ISPs Are Trampling Net Neutrality While The FCC Sits Boxed In By Lawsuits, Upcoming Election

from the rock-and-a-hard-place dept

While the public successfully forced the FCC to adopt net neutrality rules last year, one glaring omission may be coming back to haunt consumers and the commission alike. The FCC's open Internet rules contain three "bright-line" restrictions: no blocking, no throttling apps or traffic, and no "paid prioritization" of apps or content. Unlike neutrality rules in Japan, The Netherlands, Slovenia, and Chile however, the FCC refused to outright ban zero rating (exempting content from usage caps), instead opting to determine on a "case-by-case basis" if a carrier is violating the "general conduct" portion of the rules.

As we worried last year, this opened the door to ISPs trampling all over net neutrality -- just so long as they were marginally clever about it. And that's exactly what has happened, with AT&T, Verizon, Comcast and T-Mobile all running rough shod over net neutrality with varying degrees of obnoxiousness and success.

T-Mobile is now zero rating all the major music and video services, while throttling every video service that touches its network to 1.5 Mbps by default (and lying about it). AT&T has been charging companies for cap-exempt status for a few years now under its controversial "Sponsored Data" program, which tilts the playing field against smaller competitors and startups that may not be able to afford AT&T's toll. Verizon recently followed suit with "Free Bee" sponsored data, which lets companies pay Verizon to have their app, video, or entire website or service tagged with premiere, cap-exempt status.

In each example, carriers have injected themselves into the middle of the content stream for marketing or direct financial benefit, in the process completely dismantling the level playing field enjoyed by smaller companies, startups and non-profits. These smaller operators may not be able to pay to play, and in some instances won't even realize they're being discriminated against. And because these services are pitched as "free shipping" or "a 1-800 number for data," some consumers are applauding as the open Internet gets dismantled piecemeal, oblivious to the fact that usage caps are arbitrary constructs to begin with.

And while AT&T, Verizon and T-Mobile are at least being marginally subtle about it, Comcast simply declared "fuck it" -- first imposing completely unnecessary usage caps on millions of its broadband customers to hinder Netflix, then making its own streaming video service cap exempt. When pressed, Comcast's bullshit department proudly declared it wasn't violating net neutrality -- because its streaming video service runs entirely over "Comcast's managed network to the home." So yes, as predicted, net neutrality is crumbling under the weight of rule loopholes and immaculately-crafted bullshit.

So what is the FCC doing about it? Two years ago, FCC boss Tom Wheeler said the agency would watch AT&T's Sponsored Data carefully, but did nothing. More recently, Wheeler applauded T-Mobile's zero rating practices for being "highly innovative" and "pro-competition." Once complaints mounted, the FCC was forced to "act" in the form of a letter sent to companies late last year, asking for more detail on these programs. The FCC has been quick to repeatedly make clear this is just an "information exercise" and not a formal investigation:

Wheeler pointed out that the meetings the FCC has been holding with those companies--Comcast, AT&T, T-Mobile and likely Verizon--were at the bureau level, which he said was significant. "I am not at these meetings," he said. "Nobody from the office of the chairman is in these meetings. They're gathering information and we'll see what happens from there."

It's not really clear just how much data the FCC needs to collect. AT&T's Sponsored Data and Comcast's (ab)use of usage caps are obviously problematic, and have been in play for several years. The real problem for the FCC isn't information, it's limited time and shaky legal footing. One, the upcoming elections could result in a President that has no idea what net neutrality is, who immediately sets forth replacing Wheeler and dismantling the net neutrality rules. Two, the FCC is still waiting for the outcome of the mass-industry lawsuits against the rules, which could leave the FCC without a leg to stand on.

I asked Public Knowledge lawyer Harold Feld, who probably spends more time submerged in FCC policy than anyone, what he thought the next course of action would be at an FCC boxed in by the courts and politics. He suggested that the agency might follow the course it set on the interconnection front, which began with a few pointed inquiries and ended with incumbent providers magically ceasing shenanigans for fear of FCC enforcement. Feld posits that something similar could be applied to zero rating, finally letting companies know what is or what isn't acceptable:

The FCC has already gotten 12,000+ complaints about Comcast. It would not be hard to bump them to the top of the list. But Wheeler may not want to start an investigation when he only has a limited time left in office and a future FCC might drop the matter. Instead, Wheeler may push for some kind of Policy Statement or Enforcement Guidance. Something that would provide notice industry wide about what the FCC would consider "red lines" on data caps.

But Wheeler has been very clear that he is not promising to do anything but check under the hood. I certainly would not expect the FCC to do anything until the D.C. Circuit decides -- especially in light of the possibility that the FCC could win on wireline and lose on wireless. If the D.C. Circuit decides in the late spring or early summer, that will not leave much time for the FCC to take any kind of official action.

In other words? If you're expecting any hard enforcement from the FCC when it comes to caps or zero rating, you shouldn't hold your breath. The agency is currently boxed in by both lawsuits and the upcoming election, but had already made it clear it thinks zero rating and usage caps are just "creative pricing." Should the rules remain fully intact post lawsuit and election, political pressure might force the FCC to take action against Comcast's less-than-subtle abuse of usage caps, but things aren't looking good if you're part of the vast minority that realizes the horrible precedent zero rating represents.

Filed Under: bingeon, data caps, fcc, loophole, net neutrality, zero rating
Companies: at&t, comcast, t-mobile, verizon

Wacky NSA Slide Tells Agents Not To Worry About 'Incidental' Collection Of Info On Americans

from the keep-on-searching... dept

There are so many incredible bits and pieces in Barton Gellman's Washington Post expose on NSA abuse, that we've got a bunch of posts today digging deeper into various parts. For example, Gellman reveals a somewhat wacky presentation slide, complete with a palm tree graphic and with the somewhat folksy title:

Lesson 4: So you got a U.S. Person Information?

And then explains what to do about it. They're pretty clear that if you're directly targeting a US person, that's a problem (and it is, because that's illegal). If it's considered "inadvertent," then you also have to stop, write up an incident report and notify people. That sounds reasonable. But... then there's the "incidental" section. Here, incidental is described as:

You targeted a legitimate foreign entity and acquired information/communications to/from/about a U.S. Person in your results.

That doesn't seem particularly "incidental" to me. But, here's the kicker. While with all the other forms of collection the NSA is told to stop, when it's "incidental" they're told:

This does not constitute a USSID SP008 violation, so it does not have to be reported in the IG quarterly.

Note that the IG report is the one that was revealed, listing all of the abuses. Yet, here they seem to be indicating that these "incidental" collections of information (and note that it's not just "metadata" here, but full "communications" as well) aren't a real problem. They're told to "apply... minimization procedures" to limit the info on US persons, but we've already seen what a joke those minimization procedures can be.

As Gellman also notes in his report, it appears that the info collected "incidentally" here gets added to NSA databases and can be searched freely:

The NSA uses the term “incidental” when it sweeps up the records of an American while targeting a foreigner or a U.S. person who is believed to be involved in terrorism. Official guidelines for NSA personnel say that kind of incident, pervasive under current practices, “does not constitute a . . . violation” and “does not have to be reported” to the NSA inspector general for inclusion in quarterly reports to Congress. Once added to its databases, absent other restrictions, the communications of Americans may be searched freely.

Just last week, it was discussed that there's a "loophole" that, according to Senator Wyden, allows for "warrantless searches for the phone calls or emails of law-abiding Americans." Who knows if this is that particular loophole, but it does seem like a fairly large loop. Just say it's "incidental" and boom, search away.

Remember, the IG report also reveals that a "programming error" meant that a ton of phone calls placed from Washington DC were "intercepted" by the NSA (because someone typed in 202, DC's area code, instead of 20, Egypt's country code) -- and that mistake wasn't reported. That doesn't seem "incidental" to me.

Another example:

In dozens of cases, NSA personnel made careless use of the agency’s extraordinary powers, according to individual auditing reports. One team of analysts in Hawaii, for example, asked a system called DISHFIRE to find any communications that mentioned both the Swedish manufacturer Ericsson and “radio” or “radar” — a query that could just as easily have collected on people in the United States as on their Pakistani military target.

Think about that for a second. Any communication that mentions both Ericsson and "radio" or "radar." Just for the hell of it, I just did a search on my own email account for the terms "Ericsson" and "radio" and it came back with a ton of results, including 47 from just 2013. In just my mailbox. Many of those are from various wireless news letters or PR announcements, but still...

Filed Under: americans, incidental, loophole, nsa, nsa surveillance, us persons

Loophole Shows That, Yes, NSA Has 'Authority' To Spy On Americans -- Directly In Contrast With Public Statements

from the and,-another-one dept

Right, so remember that claim yesterday from Barack Obama about how there is no domestic surveillance program? And remember in our post we noted that such a statement might come back to bite him, seeing that Snowden had leaked somewhere between 15,000 to 20,000 more documents to Glenn Greenwald and somewhere in there, it seemed like there was a decent chance there was evidence that Obama was lying? Right, so, funny story... this morning, James Ball and Spencer Ackerman over at the Guardian have published the details of a neat little loophole that does, in fact, give the NSA "authority" to run searches on Americans without any kind of warrant. This is due to a "rule change" in 2011. The focus here is on Section 702 under the FISA Amendments Act, which is the authority that the PRISM program is under. Ever since the initial leaks, the defenders of the NSA have repeatedly stated that 702 only applies to non-US citizens who are outside the US. But as the "update" above notes, there was a change to the rules in late 2011 which allows for queries on US persons. As Senator Wyden told the Guardian, this "loophole" now directly allows "warrantless searches for the phone calls or emails of law-abiding Americans."

This also seems reminiscent of our point on Wednesday, in which we noted that every time the NSA is asked about its ability to spy on everyone, it answers about its authority. And, here's evidence that it has clearly been given the "authority" to spy on Americans, contrary to the very clear language of the law.

Also, the timing of this seems interesting. Earlier, we'd noted that the NSA's massive data collection program, Stellar Wind, had been shut down in 2011. And... right about that time suddenly a new law is put in place allowing 702 searches to happen on US persons? I'm sure that's just a complete coincidence...

Filed Under: 702, backdoor searches, domestic surveillance, faa, fisa amendments act, loophole, nsa, nsa surveillance, ron wyden, surveillance, us persons

And... Here Come The iPad Patent Claims

from the live-by-the-patent... dept

Back when Steve Jobs launched the iPhone, one of the points he made clear in his presentation was how Apple had applied for over 200 patents on the device. And, yet, despite all of that, Apple has been sued over and over and over and over and over and over and over and over and over and over again. And, of course, only recently did Apple file a patent lawsuit in the other direction.

Given all of this, it was really only a matter of time until the patent litigation began flying over the iPad. Slashdot points us to the news that Elan Microelectronics is seeking to ban the import of iPads into the US via the ever-popular ITC loophole. Amusingly, the whole point of the ITC injunction process is supposed to be to protect American companies against foreign companies importing in patented technology. Yet, in this case, it's a Taiwanese company suing an American company. This seems like a pure money grab, like many of the iPhone patent lawsuits, and once again demonstrates the problems of the patent thicket around mobile devices these days.

The patent in question 5,825,352 is for multi-touch screen inputs, and was apparently originally held by Logitech. Of course, in many ways this really highlights the points we've talked about. What Apple did with the iPhone was quite innovative, but wasn't really that inventive. It took concepts that had been out for a while, including multi-touch, and did something really cool with it: putting it into a compact, mobile device that people really wanted. The other players in the space weren't working on anything like that at all, and now patent battles are simply a waste of time holding back more innovation, rather than letting companies actually continue to come up with the next great thing.

Filed Under: ipad, itc, loophole, patent
Companies: apple

Can't Innovate? Litigate! Kodak Goes After Apple, RIM For Patent Infringement In Both Courts And ITC

from the but-of-course dept

We actually had some high hopes for Kodak not to go down this road, as it had shown some desire to actually focus on innovation, rather than going the litigation route, but apparently that wasn't working. As a bunch of you have sent in, Kodak has decided to go after both Apple and RIM for patent infringement -- and like so many these days, it's going for a double dip by filing a lawsuit in the courts and separately using the ITC loophole as well. How often do we see this? A company with a legacy business that is under threat of innovation... and it suddenly starts focusing on patent lawsuits rather than concentrating on actually adapting. Sure, it can try to do both at once, but it's rare to see that happen. Once the company breaks out the patent lawsuits, it's almost screaming out that its innovation efforts aren't very successful.

Filed Under: innovation. litigation, itc, loophole, patents
Companies: apple, kodak, rim

Nokia Launches Another Patent Attack On Apple, Uses ITC Loophole To Get Second Shot At Hurting Apple

from the can't-compete? dept

We've seen how Nokia's troubles in keeping up in the smartphone market have resulted in suddenly filing a whole bunch of patent lawsuits, including the big one against Apple over the iPhone. Of course, as usually happens in these types of situations, Apple fired back with a patent infringement lawsuit of its own against Nokia. Welcome to patent nuclear war.

And, of course, if you thought the battles would end there, you haven't been paying attention to how patent battles work these days. For years now, we've been pointing out that many patent holders actually get two cracks at companies over the same exact patents. They sue in the courts, and they use the ITC loophole to get a second crack, which could have even worse consequences. You see, the International Trade Commission is supposed to watch out for unfair trade practices. So many patent holders go to the ITC and claim that companies that infringe on patents are using unfair trade practices and should be barred from importing those goods into the US. Of course, the ITC could rely on the courts to determine if the products are actually infringing, but it does not. It decides for itself. And while the ITC cannot issue fines, it can issue an injunction barring the import of these products. With so many high tech products being manufactured overseas, this creates an effective injunction against selling many high tech products in the US... even as the Supreme Court has made clear that injunctions don't always make sense. But, the ITC is not bound by the Supreme Court on this and can do what it wants. A recent study has shown that this ITC loophole is frequently abused.

So, it's not at all surprising that (yes, indeed), Nokia has jumped in with both feet and has filed a complaint with the ITC as well over the Apple iPhone and its alleged infringement on Nokia patents. So now we have two totally seprate processes, either of which could conceivably bar Apple from selling iPhones in the US, just because Nokia's been too slow in coming up with its own iPhone competitor. That's not encouraging innovation at all. It's proactively trying to use the US government to slow it down.

Filed Under: itc, loophole, patents
Companies: apple, nokia

Patent Hoarding Firms Discover The ITC Loophole

from the that's-not-good-for-anyone dept

We've been discussing the ITC loophole, that allows patent holders to get two cracks at charging a company with infringement over the same patent (using different rules) for a while now. Patent holders can sue in court and they can complain to the International Trade Commission, which has the power to issue an injunction, barring the import of any "infringing" products. Even worse, the ITC doesn't necessarily need to follow the rules set forth by the Supreme Court over what is and what is not infringing. It gets to decide on its own. This has resulted in widespread abuse of the process, with many companies getting to use both processes to beat other companies into submission. Perhaps the one saving grace of the ITC loophole was that it was really only used by patent holders who actually had products on the market -- since there's a requirement that the supposedly infringing products represent a threat to a "domestic industry." That would (in theory) make it difficult for a company that just hoards patents to make a successful claim that a domestic industry is harmed.

But, of course, you should never underestimate the lawyers who deal with such non-practicing entities. Joe Mullin has the latest on one such attempt by an patent hoarding firm, Saxon, who is using the ITC loophole to go after a bunch of companies, including Nokia, HTC, RIM, Palm and Panasonic. Not surprisingly, on the very same day, it filed a patent infringement lawsuit (in East Texas, of course) against the same companies using the same patent. So, it's a perfect example of getting two cracks at the same issue. But how is Saxon claiming that a "domestic industry" is at risk to the ITC? From all appearances, it seems to claim that its domestic industry is patent licensing itself. And, the argument goes, allowing the companies listed above to continue importing their mobile phones would hurt that "domestic industry." Many lawyers think this is a pretty big stretch, and hopefully the ITC agrees. If not, expect to see many more companies that do nothing but hoard patents get an extra high-powered weapon in trying to force companies who actually develop products to pay up.

Filed Under: itc, loophole, patents
Companies: saxon

Time To Close The ITC Patent Injunction Loophole

from the two-hacks-at-the-same-ball dept

For quite some time, we've been pointing out how patent holders have been using a bit of a loophole to get two separate shots at getting an injunction against other companies in patent disputes. This became even more popular after the Supreme Court ruled in the MercExchange case that injunctions banning the sale of goods often did not make sense. The loophole is that, rather than go through the court system, patent holders would go to the US International Trade Commission, claim that the goods they believed were infringing were an "unfair trade practice" and demand an injunction against importing them into the US -- effectively the same thing as a court injunction against sale (assuming the good was manufactured outside the US).

Since then, we see it's happening all the time that companies sue in the courts and use the ITC loophole as well. The ITC doesn't need to abide by the court's rules either, making it even easier to get an injunction this way. We found it quite problematic that patent holders were getting two hacks at the same ball -- especially when one of those hacks doesn't need to follow the Supreme Court's rules on when an injunction is and is not appropriate. Others disagreed with our assessment, claiming that it's not a loophole, but an important way to stop foreign companies from unfairly entering US markets.

Luckily, there's now some actual research looking into the details of how the ITC is used for these sorts of things. Eric Goldman points our attention to a law review article looking at data on how the ITC patent injunction process has been used over the past twelve years, and the results aren't pretty. It found that the ITC is used just as often between two American companies as it is used by an American company against a foreign company. Why the International Trade Commission gets involved in disputes between two domestic companies is not clear at all. It also found that many companies use both processes simultaneously, allowing them two separate attempts at getting the same injunction. Finally, the report finds that while there's only a slight increase in the likelihood of the ITC finding in favor of the patent holder, it's much more likely to grant an injunction barring the sale of a product.

As the report notes: "In the absence of coordination between the venues and with the high rate of parallel litigation, this two-track system may invite judicial waste and expose parties to the risk of duplicative litigation and potentially conflicting outcomes." Hopefully this will help Congress realize that the ITC loophole on patents needs to be closed.

Filed Under: itc, loophole, patents

Columbia Professor Latest To Go On The Patent Offensive

from the very-offensive dept

Over the last year or so, we've seen two disturbing trends in enforcing patents. The first, is seeing patent holders suing a bunch of companies at once rather than just one or two, as used to be standard. They do this because they fear that some type of patent reform is coming, either via Congress or the courts. So they want to get as many patent suits in as quickly as possible. The second trend is that, rather than taking patent infringement cases through the court system (which is bound by the recent precedents set by the Supreme Court that loosen patent rules), they use a loophole: taking patent infringement claims to the US International Trade Commission (ITC). The ITC has the authority, if it believes that infringement occurs, to block the import of infringing goods. The ITC doesn't need to pay attention to what the courts say, and doesn't need to wait for the USPTO to review a patent. It can simply decide infringement occurred and ban the import of the goods. This is, effectively, the equivalent of an injunction against the product (just the sort of thing the Supreme Court said should be used more cautiously).

A Columbia professor has now picked up on both of these trends, getting the ITC to investigate 30 companies for violating her patents on LED and laser technologies. Among the companies investigated: Sony, LG Electronics, Hitachi, Toshiba, Panasonic, Motorola, Nokia, Pioneer, and Samsung. Whether or not these patents turn out to be valid, it's a cheap tactic to use the ITC rather than going to the courts to fight this battle.

Filed Under: itc, lasers, lawsuits, leds, loophole, patents
Companies: hitachi, lg, motorola, nokia, panasonic, pioneer, samsung, sony, toshiba