European Telcos Threaten To Withhold Next Gen Wireless Upgrades If Net Neutrality Rules Passed

from the chicken-little's-manifesto dept

Tell me if you've heard this one before: broadband carriers are once again claiming that if regulators pass net neutrality rules, their ability to invest in next-generation networks will somehow be severely hindered, causing no limit of damage to consumers, puppies, and the time-space continuum. That's basically the line U.S. broadband providers tried to feed the FCC in the States. But no matter how many industry-tried, cherry picking think tank studies have tried to claim that net neutrality hurts broadband investment, real world data and ongoing deployment show that just isn't true.

As we noted last October, Europe passed net neutrality rules that not only don't really protect net neutrality, but actually give ISPs across the EU's 28 member countries the green light to violate net neutrality consistently -- just as long as ISPs provide a few flimsy, faux-technical justifications. The rules are so filled with loopholes as to be useless, and while they technically took effect on April 30, the European Union's Body of European Regulators of Electronic Communications (BEREC) has been cooking up new guidelines to help European countries interpret and adopt the new rules.

With BEREC's public comment period set to end on July 18, European net neutrality advocates are giving it one last shot to toughen up the shoddy rules. Fearing they might succeed, a coalition of twenty European telcos (and the hardware vendors that feed at their collective trough) have taped together something they're calling their "5G Manifesto," (pdf) which trots out some pretty familiar fear mongering for those who've remotely followed the last fifteen years of net neutrality debate.

Among them is the continued, not so veiled threat that technological progress will stop dead in its tracks if these companies don't get the kind of consumer net neutrality protections they want (namely, none):

"The EU and Member States must reconcile the need for Open Internet with pragmatic rules that foster innovation. The telecom Industry warns that the current Net Neutrality guidelines, as put forward by BEREC, create significant uncertainties around 5G return on investment. Investments are therefore likely to be delayed unless regulators take a positive stance on innovation and stick to it."

And the threat doesn't just involve next-gen wireless. The carriers also proceed to effectively argue that unless they're allowed to include huge gaping loopholes (like the existing exemption of "specialized services"), other technologies like VR, smart cars and smart cities will all be hurt (much like ISPs here in the States tried to argue that net neutrality rules would somehow hurt medical technology unless ISPs were allowed to discriminate):

"In this context we must highlight the danger of restrictive Net Neutrality rules, in the context of 5G technologies, business applications and beyond. 5G introduces the concept of “Network Slicing” to accommodate a wide-variety of industry verticals’ business models on a common platform, at scale and with services guarantees. Automated driving, smart grid control, virtual reality and public safety services are examples of usecases with distinguished characteristics which call for a flexible and elastic configuration of resources in networks and platforms, on a continuous basis, depending on demand, context and the nature of the service."

This is all, for lack of a more scientific term, unequivocal and total crap. The argument that "net neutrality rules will stop us from keeping your pace maker from working" is fear-based prattle with no foundation in reality. If anything, the EU's rules go well out of their way to ensure traffic can be treated differently (to an extreme fault). As for 5G, these upgrades are a necessary part of doing business, and carriers will invest in networks whether or not there's some flimsy net neutrality rules governing their behavior. Realize too that the "manifesto" is talking about rules as currently written that effectively say it's ok to violate net neutrality provided you support your anti-competitive behavior in veiled, faux technical justifications (see comments made by Sir Tim Berners-Lee).

In short, people should understand these European companies' lawyers and lobbyists directly wrote net neutrality rules pretty much ensuring they can do whatever they like -- about as "certain" as things are going to get -- yet they're still god-damned complaining.

When it isn't busy making empty threats, the manifesto trots out some similarly-meaningless promises, such as claims that the "right" net neutrality rules will result in scheduled large-scale 5G demonstrations by 2018, and the launch of 5G commercially in at least one city in every EU country by 2020. Again though, this was already happening with or without net neutrality rules. Tying the success or failure of network investment to net neutrality is a hollow bogeyman, one we've seen used repeatedly in countries where carrier executives twitch at the faintest specter of a regulator actually doing its job and protecting consumers from the aggressive abuse of uncompetitive telecom markets.

Filed Under: broadband, eu, europe, net neutrality, telcos, upgrades, wireless

T-Mobile And MetroPCS Go All In On The Horrible Precedent Of Zero Rating

from the setting-the-stage-for-disaster dept

Last year we noted that for being such a supposedly cool CEO, T-Mobile's John Legere seemed utterly clueless on the subject of net neutrality. Not only did the CEO claim that Title II and new net neutrality rules would "kill innovation" (tip: that didn't happen), he seemed totally oblivious to the bad precedent set by the company's zero rating efforts. Those efforts began with T-Mobile's decision to let some music services bypass user usage caps, which as we've discussed at great length puts smaller companies and non-profits at a distinct disadvantage.

But since our regulators (and much of the press and public) seem clueless to the harm of zero rating so far, T-Mobile has decided to expand these efforts. Last week the company started cap-exempting video services, and now the company has announced it's bringing zero rating to the company's prepaid wireless brand (MetroPCS) as well. Now the company's prepaid and postpaid (monthly billed) customers both will find that thirty-three of the biggest music stream services no longer count against their usage caps (yeah, sorry, small independent radio streaming stations too little to get on T-Mobile's whitelisted radar).

As usual, the move was framed as a huge boon to consumers:

“Once again we are setting MetroPCS apart from the rest of the pack in ways that no one else will,” said John Legere, president and CEO of T-Mobile US. “MetroPCS is the #1 brand in prepaid because we keep giving customers more of what they want, and today that means adding Music Unlimited and Data Maximizer to the list! Their data will last longer than ever before without ridiculous penalty fees or trickery!"

And like regulators, most of the telecom beat covering T-Mobile has been oblivious to the bad precedent set. They don't quite yet understand that letting a wireless carrier suddenly decide what traffic gets whitelisted from already-arbitrary usage restrictions sets the stage for a total upheaval of how the Internet works now. They also don't understand that if it's ok for T-Mobile to do this, it's ok for a company like AT&T to do something similar -- and AT&T's version is going to be notably worse. The Los Angeles Times, for example, struggles to see where the problem lies:

"Besides, there's nothing in the FCC's neutrality rules that bars data caps, which enable carriers to segment the market and charge higher prices to those who put a higher value on bandwidth. Binge On represents another reduction in the pain caused by data caps, which seems like an unalloyed good thing for consumers."

But you're not reducing a "pain point" by creating an arbitrary data cap, then letting some content bypass that cap -- you're just getting in the way of a healthy Internet ecosystem. And just because the FCC lacked the foresight to prohibit zero rating in our net neutrality rules (unlike Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan, which all bar zero rating), that doesn't mean this isn't a potentially horrible idea that's going to change the face of the Internet. It's very clear that the perils of zero rating are something we're eager to experience first hand here in the States, applauding our own "great fortune" all the way.

Filed Under: john legere, music unlimited, net neutrality, wireless, zero rating
Companies: metropcs, t-mobile

FCC's Pai Desperately Tries To Pretend He Was Right About Net Neutrality Rules Killing Broadband Investment

from the revolving-door-chicken-littles dept

Before the FCC passed new net neutrality rules, countless ISP consultants, think tankers, and various other sockpuppets desperately proclaimed that the rules would totally destroy the Internet and stifle all network investment. Now months after the rules took effect, everything seems to be operating as it was before -- if not better. Google Fiber continues to deploy to a growing number of underserved cities, municipal broadband providers and smaller ISPs continue to push gigabit upgrades, and even Comcast has announced it's deploying two gigabit service to around 18 million subscribers before the end of the year.

While the broadband industry still suffers from a lack of overall competition, it appears completely unbothered by what many claimed was "draconian regulation for a bygone era" that we were repeatedly told would "utterly crush innovation" and "stifle network investment." In fact, we've seen several instances where the rules already have put big ISPs on their best behavior, most notably on the interconnection front. Granted, numerous ISP execs predicted there'd be no issues, not that anybody heard them under the din of AT&T and Verizon fear mongering.

Of course, these folks can't just admit they were wrong and were motivated to make shit up to scare people away from net neutrality, so they're now trying to retroactively claim they were right -- despite the total absence of any real evidence. Case in point is FCC Commissioner (and former Verizon regulatory lawyer) Ajit Pai, who this week proclaimed that net neutrality chicken littles were right all along, and the FCC's use of Title II net neutrality rules has utterly depressed broadband investment:

"As evidence, Pai pointed to research that showed a decline in capital expenditures by the major wireless companies of 12% in the first half of 2015 compared to the same time period in 2014—when the FCC was still expected to restore open Internet rules without reclassifying broadband.

"In my statement dissenting from the Commission’s Title II decision, I warned that '[b]roadband networks don’t have to be built. Capital doesn’t have to be invested here,'" Pai said. "'Risks don’t have to be taken. The more difficult the FCC makes the business case for deployment—and micromanaging everything from interconnection to service plans makes it difficult indeed—the less likely it is that broadband providers big and small will connect Americans with digital opportunities.' And that I fear is what we are now witnessing."

Right, except we're not witnessing that at all. Pai can't be bothered to show his math, but it appears he pulled the 12% number from a recent editorial by industry-linked think tanker Hal Singer, whose work has been the backbone of a decidedly pointed attempt to mislead the public over the last few weeks. Singer's the same guy who was widely criticized for manipulating statistics for the broadband industry to help them claim that net neutrality would result in $15 billion in new taxes. You'll be shocked to learn that most of his worst-case-scenario predictions supporting these numbers show no indication of being true.

In his Forbes editorial, Singer makes these specific claims:

"They said it wouldn’t happen. They offered assurances from three Wall Street analysts, who insisted that Internet service providers (ISPs) would continue to invest at the same levels regardless of the regulatory climate...AT&T’s capital expenditure (capex) was down 29 percent in the first half of 2015 compared to the first half of 2014. Charter’s capex was down by the same percentage. Cablevision’s and Verizon’s capex were down ten and four percent, respectively. CenturyLink’s capex was down nine percent. (Update: The average decline across all wireline ISPs was 12 percent. Including wireless ISPs Sprint and T-Mobile in the sample reduces the average decline to eight percent.)

Except, causality does not equal correlation. If you bother to look at AT&T SEC filings, you'll note that AT&T already planned to scale back capex because it was already winding up an upgrade initiative dubbed "Project VIP," which had nothing to do with net neutrality. Indeed, Verizon and AT&T (which comprise the lion's share of the capex cuts) were already dramatically scaling back their fixed-line network investments, which also had absolutely nothing to do with net neutrality. Charter, meanwhile, just finished up its all-digital network upgrade, and its declines too have nothing to do with net neutrality.

On the wireless side, AT&T and Verizon have acknowledged winding down massive LTE network upgrades, and all of the wireless carriers have been engaged in a little belt-tightening as they deal with the disruptive behavior of T-Mobile. There are about a million reasons for capex cycles, including a lack of competition resulting in muted network upgrades, completed projects, to numerous ISPs in holding patterns as they wait for mergers and acquisitions. But there's absolutely no data that directly links these capex reductions to net neutrality or the FCC's implementation of Title II to govern ISPs. And, meanwhile, just a few days before Pai claimed that companies like Verizon were no longer investing in wireless... Verizon announced that it was ramping up its schedule for 5G deployment (the next big upgrade after LTE), which will lead to the next big round of capital expenditure in wireless. So, apparently the new rules did not scare off Verizon -- arguably the biggest opponent of net neutrality in the United States.

So basically you've got a revolving-door regulator who used to work for the broadband industry, citing statistics from a think tanker with ties to the broadband industry, both hoping that a wish, a dream, some out-of-context data and a little make believe will fool people into thinking these guys weren't utterly full of crap all along.

Filed Under: ajit pai, broadband, capital expenditure, fcc, hal singer, investment, net neutrality, title ii, wireless
Companies: at&t, verizon