Why Do Josh Hawley's Cures For 'Big Tech' Always Oddly Omit 'Big Telecom'?

from the half-the-battle dept

Over the last year, giants like Amazon, Facebook, Google, and Apple have all faced growing calls for greater regulatory oversight and antitrust enforcement, something that isn't particularly surprising. After all, experts have noted for decades that US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech."

But while Silicon Valley giants now face an endless cavalcade of outrage in DC, the telecom sector is suddenly seeing no scrutiny whatsoever. Whether it's the speed at which the problematic T-Mobile merger is being shoveled through the DOJ and FCC, or the blind eye being turned to major telecom privacy scandals (like location data), telecom lobbyists have been on a successful tear convincing well-heeled DC lawmakers to ignore the massive, obvious monopoly, privacy, and competition issues inherent in telecom to focus exclusively on the problems in "big tech."

This crusade against "big tech" has seen no shortage of advocates who've historically been absent on glaring and painful monopoly and consumer protection issues in other sectors. Like Marsha Blackburn, who has rubber stamped every fleeting monopolistic and privacy-violating whim AT&T executives have ever had, yet is now branding herself as some sort of consumer advocacy and privacy expert as she rails against "big tech."

Another major voice in the "battle to fix 'big tech'" has been Josh Hawley, who has been endlessly vocal about the issues with big tech, but just as absent as Blackburn when it comes to criticizing the same exact problems plaguing the telecom sector. Last week, Hawley unveiled a plan to fix the FTC (pdf) -- an agency, he correctly notes, that has been largely feckless when it comes to reining in the bad behavior of lumbering giants like Facebook:

"As it stands today, the FTC lacks teeth. Its jurisdiction is divided. It wastes time in turf wars with the Department of Justice (DOJ) while failing to confront the increasing concentration in our economy, in the tech sector most obviously. And it is woefully unaccountable. The agency as presently constituted is in no shape to ensure competition in today’s markets, let alone tomorrow’s."

He's certainly not wrong on that. If anything, he undersells the problem. The FTC has somewhere around 8% of the staff focused on resolving privacy issues as its counterpart in the UK, despite the UK having a fifth as many people as the US. The FTC is also a cesspool of revolving door conflicts, with most employees having either recently left the companies they're supposed to hold accountable, or simply biding their time until they can go lobby for those same companies. And, like the FCC, its partisan majority makeup results in whiplash as the parties jerk the reins of policy from one side of the spectrum to the other.

This is not some inadvertent error. An understaffed, underpowered FTC is the intentional lobbying byproduct of giant U.S. companies that don't find taxpayer or regulatory accountability particularly exciting. It's why even when the FTC finally acts on an issue, its solutions (as we saw with Equifax or Facebook) are pathetic messes that in no way deter future bad behavior (and in some ways only encourage the problems to repeat themselves). It's a feature, not a bug.

Hawley's cure for this involves essentially gutting the agency as it stands, then rolling it into the DOJ to provide "clear and direct oversight." His effort would also eliminate the FTC’s five-member structure, which, like the FCC, is based on a partisan 3-2 split depending which party holds the Presidency. Instead, the FTC boss would fall under the authority of a Senate-confirmed single director serving a five-year term.

There's stuff under Hawley's plan that's certainly common sense -- stricter controls on ethics, antitrust enforcement being centralized, etc. The problem is several fold. For one, do we really want ex-Verizon lawyer Bill Barr in charge of the FTC? Couldn't giving that kind of leverage to Barr only aid his relentless effort to break encryption and put backdoors into, well, everything? Meanwhile, the partisan FTC strife Hawley claims to be eliminating would probably just jump over to the confirmation hearing process, and the numerous hearings and laws you'd likely need to make his plan a reality.

The other big problem: a lot of these regulatory "modernization" plans often wind up being little more than exercises in butchery dressed up as reform once they actually materialize in the wild.

Case in point: with its recent net neutrality repeal, the FCC recently neutered its authority over telecom providers at telecom lobbyist behest amidst claims it would create "internet freedom" and spur investment (neither happened). But contrary to public wisdom, the repeal didn't just kill net neutrality. It effectively gutted the FCC, shoveling much of its responsibilities over to the FTC -- an agency that lacks the authority or resources to actually police the telecom sector. This was, in case you're a little slow, the entire reason the telecom lobby pushed for it. It wanted consumer protection and accountability to fall into a deep, dark chasm. It's working, and a lot of blatant efforts by telecom to rip users off or violate their privacy have gone utterly unpunished amidst crickets from "big tech" reformers.

Gutting already shaky oversight is not really "reform," and I'm curious what happens to telecom oversight if we destroy the existing FTC and hand management of the telecom sector over to Bill Barr. Former Verizon lawyers would be running both the FCC and FTC, and both consumer protection and antitrust enforcement would fall to a duo who've shown less than zero interest in reining in AT&T, Verizon and Comcast, or the trio's thirty year track record of aggressively anti-consumer, anti-innovation, and anti-competitive behavior. Behavior that was being bone-grafted to the American institution while Google and Facebook were still just twinkles in youngsters' eyes.

One might feel better about this if the perils of telecom monopolies weren't so utterly absent from Hawley's rhetoric. When you dig through his plan or his lengthy treatises on reform over at his website or in speeches, big telecom is almost never mentioned -- despite the sector engaging in many of the same, or worse behaviors. Much like Blackburn, Hawley appears to have placed the entire onus for the modern internet's ills securely on the back of big tech, while giving telecom a free pass. Why do you think that is, exactly?

There are certainly plenty of reasons to criticize big tech giants like Facebook, whose face plants on privacy are now the stuff of legend. But big telecom is every bit as bad as big tech. As government-pampered giants that also enjoy unaccountable monopolies over internet access itself, in some ways the sector is arguably worse.

AT&T's massive ad ambitions rival anything Silicon Valley ever concocted, fusing television, mobile, location, and countless other data sources into what The Verge recently called an "ad tracking nightmare hellworld." From Verizon getting busted for covertly modifying user packets to track you around the internet to recent location data scandals, the sector's just as terrible on privacy as anything Silicon Valley has to offer. This is before you even mention that they're enthusiastically bone-grafted to the NSA.

As companies like Comcast NBC Universal and AT&T Time Warner increasingly push into the ad tech space, they've been eagerly pushing a crackdown on the big tech giants whose market share they hope to erode. Any quest to fix the US' broken antitrust and consumer protection enforcement has to take a bigger picture view that identifies both big tech and big telecom monopolies as part of the same giant problem.

Politicians that fixate exclusively on the former are either being painfully but genuinely myopic, or they're exhibiting a byproduct of relentless lobbying by the telecom sector, which has been pushing for this special brand of asymmetrical "reform" for several years now.

Filed Under: antitrust, big tech, competition, doj, ftc, internet, josh hawley, law enforcement, privacy, telecom

US Antitrust Enforcement Clearly Broken As Court Rubber Stamps T-Mobile Merger

from the ill-communication dept

When AT&T was busy trying to gain regulatory approval of its $86 billion merger with Time Warner, economists, consumer groups, antitrust experts, and opponents of the deal warned it should be blocked because a bigger AT&T would only act anti-competitively to raise rates and hamstring competitors. AT&T and the FCC denied those claims, only to have them all come true a short while later.

Fast forward to this week and we're repeating history all over again. This morning U.S. District Judge Victor Marrero approved (pdf) T-Mobile's controversial $26 billion merger with Sprint, shutting down a multi-state AG lawsuit aimed at stopping the deal. Citing ample evidence that the reduction of four major carriers to three would dull any incentive to compete on price, a coalition of AGs tried to stop the deal after it was rubber stamped by both the FCC and FTC. But in his decision, Marrero tied himself into bizarre, esoteric knots in a bid to try and justify approval of the deal:

"How the future manifests itself and brings to pass what it holds is a multifaceted phenomenon that is not necessarily guided by theoretical forces or mathematical models,” Marreno wrote. “Instead, causal agents that engender knowing and purposeful human behavior, individual, and collective, fundamentally shape that narrative."

That's deep, bro.

Marreno at one point goes on at great length to suggest that it's "unlikely" that U.S. telecom giants, among the least competitive companies on the planet, would ever possibly act anti-competitively in the wake of the deal:

"In this court's view, in the intensely competitive and rapidly changing environment in which complex and dynamic markets operate, the anticompetitive business strategies and market effects Plaintiff States predict are unlikely. It is not likely, perhaps improbably or even not rational, that a major new or reinforced market participant, rather than vying aggressively to entire additional customers from competitor by introducing innovations, and investing more to protect and expand market share, would do the exact opposite, thereby risking har to its customer base.

Here in reality, there's ample evidence from around the globe that such 4 to 3 market shifts result in higher prices and significant layoffs. From Canada to Ireland, this kind of consolidation almost never ends well for consumers, competition, or the market. Hell, you only need look at Comcast, whose legendary status as one of the most despised companies in America is a direct byproduct of mindless M&A and a patent refusal to scale customer service alongside its relentless growth. US telecom consolidation has not been a good thing, no matter how many telecom-linked think tanks spin themselves into butter insisting otherwise.

American antitrust enforcement and consumer protection has turned into a running joke. The Trump administration uses antitrust to pursue weird, petty and pointless vendettas, while deals that create obvious market harm (AT&T Time Warner, T-Mobile Sprint) are allowed to proceed. The FCC rubber stamped the T-Mobile merger before staffers had even read the full proposal. The DOJ approved the deal against the advice of its own staffers.

The grotesqueness of the T-Mobile approval process couldn't have been any more blatant. Former FCC Commissioners from both parties, ranging from Mignon Clyburn to Robert McDowell, lobbied to help gain regulatory approval, often without identifying themselves (in Op/Eds and elsewhere) as being on T-Mobile's payroll. T-Mobile also hired Trump ally Corey Lewandowski (just days after he mocked a kid with Down Syndrome on national TV), and made a point of ramping up executive stays at Trump's DC hotel to further grease the wheels. It clearly worked.

To justify its approval of the deal, the DOJ created an absurd proposal that involves shoveling some spectrum off to Dish Network, which will then be tasked with building up a new fourth replacement carrier over a period of seven years. Economists pointed out repeatedly the plan isn't likely to work.

Dish (whose history of flaky promises in wireless was even previously mocked by T-Mobile) will spend much of that time as little more than a rebranded T-Mobile MVNO, and may never become fully viable. The effort is also likely to be undermined by AT&T and Verizon, which have every incentive to make sure Dish never becomes a viable fourth competitor. Who is supposed to prevent AT&T and Verizon from scuttling the effort? Who makes sure T-Mobile and Dish live up to their promises? Ajit Pai? The guy who mindlessly rubber stamps every fever dream the telecom sector has?

US consumers already pay some of the highest prices in the developed world thanks to regulatory capture and muted competition. A laundry list of economists have made it abundantly clear that further consolidation in wireless will only make the problem worse. There's literally forty years of documented history showing how these kinds of deals drive up prices, erode jobs, and result in worse overall service. While DC policy experts freak out about the perils of "big tech," we're giving big telecom a free pass to build something that could be arguably far worse.

Filed Under: antitrust, competition, consolidation, judge, state ags, victor marrero, wireless
Companies: sprint, t-mobile

DOJ Antitrust Boss Delrahim Ignored Hard Data As He Rubber Stamped T-Mobile Merger

from the dysfunction-junction dept

Technically, the head of the DOJ's antitrust division, Makan Delrahim, is supposed to enforce antitrust law and derail harmful monopolies when they arise. But that's certainly not what's happening with the DOJ review of T-Mobile's $26 billion merger with Sprint, which antitrust experts (and even the DOJ's own economists) have repeatedly warned will indisputably reduce competition, raise rates, and result in thousands of layoffs as duplicative positions are eliminated.

As state AGs continue their lawsuit to stop the merger, details were revealed last week in court showing that Delrahim did everything in his power to help shovel the deal through the merger approval process, including providing T-Mobile tips (via both personal and business accounts) on which officials they should focus their lobbying attention on in order to get the deal across the finish line:

"As the $26 billion blockbuster merger between T-Mobile and Sprint teetered this summer, Makan Delrahim, the head of the Justice Department’s antitrust division, labored to rescue it behind the scenes, according to text messages revealed this week in a lawsuit to block the deal.

Mr. Delrahim connected company executives with the F.C.C. and members of Congress. And he gave executives insight into the thinking of Ajit Pai, the chairman of the F.C.C. who would also have to approve the merger.

He is “open and willing” to discussions about the deal, Mr. Delrahim said in one text message in June, a month before regulators blessed the transaction."

Delrahim's job is to look at the evidence and protect markets where necessary, not help companies push deals that erode competition, harm workers, and hurt markets. Keep in mind, past deals just like this one (AT&T/T-Mobile 2011, T-Mobile/Sprint 2014) were blocked because the harm was so obvious there was simply no way to justify it. This latest merger is no different, yet government officials have stopped even pretending to care. They're intent on shoveling this turd of a deal across the finish line at all costs at the behest of T-Mobile, Sprint, and Japan's Softbank.

The FCC rubber stamped the merger before Commissioners had even seen their own staff's full economic analysis. FCC staffers privately met with T-Mobile numerous times to massage their underlying and fragile arguments. Former FCC officials (Clyburn, McDowell) have happily lobbied on T-Mobile's behalf, and T-Mobile executives ramped up patronage of Trump's DC hotels to curry favor with the administration. That's all capped off by Delrahim all but putting out runway lights for T-Mobile in a bid to shine up a deal that, again, is going to be indisputably bad for consumers and the market.

Former FCC staffers like Gigi Sohn were not what you'd call impressed:

To justify its mindless rubber stamp of the deal, the DOJ has pushed forth a shaky plan that involves giving Dish Network some spectrum (and prepaid brand Boost Mobile), then just hoping the company can build a replacement fourth wireless carrier over the next 7 years. But with T-Mobile, Verizon, and AT&T all heavily incentivized to make sure a strong fourth competitor never emerges, Dish having a reputation for empty promises and bluster, and regulators largely captured by industry players (who again, want less competition to boost revenues) few serious analysts actually think the plan's going to work.

This is, of course, the same DOJ that folks seriously hope will come in and "fix big tech" via an ocean of new antitrust inquiries. But it's pretty damn clear this DOJ doesn't actually give a damn about those responsibilities, and has been largely captured by the telecom industry under former Verizon lawyer Bill Barr. And while US corruption is nothing new, we seem to be entering a new era where we can't even be bothered with the faintest pretense to the contrary.

Filed Under: antitrust, assistance, competition, doj, fcc, lobbying, makan delrahim
Companies: sprint, t-mobile

DOJ Wimps Out On Wireless Sector eSIM Antitrust Investigation

from the what-collusion? dept

Last year, the DOJ announced it had launched an investigation into whether AT&T, Verizon and a telecommunications standards organization had conspired to make it harder for consumers to switch mobile carriers. At the heart of the controversy was eSIM, a technology that's supposed to make it easier than ever to switch carriers without consumers needing to buy and install a new SIM card. With eSIM, user identification technology of a traditional SIM card is instead transferred to the device's processor or modem itself. Ideally, that could let a consumer switch carriers within just a few seconds.

But given AT&T and Verizon had already been losing subscribers hand over fist to smaller competitors like T-Mobile, they had a vested interest in ensuring this technology never fully materialized. As a result, they leveraged their influence over the GSM Association (GSMA) -- a trade association for mobile network operators -- to hamstring the technology's rise. By and large this was done by ensuring the inclusion of bizarre and arbitrary restrictions and bureaucracies the DOJ found served no technical purpose outside of slowing the actual implementation of the tech and locking users to one carrier.

Just before Thanksgiving the DOJ quietly did a news dump announcing the completion of its two year investigation into the sector collusion, and it's not particularly impressive. According to the DOJ announcement, the investigation has ended with no punishment or penalty of any kind. Why? The industry effectively pinky swore to the DOJ that it would try to do better in the future:

"The Antitrust Division’s investigation revealed that, in recent years, the GSMA used its industry influence to steer the design of eSIMs technology in mobile devices. In response to the investigation, the GSMA has drafted new standard-setting procedures that will incorporate more input from non-operator members of the mobile communications industry. The new standard-setting process will have a greater likelihood of creating procompetitive benefits for consumers of mobile devices; it will also curb the ability of mobile network operators to use the GSMA standard as a way to avoid new forms of disruptive competition that the embedded SIMs (eSIMs) technology may unleash."

Granted, just because the industry organization created voluntary standards doesn't mean anybody will actually adhere to them. But that was enough for the Trump DOJ, which will end the inquiry without actually doing much of anything to, you know, actually stop the behavior or punish sector giants for past misdeeds. Did I mention that the DOJ is now run by a former Verizon lawyer?

Recall, the antitrust investigation began because Apple and one wireless carrier (likely T-Mobile or Sprint) filed formal complaints with the Justice Department, saying AT&T and Verizon were abusing the standards process to hamstring competition and innovation. Apple was excited about eSIM because the elimination of a physical SIM card would free up design space for additional features and improve the customer experience. Smaller carriers like it because it would technically make it a snap to change carriers. AT&T and Verizon did everything in their power to hamper the effort.

Ultimately the GSMA, AT&T and Verizon pinky swore they'd play nice going forward, which is effectively a worthless promise. While a big deal, this is just one of countless offenses AT&T and Verizon have engaged in over the years to ensure that the industry remains less competitive than advertised, leading to US wireless prices being some of the highest in the developed world. And just like those past offenses, the US government is, by and large, generally ok with that.

Filed Under: antitrust, competition, doj, esim, mobile carriers
Companies: apple, at&t, verizon

Nonprofit TV Service Locast Accuses Big Four Broadcasters Of Collusion

from the dysfunction-junction dept

Locast, a New York based nonprofit that offers viewers access to over-the-air (OTA) broadcasts via the internet, has accused the big four broadcast networks of colluding to restrict consumer access to those broadcasts. As we noted recently, Locast was custom built to test the copyright legal minefiled created in the wake of the Aereo ruling, which made made numerous dubious assumptions and provided zero guidance for companies that wanted to enter the space but comply with the law. Enter former FCC lawyer and media executive David Goodfriend, who effectively created Locast specifically in the hopes the industry would sue.

Last month Goodfriend got his wish, with ABC, CBS, Comcast/NBC, and Fox all filing suit, claiming the video nonprofit (which currently offers the service in 13 markets) is "illegally using broadcaster content." Locast in turn has now responded in a court filing (pdf), alleging that the broadcast networks have unfairly colluded to restrict public access to OTA broadcasts:

Plaintiffs have colluded to limit the reasonable public access to the over-the-air signals that they are statutorily required to make available for free, and have opted instead to use their copyrights improperly to construct and protect a pay-TV model that forces consumers to forgo over-the-air programming or to pay cable, satellite, and online providers for access to programming that was intended to be free. A large portion of the fees paid by the public is then handed over to Plaintiffs in the form of retransmission consent fees.

Broadcast TV networks are available using both an inexpensive antenna and airwaves that are technically owned by the public. But, given broadcast networks collected $10.1 billion in retransmission fees for these channels in 2018 from cable TV operators looking to include them in their cable lineups, they're obviously not keen on outfits looking to disrupt their profitable, existing models. Locast currently streams these channels in 13 markets but doesn't charge users for access, only taking donations as a nonprofit. Its lawyers say the existing broadcast model is little more than a complicated con:

This is classic copyright abuse. By limiting access to the over-the-air signals that Plaintiffs have committed to make freely available, and simultaneously using the copyrights in their programming to drive revenue for the local programming that consumers cannot now effectively receive over the air through their pay-TV model, Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The payTV providers get rich. Plaintiffs get rich. The public gets fleeced.

In addition to engaging in what Locast's lawyers call a "a sham copyright infringement claim," they state that the broadcast networks have been working in concert to threaten retaliation against any additional partners beyond AT&T and Dish:

Plaintiffs’ bad faith litigation is part of a broader coordinated campaign to undermine Defendants’ business dealings and chill financial support among potential donors, including with direct threats of retaliation or baseless litigation against them. These threats have harmed competition and will continue to do so until stopped by this Court.

The broadcasters' lawsuit was filed in US District Court for the Southern District of New York against Sports Fans Coalition New York (SFCNY), the organization that technically runs Locast. The broadcasters continue to argue that the outfit is not only illegal, but that it's not eligible for non-profit status because it's funded, in part, by Dish and AT&T, two companies both trying to make inroads in the streaming TV space.

Filed Under: antitrust, collusion, competition, copyright, david goodfriend, tv
Companies: locast

Comcast Apparently Feels Qualified To Give Google Lectures On Monopoly Power

from the ill-communication dept

For several years the telecom sector has been quietly trying to spur additional regulation of Silicon Valley. Why? As giants like AT&T and Comcast increasingly push into the online advertising arena, they're keen on having competitors saddled with regulation, while they successfully eliminate oversight of their own problematic monopolies. Given the FCC (now headed by a former Verizon lawyer) just effectively neutered itself at telecom lobbyist behest while the DOJ (now headed by a former Verizon lawyer) goes the extra mile to vilify Facebook, you'd have to consider the gambit fairly successful so far.

To be clear, there are plenty of problems with Google, Facebook, Amazon, and other Silicon Valley giants that require attention and intelligent solutions by objective experts. And while a huge chunk of the animosity toward Silicon Valley giants is entirely genuine and well deserved, a lot of the "big tech" hyperventilation among lawmakers like (longtime AT&T ally) Marsha Blackburn is largely theatrical in nature and being driven by the telecom sector. Ferreting out which is which isn't easy, but looking at campaign contributions can certainly help.

The mainstream press, for its part, has been oddly unaware of how much of the animosity against "big tech" has been co-opted and amplified by telecom for what should be obviously selfish reasons. For example, telecom (hand in hand with Rupert Murdoch) has been making the rounds trying to suggest that Google's support of encrypted DNS somehow runs afoul of antitrust guidelines (it doesn't). And Reuters, for example, ran a story this week suggesting that Comcast had suddenly emerged as a "new antitrust foe" for Google, levying criticism at the company's ad business for the "first time":

"Comcast, one of America’s largest media and communications companies, is wading into the epic regulatory pile-on against big tech companies such as Google, according to people familiar with the matter...Comcast may be drawing a line in the sand and wants to avoid letting Google do to the video ad business what it has done to the online ad market. It is the first time one of the most powerful companies in the United States, with its own muscular lobbying apparatus in Washington, is taking sides in the antitrust battle looming over the world’s largest seller of online ads.

So for one thing, Comcast's efforts to push for a regulatory and antitrust crackdown of Google isn't "new." The cable industry's top lobbying organization, the NCTA (whose primary backer is Comcast) has been pushing for a crackdown on Silicon Valley for several years now. Former FCC boss Mike Powell, now the cable industry's top lobbyist, had this to say at an industry show in March of last year. Take special time to note how every criticism levied at Silicon Valley giants applies equally to telecom providers:

"Our governmental authorities need to get a handle on what kind of market power and harm flow from companies that have an unassailable hold on large pools of big data, which serve as barriers to entry, allowing them to dominate industries throughout the economy. For years, big tech companies have been extinguishing competitive threats by buying or crushing promising new technologies just as they were emerging. They dominate their core business, and rarely have to foreclose competition by buying their peers. Competition policy must scrutinize more rigorously deals that allow dominant platforms to kill competitive technologies in the cradle."

While there's plenty of individuals, groups, and companies that can provide helpful insight on the problems in "big tech," Comcast isn't among them. In large part because it's guilty of nearly all of the criticisms it levies at Google. After convincing the FCC to effectively neuter itself recently, Comcast has been enjoying a growing broadband monopoly across huge swaths of the country as the nation's telcos give up on upgrading aging DSL networks. Comcast then uses that monopoly to jack up prices, erect arbitrary barriers for competitors, and stifle emerging technologies (like better cable boxes).

And while Comcast tries to get DC lawmakers to impose all manner of new restrictions on Google, with its other hand it has successfully convinced DC (and a lot of policy folks who should know better) to ignore the problems with telecom entirely. Comcast has largely been criticizing Google via its advertising subsidiary Freewheel, and via its policy and lobbying extension organizations, while leaning on politicians like Marsha Blackburn whose sudden, breathless concern about tech monopolies mysteriously omits some of tech's worst offenders: telecom providers.

Yes, countless experts have noted for a decade than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech." That said, if we're looking for expert insight into the genuine problems posed by "big tech," maybe skip taking advice from natural telecom monopolies whose only real motivation here is to elbow in on Silicon Valley advertising revenues while saddling competitors with layers of new regulation.

Filed Under: antitrust, broadband, dominance, hypocrisy, internet, monopoly power
Companies: comcast, google

Telcos And Rupert Murdoch Pushing Nonsense Story That Google Helping Keep Your Internet Activity More Private Is An Antitrust Violation

from the oh-really-now? dept

There are all sorts of reasons and ways to hate on big internet companies these days, but as we've warned, some of them are in conflict with one another -- though that doesn't seem to stop those who keep pushing the narrative forward from blindly repeating them anyway. The latest is a positively bonkers article in the Wall Street Journal arguing that Google's (somewhat middle of the road) support for DNS over HTTPS (DoH) is potentially an antitrust violation worthy of Congressional action.

This is (1) utter nonsense and (2) driven by telcos looking to undermine consumer privacy. So if you're a pro-privacy Google hater, you might want to at least reconsider supporting this particular line of attack. If you are unaware, under the current DNS system, you still leak some key metadata every time you visit a site to your DNS provider (which is usually, but not always, your broadband/internet access provider). It used to be that those providers could collect even more, page-level, information, but that is less and less true as more and more of the web itself is encrypted with HTTPS. DoH is an attempt to encrypt the last bit of info that leaks when you surf -- the metadata about the top level domains you are visiting. Mozilla has been strongly pushing support for DoH, and will plan to move most public Firefox users to DoH in the relatively near future. Google, on the other hand, is supportive of the standard, but has shown no inclination to adopt it nearly as widely as Mozilla.

Either way, done correctly, DoH protects your privacy and stops the fairly large metadata loophole that has allowed DNS providers (generally your telco/broadband provider) from being able to snoop on everywhere you surf. There are some reasonable concerns that if browsers automatically force users to use specific DNS resolvers for DoH that it could, potentially, lead to more control/centralization of both those servers, but as EFF points out in the link above, that's mitigated by more ISPs simply adopting DoH themselves.

The problem, of course, is that the biggest telcos, such as AT&T, Verizon, and Comcast don't want to stop spying on you and all of your internet habits. And, so, rather than adopting DoH, they're trying to undermine DoH entirely by pretending that Google's lukewarm interest in supporting DoH is, itself, an antitrust violation. What's kind of incredible, however, is just how open they are about this plan, and that's it's entirely about preventing the big broadband providers from spying on your traffic:

“Because the majority of world-wide internet traffic…runs through the Chrome browser or the Android operating system, Google could become the overwhelmingly predominant DNS lookup provider,” a coalition of internet service providers said in a Sept. 19 letter to lawmakers. “Google would acquire greater control over user data across networks and devices around the world. This could inhibit competitors and possibly foreclose competition in advertising and other industries.”

They urged lawmakers to call on Google not to impose the new standard as a default standard in Chrome and Android.

Google, for it's part, reiterated (as it has in the past) that it has no plans to force users into using its own DNS offerings. While the Wall Street Journal report at least quotes some pushback on this claim, it still seems to present this mostly as a credible antitrust concern, when the reality is that it's clearly an attempt by big broadband players to play an antitrust card to (1) attack Google and (2) to prevent Google from helping consumers better protect their own internet privacy.

There are, of course, plenty of legitimate concerns that people have about Google's own privacy practices. But pushing people towards DoH is a good thing. A few months back we saw UK ISPs laughably attack Mozilla's plans to support DoH by calling the company an "internet villain" claiming that better protecting your privacy would undermine "internet safety standards." To be clear: this is nonsense. What they mean is, like with other forms of encryption, it might make a very tiny number of criminals marginally harder to track down. But, on the flip side, it will massively protect everyone else's privacy from overly snoop happy broadband providers.

We've noted for a while how hypocritical it is for people to focus on "antitrust" and "privacy" claims about the big internet companies, while ignoring the much larger problems on both fronts regarding broadband companies. Similarly, we've talked about how many of the attacks on "big tech" are quietly driven by the big broadband players quietly fanning the flames. But this story combines all of that. It's the big broadband players/telcos pushing a totally bogus monopoly story against Google (which makes no sense at all if you understand the details, and which wouldn't even be a potential monopoly concern at all if those very same broadband companies adopted DoH themselves), in order to stop Google from better protecting your privacy -- so that the broadband providers can better snoop on you.

And, a side note: Rupert Mudoch's Wall Street Journal has been one of the worst in pushing these misleading anti-Google/Facebook stories over the last few months, which is, again, no surprise at all, as it's been revealed before that Murdoch has been eager to attack Google and Facebook and has no problem using the Wall Street Journal to do so. While this story at least includes some balance, the entire narrative arc of it seems to follow the telcos talking points -- and it's notable that while it briefly quotes a section of the telcos letter to Congress, it fails to post the entire letter. I wonder why...

Either way, this kind of thing undermines any serious discussion of either privacy or competition online, by mixing up and conflating an attempt to better protect privacy, and pretending it's an antitrust violation.

Filed Under: antitrust, competition, dns over https, doh, privacy, rupert murdoch, snooping, telcos
Companies: google, mozilla

Much Of The Assault On 'Big Tech' Is Being Driven By 'Big Telecom'

from the inauthentic-outrage dept

Over the last few months, Google, Amazon, and Apple have all taken a significant beating on Wall Street amidst rumblings of looming antitrust investigations by the DOJ and FTC. Google, we're told, is subject of a looming antitrust probe by the DOJ. Amazon, we've learned, is facing growing scrutiny from the FTC. Apple stock also briefly did a nose dive on the news that it too may soon be subject to a significant new antitrust probe.

On its surface, many of these actions aren't all that surprising. After all, experts have noted for a decade than US antitrust enforcement has grown toothless and frail, and our definitions of monopoly power need updating in the Amazon era. Facebook's repeated face plants on privacy (and basic transparency and integrity) have only added fuel to the fire amidst calls to regulate "big tech."

But while Silicon Valley faces an endless cavalcade of outrage, the telecom sector is suddenly seeing no scrutiny whatsoever. Whether it's the speed at which the problematic T-Mobile merger is being shoveled through the DOJ and FCC or the blind eye being turned to major telecom privacy scandals (like location data), telecom lobbyists have been on a successful tear convincing well-heeled DC lawmakers to ignore the massive, obvious monopoly, privacy, and competition issues inherent in telecom to focus exclusively on the problems in "big tech."

Yet somehow, this asymmetrical policy paradigm is still treated as entirely coincidental in press coverage. Only recently have some news outlets started to notice how well things have been going for telecom lately in DC (Axios calls it telecom's "sweet summer of revenge"). Outlets have even started to finally realize that with former telecom lawyers now running the FCC and DOJ (Ajit Pai and Bill Barr), that is not coincidentally being reflected in federal policies attempting to hamstring telecom's competitors:

"In a June speech, DOJ Antitrust Division Chief Makan Delrahim laid out ways his agency could could go after Big Tech for anti-competitive behavior. In a June Senate hearing, FCC Chairman Ajit Pai said, “The greatest threat to a free and open internet has been the unregulated Silicon Valley tech giants that do, in fact, today decide what you see and what you don’t,” he said."

It's routinely understated how telecom lobbying, not a sincere worry about market power or privacy, is what's driving much of this current policy paradigm in DC (including much of the hyperventilation over nonexistent Censorship of Conservatives). The telecom sector is pushing hard into an online advertising sector traditionally dominated by Silicon Valley. As such, telecom lobbyists have spent several years now pushing to hamstring their direct competitors with the help of cash-compromised lawmakers and full blown regulatory capture.

That includes successfully convincing government that a sector filled with natural, historically-predatory monopolies should see no guard rails whatsoever (see the killing of net neutrality and the neutering of the FCC as example A). Yet somehow, there are still a lot of folks in tech policy circles who see the lopsided focus on "big tech" as entirely authentic, and any failure to police telecom as somehow coincidental. But folks in DC (like former FCC lawyer Gigi Sohn), are well aware that much of this current policy paradigm is highly-produced theater and, shockingly, all about money:

Again, none of this is to say that there aren't massive problems with Silicon Valley giants and plenty of authentic calls for reform. But it is a reminder that an oversized portion of the current anti big tech sentiment in DC is telecom driven. Intellectual inconsistency and campaign finance data usually makes it clear which lawmakers are telecom sector marionettes. More often than not consumer rights, market power, or healthy competition are the very last thing on the minds of those pushing lopsided regulatory solutions to a "big tech" problem they don't actually care all that much about.

Filed Under: antitrust, doj, ftc, internet, telecom
Companies: amazon, apple, at&t, comcast, facebook, google, verizon