stories filed under: "fcc"

Under Cable Lobbying Assault, FCC Commissioners Waffling On Cable Box Competition Plan

from the $21-billion-reasons-to-fold dept

Wed, Jun 29th 2016 3:42pm — Karl Bode

The cable industry's relentless lobbying assault on the FCC's plan to bring competition to the cable box appears to be working. As we've been covering, cable lobbyists have been filling editorial sections nationwide with all manner of misleading dreck, claiming the FCC's plan (which you can read here (pdf)) will increase piracy, hinder innovation, hurt minorities, and rip giant holes in the time-space continuum. They've also engaged in the time-honored tradition of paying lawmakers that have no idea how technology works to make all manner of false claims about what the FCC's plan actually does.

Unfortunately for those of you tired of paying the cable industry $21 billion annually to rent a shitty cable box, it looks like the efforts are working.

Two of the Democratic Commissioners that originally voted yes on the plan say they're starting to get cold feet, surely only coincidentally after the cable industry decided to ramp up lobbying to levels not seen since 2009 to try and kill the plan. FCC Commissioner Jessica Rosenworcel, for example, is now claiming that the FCC plan she voted for is "too complicated" and that the FCC should compromise with the cable industry on some kind of new arrangement:

"Kudos to the chairman for kicking off this conversation [Rosenworcel voted along with Wheeler and Democrat Mignon Clyburn to kick off that conversation], but it has become clear the original proposal has real flaws and, as I have suggested before, is too complicated. We need to find another way forward." She was not endorsing the cable effort, but instead appeared to be supporting the effort to find a compromise proposal that addresses the flaws. "I am glad that efforts are underway to hash out alternatives that provide consumers with more choice and more competition at lower cost."

Except there's nothing really that complicated or "flawed" about what the FCC is proposing. Under the plan, cable operators simply have to provide access to their programming -- using systems and copy protection of their choice -- to third-party hardware vendors without the need for a cable card. While there's certainly some engineering challenges with the idea, the "complicated" part only really comes from the cable industry's decision to fight cable box competition tooth and nail.

Meanwhile, the "compromise" referenced by the article that appears to have swayed Rosenworcel isn't much of one. Instead of real cable box competition, the cable industry has proposed a plan whereby they simply have to deliver their programming via app -- but consumers would still have to pay for a cable box if they want to do things like record via DVR. Consumer advocates and groups like INCOMPAS are warning that the cable industry will go out of is way in any voluntary proposal to find creative ways to continue forcing consumers to use their hardware and services.

And Rosenworcel doesn't appear to be alone in waffling. Commissioner Mignon Clyburn also appears to be buckling under the weight of false narratives suggesting the FCC's plan somehow needs to be rolled back, lest it damage "copyright, security and privacy":

"We also asked Democratic Commissioner Mignon Clyburn's office if she still supports the original proposal and got this response: "Commissioner Clyburn appreciates and welcomes the constructive ‎efforts by industry to put forward an alternative apps-based proposal. She continues to study the proposal with an eye towards a solution that adheres to Section 629 of the Communications Act; ensures truly competitive choice; enhances access to diverse programming; and provides the protections for copyright, security and privacy that consumers have come to expect."

Note again that the two waffling commissioners don't really provide any solid reasons why the FCC's original proposal couldn't work, but it's pretty clear that they've been influenced -- to one degree or another -- by the paid sound wall cable lobbyists have constructed in trying to scuttle real cable box competition. With their fellow Commissioners Pai and O'Rielly voting no on the proposal (because voting no on consumer friendly policies is their entire purpose in life) and foundering support among Democratic commissioners, Wheeler won't have the political firepower to get the plan approved.

Again that's not the end of the world. The legacy cable TV industry's empire is slowly crumbling with or without the FCC's help, it will just take a little longer if the FCC doesn't give the entire process a swift kick in the ass. If the FCC's cable box proposal sinks, the agency has more time and calories to focus on what's truly going to be important in the new streaming TV age: bringing real, sustained competition to bear on the broken U.S. broadband market.

Filed Under: cable, cable tv, competition, fcc, jessica rosenworcel, mignon clyburn, monopolies, set top box, tom wheeler, unlock the box
Companies: comcast, time warner cable

24 Comments

Open Access Idaho Broadband Network Lets Customers Switch To A New ISP In Seconds

Broadband

from the what-competition-actually-looks-like dept

Thu, Jun 23rd 2016 3:25am — Karl Bode

In 2009, the FCC funded a Harvard study that concluded (pdf) that open access policies (letting multiple ISPs come in and compete over a central, core network) resulted in lower broadband prices and better service. Of course when the FCC released its flimsy, politically timid "National Broadband Plan" back in 2010, this realization (not to mention an honest accounting of the sector's limited competition) was nowhere to be found. Since then, "open access" has become somewhat of a dirty word in telecom, and even companies like Google Fiber -- which originally promised to adhere to the concept on its own network before quietly backpedaling -- are eager to pretend the idea doesn't exist.

That's not the case for Ammon, Idaho however, where a small municipal broadband ISP is building a core broadband network that's not only embracing open access, but is developing tools that will let customers easily switch between ISPs in seconds. Even different customers in the same home can select different ISPs depending on their needs:

"Residents will get a gateway provided by the city. When they hook it up and try to surf the Web, they will be taken to the portal where they can select an ISP—very much like using the Internet in a hotel. From that point, residents will scan the available Internet offers, purchase one, and get hooked up immediately. They could even buy two different Internet services, which might be useful for a family where a parent works at home and wants a single broadband line for a home office and a second broadband service for the rest of the home."

While only a 12 home trial at the moment, the city of Ammon is beginning expansion to 200 homes, with plans to reach all 4,500 homes and apartment buildings in time. Like most municipal broadband networks, the Ammon network was forged in the wake of resident annoyance at apathetic area incumbents CenturyLink and Cable One. Also like most municipal broadband communities, Ammon is relatively conservative, once again putting to bed the useful ISP-backed myth that municipal broadband is a partisan, political issue:

"Ammon is "a very conservative community," so creating a fiber network instead of relying solely on the private sector is not something city officials were about to do lightly, Mayor Dana Kirkham said in the video. But city officials soon figured out that they could do the initial project themselves for just $22,000 and that they could also bring Internet access to government buildings and businesses, improving the city's ability to compete in a high-tech world in a fiscally responsible manner."

Again though, open access in most areas of the country is treated like the bubonic plague. Why? Most large scale open access proposals often involve some form of local public/private partnership to ensure even coverage of what's becoming a necessary utility to lower ROI areas. The end result is any ISP lobbyists' worst nightmare: an informed, motivated public with the backing of local governments working together to improve broadband competition, instead of the current paradigm of regulatory capture resulting in government ignoring the public to maintain the duopoly status quo.

And while Ammon's approach is unlikely to be adopted on any scale here in the States, it's an interesting look at what could have been if the country wasn't quite so beholden to telecom industry campaign contributions.

Filed Under: ammon, broadband, competition, fcc, idaho, isps, line sharing, municipal broadband, open access

6 Comments

Study Finds That T-Mobile's Binge On Is Exploitable, Unreliable, And Still Violates Net Neutrality

Broadband

from the a-duck-is-still-a-duck dept

Wed, Jun 22nd 2016 6:23am — Karl Bode

For a while now we've warned how "zero rating" (letting some content bypass usage caps) is a creative way for ISPs to tap dance around net neutrality --potentially to public applause. Comcast, for example, exempts its creatively-named "Stream" streaming video service from caps, but claims this doesn't violate net neutrality because the traffic never technically leaves Comcast's network. Verizon exempts its own Go90 video service from caps as well, and to date doesn't even bother justifying the move. Both AT&T and Verizon let companies pay for cap exemption.

And while these programs all laugh in the face of neutrality, many users still tend to applaud the horrible precedent because they believe -- despite paying an arm and a leg for wireless data -- that they're getting something for free.

T-Mobile has been perhaps the most creative in exploiting this belief and implementing zero rating, now exempting some 90 video services from user usage caps and throttling these services to 1.5 Mbps (or 480p) unless a user opts out. But neutrality advocates have repeatedly noted this idea still violates net neutrality given that thousands of startups, educational orgs, and non profits still aren't whitelisted -- and may not even realize they're being discriminated against.

And while T-Mobile has done some great things for consumers the last few years, T-Mobile's response to these concerns has been relatively pathetic, vacillating between lying about how the program works, to insulting net neutrality supporters like the EFF while fighting real net neutrality rules and Title II reclassification. Yet because many in the public don't understand the horrible precedent and just think it's really groovy they're getting free stuff -- T-Mobile's Binge On, happily lives on.

But a new study out of Northeastern University doesn't have much nice to say about T-Mobile's "consumer friendly" zero rating program. The researchers found numerous problems with Binge On, including the fact that T-Mobile's promise of 480p video quality is consistently less:

"T-Mobile says that the resolution for Binge On streaming is 480p (progressive scan) or better, which is considered standard for DVD movies. However, the researchers did not find evidence to back up these claims. In their trials using YouTube, the resolution was only 360p, noticeably blurry on a modern smartphone.

They also found that T-Mobile's systems not only had trouble accurately detecting video services:

"T-Mobile’s detection methods are very simple, so there’s no way they can always be right,” he says. "That means that Binge On is likely slowing down traffic that is not video. This raises serious concerns about compliance with the Open Internet Order."

And they found that the system was manipulable by clever T-Mobile users, potentially allowing them to zero rate services not covered by the program:

"Those simple methods open the door to exploitation as well, allowing subscribers to get free data even for non-video content. The researchers developed simple software that manipulates internet traffic so that it looks like video. For example, it makes any web content—web pages, app downloads, and photos—look like YouTube traffic. “We realized we could make any network traffic zero rated by just putting the right text in the right place," says Choffnes. "That is a security vulnerability -- it's potentially an open cash register that people can take from."

So in short, the report notes that T-Mobile's Binge On isn't accurate, is exploitable, and reduces video quality more than T-Mobile claims. T-Mobile (and zero rating supporters) argue that what T-Mobile's doing is ok simply because users can opt out. But the researchers noted that putting the onus to opt out on frequently non-technical consumers doesn't somehow magically mean net neutrality isn't violated by the underlying precedent. The researchers argue that regardless of public opinion on the subject -- the T-Mobile Binge On is still a net neutrality violation however you'd like to slice it:

"The internet has been hugely successful because it enables innovation, where all new internet applications receive the same network service as incumbents -- it's a level playing field," says Choffnes. "T-Mobile’s policy gives special treatment to video providers that work with them. What if every ISP did this, but in a different way? In such a world, the next Netflix, Hulu, or Pied Piper might never get off the ground because keeping up with ISPs and their policies would leave them chasing their tails."

There's several reasons why we're not seeing the backlash to zero rating we've seen elsewhere in the net neutrality fight. One, again, consumers think they're getting something for free, and don't understand that usage caps are entirely arbitrary constructs to begin with, and not actually even useful for managing network congestion (should it even actually exist). Zero rating also is seeing support from companies that historically supported net neutrality (Google, Netflix) because these companies are benefiting from the additional traffic and ad eyeballs these programs send their direction.

But because consumers don't really understand the slippery slope they're happily having a picnic on -- and Silicon Valley companies are willing to turn a blind eye to these types of net neutrality violations because they profit off of them -- doesn't magically mean what T-Mobile is doing is a good idea.

With the FCC's net neutrality rules now on more secure footing after their major legal win, all eyes now turn to what the FCC intends to do about broadband usage caps and zero rating. While many countries (India, Japan, The Netherlands, Chile) understand the bad precedent at play here and have banned zero rating outright as anti-competitive, the FCC decided to weigh the anti-competitive impact of zero rating on a "case by case basis." And while the FCC is currently conducting a rather glacial inquiry into caps and zero rating, ISPs so far have been allowed to employ the practice with relative impunity.

In short, the FCC's failure to ban zero rating opened the door to net neutrality violations, provided an ISP is just clever about it. Without Netflix or Google's support, and with consumers believing they're benefiting from such models, the FCC is seeing notably less political pressure to act. So while it's wonderful that we've got shiny new net neutrality rules freshly upheld by the court system, they may wind up being useless as carriers and ISPs tap dance over, under and around them -- to thunderous public applause.

Filed Under: binge on, fcc, net neutrality, video, zero rating
Companies: t-mobile

25 Comments

Cable Industry: Our Shitty TV Apps Are Just As Good As Real Cable Box Competition, Right?

Overhype

from the half-baked dept

Tue, Jun 21st 2016 8:37am — Karl Bode

The cable industry is aggressively fighting the FCC's attempt to bring competition to the cable box market. So far that's been via a two-pronged approach of buying a torrent of incredibly misleading editorials by people pretending to be objective observers (including Jesse Jackson), and throwing money at politicians who oppose the plan, but pretty clearly have no goddamned idea what they're actually talking about.

Under the FCC's plan (pdf), cable providers would be required to provide their existing programming to third-party hardware vendors, creating competition and hopefully a flood of better, cheaper hardware without the need for expensive, and annoying CableCARDs. But with the average user paying $231 annually in set top box rental fees, the cable industry is pulling out all the stops to protect $21 billion in annual, captive revenues.

The cable sector's latest attempt to scuttle the FCC's plan? A voluntary counter-proposal that pretends to deliver what the FCC is asking for, but falls well short. Under the proposal unveiled during recent meetings at the FCC (pdf), the cable industry would instead provide much of its existing programming via apps. This, the cable industry claims, would somehow create competition in the third-party hardware market without FCC involvement:

This alternative could be built on enforcing an industry-wide commitment to develop and deploy video “apps” that all large MVPDs would build to open HTML5 web standards....They expressed their belief that such an approach could further advance competition for independent device manufacturers within the context of a market transformation already underway and in a manner that fully protects and respects the rights of content owners.

But while this has been portrayed as some kind of revolutionary concession by hired telecom sector policy cheerleaders and several different press outlets, it isn't much different than what cable operators offer today. Currently, most cable providers offer some of their content via apps usable on tablets, smartphones, and many streaming devices. Historically, they offer fewer features and less content than is available via full, traditional cable; little more than a token gesture toward innovation in the hopes of keeping paying customers from jumping ship to Netflix, Amazon, or a collection of other cheaper options.

Under this latest proposal, you'd be able to watch some cable content via apps, but if you wanted to, say, record via DVR -- you'd still have to sign up for old, vanilla QAM-based cable and pay for the same, old, clunky set top box. Ultimately, my guess is that these cable executives would eventually get rid of the cable box if you use their apps, but force you to pay a monthly fee for their cloud-based streaming or other services. Potentially using zero rating (exempting their services from usage caps) to ensure fealty. Slight variation on the same, existing song.

INCOMPAS, a trade association that has Google, Amazon, Netflix, and some ISPs as members (mostly telcos with no interest in selling cable TV), issued a statement pointing out that this "compromise" wasn't much of one, while reminding everyone that cable sector promises historically don't mean much:

...The cable industry is proposing competitive choice for streaming devices, but still seeks to retain a controlling grip on DVRs and recordable devices. “The cable industry has made promises before about ditching the set-top box, that have not materialized. So it is important for the FCC’s unlock the box proposal to include enforceable standards that will create a thriving market for competition, congruent with the law.

Consumer groups too were quick to point out that the cable industry's proposal is murky and falls short:

"The proposal does not allow for many features that consumers want, such as home recording, and it does not allow for true user interface competition," Public Knowledge Senior Staff Attorney John Bergmayer said in a statement sent to Ars. "Additionally, core aspects of the proposal are unclear, in particular, the precise mechanism by which MVPDs propose to provide apps for various hardware and software platforms, and whether consumers would need a broadband connection to access video programming instead of leveraging their existing pay TV connections."

While it's good this proposal at least brings the cable industry to the table, skepticism is more than warranted. This is, after all, an industry with a long, proud history of engaging in anti-competitive behavior under the auspices of phantom technical justification, with net neutrality and usage caps being only a small part of the equation. Comcast, for example, is so eager to limit streaming competition it refuses to let its broadband customers access HBO Go across a wide variety of devices, providing only fleeting, half-baked justifications for the behavior.

Make no mistake, the cable industry is absolutely terrified of not only losing tens of billions in rental fees, but of truly open hardware platforms willing to direct customers to cheaper streaming alternatives. Under this app-based approach, you can be dead certain that cable would include all manner of caveats to ensure customers still need to sign up for traditional cable or their DVR services if they want the "full TV experience." Anyone who thinks the sector's going to honestly volunteer any plan that puts its existing monopoly power at any serious risk -- simply doesn't know the cable industry.

If the FCC is truly intent on real competition to the set top box market, the cable industry may need to be dragged kicking and screaming to the finish line.

Filed Under: apps, cable, cable tv, competition, fcc, set top box, unlock the box

Consumer Groups Say AT&T, Comcast Violate Privacy Law By Hoovering Up Cable Box Data Without Full User Consent

Privacy

from the informed,-empowered-consumers-cost-us-revenue dept

Thu, Jun 16th 2016 3:31am — Karl Bode

In addition to the $21 billion made annually by cable set top box rental fees, cable companies make untold billions from monetizing the user viewing data these boxes help collect. That captive revenue alone is the driving force behind the pay TV sectors histrionic opposition to the FCC's plan to open the sector up to third-party hardware competition. Consumer viewing and behavioral data is an immense cash cow, one the cable industry has occasionally threatened to take even further -- with patents on tech that lets the cable box literally watch or listen in on American living rooms.

While things haven't quite reached that level of total information awareness yet, consumer groups this week filed a formal complaint with both the FTC and FCC arguing that things have gone far enough. Public Knowledge, the Center for Digital Democracy and Consumer Watchdog have filed formal privacy complaints with both the FCC and FTC saying that major cable companies routinely fail to inform consumers about the degree in which their viewing data is collected, stored and monetized via ye olde cable box.

The complaints note that while most cable company privacy policies do alert consumers that they use personally identifiable information and third-party data for ads, these warnings don't go far enough to formally adhere to cable privacy rules on set-top box information:

"Federal law requires cable and satellite providers to obtain permission from subscribers prior to collecting and using their information for advertising purposes. Cable operators are also required to provide subscribers with a written statement that clearly describes the nature of the use of their personally identifiable information. Currently, cable operators obtain opt-out consent from consumers to use their information, which is insufficient to constitute prior consent under the law. And their privacy policies often fail to adequately disclose the extent to which they are sharing and combining customer data with third parties."

The complaints specifically single out Comcast, AT&T and Cablevision as "among the most egregious" when it comes to using consumer data without adequate consent. The complaint filed with the FCC (pdf) for example, notes that companies like AT&T often pull data from both the wireless and wireline empires to create mammoth databases of user behavior and personal information for targeted ads, without making the scope of this collection and usage clear to consumers or obtaining full, legal consent:

"AT&T’s TV Blueprint, for example, “gives advertisers working with AT&T the ability to reach people based on factors like device, operating system, whether or not they’re heavy data users or the status of their carrier contract,” using “sophisticated second-by-second set- top box data” and other information. AT&T pulls data “from millions of set-top boxes” and analyzes consumer viewing history and uses these data to target consumers based on their viewing profile. Companies like Cablevision leverage granular data and precise details of household viewing behavior, and combine it with third-party data covering other intimate details of consumers’ lives to analyze and target specific individuals with video advertising across a range of screens. In their own words, “this set-top box level targeting lets marketers target customers that fit particular trends, profiles, demographics and attributes, and they can also pair the Cablevision data with their own or third-party data."

With the FCC eyeing both set top box reform and new privacy rules for broadband providers, Public Knowledge is providing the commission with a little ammunition and fuel for thought on both fronts. Historically, consumer privacy in telecom and television has been feebly protected at best, and companies like AT&T have consistently pushed the barriers in their ever-expanding quest for more marketing data, whether that's the use of modified wireless packets to track users around the Internet, or charging a steep premium to opt out of deep packet inspection and data collection.

In the not-so-competitive realm of telecom, this is about as close to "innovation" as many sector companies get.

Specifically, Public Knowledge makes it clear they'd like to see such collection be made opt in instead of opt out, and argues that opting out doesn't go far enough to count as "consent" under existing privacy law:

"...The Commission should take the affirmative step of declaring that the use of customer information requires opt-in consent and that absent such consent, cable providers violate privacy rules by collecting customer information and using it to deliver marketing tailored to those customers."

As we've seen with the do not track debate, opting in is the bane of any data hoovering operation, given an informed and empowered consumer protected by a still-clawed regulator results in an obvious dent in the profit party. As such, telecom regulators have never been keen on supporting opt in, and it doesn't seem likely they'll start doing so anytime soon, despite the groups' request.

Meanwhile, AT&T was quick to unsurprisingly pooh pooh the groups' complaint as "bogus," while somehow arguing the attempt to protect consumer privacy would violate consumer privacy:

"AT&T’s use of anonymous and aggregate set-top box information is entirely consistent with the statute. Our disclosures tell our customers exactly how we use that data and provide tools for customers to opt out. Frankly, this complaint is bogus, and seems mainly designed to distract the public from the overwhelming bipartisan opposition to the FCC’s controversial set-top box plan.

That plan itself will erode existing consumer privacy protections, not to mention its many other harms. Because the plan’s few remaining supporters have no answer to that charge, they’ve decided to invent a false privacy claim. This smacks of desperation, and it also carries the whiff of hypocrisy. It’s further proof, if any is needed, that the plan’s supporters have lost the public policy debate on this issue."

AT&T somehow forgets to mention that most of the opposition to the FCC's set top box competition plan is entirely artificial -- generated in large part by AT&T and Comcast lobbying departments -- who've been busy filling editorial pages nationwide with absurd and misleading arguments.

The genuine reason for AT&T's opposition isn't surprising or complicated: ill-informed customers in un-competitive markets trapped in walled gardens are hugely profitable. Any deviation from this standard is treated as an egregious affront. But cable ops can't just come out and admit this is simply about protecting set top box monopoly money; that's why they've created groups like the "Future of TV Coalition" to try and complain -- like AT&T briefly does above -- that actually protecting cable customer privacy -- will somehow be a privacy violation in and of itself:

"But the new AllVid-style TV regulations being proposed by the FCC this week are an assault on consumer privacy. They will strip viewers of vital safeguards for their viewing choices and add “what we watch” to the mountains of data being mined and exploited by privacy scofflaws like Google, alongside their existing files of what we search for on the Internet; what we say in our gmail at home, work, and school; what happens in our “Nest”-connected homes; and where we go using Waze and Google Maps."

Cable companies could embrace opt in as a new standard and creatively offer small discounts to users who participate, but it's much easier to whine nebulously about Google. Companies like AT&T and Comcast desperately want to be regulated exactly like "edge providers" such as Google when it comes to privacy, ignoring the fact that their stranglehold over the broadband last mile -- and the cable box -- create a scenario whereby if regulators don't make at least a token effort to protect consumer privacy, the sky will be the limit in terms of abusing these captive markets and consumer walled gardens.

Filed Under: data, fcc, ftc, privacy, set top boxes
Companies: at&t, comcast, public knowledge

9 Comments

The Cable Industry Trots Out Mitch McConnell To Fight Against Cable Box Competition

Say That Again

from the nobody-believes-the-words-coming-out-of-your-mouth dept

Wed, Jun 15th 2016 6:27am — Karl Bode

We've been talking for weeks about how the cable industry has dramatically ramped up lobbying in an attempt to kill the FCC's plan to bring some competition to the set top box market. The cable industry opposes the idea for two reasons: competition would dramatically reduce the $21 billion the sector makes each year off of rental fees, but the flood of new, cheaper boxes would also likely direct users -- historically locked behind cable's walled gardens -- to a huge variety of streaming video alternatives.

But the cable industry can't just come out and admit that they're terrified of competition -- so they've been attacking the FCC's plan with a two pronged approach. One, pay for an absolute torrent of hysterically-misleading editorials that claim set top competition will hurt consumers, scare the children, ramp up piracy, and knock the planet off of its orbital axis. The other prong of their attack involves a lobbying mainstay: throwing money at politicians to take positions they don't have the slightest actual understanding of.

Case in point is Senate Majority Leader Mitch McConnell, who this week was nudged by the cable sector to jump into the fray with comments like this one:

"Rather than applying a light regulatory touch," Senator McConnell wrote in a letter to FCC Chairman Tom Wheeler, "the FCC would require existing programming distributors to provide the copyrighted programming they have licensed from content providers to third party manufacturers and app developers, none of whom would be bound by the agreements to protect the content."

This is a line that the cable sector and its marionettes have been repeating, but it's simply not true. As the FCC's proposal outline notes (pdf), all the plan does is require that cable operators deliver the same expensive programming they do now -- using the same copy protection and business arrangements -- without requiring a CableCARD. A set top vendor can't just claim cable broadcasts as their own and ignore existing programming agreements, but that's one of several misleading arguments being put forth by the sector to kill the initiative.

Advertisers looking to protect legacy cash cow relationships have also been trying to derail the FCC's effort, claiming that the reform plan will somehow hurt consumers, violate copyright (as the EFF did a great job detailing that's not true either), and thrust the entire pay TV advertising ecosystem into "chaos":

"The current market structure for television advertising supports advertisers' ability to place their ads based on national, regional or local distribution; the type of programming or specific content; the audience composition; and the time of day or night that the ads appear," the ANA wrote. The proposed regulations could tilt that system toward chaos, it suggested."

Perhaps the ANA hadn't noticed, but the legacy pay TV advertising ecosystem already faces a wholesale revolution in terms of how consumers are served TV programming and the ads attached to them. If the existing "market structure" can't adapt behavioral and location advertising to consumers viewing TV content on a myriad of devices and hardware, they may want to change professions. In reality, advertiser opposition is based on little more than fear; fear that they may have to share revenues with new economy companies, and fear that these companies may actually give consumers what they want -- like the ability to skip ads.

But again it's not as if the FCC's proposal is even really that dramatic of an idea. It would simply act to accelerate a shift that -- thanks in large part to cable and broadcast lobbying power -- is already happening but could take another decade to fully materialize. The shift away from the traditional cable box and legacy TV is well underway, and it's hubris to think it can be stopped by pouting. Opposition to the set top box reform plan is little more than the dull creaking of yet another legacy sector behaving like a toddler because the uncompetitive markets they've built over a generation can't somehow, magically, live forever.

Filed Under: competition, copyright, fcc, mitch mcconnell, set top box

27 Comments

Appeals Court Fully Upholds FCC's Net Neutrality Rules

Broadband

from the pop-the-bubbly dept

Tue, Jun 14th 2016 8:04am — Karl Bode

After months of anticipation the U.S. Court of Appeals for the D.C. Circuit has upheld the FCC's Open Internet Order, an indisputably-massive win for net neutrality advocates. The full court ruling (pdf) supports the FCC's arguments across the board, including the FCC's decision to classify internet providers as common carriers under Title II of the Communications Act. That's not only big for net neutrality, but it solidifies the FCC's authority as it looks to move forward on other pro-consumer initiatives such as the exploration of some relatively basic new privacy protections for broadband users.

Historically the DC Appeals court has been a mixed bag for the FCC, but in this instance the court declared the FCC's neutrality protections rest on solid legal ground from beginning to end, dismantling arguments by the likes of US Telecom, AT&T, and advocacy groups like TechFreedom from stem to stern. That includes industry attempts to prevent the rules from being applied to wireless networks (a split decision whereby fixed-line services were covered by wireless was not was something that had worried many telecom sector consumer advocates).

The court also repeatedly shot down ISP claims that the rules somehow violate their First Amendment rights:

"Because a broadband provider does not— and is not understood by users to—“speak” when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules."

The court also fully supports the FCC's contention that thanks to limited competition, broadband providers have plenty of incentive to act anti-competitively against "edge" providers like Netflix, and that this threat required FCC action:

"We also determined that the Commission had “adequately supported and explained its conclusion that, absent rules such as those set forth in the [2010 Open Internet Order], broadband providers represent[ed] a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” Id.at 645. For example, the Commission noted that “broadband providers like AT&T and Time Warner have acknowledged that online video aggregators such as Netflix and Hulu compete directly with their own core video subscription service,” id.,and that, even absent direct competition, “[b]roadband providers... have powerful incentives to accept fees from edge providers, either in return for excluding their competitors or for granting them prioritized access to end users,” id.at 645–46.

Ironically, the internet has Verizon to thank for today's ruling. The telco sued to overturn the FCC's flimsy 2010 rules, which didn't cover wireless and quite by design included massive, tractor-trailer-sized loopholes. But in overturning the rules the previous court decisions gave the FCC a path forward -- in effect urging it to reclassify ISPs as common carriers under Title II. It may also be worth noting (again) that despite industry claims that this reclassification would result in telecom Armageddon, the internet and broadband investment (at least in marginally competitive areas) has rumbled along happily.

While a huge win for net neutrality fans everywhere, it's important to understand that the open internet isn't out of the woods yet. The fight could still stumble its way to the Supreme Court. The Presidential election could similarly culminate in a total dismantling of the current FCC and a restocking of the agency with ISP-allies eager to roll back the protections -- as well as the myriad other efforts the FCC's currently engaged in (cable set top box reform).

And as we've noted a few times zero rating and usage caps also play a huge role in determining what constitutes a level playing field for startups and other smaller companies, and the rules don't specifically address such concerns. In other words, we've noted that even while legally sound the FCC's rules have plenty of loopholes allowing ISPs to hinder net neutrality -- just as long as they're somewhat clever about it.

The FCC has stated they'll be looking at the potential anti-competitive ramifications of zero rating and usage caps on a "case by case basis." With the court's full support, hopefully that inquiry will culminate in a harder policy decision sooner rather than later.

Filed Under: broadband, competition, dc circuit, fcc, net neutrality

Cable Industry Proclaims More Competition 'Hurts Consumers' & 'Damages Economic Efficiency'

Say That Again

from the bigger-ain't-better dept

Tue, Jun 14th 2016 6:31am — Karl Bode

As part of the conditions attached to Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks, the FCC imposed a requirement that Charter expand broadband service to another two million locations, one million of which must already be served by an ISP delivering speeds of 25 Mbps or greater. Unfortunately these kinds of conditions historically don't mean much; merger broadband expansion promises are almost always volunteered by the ISPs themselves, who already planned the expansion regardless of their merger plans.

That isn't stopping a lobbying organization representing Charter's cable competitors from crying and stomping their feet over the condition. In a filing by the American Cable Association (ACA, pdf), the organization's lawyers try to claim that not only would an influx of competition somehow harm consumers, the group claims that adding competitors to what are frequently stagnant markets will somehow "damage economic efficiency":

"That overbuild condition is unlawful. It is not tailored to mitigate a merger-specific harm or confirm a merger-specific benefit. It will exacerbate the merger harms the Order identifies, damage economic efficiency, injure small providers, and harm consumers. The condition should be stricken."

Another coalition of cable providers, the NTCA, tried to claim the same thing in a filing of its own:

"While the commission’s intentions in proposing the buildout requirement were undoubtedly good, the reality is imposing such a condition creates artificial competition in areas that cannot support it, which will ultimately undermine, rather than further, broadband availability and affordability in higher-cost areas in particular."

When is competition "artificial?" When we say it is! The thing is, it's not really competition these companies are worried about. It's the inevitable hoovering up of their businesses by Charter down the road. Charter CEO Tom Rutledge recently made it clear at an investor conference that he won't be targeting cable companies under the condition -- rather, he'll be targeting phone companies. Why? Phone companies, usually unwilling or unable to invest in fiber, make easier targets. There's no need to compete with smaller cable operators, when you can just gobble them up at a later date:

"When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those,” Rutledge said at the MoffettNathanson event. “It’s really about overbuilding telephone companies.” “Why would we go where we could get killed,” Rutledge said.

In other words, Charter doesn't want to compete with cable companies, because the FCC would then prohibit them from merging with them later for fear of lessening competition. Instead, Charter plans to take aim at the already struggling second-tier telcos in these areas, then acquire smaller cable operators down the road. So despite the FCC's intentions, the deal creates another homogeneous giant just like Comcast with little to no real competition to keep it in check, and the conditions are little more than regulatory band-aids for what's ultimately going to end badly for every individual and organization not-named Charter.

While the FCC's conditions do include a few useful nuggets for consumers and small businesses (a ban on caps and net neutrality violations for seven years), with the pace at which the cable industry is looking to defang and hamstring the agency, it's not clear there's going to be much of an FCC left to enforce the conditions during the latter stretch of that window. While the FCC certainly tried to shine up these conditions to downplay the negative aspects of deal approval, it's still abundantly clear that giant telecom mergers like this only ultimately benefit the companies involved.

That's a lesson that for whatever reason we seem utterly unwilling to learn despite our collective disdain for the end result.

Filed Under: broadband, buildout, cable, competition, fcc
Companies: aca, bright house networks, charter, ncta, time warner cable

33 Comments

House Attacks Net Neutrality, Cable Box Reform With Sneaky Budget Rider

Politics

from the dysfunction-junction dept

Mon, Jun 13th 2016 10:38am — Karl Bode

As we've noted a few times, there's really only two ways the telecom sector can successfully destroy U.S. net neutrality rules. Broadband providers could prevail on part or all of their multi-headed lawsuit against the FCC, a decision on which is expected any day now. Or the rules could be dismantled by the next President, who could repopulate the FCC with the usual assortment of revolving-door sector sycophants, reverting the agency back to its more consistent, historical role as a dumbly nodding enabler of broadband sector dysfunction.

Every other attempt to kill the rules is just politicians barking loudly for their campaign contribution dinners -- though that's not to say the barking doesn't get very loud from time to time.

The latest example is the House Appropriations Committee's 29-17 vote to approve an FCC appropriations bill (pdf), part of a larger Financial Services Bill determining the 2017 budgets for multiple agencies. The bill was passed last week with amendment language intended to hobble the FCC's net neutrality rules -- and its quest to bring competition to the cable set top box. More specifically, the bill prohibits the FCC from enforcing its net neutrality rules until the ongoing court case is settled. But it also would relegate the FCC's attempt to bring competition to the cable box to committee purgatory.

This attempt to force the FCC's cable box reform plan into a "study" that never ends -- despite an already scheduled extensive public comment period -- has been a constant drum beat among telecom lobbyists, who've masterfully enjoyed having a laundry list of Senators parrot their claims that cable set top box reform will somehow hurt consumer privacy, spike piracy rates, and even harm minorities. The real reason for the sector's opposition is the $21 billion in captive annual set top rental fees the cable sector enjoys, and the fact that more set top box competition means better, cheaper hardware that will highlight streaming alternatives to legacy television (the horror).

As is usually the case, politicians supporting the hamstringing of the FCC profess they're wasting taxpayer money and legislative time not because they're paid allies of the telecom duopolists, but because they're just breathlessly worried about the health of the nation. For example, Chairman of the Financial Services and General Government Appropriations Subcommittee, Florida Representative Ander Crenshaw, issued a statement making it abundantly clear he's not happy with a regulator actually doing its job:

"In addition, this Committee has strong concerns that the FCC seems to be prolonging their pattern of regulatory overreach with its recent set-top box proposal. And so, we include language that requires the FCC to stop and study this controversial rule before they can move any further. The telecommunications industry is more competitive than ever. And yet, the Commission has been more active than ever in trying to exert regulatory control over market innovation. To return the FCC’s focus towards mission critical work and away from politically charged rule makings, the bill requires the FCC to do less with less."

And by "mission critical work" Crenshaw means joining him in pretending that the broadband sector is actually competitive, and that forcing consumers to pay thousands of dollars for sub-standard, closed cable hardware is the pinnacle of innovation. Like past efforts of this type, the rider language won't make it very far, but it's always entertaining to see folks like Crenshaw dressing up cronyism as a noble assault on the very dysfunction he covertly enables.

Filed Under: competition, congress, fcc, funding, net neutrality

Jesse Jackson Likens FCC Cable Box Reform Plan To 'Snarling Dogs, Water Hoses And Church Bombings'

Say That Again

from the sock-puppetry dept

Wed, Jun 8th 2016 6:29am — Karl Bode

Back in February the FCC voted to open up the captive cable set top box market to competition, potentially opening the door to better, cheaper hardware, but also putting an end to the $21 billion the cable industry makes annually in set top box rental fees. Shortly thereafter the cable industry responded by pushing an absolute torrent of misleading editorials in newspapers and in websites nationwide. Some of these editorials claim set top box competition will result in privacy, security, or piracy Armageddon. Most try to claim set top box competition is some kind of nefarious plan by Google to freeload on cable's "amazing history of innovation."

But the most obnoxious of these editorials have been those trying to claim that the FCC's set top box reform plan will hurt minority communities and diversity. We've long noted how one of the cable industry's favorite lobbying tricks is throwing money at minority groups so they'll parrot bad telecom policy, whether that's supporting the latest merger or opposing net neutrality. In short, many such groups are willing to support policies that actively harm their constituents -- for just the right amount of cash.

Enter Jesse Jackson, who this week penned an Op-ed over at USAToday that right out of the gate starts off on unsteady footing by mentioning the FCC's set top box reform plan in the same breath as "snarling dogs, water hoses and church bombings in the American South":

"National news coverage of the snarling dogs, water hoses and church bombings in the American South were the catalysts to exposing the ugly truths of racism and bigotry in the 1960s. Local news outlets gave new meaning to what the struggle looked like for people on its front lines. That is why a new proposal at the Federal Communications Commission (FCC) to regulate TV “set top boxes" has raised so much concern."

Wait, what? Because history is filled with racism means the FCC's plan to open up the cable set top box market to competition raises concern? If you've actually bothered to read the FCC's proposal (pdf), all the rules would do would require cable companies to take their existing programming -- and make it available to third party hardware using the delivery methods and copy protection of the industry's choice. If anything the move would result in consumers getting access to more diverse programming options than ever before, given it would eliminate the traditional cable box walled garden, and replace it with hardware that nudges consumers in the direction of an ocean of streaming content.

Just like the cable industry (surely coincidental, right?), Jackson tries to claim that the FCC plan would let hardware vendors obtain cable programming "without any compensation":

"Essentially, the FCC is proposing that small and diverse television programmers such as Revolt and Vme TV hand over their television content to third party device manufacturers without any compensation. These companies could then pull networks apart, ignore copyright protections and dismantle the local and national advertising streams that have traditionally supported high quality, multicultural content."

Again though, that's not true. Cable customers will still pay cable companies the same high rates for the exact same content lineups using the exact same copy protection, users will just be able to access it via a wider variety of hardware. That's much like how third party hardware (like TiVO) work now, except without the costly and cumbersome CableCARD installation. Jackson (or what ever cable lobbyist ghost writer rented his name for the afternoon) preaches on -- pretending he's engaged in a brave civil rights battle:

"Diversity on television and media still matters as much as it did in the 1960s. While new video platforms and content are being developed, the promise of this new medium will not be an immediate substitute for the current range of images and voices now available on TV. Furthermore, the market is already demonstrating its own agility to change with many new devices, streaming options and services bringing traditional television and Internet video onto our screens seamlessly.

Fighting for diversity in programming and media ownership is one thing. Opposing a plan that would actually help diverse communities by making cable cheaper while delivering more diverse content than ever before is something else entirely. Jackson tries to support his shaky position by rattling off a laundry list of politicians and minority groups that oppose the FCC's plan:

"Leaders of the Congressional Black and Hispanic Caucuses have voiced opposition to this proposal; to date, over 80 House Democrats have expressed opposition or serious concerns. Major civil rights organizations, such as the National Urban League and the League of United Latin American Citizens (LULAC), have asked the FCC to pause this proceeding until more empirical data detailing the impacts on diversity is released."

And while it's possible a few members of these groups actually believe (or are mislead to believe) the FCC's plan hurts diversity, all Jackson's laundry list of such groups does is highlight just how pervasive this kind of lobbyist dreck has become. Most consumers frankly have no idea that "astroturf" of this type even exists, and as a result many will be convinced that a plan that actually helps them will do them harm thanks to Jackson's missive. Comcast has found this kind of sock puppetry so effective, it now calls its top lobbyist David Cohen the company's "Chief Diversity Officer."

And while this really is nothing short of disinformation, it speaks volumes about the quality of the cable industry's argument -- and its fear of set real top box competition -- that it needs to resort to grotesque, misleading puppetry of this type.

Filed Under: cable box, competition, copyright, diversity, fcc, fud, jesse jackson, open technology, set top boxes
Companies: comcast

35 Comments

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from the nobody-believes-the-words-coming-out-of-your-mouth dept

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from the pop-the-bubbly dept

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from the bigger-ain't-better dept

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Jesse Jackson Likens FCC Cable Box Reform Plan To 'Snarling Dogs, Water Hoses And Church Bombings'

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