As Expected, FCC Approving Net Neutrality Rules That AT&T Wants

from the not-like-we-didn't-warn-you... dept

For years, we've been pointing out that while the concept of net neutrality is important, any attempt by the government to put it into law would inevitably involve lobbyists twisting it to be quite favorable to the telcos and others. So, really, it should come as no surprise that the FCC is planning to approve a "net neutrality" plan that was heavily influenced by AT&T and from which long term supporters of "net neutrality" rules are distancing themselves. In other words, pretty much exactly what many folks had warned early on. We shouldn't confuse the concept of the end-to-end principle of the internet with the need for laws that start to regulate parts of the internet, because we've seen time and time again how the telco lobbyists will shape anything along those lines to their own advantage, and it appears this was no exception.

Filed Under: broadband, fcc, net neutrality, telcos
Companies: at&t

Telco Opposition To Anti-Bill Shock Plans Doesn't Pass The Laugh Test

from the more-confusion? dept

It's been talked about for ages, but the FCC is finally preparing to take on mobile operator "bill shock," that happens when a user, unknowingly, goes way over their allotted time/data and is charged ridiculous overage fees, leading to the ever popular stories of multi-thousand dollar bills. The FCC plans to require mobile operators to at least alert users when they're nearing the limits on their plan. While I'm often skeptical of FCC actions, I'm having trouble seeing what's wrong with this, and the mobile operators protestations are so silly that it's difficult to take them seriously.

Mobile operator trade association CTIA has warned that these sorts of warnings would "cause customer confusion and frustration." Huh? How? And it's already established that it's the crazy huge bills that are causing customer confusion and frustration (and, um, anger). Then there's Verizon Wireless, quoted as saying that "intense competition has led wireless carriers to provide consumers with usage information." Hmm. Information like the phantom charges that Verizon Wireless denied for nearly two years, until it finally 'fessed up and agreed to pay back to the tune of $50 million to $90 million. Honestly, I can't figure out what the pushback is over actually warning customers before they get insane overage charges?

Filed Under: bill shock, bills, mobile phones, telcos
Companies: ctia, fcc, verizon wireless

Companies Reach 'Deal' On Net Neutrality... But What Does That Mean?

from the not-really-their-call,-is-it? dept

A few weeks back, we noted that a bunch of tech and broadband companies were back to "negotiating" around net neutrality, leading us to highlight Adam Smith's famous quote that "people of the same trade" seldom meet together except to create "a conspiracy against the public, or in some contrivance to raise prices." Now comes the news that those involved -- including Verizon, AT&T, Skype, Microsoft, NCTA and "others" have "reached an agreement," which might be "stricter" than the Googrizon "framework," but which probably doesn't really apply to wireless networks.

I'm still at a loss as to how this actually matters. The companies can agree to whatever they want, and none of it makes a difference if Congress acts (or the courts say that the FCC is allowed to act). I guess the idea is to think that an "industry agreement" will stave off legislation, which perhaps might work for some time, but still reeks of collusion without consumer input or review.

Filed Under: lobbyists, net neutrality, telcos

Telcos Close To 'Deal' On Net Neutrality That Gives Them Everything They Want

from the careful-what-you-ask-for dept

Can't say we didn't warn people on this one. Way back in February, we suggested that people pushing for net neutrality legislation were going to be disappointed after the telco lobbyists got done with it. The telcos came ready for battle, hiring hundreds of former government employees, including 18 former members of Congress to lobby on their behalf. Back in June, we noted that the telcos were privately saying they were okay with net neutrality rules, so long as they helped shape them. Then, last month, we noted that, contrary to its promises of transparency and openness, the FCC was meeting behind closed doors in secret with those telco lobbyists.

Well-connected telco-beat reporter Dave Burstein is now claiming that this past weekend, the top broadband lobbyists finalized the deal on their version of net neutrality, with part of the deal being a back-scratcher promise to dump a bunch of money into the campaign coffers of Democrats this upcoming election season:

This weekend, uber-lobbyists Cicconi (AT&T), Tauke (Verizon) and McSlarrow (Cable) are at the FCC to make a final deal on net neutrality, Arbogast and Kaut report. Ivan Seidenberg has put enormous pressure on the White House to intervene, and the rumor is that chief of staff Rahm Emanuel is telling agencies to go along. Seidenberg, who has been to the White House 16 times,made a major D.C. speech suggesting that the business community would throw their money and power against the Democrats in the campaign. NN was one of the specific points he demanded.

Under pressure like that, Julius has already agreed to almost everything Cicconi really wants, including loopholes wide enough to carry 350 TV channels. K & A say there is still some opposition so that nothing is final and that the public interest groups are ready to assail Julius. Meanwhile, Verizon and Google are discussing a separate peace that will make the FCC irrelevant.

This one is about power and money, not principle. The likely outcome is an agreement that will allow everyone to say noble things, will allow Julius to look himself in the mirror, and will essentially have no substance.

Now, as Burstein notes, this isn't "final," so things could change, but everyone should have seen this coming. Yes, network neutrality principles are important, but fighting for network neutrality and understanding how the political process works are two different things -- and it's been obvious for years that any attempt to enshrine net neutrality in the law would almost certainly be twisted by telco lobbyists.

Filed Under: lobbyists, net neutrality, telcos
Companies: fcc

Wall Street Calling Telcos' Bluff On Stopping Investment If Net Neutrality Put Into Law

from the give-it-up dept

While we're still worried that any "net neutrality" rules put in place by the government will contain so many loopholes for the telcos as to make them do more harm than good, it's nice to see that more and more people are calling the telcos on their bogus claim that net neutrality rules would mean that telcos would cut back on investment. Lots of us have debunked that claim before, but the telcos have tried to make the case that this is a big deal for Wall Street people. Eh... perhaps not so much. Broadband Reports notes that even the Wall Street analysts who are against net neutrality rules don't believe it will impact investment:

Net neutrality/reclassification opponent Thomas Seitz (Height Analytics and previously Barclay) today joined the parade of top analysts doubting the claims that Net Neutrality rules would produce a serious cutback in broadband investment. Washington is inundated with claims NN will clobber investment, but the carrier CFO are telling Wall Street it won't be a determining factor. Seitz joins John Hodulik of UBS (voted #1 telco analyst), Craig Moffett (voted #1 cable analyst) and Michael Rollins of Citigroup as well as several others who haven't gone on the record.

As we've seen over and over and over again, telcos invest when there's competition in the market. When competition goes away, that's when they cut back. If the focus is really on encouraging investment in network infrastructure, then the focus should be on encouraging more competition in the marketplace -- which is exactly what the telcos don't want. They like their monopoly rents. They like not having to invest as much in infrastructure. It's great that more and more people are calling them on this bogus claim.

Filed Under: infrastructure, investment, net neutrality, telcos, wall street

FCC Finally Admits US Broadband Competitiveness Sucks; Broadband Co's Then Order Their Favorite Politicians To Trash FCC

from the gee,-who-coulda-thunk-it dept

Every year, the FCC is required to come out with a report on broadband competitiveness. Every year, it's a joke. Way back in 2006, the GAO looked at the 2005 report and pointed out that the FCC's methodology sucked and was highly inaccurate. Basically, the FCC looked at whether or not a single node in a zip code was wired for broadband (defined at some laughably low rate), and declared that the provider offered service across that entire zip code. On top of that, it relied on the broadband providers themselves to let the FCC know who was covered. So, in theory, you could have a zip code where only two houses were covered by broadband, and the FCC would define that entire zip code as not only covered, but a competitive market. That was in 2006. Yet, the FCC basically ignored the GAO and kept putting out its bogus reports each year, even as the GAO continued to highlight the problems of the report.

So here we are, years later, and the FCC has finally, finally, finally changed its methodology and for the first time released a report admitting that all is not well in the US broadband market. As Broadband Reports notes:

The report ditches the inaccurate zip code determination, and takes the long-overdue step of bumping the minimum definition of broadband from just 200 kbps, to at least 4 Mbps downstream and 1 Mbps upstream.

I should admit, by that definition, even I don't have broadband at home. To be honest, I'm less concerned about the amount of people who have access to broadband, as I am about the actual level of competition, which isn't really covered by this report. Still, it's amusing to see how angry the telcos and some elected officials are about the FCC finally telling the truth.

A telco lobbying organization, US Telecom immediately trashed the report saying it "strained credulity." And, it didn't take elected officials long to start grandstanding as well. Rep. Cliff Stearns wasted little time blasting the FCC report, saying he was "perplexed" by the report.

Perhaps we can clear up some of the confusion. You see, it appears that over the course of Cliff Stearns career, the single largest contributor to his campaign was (you guessed it) AT&T. Oh, and as for this year's campaign, it's probably worth noting that while AT&T is still his top contributor Comcast and Verizon are number two and three respectively, and closing in fast. And, of course, in the last election (2008), Stearns' top two contributors were AT&T and the National Cable & Telco Association. Verizon was fourth. But I'm sure that has nothing whatsoever to do with Stearn's confusion over the FCC report. Couldn't possibly be... And people wonder why every day citizens think that DC is corrupt.

Filed Under: broadband, cliff stearns, politics, telcos
Companies: fcc

FCC Ignores Criticism Over Lack Of Transparency; Negotiates Net Neutrality Behind Closed Doors With Industry Execs

from the you-don't-want-this dept

As much as we believe in the importance of a neutral network, we've pointed out over and over again that the last thing people should want is for specific net neutrality rules to be written by the government. For a while now, we've warned that once the lobbyists took over, people supporting net neutrality wouldn't like the results. And, of course, everything has been playing out following just that script. The telcos hired a ton of high-power lobbyists to cover net neutrality, including eighteen former members of Congress. And, despite arguing for years that net neutrality was evil, the telcos "miraculously" admitted last month they "might agree" to regulations... just as long as they got to write the details

Given that, there was a lot of outrage last month for a series of secret meetings between telco/cable execs and the FCC. You would think that, given the public beating the FCC got over those meetings it would know better than to hold more. No such luck. Apparently they're right back at it.

As important as the concept of a neutral network might be, what comes out of this sausage making process is going to favor the very companies net neutrality regulations are supposed to keep in line.

Filed Under: lobbyists, net neutrality, telcos

Telcos Still Pretending Google Gets "Free Ride"

from the repeating-something-relentlessly-does-not-make-it-true dept

Back in 2005, former AT&T CEO Ed Whitacre (now the head of GM) boldly proclaimed that Google was getting a "free ride" on his company's "pipes," and that they should be charged an additional toll (you know, just because). As we've discussed several times now, Whitacre's argument made absolutely no sense, given that Google not only pays plenty for bandwidth (as do AT&T's customers), but the company owns billions in international and oceanic fiber runs, data centers and network infrastructure. Despite making no sense, this idea that Google was some kind of free ride parasite quickly became the cornerstone of the telco argument against network neutrality. In response,Techdirt has suggested that telco spokespeople should pay for Google's bandwidth bill for a month if it's so low -- with no takers.

Of course, lost under the circus of the network neutrality debate was Whitacre's real goal: to get content providers to subsidize AT&T's network upgrades, something many myopic investors don't want to pay for. Whitacre was also afraid; he understood Google poses an evolutionary threat, the likes of which traditional phone companies like AT&T had never seen before. Incumbent phone companies had grown comfortable sucking down regulatory favors, subsidies and tax cuts while operating in non-competitive markets. Suddenly, increasingly-ubiquitous broadband allowed companies like Google to enter "their" telecom space, gobbling up ad dollars and offering disruptive products like Google Voice -- which threaten sacred cash cows like SMS and voice minutes.

Instead of competing with Google by out-innovating them, Whitacre's first reaction was to impose an anti-competitive toll system like some kind of bridge troll -- which should tell you plenty about pampered phone company thinking. Whitacre's fuzzy logic was given a new coat of paint in pseudo-scientific studies paid for by phone carriers, and has since floated overseas. In the UK, incumbent phone companies have taken a page from Whitacre, insisting that the BBC should pay them extra money -- just because people were using the BBC iPlayer. Now Google's non-existent free ride has popped up in Europe this week, with Telefonica, France Telecom and Deutsche Telekom all jointly insisting that Google should be paying them a special toll for carrying Google traffic:

Cesar Alierta, chairman of Telefonica, said Google should share some of its online advertising revenue with the telecoms groups, so as to compensate the network operators for carrying the technology company's bandwidth-hungry content over their infrastructure. "These guys [Google] are using the networks and they don't pay anybody," he said.

Yes, Google doesn't pay anything -- except for the billions they pay for bandwidth and extensive infrastructure. Were Google a telecommunications carrier, they'd be the world's third biggest according to Arbor Networks. It's absolutely stunning that such a ridiculous argument remains in circulation (and that many press outlets don't debunk the concept as painful nonsense). If electric companies went to AT&T or Telefonica to inform them that they wanted a cut of revenues on top of payment for electricity "just because" -- they'd be laughed out the building. Yet somehow we're supposed to take phone companies seriously, when in reality they're simply repeating total nonsense in the hopes that repetition will magically make it true.

Filed Under: bandwidth, infrastructure, network, telcos
Companies: at&t, google

Once Again, FBI Caught Breaking The Law In Gathering Phone Call Info; But Real Issue Is Why Telcos Let Them

from the surprise-surprise dept

A few years back, we found out that the FBI regularly violated the Patriot Act, issuing "National Security Letters" to access information that they had no right to access. So it should come as no surprise that during that same period, the FBI was also regularly violating the law to get phone call records without following the proper procedures, even beyond the problem with the NSLs. In fact, it appears the FBI may have violated the law in about half of all of these cases. Basically, it sounds like the FBI just went to phone companies, said the magic word ("terrorism!!") and the phone companies just handed over records -- even without using NSLs, but instead using an "exigent circumstances letter," which could be used even more easily than an NSL, but which required an NSL to follow it up eventually. The FBI is now basically admitting to screwing up and that using these "ECLs" without followup NSLs almost certainly violated the Electronic Communications Privacy Act. The FBI's excuse? They're claiming that the process was "good-hearted but not well-thought-out." Doesn't that make you feel better?

The story heads into Keystone Kops territory, as some in the FBI pushed for actually following up the ECLs with real NSLs, but the FBI was pretty slow. Eventually, someone signed a "blanket NSL" supposedly to cover all of the previous ECLs that never had a followup NSL -- except the guy who signed the blanket NSL later claimed that he couldn't recall ever signing anything, and insisted that NSLs should be for specific cases only. Oops.

Of course, lost in all of the attention over the FBI's process is the rather serious unanswered question of why the telcos didn't seem to push back when handed a bogus demand to hand over records that did not match the official process and violated the law. Shouldn't the telcos have some responsibility for actually making sure that a random FBI agent yelling "terrorism" has some sort of official basis to get information out of the them?

Filed Under: ecpa, exigent circumstances letters, fbi, national security letters, phone records, privacy, surveillance, telcos
Companies: fbi

Bush Administration Was Afraid It Would Have To Admit Telcos Helped With Warrantless Wiretaps To Get Immunity

from the why-would-they-want-immunity-otherwise dept

With the EFF finally successful in getting the federal gov't to hand over some lobbying documents involved in the process of granting telcos total immunity in lawsuits over warrantless wiretapping, the press is starting to go through the documents. Wired digs in and finds that the Bush administration was worried it would have to admit that the telcos had actually broken the law in order to get immunity -- but were able to route around that by having the Attorney General "submit a certification to the district court that the carrier defendant either did not provide the assistance as alleged, or did so in connection with a counter-terrorism program authorized by the president and pursuant to written assurances of legality." In other words, by doing a "this" OR "that," they could claim some sort of plausible deniability for the gullible.

Of course, the whole thing is silly. Why would the telcos need immunity if they hadn't broken the law? The only reason to push for immunity was because they obviously had broken the law. The entire push for immunity was never really about protecting the telcos, but about protecting the federal government from having to admit that it clearly broke the law as stated concerning oversight of wiretaps.

The other interesting element in the Wired report is that the Bush administration was worried that future administrations would reverse the immunity -- something it doesn't seem to have to worry about considering that the Obama administration has happily continued to hold the same position on warrantless wiretaps. However, the administration was unable to get anything put in the bill that would prevent future administrations from changing the immunity -- so, perhaps there's still some hope.

Filed Under: bush administration, obama administration, telco immunity, telcos, warrantless wiretapping