Report: President Trump Picks Former Verizon Lawyer Ajit Pai To Head FCC

from the populism-schmopulism dept

As many expected, Donald Trump has chosen former Verizon lawyer and current FCC Commissioner Ajit Pai to head the FCC, according to a report by Politico. According to two anonymous insiders "familiar with the decision," Pai, who met with Trump on Monday, should be formally announced as FCC boss in short order. Pai recently proclaimed that net neutrality's "days are numbered" under Trump, while stating that the reformed FCC would be taking a "weed whacker" to "unnecessary regulations" like the FCC's net neutrality rules and its new consumer broadband privacy protections.

Politico rather soft sells the controversy that Pai will represent to those who don't think technology policy should be dictated by Verizon, AT&T, Comcast and Charter Communications:

"Pai is already a familiar name in tech and telecom policy debates. He’s a fierce and vocal critic of many regulations passed by the commission's Democratic majority, including the 2015 net neutrality rules that require internet service providers to treat all web traffic equally and are opposed by the major broadband companies."

Let's be clear here. Pai has supported the incumbent duopoly providers on nearly every issue of substance. He has vilified net neutrality to an often-comic degree, falsely claiming the rules encouraged dictators in North Korea and Iran and led to a massive slowdown in industry investment. He has consistently refused to even admit the U.S. broadband market has a competition problem. He's made it abundantly clear he wants to eliminate every FCC consumer protection function, and, alongside fellow Commissioner Mike O'Rielly, has even repeatedly voted down holding AT&T accountable for outright fraud.

If you're looking for somebody who will rubber stamp every Comcast request shoveled in his general direction, Pai is certainly your man. If you're looking for an FCC leader who's going to care about consumer issues or the plight of the startup or small business in a word dominated by massive, ever-consolidating telecom conglomerates, you're about to get a master class in disappointment. The irony, of course, is that Pai is about as far from the "populist" rhetoric President Trump leaned on to get elected as one can get:

Yes, nothing quite says "man of the people" like a former Verizon lawyer who has fought tooth and nail against every single effort to hold large ISPs accountable to the public. On any given day, if the wind is right and with enough pressure, Pai may just be convinced to occasionally do the right thing. But as the leader of an agency tasked with keeping Comcast from viciously savaging both consumers and the competition, it's not really physically possible to make a more controversial and uninspired selection.

Filed Under: ajit pai, broadband, fcc, net neutrality, privacy
Companies: at&t, comcast, verizon

Trump's Plan Is To Gut All FCC Consumer Protection Powers

from the utterly-Comcastic dept

Trump's telecom advisors have made it abundantly clear the incoming administration intends to gut net neutrality, roll back most consumer broadband protections, and defund and defang the FCC as a broadband consumer watchdog. While deregulation works in some sectors, history makes it abundantly clear that blindly deregulating the broken telecom market only makes the problem worse. Just ask Michael Powell, the former deregulatory-focused FCC boss turned top cable lobbyist, whose blanket deregulatory tenure at the agency helped forge the "Comcast experience" most modern consumers enjoy today.

It shouldn't be all that surprising then that leaked details on the incoming FCC's transition plan confirms that gutting of the FCC as consumer watchdog is precisely what Trump's team has in mind. Of his advisory team can't just call this spade a spade, given consumers would realize an unchecked Comcast, AT&T, Charter and Verizon spells significant trouble for their wallets... and peace of mind. As such, Trump's advisors intend to dress up what they have planned as an act of ultra-efficiency and reform:

"That approach would be to restructure FCC bureaus to better reflect the convergence of the digital age as a first step, and, eventually, move functions deemed "duplicative," like, say, competition and consumer protection, to other agencies, particularly the Federal Trade Commission.

While some have described the plan as one to eliminate the FCC, and certainly many if not most of its functions could be reapportioned, landing team members Jeff Eisenach and Rosyln Layton have argued that what remains would be "a more coherent and streamlined" agency that "would more effectively serve the goals of consumers, competitors, and Congress."

It's worth noting that it's not "some" people that are saying the goal is to neuter the FCC -- that's what Trump's own advisors and most of the GOP are saying. And sure, the FCC will be more "efficient" in the way that a car stripped and sold off for parts needs less maintenance and fewer oil changes, but the pretense that this has anything to do with helping consumers should be utterly transparent to anybody familiar with America's pay-to-play legislature and the kind of "dollar per hollar" industry-tied think tankers that currently have Trump's ear.

In telecom you'll very often see ISP lobbyists and executives urging that the FCC's consumer protection duties be offloaded entirely to the FTC. That's because they know full well the FTC is already under-staffed, under-funded, and ill-equipped to pick up this additional workload, and most consumer issues would be guaranteed to fall through the cracks. The goal isn't more efficient regulation and better, more streamlined regulators: the goal is no oversight whatsoever of some of the least competitive companies in America and one of the most loathed industries in America. All else is pretense.

Of course we could just ask real consumer advocates like Public Knowledge lawyer Harold Feld. Feld has spent the lion's share of his life defending consumers from companies like Comcast, and tells Ars Technica that Trump's plan is effectively an all out war on telecom consumer protections:

"Harold Feld, senior VP of consumer advocacy group Public Knowledge, called this plan "a declaration of war on the most basic principles of universal service, consumer protection, competition, and public safety that have been the bipartisan core of the Communications Act for the last 80+ years." Feld argued that this proposal would "poison the well for any serious effort to update the Communications Act." Feld also worries about the impact on rural areas, which are given special protections in the Communications Act, he told Ars today.

Feld said that the FCC itself has "considerable latitude" to limit its own enforcement actions "and to use rulemakings and forbearances to strip itself of authority," but it still has to meet the requirements of the federal Administrative Procedures Act. Moreover, the proposal to shift FCC competition and consumer protection authority to agencies such as the FTC would require the writing of extremely complicated legislation in Congress, he said."

But Congressional legislation is just what the GOP is planning. The GOP has made it repeatedly clear they intend to table a Communications Act rewrite this year that further erodes regulatory authority over the nation's largest cable TV and broadband providers. It's very likely this new bill will not only severely curtail the FCC, but will roll back the agency's Title II reclassification of ISPs -- as well as net neutrality and new broadband privacy rules. All under the pretense of jobs, broadband expansion, and protecting net neutrality.

Of course the way things are going, dismantling the only government agency that has dared stand up to Comcast is going to be portrayed as some kind of "populist" reform, resulting in countless millions cheering against their own best interests as their rights burn down around them. But as consumer TV and broadband bills skyrocket, net neutrality is gutted, consumer privacy concerns get thrown in the toilet, and unchecked industry duopolists truly begin to run amok -- misdirection and bullshit will only go so far in preventing consumers from realizing precisely who'll be to blame.

Filed Under: consumer protection, donald trump, fcc, ftc, privacy

AT&T Intends To Dodge FCC Review Of Time Warner Mega-Merger, But Trump Remains A Wild Card

from the synergies-out-the-wazoo dept

AT&T continues to try and sell regulators on the company's $100 billion acquisition of Time Warner, making all kinds of promises (few actually being true). Consumer advocates are highly wary of the deal, arguing that a more powerful AT&T (with its rich history of anti-competitive behavior and outright fraud) would be in a perfect position to hinder streaming competitors from licensing the content they need to compete. That's of course when AT&T isn't busy giving its own DirecTV Now service an unfair market advantage via zero rating and usage caps.

But AT&T's path to merger completion just got a bit easier. Outlets had been noting for some time that an FCC review would only be triggered if AT&T attempted a transfer of the two dozen or so Time Warner satellite licenses or the station license for WPCH-TV in Atlanta. Avoid those, and you avoid even a possibility that the FCC could block the deal or saddle it with conditions. And that's precisely what AT&T appears intent on doing according to a new regulatory filing with the SEC:

“Time Warner has conducted a review of all licenses that it holds that are granted by the FCC,” says the company. “While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction.”

If, as AT&T contends, these licenses don’t need to be transferred — or if Time Warner divests itself of the licenses before merging — the companies seem to believe the FCC has no authority to intervene and review the merger.

The deal would still need approval from the Justice Department, but Donald Trump remains a bit of a wild card in AT&T's equation. Trump promised to block the deal in the lead up to the election, claiming "it's too much concentration of power in the hands of too few." But Trump's telecom transition team consists largely of folks interested in defunding and defanging regulators. These aren't exactly the kind of folks who'll be supporting government blockades of (or restrictive conditions attached to) telecom sector mega mergers. Neither is the most likely top FCC choice, Ajit Pai.

But there's a wrinkle. Trump may still block the deal, just for reasons other than what he claimed on the campaign trail. A recent New York Magazine column on Megyn Kelly contained an interesting tidbit, noting that Trump has turned to News Corporation boss Rupert Murdoch for tips on choosing the next FCC boss. Murdoch's also urging Trump to block the deal as a favor to Murdoch and his obvious competitive interests:

If Fox News’ politics ultimately solidify as more pro-Trump than they were during the campaign, that might be to the benefit of Murdoch’s business interests. According to a well-placed source, Trump has asked Murdoch to submit names for FCC Chairman. Murdoch, another source said, also wants conditions put on the AT&T-Time Warner merger, and he could lobby Trump to make that happen.

In other words (assuming this report is correct), Trump could block the deal, but only to benefit Murdoch's own news empire, and not because it would protect consumers, smaller competitors, or the media and streaming markets. There's another possible factor as well. Bloomberg recently reported that Trump was opposed to the deal, but mainly because he's still bitter about CNN's coverage of his campaign -- and CNN is, of course, part of Time Warner. So there are still more "personal" reasons why Trump may want to block the merger. That's going to likely cause friction among Trump's own telecom sector and tech appointees, who have made it abundantly clear they don't want regulators doing much of anything outside of nodding dumbly and looking busy.

Regardless, AT&T remains publicly optimistic, insisting there's just no way regulators would dare block its latest megamerger; it's simply too fantastic:

"In the modern history of the media and the internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment," AT&T executive VP and general counsel David McAtee said of the transaction.

Filed Under: doj, donald trump, fcc, ftc, merger, review, spectrum
Companies: at&t, time warner

ISPs Get Right To Work Pushing For Elimination Of New FCC Broadband Privacy Rules

from the snoopvertising-supernova dept

So we've noted that killing net neutrality isn't the only goal for large ISPs in the new year. Trump's top telecom advisors have all made it abundantly clear they'd like to defang and defund the FCC as a consumer watchdog entirely, and roll back the decision to classify ISPs as common carriers under Title II. This would not only dismantle net neutrality, but it would also eliminate the relatively basic broadband privacy rules the FCC recently passed. Those rules, in short, require that ISPs not only clearly disclose what's being sold and who it's being sold to, but also require they also provide working opt-out tools.

Unsurprisingly, ISPs made quite a stink about the "draconian" nature of the rules, and sector lobbyists are getting a running head start in dismantling them. After all, informed customers with the tools to protect their own privacy could cost them billions of dollars annually. Especially since the rules require that consumers opt in to collection of more sensitive financial data.

The cable industry's largest lobbying and trade organization, the Internet & Television Association (NCTA), is urging the FCC to eliminate the rules entirely, claiming they simply weren't necessary:

"They are unnecessary, unjustified, unmoored from a cost-benefit assessment, and unlikely to advance the Commission’s stated goal of enhancing consumer privacy,” wrote the Internet & Television Association, known as NCTA."

Except if you've tracked why the rules were created, you'd know that's simply not true. The FCC acted after security researchers discovered that Verizon Wireless was modifying user data packets to track consumers around the internet, without informing them or providing working opt out tools. The FCC was also concerned that some ISPs (Comcast, AT&T) had begun exploring charging users a steep premium if they wanted to actually protect their own privacy. Similarly, the FCC acted after some ISPs claimed they'd started providing worse customer service depending on a customer's credit score.

That alone should show you two truths: one, the broadband industry's claim that it can self-regulate on privacy issues is a joke. Two, the lack of competition in the broadband space opens the door to abuses you won't see in the broader, more competitive content markets Verizon, Comcast and AT&T are interested in rushing toward. These ISPs have long tried to claim that placing additional regulatory burdens on them is unfairly "asymmetric" because Google, Facebook and friends don't face them. But Google, Facebook and friends don't operate in a competitive vacuum thanks to a generation of lobbying, dysfunction, and regulatory capture, something these ISPs would prefer we all ignore.

Like the NCTA, the industry's biggest telco lobbying organization (US Telecom), had plenty to say about the new privacy rules. In its own filing with the FCC (pdf), the group urges the FCC to "modify key elements" of the privacy rules (read: all the ones that mean anything) right after it gets done eliminating net neutrality. The organization actually tries to claim at one point that privacy protections for consumers aren't necessary because ISPs don't really know all that much about you and hey, if you really don't like it you can always encrypt your data:

"...the Order ignores the record facts when it predicates this scheme of asymmetric regulation on the premise that ISPs are nearly omniscient and have greater visibility into consumer data than any other Internet company. That premise is false, as Commissioners Pai and O’Rielly and many commenters have explained. Given the recent rise of encryption and multiple ISP connections per user, any given ISP has rapidly declining visibility into the details of consumers’ Internet usage and, in some respects, less visibility than leading social media platforms, search engines, and data brokers."

This idea that ISPs aren't actually information super vacuums has been used consistently by dollar per hollar telecom sector think tankers, and it's nonsense. As exposure of deep packet inspection and Verizon's stealthy super cookies shows, incumbent ISPs do have nearly "omniscient" awareness of everything a consumer sees, watches, hears, or does. And encryption isn't a privacy panacea; ISPs can still observe user online behavior based on overall traffic patterns and volume, unencrypted portions of communications, and the growing volume of unencrypted Internet of Things traffic. And a VPN is no guaranteed blockade to ISP snooping either, since again IoT devices won't use VPN, and ISPs can often still monitor user behavior via DNS anyway.

Large ISPs could have avoided these regulations by making sound, reasoned policy choices. Instead, they chose to hoover up every shred of data they could find and sell everything that wasn't nailed down, making consumer choice and transparency a distant afterthought. And thanks to limited competition, broadband consumers have no way of "voting with their wallet" to avoid many of these practices, which is why the FCC crafted them in the first place. You either need to fix broadband competition, or impose rules protecting consumers from the symptoms of that particular disease (net neutrality and privacy violations).

So far, there's every indication that the new, incoming FCC intends to do neither.

Filed Under: broadband, fcc, isps, net neutrality, privacy, title ii
Companies: ncta

Net Neutrality Hating, SOPA-Loving Marsha Blackburn Pegged To Chair Key Technology & Telecom Subcommittee

from the rise-to-the-level-of-your-incompetence dept

If you were to sit down and consciously select a politician that best represents the stranglehold giant telecom companies like AT&T, Verizon and Comcast have over the legislative process, you probably couldn't find a better candidate than Tennessee Representative Marsha Blackburn. From her endless assault on net neutrality, to her defense of awful state protectionist laws written by ISP lobbyists, there has never been a moment when Ms. Blackburn hasn't prioritized the rights of giant incumbent duopolists over the public she professes to serve.

Blackburn has been fairly awful on technology policy in general, from her breathless support of SOPA to her claim that fair use is just a "buzzword" obscuring our desperate need for tougher copyright laws. As such, there should be little surprise that Blackburn has been selected to head the House Energy and Commerce Committee's Subcommittee on Communications and Technology. The subcommittee tackles most of the pressing internet-related issues, with Blackburn replacing Oregon Representative Greg Walden.

Blackburn joins a growing chorus of GOP insiders who have made it a core mission to dismantle net neutrality protections, despite the fact that they have broad, bipartisan appeal among consumers. At least Blackburn has been consistent; she spearheaded the "Internet Freedom Act," which attempted to kill net neutrality by effectively codifying non-net neutrality into law and hamstringing any regulator that tried to protect it. According to Blackburn, this wasn't just because AT&T and Comcast are among her biggest campaign contributors, but because she really, truly adores "innovators":

"Once the federal government establishes a foothold into managing how Internet service providers run their networks they will essentially be deciding which content goes first, second, third, or not at all. My legislation will put the brakes on this FCC overreach and protect our innovators from these job-killing regulations."

Blackburn has also gone out of her way to defend AT&T and Comcast's efforts to pass state-level protectionist laws. These laws, passed in more than nineteen states, prevent towns and cities from improving local broadband infrastructure -- even in instances where incumbent ISPs have refused to upgrade. According to Blackburn, these competition-killing laws -- which serve solely to protect duopoly revenues -- are somehow necessary to protect "free market competition":

"After witnessing how some local governments wasted taxpayer dollars and accumulated millions in debt through poor decision making, the legislatures of states like North Carolina and Tennessee passed commonsense, bipartisan laws that protect hardworking taxpayers and maintain the fairness of free-market competition."

Needless to say, Blackburn's home state of Tennessee consistently ranks as one of the least connected states in the nation as a direct result of her hard work. More recently, Blackburn went so far as to suggest that ISPs should be forced to remove "fake news" from the internet:

"If anyone is putting fake news out there, the ISPs have the obligation to, in some way, get that off the web. And maybe it's time for these information systems to look to have some type of news editor doing some vetting on that. Whether it's the Russians, the Chinese, the Iranians or whomever. You do not want that out there because it's... because it's fake news!"

In other words, Blackburn doesn't believe in protecting a healthy and open internet, thinks letting incumbent ISPs write competition-killing protectionist law is somehow good for broadband competition, consistently complains about government overreach, and yet wants the government to force ISPs to dictate what is or isn't acceptable news, while dramatically expanding draconion and unnecessary copyright law. Clearly she's the perfect choice to lead tech policy toward the twenty-second century -- provided you like living in something akin to a poorly-written dystopian novel.

Filed Under: broadband, communications and technology subcommittee, congress, copyright, fcc, house energy and commerce committee, marsha blackburn, net neutrality

Potential New FCC Boss Blames Obama For The Washington Post's Botched Russian Utility Hacking Story

from the finger-pointin' dept

We've noted how one of Trump's top telecom advisors is Jeffrey Eisenach, a long-time Verizon consultant and aggressive opponent of net neutrality. Eisenach's one of three Trump advisors who have made it clear their top priority in the new administration will be to not only gut net neutrality, but to defang and defund the FCC as a consumer watchdog on telecom issues. Eisenach isn't just an advisor, he's also on the shortlist to be the next head of an agency he doesn't believe in.

But when Eisenach isn't busy dreaming about dismantling net neutrality, he can apparently be found writing logically incoherent op-eds over at the Wall Street Journal. In a strange little tirade posted on January 3, Eisenach quite correctly ridicules the Washington Post's recent false claim that Russians were busy hacking U.S. utilities. In short, a piece of common malware was found on one PC, and because the Washington Post couldn't be bothered to even call the company in question, the paper created a bogus narrative, based entirely on anonymous sources, that casually pushed the country closer to war.

Yeah, no biggie.

Eisenach starts off well enough, quite correctly illustrating the depth of the Washington Post's failure on the story, and how the malware was arguably run of the mill, and certainly not directly tied to the government:

"The kind of malware involved in these two intrusions is neither new nor particularly sophisticated. It is run-of-the-mill spyware that has probably been implanted on thousands of networks around the world, from home computers to those inside banks, power companies and government agencies. These bugs are freely available online, and the code found at the Democratic National Committee and the power company isn’t even the latest version. The notion that such a mundane piece of software reveals a new and ominous threat to critical infrastructure is laughable."

All true. But Eisenach's piece then takes a strange turn, in that it somehow tries to blame the Washington Post's awful reporting on... the outgoing President:

"Misleading the American people to advance a political narrative has been a hallmark of President Obama’s foreign policy. The most recent example is the administration’s attempt to conflate the hacking of the Democratic Party with potential cyberattacks on critical infrastructure...Cyberthreats pose a clear danger to national security, and building an effective defense will take a concerted effort by the Trump administration. Americans are right to be concerned. But by playing on those fears, the Obama administration is putting politics ahead of the national interest."

While the Washington Post was once again happy to quote all manner of anonymous, pearl-clutching intelligence sector insiders for its story (a bipartisan disorder for sure), Obama wasn't among them. Nor is there any indication that the Obama administration actively encouraged the Washington Post to trip over its own shoelaces and perform an epic, journalistic face-plant. Obama certainly has been no saint on cybersecurity, but to blame him for the Washington Post's dysfunction is more than a little strange, especially when the entire point of your article is to lament the senseless politicization of cybersecurity.

Someone might want to notify Eisenach that as a top advisor and potential new FCC boss, he's now the one in a position of power. If your goal is to demonstrate that partisan patty cake should be nowhere near technology and cybersecurity policy, why not demonstrate that with your actions -- instead of penning editorials that completely undermine the entire point you're trying to make?

Filed Under: cybersecurity, donald trump, fake news, fcc, hacking, jeffrey eisenach, president obama, reporting, russia

Ad Industry Wants New FCC Broadband Privacy Rules Gutted Because, Uh, Free Speech!

from the helpless-little-daisies dept

We've noted repeatedly how Trump's incoming telecom advisors have made it very clear they not only want to gut net neutrality, but defund and defang the FCC. That means rolling back all manner of other recent FCC policies, like the agency's recently approved broadband privacy rules. While ISPs and advertisers threw a collective hissy fit about the rules, they really were relatively fundamental; simply requiring that ISPs not only make it clear what's being collected and who it's being sold to, but requiring they provide working opt-out tools to broadband subscribers.

ISPs and the advertising and marketing industry are already getting a running start on rolling back these new privacy rules. In a joint filing by all of the major advertising lobbying and trade associations, the advertising industry this week was quick to submit a petition to the FCC (pdf) claiming that the new rules aren't necessary because the marketing sector already adheres to a "self-regulatory" regime that delivers all the transparency, choice and benefits that consumers could possibly handle:

"This ecosystem has functioned well for years under an enforceable self-regulatory framework developed by the Digital Advertising Alliance (“DAA”), which is broadly supported by industry and widely recognized as a highly credible and effective privacy self-regulatory program that offers consumers transparency about online data collection and a way to control the use of their online data by DAA members while allowing data-driven innovation to flourish. The DAA has been widely successful, with hundreds of companies and thousands of brands participating in the program, over 75 million unique visitors to its digital properties, reaching 35 countries and translated into 26 languages."

And while it's certainly nice that the advertising agency has translated its entirely voluntary privacy practices into so many languages, that's not really relevant to what the FCC was trying to accomplish with the rules. The FCC imposed rules specifically thanks to the lack of competition in the broadband last mile, a lack of competition that lets ISPs and advertisers impose draconian new consumer surveillance policies the consumer can't vote to avoid with their wallet. The FCC was particularly nudged to action by the discovery that Verizon and its ad partners were covertly modifying user packets to track users around the internet.

It took two years for security researchers to even discover what Verizon and its marketing partners were up to. It took another six months of heavy public shaming before Verizon was even willing to provide working opt-out tools. At no point did industry, or any of its self-regulatory apparatuses, stop and think they'd taken things a bit too far, which is why the FCC, agree or not, felt it was necessary to lend consumers a hand. The FCC was also concerned about a growing push by some ISPs to make opting out of data collection a pricey, luxury option for consumers, "self-regulatory safeguards" be damned.

At the thrust of the ad and marketing industry's formal opposition to the FCC's rules is an old favorite; the claim that protecting consumer privacy is somehow a violation of the marketing industry's free speech rights:

"The Commission did this in a manner that unreasonably exceeds its statutory mandate by restricting a substantial amount of protected free speech counter to the First Amendment, and using a process that did not allow adequate notice and comment from interested parties."

Of course, if you tracked the FCC's privacy rules comment period, or the public debate over do not track, the idea that anyone has ever silenced the marketing and advertising industry is hysterical. Most, of course, realize that the debate over consumer broadband privacy protections has absolutely nothing to do with free speech (a claim ISPs also used to fight net neutrality), and everything to do with the billions that are lost when you have empowered, informed, and engaged consumers with the tools to protect their privacy and a few sensible privacy protections at their back.

Again though, this may all be water under the broader, privacy bridge. If Trump's top three telecom advisors do what they've long said they want to do, the new FCC will look to roll back the FCC's newfound Title II authority, and by proxy both its net neutrality and privacy rules (which rely on the new classification of ISPs as common carriers). And as we've noted previously, to minimize activist backlash this will likely come in the form of a new update to the Telecom Act -- one that breathessly professes to protect net neutrality and privacy, yet is intentionally written to do the exact opposite.

Filed Under: broadband, fcc, first amendment, free speech, privacy