stories filed under: "fcc"

Trump Telecom Advisor Doesn't Think Broadband Monopolies Are Real, Wants To Dismantle The FCC

from the Comcastic dept

Mon, Nov 28th 2016 6:21am — Karl Bode

We just got done noting how despite all the hype surrounding Google Fiber and similar initiatives, the cable industry's monopoly over broadband service is growing larger than ever. Incumbent telcos don't want to upgrade their DSL customers across huge portions of their networks, effectively giving cable broadband less competition than ever. At the same time, we've noted how Trump's telecom transition team is thus far comprised of telecom sector cronies that not only can't admit the broadband market isn't competitive, but are eager to demolish all regulatory oversight of these anti-competitive carriers.

It doesn't take a whole lot of insight to see the problem with that scenario, yet here we are -- once again -- having this conversation anyway. Apparently, it's somehow hard to understand that giving incumbent ISPs control of the very agency tasked with regulating them doesn't end well for consumers, small businesses, or innovative new startups.

Jeffrey Eisenach, Trump's FCC transition team leader, ISP-funded "think tanker" and a candidate for the top FCC spot, thinks net neutrality and the FCC need dismantling. Former Sprint lobbyist Mark Jamison, also tasked with leading Trump's telecom team, also thinks net neutrality rules should be walked back and the FCC defanged. Jamison apparently doesn't believe telecom monopolies are real and thinks the FCC serves no purpose. In an October blog post, Jamison makes his thoughts clear:

"Most of the original motivations for having an FCC have gone away. Telecommunications network providers and ISPs are rarely, if ever, monopolies. If there are instances where there are monopolies, it would seem overkill to have an entire federal agency dedicated to ex ante regulation of their services. A well-functioning Federal Trade Commission (FTC), in conjunction with state authorities, can handle consumer protection and anticompetitive conduct issues."

Again, so we're clear, that's a lobbyist tasked with deciding the future of the FCC declaring that telecom monopolies not only aren't real, but also that the FCC technically shouldn't exist. Most of our readers are well aware of the fact that most broadband markets suffer from a duopoly logjam, where their choices are overpriced cable broadband service, or DSL services that offer circa 2003 speeds and 2016 prices. And again, as we noted recently, cable's monopoly is only growing as companies like AT&T and Verizon give up on fixed line broadband and shift their attention to higher-growth advertising and content markets.

To deny these realities borders on outright delusion. But time and time again, we've seen how incumbent ISPs (and the loyal sycophants they use to bend government to their will) are utterly incapable of even admitting the U.S. broadband market isn't competitive. If you can't admit this lack of competition, you're certainly not going to be able to understand the steps necessary to fixing it. Gutting most regulatory oversight, demolishing net neutrality, and dismantling the FCC's new privacy rules won't somehow magically result in telecom utopia.

This is a line of fantasy the incumbent ISPs (and their various, well-funded policy tendrils) have been mainlining into the public discourse for the better part of the last twenty years despite a parade of evidence to the contrary. A major reason Comcast and AT&T are abysmal companies isn't because the FCC tries to protect consumers. It's because gentlemen just like Eisenach and Jamison spent the lion's share of the last twenty years denying there's a problem while actively trying to prevent the agency from doing its job. They then clap and dance like school children when the dysfunction they built by hand suddenly manifests.

None of this is to say the FCC doesn't do stupid things, shouldn't and couldn't be reformed, or in many instances pared back. And Jamison's certainly correct that partisan patty cake is a problem at the agency that can and does result in inconsistent progress (even though partisan infighting is often intentionally used by companies to sow division on non-partisan issues like net neutrality). But reform is a far cry from what Jamison is proposing. What Jamison wants is to dismantle the FCC completely and shovel any outstanding responsibilities to the states:

"What would we do without an FCC? Any legitimate universal service concerns could be handled by others: States can subsidize network access as they see fit, the Department of Health and Human Services can incorporate telecommunications and internet into its assistance to low-income households, and the FTC and states can handle consumer protection and ex post regulation."

Right, but if you know anything about the telecom market at all, you know that state legislatures are beholden to incumbent broadband providers to an even more comic degree. Incumbent ISPs, with the help of groups like ALEC and lobbyists like Jamison, quite literally write state telecom law. That's why twenty states have passed laws, written by ISP lawyers, hamstringing their citizens' ability to build their own networks or strike public/private partnerships in case of market failure. This corruption is why AT&T is able to try and sneak competition-killing measures into unrelated traffic laws. That's why states like West Virginia are an absolute telecom shit show dominated by broken monopolies Jamison pretends don't exist.

Many Trump supporters will try to point out that current FCC boss Tom Wheeler was a former wireless and cable lobbyist we all expected nothing from, but were pleasantly surprised by. But Wheeler was an enigma, and he isn't like Jamison or Eisenach. His lobbying for the wireless and cable sectors occurred when both industries were pesky upstarts. His documented positions were also vastly less extreme. He wasn't stumbling about proclaiming that the agency he was about to be employed by shouldn't exist, or denying fundamental realities like the existence of telecom monopolies. And Jamison and Eisenach are on record criticizing nearly all of Wheeler's policies, especially net neutrality.

Consumers tired of awful broadband should be bored to tears by the parade of ISP lobbyists, think tankers, lobbyists, consultants and other mouthpieces who endlessly insist government telecom oversight never works -- then set about spending millions of dollars and decades to ensure it can't. The FCC, under both parties, certainly has a long history of dysfunction that needs fixing. But anybody that actually thinks that dismantling regulatory oversight of the nation's broken broadband duopoly is a panacea has been fed a line of stale bullshit. When you put the foxes in charge of the hen house you don't get better eggs -- you get a bloodbath and a call to Comcast customer service. Why exactly is this such a difficult lesson for us to learn?

Filed Under: competition, donald trump, fcc, jeffrey eisenach, mark jamison, monopolies, telcos

48 Comments

AT&T Tells FCC That Giving Its Own Content An Unfair Market Advantage Is Good For Consumers

Say That Again

from the the-death-knell-of-net-neutrality dept

Wed, Nov 23rd 2016 8:24am — Karl Bode

We've noted a few times that the whole net neutrality debate truly started back in 2005, when then AT&T CEO Ed Whitacre proudly proclaimed that he wasn't going to let Google "ride his pipes for free." While AT&T's rhetoric has mutated slightly over the years, its core objective has remained the same: use its monopoly over broadband to extract unnecessary "troll tolls" from competitors, giving its own services an unfair advantage. It's precisely this kind of behavior that triggered the creation of net neutrality rules in the first place; an effort that took more than a decade of fighting tooth and nail to come to fruition.

And yet here we are a decade later, with the entire concept of net neutrality in the United States about to implode in truly spectacular and depressing fashion (assuming you like markets that function properly).

We've been talking about how AT&T intends to exempt its upcoming "DirecTV Now" streaming service from the company's own, arbitrary usage caps -- while still penalizing competing services. In other words, if you use AT&T's TV service you won't run into caps, throttling, or surcharges. But use a competitor and you will be penalized, whether that's Netflix or instructional videos from a non-profit or educational institution. This is precisely why people urged the FCC to join countries like India, Japan, Norway and The Netherlands and ban zero rating entirely. The FCC didn't listen.

But last week the FCC appears to have woken briefly from its year-long slumber on the subject; long enough to pen a letter to AT&T informing them that the agency had finally realized that this sort of behavior was horrible for the streaming video market:

"In the letter to AT&T from the FCC's Jon Wilkins, the agency states that this behavior "may obstruct competition and harm consumers by constraining their ability to access existing and future mobile video services not affiliated with AT&T."

"It is not difficult to calculate usage scenarios in which an unaffiliated provider's Sponsored Data charges alone could render infeasible any third-party competitor's attempt to compete with the $35 per month retail price that AT&T has announced for DIRECTV Now," the letter said. "Unaffiliated video providers not purchasing Sponsored Data would likewise face a significant competitive disadvantage in trying to serve AT&T Mobility's customer base without zero-rating."

AT&T responded in a letter back to the FCC This week (pdf), claiming that giving its own content an unfair market advantage is going to be really wonderful for consumers:

"These initiatives are precisely the kind of pro-consumer challenges to cable that the Commission heralded in approving AT&T's acquisition of DIRECTV...DIRECTV’s sponsorship of that content through Data Free TV allows DIRECTV to better compete against the cable incumbents by ensuring that its subscribers receive the mobile video experience they increasingly demand in the most consumer-friendly manner possible.

Sure, unfairly distorting the market so your content and services get a leg up on competitors is great for AT&T, but it comes at the cost of dismantling the level streaming video playing field. Of course that has been AT&T's goal all along. All of the lawsuits, misleading rhetoric, and farmed studies have always been about one thing for AT&T: protecting its ability to abuse its stranglehold over the broadband last mile to unfair advantage. Calling this molestation of functional markets a consumer benefit only adds insult to obvious injury.

Amusingly, AT&T also tries to tell the FCC that it's not a big deal that it's giving its own content an unfair advantage, because other companies can get the same priority treatment -- if they're willing to pay AT&T for the privilege:

"The suggestion that Data Free TV creates “significant disadvantages” for online video distributors who wish to reach AT&T’s wireless subscribers is likewise off-base. Any unaffiliated content provider can participate in AT&T’s Sponsored Data program on the same terms and at the same rate as DIRECTV, and the sponsored data rate is as low as the market based rates AT&T currently offers even to wireless resellers who commit to significant purchase volumes."

That's AT&T intentionally pretending that it doesn't own DirecTV, if you're playing along at home. Sure, you can get the same exact deal as AT&T's own company gets, but you have to pay a premium to do so. But that again distorts the streaming video market, given that large companies are far more likely to be able to afford AT&T's troll toll than startups, non-profits, or other competitors. There's simply no planet where what AT&T's doing shouldn't be seen as anti-innovation and anti-competitive.

And while it's nice that the FCC at least woke up a little bit to the threat of usage caps and zero rating, this entire mess is, in large degree, thanks to the FCC's failure to craft tougher net neutrality rules. The agency ignored net neutrality advocates and didn't ban zero rating outright. And despite claiming it would take a "case by case" approach to anti-competitive behavior on this front, the FCC turned a blind eye while Comcast, Verizon and AT&T all began taking advantage of the omission to give their own content a leg up. Now, it's incredibly unlikely we'll see actual FCC enforcement on this subject anytime soon, if ever.

It seems possible the FCC expected it would have time to examine the issue further under a Clinton administration. But with Trump's surprise win of the Presidency, it's not only likely that anti-competitive abuses of zero rating will never be banned, Trump's FCC transition team is giving every indication that they intend to dismantle the net neutrality rules we do have, entirely. With no hyperbole intended, you're witnessing the death of net neutrality, and it's arriving not with a bang but with a whimper, some smug AT&T platitudes, and the thunderous applause of a misled populace that thinks it's getting something for free.

Filed Under: competition, consumers, fcc, zero rating
Companies: at&t, directv

45 Comments

Trump Formally Picks Two Net Neutrality Opponents To Head FCC Transition

Broadband

from the restocking-the-swamp dept

Tue, Nov 22nd 2016 9:46am — Karl Bode

Trump this week formally selected two staunch opponents of net neutrality to oversee the incoming President's FCC transition team. Economist Jeff Eisenach and former Sprint Corp lobbyist Mark Jamison both have deep-rooted ties to the broadband sector, and both played major roles in helping the industry fight passage of the U.S.'s net neutrality rules last year. We had already noted that incumbent ISPs like AT&T, Verizon and Comcast have been getting excited by the possibility of a hamstrung FCC and the roll back of numerous consumer-friendly policies made under the tenure of outgoing FCC boss Tom Wheeler.

Eisenach, formerly a consultant for Verizon and a think tanker over at the American Enterprise Institute, testified as an "objective" expert in a 2014 Senate Judiciary Committee hearing on net neutrality. There, Eisenach boldly declared that "net neutrality would not improve consumer welfare or protect the public interest." Similarly, in an AEI blog post last year, Eisenach again proclaimed that net neutrality doesn't help consumers, isn't necessary, and is little more than just "crony capitalism":

"Despite what you may have heard, net neutrality is not about protecting consumers from rapacious Internet Service Providers (ISPs). It would not make broadband more available in rural America, or lower prices for small businesses. And it has nothing to do with protecting free speech or dissenting voices. Net neutrality is crony capitalism pure and simple – an effort by one group of private interests to enrich itself at the expense of another group by using the power of the state."

For somebody who has supposedly made an entire living discussing the telecom sector, that's a staggering misrepresentation of the concept of net neutrality. As our readers know, the telecom market suffers painfully from limited competition, resulting in some of the highest broadband prices in the developed world (OECD data) and some of the worst customer service in any sector. Eisenach is of the vein of telecom-friendly allies that willfully ignore this fact in order to justify further sector deregulation.

And while deregulation can be a useful tool in healthy, functional markets that truly suffer from government over-reach, in the telecom sector (where incumbent ISP think tankers like Eisenach have polluted intelligent discourse) deregulation has an entirely different meaning. For most of these folks, deregulation quite literally means letting giant duopolists quite literally write telecom law. In telecom, we've discussed how this form of deregulation (time and time and time again) only makes the already broken telecom market worse for consumers and innovation.

Net neutrality, however imperfect the rules wind up being, is at least an attempt to create some layer of protection for consumers against incumbent ISPs looking to abuse their monopoly over the last mile. Both Eisenach and Jamison have made careers out of not only ignoring the lack of telecom sector competition, but the fact that net neutrality has broad, bipartisan support among consumers. It's worth noting that Eisenach isn't just tasked with spearheading Trump's telecom transition, he's in the running for the top FCC spot himself.

And it's not just net neutrality Eisenach would dismantle. Under Eisenach's outdated policies, gone too would be the FCC's recently passed privacy rules, which ensure consumers are clearly informed of what data is collected and who it's sold to, while ensuring ISPs provide users with working opt-out tools. In fact, the very FCC itself is likely at risk, as the GOP has made it abundantly clear that it plans to completely rewrite the Communications Act with an eye on one thing: ensuring the FCC lacks the funding and authority to effectively protect consumers from dominant, incumbent broadband providers.

Appointing two telecom-sector cronies to guide the FCC runs in stark contrast to Trump's claims that he'd "drain the swamp." Defanging the FCC so companies like Comcast grow even more powerful would be a crushing blow to consumer welfare. And the erosion of popular net neutrality rules would be a kick to the gut of the supposed "populist" rhetoric at the very heart of the Trump campaign.

Filed Under: broadband, donald trump, fcc, jeff eisnach, mark jamison, net neutrality

84 Comments

Cable's Broadband Monopoly Is Becoming Stronger Than Ever

Broadband

from the do-not-pass-go,-do-not-collect-$200 dept

Tue, Nov 22nd 2016 6:37am — Karl Bode

Despite ample lip service to the subject of broadband, huge swaths of United States' broadband markets are becoming less competitive than ever before. Companies like AT&T and Verizon have proven completely disinterested in upgrading huge swaths of their networks, instead pivoting toward content and advertising, as evident by AT&T's $155 billion acquisitions of DirecTV and Time Warner, and Verizon's acquisitions of AOL and Yahoo. CenturyLink and Windstream are following suit, shifting their focus from residential broadband to enterprise service with their respective acquisitions of Level 3 and Earthlink.

That's not to say that telcos aren't upgrading their networks at all. Many selectively upgrade customers in markets where fiber is already in the ground and deployment costs are minimal (developments, college campuses), then use marketing magic to pretend these deployments are much larger than they actually are. But in reality most telco execs are now shifting their attention to higher-growth markets like content and advertising, well aware of Wall Street's outright refusal to wait on a return on broadband investment.

As a result, not only are these "broadband" companies incapable of technically offering millions of their customers the FCC definition of broadband (25 Mbps), they're quite actively trying to drive these unwanted customers away with the one-two punch of outright apathy or price hikes for 2003-era speeds.

As a result, phone companies have seen broadband subscriber net losses in five of the last six quarters. In fact, in the first three quarters of 2016, cable companies added about 2,440,000 broadband subscribers, while Telcos lost about 475,000. Last quarter alone the top cable providers added about 775,000 net broadband customers, compared to a net loss of 150,000 broadband subscribers for the nation's telcos:

Cable's faster broadband speeds and telco apathy also mean cord cutting is hitting telcos much harder. Leichtman Research states that pay TV overall lost about 255,000 subscribers last quarter (other estimates from folks like SNL Kagan peg that number at closer to 430,000). But whereas cable providers lost just 90,000 net pay TV customers last quarter, the telcos lost 375,000 net pay TV customers. In short, customers frustrated with slow DSL are fleeing to cable, then signing up for cable TV bundles they may not even want, usually because they're priced more cheaply on promotion than cable broadband alone.

Obviously this is all wonderful news if you're a cable broadband provider. As telcos back away from the residential broadband markets they don't want to upgrade, cable's monopoly becomes stronger than ever. As a result, cable providers can implement their weapon-du-jour against streaming video providers (usage caps and overage fees), without fear of the competitive repercussions you'd see in a healthy market. There's also less incentive than ever to lower prices, or to shore up what has historically been some of the worst customer service in any U.S. industry.

While some (including AT&T and Verizon) like to claim that fifth-generation wireless will come in and save us from this more powerful cable monopoly, there's absolutely no indication these services will be uniformly available -- or cheap. While 5G technically does provide significantly faster broadband with lower latency, usage caps and overage fees will ensure these services are priced out of the range of many households. And again, with the only competition being either expensive and capped satellite broadband, or expensive and capped cable broadband, the end result won't so much be competition as it will be competition theater.

Keep in mind cable providers are being allowed to consolidate at a faster rate than ever before, at the same time we seem intent on turning a blind eye to letting incumbent ISPs quite literally write awful protectionist state laws that hamstring broadband competition and creative solutions to spotty coverage. Combine that with the early signs that a Trump Presidency will likely focus on gutting net neutrality and other consumer protections, and the writing on the wall for U.S. broadband markets should start to come into focus.

Filed Under: broadband, cable, competition, fcc, monopoly

27 Comments

Trump, GOP Prepare To Gut FCC Boss Tom Wheeler's Populist Reforms...Under The False Banner Of Populist Reform

Broadband

from the autopilot-to-oblivion dept

Fri, Nov 18th 2016 6:26am — Karl Bode

So we've noted a few times over the years how current FCC boss Tom Wheeler was a bit of a surprise for many of us covering the telecom sector. As a former wireless and cable lobbyist with some unclear policy positions, alarm bells were raised when his appointment to the chairman spot was first announced. But as Wheeler's tenure rolled on, he wound up being arguably one of the most consumer and startup-friendly FCC leaders in the history of the agency (which, given the agency's history as a rubber stamp for large broadband providers, admittedly wasn't a particularly high water mark).

Under Wheeler, the FCC raised the definition of broadband to 25 Mbps (to highlight competition gaps for next-gen speeds), passed and successfully defended net neutrality rules, imposed some relatively basic broadband privacy protections for consumers, fought for an open and more competitive cable box market, fought (albeit unsuccessfully) to stop incumbent ISPs from writing protectionist state laws, and did something few of his predecessors (of either political alignment) could bother to do: admit the U.S. broadband market was uncompetitive. I was so shocked by Wheeler that I issued a mea culpa.

But that was then, and this is now.

With a Trump victory in the books, Wheeler is now headed for the door. While his tenure technically extends until 2018, it's generally customary for the current FCC boss to step down as chairman. While Wheeler could legally stick around as a regular commissioner, it's not clear Wheeler wants to spend his retirement years playing Sisyphus. Fearing Wheeler might continue, well, trying to help consumers in the months before his departure, the chairs of the House Energy & Commerce Committee and Communications Subcommittee this week officially asked Wheeler to avoid trying to implement any "controversial" or "partisan" efforts in his final months in office:

"I strongly urge the FCC to avoid directing its attention and resources in the coming months to complex, partisan, or otherwise controversial items that the new Congress and new Administration will have an interest in reviewing,” Senator John Thune wrote Tuesday in a letter to Wheeler...Any action taken by the FCC following November 8, 2016, will receive particular scrutiny,” the GOP lawmaker proclaimed."

At this point we should probably remind you that the GOP has hounded Wheeler for several years now with an endless series of pointless "accountability" hearings with one core function: shame Wheeler for standing up to AT&T, Verizon and Comcast. Absolutely everything Wheeler has done has been deemed "controversial" by the GOP, which was particularly incensed over net neutrality and the reclassification of ISPs as common carriers (necessary to legally defend the rules). In each hearing, Wheeler was cool under pressure despite being repeatedly shamed for simply doing his job.

People should also probably be reminded that much of what the GOP tries to insist are "partisan" issues in telecom in fact have broad bipartisan support. Net neutrality, for example, is framed as "divisive" and "partisan" by the GOP, yet has broad support from members of both political parties. Similarly, municipal broadband (communities building their own networks or striking public/private partnerships to address private market failure) is often tagged as "partisan" by the GOP, despite the fact that the idea has broad bipartisan support, and most community broadband networks are built in Conservative areas.

The public's disdain for companies like Comcast and their lobbyist stranglehold of government is damn near universal, and indisputibly bipartisan.

Much like former FCC boss Kevin Martin did when Democrats made a similar request in 2008, Wheeler was quick to bow to GOP pressure and wipe the FCC calendar clean. With that decision the FCC is effectively now on autopilot, and most of the remaining items on Wheeler's agenda (especially attempts to bring competition to the cable box) can be considered dead. Needless to say, consumer advocacy groups like Public Knowledge weren't all that impressed with the FCC's decision to give up on a number of items (like legacy business data services pricing) the agency had been working on for years:

"...the agenda items address real and pressing problems in the broadband marketplace. These problems do not simply go away due to an administration change. When Republicans take over, they will need to address the same competitive problems, or explain to the American people why they plan to perpetuate our broadband duopoly."

A number of the things the FCC put on hold at GOP request were simply normal operational efforts the GOP would have needed to address anyway -- including efforts to create a new roaming standard and to classify Voice over LTE (a higher quality audio standard). Senator Ron Wyden also issued a statement pointing out that the freeze also impacts efforts to try and expand funding for wireless broadband in more rural markets -- markets that Trump repeatedly paid ample lip service to throughout his campaign:

"I regularly hear from Oregonians in rural counties that it is clear high costs are preventing private sector broadband investment in parts of rural Oregon. The FCC must fulfill its responsibility to provide a lifeline to rural communities and a connection to the global economy. Wireless cell service and broadband internet spur economic opportunity, improve public safety and increase educational outcomes for rural Americans. Any delay causes these rural communities to wait even longer for help," said Wyden."

What happens next isn't entirely clear, but early signs aren't promising if you prefer your regulators independent and with a dash of backbone. Trump's telecom transition team is being led by Jeffrey Eisenach, a think tanker with direct ties to telecom (yet not technically a "lobbyist") who has vehemently opposed nearly every pro-consumer policy the agency has ever implemented. Also on Trump's advisory team is Rep. Marsha Blackburn, whose faithful support of AT&T and protectionist state laws has played a starring role in ensuring that her state of Tennessee remains a broadband backwater.

Trump has said he opposes net neutrality (even if it's not clear he actually understands what it is), suggesting those rules will either be scrapped -- or simply not enforced. Eisenach has similarly made it abundantly clear he sees the FCC's future as one in which its influence over broadband is negligible to non-existent, and net neutrality is no longer the law of the land. In an editorial written over at The Hill in 2010, Eisenach blasted net neutrality as a "radical scheme" crafted (ironically) by bogus populists:

"Boiled down to the basics, in other words, net neutrality is a massive scheme for what Richard Posner termed “taxation by regulation” – the transfer of wealth from one group to another by means of government regulation....The populist rhetoric of (net neutrality supporting groups) often strikes a radical pose, but the real radicalism of net neutrality lies in the naked use of Federal regulatory power to redistribute wealth.

Eisenach, like so many incumbent ISP allies at the time, intentionally ignored the fact that net neutrality is something the public wanted by an overwhelming, bipartisan degree. And there's nothing "radical" about preventing Comcast, AT&T or Verizon from using their last mile monopolies or arbitrary usage caps to give their own content an unfair market advantage (something they're already happily doing with zero rating). What would be "radical" would be ignoring the will of the public and gutting net neutrality, a decision that will make the SOPA uprisings look like a small summer picnic.

While Eisenach picks a new FCC boss who shares his antiquated views, the GOP will be working on crafting entirely new broadband-industry-friendly laws. The GOP has long promised to rewrite the Communications Act with a strict focus on defunding and defanging the FCC, keeping the agency far away from the "amazing innovation" they believe magically blossoms when you refuse to protect consumers or regulate broken, uncompetitive markets. Efforts to try and do this previously have hit brick walls thanks, in large part, to the popularity of net neutrality -- a popularity the GOP seems intent on ignoring.

By now, most Comcast or AT&T customers should realize the GOP's antiquated claims that broadband is a healthy "free market" made better by gutless regulators is dated rhetoric from a bygone era of hot garbage. And while you'll be hearing a lot of "let's wait and see" in the months leading up to inauguration, there's every indication the FCC will soon be reverting to its role as a rubber stamp for sector giants. Despite some potentially empty Trump campaign promises to fight the AT&T Time Warner Merger, Trump, the GOP and his transition team have made it brutally clear (in both commentary and transition hiring) that their plan for the FCC involves something in between a solid hamstringing and a frontal lobotomy.

To make it very clear: we're gutting the FCC right at the point the agency was starting to actually listen to consumers for arguably the first time in its history -- ironically, idiotically or insultingly (pick two) under the banner of "populist reform." But overreach on net neutrality, and Trump will find himself not only on a collision course with net neutrality activists, but also with Trump supporters who signed on believing the Manhattan billionaire was leading a populist revolt.

Wheeler's tenure floundered a bit at the tail end thanks to the agency's refusal to seriously address zero rating, sneaky industry fees, or usage caps and unreliable meters. Even then, most consumers will remember Wheeler fondly as the first FCC Commissioner in the broadband era from either party that was at least willing to actually listen to the will of the public -- a public that's sick to death of uncompetitive broadband markets caused by letting AT&T, Verizon, and Comcast quite literally write protectionist laws that only serve to ensure market dysfunction continues.

While the future is uncertain, one thing seems likely: Wheeler's shortcomings on subjects like zero rating are going to seem downright charming compared to the regulatory landscape currently being constructed by the next administration. Tom Wheeler, the man who went from dingo to net neutrality hero, was the closest thing to a true populist the modern FCC has ever had. Completely gutting net neutrality and his other efforts isn't "populist reform," it's the political and intellectual equivalent of a roundhouse kick directly to the face of the American citizenry.

Filed Under: donald trump, fcc, jeffrey eisenach, lobbying, net neutrality, populism, rural broadband, tom wheeler

66 Comments

Too Little Too Late: FCC Finally Realizes AT&T's Zero Rating Is Anti-Competitive

Broadband

from the thanks-for-the-help dept

Mon, Nov 14th 2016 8:40am — Karl Bode

For much of the last year we've talked about how the FCC's decision not to ban zero rating (or the practice of exempting some content from usage caps) when crafting net neutrality rules was a horrible oversight. As we warned initially, it simply opened the door to wireless carriers and ISPs abusing net neutrality in entirely new and creative ways. As a result, despite having net neutrality rules, we now have companies like AT&T, Verizon and Comcast all exempting their own streaming content from the caps while still penalizing smaller streaming startups and competitors.

While the anti-competitive implications of this should have been clear to most people, the FCC apparently decided it was best not to ban the practice, instead promising to enforce net neutrality on a "case by case basis." But outside of launching a glacial-moving "informal information inquiry" last year, the FCC had given no indication it planned to actually protect this aspect of net neutrality. That was until last week, when the agency fired off a letter to AT&T stating that its plans to exempt its upcoming "DirecTV Now" streaming service is technically anti-competitive and could harm consumers and competitors:

"In the letter to AT&T from the FCC's Jon Wilkins, the agency states that this behavior "may obstruct competition and harm consumers by constraining their ability to access existing and future mobile video services not affiliated with AT&T."

"It is not difficult to calculate usage scenarios in which an unaffiliated provider's Sponsored Data charges alone could render infeasible any third-party competitor's attempt to compete with the $35 per month retail price that AT&T has announced for DIRECTV Now," the letter said. "Unaffiliated video providers not purchasing Sponsored Data would likewise face a significant competitive disadvantage in trying to serve AT&T Mobility's customer base without zero-rating."

And while it's great the FCC finally woke up to the fact that ISPs are using caps to both raise rates on uncompetitive markets and hamstring streaming competitors, the FCC's letter is almost comical in how late in the game it has finally arrived. Given that the man heading up Trump's telecom transition team (Jeffrey Eisenach) is a paid consultant and think tanker with ties to large broadband providers, there's every indication a Trump Presidency will go easier on incumbent ISPs like AT&T and Comcast than ever before.

As a result, the FCC's move here should generally be seen as the agency giving a pointless lecture on playing with matches after the barn has burned down. For what it's worth, AT&T is simply responding to the inquiry by claiming it can't possibly be acting anti-competitively because other companies can get cap-excempt status too -- provided they pay AT&T significantly more money:

"While we welcome additional questions, we hope the FCC will consider the enormous value consumers find in obtaining free data or free streaming where someone else is footing the bill for their data. We welcome any video provider that wishes to sponsor its content in the same “data free” way for AT&T Mobility customers and we’ll do so on equal terms at our lowest wholesale rates," the company added. "Saving consumers money is something we all should support."

In short, you've got a company using arbitrary usage caps to give its own content a leg up, and a regulator that couldn't be bothered to see the negative impact of this behavior apparently until it had one foot out the door of governance. Where we head now isn't clear, but I think it's fairly apparent that all of the griping concerning usage caps and zero rating will likely seem downright quaint in around three to six months.

Filed Under: competition, fcc, net neutrality, zero rating
Companies: at&t

20 Comments

In Wake Of Trump Win, ISPs Are Already Laying The Groundwork For Gutting Net Neutrality

Broadband

from the deep-shit dept

Wed, Nov 9th 2016 1:05pm — Karl Bode

With Donald Trump now the President elect, all eyes in telecom have turned to what happens now in regards to FCC telecom enforcement generally, and our shiny new net neutrality rules specifically. Trump has proclaimed he opposes net neutrality, despite making it abundantly clear he doesn't appear to actually know what it is (he appears to falsely believe it has something to do with the fairness doctrine). As such most people believe he'll work to gut the current FCC, which as we've noted has, for the first time in arguably twenty years or so, actually been doing a few things to actually help broadband consumers and sector competition.

Trump is said to have appointed Jeffrey Eisenach, "a crusader against regulation," who has consistently criticized current FCC boss Tom Wheeler, to handle his telecom transition team:

In 2012 Eisenach arrived as a fellow at the conservative American Enterprise Institute — and in that role, he’s been an outspoken antagonist of FCC Chairman Tom Wheeler and his policies. In his research and advocacy, often backed by tech and telecom interests, he's slammed the Obama administration's efforts on net neutrality, broadband investment and more.

As such, any newly-configured FCC is more than a little likely to consist of the kind of revolving door regulators that either will move to strip back net neutrality protections (difficult but not impossible), or (potentially more likely) simply refuse to enforce them. ISPs are already making it clear they see an opportunity to role back "onerous FCC regulations" at the behest of giant ISPs -- likely in the form of a complete Communications Act rewrite courtesy of the Republican-controlled House and Senate.

This enthusiasm includes former Congressman Rick Boucher, who at one point in time was a fantastic crusader for fair use rights, but has since made his living playing parrot for the telecom industry over at Sidley Austin, a law firm that effectively acts as an AT&T policy arm. Not wasting any time, an e-mail dropped into Techdirt's inbox this morning by the Internet Innovation Alliance (also part of AT&T's telecom policy efforts), featuring Boucher proclaiming that it was time to "return to the bi-partisan light regulatory oversight of broadband":

The first order of business for the new FCC should be a return to the bi-partisan light regulatory oversight of broadband launched during the Clinton administration. The decision to treat broadband as an information service unleashed a wave of investment in internet infrastructure that enabled our communications network to become the envy of the world. That progress has been undermined by the Commission's decision to treat broadband as a telecommunications service with regulatory requirements designed for the monopoly era of rotary telephones. Few regulatory changes would do more to promote investment and a stronger U.S. economy than a return to the time-honored light regulatory regime for broadband.

If you're playing along at home and don't speak telecom sock-puppet, Boucher's effectively arguing Trump should back off the FCC's recent decision to reclassify ISPs as common carriers (which put the FCC on the proper legal footing to enforce net neutrality) and return to the FCC's earlier mantra of going out of its way to avoid doing much of anything that would hinder incumbent ISP profits. That's unfortunate, given that this was a period during which we pretended that if we let ISPs dictate all regulation they would magically deploy amazing new competitive broadband networks.

Generally speaking, most of you should be able to see how well that worked out for us based on, well, looking at Comcast or your over-priced and slow AT&T DSL line. Meanwhile pay TV providers like Dish, rather unsurprisingly, made it clear they see this being a possible end to net neutrality:

$DISH CEO Ergen says Trump administration may mean Obama -backed tough net neutrality rules gets "challenged or weakened" going forward @WSJ
— Shalini Ramachandran (@shalini) November 9, 2016

That said, it's worth reminding people that while Democrats were already waffling on the net neutrality rules they helped pass (Clinton was expected to be overly cozy with telecom in her own right), a Trump FCC is likely to be notably, significantly worse for broadband consumers and net neutrality. The FCC's recent decision to pass some basic privacy protections for broadband users is certain to face turbulence, and efforts to bring competition to the cable box and the broadband sector in general will be all-but-certainly derailed.

In other words there's every indication that we're headed back in time -- to a bygone era not that long ago where folks like AT&T and Comcast dictated policy to FCC Democrats and Republicans alike, resulting in a weak-kneed regulator whose sole purpose was to dumbly nod each and every time AT&T, Verizon, Comcast or Charter made a policy proposal.

Filed Under: broadband, fcc, net neutrality, regulation, rich boucher

63 Comments

Congressman And Former Trump Advisor Calls For Hearings On Media Bias, Threatens To Start Pulling FCC Licenses

Free Speech

from the trash-talking dept

Tue, Nov 8th 2016 8:28am — Tim Cushing

It's always the people neck deep in partisanship that make the most noise about unfairness. In a move that bodes well for free speech, Rep. Kevin Cramer is calling for hearings to sort out this "problem" with "biased" media. Cramer also spent some time as Donald Trump's energy advisor, so it's a good guess he feels his candidate hasn't been treated fairly by The Liberal Media™ -- an entity that's always useful for easy scapegoating when things go south for candidates, legislation, etc. on the Republican side. (The liberals/left do the same when stuff goes wrong for them. Everyone does it. The only difference is the scapegoat.)

Rep. Kevin Cramer (R-N.D.) sent a letter to the heads of the four "major" TV networks—CBS, NBC, ABC, and Fox—threatening to hold a hearing "to explore network media bias in coverage of the 2016 presidential campaign." To justify this grandstanding and overreaching display of concerned government, Cramer cites a recent Gallup poll which put Americans trust in "media" at around 32 percent and also asserted only 37 percent of Americans think the media's coverage of the 2016 campaign has been "balanced."

Cramer's biases are clear, but he seems blissfully unaware of them. Presumably Fox is being added to this hearing's lineup for the same reason criminal informants get swept up during law enforcement raids -- to prevent any suspicion arising from its exclusion. While Cramer cited the Gallup poll, he also added in more feelings of his own, stating the media (both sides, I guess) is engaged in "surreptitious propaganda" which somehow violates its "moral" duty to inform the public without taking sides.

Rather than allow adults to address the open question of "moral" obligations, Cramer has issued threats with the weight of the federal government behind them. He brought up the Fairness Doctrine, only to drop it moments later, stating that a "free system" is only possible with unbiased media.

Media bias is something universally hated, but it's never not a partisan issue. Everyone agrees bias -- at least too much of it -- is bad. Those wanting to see it gone usually just want the other side to change, not the ones that confirm their world view. Rep. Cramer is no different, and seeing as he has somewhat of a vested interest in Trump's success, his official offendedness is incredibly suspect.

Hearings aren't the only thing Cramer threatened. He also hinted he would start pulling FCC licenses if things didn't change while implying that the First Amendment is mostly for protecting speech he likes.

So instead of wielding the Fairness Doctrine as a means of forcing the networks to rid themselves of all political bias (which would be impossible to quantify, not least because bias is in the eye of the beholder), Cramer threatens their "the use of federally-allocated spectrum" afforded by their FCC licenses, writing "Your FCC license and the liberty that comes with your First Amendment rights are not a license to broadcast anything you want or in any way you choose."

That's an odd interpretation of the First Amendment. There are very few modes of expression that aren't protected by it and "always running down my guy" isn't one of those exceptions. Not that it matters. As Reason's Anthony Fisher points out, Cramer's more angry than informed.

Cramer appears to have not read the FCC's website, which explicitly states (emphasis theirs), "We license only individual broadcast stations. We do not license TV or radio networks (such as CBS, NBC, ABC or Fox) or other organizations with which stations have relationships (such as PBS or NPR), except to the extent that those entities may also be station licensees."

[...]

Though Cramer might want to use the FCC as his own task force, the FCC's website also states the commission "cannot prevent the broadcast of any particular point of view. In this regard, the Commission has observed that 'the public interest is best served by permitting free expression of views."

So, the FCC won't be doing any of the things Cramer imagines he can make it do, and any attempt to force the issue would look exactly like what it is: an attack on free speech disguised as a call for "fairness."

Bias will always exist in the media. That's because humans are biased creatures and some of it bleeds over into the profession, no matter how much they might aspire to loftier ideals. And, of course, there are always those who don't even aspire to these ideals and wallow in fully-biased reporting.

But it's not as if dragging down the Big Four to Cramer's level would have much of an impact immediately, much less a lasting one. Only a small minority of Americans get their news exclusively from these outlets. Many more get them from a variety of other sources, all with their own preferences and biases. And humans, being humans, tend to be drawn to viewpoints that agree with their own. Hollering about FCC license and moral obligations won't do anything to make the news more fair -- not when there's a market on both sides of the political aisle hungering for a slant that agrees with their own.

Filed Under: congress, fcc, first amendment, kevin cramer, media bias, news
Companies: abc, cbs, fox, nbc

FCC Lends Support To Google Fiber, Louisville In Fight To Access AT&T Utility Poles

Broadband

from the beaten-by-bureaucracy dept

Wed, Nov 2nd 2016 6:29am — Karl Bode

As we've been discussing, the hot new broadband battleground is the boring old utility pole. In most existing markets, a new competitor needs the incumbent ISP to move their gear and "make ready" the pole before a competitor can attach their own fiber. With every incentive to slow new competition, incumbent ISPs have long (ab)used this bureaucracy to their advantage. As a result, this preparation can take the better part of a year, especially if gear from multiple incumbents needs moving.

In a recent Google Fiber blog post, the company documented the end result of this logjam. In Nashville, the company noted that of the 88,000 poles in Nashville needed to deploy Google Fiber, over 44,000 will require make-ready work -- but only 33 had been adequately prepped by incumbent ISPs. In response, Google Fiber has been pushing cities like Nashville and Louisville to pass "one touch make ready" rules, which allow an insured, third-party contractor to move any ISP's gear (often a matter of inches), provided they give the incumbent ISP a 15-day heads up.

Unsurprisingly, the response from incumbent ISPs like AT&T and Comcast has been to breathlessly claim that their Constitutional rights are being violated, that Google Fiber is getting preferential treatment, and that these reform rules will result in a dramatic spike in internet outage (despite the fact that some incumbent ISPs often use these exact same contractors for pole work). They've also been quick to file lawsuits claiming that these cities are exceeding their authority and in some instances violating federal pole attachment rules.

In Kentucky, Google Fiber and Louisville this week got an unexpected ally in the FCC, which submitted a statement of interest (pdf) in Kentucky court effectively pointing out that AT&T and Comcast's arguments are nonsensical (at least in Kentucky). According to the FCC, while it does have federal pole attachment rules, Kentucky was one of 20 states to have opted out of those requirements in order to implement their own rules:

"BellSouth maintains in its motion for summary judgment that the Louisville Ordinance conflicts with, and is therefore preempted by, the federal pole-atachment rules promulgated by the Commission under Section 224. That argument is wrong as a mater of law. The federal pole-atachment regulations do not apply in Kentucky because Kentucky has filed a certification invoking reverse-preemption under Section 224(c) and has thereby opted out of the federal pole-atachment rules.

That said, AT&T's lawsuit against Louisville also claims that Louisville's new rules violate Kentucky state law. As we've long noted, companies like AT&T have so much influence on state legislatures that they're often allowed to quite literally write telecom law that specifically hinders competition, as they've done in states like Missouri and Tennessee, regarding municipal broadband. For those playing along at home, these are the same incumbent ISPs that whine endlessly about "burdensome regulations," unless they're the ones writing said regulations to hamstring competitors.

All told, this sort of bureaucratic protectionism is one of several reasons Google Fiber executives are pondering a pivot to next-generation wireless.

Filed Under: fcc, google fiber, louisville, one touch make ready, otmr, utility poles
Companies: at&t, comcast, google

After North Carolina Law Bans Municipal Broadband, One ISP Gives Gigabit Connections Away

Broadband

from the shooting-yourself-in-the-foot dept

Tue, Nov 1st 2016 9:40am — Karl Bode

Back in August, we noted how the FCC lost an incredibly important case regarding municipal broadband. In short, the FCC tried to dismantle state-level protectionist laws, written by incumbent ISPs, that hamstring towns and cities from building their own broadband networks or striking public/private partnerships for broadband -- even in areas those same incumbent ISPs refused to upgrade. The FCC had tried to claim that its congressional mandate to ensure "even and timely" broadband deployment allowed it to strip away any part of these laws that hindered broadband expansion.

But the courts argued that the FCC lacks this authority, forcing the agency to acknowledge it was giving up on this fight. But there are still countless municipal broadband providers in the 19 states that have passed these laws that can't launch or expand existing service lest they run face-first into a law written by Comcast, AT&T, Verizon, or CenturyLink lawyers. And there are millions of customers that are incredibly frustrated by the lack of broadband market competition, resulting in the expensive, inconsistent broadband connections most of us "enjoy" today.

In North Carolina, it took Time Warner Cable four attempts to convince the state legislature to pass such a protectionist law. The FCC's failure to dismantle this law resulted in one municipal ISP, Greenlight, facing the specter of having to disconnect customers in a neighboring county given the ban on selling municipal broadband. In response, the ISP has decided not to sell broadband to these neighbors at all, instead announcing this week that it would be giving away gigabit service for free until it can figure out what to do next:

"Wilson officials voted Thursday to provide free Greenlight Community Broadband services to existing customers outside the county on a limited basis until efforts are successful in overturning the law that prohibits fee-based municipal broadband beyond the county line.

“While the short-term fix is not perfect, it was the only alternative we had to disconnecting our neighbors,” said Wilson Mayor Bruce Rose. “Taking broadband service from the people of Pinetops would have been a terrible blow, especially when they are still recovering from Hurricane Matthew."

And while that's quite a feel good story and a nice move by Greenlight, the reality is there's nobody coming to the rescue of these states any time soon in the wake of the FCC's loss. Incumbent telecom providers have such a stranglehold over state legislatures, they're being allowed to quite literally write the law. In most instances, the states that pass these laws wind up being among the least connected and competitive broadband states in the union. That leaves the only solution being to vote these beholden lawmakers out of office.

The problem is that ISPs have historically been successful in framing this as a partisan issue, one in which the mean ol' government is competing unfairly with the innocent daisies in private industry. This narrative usually involves framing all municipal broadband efforts as unmitigated financial disasters, while trying to claim these laws are necessary to protect poor, naive citizens from themselves. As such efforts in Congress to pass new laws banning state protectionist laws have consistently been scuttled, in part thanks to a public voter base that has been tricked into rooting against its own best self-interest.

The reality however is that this isn't a partisan issue at all. In fact, most municipal broadband networks are being built in Conservative areas with the support of Conservative voters. As these voters grow more and more disenfranchised by the existing duopoly status quo, it's getting harder and harder to convince them that letting AT&T, Verizon and Comcast buy protectionist, anti-competitive state law is perfectly fine, while building local, better broadband networks that dramatically improve local quality of life is the very worst sort of villainy.

Filed Under: broadband, competition, fcc, municipal fiber, north carolina
Companies: greenlight

22 Comments

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Trump Telecom Advisor Doesn't Think Broadband Monopolies Are Real, Wants To Dismantle The FCC

from the Comcastic dept

AT&T Tells FCC That Giving Its Own Content An Unfair Market Advantage Is Good For Consumers

from the the-death-knell-of-net-neutrality dept

Trump Formally Picks Two Net Neutrality Opponents To Head FCC Transition

from the restocking-the-swamp dept

Cable's Broadband Monopoly Is Becoming Stronger Than Ever

from the do-not-pass-go,-do-not-collect-$200 dept

Trump, GOP Prepare To Gut FCC Boss Tom Wheeler's Populist Reforms...Under The False Banner Of Populist Reform

from the autopilot-to-oblivion dept

Too Little Too Late: FCC Finally Realizes AT&T's Zero Rating Is Anti-Competitive

from the thanks-for-the-help dept

In Wake Of Trump Win, ISPs Are Already Laying The Groundwork For Gutting Net Neutrality

from the deep-shit dept

Congressman And Former Trump Advisor Calls For Hearings On Media Bias, Threatens To Start Pulling FCC Licenses

from the trash-talking dept

FCC Lends Support To Google Fiber, Louisville In Fight To Access AT&T Utility Poles

from the beaten-by-bureaucracy dept

After North Carolina Law Bans Municipal Broadband, One ISP Gives Gigabit Connections Away

from the shooting-yourself-in-the-foot dept

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