Comcast Admits Broadband Usage Caps Are A Cash Grab, Not An Engineering Necessity

from the whoops-a-daisy dept

For years the broadband industry tried to claim that they were imposing usage caps because of network congestion. In reality they've long lusted after usage caps for two simple reasons: they allow ISPs to charge more money for the same product, and they help cushion traditional TV revenues from the ongoing assault from Internet video. Instead of admitting that, big ISPs have tried to argue that caps are about "fairness," or that they're essential lest the Internet collapse from uncontrolled congestion (remember the debunked Exaflood?).

Over the years, data has shown that caps aren't really an effective way to target network congestion anyway, can hinder innovation, hurt competitors, and usually only wind up confusing consumers, many of whom aren't even sure what a gigabyte is. Eventually, even cable lobbyists had to admit broadband caps weren't really about congestion, even though they still cling to the false narrative that layering steep rate hikes and overage fees on top of already-expensive flat-rate pricing is somehow about "fairness."

Comcast is of course slowly but surely expanding usage caps into its least competitive markets. More recently the company has tried to deny it even has caps, instead insisting these limits are "data thresholds" or "flexible data consumption plans." But when asked last week why Comcast's caps in these markets remain so low in proportion to rising Comcast speeds (and prices), Comcast engineer and vice president of Internet services Jason Livingood candidly admitted on Twitter that the decision to impose caps was a business one, not one dictated by network engineering:Jason's not the first engineer to admit that caps aren't an engineering issue and therefore don't have anything to do with congestion. In fact if you followed the broadband industry's bunk Exaflood claims over the last decade, you probably noticed that ISP lobbyists say one thing (largely to scare legislators or the press into supporting bad policy), while actual engineers say something starkly different.

Repeatedly we've been told by ISP lobbyists and lawyers that if ISPs don't get "X" (no net neutrality rules, deregulation, more subsidies, the right to impose arbitrary new tolls, whatever), the Internet will choke on itself and grind to a halt. In contrast, the actual people building and maintaining these networks have stated time and time again that nearly all congestion issues can be resolved with modest upgrades and intelligent engineering. The congestion bogeyman is a useful idiot, but he's constructed largely of bullshit and brainless ballast.

Livingood will likely receive a scolding for wandering off script. Comcast, unsurprisingly, doesn't much want to talk about the comment further:

"We've asked Comcast officials if there are any technology benefits from imposing the caps or technology reasons for the specific limits chosen but haven't heard back yet. Livingood's statement probably won't come as any surprise to critics of data caps who argue that the limits raise prices and prevent people from making full use of the Internet without actually preventing congestion."

That's worth remembering the next time Comcast tries to insist that its attempt to charge more for the same service is based on engineering necessity. The problem? Our shiny new net neutrality rules don't really cover or restrict usage caps, even in instances when they're clearly being used to simply take advantage of less competitive markets. While Tom Wheeler did give Verizon a wrist slap last year for using the congestion bogeyman and throttling to simply make an extra buck, the FCC has generally been quiet on the implementation (and abuse) of usage caps specifically and high broadband prices in general.

There are some indications that the FCC is watching usage caps carefully, and says it will tackle complaints about them on a "case by case basis." But what that means from an agency that has traditionally treated caps as "creative" pricing isn't clear. It's another example of how our net neutrality rules were good, but serious competition in the U.S. broadband sector would have been better.

Filed Under: broadband, business models, data caps, jason livingood, technologists
Companies: comcast

Dianne Feinstein Worries That Net Neutrality Will Block ISPs From Censoring 'Terrorist' Content She Doesn't Like

from the that's-not-how-any-of-this-works dept

Dianne Feinstein has this weird obsession with book burning and violating the First Amendment. Just a few months ago, we wrote about her ridiculous rant about how the First Amendment doesn't cover The Anarchist Cookbook and that it should be banned from the internet:

I am particularly struck that the alleged bombers made use of online bombmaking guides like the Anarchist Cookbook and Inspire Magazine. These documents are not, in my view, protected by the First Amendment and should be removed from the Internet.

This was in response to yet another of the FBI's homemade terrorist plots, in which an undercover FBI informant gave some clueless individuals both The Anarchist Cookbook and Inspire Magazine and told them to read it. Feinstein, apparently not understanding that these documents came from the FBI, seemed to think the publications should be banned and that the First Amendment doesn't apply to them. She's wrong. And, worse, she knows she's wrong, because 18 years ago the Justice Department told her she was wrong:

The Department of Justice agrees that it would be appropriate and beneficial to adopt further legislation to address this problem directly, if that can be accomplished in a manner that does not impermissibly restrict the wholly legitimate publication and teaching of such information, or otherwise violate the First Amendment.

The First Amendment would impose substantial constraints on any attempt to proscribe indiscriminately the dissemination of bombmaking information. The government generally may not, except in rare circumstances, punish persons either for advocating lawless action or for disseminating truthful information -- including information that would be dangerous if used -- that such persons have obtained lawfully.

But, no matter, Feinstein continues to insist that these publications are illegal and should be wiped from the internet. And, now, suddenly, she's afraid that net neutrality will block her from getting her wish of unconstitutionally banning books from the internet. Which makes her wrong on multiple levels. Back in February (a couple of months before her nonsensical public rant), she sent FCC boss Tom Wheeler a letter, asking him to make sure that net neutrality wouldn't get in the way of her unconstitutional censorious desires:

As you consider your proposed Order for an open Internet, I urge you to again include provisions that will preserve the ability of Internet service providers to block access to material that endangers public safety, violates intellectual property protections, or threatens national security.

As you may know, terrorists are actively using the Internet to recruit disgruntled youth, and to encourage them to commit acts of terrorism. Pirate websites use the Internet to steal millions of dollars of intellectual property from American creators and businesses. Predators use the Internet to lure and traffic in children, among other crimes. It is therefore essential that Internet service providers (ISPs) have the ability to impede access to sites and services that facilitate these activities.

Wheeler responded to Feinstein in April (right after her public rant), in which he pointed out that net neutrality wouldn't actually stop an ISP from blocking "illegal" content, so she shouldn't worry about it:

As you stated, it is essential that ISPs still have the ability to prevent access to sites and services that facilitate illegal and criminal activities. The Open Internet rules are not intended to expand or contract broadband providers' rights or obligations with respect to other laws or safety and security considerations, including the needs of emergency communications and law enforcement, public safety, and national security authorities. Similarly, the Open Internet rules protect only lawfal content and are not intended to impede efforts by broadband providers to address unlawful transfers of content or transfers of unlawful content.

You'll note, of course, the little sidestep by Wheeler, that ISPs can block "illegal" content, which leaves aside the fact that The Anarchist Cookbook and Inspire are legal content protected by the First Amendment.

And, apparently, that wasn't good enough for Dianne Feinstein and her desire to censor the internet. As Eric Geller at the Daily Dot pointed out last week, back in May, Feinstein wrote to Wheeler once again, this time focusing much more specifically on Inspire magazine, rather than her original, more general "material that endangers public safety":

Unfortunately, it has recently come to my attention that some broadband providers are suggesting, including through discussions with my staff on the Senate Select Committee on Intelligence, that the FCC order may prevent them from blocking the posting of information that inspires and aids terrorist activity such as Inspire magazine, an online publication produced by al-Qa'ida in the Arabian Peninsula (AQAP).

I write today to urge the Commission to clarify that the Open Internet order does not protect content like Inspire magazine, which seeks to encourage and assist individuals in carrying out acts of terrorism.

She goes on with a rather long description of Inspire magazine and some of its articles and claims that "there is no reason to publish this information for reasons other than to assist readers in carrying out terrorist attacks." Then there's fearmongering about how various terrorirst wannabes read Inspire (she leaves out the parts about the FBI giving it to some of them... I wonder why?) and ridiculously suggests that without Inspire, Dzhokhar Tsarnaev might not have bombed the Boston Marathon.

And then she gets back to the point. She's apparently been pressuring ISPs to start blocking that publication, and at least one pushed back on her pointing to net neutrality rules:

The FCC's Open Internet order does not appear to prevent a broadband provider or other type of company from taking reasonable steps to block such material for at least two reasons. First, in many cases, distribution of Inspire would violate federal criminal laws, such as Section 842(p) of Title 18 of the United States Code, or laws criminalizing material support to terrorists or terrorist organizations. Thus, companies can take reasonable steps to combat the distribution of such content.

Moreover, the Open Internet order clearly states that it does not alter a provider's rights or obligations with respect to "safety and security considerations" or the needs of public safety and national security authorities. Therefore, a broadband provider clearly is permitted to take public safety or national security into account by taking action against such content.

Nonetheless, there is apparently confusion among at least some broadband providers on whether they may take such actions in order to promote national security and law enforcement purposes. I therefore ask that you promptly confirm that they may do so, consistent with your Open Internet order and any other applicable FCC order. I look forward to your response and appreciate very much your attention to this important issue.

All of this is ridiculous, of course. Whichever ISP pointed to net neutrality as a reason why it won't censor the internet was doing one of two things: (1) trying to get this Senator to leave them alone and stop bugging them about censoring completely legal content online, or (2) seeing an opportunity to get a Democratic Senator (who has mostly been supportive of net neutrality) on their side to fight against it. And she fell for it.

Either way, despite Feinstein's quixotic desire to censor the internet of content she doesn't like, it's worth noting that the First Amendment doesn't allow her to censor content, and she's been told this for many years -- and yet apparently she's directly applying pressure to ISPs to censor the internet. That seems quite questionable. Separately, net neutrality and the open internet rules from the FCC have absolutely nothing to do with this, and Feinstein's weird letters to the FCC about the matter are just her falling for some ISP playing games with her to get her on their side against net neutrality.

Filed Under: anarchist's cookbook, censorship, dianne feinstein, fcc, first amendment, free speech, inspire, net neutrality, tom wheeler

FCC May Finally Include Price & Usage Caps When Weighing Broadband Deployment Progress

from the welcome-to-2015 dept

The FCC's long history of ignoring the broadband duopoly's stranglehold over telecom markets has at times bordered on the comedic. This is, after all, the agency that required 36 public workshops, 9 field hearings, 31 public notices and 376 pages to craft a "National Broadband Plan" that went well out of its way to avoid doing anything substantive about the lack of broadband competition. And only the FCC could spend $300 million on a broadband mapping website that completely omits price, while routinely hallucinating both competitors and available speeds.

If the FCC has an area of expertise, it has historically been empty broadband lip service and elaborate, theatrical dance routines designed to protect the status quo.

But under Tom Wheeler, we're actually starting to see this change a little bit. For example, Wheeler recently pushed the agency to bump the definition of broadband to 25 Mbps, to highlight how three-quarters of American homes lack more than one option for real broadband service. Under Wheeler, for the first time in fifteen years, the FCC is no longer pretending that U.S. broadband is robustly competitive. He's still been reticent to acknowledge high prices or the fact that broadband users are consistently gouged with misleading, below the line fees, but baby steps, right?

Now the agency has announced it is fielding inquiries on whether or not it should include usage caps, overage fees, pricing and latency when crafting its annual Broadband Progress Report on the state of broadband competition:

"Today’s Notice of Inquiry further seeks comment on whether to consider standards beyond speed when assessing broadband deployment, including latency and consistency of service. And it asks whether to consider factors beyond physical deployment, including pricing and data allowances, privacy, and broadband adoption."

That's not great news for lagging broadband ISPs, given that the FCC's most recent Broadband Deployment Report already found that 55 million Americans -- 17 percent of the population -- lack access to advanced broadband, and over half of all Americans lack access to broadband at speeds of 25 Mbps down, 3 Mbps up. Factor in price, actual line performance, and whether a connection is hampered with bandwidth caps and overages, and those statistics could very quickly get much, much uglier. The FCC has also told the GAO that it may start factoring in streaming video performance when reporting on whether competitive broadband is being successfully deployed.

All told, the FCC's proposed changes will make it harder than ever for incumbent broadband ISPs to pretend that nothing's wrong with the U.S. broadband market. Not that they won't keep trying, since at this point pretending U.S. broadband is infallible is sort of a national pastime and full-time job for incumbent ISPs and their armies of paid telecom policy wonks.

Filed Under: broadband, deployment, fcc, price, usage caps

FCC Approves AT&T's $69 Billion DirecTV Merger, Announces It Late Friday And Hopes Nobody Notices

from the lava-is-in-the-public-interest dept

Waiting until late Friday afternoon to minimize public and press backlash, the FCC has formally announced that it has voted to approve AT&T's $69 billion acquisition of DirecTV, creating the nation's biggest ever pay TV provider at 27 million subscribers strong. According to the FCC statement, the agency found that the deal, despite the fact it eliminates a direct pay TV competitor, somehow serves the public interest:

"The Commission’s decision is based on a careful, thorough review of the record, which includes extensive economic analysis and documentary data from the applicants, as well as comments from interested parties. Based on this review, the Commission has determined that granting the application, subject to certain conditions, is in the public interest."

It will be curious to see if the DirecTV employees trimmed by AT&T's garden shears as the telco eliminates "redundancies" will feel the same way. Or if the DirecTV customers who'll suddenly face higher TV prices thanks to less direct pay TV price competition feel their interests have been well looked after by this time next year. Only time will illuminate the magical public interest benefits of the deal, since they're not entirely apparent at the moment.

As we noted previously, the temporary conditions attached to the deal appear to be wimpy at best. One condition prevents AT&T from abusing its fixed-line usage caps anti-competitively, but the agency doesn't bother to note that AT&T doesn't have usage caps on the majority of its U-Verse broadband lines, and has no plans to implement them. AT&T's focus, and the current controversy as it pertains to AT&T's use of caps to trample net neutrality, is on wireless, which these conditions wouldn't apply to.

Another condition states that AT&T has to submit any new interconnection agreements to the FCC for review to ensure it's not behaving anti-competitively, but this was already effectively part of the FCC's new net neutrality protections. Thanks to the mere threat of neutrality rules, AT&T was already on its very best behavior in regard to interconnection. Granted AT&T is engaged in two different lawsuits to kill these rules, so at least there's something in place to police interconnection should the neutrality rules get defeated in court. But AT&T promising to avoid interconnection jackassery for a few years is hardly a groundbreaking commitment.

But it's this part of the FCC's statement I find the most misleading:

"Recognizing that the merger reduces AT&T-DIRECTV’s incentive to deploy FTTP service, the Commission adopts as a condition of this merger the expansion of FTTP service to 12.5 million customer locations. This condition also responds to the harm of the loss of a video competitor in areas where AT&T and DIRECTV had directly competed before the merger by providing a pathway for increased competition from services that rely on broadband Internet to deliver video."

One, what good is an expanded "pathway" to Internet video competition if said pathway wanders straight through a monopoly mine field on last mile broadband service? Two, as we noted previously, AT&T and the FCC are being incredibly misleading on this 12.5 million deployment total. A month before the DirecTV deal was even announced, AT&T promised to expand its fiber broadband service (mostly aimed at high-end developments) to "up to" parts of 100 cities. When pressed, AT&T in filings conceded this project, primarily aimed at countering Google Fiber's buzz, would likely bring service to around 11.7 million users. So in short, the lion's share of the 12.5 million total isn't new commitment, it's deployments that were already planned (and in some cases already finished) being dressed up as only having been made possible by the magic of a mega-merger.

So why did an FCC on a bit of a pro-consumer tear approve this deal? It's likely because the FCC knows in time AT&T's acquisition of a satellite TV provider will be made wholly irrelevant by a surge in Internet video competition and cord cutting. The FCC's been engaged in a fierce battle with the broadband industry over net neutrality, a new 25 Mbps definition for broadband, and municipal broadband, so approving this deal was one way to throw the broadband industry a few crumbs with the least amount of market damage. The FCC's likely just picking its battles after having just fought a protracted war.

That said, the short-term harm from effectively killing a pay TV competitor will be felt by TV subscribers and employees alike. And the fact the FCC was so eager to swallow and sell AT&T's miracle math suggests that the FCC hasn't entirely discarded old habits just yet.

Filed Under: competition, fcc, merger, satellite, spectrum, tv
Companies: at&t, directv

FCC Commissioner O'Rielly: Nobody Takes Me Seriously After Voting Down Every Consumer-Friendly FCC Policy This Year

from the obstruction-junction dept

FCC Commissioner Michael O'Rielly will never be confused with a consumer advocate or champion of the people. He's voted down nearly every consumer-friendly FCC initiative that has come down the pike, whether that's net neutrality, raising the base definition of broadband to 25 Mbps, or fighting back against state protectionist broadband laws written by ISPs to protect their uncompetitive geographic fiefdoms. O'Rielly most recently made waves by proudly declaring, as an employee of an agency tasked with ensuring timely deployment of broadband to all Americans, that he really didn't think broadband was all that necessary.

Hand in hand with anti-net-neutrality Commissioner Ajit Pai, a former Verizon regulatory lawyer, the two form sort of a knee-jerk, objectionist Commission superhero that opposes everything in its path under the pretense of a deeper, mysteriously undefinable ethos. The dynamic duo have even objected to holding AT&T accountable for ripping off taxpayer money earmarked for the poor.

With that as a backdrop, it was entertaining to see CNET push forth a bit of a puff piece helping O'Rielly portray himself as some sort of unfairly ostracized hero of the Commission, whose insights aren't being taken seriously:

"It takes time and effort to soldier on and make your arguments," he said..."I do the work you'd expect me to do. I read every item. I do my homework. And I make substantive suggestions. But I'm often shot down."

Of course it's actually O'Rielly that's doing the shooting, bravely voting no on nearly every single issue of the day. When AT&T was fined for throttling "unlimited" connections and lying about it, O'Rielly stood up for the little guy, bravely calling the FCC's behavior "Draconian" (Pai, in contrast, compared the FCC's behavior to Kafka). Still, O'Rielly lays the blame at the feet of Wheeler and company:

"O'Rielly and his Republican colleague, Ajit Pai, have opposed all the major Democrat-supported issues that have passed, in large part due to philosophical differences they have with their colleagues across the political aisles on these issues. But O'Rielly said what has truly frustrated him is what he sees as an unwillingness by the FCC leadership to find consensus on any issue.

Partisan patty cake at the Commission is certainly nothing new. Except as we've noted, most people on both sides of the aisle think Wheeler is actually doing a shockingly good job for a former industry lobbyist many expected little from. He's shaken off fifteen years of the status quo, and is actually doing something about the woeful state of broadband competition instead of paying politically-safe lip service to the idea. He also managed to implement real net neutrality protections, an idea that's supported by Democrats and Republicans alike.

It's repeatedly unclear to me how you can be a career obstructionist, then cry when policy and conversation moves on without you. Indeed, O'Rielly tells CNET he's just a hard working fellow who desperately wishes the there was "more receptivity to finding common ground." CNET responds by failing to ask O'Rielly a single difficult question regarding how he aligns this hallucinated persona with his actual anti-consumer and anti-Internet voting record.

Filed Under: broadband, consumer protection, fcc, michael o'rielly

Cable Industry Still Proudly Thinks Cord Cutting Is A Media-Manufactured Crisis

from the denial-is-not-just-a-river-in-Egypt dept

A few years ago, if you asked cable and broadcast executives if cord cutting was real, most of them would proudly declare that it was a complete and total phantom (like Yeti). The few that could admit to the trend would usually try to argue that the only people engaged in this kind of behavior were losers not worthy of their consideration when contemplating their business models. Of course data has emerged since suggesting that not only is cord cutting very real (albeit slow), the people doing it are affluent, educated, and right in cable's key future target demographic.

These days, most cable and broadcast executives, after slowly hemorrhaging basic cable subscribers for several years and watching broadcast TV ratings drop through the floor, will at least admit that cord cutting is real. But there's still a strong contingent among them that desperately wants to believe that cord cutting is a media-manufactured phenomenon and that their beautiful legacy cash cow will somehow live forever. The latest case in point comes via a Fortune article that explains "Why Cord Cutting Is a Myth" without actually doing anything of the sort:

"The way content is consumed is changing,” said Amy Banse, managing director of Comcast Ventures. “We’re all aware of that. But I personally believe, and also by looking at our own statistics, that the volume of press around cord cutting doesn’t quite match reality."

Again though, Banse doesn't offer any data to support the argument that cord cutting is a mass media hallucination. Factoring cable's failure to scale with new housing growth as the housing market recovered, telecom analyst Craig Moffett (who used to deny cord cutting) notes the pay TV business lost 1.4 million subscribers in the last year. The pay TV industry saw its first net subscriber loss during the first quarter of this year, and the industry is contracting at a 0.5% annual rate. This is before you factor in that many people aren't "cutting the cord" -- they're not signing up for traditional cable in the first place. And all of this is hitting cable and broadcast ratings hard. Comcast's recent earnings say the company lost 69,000 basic video subscribers last quarter and 3 million over the last six years.

These are measurable metrics -- some small, some not so small. All important, and none imagined.

Still, to hear the cable industry tell it, cord cutting is "over-reported":

"George Kliavkoff, president of Hearst Ventures, agreed, and said the topic is low-hanging fruit for the media: “Cord-cutting is a great ‘story,’” he said. “But I think it’s over-reported.” What’s more likely to gain sizable traction, he said, is cord “shaving,” where consumers simply move away from all-encompassing multichannel packages. “A la carte purchasing of channels—and not taking most of them—is a far more interesting area,” he said.

The second half of that argument could certainly be true. "Cord shaving" or "cord cheating" is also occurring at an increased rate as cable customers socked with bi-annual rate hikes look for any opportunity to cut their monthly bill. Eventually, these users will also likely be turning their gaze toward redundant cable voice services, forcing cable operators to replace that revenue in new and "creative" ways. This is all part of one conversation. And while yes, some media outlets do overhype cord cutting without nuance or context (as happens with all things), how the media explains what's happening is a distraction. The focus should be on how the cable and broadband industry is failing to adapt to internet video through its refusal to offer truly evolutionary products and pricing.

Some of this is semantics. Some cable execs simply don't like to call it "cord cutting," given there's still a cord -- it just happens to be broadband only. But whatever you call it, the answer to all of these problems has a single unified answer. With 2015's rise in new internet video options, cable's going to have to do the one thing it has spent a generation refusing to do: compete on price.

Filed Under: broadband, cable, cord cutting, denial, tv
Companies: comcast