The Wall Street Journal Doubles Down On Dumb: Falsely Claims Net Neutrality ('Obamanet') Has Crushed Broadband Investment

from the it's-election-season dept

Last week, we noted that the Wall Street Journal appeared to have reached a completely new low in the "conversation" about net neutrality, with a bizarre, facts-optional missive about how Netflix was to blame for pretty much everything wrong with the Internet. According to Holman W. Jenkins Jr., Netflix is the diabolical villain at the heart of a cabal to regulate the Internet, cleverly convincing regulators to treat hard-working, honest companies like Comcast unfairly. As we noted, the screed is part of a broader telecom-industry attempt to vilify Netflix for not only its support of net neutrality, but for daring to erode traditional cable TV subscriptions through (gasp) competition.

This week the Journal decided to double down on notably cryptic and dumb editorials, with another rambling tirade about net neutrality. Piece author Gordon Crovitz, who we've repeatedly documented as aggressively wrong on everything from surveillance to encryption, begins by riling up the partisans in claiming "'Obamanet is hurting broadband":

"The FCC never planned to set rates and terms for broadband under the laws that dictated how railroads operated in the 1880s and the phone system in the 1930s. But President Obama decided “net neutrality” was good politics, so he demanded that the commission impose the most extreme form of regulation. Today bureaucrats lobbied by special interests determine what is “fair” and “reasonable” on the Internet, including rates, tariffs and business arrangements. The FCC got thousands of requests for new regulations within weeks of the new rules."

Right, except none of that is true. While the FCC has issued some warnings about interconnection shenanigans (which has resulted in Netflix, transit and last mile ISPs suddenly getting along famously), the FCC is forbearing from most of the more aggressive portions of Title II regulations. And despite the fact that anti-net-neutrality folks don't want to believe him, it's clear that FCC boss Tom Wheeler doesn't want to regulate broadband pricing. The proof is in the fact that the agency continues to turn a blind eye to industry prices (it's simply never even mentioned as an issue), and the agency has effectively given the green light to usage caps, overages and zero rating.

If they had any sense, net neutrality opponents should be happy about this, as it's abundantly clear the FCC's only looking to enforce the most ham-fisted of neutrality abuses (filtering, blocking, heavy throttling of competing services), and ISPs can continue doing precisely what they're doing now (aggressively cashing in on uncompetitive markets) with no worry of regulatory interference. Most ISPs understand the message is subtle but it's there: ISPs can continue to experiment with this kind of "creative" pricing, they just need to be subtle about it. There's zero indication that Wheeler has any interest in serious rate regulation.

Crovitz then proceeds to parrot a new missive the broadband industry has loyal mouthpieces chanting at the top of their lungs the last few weeks: that, like neutrality opponents ingeniously predicted, the FCC's new rules have indeed stifled broadband sector investment. Like FCC Commissioner Pai last week, his evidence once again comes courtesy of broadband-industry tied "consultant" and professional statistics-massager Hal Singer:

"Now Mr. Singer has analyzed the latest data, and his prediction has come true. He found that in the first half of 2015, as the new regulations were being crafted in Washington, major ISPs reduced capital expenditure by an average of 12%, while the overall industry average dropped 8%. Capital spending was down 29% at AT&T and Charter Communications, 10% at Cablevision, and 4% at Verizon. ( Comcast increased capital spending, but on a new home-entertainment operating system, not broadband.)"

Except Mister Singer cherry picked his statistics and ignored context. AT&T and Charter's capex dropped because both were winding up major investment projects ("Project VIP" and a digital video upgrade, respectively) that had nothing to do with net neutrality. Singer also intentionally ignores that capex reductions in AT&T and Verizon's fixed-line networks are because those companies had already frozen "next-gen" broadband deployments and are hanging up on unwanted DSL users, something that again has nothing to do with net neutrality. So right out of the gate, the vast majority of Singer and Crovitz's "proof" evaporates into thin air.

While Singer acknowledges that Comcast boosted capex, he intentionally ignores that the company subsequently announced a huge nationwide plan to deploy two-gigabit broadband service. And while Verizon's capex dropped 4% due to winding down LTE upgrades (that tends to happen when a job is complete), the company just last week announced a huge investment initiative in 5G wireless broadband technology. Odd that Singer and Crovitz somehow forget to mention that two of the country's biggest neutrality opponents just announced major new investment initiatives yeah?

Singer also ignores the fact that capex was up for a huge number of broadband ISPs, including Google Fiber, Sprint, T-Mobile, Frontier, Windstream, Suddenlink, and Time Warner Cable -- not to mention continued growth on the municipal (community driven) broadband front. In short, Crovitz, Singer, Pai and other neutrality opponents are trying to make a claim that -- no matter how you twist the data -- simply can't be substantiated. The capex fluctuations they're pointing to as proof positive of broadband industry damage are perfectly ordinary and have absolutely nothing to do with net neutrality. Period. Full stop.

In the short term only the courts, not stat farmers, sockpuppets and bullhorns, can kill net neutrality. But since a 2016 administration change would allow the selection of a new (and decidedly anti-neutrality) FCC boss with the power to dismantle the rules, there are obvious benefits to riling up the uninformed masses just ahead of election season. You just hope some of them are able to read a simple spreadsheet.

Filed Under: broadband, gordon crovitz, investment, l. gordon crovitz, net neutrality

Ridiculously Misinformed Opinion Piece In WSJ Asks Apple And Google To Make Everyone Less Safe

from the who-takes-these-people-seriously? dept

Former Wall Street Journal publisher L. Gordon Crovitz still gets to publish opinion pieces in the WSJ. And while I often find them interesting, any time he touches on technology in almost any manner, he seems to fall flat on his face, often in embarrassing ways -- such as the time he insisted the internet was invented by companies without government support (yes, he really argued that). Crovitz has also been strongly pro-surveillance state for years. He's attacked Wikileaks and Chelsea Manning by blatantly taking quotes out of context, and then last year, writing a column about the Snowden leaks that showed he doesn't understand even the basic facts. Crovitz tends to see the world the way he wants to see it, rather than the way it really is.

His latest is no exception, repeating a bunch of bogus or debunked claims to argue that the tech industry should happily insert back doors into technology to aid in surveillance. He kicks it off by both repeating the false claim concerning how "subway bomber" Najibullah Zazi was caught, but also totally misunderstanding the difference between encrypting data on a device and encrypting data in transit:

It’s a good thing Najibullah Zazi didn’t have access to a modern iPhone or Android device a few years ago when he plotted to blow up New York City subway stations. He was caught because his email was tapped by intelligence agencies—a practice that Silicon Valley firms recently decided the U.S. government is no longer permitted.

Apple , Google, Facebook and others are playing with fire, or in the case of Zazi with a plot to blow up subway stations under Grand Central and Times Square on Sept. 11, 2009. An Afghanistan native living in the U.S., Zazi became a suspect when he used his unencrypted Yahoo email account to double-check with his al Qaeda handler in Pakistan about the precise chemical mix to complete his bombs. Zazi and his collaborators, identified through phone records, were arrested shortly after he sent an email announcing the imminent attacks: “The marriage is ready.”

Except, no. It wouldn't have mattered if he had a modern iPhone or Android device because whether or not email is encrypted is entirely unrelated to whether or not data on the device is encrypted. What Apple and Google are promising now is to encrypt data on the device. Even if that was turned on, if you send an unencrypted email, it's still available to be viewed. Crovitz is comparing two completely different things and doesn't seem to realize it. What kind of standards does the WSJ have when it allows such false arguments to be published uncritically?

Furthermore, the fact that Zazi sent an unencrypted email via Yahoo was a different issue. And Yahoo encrypted all its email connections a while ago, and no one freaked out at the time. Even so, that's unimportant, because law enforcement and the intelligence community can and do still read emails with a warrant. And, as was made clear by many in the analysis of the Zazi case, he had been watched by law enforcement for a while. The phone encryption that Google and Apple are discussing would have had no impact whatsoever on the Zazi case. So why even bring it up, other than pure surveillance state FUD?

But, to someone as ignorant of the basics as Crovitz, it's an opportunity to double down.

The Zazi example (he pleaded guilty to conspiracy charges and awaits sentencing) highlights the risks that Silicon Valley firms are taking with their reputations by making it impossible for intelligence agencies or law enforcement to gain access to these communications.

Except, again, that's not true. Intelligence agencies and law enforcement would still have access to communications in transit -- just not data held on his phone directly (which they wouldn't have unless they got the phone itself). Second, it still wouldn't be "impossible" to get the information. They could either crack the encryption or issue a subpoena ordering the phone's owner to unlock the data (or potentially face a potential contempt of court ruling). While there are some 5th Amendment concerns with that latter route, it's still not "impossible." And it's not about communications. Crovitz is just totally ignorant of what he's writing about.

Since then, U.S. and British officials have made numerous trips to Silicon Valley to explain the dangers. FBI Director James Comey gave a speech citing the case of a sex offender who lured a 12-year-old boy in Louisiana in 2010 using text messages, which were later obtained to get a murder conviction. “There should be no one in the U.S. above the law,” Mr. Comey said, “and also no places within the U.S. that are beyond the law.”

Again, different issue. The Louisiana case? That was debunked a day later, and it wasn't because of access to the kind of information that would now be encrypted. As noted by the Intercept:

In another case, of a Lousiana sex offender who enticed and then killed a 12-year-old boy, the big break had nothing to do with a phone: The murderer left behind his keys and a trail of muddy footprints, and was stopped nearby after his car ran out of gas.

Next thing you know, Crovitz will argue that all shoes should come pre-muddied so that law enforcement can track them. After all, how could law enforcement track down criminals who don't leave a trail of muddy footprints?

Then Crovitz shifts to his own personal worldview -- insisting that the public actually doesn't want privacy or protection from the snooping eyes of government. He insists, the truth is the public really wants to be spied on.

It looks like Silicon Valley has misread public opinion. The initial media frenzy caused by the Edward Snowden leaks has been replaced by recognition that the National Security Agency is among the most lawyered agencies in the government. Contrary to initial media reports, the NSA does not listen willy-nilly to phone and email communications.

Last week, the Senate killed a bill once considered a sure thing. The bill would have created new barriers to the NSA obtaining phone metadata to connect the dots to identify terrorists and prevent their attacks. Phone companies, not the NSA, would have retained these records. There would have been greater risks of leaks of individual records. An unconstitutional privacy advocate would have been inserted into Foreign Intelligence Surveillance Court proceedings.

First off, no, the USA Freedom Act was never "a sure thing." From the very beginning, it was considered a massive long shot. And, no it would not have "created new barriers" -- it would have merely made it clear that the NSA can't simply collect everyone's data in the hopes of magically sifting through the haystack and finding connections. Also, Crovitz is flat out wrong (again!) that this would have led to a "greater risk" because the phone companies held the data. While this was the key talking point among those who voted against it, it's simply incorrect. The telcos already retain that information. The bill made no changes to what information telcos could and would retain. It only said that they shouldn't also have to ship all that data to the NSA as well. There was no increased risk. Saying so is -- once again -- trumpeting Crovitz's ignorance.

Furthermore, the idea that the public is miraculously comfortable with the government spying on them... based on the government voting against curtailing government surveillance is simply ludicrous. It doesn't even pass a basic laugh test. The Pew Research poll that tracks this issue most closely continues to show that the vast majority of people are against NSA surveillance on American data, and the numbers who feel that way have been growing consistently since the first of the Snowden revelations.

But let me repeat the assertion Crovitz made here, just to remind everyone of how idiotic it is: he's saying that the public is now comfortable with surveillance because Congress voted down surveillance reform. And he thinks this is obvious.

The lesson of the Snowden accusations is that citizens in a democracy make reasonable trade-offs between privacy and security once they have all the facts. As people realized that the rules-bound NSA poses little to no risk to their privacy, there was no reason to hamstring its operations. Likewise, law-abiding people know that there is little to no risk to their privacy when communications companies comply with U.S. court orders.

Facts, huh? It's kind of funny that he'd argue for the facts when he seems to be lacking in many of them. And he's wrong. There is tremendous risk to privacy, as illustrated by the fact that the NSA regularly abused its powers to spy on Americans. Furthermore, he ignores (or is ignorant of the fact) that much of the data the NSA collects is also freely available to the CIA and FBI -- and that the FBI taps into it so often that it doesn't even track how many times it dips into the database.

And of course, none of this even bothers to point out that the reason why Google and Apple are increasing encryption is because it makes us all much safer from actual everyday threats -- including the very threats that the NSA and others in law enforcement keep warning us about. Making us all safer is a good thing, though, not to L. Gordon Crovitz, apparently.

Crovitz is either woefully clueless and misinformed or he's purposely misleading the American public. Neither reflects well on him or the Wall Street Journal.

Filed Under: encryption, fud, gordon crovitz, l. gordon crovitz, mobile encryption, najibullah zazi, surveillance
Companies: apple, google, wall street journal

WSJ The Latest Mainstream Press To Run Anti-SOPA/PIPA Opinion Piece

from the this-isn't-what-hollywood-expected dept

Add the Wall Street Journal to the list of mainstream publications writing about just how damaging SOPA and PIPA would be. Former WSJ publisher, and now columnist, L. Gordon Crovitz, has written an opinion piece trashing the bills as being nothing more than Hollywood trying to "strangle" the internet.

These bills would go so far to protect copyright that they would strangle the Internet with regulation. The Web would be transformed from a permissive technology where innovation is welcome to one where websites are shut down first, questions asked later.

Crovitz summarizes the situation by highlighting how frequently the entertainment industry has cried wolf in the past:

Hollywood is playing to stereotype, hoping to suppress technology as it did in 1982, when the late industry lobbyist Jack Valenti said the invention of the VCR was to the "American film producer and the American public as the Boston Strangler was to the woman home alone." Hollywood has since also fought DVD players, DVRs and MP3 players.

Technology makes many things possible, good and bad. One thing that seems a mission impossible is having laws keep up with the pace of change on the Internet. Hollywood's effort to create a different story line for the future of the Web is a horror show. Lawmakers should walk out.

While not the official position of the WSJ, it's good to see more mainstream pieces calling out the problems with SOPA and PIPA. It's really kind of amazing. The supporters of these bills really seemed to think they'd be approved without any real pushback. They're still trying to make such claims in our comments. The reality is that there's a growing public realization that a few big businesses who don't want to adapt are trying to saddle the innovation industry with regulations to slow down the pace of innovation. That goes against what most people want. Sooner or later, Congress is going to realize that you can't just vote for the bills that get the most lobbying dollars... if you won't be able to get the votes of your constituents when election season rolls around.

Filed Under: l. gordon crovitz, pipa, protect ip, sopa, wsj

WSJ Latest To Note Ridiculous State Of The Patent System

from the anyone-not-noticing? dept

The avalanche of mainstream press stories condemning the state of the patent system (especially when it comes to software) continues. The latest is a column in the Wall Street Journal by former WSJ publisher L. Gordon Crovitz that also condemns the state of the patent system. I don't always agree with Crovitz (in fact, I was just strongly disagreeing with him over his First Amendment views), but it's nice to see another well known commentator point out the problem and pure economic waste created by the patent system:

The costs of our broken patent system are often abstract, but this month Google put a price tag on the problem: $12.5 billion. That's what Google paid for Motorola's U.S. smartphone business and its 17,000 patents. This is $12.5 billion that one of America's most creative companies will not use to innovate, fund research or hire anyone beside patent lawyers.

[....]

The value of patents in software and hardware such as smartphones has everything to do with litigation risk. It has almost nothing to do with technology.

So now we've got This American Life, the NY Times, the Washington Post, the Economist and the Wall Street Journal -- all coming out with articles about how the patent system is massively hindering innovation in the tech industry, and is generally driving money to unproductive and non-innovative parties. So, again, we have to ask, why is Congress still pretending that it's tackling this problem with its current useless patent reform bill that doesn't address the problems raised by all of these articles? Where's the real patent reform, Congress?

Filed Under: l. gordon crovitz, patent reform, patents, software patents

The Phrase 'Reasonable Compromise' Should Not Be Part Of Any 'Free Speech' Discussion

from the congress-shall-make-no-law dept

Pretty stunning to see L. Gordon Crovitz, the former publisher of the WSJ (and now a columnist) make the argument that shutting down social media is fine and dandy, if governments say that it's to stop bad stuff (as defined by those governments). Specifically, he defends UK politicians calling for blocks on social media in response to the London riots. Crovitz's reasoning isn't just weak, it's full of bizarre logical fallacies.

But all uses of technology are not equally virtuous. Enthusiasm for technology should not lead to a moral and political relativism that confuses crime with free speech and the British police with authoritarian governments.

No one has claimed that the two are the same. The point, which seems to sail way, way, way over Crovitz' head, is that the ability to block communications in one case quite easily leads to it being used in the other. Bizarrely, Crovitz then defends the highly questionable BART cell service shutdown in response to the threat of protesters, by saying it's fine because "the world did not end."

And the world did not end when police did indeed temporarily shut down social media. This happened last week in San Francisco, Calif., one of America's most liberal cities.

Last I checked, the Constitution of the United States says, "Congress shall make no law... abridging the freedom of speech." It does not say, "Congress shall make no law abridging the freedom of speech... but it can if the world won't end from doing so." From there, Crovitz just gets weird:

Permitting peaceful protests while stopping violence seems like a reasonable compromise.

Let's be clear: when discussing the First Amendment, the phrase "reasonable compromise" generally means someone taking away your rights. The problem, which Crovitz can't seem to get his head around, is that you can't set up a system that properly determines what speech is allowed and what speech is violence-inducing. People who trample on the First Amendment assume, falsely, that it's easy to tell one form of speech from another. If someone is committing violence, arrest them for committing violence. Don't take away their free speech rights.

From there, Crovitz insists that China's free speech trampling is different. Why? Because it is! Don't you see? The problem is that it's very much in the eye of the beholder. China continues to insist that its trampling of free speech is a "reasonable compromise" because it keeps "bad stuff" away from the people. How do you determine where that line is? Crovitz pretends its easy. Our founding fathers knew that it was not, which is why they specifically wanted to make sure that "dangerous speech" was allowed.

Then Crovitz jumps into obnoxious false dichotomy territory:

Robert Andrews, a reporter for the paidcontent:UK website, asked Twitter users whether they would prefer to keep the service available so they could chat about the television music competition "The X Factor" or let the service be closed temporarily "so that fellow citizens like shopkeepers need not be assaulted, have their property and premises pilfered and trashed, and so that they need not live in fear."

Though it was an admittedly unscientific survey, Mr. Andrews nevertheless reports that every Twitter respondent opted for "The X Factor." He concludes: "So addicted are we to our electronic connections, we simply cannot bear to be parted, for even an hour or two, in the name of public safety while London burns."

Or perhaps the people responding to Andrews recognized the ridiculousness of the question, and knew damn well, that social media is used for a hell of a lot more than discussing some TV show... and that allowing communications platforms to be shut down, because the government and Crovitz think "bad stuff" might happen, is a path to censorship. It's not that people are "addicted to electronic communications." It's that people believe in their rights to free speech. Taking away social media wouldn't stop London from burning, but it might harm some pretty core principles of democracy and the ability to speak your mind.

Techno-utopians would like to believe that digital technology is always a force for good, but technology can also accelerate evil. As Thomas Hobbes would say, without the enforcement of rules for ordered liberty, life is "solitary, poor, nasty, brutish and short," both in the real world and online.

And since we're doing a grand tour of logical fallacies, Crovitz closes with a claim that is simply unsubstantiated because it's false. I've never heard the folks normally associated with "techno-utopianism" ever claim that digital technology is always a force for good. In fact, I've almost always heard them claim that technology itself is neutral and can be used for both good and bad. If anything, people tend to note that it can help amplify both good and bad uses. But the point that they make is that you can't somehow cherry pick the "good" stuff to allow and the "bad" stuff to ban, because that always fails in the long run. It always leads to greater than "reasonable" censorship and always leads to important critical speech being stifled. Crovitz may have no problem with trampling on the rights of others. I, on the other hand, have serious problems with it -- and with the WSJ advocating what appears to be flat out censorship.

Filed Under: compromise, free speech, l. gordon crovitz, riots, social media

Media Dinosaurs Look To Set Up iTunes For News

from the haven't-we-seen-this-before? dept

Well, there they go again. Three big "media" names, who have been trying to convince themselves that there are enough people out there clamoring for someone to give them a way to pay for news, have decided to put together a company that will do just that. Stephen Brill, L. Gordon Crovitz and Leo Hindery Jr. have teamed up to create a system to charge for news, with the idea that any newspaper can sign up and use their system. Clay Shirky calls this an RIAA for news, while Mathew Ingram points out that it may be more accurate to call it an iTunes for news.

The problem, of course, is that this is all based on the faulty theory that people want an iTunes for news. This, of course, is great for other newspapers who know better, and decide to skip out on this plan, and get all the traffic that these newspapers give up. As Jeff Jarvis points out, in looking for news about this very venture, he was blocked by the paywall at some sites, and found the best coverage at a free site.

And, of course, it's especially ironic that Stephen Brill is behind this. That's because he's tried this before and it failed. Miserably. Meanwhile, Hindery in the past has shown that he also is one of those guys who tends to overvalue content and undervalue everything else people do online (communicate, share, discuss). This whole model is based on this single faulty assumption: that it's the news itself that's important to people. It's not. The news is important, but people want to be able to share the news, spread the news and discuss the news -- and you can't do that when it's behind a paywall. The very act of putting up a paywall diminishes the value of the content.

Still, it's a great opportunity for competitors of any newspaper short-sighted enough to sign up for this program.

Filed Under: l. gordon crovitz, leo hindery, media, news, paid content, paywall, stephen brill