Two Separate Studies Show That The Vast Majority Of People Who Said They Support Ajit Pai's Plan... Were Fake

from the fake-news dept

The fact that the FCC comments for Ajit Pai's net neutrality repeal were stuffed with fake comments is nothing new at all. We first reported on it back in May, and reports of comments from totally fake people or long dead people continue to pop up. Even worse are multiple stories of people having their own identities used to file comments, often opposed to their own views. The FCC has consistently responded that it doesn't care. New York's Attorney General has been investigating this as fraud, and asked the FCC to delay its net neutrality repeal until after the investigation was complete -- a request the FCC completely ignored. And, as we just noted a little while ago, Schneiderman recently announced that he's found over 2 million fake comments.

But it's easy to say "well, all these fake comments mean all the comments can be ignored." But it's important to look at the source of these fake comments and on which side they ended up. And just this week two new studies have come out, both taking a really deep dive into the fake comments. The Wall Street Journal did an investigation and reached out to 2,757 people who had supposedly commented. 72% of them said they had not posted the comments.

But even more thorough and more interesting is a new report that just came out this morning, from Startup Policy Lab's "Truth in Public Comments" project. Its methodology was even more thorough than the Wall Street Journal's. It took a random sample of 450,000 public commenters, and asked them "did you submit the comment quoted below to the FCC, yes or no?" The results are astounding:

88% of survey respondents whose emails were used to submit pro-repeal comments replied, “no,” that they did not submit the comment . Conversely, only 4% of pro-net neutrality respondents said that they did not submit the comment attributed to them.

Let's unpack that again to make it clear. Out of a fairly massive sample of FCC commenters nearly all of the ones supporting Pai's plan were fake. And nearly all of the ones supporting the existing rules were real. Here, see it in graphical form:

And this happened across multiple samples that the TiPC project ran. Each time, it showed that nearly all of the support for Pai's plan was fake. And nearly all the support for existing rules was real.

Also, quite telling: in sending out these emails asking people whether or not they filed, most of the responses they got came from people who supported net neutrality. The response rate among those who supported Pai? Tiny. Because most of them appear to be fake.

This is not to say that there weren't fake comments in support of the old rules. They did exist. But as the TiPC report notes, the "fakes" in support of the old rule were fairly obvious -- using obviously fake emails and names. The comments in support of Pai, while fake, used real emails and names that tried to appear real:

The FCC received spam comments that supported both the pro-net neutrality and pro-repeal. The difference, however, is that the majority of spam comments associated with email addresses supporting pro-net neutrality were ignored by the FCC because they were obviously fake. Conversely, we must conclude that the spam comments associated with email addresses that supported pro-repeal email addresses were a deliberate campaign to evade the eyes of regulators and influence the rulemaking process.

The discrepancy rests in the nature of the bounceback of emails. The survey resulted in a high bounce rate for emails associated with pro-net neutrality using unsophisticated approaches. Examples of an unsophisticated spam comment are those the FCC acknowledged are, “[o] bviously, fake comments [...] by the Flash, Batman, Wonder Woman, Aquaman, and Superman are not going to dramatically impact our deliberations on this issue. ”

By contrast, it appears that the spam comments for emails associated with pro-repeal comments reflect deliberate action to use stolen identities. In these instances, millions of Americans may have had their identity harvested for the political objectives of supporting the repeal of net neutrality laws, regardless of whether that individual agreed with the position or even had a position on the proposal. Accordingly, unlike the submission from Batman, which the FCC was correct to ignore, millions of Americans had their voice taken and repurposed without their consent.

No matter where you stand on the question of net neutrality, this should be a major concern. Public commenting is important, but when the system is totally hijacked in a way that appears designed to deliberately skew or merely taint the results, it does no one any good at all.

Filed Under: ajit pai, fake comments, fcc, net neutrality

Why Must The FCC Insult Everyone's Intelligence By Misrepresenting Broadband Investment?

from the big-question dept

Last month, I wrote a post detailing Ajit Pai's big lie, concerning his totally false claim that the order the FCC voted on today simply brings the internet back to where it was in 2015. As we explained that's not even remotely close to accurate. That same post also mentioned a second, but still important, lie that Pai and Pai's supporters have been telling repeatedly: that the 2015 rules harmed broadband investment.

There are two very important things to discuss regarding this claim. First, it is simply not true. Second, whether or not it is true, broadband investment is an incredibly meaningless proxy for whether or not the rules are good.

Let's start with the first point. There is no credible evidence that Title II harmed investment. While the big broadband companies have made claims about this, and telco-funded thinktanks have pushed out studies claiming this, on financial reports (where the consequences can mean jail time if they're lying), they all admit that classifying broadband under Title II has not harmed investment.

Here's Neil Smit, Comcast Cable's President and CEO telling Wall Street that nothing about Title II changes anything (on page 16):

On Title II, it really hasn't affected the way we have been doing our business or will do our business. We believe on Open Internet and while we don't necessarily agree with the Title II implementation, we conduct our business the same we always have...

He immediately follows that up by stating:

We have invested significantly in our capacity and will continue to do so and that includes both the -- we launched a 2 gigabit speed, 2 gigabit symmetrical speed recently. We are rolling that out across 18 million homes by the end of the year...

That doesn't sound like the disaster for broadband investment that Pai and his supporters are claiming.

How about AT&T? AT&T's Randall Stephenson was asked by a UBS analyst "are these net neutrality or Title II rules an impediment..." and Stephenson responded:

No, we don’t think so.

How about Charter (formerly Time Warner Cable)? Well, just last year at a UBS conference, he said:

I mean, Title II, it didn't really hurt us; it hasn't hurt us.

And, that wasn't the first time he said that. A year earlier he made it clear the company changed nothing about its investment plans:

"the commission’s decision to reclassify broadband Internet access under Title II has not altered Charter’s approach of investing significantly in its network to deliver cutting edge services."

Verizon is basically the only big broadband provider that didn't directly contradict its claims with a statement specifically about Title II... but, it did increase its investment spending quite a bit. Verizon's only comments have basically been the company saying that it continues to invest exactly as planned prior to the 2015 rules change. None of this should be surprising. As we've explained there is nothing in the 2015 order that increases compliance costs -- so long as you're not screwing over customers. The only way that the 2015 Open Internet Order should be a burden is if the broadband providers were doing something that broke the rules.

And, of course, just yesterday we noted that contrary to Pai's claims of five smaller ISPs decreasing investment, the actual data showed the opposite -- that they had all expanded. And that says nothing of the over 40 small ISPs which spoke out in favor of keeping the 2015 rules, in part because it allows them to invest more, knowing that the giant incumbents mentioned above can't use certain unfair, anti-competitive practices to keep them out of a market.

Without a legal foundation to address the anticompetitive practices of the largest players in the market, the FCC’s current course threatens the viability of competitive entry and competitive viability. As direct competitors to the biggest cable and telephone companies, we have reservations about any plan at the FCC that seeks to enhance their market power without any meaningful restraints on their ability to monopolize large swaths of the Internet.

It certainly looks like Pai's rules may actually cause some of those ISPs to decrease their investment as they'll have trouble competing with the large incumbents.

That's why it's so ridiculous not just to see Pai make these false claims about investment, but to also see Pai's handpicked "chief economist" ridiculously claim that this FCC "is no longer an 'economics free zone.' This line was parroted a lot leading up to the 2015 rules (which, we must remind you, have been approved by the courts). People claimed that there was no economic basis for the changes in 2015, which ignores the fact that the 2015 rules pretty clearly lay out the economic rationale for reclassifying broadband under Title II. You can see it starting on Page 150 of the order.

And yet, in Pai's new order he insists that it's conclusively proven that the 2015 order hurt investment. He does name multiple studies -- though every single one comes from a group or organization connected to the big broadband players. It's hard to see how that's a neutral, careful analysis. And, of course, some commenters on the proposal pointed to the studies that debunked all those studies -- and rather than actually address those points, Pai's rules hand-wave all of them away as just not credible.

But, of course, if you start to dig into the studies that Pai does rely on... they're terrible. Basically all of them make questionable assumptions -- assumptions that if you start to question them, the entire "economics" claims fall apart. Take, for example, the "study" by the Free State Foundation, which the FCC points to as saying its results are "consistent with other evidence in the record that indicates that Title II adversely affected broadband investment." But read the analysis. It is hardly a rigorous economic look at broadband investment. It's an extrapolation, with a bunch of assumptions.

Here is how I calculated that figure.

USTelecom publishes data on broadband capital expenditures (capex) for each year dating back to 1996. Using this historical data, I collected figures on the previous twelve years before the Open Internet Order was adopted in February 2015. I picked 2003 as the first year because the market had just collapsed from the dot-com bubble and total broadband capex was at its lowest point since 1996. I established a trend line from 2003 to 2016, which created a linear pattern over the first 12 years before the Open Internet Order and estimated what we could have expected broadband capex to be in 2015 and 2016 without Title II public utility regulation.

I also collected broadband capex data on sixteen of the largest ISPs for years 2014, 2015, and 2016. My sample found a 2.46% decline from 2014 to 2015 and a 4.69% decline from 2015 to 2016, totaling an overall decline of 7.04% from 2014 to 2016.

Count the assumptions. The date range is an assumption (at least that one's explained). The "trend line" is a total extrapolation, without any research into whether or not there's a reason for such a trend line or even if the timeline is a large enough sample size for a reasonable trend line. As for the capex data -- why on "sixteen of the largest ISPs." Sixteen is a fairly strange number. What happens if you just look at the top 3? Or the top 10? Or all of them? This is not a rigorous analysis.

And, of course, if it's really true that all of these think tanks funded by the telcos magically have more insight into what's happening with broadband investment, then... does that mean all those quotes we mentioned above are examples of these CEOs lying on investor calls? Because, if so, that seems like a pretty big deal. But, I'm generally going to assume that the execs are telling the truth to Wall St. and relying on others to put forth the misleading arguments -- which Pai then parrots, and his "Chief Economists" gets to play make believe and say that the FCC cares about economics again.

But, really, none of this matters. Because my second point is more important: Broadband investment is not a good proxy for whether or not Title II is a good or bad idea. It's a giant broken windows fallacy. I'll use a few extreme examples to prove the point: if "broadband investment" is the sole proxy that we use as economic proof of a good or bad policy, well, then the best policy for the FCC right now is to physically destroy the internet. With all internet infrastructure broken, it will surely boost investment and economic activity around rebuilding the internet, right? Of course, no one would consider that a good policy, but if our metric is purely investment, then that's the kind of crazy result you get. Or, let's say that new technologies are developed that allow people to implement better broadband more cheaply. Indeed, that's what some broadband access providers have been claiming. In that case, investment is likely to drop, even though the speeds/access/value that everyone gets increases.

Especially when you're discussing a technology field, any halfway competent economist knows that you have different forces at play than in static markets. With technology, thanks to innovation, stuff gets cheaper as it gets better. Yet, under the new FCC's sole focus on broadband investment as an economic measure, a more efficient, cheaper roll-out to more people would be "bad" because it would decrease investment. That's not to say either of things have actually happened, but just to demonstrate the pure uselessness of aggregate investment data. It's not "economics," its junk science. It's pretending that the numbers are meaningful because they're numbers.

But the real "economic" test should be about the value to the end user. And broadband access and speeds is one part of that. But only one part. Indeed, a huge part of this discussion is how the real value on the internet comes from the edge providers, the apps and services that people use on the internet. That's why the network is valuable. And the problem with killing net neutrality is it puts that in danger. It can make it more expensive, or limit competition, or make some of those services go away altogether. And that decreases the value of the internet to every user. And that's because the internet works off of network effects for the services on them. That is, with many services, the more people use them, the more valuable they get. Killing net neutrality will interfere with those network effects in many cases, again decreasing value.

So, in short, even ignoring that the FCC's numbers are bogus, so is its entire framing of the net neutrality debate. Perhaps it's not surprising that the framing used here -- broadband investment -- only measures what the giant telco/cable companies do related to the internet. Because, after all, Chairman Pai has made it pretty damn clear that that's all he cares about. But it's economics malpractice to ignore where the actual value is on the network, and what these rules will do to all those service providers and the end users.

Filed Under: ajit pai, broadband, competition, fcc, investment, net neutrality, open internet, value

Leaked E-mail Shows Even The FCC's Own CTO Thinks Gutting Net Neutrality Harms The Public

from the dysfunction-junction dept

So by now we've pointed out how 200 engineers, internet legends, nearly 1000 startups, countless internet companies, 30 small ISPs, and millions of American consumers have told the FCC its plan to repeal net neutrality is extreme and will harm competition, innovation, and the health of the internet. But we've also pointed out repeatedly how this makes absolutely no difference at Trump's FCC, which appears mindlessly dedicated toward one singular purpose: pleasing entrenched telecom duopolies like Comcast, AT&T and Verizon.

You can add the FCC's own CTO to the long list of folks who think the FCC's net neutrality repeal is neither in the public interest, nor good for the health of the internet. In a leaked e-mail this week, FCC CTO Eric Burger (hired by Ajit Pai last October) warned that once the rules are repealed, there's really nothing in place to stop these entrenched duopolies from throttling or hamstringing services or websites they compete with:

"In an internal email to all of the FCC commissioner offices, CTO Eric Burger, who was appointed by Pai in October, said the No. 1 issue with the repeal is concern that internet service providers will block or throttle specific websites, according to FCC sources who viewed the message.

"Unfortunately, I realize we do not address that at all," Burger said in the email. "If the ISP is transparent about blocking legal content, there is nothing the [Federal Trade Commission] can do about it unless the FTC determines it was done for anti-competitive reasons. Allowing such blocking is not in the public interest."

So if you buy the FCC/big ISP argument here, the net neutrality repeal and the gutting of FCC authority over giant ISPs isn't a big deal -- because the FTC will rush in and protect consumers. But we've already noted in great detail how that's simply not going to be happening. The FTC's currently losing a lawsuit against AT&T that could obliterate that ability almost entirely. Even if they win that case, we've explored in detail how the FTC's existing authority is so limited, clever ISPs like Comcast will be able to simply tap dance around enforcement.

Another source at the FCC told Politico that Burger's concerns were just part of the everyday back and forth chatter that occurs at the FCC, and that his concerns had somehow been addressed by an update to the NPRM:

"An FCC official, speaking on the condition of anonymity to discuss the internal deliberations, said Burger's concerns have been addressed since his message Wednesday morning. The discussion, the official said, is part of the normal back-and-forth process of editing an FCC order.

The official said that some clarifying language was added to the order and that Burger replied Wednesday afternoon to say his concerns were "fully addressed." The official also noted that the CTO was focused on one section of the order and not the part that dealt with the rules.

The problem is that there's no way that this issue was "fully addressed," because it's the entire foundation for Pai's order. Gutting FCC authority, then throwing any piddly remaining oversight of ISPs to an FTC ill-equipped to handle it is the entire plan. The fact that enforcement will fall through the cracks at the FTC is the whole damn point and is precisely why ISPs are lobbying for this. The FTC can't make new rules, can't act until after offenses have occurred, and even then -- only if it can be clearly proven that the ISP was being "unfair" or "deceptive" --something that's easy to dodge just by using TOS mouse print.

In the world of net neutrality violations, where ISPs often hide anti-competitive behavior under faux technical nonsense or breathless claims they were only trying to protect the network -- ISP lawyers will run circles around the FTC. And again, this is only if the FTC wins its court case against AT&T. If it loses, there's really nothing stopping giant ISPs from being as large of an anti-competitive ass as they can imagine. And should any states get the funny idea to step in and protect consumers or competitors, Pai's FCC incumbent ISPs want to hamstring those efforts as well.

Experts have been pointing out this fatal flaw in Ajit Pai's plan for much of the last year. That includes the two-time former FCC CTO, who has repeatedly pointed out how easy large ISPs will be able to abuse a lack of competition under this new paradigm. And while it's nice to see the FCC's current CTO recognize the problem as well, these concerns will likely only join the now-towering pile of discarded feedback that didn't quite line up with Comcast, Verizon and AT&T's vision of the internet.

Filed Under: ajit pai, eric burger, fcc, ftc, net neutrality, title ii