Small ISPs Being Forced To Eat The Costs Of FCC's Huawei Ban

from the do-as-we-say,-not-as-we-do dept

We've repeatedly noted that while Huawei certainly engages in some clearly sketchy shit (like many modern US telecom giants), the evidence supporting the Trump administration's global blacklist of the company has been lacking. Despite more than a decade of accusations and one eighteen month investigation that found nothing, the Trump administration still hasn't provided any public evidence supporting the central justification for the global blackballing effort (that Huawei works directly for the Chinese government to spy wholesale on Americans).

While there's certainly some valid natsec concerns in the mix when it comes to letting an authoritarian government dominate global network builds, at least some portion of the effort appears to be protectionism driven by US network hardware makers that simply don't want to compete with cheaper Chinese gear. Some of the effort is also Trump trying to obtain leverage for his often ridiculous tariff and trade war, which at least, for some advocates, is driven more by partisan patty cake or bigotry than substantive reason.

Regardless, the US effort to blackball Huawei from all global technology networks continues apace, without much concern about (1) the lack of public evidence, (2) the fact that the United States routinely does most of the stuff we're accusing China of, and (3) much of this pearl clutching has been co-opted by US companies that simply want to avoid international competition (especially in the smartphone and 5G network realm), but have had great lobbying success disguising those motivations under the guise of national security hyperventilation.

There are other problems with the campaign as well. This week the FCC formally announced it would be banning companies that take taxpayer subsidies from using any Huawei or ZTE hardware in their networks. At the moment, the ban just prohibits them from buying new Chinese gear or maintaining it, but the FCC may expand eventually to forcing these ISPs to remove existing gear entirely. Smaller telecom and broadband providers were quick to note that they're not exactly thrilled:

"As a result, rural carriers who have deployed Huawei or ZTE equipment or services in their networks will now lack the ability to support their critical networks that are serving hundreds of thousands of rural Americans and those traveling through rural America. Given the difficulty in demonstrating where specifically their USF support is being utilized in their networks, this puts rural carriers in a precarious situation while they strive to offer extended payment terms for their customers as requested by FCC Chairman [Ajit] Pai, adjust to the fallout of the T-Mobile/Sprint merger, and continue to keep rural Americans connected to broadband and telephone services during the COVID-19 pandemic."

Smaller carriers state that while the FCC is granting waivers, they didn't give carriers enough time to apply. And while there was also talk about helping fund these network gear removal and replacement efforts, that money appears lost in regulatory and legislative purgatory, according to FCC Commissioner Geoffrey Sparks:

"Funding is the missing piece. Congress recognized in the Secure and Trusted Communications Networks Act that many carriers will need support to transition away from untrustworthy equipment, but it still has not appropriated funding for replacements. I look forward to working with Congress and my colleagues to ensure there are sufficient funds to get the job done."

In the interim small ISPs have to apparently just eat those costs, at the same time they're being expected to maintain connectivity during a pandemic, which is... not great. Of course broadband subsidization has a long, ugly history where we throw billions at giant companies for doing less than nothing. Here we have the small businesses US leaders routinely pay ample lip service toward being forced to (for now) foot the bill for policy that doesn't seem fully thought out.

None of this is to suggest that the Chinese government and Huawei don't engage in terrible behavior. They do. But the US approach of a blanket global blacklisting is a cumbersome, evidence-optional mess. The UK and Germany have kicked back a bit against the US approach, arguing that existing security standards (where you judge the safety of each piece of hardware based on its actual lack of security or vulnerabilities) makes a lot more sense than a cumbersome, global blackballing effort based at least in part on protectionism, and so far justified by very little in the way of hard, public evidence.

There's also the hypocrisy of a country that routinely engages in all manner of sketchy global surveillance lecturing other countries on sketchy global surveillance. Can you imagine if other countries began blacklisting AT&T for the fact it's effectively bone grafted to the NSA? The amount of patriotic pearl clutching from fans of the blackballing effort would easily make your head spin. There's an underlying logic at play that because the US does it, it must be good, and the "do as we say, not as we do" messaging at play here gives off a ripe stink of hypocrisy.

Filed Under: broadband, china, competition, fcc, protectionism
Companies: huawei

Google Joins The Evidence-Optional Assault On Huawei

from the intercontinental-blackballing dept

So we've noted several times now how the US efforts to blacklist Huawei from global telecom markets haven't much in the way of, oh, supporting evidence. The Trump administration and FCC have taken all manner of actions to try and blackball the company, from pressuring U.S. carriers to drop plans to sell Huawei phones to the FCC's decision to ban companies from using Huawei gear if they want to receive federal subsidies.

The underlying justification for these moves has centered on the idea that Huawei operates as a surveillance extension of the Chinese government, something that still hasn't been proven despite a decade's worth of claims to this effect, and an eighteen month investigation by the White House.

That's not to say the Chinese government is an innocent little daisy. Nor is it meant to suggest that it's impossible that Huawei spies on Americans. But the lack of any actual public evidence of spying remains troubling all the same, given that if the shoe were on the other foot, there'd be no shortage of face-fanning consternation on the part of American politicians and industry.

Enter Google, which this week decided that it'd be joining the evidence-optional festivities by announcing it would be severing Huawei's Android license. The move forces Huawei to rely on the Android Open Source Project (AOSP), cutting it off from critical Google apps and services. The move, as Reuters notes, could prove devastating for one of the nation's biggest smartphone manufacturers:

"The suspension could hobble Huawei’s smartphone business outside China as the tech giant will immediately lose access to updates to Google’s Android operating system. Future versions of Huawei smartphones that run on Android will also lose access to popular services, including the Google Play Store and Gmail and YouTube apps."

As some were quick to note, the move may actually prove to be counterproductive, given the negative impact it could have on deploying timely security updates:

For its part, Google stated it was simply complying with the US Commerce Department’s decision to place Huawei on the “Entity List," a move that was justified as essential to ensuring network security. But the company largely ignored any criticism that such a move might actually undermine end-user security. And in the press, it's almost bizarre how few reporters have noticed that public evidence of spying allegations is nonexistent:

It's perfectly fine if your gut tells you Huawei is a surveillance proxy for the Chinese government, but that's not the same as evidence. Also lost in this conversation is the fact that companies like Cisco have a long history of trying to gin up lawmaker hysteria on this subject for competitive advantage, or that this blackballing effort just mysteriously materialized at the same time US gear makers were worried about competing with cheaper Chinese gear as they rush to secure international fifth-generation (5G) network contracts.

Again, perhaps Huawei really is a spy and the last decade of similar hand-wringing is perfectly justified. But if that's the case, it shouldn't be hard to provide some public evidence supporting that allegation. And while some of the concern about Huawei may very well be driven by legitimate national security concerns, another significant chunk of these efforts is pretty clearly driven by good old vanilla protectionism. To ensure US policy is being driven more by the former than the latter, it might be a good idea if the press stopped playing parrot and demanded a little more in the way of actual proof.

Filed Under: android, china, donald trump, entity list, protectionism, security, us, white house
Companies: google, huawei

Why The Hell Are States Still Passing ISP-Written Laws Banning Community Broadband?

from the ill-communication dept

We've long talked about the more than 750 towns, cities, and counties that have responded to US broadband market failure by building their own broadband networks. We've also talked at length about how data has shown these networks often offer better service at lower, more transparent prices than their purely private sector counterparts (usually natural monopolies), whose apathy and political power has only grown in the wake of limited competition.

We've also talked at great length about how instead of derailing these efforts by offering better, cheaper service (aka competition), industry giants like AT&T and Comcast have found a cheaper solution: they've quite literally paid state lawmakers to pass protectionist laws in dozens of states that ban or hinder towns and cities from even exploring the option. These bills are widely opposed by the public, but a new study says the phenomenon is growing all the same:

"A new report has found that 26 states now either restrict or outright prohibit towns and cities from building their own broadband networks. Quite often the laws are directly written by the telecom sector, and in some instances ban towns and cities from building their own broadband networks—even if the local ISP refuses to provide service.

The full report by BroadbandNow, a consumer-focused company that tracks US broadband availability, indicates the total number of state restrictions on community broadband has jumped from 20 such restrictions since the group’s last report in 2018.

So why are these bills expanding if they're so unpopular among the public? Because they're often shoveled through the legislative process in an underhanded manner, like AT&T did when it tried to pass community-broadband killing rules into an unrelated Missouri traffic bill. Most of the time though, ISPs simply write these bills in cooperation with ALEC, who then shovels the legislation on to financially-compromised lawmakers who are happy to pass the bills with little real fact check or debate.

Sometimes the bills ban such networks outright, other times they more cleverly restrict how and where such projects can be funded or grow, something experienced by Chattanooga's utility-run EPB:

"In Tennessee, for example, state laws allow publicly-owned electric utilities to provide broadband, “but limits that service provision to within their electric service areas.” Such restrictions have made it hard for EPB—the highest rated ISP in America last year according to Consumer Reports—to expand service into new areas.

“During the 2017 legislative session, a bill considered by state lawmakers would have enabled municipalities to expand broadband infrastructure to residents,” the report notes. “Instead, lawmakers passed a bill that offers $45 million in subsidies to private Internet service providers to build the same infrastructure."

ISP lobbyists, loyal lawmakers, and the ocean of dollar per holler consultant, academics, and think tankers they employ have spent years trying to vilify these community broadband efforts as guaranteed taxpayer-funded boondoggles. But such efforts are like any business plan and highly dependent on the competency of the crafter and the underlying business model. These criticisms also ignore that US telecom ideology has generally focused at throwing unchecked billions at private monopolies who then fail repeatedly to actually deploy the fiber they promise, which actually is a taxpayer-funded boondoggle.

Even if you're opposed to your town or city getting into the broadband business, that doesn't mean Comcast and AT&T lobbyists should be pushing laws that quite literally strip away your democratic right to decide local infrastructure issues for yourself. That's a concept that's grotesque across political and economic ideologies. It's pure protectionism, and a violation of local democratic rights.

We've noted repeatedly how these towns and cities aren't getting into the broadband business because they're "socialists" or because they think it's fun. They're doing it because of decades of market failure, leading to historically awful customer service, sky high prices, slow speeds, and patchy availability. US broadband is a web of dysfunction thanks to growing natural cable broadband monopolies, corruption, and regulatory capture. Letting natural monopolies literally write protectionist laws banning creative, local, niche solutions only makes the over-arching problem that much worse. And yet here we are.

Filed Under: broadband, competition, monpoly, muni-broadband, protectionism, states

Trump's Chinese Telecom Protectionism Always Seems To Be Lacking Evidence

from the facts-matter dept

If you hadn't noticed by now, the Trump administration has made blacklisting Chinese telecom companies one of its top priorities. That's been most notably exemplified by the administration's attacks on Huawei, which is repeatedly cited as an asset of the Chinese government without much in the way of proof. From pressuring U.S. carriers to drop plans to sell Huawei phones to the FCC's decision to ban companies from using Huawei gear if they want to receive federal subsidies, this effort hasn't been subtle. A harder, broader ban is supposedly looming in the wings.

There's no doubt that Huawei, like AT&T here in the states, isn't a shining beacon of ethical behavior. At the same time, the dulcet undertones justifying much of the blacklisting is based on the premise that the company spies on Americans on a massive scale. Yet nobody has provided evidence of that. In the slightest. In fact, one 18-month investigation into Huawei in 2011 (the last time we had a similar epidemic of hand-wringing on this subject) found that there was no evidence supporting that claim. As in, at all:

"We knew certain parts of government really wanted” evidence of active spying, said one of the people, who requested anonymity. “We would have found it if it were there."

Also ignored is that U.S. hardware vendors like Cisco have a very long history of trying to gin up hysteria on Capital Hill on this front among lawmakers who aren't too keen on, well, facts:

"What happens is you get competitors who are able to gin up lawmakers who are already wound up about China,” said one Hill staffer who was not authorized to speak publicly about the matter. “What they do is pull the string and see where the top spins."

Again, it's certainly possible that Huawei has spied on Americans, but shouldn't somebody actually provide the smallest bit of public evidence of that fact before we blacklist a company from the better part of a continent? Wouldn't we demand the same if the shoe was on the other foot? The UK and Germany have been skeptical of the US claims, noting they've also yet to see hard evidence proving the scope of the claims. As such, they've taken steps to tighten up security in general, instead of stumbling down the facts-optional protectionism rabbit hole.

Fast forward to last week when the FCC announced it would be banning China Mobile from doing business in the US:

"After a lengthy review of the application and consultation with the U.S. intelligence community, in 2018, the Executive Branch agencies recommended that the FCC deny China Mobile USA’s application due to substantial national security and law enforcement concerns that cannot be resolved through an agreement with the company (called “voluntary mitigation”). Notably, this is the first time the Executive Branch has ever recommended that the FCC deny an application due to national security concerns. Based on this recommendation and the full public record in this proceeding, I have determined that approving this application would not serve the public interest. At our May meeting, the Commission therefore will vote on an Order that would deny China Mobile USA’s application."

Given the Trump administration's relationship to factual reality, that it was the "first" to deny a telecom application on national security grounds doesn't actually mean anything. What was the nature of the identified threat? How severe was it? Where was it discovered? Can you provide the slightest shred of data supporting this claim? Even in redacted form? ¯\_(ツ)_/¯

Again, it's entirely possible China Mobile is a surveillance threat. But again, why not make at least some of that information public? The problem with the all-too-patriotic and unquestioning press and analyst repetition of these claims (and that is the general tone of US coverage) is that it opens the door to letting government and US industry disguise protectionism as national security. And when you press for evidence, those pushing the agenda hide behind government secrecy. Hopefully it's not too hard to see how this is a problem, or to understand that demanding a bit more (any?) actual evidence isn't really a steep ask.

But the press, oblivious to its own patriotism, tends to parrot these claims without much in the way of hard questions. Or without providing much meaningful context.

For example, you'd be hard pressed to find many stories on Huawei that mention that Americans are so happy to install poorly secured internet of things devices on their home and business networks, foreign intelligence organizations probably don't even need to own the core infrastructure. Or that there's an absolute universe of other Chinese-made hardware embedded in everything from your home router to your not-so-smart refrigerator we apparently don't seem nearly as perplexed by. Or that the United States engages in most of the dubious behavior we have routinely accused China of.

That the "US engages in much of this same behavior and probably shouldn't be giving lectures on surveillance ethics" isn't intended as whataboutism. There's a genuine problem at the heart of this issue: if the US press doesn't demand a factual, transparent public accounting of the Chinese surveillance threat, the door is opened wide to lobbyists eager to disguise protectionism as national security. Companies like Cisco, who simply don't want to compete with cheaper Chinese hardware, have been exploiting this dysfunction for years. And the press, with a few occasional exceptions, has been happy to lend a hand.

Filed Under: china, evidence, fcc, protectionism, telecom
Companies: china mobile

The FCC's Evidence-Optional Blacklist Of Huawei Is About Protectionism, Not National Security

from the evidence-schmevidence dept

Last week we noted that Best Buy was the latest to join a growing, evidence-optional blacklisting of Huawei based on ambiguous "national security" concerns. We also noted how despite a lot of hand-wringing on certain fronts for most of this decade, nobody has been able to provide evidence that Huawei actively spies on American consumers, the justification for similar blacklisting by AT&T and Verizon earlier this year (both bosom bodies with the NSA, it probably goes without saying). Few news outlets bother to mention an 18-month investigation found no evidence of wrongdoing by Huawei.

While it's certainly possible Huawei is embedding backdoors no security researcher has been able to ferret out, it's just as possible that we're engaging in good, old-fashioned vanilla protectionism dressed up as ambiguous national security concerns. As one anonymous source told the Washington Post during the last flare up of Huawei phobia, getting non-tech savvy lawmakers riled up on this subject isn't particularly difficult:

"What happens is you get competitors who are able to gin up lawmakers who are already wound up about China,” said one Hill staffer who was not authorized to speak publicly about the matter. “What they do is pull the string and see where the top spins."

There's a large contingency of folks who breathlessly profess dedication to free trade and open competition at every opportunity, yet can somehow pivot to protectionism on a dime -- despite criticizing China for doing the same thing. That apparently includes the FCC, which this week announced it would be joining the evidence-optional blacklist of Huawei by banning U.S. telcos from buying Huawei gear if they take taxpayers subsidies. From a statement by FCC boss Ajit Pai issued to the media this week:

"Threats to national security posed by certain communications equipment providers are a matter of bipartisan concern. Hidden ‘back doors’ to our networks in routers, switches—and virtually any other type of telecommunications equipment—can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more. Although the FCC alone can’t safeguard the integrity of our communications supply chain, we must and will play our part in a government- and industry-wide effort to protect the security of our networks."

Again though, nobody has provided a shred of public evidence that Huawei routinely spies on American consumers. And the evidence that we do have routinely indicates that the United States is in no position to throw stones anyway. Edward Snowden documents revealed that not only did the NSA break into Huawei starting in 2007 to steal source code and implant its own backdoors, but that the agency also intercepted Cisco hardware en route for the same purpose. So again, the real message being sent here is that this kind of behavior is only acceptable if the United States does it.

In his statement, Pai declares that he's solely looking out for the welfare of the American public (you know, like he did during the net neutrality repeal), and that the agency will vote on the proposal next month:

"That’s why I’m proposing to prohibit the FCC’s $8.5 billion Universal Service Fund from being used to purchase equipment or services from any company that poses a national security threat to the integrity of communications networks or their supply chains. The money in the Universal Service Fund comes from fees paid by the American people, and I believe that the FCC has the responsibility to ensure that this money is not spent on equipment or services that pose a threat to national security. On April 17, I hope that my fellow Commissioners will join me in supporting this important proposal to help protect our national security."

But many small cable operators appear to see what this effort is really about. One Oregon cable operator told the Wall Street Journal this week that using Huawei gear saved them around $150,000 when they were trying to expand broadband into rural markets (something you'll recall Pai insists is a priority). They appear to be well aware that this effort is about protectionism and nationalism, not national security:

"“Our margins are pretty thin,” Mr. Franell said. “If you start dictating what kind of equipment I can use, it tips the scales.” He said he thinks the new legislation making the rounds in Washington is more likely driven by nationalism and protectionism than by real concerns about hacking and spying. ”I’m not going to rework my whole business plan based off a rumor or an unsubstantiated allegation,” he said.

Again, there's an ocean of ways China can (and does) spy on the United States without Huawei's help. Chinese hardware is literally everywhere, including in many of the products manufactured by U.S. companies. And given the fact that we're happily connecting security-optional internet of things devices to home and business networks like it's going out of fashion, there's ample opportunities to spy on Americans -- with Americans' oblivious enthusiasm.

U.S. networking and smartphone manufacturers are particularly afraid of losing ground to China in the race to deploy faster fifth-generation (5G) networks and handsets. But instead of competing, we're apparently going to double down on the argument that Huawei (and other Chinese network vendors) are rampant national security threats, while ignoring we routinely engage in the same or worse behavior (except with proof). It's protectionism plain and simple, but if you wave your hands hysterically and patriotically enough, nobody (including the American tech press) will apparently call you on it.

Filed Under: fcc, protectionism, security
Companies: cisco, huawei

Cannes Bans Netflix Films From Competition Because The Internet Is Bad (Or Something)

from the get-off-my-lawn dept

Cannes this week declared that the long-running festival would be banning streaming services like Netflix from being able to win the Palme d’Or. That said, festival leaders weren't able to offer a coherent reason why. Festival boss Thierry Fremaux apparently tried to offer something vaguely resembling an explanation to a variety of different news outlets, but wasn't particularly successful. Most of the arguments made by Fremaux to the press had something to do with Netflix being different (gasp) from the traditional film industry production and criticism model:

"The Netflix people loved the red carpet and would like to be present with other films. But they understand that the intransigence of their own model is now the opposite of ours,” Thierry Fremaux said."

The heart of the ban appears to be a fusion of protectionist concerns about how streaming could harm the traditional French film industry and brick-and-mortar theaters (aka: fear of competition). France has a cultural exception law that requires a percentage of all box office, TV and streaming revenues be used to finance homegrown and foreign films. That law also forces a very outdated and obnoxious release window: namely a 36-month delay between theatrical release and streaming availability. Streaming providers' disdain for such artificial and arbitrary restrictions has been ruffling feathers for years.

In other words, this is really just the same old story about people making silly decisions because of fear of something new disrupting legacy business models that may not work as well in the modern era. But because Cannes just can't come out and admit that, we instead got a heavy dose of disdain for the internet in general:

"Fremaux said the while new players like Netflix and Amazon are enabling directors to make big budget films, they are creating “hybrids” that aren’t TV and aren't quite film. “Cinema [still] triumphs everywhere even in this golden age of series,” he said. “The history of cinema and the history of the internet are two different things."

It's 2018 and that's not entirely true anymore but who cares, get off my lawn!

Cannes has previously banned made for TV movies to ensure a certain quality bar in competition. The organization appears to be using that ban to justify banning Netflix, despite the fact that Netflix is now spending billions on producing its in-house, award winning fare. Because many of these films only saw limited runs in theaters (or no run at all) doesn't automatically equate to low quality, and banning streaming services from awards isn't likely to magically save an industry unwilling to evolve.

Of course this disdain for all things new isn't solely a French phenomenon. Stephen Spielberg recently stated that Netflix films shouldn't be allowed to win Oscar awards, though here too you'll notice that the justifications are arguably flimsy, with an attempt to equate "streaming" with inevitably low quality:

"Once you commit to a television format, you’re a TV movie,” he told ITV News. “You certainly, if it’s a good show, deserve an Emmy, but not an Oscar. I don’t believe films that are just given token qualifications in a couple of theaters for less than a week should qualify for the Academy Award nomination."

Why not? Who knows! If the content is awful it will get rejected from such competitions anyway. And trying to fend off streaming at this point is like trying to slow the flow of a river with just your hands. The move is pretty clearly an effort by Fremaux to project a certain standard of excellence (he also announced that selfies would be banned at this year's festival), but the message it's actually sending the world is more of the "I'm a Luddite" variety.

Filed Under: cannes, competition, disruption, films, innovation, movies, protectionism, streaming, thierry fremaux
Companies: cannes film festival, netflix

Verizon Folds To Government Pressure To Blacklist Huawei Without A Shred Of Public Evidence

from the blacklisted dept

Earlier this month, AT&T cancelled a smartphone sales agreement with Huawei just moments before it was to be unveiled at CES. Why? Several members of the Senate and House Intelligence Committees had crafted an unpublished memo claiming that Huawei was spying for the Chinese government, and pressured both the FCC and carriers to blacklist the company. AT&T, a stalwart partner in the United States' own surveillance apparatus was quick to comply, in part because it's attempting to get regulators to sign off on its $86 billion acquisition of media juggernaut Time Warner.

But Verizon has also now scrapped its own plans to sell the company's smartphones based on those same ambiguous concerns:

"Verizon Communications Inc. has dropped all plans to sell phones by Chinese manufacturer Huawei Technologies Co., including the new Mate 10 Pro, under pressure from the U.S. government, according to people familiar with the matter... Huawei devices still work on both companies’ networks, but direct sales would’ve allowed them to reach more consumers than they can through third parties."

The problem? There's no publicly-available evidence that Huawei is spying for the Chinese government after more than a decade of hunting for it. Similar breathless hysteria over Huawei's connection to the Chinese government surfaced in 2011, prompting numerous investigations into the claim. One 18-month investigation found absolutely no evidence that Huawei was spying on American citizens for the Chinese government. One source at the time explained the investigation this way when asked about it by Reuters:

"We knew certain parts of government really wanted” evidence of active spying, said one of the people, who requested anonymity. “We would have found it if it were there."

Again, while it's possible that Huawei helps the Chinese government spy, a decade of hunting has resulted in zero publicly-available evidence proving it. And the evidence that does exist tends to suggest that this is little more than the same kind of protectionism the United States frequently accuses China of. And much of the hysteria surrounding Huawei's role as a Chinese spy tends to originate with companies like Cisco which simply don't want the added competition, as this 2012 Washington Post Report observed:

"What happens is you get competitors who are able to gin up lawmakers who are already wound up about China," one source told the The Washington Post. "What they do is pull the string and see where the top spins."

It's apparently easy to get cash-compromised or just plain gullible lawmakers all hot and bothered on this subject. Ignored of course is the U.S. government's own bad behavior on this front, whether we're talking about using AT&T to hoover up every shred of data that touches its network in violation of the law, or the NSA's own attempts to hack into Huawei, steal source code, then embed backdoors into Huawei gear. Similarly ignored is the fact that Chinese hardware already exists in everything from U.S.-made network gear to poorly-secured internet of things devices, creating ample surveillance opportunities already.

Again, that's not to say that it's impossible Huawei aids the Chinese government, but despite a decade of breathless face-fanning there's been little to no hard evidence that justifies this kind of blackballing. And what evidence that does exist indicates that Cisco, AT&T, Verizon, the NSA, and most of the folks beating the drum to blacklist Huawei have less than zero credibility when it comes to determining who's trustworthy in the first place.

Filed Under: china, evidence, protectionism
Companies: huawei, verizon

Maine The Latest State To Try And Let Giant Broadband Providers Write Shitty, Protectionist State Law

from the you're-not-helping dept

One of (several) reasons why American broadband is so uncompetitive is the fact that we continue to let giant broadband mono/duopolies quite literally write awful state telecom law. As we've long noted, more than twenty different states have passed laws making it difficult to impossible for towns and cities to improve their local broadband networks -- even in instances when the entrenched duopoly refuses to. Many of these laws even ban towns and cities from entering into public/private partnerships with the likes of Google Fiber. It's pure protectionism.

Maine is the 49th ranked state in broadband speed and coverage -- in large part due to rural markets. Despite countless years of subsidies, broadband providers consistently refuse to seriously upgrade these areas at any scale due to costs. And yet they refuse to let the towns do it themselves, either. State Representative Nate Wadsworth has introduced HP1040, aka "An Act To Encourage Broadband Development through Private Investment." Except like so many of these bills, the proposed law's name is a stark 180 from what the legislative measure actually does.

You see Wadsworth is a state chair for ALEC, the group most ISPs use to help them ghost write these protectionist bills. And Wadsworth's proposal, like countless others, imposes a laundry list of restrictions on any town or city that might dare try to do something about the fairly awful service state residents receive from the likes of Frontier Communications and Comcast. From limits to how money can be raised to requirements for repeated public referendums (at which point deep-pocketed ISPs outspend local advocates), communities suddenly face all manner of restrictions on what they can or can't do in their own backyards.

Page Clason, Member of the Islesboro Broadband Committee, described HP 1040 this way:

"I would say this proposed bill is puzzling because while suggested to promote investment of broadband in Maine it would do the opposite. Nothing in the bill provides stimulus, most everything in the bill provides increased hurdles and costs for communities needing the broadband investments. The only stimulus I can garner from such an approach would be that the largest providers would be further comforted that no other service providers would show up to do the builds that the dominating providers have not been supplying for the last few decades."

More often than not, backers of these bills claim they're only looking to protect taxpayers from fiscal mismanagement. But community broadband networks aren't by nature inherently dysfunctional (though they're often sold that way by municipal broadband opponents). They're like any other business plan: some are good, and some aren't. But the reality is that towns and cities wouldn't be getting into the broadband business if they were happy with local service. The "solution" to this organic backlash isn't letting giant duopolists write shitty law; the solution is more competition.

And laws banning municipal broadband -- and especially public/private partnerships -- accomplish the exact opposite of that. And while large ISPs (and their ocean of paid think tankers, economists, and other doller-per-holler professionals) have tried to make this a partisan issue -- the vast majority of municipal networks are built in Conservative areas with broad, bipartisan support. That's because there's one thing we can all agree on: nobody likes the local cable and broadband monopoly. And, as the local Maine newspapers make clear, consumers aren't half as dumb as many politicians think they are:

"I can guarantee you if this bill moves forward, they will hear from an awful lot of very angry people," (said one Maine resident). “Maine people are self-reliant, but island people are very self-reliant. When the boat stops at the end of the day, we take care of each other, and if somebody comes in from the outside and says we can’t take care of ourselves, that message won’t go over well."

The public is, however, inattentive -- and so state by state, large ISPs like Frontier, CenturyLink, AT&T and Comcast continue to push such bills through state legislatures. When they can't get a bill passed once, they'll try repeated times. When that doesn't work, they'll try to push these restrictions through via entirely unrelated legislation, like traffic bills. These same companies will then whine excessively about "overreach" when government does things they don't like, but remain dead quiet when they use that precise same government to protect the dysfunctional status quo.

Update: Lo and behold, the fierce public opposition has resulted in the bill being killed. Pressure appears to have been so intense, even the bill's sponsor, Nate Wadsworth, voted it down.

Filed Under: broadband, competition, maine, muni broadband, municipal broadband, nate wadsworth, protectionism

Chinese State Patent Troll Absorbed By Smartphone Maker Xiaomi, Adding To Its Patent Hoard

from the but-will-it-come-in-peace? dept

A couple of years ago, we wrote about Ruichuan IPR Funds, which seemed to be a rather odd kind of patent troll -- one that was essentially backed by the Chinese government. Since then, Ruichuan has dropped off the radar in the West, but there have been some important changes in its home country, as reported on the IAM blog:

China's first patent fund is now being run as part of the Xiaomi IP function, IAM can exclusively reveal. When last we reported on the Ruichuan IPR Funds its status was somewhat unclear. The fund's operator, an IP services firm called Zhigu, had apparently been merged with the smartphone company's in-house IP department, but there had been no official word on the move.

Techdirt wrote about Xiaomi -- sometimes called "China's Apple" -- last year. Although it has lost some of its initial shine, it's still a top Chinese company, and one that has global ambitions. As Techdirt readers know only too well, to stand a chance in the West's patent-saturated tech markets, new entrants need a patent portfolio to use as a bargaining counter, and Xiaomi has been busy acquiring one. In June of this year, Bloomberg reported the following:

Xiaomi Corp. bought nearly 1,500 technology patents from Microsoft Corp. in a deal that may smooth potential legal tangles over intellectual property as it pushes beyond China.

The patents cover a range of wireless communications, video, cloud and multimedia technologies, spokeswoman Kaylene Hong said. The acquisition came as part of a broader agreement announced Wednesday with the U.S. software giant, under which Microsoft Office and Skype will come pre-installed on the Chinese smartphone maker devices.

The absorption of Ruichuan IPR Funds by Xiaomi -- which must have taken place with the Chinese government's approval -- is clearly part of the same strategy of bulking up in the patent department as it prepares to expand abroad. The big question is whether Xiaomi is planning to use its new portfolio purely defensively, so that it can sign cross-licensing deals, or whether it will start going on the offense and sue Western companies in their home markets too.

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Filed Under: china, patent trolls, patents, protectionism, smartphones
Companies: ruichuan ipr funds, xiaomi