FCC Commissioner Thinks Ultra-Fast Broadband Just a 'Novelty'

from the 640K-is-more-memory-than-anyone-will-ever-need dept

One of the hallmarks of Tom Wheeler's FCC was a renewed focus on competition at higher broadband speeds. It's one of the reasons the last FCC bumped the standard definition of broadband from a measly 4 Mbps down, 1 Mbps up, to 25 Mbps down, and 3 Mbps up. That higher benchmark allowed the FCC to point out that roughly two-thirds of American homes lack access to more than one ISP at 25 Mbps or better, highlighting a growing cable monopoly over broadband as DSL providers like AT&T and Verizon shift their attention toward giant media acquisitions and away from residential broadband.

Needless to say, large broadband providers (and the politicians paid to love them) quickly threw a hissy fit, insisting that nobody really needs that much bandwidth. This idea that you don't really need faster speeds falls in line with the industry's (and again, many politicians') ongoing refusal to acknowledge that the broadband market isn't all that competitive. After all, if you admit there's a problem, then you've admitted that somebody may just have to fix it.

FCC Commissioner Mike O'Rielly is squarely on the side of industry on this subject, having voted down the FCC's higher 25 Mbps benchmark. Even though 25 Mbps is a far from radical benchmark, and 3 Mbps upstream remains a bit of a joke, O'Rielly's dissent (pdf), made his disdain for faster speeds (and the technologies that will use them) abundantly clear:

"To justify setting the new benchmark at 25/3, as opposed to the current 4/1 or even 10/1 as several commenters suggested, the Report notes that 4K TV requires 25 Mbps. But 4K TV is still relatively new and is not expected to be widely adopted for years to come. While the statute directs us to look at “advanced” telecommunications capability, this stretches the concept to an untenable extreme. Some people, for example, believe, probably incorrectly, that we are on the path to interplanetary teleportation. Should we include the estimated bandwidth for that as well? "

Chortle! Guffaw! Of course 4K is here now, the streaming of which is already being hamstrung by ISP usage caps, even on ultra-fast connections. Now on the agency's majority, O'Rielly last week again proclaimed that the sector really needs to stop focusing on this whole ultra-fast broadband thing, since faster speeds are really just a novelty:

"The outcry for things like ultrahigh-speed service in certain areas means longer waits for those who have no access or still rely on dialup service, as providers rush to serve the denser and more profitable areas that seek upgrades to this level,” O’Rielly said. “Today, ultrafast residential service is a novelty and good for marketing, but the tiny percentage of people using it cannot drive our policy decisions."

Of course, that's not really true. Ultra-fast broadband and even consistent coverage aren't somehow mutually exclusive; we can focus on getting broadband to rural markets (first at slower speeds), and still enjoy gigabit speeds provided by the likes of Google Fiber. There's not a longer wait for broadband in Cleveland, for example, just because Google Fiber wants to bring broadband to San Antonio. As we've noted, the real reason there are stalled rural broadband deployments is a growing cable monopoly in areas that telcos are effectively giving up on. That FCC data now shows this is not somehow the fault of faster gigabit broadband itself.

The idea that gigabit is a "novelty" or unnecessary bumbles around the newswires occasionally, but originates with industry executives who don't want their own, slower speeds highlighted. But that doesn't mean ultra-fast service isn't important. Data has indicated that prices overall tend to drop in markets with ultra-fast service, which is likely a reflection of the increased competition that brought those speeds in the first place. AT&T's gigabit broadband service, for example, has been anywhere up to $50 less per month in markets where it faces competition from Google Fiber.

But even if there's a touch of marketing hype involved in the gigabit race, ISPs benefit from the fascination with faster speeds as well; numerous providers have noted that just advertising these ultra-fast connections causes consumers (most of whom have absolutely no idea what their current speed even is) to call in and upgrade to faster tiers, even if they're not the fastest options available. As Google Fiber made evident, ultra-fast broadband has captured the imagination of a public tired of overpaying for slower speeds. That excitement, and the surrounding competition, is not a bad thing.

If there's something that does get overlooked in the hype surrounding faster speeds, it's the fact that the United States still pays more for broadband service than a laundry list of developing nations, something the industry -- and O'Rielly -- also don't want highlighted in FCC policy discussions moving forward.

Filed Under: bandwidth, broadband, competition, fcc, mike o'rielly, speed, tom wheeler

Tom Wheeler: Trump, GOP Plan To 'Modernize' The FCC A 'Fraud'

from the in-Comcast-we-trust dept

So we've noted a few times how former FCC boss Tom Wheeler surprised many of us (myself included) simply for basing his telecom policy decisions on actual facts. That doesn't sound like much, but for more than fifteen years, both parties had stocked the agency with a rotating crop of either sector apologists like Michael Powell (now the cable industry's top lobbyist) -- utterly incapable of even admitting the broadband industry had competition problems -- or wishy-washy folks like Julius Genachowski, who basically just told everybody what they wanted to hear, and just hoped things worked out for the best.

Wheeler wound up being a notably different animal for the FCC. He based many of his policy decisions on real-world data collected from actual customers (shocking!), repeatedly highlighted the lack of real broadband competition in many markets (blasphemy!), and, as evident on his shift toward Title II reclassification and net neutrality, actually changed his mind when confronted with evidence that challenged his world view (what insolence!).

Now that Wheeler's back in the private sector, he's unshackled himself somewhat, last week providing an interesting interview with Harvard Law Professor Susan Crawford. In it, Wheeler takes particular aim at Trump's new FCC pick Ajit Pai, noting the new FCC boss (who repeatedly complained that Wheeler left him out of key policy decisions) refused to even meet with him during the last year. Wheeler also chimes in on the subject of net neutrality, municipal broadband, and how ISPs like Comcast and AT&T have an almost nauseating amount of influence over state legislatures.

But the most important part has to do with Wheeler's take on the Trump administration's increasingly obvious plan to defund and defang the FCC as broadband watchdog. Because the industry and our new FCC boss lack the courage to just come out and say this, telecom sector lobbyists (and the various PR flacks, consultants, think tankers, and politicians paid to love them) have concocted a new narrative in which they claim they're simply "streamlining" or "modernizing" government by eliminating the FCC from the equation, and dumping all oversight of megacarriers like AT&T, Comcast and Verizon into the lap of the FTC.

Wheeler, however, was quick to point out the real goal of such a shift:

In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?

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.

Again, so it's clear, broadband ISPs want all oversight shifted to the FTC because they know the underfunded and overworked agency won't have the ability to actually enforce the rules currently on the books, much less craft new ones should they become necessary. With companies like Comcast facing less organic broadband market pressure than ever, less federal regulatory oversight than ever, and the ability to literally write state protectionist laws keeping your town and city from having any say over this dysfunction, you've got a disaster brewing for consumers and numerous business sectors alike.

To be clear, deregulation does help some industries -- especially those that naturally enjoy healthy competition. But with the amount of control large ISPs have over state legislatures, and the lack of competition in the last mile, the telecom sector is far from a free market. Undaunted by historical evidence of the folly of blind telecom deregulation, ISPs have long argued that if you just leave the industry completely alone, gigabit connections will miraculously sprout from sidewalk cracks and we'll all be living in a telecom utopia in no time. History has proven repeatedly this antiquated belief system is pure folly.

Just when it seemed like we were finally putting this dated fantasy in the rear-view mirror, in comes a brand new plan to effectively neuter the only regulatory agency to stand up to AT&T and Comcast in the last decade. Again, it will go something like this: first Pai and the new FCC will simply refuse to enforce the rules already on the books (net neutrality). From there, you can expect Comcast, AT&T and Verizon's Congressional allies to push for a new Communications Act rewrite that rolls back all of Wheeler's policy proposals and fits the FCC with a shiny new collar and chain.

Said Act will breathlessly profess to create jobs, increase broadband deployment, close the digital divide and finally solve net neutrality, but will do nothing of the sort. What it will actually do is contain ample loopholes ensuring that the FCC can never again actually hold massive broadband and media empires accountable to the public by cutting the agency off at the knees, in part by rolling back Wheeler's Title II classification, but also by shoveling consumer protection off to an FTC whose purview will be similarly constrained over the coming months and years.

The end result of this "modernization"? Less oversight than ever for industry giants AT&T, Comcast, Verizon and Charter. Given these companies' growing size, long and undeniable track record of anti-competitive behavior and outright fraud, what could possibly go wrong?

Filed Under: ajit pai, fcc, net neutrality, susan crawford, tom wheeler

New FCC Boss Decides It's Cool If Phone Monopolies Want To Rip Off Inmate Families

from the man-of-the-people dept

For decades, inmate calling service (ICS) telcos have charged inmates and their families upwards of $14 per minute for phone calls without anybody giving much of a damn. Because these folks are in prison, and as we all know everybody in prison is always guilty, drumming up sympathy to convert into political momentum had proven difficult. But after decades of activism, the FCC intervened in 2013 and again in 2015, voting to cap the amount companies can charge the incarcerated for intrastate phone calls. This resulted in a firestorm of complaints from these companies, which not only get to rip off inmates, but have all too cozy and often not particularly legal relationships with law enforcement.

One of the more vocal ICS outfits, Securus, quickly sued the FCC, going so far at one point as to claim that inmates would riot if the company wasn't allowed to continue overcharging inmates and their families. Securus, Global Tel*Link and other providers challenged the FCC's intrastate rate caps in the US Court of Appeals for the DC Circuit, claiming the agency lacked the adequate authority to set caps and that the rates were too low. And for the last several years, the FCC had been working to defend its actions in court.

That all changed last month, when Donald Trump pegged Ajit Pai to head the FCC. Pai and former Commissioner Mike O'Rielly had consistently voted against defending inmates from monopoly overcharging. And just days after giving a speech in which he professed his selfless dedication to closing the digital divide, Pai effectively decided to pull the rug out from underneath FCC Deputy General Counsel David Gossett, who had been defending the FCC's action in court. In a brief filed by Gossett last week (pdf), he notes that he was ordered to no longer defend the FCC's intrastate calling cap:

"As a result of these changes in membership, the two Commissioners who dissented from the Order under review—on the grounds that, in specific respects, it exceeds the agency’s lawful authority—now comprise a majority of the Commission," Gossett wrote. Gossett is thus no longer authorized to defend the FCC's previous contention that it "has the authority to cap intrastate rates for inmate calling services" and cannot defend the FCC's assertion that it "lawfully considered industry-wide averages in setting the rate caps contained in the Order," he wrote."

Despite Pai suddenly undermining the agency's own lawyers, all is not lost quite yet:

"Gossett said he will continue to defend other parts of the commission's October 2015 order, which also lowered the price of interstate calls, those that cross state lines. Despite the FCC's various losses, a 2013 decision to set interim rate caps of 21¢ to 25¢ per minute for interstate calls has survived court challenges...The FCC's decision to stop defending the full order hurts the case for maintaining rate caps on intrastate calls in which both parties are in the same state, but it doesn't completely kill the case. The FCC is ceding 10 minutes of its allotted argument time to attorney Andrew Schwartzman, who is defending the rate caps on behalf of prisoners' rights groups."

It's worth reiterating that voice services these days cost very little to actually provide. Also keep in mind that Securus and other such companies are part of a dangerously cozy and captive market, where prisons get paid upwards of $460 million annually in "concession fees" (read: kickbacks) to score exclusive, lucrative prison contracts. In this comically absurd environment, the service pricing and quality are just about what you'd expect. Government oversight of these businesses have been virtually non-existent, in part thanks to accusations that these companies have allowed some law enforcement to monitor what should be privileged attorney client communications.

The fact that making it easier to rip off inmates was new boss Pai's first move in office should tell you plenty about just how far his dedication to "closing the digital divide" is going to go. That's before you realize that Pai's other early actions have involved preventing 9 pre-approved ISPs from helping the poor, killing an FCC plan to bring competition and cheaper rates to the cable box, and killing all FCC Net neutrality enforcement moving forward. With friends like these...

Filed Under: ajit pai, fcc, ics, inmate calling service, phone calls, prisoners
Companies: global tel*link, securus

New FCC Boss Ajit Pai Insists He's All About Helping The Poor, Gets Right To Work Harming Them Instead

from the watch-what-I-do,-not-what-I-say dept

Just last week, new FCC boss Ajit Pai made a speech in front of FCC staffers breathlessly professing his dedication (pdf) to consumers, innovation, and closing the digital divide. In a post over at Medium, the former Verizon lawyer again insisted that closing the digital divide would be the defining theme of his tenure as FCC Boss:

"I look forward to working with my fellow Commissioners on this aggressive agenda to connect Americans on the wrong side of the digital divide, to allow broadcasters to innovate and better serve viewers, and to reduce unnecessary regulations. And Groundhog Day or not, you can expect that I will return to these themes over and over and over again."

So, how is Pai doing on his promise after just a few weeks in office? Let's see. In just the last few weeks, Pai:

Began undermining FCC attempts to prevent prison phone monopolies from dramatically overcharging inmate families for phone calls.

Dropped all FCC investigations into whether or not zero rating violates net neutrality and drives up rates for streaming video consumers -- the opening salvo of what's believed to be the rollback of all net neutrality protections.

Killed an attempt by the FCC to bring competition to the cable box market, which would have threatened $20 billion in cable industry rental fee revenues.

Not to be outdone, Pai also actually made it harder for poor people to get discounted broadband by unnecessarily disqualifiying nine, already approved small ISPs (Spot On, Boomerang Wireless, KonaTel, FreedomPop, AR Designs, Kajeet, Liberty, Northland Cable, and Wabash Independent Networks) from participating in the FCC's Lifeline program. That program, founded by Reagan and expanded by Bush, doles out $9.25 per low-income household for them to use on phone or broadband service. Last year the FCC expanded it marginally so low-income homes could use that money to pay for stand-alone broadband, cellular, or fixed-line phone service (Pai, digital divide closer extraordinaire, voted down that effort).

The FCC's rushed-through late Friday order makes a big deal out of the amount of fraud occurring in the Lifeline program, ignoring that under Wheeler's watch, the agency managed to finally get a handle on much of it. Like that time AT&T was caught falsely inflating its Lifeline subscriber rolls to keep getting subsidies it didn't deserve (punishment for which, again, Pai himself voted down). But there's no evidence the nine ISPs targeted by Pai were involved in any fraudulent behavior whatsoever. And when Jon Brodkin at Ars Technica tried several times to get the FCC to clarify why these ISPs were singled out, the agency refused:

"Pai's FCC says the commission wants to implement new measures to combat fraud and waste in the Lifeline program and that revoking the Lifeline designations will provide additional time to achieve that. But none of the nine providers was accused of fraud, and the FCC already has the power to investigate and punish any provider that defrauds the program. Pai could have let these companies continue selling subsidized broadband to poor people as long as they committed no fraud, but he chose not to."

Unsurprisingly, the people out in the field actually trying to get broadband to the poor were greatly annoyed by Pai's "help." Kajeet's founder Daniel Neal finds Pai's particular version of assistance a little bit curious when asked about it by the Los Angeles Times:

"I’m most concerned about the children we serve,” Kajeet founder Daniel Neal said. “We partner with school districts — 41 states and the District of Columbia — to provide educational broadband so that poor kids can do their homework."

Consumer advocacy groups like Public Knowledge were also quick to point out how Pai broke the sound barrier in rushing to immediately undermine his own agency's promises:

"The most obvious fact in our society is that high-speed Internet is astronomically expensive for the middle class and down,” said Gene Kimmelman, president of the consumer advocacy group Public Knowledge. “So in any way limiting the Lifeline program, at this moment in time, exacerbates the digital divide. It doesn’t address it in any positive way."

So yes, when your definition of "helping the poor" includes ensuring cable boxes stay expensive and closed, allowing duopolies to abuse net neutrality and drive up service costs, protecting prison monopoly telcos that have price-gouged families for years, and preventing smaller ISPs from actually helping the poor you profess to love -- you have to wonder what it looks like when Pai actively wants to harm something.

Filed Under: ajit pai, digital divide, fcc, poor, subsidized broadband

Comcast, Verizon, T-Mobile & AT&T Issue Breathless Love Letter To Privacy With One Hand, Lobby To Kill All Privacy Protections With The Other

from the trust-us,-we're-Comcast dept

As we've been noting, broadband providers have wasted no time pressuring Congress to kill the FCC's new broadband privacy rules. These rules, passed last year, simply require that ISPs are transparent about what data they're collecting and who they're selling it to, while requiring they provide working opt-out tools. But the rules went further in requiring that broadband customers opt in to more sensitive data collection, including financial data. Given an informed, empowered consumer means less advertising revenue, ISPs quickly went to work throwing a monumental hissy fit.

This week, a coalition of broadband providers including Comcast, AT&T, T-Mobile and Verizon issued a breathless letter professing their absolute dedication to consumer privacy, apparently hoping that consumers haven't noticed they're simultaneously trying to kill the first meaningful broadband-specific privacy protections users have enjoyed in the history of the technology. As you might expect, the least-liked industry in America spends a notable part of the missive patting itself on the back for its selfless dedication to user privacy:

"ISPs understand the trust our customers place in us, and we are committed to protecting our customers’ privacy and safeguarding their information. For 20 years, we have implemented policies and practices that are consistent with the FTC’s widely respected and effective privacy framework and other federal and state privacy laws.

...We understand the importance of maintaining our customers’ trust. That is why we will continue to provide consumer privacy protections, while at the same time meeting consumers’ expectations for innovative new product solutions to enhance their online experiences.

Yeah, like that time Verizon was caught modifying user data packets to covertly track customers all around the internet without A. telling anybody or B. providing working opt out tools. Or that time AT&T began charging its broadband customers a steep premium just to protect their own privacy (something Comcast has shown repeated interest in as well). Or that time Cable One made it clear it wants to use user financial data to deliver worse customer service to low-income customers with bad credit. You can just feel the broadband industry's dedication to protecting your private data pulsing in the very wind itself!

In short the industry's trying to argue that the weaker, inconsistent privacy protections of the FTC are enough to protect consumers from wrongdoing. But as you saw in the last paragraph, the FTC (already overloaded and in constant risk of having its authority eroded) rarely has the time or interest in actually enforcing these rules anyway. The FCC's new rules were created specifically in response to these behaviors, and because the barely-competitive broadband industry creates some unique consumer protection challenges other industries and companies (like Google or Facebook, where users are free to use other services) don't face.

This idea that Congress will be somehow "streamlining" the FCC and eliminating duplicate authority will be the narrative du jour for most of this year. But in an outgoing interview with former FCC boss Tom Wheeler this week, the former dingo makes a point that's important for consumers and telecom journalists alike to understand:

"In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?

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.

To try and ease concerns among those that, well, have actually paid attention to the industry's bad behavior on this front, giant ISPs like Verizon and Comcast instead proposed a voluntary group of self-regulatory principles governing transparency, data security, notifications in the wake of hack attacks, and "consumer choice." The industry's promise to respect user privacy choices are framed as such:

"ISPs will continue to give broadband customers easy-to-understand privacy choices based on the sensitivity of their personal data and how it will be used or disclosed, consistent with the FTC’s privacy framework. In particular, ISPs will continue to: (i) follow the FTC’s guidance regarding opt-in consent for the use and sharing of sensitive information as defined by the FTC; (ii) offer an opt-out choice to use non-sensitive customer information for personalized third-party marketing; and (iii) rely on implied consent to use customer information in activities like service fulfillment and support, fraud prevention, market research, product development, network management and security, compliance with law, and first-party marketing."

In short, we're going to just keep doing what we're already doing, while hiding behind overlong privacy policies, "implied consent," and loopholes that broadly declare most data "non-sensitive" -- all while obfuscating the fact the FTC privacy enforcement hasn't worked. If FTC enforcement alone for broadband privacy actually worked, Verizon wouldn't have been allowed to covertly track consumers around the internet for two years before security researchers actually noticed it. If FTC oversight actually worked on this subject, AT&T wouldn't have been allowed to charge users up to nearly $800 more per month in some instances just to protect their own data.

And having a weak (and likely soon to be weaker) cop on the beat is particularly important to companies like Verizon moving forward, given it has been on a tear gobbling up failed internet brands like AOL and Yahoo as part of its master plan to shift its focus from broadband toward slinging video ads at Millennials (apparently not very well). Verizon and friends have tried to argue that the FCC's privacy rules created "asymmetrical regulation," but they consistently ignore that the lack of broadband competition creates risks you don't see in the markets inhabited by the companies Verizon's envious of (Facebook, Google).

Here's the thing. The broadband industry had it pretty good for most of the last decade in terms of doing whatever it wanted with consumer data. Regulators, regardless of party, generally looked the other way as these companies hoovered up every shred of location and browsing data -- using everything from DNS tracking to deep packet inspection -- then relied on FTC regulatory loopholes to sell this data to pretty much everybody. Only once the broadband industry began pushing its god-damned luck with incredibly stupid ideas (with ideas like charging users for their own privacy) did the FCC even feel the need to get involved.

So in short, if the broadband industry's looking for someone to blame for the FCC's relatively modest privacy rules, it should spend some time looking in the mirror. Granted that may all be a moot point now that we've decided to put a former Verizon lawyer with a disdain for facts in charge of regulating the broadband sector. Back in 2008 Verizon claimed that consumer privacy protections weren't necessary because "public shame" would keep the company honest. There's every indication we're about to truly put that theory to the test.

Filed Under: broadband, fcc, isps, privacy
Companies: at&t, comcast, t-mobile, verizon

AT&T's Downright Giddy About Weaker FCC Oversight And The Looming Death Of Net Neutrality

from the who-doesn't-like-zero-accountability? dept

AT&T is pretty damn excited about former Verizon lawyer Ajit Pai, Trump's new industry-cozy pick to head the FCC. That's in large part because Pai has made it clear his goal isn't just to gut net neutrality, new broadband privacy rules and most of the other consumer protections pushed by former FCC boss and and former dingo Tom Wheeler -- but to help dismantle the agency's role as consumer watchdog entirely. Of course, AT&T put things a little differently in a blog post applauding the selection:

"Today, on his first official day in office, President Trump designated Ajit Pai as the new FCC Chairman. No one is more prepared to reframe the agency to address the needs of this rapidly changing marketplace. Chairman Pai will work with his fellow Commissioners to quickly and decisively put back in place the commonsense regulatory framework necessary to support the President’s agenda for job creation, innovation and investment."

Anybody who actually believes this has simply not been paying attention to Pai's tenure at the agency, during which he consistently refused to stand up to large ISPs in absolutely any capacity. That includes downvotes on numerous attempts to hold AT&T accountable for outright fraud, whether it was the time AT&T was caught actively making its bills more confusing to help make it easier for crammers and scammers, the time AT&T was caught ripping off a program designed to help low income families, or that time AT&T was busted for turning a blind eye to drug dealers running directory assistance scams on AT&T customers.

So sure. AT&T's pretty excited about the fact it's potentially facing little to no accountability for what's a well-documented history of anti-competitive behavior and fraudulent activity. But it's also just thrilled by the idea that net neutrality rules could soon be sent to the digital dustbin of history, allowing AT&T to, in its own words, "go hard" on this whole zero rating thing:

"With a new operator-friendly FCC chairman in place, AT&T CEO Randall Stephenson said to expect the operator to “go hard” with its controversial “zero rating” strategy for its virtual MVPD service, DirecTV Now.

“Our customers are loving this value proposition,” Stephenson said during AT&T’s fourth quarter earnings call Wednesday. “We have more than 200,000 DirecTV Now customers on it, the service is not counting against their data cap, and that’s a big deal."

Except the "value proposition" AT&T's presenting isn't much of a value at all. Sure, some consumers labor under the illusion they're getting "free stuff" because AT&T's graciously letting them stream AT&T's content without running afoul of its arbitrary usage caps. But in reality, AT&T's preferential treatment of its own content simply repositions the cost burden to competing services while distorting the overall competitive market. You know, like the outgoing FCC told AT&T when it sheepishly and belatedly told the company it was violating net neutrality and acting anticompetitively just a few weeks and a universe ago.

Moving forward, the name of the game for AT&T will be to play kissy face with the new administration in the hopes of blind, blanket deregulation, some lovely tax cuts, additional unaccountable subsidies (these telcos have received billions over the years for networks either barely or half-deployed), and approval for the company's $100 billion acquisition of Time Warner:

"I got to tell you, I was impressed,” Stephenson said (after meeting Donald Trump). “It was obvious I was meeting with a CEO. He has a very clear agenda—tax reform and regulatory reform. I can tell you that he’s focused on these things. And I left with a degree of optimism that this could be pulled off this year."

Describing himself as a “supply-side guy,” Stephenson added that “If you saw tax rates move to 20-25%, we know what we would do. We would step up our investment rate."

In regards to deregulation, he added, “Nobody thinks that regulations should go away. We all believe the customer needs protection. But the problem is that we’ve had regulation that’s unpredictable, and it’s interfering with how we’re designing products, how we enter markets."

AT&T's a master in promising broadband deployment it never actually delivers in exchange for regulatory favors and government handouts, and has been doing it for decades without much fact-checking from the media. AT&T's also incredibly good at bullshitting the press and public into falsely believing that massive telecom megamergers actually create jobs, despite thirty years of documentable history proving the exact opposite.

So despite Trump's campaign-trail promise to block AT&T's latest megamerger (largely believed to be little more than pouting over negative CNN coverage), there's an incredible opportunity here to field a merger sales pitch bullshit supernova -- the scope and scale of which we've never seen before.

Filed Under: ajit pai, fcc, net neutrality, oversight, privacy, randall stephenson, zero rating
Companies: at&t

Cable's Congressional Allies Quickly Urge New FCC Boss To Kill Cable Box Competition Plan

from the fighting-competition-for-the-people dept

Last year, the FCC unveiled a new plan that would require cable operators make their content available via app for third-party cable boxes and other streaming hardware. The goal was to bring a little added competition and openness to the clunky old cable box. But because the FCC's plan would have not only eroded the cable industry's walled-garden control over content -- but $20 billion in annual cable box rental fees -- the cable industry, broadcasters, Congressional allies and even the US Copyright Office got right to work lying about the plan -- repeatedly.

Via an absolute sound wall of disinformation, these collective allies claimed that the FCC's plan would violate copyright (false), confuse consumers (nope), harm minorties (not true), result in skyrocketing piracy (well, no), hurt puppies, and tear a giant hole in the time-space continuum. With these claims popping up in hundreds of newspaper op-ed sections and websites nationwide, the FCC's plan soon ran into some stiff headwinds, with even some of the initial FCC supporters of the plan backing away from it. It was, frankly, one of the most effective lobbying and disinformation campaigns the cable industry has ever fielded.

With the plan on life support, cable industry Congressional allies are now demanding the plan be formally put out of its misery. In a letter sent to new, ultra-industry friendly FCC boss Ajit Pai (pdf), Energy and Commerce Committee Chairman Greg Walden, Communications and Technology Subcommittee Chairman Marsha Blackburn, and Energy and Commerce Committee Vice Chairman Joe Barton urged Pai to close the docket on the set-top box proceeding.

The letter unsurprisingly mirrors most of the falsehoods used by the cable industry to derail the plan, including the idea that bringing competition to the cable box would somehow hamper the cable industry's incredible knack for innovation:

"The regulatory overhang of the set-top box regulation has cast a shadow over investment and innovation in traditional video programming delivery. [W]e urge you to close the proceeding and permit the industry to innovate and serve consumers free from the restrictions of a government-chosen platform."

Of course the whole point of the FCC's plan was to avoid "chosen platforms" entirely, giving consumers the ability to view existing cable content on any device. The letter then proceeds to stroll casually through all of the lies the cable industry has been spreading about the plan for most of the last year, including claims that cable box competition would harm minorities, would harm copyright, and result in nobody making decent television programming ever again:

"The FCC's proposal remains an unnecessary regulatory threat to the content creation and distribution industries. Content creators have argued that the proposed set-top box pan undermined their ability to protect copyrights and contracts. Without a clear indication that the Commission rejects this current proposal, content creators will be hesitant to invest in high-quality video programs. Minority programming creators, in particular, have argued that the Commission's proposal would rob them of audiences and the benefits of hard-negotiated contracts, ultimately limiting the availability of diverse programming to viewers."

That is, once again, all nonsense. This has always been about control, not copyright. The FCC's plan kept all the same copyright protection and licensing contracts intact. And providing consumers access to more content viewing options over less expensive and more open hardware would have only helped minorities and consumers. Meanwhile the claim that art creation will cease to occur completely should ring a few memory bells for those familiar with the recording industry's long-standing myopic frontal assault on natural market evolution.

For the record I never thought the cable box plan was the best use of the agency's time. To me, it seemed like streaming alternatives would force cable to adapt anyway, even if it would have probably taken half-a-decade longer without this FCC nudge. Instead, I thought the FCC would have been better served spending its regulatory calories on the real problem facing consumers and the streaming sector: the lack of broadband competition, and the resulting anti-competitive shenanigans this lack of competition helps cement -- from net neutrality violations to arbitrary and unnecessary broadband usage caps.

Still, the government's willful participation in a massive disinformation and lobbying campaign whose sole function was to protect the cable industry revenues from competition is no less disgusting. Particularly the involvement of the US Copyright Office, and the failure of media outlets to clearly highlight the cable industry financial tethers obviously affixed to countless op-eds and media missives aimed at undermining what really was just an attempt to bring a little competition to a monopolized hardware market.

Given that the new FCC boss is a former Verizon lawyer with a long, proud history of supporting incumbent ISPs and giant cable providers in absolutely everything -- it shouldn't be long before the FCC's cable box plan is finally put out of its misery. Following not-too-far behind should be the FCC's new broadband privacy rules, net neutrality, and, if Trump's advisors mean what they say, the FCC's role as a consumer watchdog itself. You know, to protect minorities, the children, and innovation.

Filed Under: competition, copyright, exaggerations, fcc, set top boxes

Outgoing FCC Boss Reminds Trump Supporters That Net Neutrality Is Good For Them, Too

from the burning-your-own-house-down dept

We've repeatedly noted how the idea of a healthy and open internet, free from the meddling of incumbent giants like Comcast, is a good thing. We've also noted that until we bring some real competition to bear on the broadband sector, the FCC's inconsistent protection is about the only thing separating you from a hearty "servicing" from Comcast corporation (whether that's usage caps or abysmal service). As such, the nation's net neutrality rules (which are really quite basic and if anything didn't go far enough) have broad, bipartisan support, and holding Comcast accountable is a bipartisan, very popular idea.

And while Trump's Presidential campaign endlessly promised Trump would focus on bringing power back to the people, Trump's new FCC boss Ajit Pai -- a former Verizon lawyer -- effectively represents the complete opposite of that. He's yet to seriously stand up to Comcast or any other ISP, adores media consolidation, wants to kill net neutrality, is incapable of admitting the broadband market lacks competition, and has promised to dismantle the FCC's consumer watchdog functions solely at AT&T, Comcast, Verizon and Charter's behest.

On his way out of office, former FCC boss Tom Wheeler had a message for Trump supporters: you need net neutrality protections and healthy broadband competition too.

"The Trump administration campaigned that they are the voice of the forgotten," Wheeler said in a phone interview with Ars yesterday. "Well you know, the half-dozen major carriers [lobbying against FCC regulations] are hardly forgotten."

The people who are forgotten are the "two-thirds of consumers in America who have one or fewer broadband choices," Wheeler said. "Where are those choices most limited? In the areas where Donald Trump got the strongest response, in rural areas, outside of major cities. If indeed this is an administration that is speaking for those that feel disenfranchised, that representation has to start with saying, 'we need to make sure you have a fast, fair, and open Internet because otherwise you will not be able to connect to the 21st century.'"

In many of these states, convincing people to vote against their own best interests has become an art form. Like in Tennessee, where Representative Marsha Blackburn has allowed companies like Comcast to write horrible laws protecting giant corporations from public accountability (the end result for the consumer should be obvious). Again: improving broadband networks shouldn't be partisan. Ensuring that these networks remain healthy and open shouldn't be partisan. Keeping Comcast from destroying level competitive playing fields should not be partisan. Yet here we are.

For his part, Wheeler responded to indications that the incoming administration intends to kill net neutrality and neuter the FCC with sadness and alarm:

"I think it would be tragic," Wheeler said of taking away the FCC's competition and consumer protection authority. "This is tragic for the American consumer and the competitive marketplace."

"We’re talking about a handful of companies who are lobbying for their own self-interest, and trying to say to the new commission, 'you need to listen to us, not to consumers, not to a competitive marketplace, not to those who could be affected by a network where we act as gatekeepers,'" Wheeler said. "And if they are successful, that will put in jeopardy tens of thousands of other companies that rely on open networks and millions of consumers."

Historically, most FCC bosses paid empty lip service to the competition problem in the broadband sector. Many, like former FCC boss turned top cable lobbyist Michael Powell, went comically out of their way to pretend the market was perfectly healthy. While his solutions were sometimes imperfect, Wheeler was at least capable of admitting that the core issue in the telecom sector is a lack of competition. A lack of competition not only in the last mile, but in the very cable boxes and closed hardware at the heart of the industry's control.

In contrast, Pai's entire platform rests on the idea that the real problem in the broadband sector is that government has been too hard on companies like Comcast and AT&T, and that these companies need less oversight than ever before. Of course, that kind of thinking is what helped create the Comcast and the pricey, annoying broadband and cable sector most consumers know and love today. Believing that dismantling the only government agency to stand up to Comcast this decade is going to somehow fix everything is precisely the kind of thinking that gave us Comcast in the first place.

Filed Under: broadband, competition, fcc, net neutrality, tom wheeler