. At the end of the day you have to wonder: if you need to covertly pay people to support your argument, what kind of argument do you actually have?

Filed Under: ajit pai, broadband, consumers, fcc, fred campbell, public, rick boucher, scott cleland