FCC Revisits Transparency 'Nutrition Label' For Broadband

from the making-it-clear-Comcast-has-all-the-power dept

For years we've noted how broadband providers impose all manner of bullshit fees on your bill to drive up the cost of service post sale. They've also historically had a hard time being transparent about what kind of broadband connection you're buying. As was evident back when Comcast thought it would be a good idea to throttle all upstream BitTorrent traffic (without telling anybody), or AT&T decided to cap the usage of its "unlimited" wireless users (without telling anybody), or Verizon decided to modify user packets to track its customers around the internet (without telling anybody).

Back in 2016 the FCC eyed the voluntary requirement that broadband providers be required to provide a sort of "nutrition label" for broadband. The idea was that this label would clearly disclose speeds, throttling, limitation, sneaky fees, and all the stuff big predatory ISPs like to bury in their fine print (if they disclose it at all). This was the example image the FCC circulated at the time:

The idea never fully came to fruition under Obama-era FCC boss Tom Wheeler, and was scuttled by the Trump FCC for what should be obvious reasons. Biden's FCC is now thinking about voting to revisit the idea:

"FCC Chair Jessica Rosenworcel is finally moving ahead with a vote planned for Jan. 27 on “a proposal to establish simple-to-understand broadband labels, whereby internet providers would disclose accurate information about prices, introductory rates, data allowances, and broadband speeds,” she wrote in a blog post Wednesday."

The problem, of course, is that the FCC is currently (and quite intentionally) vote gridlocked at 2-2 commissioners thanks to the rushed appointment of Trump ally Nathan Simington last year, and the GOP (read: AT&T, Comcast and Verizon) effort to block or at least delay the appointment of Biden FCC nominee Gigi Sohn. It's no guarantee that GOP Commissioners like Brendan Carr would ever sign off on such a plan, given he rarely wanders out of synchronized lockstep with the interests of companies like AT&T, Comcast or Verizon (who prefer less transparency for obvious reasons).

If the proposal mirrors the Wheeler one, it will be voluntary...meaning ISPs could just ignore it. That's likely to get buried in coverage. The other problem, as some Twitter observers were quick to note, is that a label transparently informing you that you're being ripped off isn't of much use if you're one of the 83 million Americans currently living under a broadband monopoly. As in, it's maybe good to have more transparency into what you're buying, but its value is limited if you have no alternative ISPs to switch to once gifted with that knowledge:

Having actual competition in many of these markets would force ISPs to avoid nickel and diming customers in the first place. In fact, customer service complaints, privacy violations, net neutrality violations, slow speeds, and high prices would all miraculously improve if ISPs faced a meaningful, competitive penalty for them. But with so many U.S. residents living under a monopoly (usually Comcast or Charter), there's simply no penalty. Tack on regulatory capture and a corrupt Congress, and penalties for bad behavior of any kind are hard to come by if you're a giant regional telecom monopoly.

This comes back to my complaint that even well intentioned U.S. telecom regulators never seem willing to target the real root of the U.S. broadband problem: regional monopolization and the state and federal corruption that allows it. Not only do regulators not take aim at this problem, they'll routinely never mention it. You'll routinely watch U.S. regulators and politicians (and by proxy much of the press) talk vaguely about the "digital divide" or "homework gap" as this entirely-causation-free thing, but they'll just completely ignore acknowledging that the underlying problem has been caused by letting telecom giants run amok for 30 years, crushing healthy competition underfoot.

This sort of "discursive capture," as academics like Victor Pickard call it, is a sort of side effect companion of regulatory capture. If you simply refuse to acknowledge that rampant monopolization, mindless consolidation, and limited competition are the core problems (and in the case of U.S. broadband that's pretty much indisuptable), you don't have to embrace policies that challenge the politically powerful and actually address the problem. So what you wind up getting are policymakers who just throw more money at the problem, or apply policy band aids that don't address the underlying dysfunction.

We won't fix U.S. broadband until we confront the regional monopolies and duopolies, and the state and federal corruption that shield them from accountability. But a company like AT&T isn't just politically powerful in DC (it routinely is literally allowed to write state and federal law), they're bone-grafted to our domestic surveillance apparatus, allowing them to generally (with only the smallest of occasional exemption) face no accountability for thirty-five years of anti-consumer, anti-competitive behavior or endless efforts to rip off the federal government.

Filed Under: competition, fcc, nutrition label, truth in advertising

It's 2021 And Bullshit Broadband And Cable TV Fees Are Somehow Still A Thing

from the you'd-think-we-would-have-fixed-this-by-now dept

For years we've talked about how the broadband and cable industry has perfected the use of utterly bogus fees to jack up subscriber bills -- a dash of financial creativity it adopted from the banking and airline industries. Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate -- then sock you with a higher rate once your bill actually arrives. These companies will then brag repeatedly about how they haven't raised rates yet this year, when that's almost never actually the case.

One 2019 Consumer Reports study found that about 24% of consumer bills are comprised of bullshit fees, generating cable giants $28 billion in additional revenue annually. The problem is just as bad over in broadband (see Centurylink's utterly nonsensical "Internet Cost Recovery" fee). Often cable and broadband companies will try to give such fees official-sounding names like "regulatory recovery" so that consumers falsely blame government for being nickel-and-dimed. But between TV fees, hardware fees, usage fees, and other surcharges, bundled customers dole out a small fortune every year for absolutely nothing.

It's fraud, but fraud that has somehow been normalized over decades.

I've been writing about this problem for the better part of twenty years, so it's disheartening to see the Washington Post still covering this bullshit in 2021 without much having changed:

"Most of the price hike that I didn’t expect was Comcast sneaking in additional “fees” — not taxes, just expenses related to Comcast’s cost of doing business. I’m paying $27.05 on top of my bundle price for Comcast’s cable service to carry local broadcast networks and pro sports games. Yes, my Comcast bill, [Consumer Reports senior counsel Jonathan] Schwantes said, isn’t as bad as many others he has seen, which can include 12 or more line-item fees. Some companies, he added, try to make people think their fees are government taxes, but they’re not.

Amusingly, Comcast tries to pass off falsely advertising low prices then socking users with bullshit fees as some kind of consumer benefit:

"Comcast tells me this is exactly what its customers want. It said it disclosed its copious additional fees to me in various fine-print communications — though only after I entered my credit card number. “We conduct extensive consumer research and host focus groups and incorporate our findings into the way we present information to our customers, all in an effort to help ensure they have a positive experience and can easily understand the details of their service,” said Jennifer Khoury, Comcast’s chief communications officer."

By and large, federal regulators couldn't give any less of a shit about this problem. That leaves a patchwork collection of State AGs who'll occasionally dole out some light fines and flimsy wrist slaps. But that leaves most consumers utterly unprotected from being ripped off by their local cable TV or telecom company. As you can tell from similar behavior in the banking and airline industries, the federal government, at some point, just declared it perfectly okay to rip people off with utterly nonsensical fees, provided you're just marginally clever about it.

Filed Under: bogus fees, broadband, cable, fees, hidden fees, price hikes, truth in advertising
Companies: comcast

Frontier Communications Sued Yet Again For Lying About Its Pathetic Broadband Speeds

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

For a long time we've talked about the fact that if you really want to understand why U.S. broadband is expensive and mediocre, you should take a good hard look at Frontier Communications. The regional phone company in 25 states has, for years, been accused of neglecting to adequately upgrade or repair its network, despite millions in wasted taxpayer subsidies. Protected from both competition and accountability thanks to state and federal corruption, the company has happily price gouged captive customers without facing real penalties.

In recent years that has shifted slightly thanks largely to individual states like Washington, New York, and Minnesota, which have all sued the company at various times for neglecting its network, advertising speeds its sluggish DSL lines can't deliver, or inundating its subscribers with bullshit fees and surcharges (a neat trick that lets ISPs advertise one price, then charge you a much higher rate).

This week Frontier found itself again under fire for, you guessed it, lying about its broadband speeds and overcharging consumers for substandard service. This latest suit (pdf) was jointly filed by the FTC, the attorneys general from Arizona, Indiana, Michigan, North Carolina, and Wisconsin, and the district attorneys’ offices of LA County and Riverside County, California. Like previous suits, the new FTC suit accused Frontier of advertising speeds it knows its aging and distance-constrained DSL lines can't deliver, failing to disclose those limits to consumers, and overbilling subscribers based on speeds they can't actually get.

Granted there's a reason Frontier keeps getting sued without much changing. And that's because the fines levied upon regional telecom monopolies are usually a small fraction of the money made from exploiting captive consumers (and local governments). As such, the penalties are just viewed as the cost of doing business, get quickly brushed aside, and little really changes in the underlying market mechanics.

Thanks to the Trump administration's net neutrality repeal (which also gutted FCC consumer protection authority), the FCC is now limited as to what it can do to thwart this behavior. That left (as telecom lobbyists intended) most oversight to the FTC, which can't make new rules, lacks the resources and staff to adequately tackle telecom (on top of fifty million other obligations across a universe of other sectors) and is limited to enforcement actions in instances where it's extremely clear a company is engaged in "unfair and deceptive" behavior under the FTC Act.

The telecom lobby knew all of this, which was the whole point of the net neutrality repeal. That was acknowledged by acting Commissioner Rebecca Slaughter in a statement on the lawsuit:

"As important as this case is, it also shows why the FTC can never fully fill the regulatory gap left in the wake of the repeal of Net Neutrality at the FCC, the expert agency on telecommunications services,” Acting Chair Rebecca Kelly Slaughter said of the lawsuit.

“The FTC will do what we can to hold broadband providers accountable,” she added. “But the pandemic has underscored the essential nature of internet access; just like the country’s water, electricity, and phone services, ISPs require direct and on-going oversight. That active oversight by the proper regulator may have prevented these violations."

While these scattershot enforcement actions do help somewhat, you can't fix US broadband dysfunction without targeting its two root causes: regional monopolization and state and federal corruption. There are a million ways to do that: restore FCC consumer protection authority, properly fund and staff regulators, ramp up flimsy antitrust enforcement in telecom, embrace genuine pro-competition policies incumbents won't like (including supporting community broadband), stop mindlessly rubber stamping every idiotic merger that comes down the road, and hold telecom companies accountable for repeated empty pre-merger promises. If none of that works and they remain absolutely dedicated to obnoxious behavior, break them up.

But US policy leaders decidedly don't want to actually do any of that. One, because these companies are politically powerful campaign contributors in a pay to play system. They're also tightly tethered to our intelligence and law enforcement apparatus, further reducing any political incentive to hold them accountable. So instead we get government policy (and a lot of press coverage and rhetoric) that treats the resulting problems as ambiguous issues that just dropped out of the sky one day (see: endless lip service about the "digital divide") without acknowledging that corruption and monopolization are the obvious cause.

Filed Under: broadband speeds, fcc, ftc, truth in advertising
Companies: frontier communications

Judge Lets False Advertising Case Against Apple Over 'Buying' Music You Didn't Buy Move Forward

from the you-don't-own-what-you-bought dept

A decade ago we wrote a post about what we called Schrodinger's Download, which was that the big companies in the music space would refer to digital downloads as a sale or a license in varying ways depending on which benefited them the most. This was most evident in lawsuits between artists and labels, especially with contracts signed in the pre-digital era, where the royalties for "licensing" were much higher than the royalties for "sales." In those cases, the labels tried to claim that MP3 downloads were "sales" in order to pay lower licensing fees -- but, on the flip side, when there were cases about reselling those files, suddenly the labels would insist that wasn't allowed, since it wasn't actually a sale, but a license.

And, of course, over the years, we've seen this play out in many ways -- especially with our never ending series of posts on how you don't own what you've bought, as more and more companies try to use technology and DRM to retain control over things you've "purchased." Last year, we wrote about someone suing Amazon for claiming that she had "purchased" movie downloads, but the fine print showing that she was merely "renting" them. The argument was that this was false advertising. That case is still going, but what we hadn't realized was that someone else had filed a very similar case against Apple, arguing the same thing. And, yes, it's the same lawyers on both cases...

And even though the Apple case was filed three months after the Amazon case, it's actually seen more progress. This week the judge denied Apple's motion to dismiss (first spotted on Courthouse News), saying that there's enough of a case to move forward. Apple tried to argue that the harm here is merely speculative. It hasn't actually removed the plaintiff's downloads. But the court says that Apple's wrong about that:

Apple argues that Plaintiff’s alleged injury — which it describes as the possibility that the purchased content may one day disappear — is not concrete but rather speculative.... This, however, as Plaintiff points out, misconstrues the injury. Plaintiff responds that his injury is not that he may one day lose access to his content.... Rather the injury Plaintiff asserts, is that he spent money purchasing the content that he wouldn’t have otherwise as a result of Apple’s misrepresentation.... This occurred at the time of purchase.

Another point raised by Apple is that "no reasonable consumer would believe" that when you buy a digital file, it means that it will always be available for you on iTunes. But the Court says, uh, yeah, actually, plenty of reasonable consumers probably would believe that, because that's what "buy" means:

Apple contends that “[n]o reasonable consumer would believe” that purchased content would remain on the iTunes platform indefinitely. Id. at 12. But in common usage, the term “buy” means to acquire possession over something. Buy Definition, merriam-webster.com, https://www.merriamwebster.com/dictionary/buy (13 April 2021). It seems plausible, at least at the motion to dismiss stage, that reasonable consumers would expect their access couldn’t be revoked.

The court did dismiss a few extraneous claims, but the key ones can now move forward -- and there's a decent chance that this will eventually become a class action lawsuit.

While some might argue that it doesn't really matter that much whether or not you're "buying" or "renting" this content, it really does matter in the legal sense, and big companies have used the distinction to their own advantage (often swapping out the words when convenient, as noted up top). Forcing the companies to actually be upfront about this stuff would be much better -- and might even get them to provide some more accurate descriptions of what they're really providing.

Filed Under: buying, class action, digital goods, licensing, ownership, purchase, renting, truth in advertising
Companies: amazon, apple

Cable Giant Charter Fined $19 Million For Lying About Competitors Going Out Of Business

from the just-another-day-in-US-telecom dept

When last we checked in on cable giant Charter Communications (Spectrum), the company was busy using the Boys and Girl's Club of America as a prop to try and kill helpful conditions affixed to its megamerger with Time Warner Cable. This week, the company's under fire after it circulated advertising telling customers (falsely) that one of its competitors (Windstream Communications) was going out of business. While Windstream had filed for Chapter 11 bankruptcy protection, it very much remains in business. Yet Charter's advertising to customers informed them the company would likely be shuttering its doors soon.

This week Judge Robert Drain of US Bankruptcy Court for the Southern District of New York ruled (pdf) that Charter must now pay Windstream $19 million for spreading false claims about the company:

"Charter's goal with the mailings "was to induce the Debtors' customers to terminate their contracts and switch to Charter by sending them literally false and intentionally misleading information about the Debtors' bankruptcy cases and financial wherewithal," the ruling said. Charter premised its ad campaign "on false assertions regarding the Debtors' bankruptcy cases," the ruling said."

Charter's lawyers had, as they do every time they're in court, tried to argue that lying about a competitor was protected speech, something the Judge didn't look to kindly on:

"Charter claimed that punishment for its "literally false and intentionally misleading advertising campaign would violate their First Amendment right to free speech," the judge wrote. But First Amendment rights are not absolute and do not protect Charter's false statements about Windstream's bankruptcy proceedings and financial wherewithal, he wrote. "Such commercial speech is properly curtailed by precluding such wrongful conduct," he wrote."

All of that said, Charter, hand in hand with Comcast, is securing itself an ever larger monopoly over broadband access in countless US markets, especially at faster speeds. Cable giants now enjoy a 70% market share and growing over fixed broadband access, thanks in large part to regional phone companies that were too lazy, cheap, or heavily indebted (usually from "growth for growth's sake" megamergers) to actually upgrade aging DSL lines. In fact, many of these companies are literally just letting their networks fall apart and refusing to repair customer lines on a timely basis.

As such the irony is that Charter didn't really even need to lie, since most frustrated telco DSL subscribers likely would have eventually headed their direction anyway. But when you're a natural monopoly in a market that's neither competitive nor competently or consistently regulated, you tend to operate as if there's no repercussions for your actions -- because there usually aren't.

Filed Under: broadband, competition, false advertising, truth in advertising
Companies: charter communications, charter spectrum, windstream

Another Report Shows US Consumers Don't Get The Broadband Speeds They Pay For

from the false-advertising dept

Yet another report has shown that US consumers aren't getting the broadband speeds they're paying for.

Researchers from broadband deal portal AllConnect dug through FCC data on broadband speeds and found that about 45 million Americans aren't getting the speeds that broadband providers are advertising. Fiber and cable broadband providers appeared to have the toughest time providing the speeds they advertise, with those subscribers getting around 55% of the speeds they were promised. Satellite and DSL providers generally offer crappy speeds, but at least, the report found, those speeds were delivered more consistently.

The firm noted that consumers just aren't getting accurate data on what speed is available, or how much speed they'll get. Something that's kind of important during a pandemic in which broadband is key to education, employment, health care, human connection, and opportunity:

"Having dependable internet is crucial right now, and with so many options available, it is important to have information like this to help consumers make the right choice for their needs. Being able to compare various aspects of internet service like reliability and speed helps make those decisions a little easier,” Layton adds."

Granted this has been a problem for the better part of this decade. And it's another problem (much like patchy availability and high prices) federal regulators haven't done enough to seriously address. Speed data ISPs provide to the FCC is notoriously unreliable, and the FCC historically doesn't do enough to verify availability and speed claims. It only takes a few minutes perusing our $350 broadband availability map, which all but hallucinates competition and throughput, to realize there's a chasm between what the US government and industry claims exists, and what actually exists.

Every year, the FCC is mandated by Congress to release a report detailing the status of the U.S. broadband industry. If broadband isn't being deployed on a "timely basis," the agency is supposed to, you know, do something about that. But every year, sometimes regardless of party, the agency, swaddled in dodgy data, pretends this isn't a problem. Why? Because we've fused extremely politically powerful telecom monopolies to our government surveillance apparatus, and holding these companies accountable is bad for political careers.

Of course ISPs aren't just engaged in false advertising when it comes to speeds. They also routinely use a bevy of misleading fees and surcharges to covertly jack up their advertised rates post sale -- to the point where your advertised cable or broadband bill can be as much as 45% higher than advertised. And again, aside from the very occasional suggestion by regulators that ISPs could maybe do better or be more transparent, nobody much does anything about it. After all, who wants to risk losing Comcast, AT&T, Verizon, T-Mobile, and Charter campaign contributions by doing the right thing?

Filed Under: bandwidth, broadband, promises, speeds, study, truth in advertising

After Years Of Litigation, AT&T Customers Get A Measly $22 For Being Lied To Over 'Throttling'

from the what-accountability-doesn't-look-like dept

Way back in 2014 the FTC sued AT&T for selling "unlimited" wireless data plans with very real and annoying limits. The lawsuit noted that, starting in 2011, AT&T began selling "unlimited" plans that actually throttled upwards of 90 percent of your downstream speeds after using just two or three gigabytes of data. AT&T spent years trying to wiggle out of the lawsuit via a variety of legal gymnastics, including at one point trying to claim that the very same net neutrality and FCC Title II rules AT&T was attempting to kill, prevented the FTC from holding it accountable.

In late 2019 AT&T agreed to a $60 million settlement with the FTC without actually admitting any wrongdoing. Consumers who were lied to and ripped off for years nabbed somewhere around $12 each. Another, separate California class action recently came to a close with AT&T agreeing to a $12 million settlement. There too, consumers are expected to get somewhere around $10 to $11 each because they likely would have seen even less after a full trial:

"The new class-action settlement says that, on average, settlement-class members exceeded the throttling thresholds during 7.5 monthly billing periods. This means customers paid AT&T an average of $225 for unlimited data in months they were throttled. Despite that, plaintiffs concluded that the $10 or $11 settlement payments are a good deal compared to what they would likely get at trial."

Years of litigation, two major settlements, and $22 per consumer was the end result. Though lawyers wound up doing okay, grabbing their fair share of the $12 million:

"Here's how the numbers in the new settlement shake out. Of the $12 million, $462,000 is set aside for administrative costs and up to $3 million for attorneys' fees and expenses. The remainder would be distributed to the class, which is defined as California residents who bought unlimited mobile data from AT&T and exceeded the data usage threshold "for one or more monthly billing cycles such that the user would have been eligible for data usage slowing or deprioritization by AT&T in those billing cycles under AT&T's network management policies."

And this of course could have been worse had AT&T succeeded in flinging these folks toward binding arbitration, a system advertised as more effective than class actions despite being demonstrably even more lopsided and pathetic.

Wireless carriers have been advertising "unlimited" plans and then lying about their very real limits for the better part of fifteen years now. Many are still doing it and will continue to do it. Why? The penalty is always a tiny, tiny, fraction of the money earned by being misleading. The only real lesson here for AT&T is that stalling and litigation can easily blunt accountability for misleading or predatory business practices.

Filed Under: class action, fcc, throttling, truth in advertising, unlimited
Companies: at&t