Washington State AG Fines Frontier Communications A Pittance For Its Bullshit Fees

from the 'completely-fraudulent-surcharge' dept

In telecom policy circles, there's an army of "experts" who twist themselves into pretzels trying to pretend U.S. telecom is a healthy, normal, vibrant market. Blinded by partisan loyalties, sector financial links, or ideologies embedded decades ago in grad school, they're incapable of even acknowledging that Americans pay too much money for spotty, substandard service with historically terrible customer support. They're even less likely to acknowledge the corruption, regulatory capture, and lack of competition that made this dysfunction possible. If it is acknowledged, it's downplayed to a comical degree.

As in the Ma Bell days, at the heart of U.S. broadband dysfunction sits phone companies. Providers that have long refused to upgrade their aging DSL networks despite millions in taxpayer subsidies, yet lobby for state laws that ensure nobody else can deliver broadband in these neglected footprints either. These are companies that have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising, then, that many telco DSL customers are fleeing to cable, assuming they even have a second broadband option.

The poster child for U.S. telecom dysfunction is Frontier Communications. Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. Frontier-related graft and corruption in many states (like West Virginia) is so severe, state leaders have buried reports detailing the depth of the problem, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest.

In many states, regulatory capture ensures that Frontier's behavior never sees so much as a wrist slap. That was particularly noticeable when Frontier was recently busted charging users a $10 monthly "rental" fee for modems that the users owned. Frontier, like many big ISPs, has also been given free reign to impose all manner of additional sleazy and misleading fees, usually used to help broadband and TV providers falsely advertise a lower rate.

Even in states where consumer protection is a little tougher, the penalties aren't routinely damaging enough to deter bad behavior. The latest case in point: Washington State Attorney General Bob Ferguson reached a settlement with Frontier last week (pdf) in which Frontier will pay a $900,000 fine for years of imposing bullshit fees on the company's customers. One such fee, dubbed the "Internet Infrastructure Surcharge," imposed an additional $4 monthly on user bills:

"Ferguson began investigating Frontier in 2018 after receiving more than 600 complaints and "focused on Frontier Northwest's failure to adequately disclose fees during sales of cable, Internet and phone services since 2016," Ferguson's announcement said. "For example, the company charged as much as $3.99—nearly $50 per year—for an 'Internet Infrastructure Surcharge,' without adequately disclosing the surcharge in its advertising."

Note that Frontier has 3,735,000 broadband subscribers, each paying $4 a month in completely erroneous surcharges. That's nearly $15 million in bullshit charges in just one month, or $180 million in fraudulent revenue every year. While the $900,000 fine is semi-helpful, it's far from a deterrent -- especially considering that the ISP's settlement with the state doesn't require they stop charging the bullshit fee, just that they make it clear to consumers on their bill. $900,000 is chump change to these regional monopolies.

Keep in mind that Washington is one of the most "aggressive" states in the country at consumer protection, which admittedly isn't saying much. Also keep in mind that this is just one ISP. Numerous ISPs routinely engage in this same or worse behavior, usually with absolutely no penalty whatsoever from state or federal regulators like the FCC. It's the exact sort of behavior that's only made possible by two things: a lack of competition in the broadband market, and feckless, captured regulators who are more worried about campaign contributions than outright fraud.

All ignored, in turn, but a laundry list of telecom policy experts who've made entire careers out of pretending that the US telecom sector is healthy and immensely innovative. In reality, the closest many of these companies get to innovation is in coming up with ethically dubious surcharges.

Filed Under: bogus fees, fake fees, fine, washington state, wrist slap
Companies: frontier communications

IL Follows Suit: Employers Right To Ask For Social Media Passwords Codified Into Law

from the digital-homes dept

Just a few weeks back we relayed the news that Washington State was seeking to codify into law an employer's right to ask for the social media passwords of their employees. I continue to be amazed both at why such a law was considered in the first place, as well as why there hasn't been more backlash against it. That said, I imagine the answer to the latter has something to do with the idea that employees and prospective employees could deny that request, so perhaps some people think that there's little to no impact overall. This, on its face, is obviously silly. Were there going to be no impact to denying the request, employers would never make it in the first place. You have to imagine that an employee, and to a larger extent an applicant, is going to face enormous pressure to give the key to their personal sites away, whether that pressure is real or imagined.

However, since the bill hasn't been challenged in the court of public opinion, others are now beginning to follow suit. Such is the case in Illinois, where the state House passed a bill this week, sponsored by Jim Durkin, that gives employers there the same rights. And, of course, it's all done in the name of protecting the workplace.

The Illinois House passed a bill today that would allow employers to request access to employees' personal web accounts used for business purposes, like Facebook and other social networking sites. As if people aren't paranoid enough already. To be clear, the bill does not mandate that employees supply the information, and no one could be fired or penalized for noncompliance. The idea is to allow employers the opportunity to investigate employee misconduct, protect trade secrets, and prevent workplace violence by monitoring online activities. Even without it being mandatory to share your login and password, you could imagine a boss putting a subordinate under some uncomfortable pressure.

A challenge to everyone, if I may. If you were able to somehow catalog and characterize every single instance of employee misconduct, trade secret revealing, and workplace violence, exactly what percentage of them would you guess could have been prevented by proactive investigation of social media? Further, what percentage of such cases are such that the key evidence that would conclude any investigation into them would be only made available with a social media password? These are the kinds of answers with which I would expect proponents of such laws to be beating us over the head, yet you never seem to see any data in the reports. It all essentially comes down to, "We need to give employers the right to ask for social media passwords, because violence, scary internet, and children."

Do you know why we highlight when stupid criminals spurt their stupid juices all over the internet? Because they're the vast exception, not the rule. Creating the kind of animosity between employers and employees such as this bill will do is an awful over-reaction to those stories.

Filed Under: illinois, jim durkin, social media, washington state

Court Shelves Washington State Law That Would Turn Service Providers Into Criminals Based On Their Users' Behavior

from the good-move dept

Back in June, we wrote about a challenge -- from both the Village Voice's Backpage.com and the Internet Archive to a new law in Washington State, SB 6251, that effectively criminalized online service providers based on actions by their users. We've long talked about the problems of such secondary liability efforts, and thankfully the US has section 230 of the CDA that forbids most such efforts to apply secondary liability. And, indeed, the court has now granted a preliminary injunction against the law, citing the Section 230 issues, among other things. Basically, the court sides with Backpage and the Internet Archive on every issue here, finding the state's reasoning in support of the law to be weak.

There are some important points in this ruling. First up, the court said that Section 230 applied, even though this was about a criminal law issue, rather than a civil law issue. Many (even Section 230 supporters) have argued that Section 230 only applies to civil law. The court notes that the law says it doesn't apply to federal criminal laws, but says nothing about state laws. And, as such, CDA 230 should be seen to apply to state laws, even if they're criminal:

If Congress did not want the CDA to apply in state criminal actions, it would have said so.

So, the law is already on shaky legs due to it being knocked out by Section 230. However, the court goes further to focus on how the bill violates the First Amendment as well, targeting the suppression of speech. It's a pretty detailed explanation for how laws that target speech, rather than action, have a much higher bar, and this bill does not appear to meet that higher bar. Most importantly, the court recognizes that any laws targeting speech can have severe chilling effects, even on legal speech, and that's unacceptable under the First Amendment:

The most problematic aspect of SB 6251 is not the protected speech that it regulates by its terms, but the likelihood that it will chill a substantial amount of protected speech in addition to the unprotected speech that Defendants argue the statute was meant to address

The court even notes that it could create chilling effects and potentially criminalize sites like Facebook and Twitter as well. While the state denied this possibility, the judge points out that it's entirely possible to read the law in that way, and that alone could create chilling effects from companies trying to avoid criminal liability. Finally, the court notes that the law also almost certainly violates the Commerce Clause, because it would regulate companies located entirely outside of Washington State.

In other words, the state is on very thin ice here, as the court isn't buying any of its arguments for why the statute is legal. At this point in the case, the discussion is just over whether or not an injunction is granted to block the enforcement of the law -- and that's now done. There's still much more to come in the case, but the law doesn't look likely to survive at this point, and that's a good thing. There are some real issues that the law seeks to take on (mainly dealing with prostitution and child porn), but it does so in such a broad way and with the wrong tool: criminalizing service providers. It's good that the courts are recognizing how this law is massively overbroad.

Filed Under: liability, section 230, service providers, washington state
Companies: backpage, internet archive

Washington State Tries To Criminalize Service Providers For User Behavior; Internet Archive Sues

from the section-230,-have-you-read-it? dept

For years, we've talked about the importance of Section 230 in properly applying liability directed at the actual people who break laws, rather than the tools and services they use. Unfortunately, some people fail to make a distinction and love to blame service providers. And... once it gets into areas that make people react emotionally, things get ridiculous. For example, we've written a few times about the misguided attacks on Backpage.com, which only came about because of similar misguided attacks on Craigslist. At issue was that both sites had been used for prostitution and sex trafficking. But, rather than do the sensible thing and work with those platforms -- who both have programs to do exactly this -- to make it easier for law enforcement to find and prosecute those involved in such efforts, grandstanding politicians and activists blamed the service providers, driving the actual activities further underground. Of course, they have never had any real legal argument, and the lawsuits have fallen flat.

However, it appears that some politicians in Washington State decided to pass a state law (SB 6251) which targets service providers. It's one of those laws that it's easy for politicians to get behind without realizing what they're actually doing. They think they're "protecting the children" but they're actually making the problem significantly worse. That's because they're not setting up a better way to track down and stop those actually responsible, but rather are simply telling them to move further underground, where it will be even harder to stop them.

And, of course, in their zeal to "protect the children" the politicians who passed this bill wrote it so broadly that it can create massive problems for tons of legitimate online service providers. The Internet Archive, represented by the EFF, has filed to join a lawsuit (from Backpage) against the law, pointing out that it clearly violates Section 230 of the CDA, which providers the necessary safe harbors for service providers. The overreach of the Washington law is pretty astounding:

SB 6251 would effectively coerce, by threat of felony prosecution, online service providers to become censors of third-party users' content by threatening five years imprisonment and a $10,000 fine per violation against anyone who knowingly publishes, disseminates or displays or anyone who “indirectly” “causes” the publication, dissemination, or display of content that contains an explicit or even “implicit” offer of any sexual contact for “something of value” in Washington if the content includes an image that turns out to be of a minor. Because of its expansive language (i.e., “indirectly” “causes”), the law could be applied not only to online classified ad services like Backpage.com but also to any web site that provides access to third-party content, including user comments, reviews, chats, and discussion forums, and to social networking sites, search engines, Internet service providers, and more. A law that takes such an overbroad approach is of serious concern to the Internet Archive, which aims to serve as a library for the Internet, and accordingly, houses more than 150 billion web pages archived since 1996.

The law expressly states that it is not a defense that the defendant did not know that the image was of a minor. Instead, to avoid prosecution, the defendant must obtain governmental or educational identification for the person(s) depicted in the post (notably, even if that ID does not contain a photograph). This means that service providers – no matter where headquartered or operated – may be asked to review each and every piece of third-party content accessible through their services to determine whether the content is an “implicit” ad for a commercial sex act in Washington, whether it includes a depiction of a person, and, if so, obtain and maintain a record of the person’s ID. These obligations would severely impede the practice of hosting third-party content online.

I'm sure the folks behind this law had the best of intentions. Sex trafficking of underage persons is a very real and horrific problem (even if the numbers bandied about are massively exaggerated). But the real solution is to go after the actual perpetrators, and that means working with service providers to help track them down -- not criminalizing the service providers in a way that kills off lots of legitimate activity as well.

Filed Under: cda, censorship, liability, safe harbors, section 230, washington state
Companies: backpage.com, craigslist, eff, internet archive, village voice

Washington State Guarantees Cheap And Open Courses & Courseware For Students

from the market-forces-or-government-interference dept

We've discussed a bunch of times how the lack of market forces in the textbook market has allowed publishers to jack up the prices massively. It's why various textbooks can cost around $200, and students can spend over $1000 a year just to get the textbooks they're required to buy for school. Aaron DeOliveira points us to an interesting story involving Washington State trying to end such practices by setting up an Open Course Library that will make course details and courseware much, much cheaper for students:

The goal of the Washington State Board for Community and Technical Colleges project is to boost college completion rates by making higher education more affordable. The online library will house a collection of textbooks, readings, activities, and other educational materials for 81 of the state’s most popular general education and pre-college courses. The texts are available under an open license to other higher education institutions, as well as anyone else who wants to access them.

The effort has the potential to save students millions of dollars. The average community college student in Washington spends about $1,200 per year on textbooks—about a quarter of the total cost of attending school full-time. Some classes will still require students to purchase a textbook, but for Open Course Library classes, the cost can’t exceed $30 per student. All other materials will be free.

That's quite a program, and should make for quite a difference in terms of costs for students. In his submission, Aaron wonders if this is market forces or market interference. It's an interesting question, and it makes me wonder if there might be a better solution. First, though, it's necessary to recognize that the textbook & courseware market is not an open and competitive market, because the buyers -- students -- aren't given any choice at all. They have to buy what their professors tell them to buy, for the most part. So, the state getting involved to force down prices is definitely a reasonable response to that problem.

But I do wonder if that solution creates other problems. Suddenly the courses and books chosen for that online library are the only ones likely to be used, which could leave out other courses and sources that may be even better. That leaves some concerns about who chooses what books go into the open library. The library does seem willing to let in other courseware, so long as it's posted online with a Creative Commons license -- so perhaps this concern is solved by that. The fact that this might encourage more courseware and text creators to move to Creative Commons or similar licenses may be a useful side benefit.

Either way, in the end, education is an area where smart government involvement makes sense (though, the "smart" part often isn't evident in education efforts we see). And, on its face, this seems like a good way to drive down costs and share more education information. And I'd guess that the more disruptive education tools providers -- like Flat World Knowledge and Khan Academy -- might appreciate and work with Washington State on this effort, benefiting everyone, and making sure that there really are a wide variety of courseware options that are either free or very cheaply priced.

Filed Under: courseware, creative commons, education, open, washington state

Can Washington Charge Unauthorized Downloaders With Tax Evasion?

from the it-worked-for-al-capone dept

A bunch of states have been pushing forward with plans to add taxes on digital downloads. The state of Washington apparently passed just such a law, which is scheduled to go into effect on July 26th. Nate sent in a note, pointing out that under a strict reading of the details of the bill you could see how the state could go after unauthorized downloaders as "tax evaders." Now, that may not be the case (and it would be great if we could get someone from the state to clarify), but it seems that what Nate is likely referring to is this explanation in the Q&A about the bill:

What is the value of the digital product for use tax purposes?

The value is the purchase price of the digital product. If the digital product is acquired by means other than a purchase, the value of the digital product is determined by the retail selling price of a similar digital product.

From that, you could easily conclude that anyone in Washington who downloads unauthorized files is now expected to pay a tax based on the "retail selling price" of the files. And, from there, it's not hard to see how failing to pay such a tax, could eventually be seen as tax evasion. How excited do you think that makes the RIAA? Remember, this is the same RIAA that suggested that the feds use copyright infringement laws to arrest drug dealers. You can check out the specific text (in Section 304) within the full bill (pdf file), which is basically the same as what's written above.

The feds eventually went after Al Capone on tax evasion charges. Are file sharers next?

Filed Under: file sharing, tax evasion, washington state

Washington State Sues Company For Fake Error Messages

from the that-old-scam? dept

For years, questionable "software" firms would buy up ads that pretended to look like computer warning messages telling you that your computer was at risk. Then there were scamming companies that would include a web-based "test" of your computer to see if it was at risk -- and, of course, it always found that you were. The scam is just to get you to download (and buy) their software which rarely does anything (and most of the time you don't need it). The FTC had cracked down on these companies a while back, but it appears at least some are still in business. Washington state is now suing a software company that apparently did something similar sending messages to computer users claiming "CRITICAL ERROR!" and demanding that they download the company's product immediately to repair the problem. Of course, there was almost never an actual problem... but the software cost $40.

Filed Under: error messages, scams, software, tricks, washington state