Big Telecom Sues New York State For Trying To Bring Cheap Broadband To Poor People

from the do-not-pass-go,-do-not-collect-$200 dept

If there's one thing that the U.S. broadband industry is terrified of, it's price regulation. The idea that the government might eventually cap the rates regional monopolies can charge in the absence of meaningful competition keeps a lot of executives up late at night. But despite a lot of fear mongering by telecom industry folks on this front, the U.S. has never really gotten even close to that reality. Repeatedly, even the most modest of non-price related regulatory telecom oversight efforts (from net neutrality to privacy) are routinely and easily dismantled by powerful lobbyists either before they can take effect or not long after.

Recently New York State passed a new law (pdf) demanding that regional broadband providers (Verizon, Charter Spectrum, and Altice) provide low-income consumers $15, 25 Mbps broadband tiers to help them survive COVID. The goal: to try and help struggling Americans afford the high cost of broadband. Under the proposal ISPs are also allowed to offer $20, 200 Mbps tiers, with any price increases capped at two percent per year.

Regulators engaging in anything even close to price regulation of regional monopolies is, again, said monopolies' worst nightmare. As a result the broadband industry quickly sued New York, insisting that the state is forbidden from passing such a law thanks in part to the Trump administration's net neutrality repeal. While many folks think that repeal just killed net neutrality rules, that was never true. It also killed much of the FCC's consumer protection authority, including its ability to adequately respond to billing fraud (which happens a lot in residential broadband thanks to misleading surcharges and fees).

The repeal even went one step further in claiming that states also aren't allowed to protect consumers from telecom industry shenanigans. The problem: the courts haven't been looking too kindly upon this argument so far. In part because once the FCC abdicated its regulatory authority over telecom, it lost any authority to tell states what they can or can't do. The industry has used similar arguments to try and attack state-level net neutrality rules, and it hasn't gone particularly well for them:

"An agency that has no power to regulate has no power to preempt the states, according to case law,” Stanford Law Professor Barbara van Schewick told Motherboard. “When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC’s repeal order removed its authority to adopt such protections."

Basically, the broadband industry has spent four years having its cake and eating it too, demanding that nobody on either the state or federal level has any authority to tell broadband providers what to do, whether we're talking about basic rate regulation or even the most basic of consumer protections. While the Trump and Ajit Pai FCC thought that was just nifty, it's an argument that's not being taken particularly seriously by the States, which have simply doubled down on their own regulatory efforts to fill the giant consumer protection void left by Trump-era apathy:

"I knew giant telecom companies would be upset by our efforts to level the playing field, and right on cue, they're pushing back," New York Governor Andrew Cuomo said in a statement. "Let me be abundantly clear—providing internet in the Empire State is not a god-given right. If these companies want to pick this fight, impede the ability of millions of New Yorkers to access this essential service, and prevent them from participating in our economic recovery, I say bring it on."

Keep in mind New York is simply trying to force ISPs to offer low-cost service to low-income families. Despite the posturing here by Cuomo, the state likely lacks the political courage to take this idea one step further and regulate prices for all New York State residents truly upsetting deep-pocketed campaign contributors.

Again, none of this would be necessary if we had adequate competition in residential US broadband. But because pushing policies that increase competition upsets AT&T, Verizon, Comcast, and Charter, a corrupt Congress and captured regulators aren't willing to really do that. Meanwhile, the US telecom sector continues to whine about a "fractured landscape of state-level requirements," hoping you'll ignore the fact that they created this entire mess by repeatedly, brutally attacking absolutely every effort at even the most modest federal consumer protection oversight.

Filed Under: broadband, competition, digital divide, fcc, low income, new york
Companies: altice, charter, verizon

TurboTax Did Everything It Could To Hide The Free-Filing Its Supposed To Offer

from the hide-and-seek dept

For years, advocates for the non-wealthy public have put forward plans to simplify the tax-preparation process by having the IRS pre-prepare a tax filing with the information it already has, sending it to citizens, and allowing those citizens to either sign and return it or do their own tax preparation if they think there are errors. Several politicians have put versions of this plan forward, including Elizabeth Warren. The idea is that, for the vast majority of Americans, the IRS already has all the information it needs for the tax filing. Why make most people do tax prep when they don't have to?

Well, for just as many years, the companies that make money by doing this tax prep work have lobbied heavily in Congress to keep this from becoming law. Intuit, makers of TurboTax software, has been particularly active on this front, with novel arguments that amount to, "But if you make this law, then we'll make less money." When that messaging became a PR disaster, the company tricked a bunch of mouth-pieces to say all this for it.

Now, if all of that seems like shady shit, you ain't seen nothing yet. One of the ways companies like Intuit hand-wave concerns that its lobbying efforts are coercing the poor and middle class to pay for tax prep that is so simple it should be free is by pointing out that it entered into an agreement with the IRS to offer their own free-to-file programs for anyone that makes less than $66k in a given year. While that's true, ProPublica has a nice write up of just how far Intuit in particular goes to hide this program from the very public it's supposed to be serving.

Intuit and other tax software companies have spent millions lobbying to make sure that the IRS doesn’t offer its own tax preparation and filing service. In exchange, the companies have entered into an agreement with the IRS to offer a “Free File” product to most Americans — but good luck finding it.

Here’s what happened when we went looking.

Our first stop was Google. We searched for “irs free file taxes.” And we thought we found what we were looking for: Ads from TurboTax and others directing us to free products.

Spoiler alert: those products didn't end up being free. Despite ads that mentioned "free" several times over, the researchers that created a profile of a house cleaner making $29k for the year, TurboTax's site declared that free to file wasn't an option because the fictional citizen was an independent contractor. Instead, the tax prep would cost $119.99. ProPublica continued:

Then we tried with a second scenario. We went back to TurboTax.com and clicked on “FREE Guaranteed.” This time, we went through the process as a Walgreens cashier without health insurance, entering personal information and giving the company lots of sensitive data.

Again, TurboTax told us we had to pay — this time because there’s an extra form if you don’t have insurance. The charge? $59.99.

Per the article, both instances are not kosher based on the agreement with the IRS. That agreement is quite simple: if you make less than $66k in the year, you get to file for free, period. From there, the researchers dug into TurboTax's source code.

Even though we clicked on the “FREE Guaranteed” option and met all the requirements to file for free, the company had tagged us as a potential paying customer. In the source code, TurboTax had branded us as “NONFFA.” That stands for “Non Free File Alliance.” In other words, we were not on track to file for free after all. Even though TurboTax could tell we were eligible to file for free, the company never told us about the truly free version.

It turns out that if you start the process from TurboTax.com, it’s impossible to find the truly free version. The company itself admits this.

So, despite that site being laced with as many "free"s as could be mustered, you can't actually get to free filing at all. How many folks using the site to file for free do you think make it all the way to the FAQ page and realize their mistake compared with how many accept what the site tells them and pay up to file instead? Especially when "free" appears all over the sites on which you cannot file for free, but the actual free filing site is called, sigh, TurboTax Freedom?

But let's pretend most people do get to that FAQ. The researchers threw "turbotax freedom" into Google to see what popped up.

The first link was from TurboTax and said “Free File Program” right in the text. We clicked, and it brought us to this new page. While the orange “See If You Qualify” link did take us to the real Free File program, the blue “Start for Free” link brought us back to the version of TurboTax where we ended up having to pay.

Whatever this is, it clearly isn't Intuit comporting with the spirit of the agreement it signed with the IRS. All of these shady tactics are quite obviously designed to keep people from ever finding the free to file site, to trick the lower classes into paying for tax prep work when they should not be, and depressing the number of people that actually use it as much as possible.

The reward for all of that shady behavior are calls from the same Congress that receives Intuit's lobbying dollars to end the program as it's not achieving its goals. And, it seems Congress is also considering legally barring the IRS from offering any free to file program itself, because that certainly serves common people.

Congress is now moving to put the Free File program into law, including its restriction on the IRS creating its own free service. We wrote about that earlier this month and the opposition to this provision by freshman Democratic Reps. Katie Hill, Katie Porter, Alexandria Ocasio-Cortez and others. The House ultimately passed the bipartisan Taxpayer First Act, which also contains some provisions that consumer advocates support, such as restrictions on private debt collection of unpaid taxes.

Now the Senate is considering the bill. Its sponsors have argued that it doesn’t tie the IRS’ hands, but outside legal experts we’ve spoken to disagree. The text in the bill codifying the Free File program has long been sought by lobbyists for Intuit.

In addition to all of this, to make matters way, way worse, more information has come to light since the original ProPublica post and the original writing of this piece. In a follow up post, ProPublic has unearthed that Intuit specifically and actively de-indexed the free-to-file website from Google's search engine with the robot.txt file.

The code on TurboTax’s Free File site says “noindex,nofollow” — instructions for it not to show up in search results.

In contrast, the TurboTax page that puts many users on track to pay signals to Google that it should be listed in search results.

Sen. Ron Wyden, the ranking Democratic member of the Senate Finance Committee, said in a statement that he plans to raise Intuit’s misleading marketing with the IRS. “Intuit’s tactics to reduce access to the Free File program and confuse taxpayers are outrageous,” he said.

Don't expect Wyden to be the only member of Congress to get into the act. Several of the Democratic Presidential candidates are members of Congress as well, and you can bet that this is the kind of subject many of them will be all over. Elizabeth Warren in particular, as one of those pushing the IRS to do its own free to file program via legislation, should be an interesting watch here.

What the end result of all of this is unknown at the moment, but it looks very, very bad for Intuit. Again, Intuit signed an agreement with the IRS not only to offer free to file itself, but to take action to increase the use of it. Delisting the website where it can be done is about as counter to that promise as can be had.

Filed Under: congress, free tax filing, free taxes, irs, low income, search engines, tax prep, taxes, turbotax
Companies: intuit

FCC Boss Under Fire For Facts-Optional Attack On Low-Income Broadband Programs

from the science-schmience dept

For a while now, we've noted how FCC boss Ajit Pai professes to be some kind of a hero to the poor, despite the fact that his policies are quickly making broadband and TV services more expensive for Americans. His extremely unpopular net neutrality repeal, for example, will only wind up driving up costs for consumers as entrenched ISPs jack up costs for competitors and consumers alike. And when Pai wasn't busy killing net neutrality, he was busy killing efforts to make cable boxes more competitive and affordable, or making it easier for prison phone monopolies to rip off inmate families via absurdly over-priced services.

Pai has also been taking aim at a government program dubbed Lifeline, which makes expensive American telecom services slightly less expensive for poor families. The program, started under Reagan and expanded under Bush Jr., simply gives low-income homes a $9.25 credit they can use for home phone, broadband, or wireless service (they have to pick one). Traditionally, this program has had pretty broad, bipartisan support, and is uniformly seen as pretty much the least the government can do to help those struggling to make ends meet.

But Pai's attack on Lifeline has come via death by a thousand cuts, and is starting to alarm folks that actually try to help poor people for a living. Most recently, Pai tabled a proposal that would declare that smaller wireless MVNOs (mobile virtual network operators, like Boost or Virgin Mobile) could no longer participate in Lifeline. While Pai has claimed that these changes will somehow magically boost broadband deployment, he hasn't been able to offer the slightest shred of data to support that contention.

Even Pai allies like Verizon, who didn't even ask for this deregulation favor, have stated that Pai's changes won't do what he claims and will harm the poor. It's pretty strange to see an instance of deregulation pushed through that the industry itself didn't push for, just as it's strange to see Verizon and consumer advocates agreeing on something.

That said, a group of 10 Senators including Ron Wyden wrote Pai last week expressing concern that Pai's actions are in stark contrast to his breathless support of closing the digital divide:

"Your proposal impacts over 70 percent of current Lifeline-recipient households by eliminating their wireless providers from the program, leaving less affordable and fewer Lifeline options, while making it more difficult for the companies trying to serve Lifeline customers," Senate Democrats wrote in the letter to Pai yesterday. "Instead of cutting the program, we should ensure Lifeline reaches more Americans in need of access to communication services."

The Senators were also quick to point out that the FCC offered no hard evidence to support its claim that reducing participation in the program will somehow expand broadband availability:

"The December 1, 2017, Notice of Proposed Rulemaking (NPRM) provides no evidence, analysis, or data to support its assumption that the FCC’s proposed changes to Lifeline will spur facilities-based broadband deployment and additional affordable services for low-income families. Provide any specific data, analysis, academic studies, economic reports, etc. that you relied on to support this assumption. Explain why the NPRM included no evidence or data to support this assumption."

The FCC has yet to vote on this proposal (the public comment period ended last week), but is likely to in the coming months. Hopefully Pai shows a little more flexibility than he did during his attack on net neutrality when he not only used debunked lobbyist data to justify his positions, but directed journalists to telecom lobbying organizations if they had questions. That said, if Pai has made anything clear, it's that he's on an ideological crusade that's not only viciously unpopular, but isn't likely to have its trajectory altered by pesky things like the welfare of the public, or, say... facts.

Filed Under: ajit pai, broadband, fcc, lifeline, low income, ron wyden

AT&T's Already Happily Tap Dancing Around Its DirecTV Merger Obligations

from the ye-olde-merger-condition-two-step dept

If you've followed the telecom sector for any amount of time, you've probably noticed that the merger conditions affixed to its rotating crop of mega-mergers are usually hot garbage. Frequently the ankle-height goals are proposed by the companies themselves, and are usually something the companies planned on doing anyway. Telecom companies also know full well that regulators historically can't be bothered to check their math on such promises, letting them essentially trot out a rotating crop of feel good, but totally hollow "obligations" before they get to work laying off redundant employees and raising rates.

It's a win-win relationship of dysfunction, where giant companies get to grow ever larger, and regulators score cheap political points for "toughness" thanks to a media that can't be bothered to actually read the fine print of such deals, lest readership get bored.

When Comcast was pushing for its 2011 acquisition of NBC Universal it crafted a new wrinkle in this old story. It proposed offering $10, 5 Mbps broadband to low-income homes if regulators signed off on the deal. And while regulators were happy to promote this as yeoman's work in bridging the digital divide, it didn't take long before low-income families began protesting in the streets, pointing out the plan was hard to find, hard to qualify for, and difficult to sign up for. Still, Comcast's "Internet Essentials" plan has been a PR bonanza, with the cable giant holding an endless barrage of PR junkets advertising its selfless altruism.

To get regulators to sign off on its $69 billion DirecTV acquisition, AT&T proposed a similar $10 low-income broadband program it calls "Access." Under Access, low-income homes can get discounted, slow DSL service for an unspecified limited time -- provided they are in AT&T territory, have no outstanding debt with AT&T, and have at least one resident who participates in the US Supplemental Nutrition Assistance Program (SNAP). Under the program, users can get 5 Mbps or 10 Mbps DSL for the $10 price point, or 3 Mbps for $5 a month, which certainly sounds promising.

But the National Digital Inclusion Alliance this week issued a report noting that the company oddly omitted homes that can only get speeds of 1.5 Mbps. Given ISPs' tendency to refuse to upgrade many low-income areas, this naturally exempted a significant number of inner city applicants that might otherwise qualify for the service:

"You might think we're talking about a few isolated rural areas here. Think again. According to data published by the FCC from its Form 477 surveys of providers, AT&T's fastest reported download connection for VDSL (its current version of Digital Subscriber Line service) was 1.5 mbps or less for households in about 21% of all Census blocks in the cities of Cleveland and Detroit. Those blocks are mostly in inner-city neighborhoods with many low income households."

In a city like Cleveland, where AT&T has had little competitive incentive to upgrade its low-income urban networks, you're ultimately talking about a significant number of the poorest communities being unable to get speeds much faster than 1.5 Mbps: So the group asked AT&T if they wouldn't mind, you know, actually offering the discounted service to these slower-lines, and found their request flatly refused:

"About two months ago, NDIA contacted senior management at AT&T and proposed a change in the program to allow SNAP participants living at addresses with 1.5 Mbps to qualify for Access service at $5/mo. Yes, we know we were asking for the minimum speed to be lower than it should be, but paying $5/mo is better than paying full price and in many neighborhoods, both urban and rural, Access is the only low-cost broadband service option.

I'm sorry to report that, after considering NDIA's proposal for over a month, AT&T said no. “AT&T is not prepared to expand the low income offer to additional speed tiers beyond those established as a condition of the merger approval."

That shouldn't be too surprising. These low-income programs sound great upon shallow inspection, but once you've weeded out consumers that already have service, or owe their phone or cable company money (kind of common when you're struggling to pay the bills), you've already eliminated a huge swath of qualified applicants. AT&T apparently thought they could shave off another few million qualified households countrywide by refusing to provide service to its slower 1.5 Mbps DSL customers, hoping nobody would notice.

Of course, it's possible that AT&T will buckle should this story gain some mainstream media attention (unlikely), and promote its inclusion of 1.5 Mbps as just another generous act of altruism in the company's neverending quest to protect the poor.

AT&T's other "major" DirecTV merger condition was that it would deploy fiber to millions of additional homes, but as we've long noted, the company has a long history of fiddling with numbers to falsely inflate its deployment projections for such services. When it comes to fiber deployments, AT&T's often just lighting up some existing, already buried fiber at high-end housing developments, then crowing in a rotating crop of press releases that it has "launched" yet another market -- despite the fact that few can actually get the service.

After more than a generation, AT&T is the master of the merger condition two-step, having effectively tap danced around conditions affixed to most of its previous acquisitions, including BellSouth. For that deal, AT&T promised stand alone DSL at a discounted rate, then went out of its way to hide the offer from consumers. Regulators often don't bother to fact check or enforce such flagrant middle fingers after the fact since it would be an admission that the conditions -- and the mega-mergers they help prop up -- quite often actively harm the consumers regulators are supposed to be looking out for.

Filed Under: broadband, doj, fcc, low income, merger, requirements
Companies: at&t, directv