So for years I've noted if you really want to understand why U.S. broadband is so crappy, you should take a long, close look at Frontier Communications in states like West Virginia. For decades the ISP has provided slow and expensive service, routinely failed to upgrade or repair its network, and generally personified the typical bumbling, apathetic, regional monopoly. And its punishment, year after year, has generally been a parade of regulatory favors, tax breaks, and millions in subsidies. At no point do "telecom policy leaders" or politicians ever try to do much differently.
"I hope the state will seriously consider the track record of companies to understand which ones have a long record of meeting the needs of residents and businesses,” Christopher Mitchell, director of the Community Broadband Networks Initiative, a Minnesota-based think tank supporting communities’ telecommunications efforts, said in an interview with The Badger Project.
"Frankly, Frontier’s record suggests it should not receive a single additional dollar from any government,” he added. “Local companies, communities, and cooperatives have proven to be much better at turning public subsidies into needed networks."
Keep in mind Frontier has been accused of taking state and federal subsidies on several occasions, misleadingly billing the government extra, then basically just shrugging when asked for the money back. To date nobody has done much about any of it. Also keep in mind Frontier routinely lobbies for (and often ghost writes) state laws banning towns and cities from building their own broadband networks. They're also directly responsible for the gutting of state and federal regulatory and consumer protection authority. Facing little real competition and feckless oversight in most states, nothing much changes. By design.
Historically, state politicians and regulators ignore these kinds of problems, because, it should be made clear, they're corrupt. Regional monopolies find it immensely easy to throw a few bucks at state leaders in exchange for just mindless rubber stamping of whatever goal they're interested in (merger approvals, new subsidies, the gutting of consumer protections, tax breaks, zero accountability). That this strategy continually results in terrible, substandard, and expensive service never seems to enter into the picture. It's just rinse, wash, repeat in a long line of states.
The Wisconsin State Public Service Commission is expected to grant or deny Frontier's request by the end of the month. The company is also first in line to grab new federal broadband funding from the Biden FCC. It will be curious to see if just a parade of unprecedented scandal reduces Frontier's ability to have millions in additional taxpayer money thrown at it in the slightest. My guess is it doesn't. At all.
There are two, indisputable reasons U.S. broadband generally sucks: regional monopolization and the corruption that protects it. But when you see news articles, regulators, many think tankers, or politicians talking about broadband, notice how many are capable of even clearly acknowledging that fact, much less genuinely interested in actually doing anything about it.
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, 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, 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.
This dynamic often results in some almost comedic dysfunction.
Like in West Virginia, where incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. The graft and corruption in the state 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.
But it's not just West Virginia. Frontier has since been under investigations from New York to Minnesota for failing to upgrade or even repair its aging network, at points putting human lives at risk. The company has also been repeatedly under fire for blatantly ripping its users off. For example, it has been charging its customers a rental fee for modems they already own. Very rarely do you see state leaders stand up to the company. And you'll certainly never see any kind of substantive pushback by the current, industry-captured FCC.
Customers who can leave (usually to the other end of the duopoly, Comcast), have been fleeing whenever possible, resulting in a looming bankruptcy by the company. In a report to investors this week we're only now starting to finally see something close to truth from the company as it tries to own up to its incompetence. Frontier had apparently tried to redact much of the report detailing the scope of network neglect, but appears to have bungled that as well:
"For example, one redacted sentence says that "Frontier WV's copper network has at least 952,163 connection points that are susceptible to moisture, corrosion, loose connections, etc. that may cause interruptions of service to customers."...The failed redaction of the number of connection points was coupled with failed redactions about the age of the network. The consultant firm's report said that 46.8 percent of Frontier's West Virginia network is between 36 and 47 years old. Both the percentage and the numbers of years were unsuccessfully "redacted" by Frontier.
The report makes it clear that the company probably shouldn't have engaged in mindless M&As, acquiring unwanted aging phone networks from AT&T and Verizon in "growth for growth's sake." Many of those deals were completely bungled and saddled the company with unneeded debt. Most should have been blocked by regulators and lawmakers who were too busy kissing the company's ass. Frontier also should have invested money back into the network to build a stronger company and retain subscribers, instead of engaging in repeated stock buybacks.
There are two reasons the company didn't do better on these fronts. One is sniveling, feckless, U.S. regulators and cash-compromised state and federal lawmakers, who rubber stamp every merger thrown on their desks, and refuse to hold politically powerful monopolies accountable. The other? A lack of competition across most of Frontier's territories:
"So why would a company like Frontier not immediately hit the upgrade button and start a massive copper retirement-fiber upgrade plan to keep the company in the black? In short, Frontier has survived chronic underinvestment because of a lack of broadband competition. Nearly two million Frontier customers have only one choice for internet access: Frontier. For another 11.3 million, there is only one other choice – a cable company that many detest. Frontier has enjoyed its broadband monopoly/duopoly for at least two decades. So long as its customers have fewer options, Frontier is under less pressure to invest in upgrades."
There were ample opportunities for state and federal leaders to step in and correct these problems, while embracing pro-competition policies that minimized the need for government involvement. Instead we let a regional monopoly dictate state and federal policy, and now act surprised when the end result is a smoldering dumpster fire. Granted as Frontier stumbles toward bankruptcy most of its debt will be wiped clean, nobody in the U.S. will learn anything from the process, and a universe of "very serious telecom policy thinkers" will continue to turn a blind eye to the entire mess as history repeats itself.
For years we've explored how the nation's phone companies no longer really want to be in the broadband business. They routinely refuse to upgrade their networks, yet often lobby to ensure nobody else can deliver broadband in these neglected footprints either. Telcos in particular 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 option for broadband.
This scenario has been particularly true in West Virginia, which has become the poster child for telecom sector graft and corruption. For years, incumbent phone provider Frontier Communications (which bought most of the state assets from Verizon), has seen zero competitive pressure to improve service. At the same time, they've enjoyed rampant regulatory capture, to the point where company executives have simultaneously acted as state senator, without a single question raised. The company has also been routinely under fire for bilking the government (read: you) out of millions of dollars intended to shore up coverage gaps.
Frontier in West Virginia is the picture perfect example of why we can't have nice things. Coddled natural monopolies, free from competition and meaningful oversight, always double down on bad behavior. Yet as customers in the state routinely complain about lengthy outages and terrible service, Frontier executives are blaming everybody but themselves, to the point where the company is now proclaiming that its entire business model in the state is "unsustainable":
"Frontier serves only about ten percent of the state voice lines in its service area—and falling—but has 100 percent of the universal service obligation to serve the most rural and high-cost areas,” Mendoza said in a statement. “Our customer base continues to decline, while the cost of service per line has increased dramatically. This has resulted in an unsustainable model for providing service in rural and high-cost areas, manifesting in increased numbers of service complaints. We plan to reach out to the state’s leaders to collaboratively find solutions to this difficult challenge."
Of course Frontier put itself in this business by gobbling up Verizon's unwanted assets in a bid to grow bigger for bigger's sake and thrill its investors. While some of the company's decline is due to copper phone users switching to wireless, much of it is because the company's still offering broadband speeds to most of its customers that don't even meet the FCC's modern definition of "broadband." Don't upgrade your network? Customers leave. The real "unsustainable" model is throwing millions of dollars at apathetic natural monopolies but never holding them accountable for failure.
When Frontier executives talk about finding "solutions" with state lawmakers, they usually mean "throw even more taxpayer money at us that may or may not actually be spent to fix the problem." Frontier has been lavished with subsidies and tax breaks for years, only to face accusations it not only defrauded the government, but used much of that money on projects that didn't actually help improve last mile connectivity. A monumental portion of Frontier's problems are very much of its own design.
This is US broadband in a nutshell. Regional telecom monopolies, which all but own state and federal lawmakers, face zero regulatory or competitive pressure to actually do their jobs. As a result, in state after state, DSL networks are being allowed to literally fall apart so telcos can shift their focus to sexier objectives (usually business service or wireless video advertising). And when the government does act, it usually involves throwing even more money at a broken market, then failing to adequately ensure that money is spent properly.
Cable giants like Comcast and Spectrum then rush in to dominate the market, raising rates, neglecting customer service, and making everything worse across the board. Rinse, wash, repeat. In state, after state, after state. And while fifth-generation wireless is often painted as some kind of panacea for this problem, that's simply not the case. Nothing in this equation changes until one thing happens: apathetic voters wake up and stop electing politicians who prioritize monopoly profits over the public welfare.
After the Gazette-Mail reached out to the state police Monday with inquiries about the seizure, and after weeks of [Tonya] Smith calling police, the Jefferson County prosecuting attorney and local politicians, Smith said an officer returned her and [Dimitrios] Patlias’ possessions in full Thursday evening.
The couple was traveling from New Jersey to a casino in West Virginia. A West Virginia state trooper rolled the dice on the out-of-state plates and pulled over their car for "failure to drive within [their] lane." From there, the stop became exploratory with the trooper accusing them of smuggling drugs, smuggling cigarettes, or -- following a search of the vehicle -- gift card fraud.
Smith and Patlias had $10,000 in cash between both of them. In addition, they had a number of gift cards, loyalty cards, and cash cards -- all legally obtained -- which the trooper used to shore up the last accusation on the list. Despite being possible fraudsters/smugglers, the trooper handed the pair a warning for the lane violation and let them go on their way. So, they returned to New Jersey with $2 in their pockets.
This set the forfeiture in motion. The couple had 30 days to state a claim to their belongings, otherwise the proceeds would be split between the state police and the prosecutor. The trooper had every incentive to seize everything in the car (which included a cellphone): 90% of proceeds go to the agency that performed the seizure.
As the article points out, this could have been deterred, if not avoided completely. But, unfortunately, a bill requiring convictions for forfeitures died in the state legislature. Despite the incentive-skewing, asset forfeiture still has its advocates who make horrible arguments like this on its behalf:
Those in support of the practice say the ability of law enforcement officers to use forfeiture laws can hamstring drug dealing networks by leaning on their finances, which can be more effective than criminal charges. They also point out that the proceeds can help police buy much-needed equipment.
First, most forfeitures performed in the US involve low dollar amounts, often taken from someone never charged with drug-related crimes. Second, what kind of idiot justifies the seizure of property from people who've never been convicted of a crime by stating that it helps the government buy new stuff for itself? The answer is: only the sort of idiot who can't see how it incentivizes exactly the sort of thing that happened here: a state trooper pulling over an out-of-state driver for a roadside fishing expedition. Nothing about the process deters police officers from shaking down anyone and everyone for valuables so long as they can imagine a criminal origin for the property of citizens.
This worked out well for this couple, who now won't have to spend more than what was seized to get their property returned. Fighting forfeiture is expensive and the outcome is far from guaranteed, even if there's no evidence the seized property was involved in or the byproduct of criminal activity. Officers looking at a 90% payout down the road know this. That's why asset forfeiture -- minus criminal charges -- is the abusive debacle it is today. Nothing about it rewards honest law enforcement work.
So we've kind of been over this. For more than two decades now we've pointed out that electronic voting is neither private nor secure. We've also noted that despite this several-decade long conversation, many of the vendors pushing this solution are still astonishingly-bad at not only securing their products, but acknowledging that nearly every reputable security analyst and expert has warned that it's impossible to build a secure fully electronic voting system, and that if you're going to to do so anyway, at the very least you need to include a paper trail system that's not accessible via the internet.
Having apparently learned nothing, reports emerged this week that West Virginia is considering launching an initiative that would let some state residents vote via cellphone. To be clear, the effort initially appears focused on letting troops stationed overseas vote. Not surprisingly, more than a few folks were quick to highlight to CNN how this would be an arguably terrible idea:
"Mobile voting is a horrific idea," Joseph Lorenzo Hall, the chief technologist at the Center for Democracy and Technology, told CNN in an email. "It's internet voting on people's horribly secured devices, over our horrible networks, to servers that are very difficult to secure without a physical paper record of the vote."
Marian K. Schneider, president of the election integrity watchdog group Verified Voting, was even more blunt. Asked if she thought mobile voting is a good idea, she said, "The short answer is no."
Given security analysts routinely aren't sure whether or not our existing voting systems may have been compromised by actors foreign and/or domestic, and the federal government just got done making it clear election security isn't a priority with an idiotically-partisan vote, it seems like a pretty terrible time to begin trying to implement new online voting efforts. And if you've watched West Virginia's blistering corruption when it comes to sectors like the telecom industry, the state is probably the last state in the union that should be attempting such a voting system overhaul.
Judging from online conversations, the company that's building the new West Virginia system (Voatz) may not be the best choice either, since it doesn't appear capable of securing its own website:
The Voatz website is running on a box with out of date SSH, Apache (multiple CVSS 9+), PHP etc. https://t.co/o1RvrLbQ0S
Comforting. Ideally, the system would involve a user first registering by taking a photo of their government-issued ID and a selfie-video of their face, which are then registered via the app. Voatz claims the company's facial recognition software will then ensure the photo and video submitted are of the same person, with users then able to cast their ballot using the Voatz app. Documents the company circulates at trade shows indicate the company utilizes the blockchain to ensure its systems are more secure and "fundamentally different than touchscreen or online voting." But the company has failed to clarify how.
There's roughly a million and one ways this entire process could go to hell, from SS7 vulnerabilities to man in the middle attacks everywhere along the chain between your device and the Voatz database. And if there's not a hard paper trail, it opens the door to any number of undetectable changes that could happen during transit. Of course this has all been repeatedly stated countless times over the last few decades, but it's a message that's still not apparently getting through.
For years we've noted how if you want to really understand the dysfunction at the heart of the U.S. broadband industry, you should take a closer look at West Virginia. Like most states, West Virginia's state legislature is so awash in ISP campaign contributions it literally lets incumbent ISPs write state law, only amplifying the existing lack of broadband competition in the state. So when the state received $126.3 million in broadband stimulus funds, it's not particularly surprising that a report by the US Commerce Department's Office of Inspector General (pdf) found more than a few examples of fraud and waste.
More specifically, Frontier was accused of buying and storing miles of unused fiber to drive up costs, as well as the use of various "loading" and "invoice processing" fees to milk taxpayers for an additional $5 million. The report's findings come on the heels of previous reports that found Frontier and the state used taxpayer money on unused, overpowered routers and overpaid, redundant, and seemingly purposeless consultants. As is often the case with regulatory capture, efforts to hold anybody accountable for any of this have so far gone nowhere.
But after the Inspector General's report, the federal government decided it might be a good idea to at least ask for some of this misspent money back from Frontier and the State. According to the Charleston Gazette Mail, of particular interest were these additional "loading" surcharges, and the fact Frontier stockpiled 49 miles of unused fiber to drive up build costs:
"The Commerce Department letter cites findings that Frontier misled the public about the amount of unused fiber cable — called “maintenance coil” — the company installed across the state. The extra fiber, which is stored at public buildings and used for repairs, drove up the broadband expansion project’s cost. Frontier placed 49 miles of spooled-up, unused fiber in West Virginia, four times the amount the company had disclosed to state officials.The feds have ordered state officials to disclose whether the extra coil was included in the total miles of fiber the state claimed Frontier built with stimulus funds. The state also must get an “explanation from Frontier for the reason it misrepresented the maintenance coil mileage to the public,” according to the Commerce Department’s Aug. 21 letter.
This sort of stuff happens pretty much constantly in telecom as companies pay empty lip service to "bridging the digital divide." But whereas giants like Comcast, AT&T and Verizon have the lobbying and policy chops to obfuscate such graft, West Virginia is so dysfunctional Frontier doesn't even have to try. Case in point: a Frontier executive has spent years also employed as State Senate leader -- without anybody raising much of an eyebrow. That employee was only recently fired -- but only because he finally failed to oppose a bill Frontier wanted killed.
"In a letter to West Virginia Chief Technology Officer John Dunlap this week, Frontier asserted that any funds the state might return to the federal government “are, of course, not recoverable from Frontier.”...Frontier also disputed the federal government’s determination that the state must return $4.7 million, urging the state to file an appeal. "To avoid the waste of millions of West Virginia taxpayer dollars, the [state] should appeal,” wrote Mark McKenzie, a Frontier engineer who oversaw the company’s role in the project.
Again, if you've tracked the similar reports bubbling out of the state for years, the $4.7 million the feds want returned is likely only the tip of the iceberg. But because state legislatures are often little more than glorified rubber stamps for the interests of giant telecom operators, it's less than likely that these inquiries result in anything vaguely resembling genuine accountability. As a result, West Virginia remains one of the least broadband-connected states in the union, a story of graft and regulatory capture that plays out in countless states across the country on a daily basis. This is, as they say, why we can't have nice things.
Second Bob Murray post in a day? Second Bob Murray post in a day! It would appear that the whole ACLU amicus brief side show will remain a side show. The federal district court has sent the case back to state court where it originated. We had written about HBO moving the case to federal court and (correctly) predicted that Murray would likely try to have it sent back to state court, but (incorrectly) predicted that it wouldn't work.
Just as background: in many cases, defendants want these cases in federal court because of the general belief (and you can debate whether this is accurate or not) that federal court judges are more sophisticated in understanding legal issues than their state court counterparts. This can be a little unfair to state judges (and a little too nice to some federal judges), but the general rule of thumb is if you have a strong case, it's better to be in federal court. But, this case is moving back to state court over lack of "diversity." I'll leave it to lawyers to offer a more complete explanation of diversity, but the short layman's version is that it's basically about whether or not the parties are in different states. If they are, you can move to federal court. If they aren't, you're in state court. As we explained, HBO/John Oliver had tried to argue that Murray's inclusion of various West Virginia companies that he owned was a fraudulent attempt to avoid diversity rules, as those companies weren't really mentioned in Oliver's piece. Murray and Murray Energy are based in Ohio. Oliver and HBO are based in NY.
However, here the court finds that it was proper for Murray to include the various West Virginia coal mining companies he owns as plaintiffs.
The Plaintiff Corporations in question were, therefore, properly joined, and the case
should be remanded to state court. First, Mr. Murray is the CEO and director of each of the
Plaintiff Corporations and is listed as the controller of the mines owned by those
corporations. Not only is Mr. Murray heavily interrelated with these corporations in a formal
business sense, but a reasonable person who knows of Mr. Murray, especially in West
Virginia or another coal state, would find it nearly impossible to separate Mr. Murray from
his corporations and mines. With such a strong interrelationship between Mr. Murray and
the Plaintiff Corporations, defamatory statements made about Mr. Murray in his
professional capacity may be easily seen as negatively implicating the operation of his
corporations.
The court admits that the statements by Oliver were about Murray himself, and not his companies, but says the two are so closely identified with one another that it doesn't matter for this purpose. Also some of the comments Oliver made, while about Murray, were specifically about actions at Murray-owned companies.
The allegedly defamatory statements made about Mr. Murray did refer to him in his
professional capacity. First, the Crandall Canyon Statement refers to a collapse at a mine
Mr. Murray chaired and operated regarding the cause of the collapse. Second, The Black
Lung Statement refers to Mr. Murray in his professional capacity because his decisions
regarding Black Lung regulation would be made as the chairman and operator of the mines.
The alleged “character assassinations” of Mr. Murray, including the Geriatric Dr. Evil
Statement, refer to Mr. Murray in his capacity as a private individual because they bear no
relation to his professional conduct. However, because the interrelationship between Mr.
Murray and the Plaintiff Corporations is so strong, it is possible that those comments may
defame the corporations if it was determined that the comments discredited the way the
Plaintiff Corporations were operated. The Crandall Canyon statement implies that the
Plaintiff Corporations are run by a dishonest figure, while the Black Lung statement implies
a lack of care for the safety of Mr. Murray’s employees. Even without the character
statements, there would be sufficient cause for the Plaintiff Corporations to have a possible
chance of success in a defamation action based on comments made about Mr. Murray
Random aside: for reasons that I do not understand, in the midst of the above paragraph the court adds a footnote explaining Dr. Evil in much greater details than seems necessary.
1 For those who might not be familiar, Dr. Evil, whose real name is Douglas Evil Powers,
gained notoriety as the villain of the Austin Powers film franchise. He is a parody of Ernst Stavro
Blofeld, a nemesis of James Bond. Along with his cat, Mr. Bigglesworth, a colorful supporting
entourage, and a plethora of secret lairs, Dr. Evil made several attempts at taking over the world,
before ultimately finding redemption by the end of the final film.
First: SPOILER ALERT. And second, I mean, sure. That's a decent summary (and I must admit I don't remember Dr. Evil even having a real name, but it's been a while since I've seen the films), but I'm not sure why this footnote is necessary in a straightforward decision to remand. Almost feels like the judge wanted to get in something oddly humorous in such a weird case.
But back to the meat of the ruling. The court says that since the statements could defame the companies in West Virginia and (whoops...) HBO and those West Virginia coal companies are incorporated in Delaware, there's no diversity jurisdiction to move the case to federal court:
Defendants’ primary contention is that the Plaintiff Corporations
were not properly joined because the defamatory statements were not of and concerning
the corporations, giving the corporations no possibility of asserting a right to relief. As
discussed herein, this Court finds that defamatory statements made about an executive of
a business may be sufficient to defame his business where the statement was made about
the individual in his professional capacity and reflects negatively on the operation of the
business. Therefore, the Plaintiff Corporations may have been defamed by statements
made about Mr. Murray, giving them a possibility of success in this action as set forth by
Ashworth, 395 F.Supp.2d at 403. Because the Plaintiff Corporations have this possibility
of success, they were properly joined. This joinder destroys the diversity jurisdiction, which
would have allowed a removal to this Court because the Plaintiff Corporations and Home
Box Office, Inc. are all incorporated in Delaware. Therefore, this action should be remanded
to state court.
All in all, a pretty straightforward decision on remanding -- and, of course, it makes no statement on the merits (or lack thereof) of the actual defamation claims. This is probably not a big deal in the overall case, as Oliver/HBO's argument is much, much stronger when it comes to whether or not his statements were defamatory (as the ACLU so nicely explained in their now-irrelevant amicus brief), but it is at least something of a setback for Oliver and HBO. And, in case you're wondering, the 4th Circuit (where this is) does not tend to allow remand orders like this to be appealed. So they're likely stuck in state court. That's a bit of a hassle for Oliver/HBO, and a bigger annoyance for reporters like myself who do have access to federal court records while state court records in West Virginia are (annoyingly) not so easy to access.
So by now you've probably noticed that the broadband industry is somewhat, well, broken. Unaccountable giant telecom incumbents, with a stranglehold on both federal and state lawmakers, work tirelessly alongside well-compensated lawmakers and covertly paid policy vessels to protect the status quo (read: limited competition, high prices, poor customer service). Often that involves quite literally writing and buying state laws that make it impossible for anybody to do much of anything about this dance of dysfunction.
And when it comes to highlighting the end result of this corruption, there's no better state than West Virginia. Whereas bigger incumbents in more populated states can often hide their stranglehold over a broken market under layers upon layers of exquisitely crafted bullshit, many West Virginia lawmakers and regional incumbent Frontier Communications lack the savvy and competence to mask what they're truly up to.
As a result, the state has been awash in controversy over its telecom policies for years now. Local Charleston Gazette reporter Eric Eyre has done yeoman's work chronicling West Virginia's immense broadband dysfunction, from the State's use of broadband stimulus subsidies on unused, overpowered routers and overpaid, redundant consultants, to state leaders' attempts to bury reports highlighting how a cozy relationship with Frontier has led to what can only be explained as systemic, statewide fraud on the taxpayer dime.
Obviously letting Frontier dictate state telecom policy has resulted in the state being one of the least-connected states in the nation. Facing growing calls to actually do something about it, West Virginia finally recently buckled to pressure and passed House Bill 3093, recently signed into law by West Virginia Governor Jim Justice. The bill makes a number of changes to try and improve regional competition, including streamlining pole attachment reform, and encouraging local broadband community co-ops to shore up coverage in low ROI areas.
We already discussed how Frontier recently fired a long-standing employee for supporting the bill. Said employee's other jobwas as West Virginia Senate President, an absurd conflict of interest nobody in the state appears to have given much thought to. But Frontier has subsequently decided that it makes sense to sue the state of West Virginia for the new law, taking specific aim at the segment reforming utility pole fiber attachment rules:
"Frontier Communications has filed a lawsuit to prevent the enforcement of an article of House Bill 3093, known as the broadband bill, arguing that it conflicts with federal law and increases the chances of an interruption or outage for customers.
House Bill 3093’s Article 4 allows third parties, including Frontier’s competitors, to trespass upon, handle, move, interfere with, and potentially damage Frontier’s facilities attached to utility poles in West Virginia — thereby, among other things, destroying in whole or in part Frontier’s investment and other property and its ability to use its facilities to provide service to its customers, without prior notice to Frontier and an opportunity to protect its property,” the lawsuit says.
We've noted how incumbent ISPs have sued to thwart pole attachment reform elsewhere, most notably in places like Louisville and Nashville where Google Fiber is trying to compete with incumbents. Existing pole rules often require each individual ISP move its own gear, resulting in up to a year of bureaucratic delays for new market entrants. Delays incumbent ISPs have historically exploited to intentionally slow competitor arrival to market.
"One touch make ready" reform rules, in contrast, propose using a single, licensed and insured subcontractor able to move any company's gear provided they give a notable heads up and pay for any potential damages. And while incumbent ISPs like Frontier and many cable providers (who also sued the state for its effort to speed up competition) like to give the impression these subcontractors are random incompetent yahoos who'll cut lines and wreak havoc, they're often the same experienced, licensed subscontractors used for years by many of these companies for their own pole work.
It's believed this boring-sounding utility pole regulatory reform can reduce existing pole attachment times from six months to a year, down to a month or two. But because it would speed up the entrance of would-be competitors, incumbent ISPs have fought the reform tooth and nail. You see, incumbent ISPs talk a big game about their disdain for "burdensome regulation," but when said regulation protects their regional duopolies, they're the first in line to applaud. That is when they're not busy writing and buying protectionist state laws and regulations preventing local communities from making these decisions for themselves.
Frontier's decision to spend time and money with lawsuits comes as rumors begin to swirl of potential bankruptcy at the company. The company has been bleeding customers after it bundled an expensive acquisition of Verizon's unwanted networks in Florida, Texas and California, a deal that initially pleased investors with promised growth, but saddled the company with billions in debt, further preventing it from upgrading its network at any scale. Frontier's apparent solution to this conundrum? Like any myopic, pampered legacy company, it's to double down on the bad ideas that brought it to this moment in the first place.
So (for good reason), we keep noting that if you want to see how the American broadband market really works, you should take a close look at West Virginia. As in most states, a lack of competition keeps broadband prices high and speeds slow, with far too many consumers forced to pay a tidy sum for DSL speeds circa 2002. But the state has also been embroiled in scandal after scandal involving Frontier Communication's mismanagement of taxpayer subsidies that were intended to try and resolve this problem.
Local Charleston Gazette reporter Eric Eyre has quietly done an amazing job the last few years chronicling West Virginia's immense broadband dysfunction, from the State's use of broadband stimulus subsidies on unused, overpowered routers and overpaid, redundant consultants, to state leaders' attempts to bury reports supporting allegations that Frontier engaged in systemic, statewide fraud on the taxpayer dime.
Eyre is back again directing readers to a new report by the US Commerce Department's Office of Inspector General (pdf) which found that Frontier pretty consistently tried to game the subsidy system, imposing various "loading" and "invoice processing" fees -- outlawed by federal grant rules governing stimulus funding -- on to invoices submitted to the state. Frontier consistently used these fees to pad their bills to the tune of $4.7 million, and internal memos feature employees clearly demonstrating that Frontier saw this bill padding as a way to glean some additional profit on the taxpayer's dime:
The scathing, 31-page report declared the payments "unreasonable" and "unallowable." Meanwhile, Frontier saw the tacked-on charges as a “revenue opportunity,” according to an internal company email cited in the report. Frontier employees referred to the extra fees as “markups” and “profit."
Keep in mind Frontier had already been fighting a lawsuit alleging that it used a wide variety of tricks to both jack up its original estimates for broadband deployment -- and ensure any subsidies would only be used to shore up Frontier's internal networks, and not to improve overall broadband penetration and competition in the state. This new report notes that one of the tricks used by Frontier was to order and store a massive amount of unused fiber for future "repairs," allowing it to bill more than projects actually cost:
"What’s more, Frontier misled the public about the amount of unused fiber cable — called “maintenance coil” — the company installed across the state, according to the report. The extra fiber, which is stored at public facilities and used for repairs, drove up the broadband expansion project’s cost. Frontier wound up placing 49 miles of spooled-up, unused fiber across West Virginia — four times the amount the company had disclosed to state officials, according to the report.
Unsurprisingly, Frontier insists it has done nothing wrong, despite years of similar allegations across the state. This is the same Frontier that just got done firing a seven year employee because, at his part-time job as West Virginia senate leader, he voted for a new law that would actually help improve broadband penetration and competition in the state. Oddly, state officials (many of the same ones that tried to bury reports alleging the same sort of thing earlier) aren't commenting on the report's findings.
It should be noted that this is how state politics has worked for years for the likes of AT&T and Verizon, who long found it easy to gobble up subsidies and tax breaks, then pay state lawmakers and regulators to look the other way when it came time for accountability over how subsidies are spent. More often than not, these companies are simultaneously being allowed to quite literally write state telecommunications law ensuring that competition in the broadband sector remains muted. All while everybody in the chain professes their unwavering dedication to free markets and consumer welfare.
But Frontier has neither the competency nor the legal and accounting firepower of its larger counterparts, and as it has stumbled closer to bankruptcy courtesy of some questionable business decisions over the last few years, keeping formerly loyal state politicians and regulators consistently looking the other direction has proven increasingly difficult. Still, believing that this ends with anything even remotely resembling accountability and justice remains a very risky wager.
Yesterday we wrote about coal company Murray Energy and its CEO, Bob Murray, actually following through and suing John Oliver -- something that Murray's lawyers had threatened to do when Oliver and his team had reached out to Murray for a piece Oliver was doing on coal. The result of being threatened was that Oliver spent nearly half of the 24 minute segment on Murray, carefully detailing some of Murray's history and positions. If you missed it, watch it again here:
Anyway, when we wrote about the case yesterday, we noted that we had to do it based solely on the reporting of the Daily Beast, as they broke the story and -- for reasons I still don't understand -- refused to post the actual complaint. However, now we've obtained the full complaint and can dig in on how incredibly silly it is. It appears to be a quintessential SLAPP lawsuit, where the entire point is not to bring a legitimate cause of action, but to chill free speech that criticizes Bob Murray. As Ken "Popehat" White notes, it's "lawsuit as theater" and "an unapologetic political screed" -- that is, apparently designed to rile people up, rather than to present a reasonable legal argument.
Let's dig in. It certainly starts out on a high note with the rhetoric:
On June 18, 2017, Defendants executed a meticulously planned attempt to assassinate the character and reputation of Mr. Robert E. Murray and his companies, including Murray Energy Corporation and those in West Virginia, on a world stage. They did so for their personal financial gain by knowingly broadcasting false, injurious, and defamatory comments to HBO's approximately 134 million paying subscribers, while also knowing that their malicious broadcast would be repeated to countless more individuals through various outlets (including other media owned by certain Defendants.
I've now watched the video four times and I fail to see anywhere that it goes after "those in West Virginia." Indeed, it's actually quite sympathetic to the plight of miners and former miners in the area who have run into problems or lost their jobs. The only people that it holds out as problematic... are the CEOs of various mining companies and the President of the United States. And even if Murray's reputation is mocked in the piece, as long as there aren't false statements of fact, presented with knowledge of their falsity or reckless disregard for the truth, it's all perfectly legal. Making Bob Murray look foolish or mean isn't illegal, as long as it's based on statements of opinion or those backed up with evidence.
But, Murray's lawyers appear to suggest that because Murray is in poor health, that somehow makes this entirely different. It's... an odd sympathy play in a lawsuit:
They did this to a man who needs a lung transplant, a man who does not expect to live to see the end of this case. They attacked him in a forum in which he had no opportunity to defend himself, and so he has brought this suit to try to set the record straight.
The health stuff is pure "theater" as Ken noted. The "no opportunity to defend" himself is weird, because I thought Republicans like Murray were completely 100% against a "fairness doctrine" that required equal time for political opponents (which is the right position to take). But, even beyond that, the idea that Murray had no choice but to file a lawsuit to defend himself or to set the record straight is laughable. As Oliver's report clearly showed, Murray is regularly on TV and could easily get a message onto the various TV news programs that have him on as a guest. And, either way (again) that's got absolutely nothing to do with defamation law and how it works.
The sob story continues:
Worse yet, Defendants employed techniques designed solely to harass and embarrass Plaintiffs, including Mr. Murray, a seventy-seven year old citizen in ill health and dependent on an oxygen tank for survival, who, despite the foregoing, continuously devotes his life, including by working seven days each week, to save the jobs and better the lives of the thousands of coal miners that he employs in West Virginia and elsewhere. Defendants childishly demeaned and disparaged Mr. Murray and his companies, made jokes about Mr. Murray's age, health, and appearance, made light of a tragic mining incident, broadcasted false statements, and incited television and internet viewers to do harm to Mr. Murray and his companies, all before a worldwide audience--including the thousands of people that work for and do business with Mr. Murray and his companies in West Virginia. In fact, medical doctors have informed Mr. Murray that he should stop working because the stress is shortening his life. Mr. Murray must, however, continue working because of all those individuals who rely on him. But nothing has ever stressed him more than this vicious and untruthful attack.
Bravo! Quite a performance there. This seems clearly targeted towards pulling at the heartstrings of folks in West Virginia, but, again seems to have little to nothing to do with the actual law. Again, Murray's health is not an issue here -- and if this has caused him more stress than anything else in his life ever, then Mr. Murray has led an incredibly low stress life. Is he really saying that a late night British comedian on a premium channel has caused him more stress than the time that one of his mines collapsed and killed a group of his employees? If so... that's... weird. Separately, making fun of someone's age, health or appearance (and I don't recall any actual jokes about his age or health...) is, again, not defamation. It's sort of protected by the First Amendment. The only thing that could be defamation is "false statements" and notice how the lawsuit seems to be playing up everything else, rather than that?
When you start to dig into the actual meat of the lawsuit... there's almost nothing there. It complains that Oliver's staff may have contacted Murray Energy under false pretenses, saying that they "were under the false impression that Defendants would use this supplied information to accurately and responsibly broadcast the facts and circumstances regarding the topics," but that, again, makes little difference to the question of defamation. Just because a news company doesn't present your version of the events exactly as you want it presented, doesn't make it defamation. Not by any stretch of the imagination.
The lawsuit does provide plenty of additional bits of information concerning the Crandall Canyon mine collapse and how Murray reacted to it. And all of that is perhaps interesting, but again, none of it requires Oliver to portray the story in the way that Murray Energy likes. And, again, if you go back and review the actual story that Oliver did, he does not contradict any of the factual claims laid out by Murray's lawyers. Rather, he highlights the stories of miners or families of miners who were impacted by the collapse and were not happy with how Murray responded. The crux of the argument on Murray's side is "but we tried real hard." And, great. But highlighting how others felt about the effort and actions is not defamation. It's presenting other viewpoints.
The only possible "factual" point where there could be some controversy is over whether or not the mine collapsed due to an earthquake, as Murray has insisted since the day of the collapse itself. Oliver pointed to the US government report on the incident put together by the Mine Safety and Health Administration (MSHA), a part of the US Department of Labor. That report concluded: "The August 6 catastrophic accident was the result of an inadequate mine design," and, on top of it: "MSHA found no evidence that a naturally occurring earthquake caused the collapse on August 6."
In the lawsuit, Murray's evidence that this is false seems to focus on semantics and making fun of the MSHA inspectors (you know they're making fun of them because it puts "experts" in quote marks):
The Federal Mine Safety and Health Administration's report regarding the collapse (the "MSHA Report") contained multiple concessions that a sudden change in stresses due to a "slip along a joint" or "joint slip in the overburden," which is very similar to the United States Geological Survey's definition of an "earthquake" (i.e., "both sudden slip on a fault, and the resulting ground shaking and radiated seismic energy caused by the slip"), "could have been a factor in triggering the collapse" and was one of the "likely candidates" for triggering the collapse, but MSHA and its "experts" chose not to analyze the seismic data of the triggering event and instead focused on the secondary collapse, which was a disservice to the lost miners, their families and the truth.
Studies have shown that the Mine collapse was a seismic event originating in the Joe's Valley Fault Zone. More specifically, these studies indicated that the triggering event for the seismic disturbance, which was not consistent with normal mining-induced seismicity resulting in the collapse, occurred on a subsidiary fault parallel to the Joe's Valley Fault. This is a more technical manner of stating that the collapse was caused by what many would characterize as an earthquake.
So that first paragraph is nonsense. It's not "actual malice" if you have clear evidence to back up your statements, and the official MSHA report sure seems like pretty good evidence to support that Oliver and his team believed what Oliver said was true. The fact that Murray doesn't like the MSHA "experts" doesn't magically make using their report "defamation." Second, notice that all of the talk about the earthquake comes with qualifying language: "very similar to... definition of an 'earthquake'", "what many would characterize as an earthquake." Even beyond the other stuff, this further undermines any defamation claim over the one sort of "fact" the lawsuit focuses on: if there's a dispute over whether or not what happened was truly an earthquake, then choosing a side in that dispute is not defamation. It's an opinion. That's protected.
Mr. Murray and his companies warned Defendants to cease and desist from a broadcast of defamatory comments or any misguided attempt at humor regarding the tragic mine collapse and loss of life, which Plaintiffs believed would be cruel and heartless.
So, uh, earlier in the complaint, Murray's lawyers argue that they believed that when Oliver and his team reached out they were ordinary journalists, claiming that they reached out "under the guise of responsible and ethical journalism." And, yet, here they admit that that they knew that he's a comedian who regularly satirizes people and companies, thus they didn't want to see a humorous take on the situation. Also, there's no law against "misguided" humor (and, uh, many folks found the humor to be quite on target). Finally, there is nothing in defamation law about it being illegal for you to have "cruel and heartless" comedy. And, in actuality, Oliver's piece was neither cruel, nor heartless. Many would likely argue that it was incredibly sympathetic and empathetic to the plight of struggling coal miners, who are facing a radical transformation of their industry.
The complaint, once again, then hits on the idea that because Oliver's story didn't represent the collapse the way Bob Murray wanted it portrayed, that's defamation. That's... not how it works. It's not how any of this works.
In the ensuing broadcast, Defendants deliberately omitted the facts Plaintiffs provided regarding the Crandall Canyon Mine incident. There was no mention of the efforts Mr. Murray personally made to save the trapped miners. Defendant Oliver did not tell his audience that Mr. Murray arrived at the Crandall Canyon Mine in Utah within four hours of the collapse. Nor did Defendant Oliver say anything about the twenty-eight straight days Mr. Murray then spent on that mountain overseeing the massive rescue efforts, and administering to the families. Nor did he mention that Mr. Murray personally led the rescue efforts when rescue workers were injured and killed in a subsequent event ten days after the initial seismic event, in fact pulling rescue workers from the debris and attending to their injuries with his own hands and administering to them.
That's nice and all... but it's totally meaningless. Not reporting those things is not defamation. Murray has every right to then put out a statement, or go on TV, or get another reporter to tell these stories. But in a lawsuit? Just because the story is about Bob Murray doesn't mean that Bob Murray gets editorial control. That's not how it works, Bob.
Then it gets even more bizarre:
Instead, presumably to boost ratings, line their pockets with profits, and advance the show's anti-coal agenda, Defendant Oliver intentionally, falsely, and outrageously conveyed that Mr. Murray has no evidence to support his statements that an earthquake caused the tragedy that took the lives of Murray Energy miners during the course of their work for the organization.
Rather than fairly characterizing the evidence that he had in his possession on the subject, Defendant Oliver instead quoted an out-of-context snippet from a single report stating that there was "no evidence that a naturally occurring earthquake caused the collapse." Because Defendant Oliver omitted any mention of the other reports he was aware of that evidence that an earthquake caused the collapse, as Mr. Murray correctly stated following the collapse, Defendant Oliver's presentation intentionally and falsely implied that there is no such evidence.
Yeah. So, about that. The above just isn't true. Watch the video again. Oliver directly says that Murray relies on other evidence to support the earthquake claim ("to this day, Murray says the evidence proves that he was correct.") Then Oliver notes (correctly and accurately) that the government report says otherwise: "that was decidedly not the conclusion of the government's investigation." So, for Murray's lawyers to argue that Oliver ignored the evidence on the other side is... simply not accurate. Oliver notes that Murray points to evidence on his side, but he then points to the government's conclusions. Yes, Oliver makes it clear he believes the government's report, but, um, it's the US government. You're not going to win a defamation lawsuit by arguing that relying on the conclusions of a federal government investigation is defamation, just because you have "other evidence" that you claim disagrees with the government's evidence.
Worse still, as discussed, Defendant Oliver's Senior News Producer, Defendant Wilson, obtained from Plaintiffs detailed information evidencing an earthquake or earthquake-like event did trigger and cause the Crandall Canyon Mine collapse.
Note the immediate caveats of an "earthquake-like event." Again, this undermines the argument that saying a government report concluded it wasn't an earthquake is somehow defamation.
They also did this despite knowing that determinations of causation are vastly complex and can take years before a reliable conclusion can be reached.
So, uh, yeah. About that. This is true, but remember, part of the joke here, from Oliver, was that Murray declared definitively in a press conference the day of the collapse that it was clearly an earthquake that caused this and not the company itself. So, if Murray's own lawyers are now admitting that this is vastly complex and "can take years," it sort of reinforces the key point that Oliver was making, that Murray himself immediately jumped to the conclusion that it was an earthquake and not his fault, when that was not at all clearly know. This filing seems to do more to undermine Murray than Oliver.
Defendants also aired a clip of congressional testimony of a relative of a former employee of Murray Energy that appeared to be dissatisfied with Mr. Murray's handling of the Crandall Canyon Mine collapse, when upon information and belief the statements of that employee were not his own, but were instead scripted by adverse counsel in a lawsuit against Murray Energy and given to the employee to further the agenda of such counsel and their clients.
Right, so this is similar to the whole dismissing the MSHA report by calling its experts "experts." Oliver accurately reported what this relative said. Who wrote it is immaterial. If what that relative said was defamatory, then Murray could go after that relative. But there's no defamation in Oliver playing a clip of Congressional testimony. Again, that's not how it works.
There's a lot more in the lawsuit, which you can read below, but it pretty much all falls into the same issues as the parts described above. It's no surprise that, looking over the website of Murray's lawyers, they don't list defamation as a specialty, but tend to focus on personal injury. There's a lot of complaining and theatricality, but very little of substance, and nothing that I can see that comes anywhere close to defamation. And that makes this a pretty clear SLAPP suit, designed to chill the speech not just of Oliver and HBO, but of any other reporters looking to cover Bob Murray and Murray Energy. This is the nature of chilling effects created by SLAPP suits. They try to punish people for actually speaking out and sharing their opinion while scaring off others from doing the same.
Once again: this is an example of why we need much stronger anti-SLAPP laws at the state and federal level. Laws that require plaintiffs to pay up for filing bogus SLAPP suits, as a deterrent. And, again, one hopes that now that he's facing such a lawsuit (which, as I've said from personal experience is no fun at all, no matter how sure you are that you're in the right), John Oliver will become as outspoken in favor of anti-SLAPP laws as he's been about other important issues.
