FCC Signs Off on AT&T DirecTV Merger, And Early Indications Are The Conditions Are Hot Garbage

from the AT&T's-magic-math dept

Wed, Jul 22nd 2015 12:39pm — Karl Bode

While Comcast's failed merger attempt with Time Warner Cable received a well-deserved media and public beating, AT&T's almost-as-bad $49 billion acquisition of DirecTV has been able to largely fly under the radar, despite the fact that only the latter eliminates a direct pay TV competitor. With less public pressure from consumer outrage, the FCC and DOJ appear poised to approve AT&T's deal, and the FCC is circulating an order approving the deal among the agency's Commissioners. Approval could occur as soon as this week.

In a statement issued to the FCC website, FCC boss Tom Wheeler states he's pushing for several conditions on the deal he claims will "protect consumers, expand high-speed broadband availability, and increase competition." One of them involves restricting AT&T from using its fixed-line usage caps for anti-competitive advantage:

"In addition, the conditions will build on the Open Internet Order already in effect, addressing two merger-specific issues. First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections."

The problem? While AT&T's DSL users do face a 150 GB monthly usage cap (with $10 per 50 GB overage fees), AT&T's busy kicking these unwanted customers to the curb because they're too expensive to upgrade. On the other hand AT&T's U-Verse customers, the ones AT&T plans on keeping, don't face an enforced usage cap. As such, a condition preventing them from abusing this non-existent cap isn't much of a condition. Most of AT&T's controversial "zero rating" practices in regards to usage caps are happening on AT&T's wireless network, which the condition wouldn't apply to.

Wheeler's also promising that his conditions will force AT&T to deploy upgraded broadband services to more areas than ever before:

"If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection. This additional build-out is about 10 times the size of AT&T’s current fiber-to-the-premise deployment, increases the entire nation’s residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve.

The problem here is that AT&T's been manipulating its broadband deployment statistics for fifteen years or so to win regulatory favor. The company will take deployments already planned (or in some cases built), pretend these users are new deployments, then promise regulators it will engage in a broadband "expansion" if regulators only agree to "X" (deregulation, more subsidies, more tax breaks, merger approval, whatever). Nobody in DC has ever bothered to actually audit AT&T's endlessly shifting deployment projections, or even call them on the statistical slight of hand.

And AT&T appears to be doing that again here. With the FCC's help.

Back on April 21st, 2014 -- a month before the deal with DirecTV was even struck -- AT&T announced a shiny new PR campaign (designed to counter Google Fiber's buzz) proclaiming the company would be bringing fiber to "up to" 100 cities. These are cherry picked installs, mostly high-end developments, where install costs are already low because fiber's already in the ground. You might recall that AT&T then pouted and threatened to pull these limited upgrades if net neutrality rules were passed. When pressed by the FCC, AT&T backed down on the threat.

But in a highly-redacted June response to the FCC (pdf), AT&T states that the company is promising to deploy fiber broadband to a total 11.7 million homes (this includes the April 2014 plans) should the merger be approved, with only 2 million of this total being actual, new deployment. So only a fraction of this 12.5 million number Wheeler is using is "new" at all, and it's certainly nowhere near "10 times" the size of AT&T's current deployment. The tl:dr version is that AT&T's taking existing (and in some cases finished) deployments, pretending they're totally new deployments only made possible by the DirecTV merger, and the FCC's helping them.

The real irony is that AT&T's actually cutting fixed-line investment CAPEX so it can focus on more-profitable capped wireless, and in the process preparing to hang up on tens of millions of unwanted DSL users. This is going to leave cable with an even stronger monopoly than ever before across a huge swath of the country, and few people in the press, public or in government appear to have noticed or care. Instead, we get a mega merger bloated with AT&T's miracle math.

I think the majority FCC is ok with AT&T's merger because buying a satellite TV provider on the eve of the Internet TV revolution is basically business seppuku, ultimately made irrelevant by the rise of alternative options. But the elimination of a direct competitor still means higher rates in the short term, and there's an awful lot of actual fiber that $49 billion could help deploy. There's little to no hard consumer benefits here, and as usual AT&T lawyers are doing a bang up job manufacturing some out of very thin air (while filing two lawsuits against the FCC's net neutrality rules to ensure nobody can police their behavior after the merger conditions expire).

Note the FCC hasn't released the full details of the conditions, so hopefully there's more teeth here than Wheeler's original announcement suggests. But his willingness to buy into AT&T's magic, meandering math isn't a promising start.

Filed Under: broadband, conditions, fcc, satellite, tom wheeler, tv
Companies: at&t, directv

23 Comments

Quicken Loans Founder Dan Gilbert Follows Google Fiber's Lead, Brings $70 Gigabit Fiber To Detroit

Broadband

from the get-your-motor-running dept

Fri, Jul 17th 2015 2:10pm — Karl Bode

When Silicon Valley and New York City struggle to get incumbent ISPs to offer better service and faster speeds, you can only imagine the kind of broadband competition that exists in rust-belt cities like Detroit, Flint or Buffalo. But, following the lead of Google Fiber, Quicken Loans founder Dan Gilbert apparently hopes to do something about it. Gilbert's employed the help of a few fellow Quicken Loans employees to launch a new ISP by the name of Rocket that's going to start offering $70/month Gigabit service to a sizable chunk of Motor City.

So far, the company has received "submissions of interest" from roughly 80 businesses and 3,000 consumers, with plans to reach 12 miles of deployed fiber and 32 buildings by the end of the year. It's a small beach head in a vast underserved telecom hellscape, but it's the latest example of how communities have finally reached the breaking point when it comes to waiting for AT&T, Comcast, Verizon, and Time Warner Cable to give a damn about the territories they service. Rocket hopes to ease into the broadband market thanks to Gilbert's existing ties to downtown real estate ventures, leading to more efficient installs:

"One unique advantage is its ties to Rock Ventures, Gilbert's investment firm which funded Rocket Fiber and also owns more than 75 properties totaling more than 12 million square feet of commercial real estate in downtown Detroit. Foster says these properties and the companies within them are free to pursue internet services from any provider, and that Rocket Fiber has never assumed exclusivity with any of them."

That's good, since the FCC banned such exclusive MDU arrangements (pdf) back in 2007, even though enforcement remains a mixed bag. Like Google Fiber, Sonic.net and municipal operators, Rocket is well aware that there's a growing contingent of customers fed up with the nation's utterly abysmal incumbent ISP customer service. That's of course particularly true of Detroit's entrenched monopoly provider, Comcast:

Nationwide, ISPs are widely regarded as the worst-performing organizations in customer service. Rocket Fiber aims to set itself apart by being the rare local ISP that can focus all of its resources on the one region it serves..."There's a whole host of things that people are disenfranchised about [with] the current providers that, even if they offer exactly the same product at exactly the same price point, we still feel that they will still choose us because there are still intrinsic values other than just the dollar value that you get," Foster says."

Also like Google Fiber, the actual deployment footprint is relatively small. There are still huge swaths of Detroit that nobody is going to want to wire, and fewer still are going to want to use tax dollars to help upgrade. It also probably goes without saying the city, while greatly improved, has problems that take priority over broadband. Still, alongside Google Fiber and municipal network builds, it's another example of how the best hope of breaking down the traditional telecom duopoly -- and returning to an age when customer service was a priority -- is happening piecemeal on the local level.

Filed Under: broadband, competition, dan gilbert, detroit, gigabit
Companies: quicken

12 Comments

Comcast's Answer To Google Fiber, A Service That's Twice As Fast, But Four Times As Expensive

Broadband

from the fine-print dept

Tue, Jul 14th 2015 6:25am — Karl Bode

Back in early April Comcast unveiled its response to Google Fiber: a new two gigabit service the company promised would be made available to eighteen million customers before the end of the year. For the next four months the company made a lot of PR references to this ultra fast tier, but despite an April promise the product was launching "soon," there's five months left in the year and nobody can actually sign up for it. Comcast, now facing Google Fiber, indie ISP and municipal broadband pressure in a growing number of markets, has also consistently refused to state how much this new service would cost.

With the new service's website going live, it's now pretty clear why. While Google Fiber will offer users a symmetrical gigabit connection for $70 a month (with a waived $300 install fee if you sign a one year contract), Comcast is offering users twice the speed with this new "Gigabit Pro" service -- but at around four times the cost. As the fine print on the website indicates, Comcast also just can't help itself when it comes to caveats:

So in addition to the double gigabit service costing users $300 a month, Comcast's attempt at competition comes with a $500 installation fee and a $500 activation fee. Users also face a more than $1000 early termination fee should they leave before the two-year contract is up. That's of course before any other mystery fees Comcast adds below the line. You'll also need to wait six to eight weeks after ordering to actually get your service, which thanks to the usual "up to" language may or may not actually reach advertised speeds.

On the plus side, while Comcast continues to experiment with usage-based pricing this tier won't be capped, and it looks like they're offering a $159 promo price for a limited time (though only in some markets and only if users agree to a three year contract). And at least Comcast is building out its network, something you'll recall wasn't supposed to be possible thanks to the horrible, investment-stifling menace of ISP Title II reclassification and new net neutrality rules. That's assuming Comcast's plan isn't just "fiber to the press release," something that's not entirely clear since nobody has been able to sign up for this service yet.

Still, $1000 in buried fees right out of the gate is a very Comcast-esque way of competing when companies like Google Fiber, Sonic.net and and Tucows/Ting are trying to go out of their way to eliminate obnoxious hidden fees as a user pain point. And in places like Atlanta, where Comcast is experimenting with usage caps, Comcast is making avoiding said caps only possible if you're willing to pay an extreme premium for a service with speeds few people will ever need. In short, Comcast is offering two gigabit service simply to say that they do; service pricing on Comcast tiers that people actually buy will meanwhile continue their slow march skyward.

Filed Under: broadband, competition, google fiber, pricing
Companies: comcast

45 Comments

Google Fiber Has Accomplished More For Broadband Than Our National Broadband Plan Ever Did

Broadband

from the the-best-laid-plans dept

Thu, Jul 9th 2015 6:23am — Karl Bode

Back in 2010 under the leadership of Julius Genachowski, the FCC released a "national broadband plan." While it did help subsidize some middle and last mile rural deployment and directed the FCC to actually start using real world data to make policy decisions (ingenious!), it somehow managed to float like a butterfly over the U.S. broadband industry's biggest and most glaring problem: the lack of broadband competition. Even the agency's $300 million broadband coverage map birthed by the plan couldn't be bothered to actually list broadband service pricing, lest site visitors conclude that they're paying too much for too little.

As the years ticked by, it became increasingly clear many of the plan's action items were little more than political show ponies, paying empty lip service to issues like the digital divide, with ankle-high "goals" the government knew full well would have been achieved without government lifting a finger. Even the plan's architect Blair Levin has acknowledged the FCC was quick to offer a "one-note narrative of self-praise," instead of disrupting the status quo. Basically, it took 36 public workshops, 9 field hearings, 31 public notices and 376 pages to create the illusion the government was doing something about the nation's rotten duopoly problem.

Hindsight now has many people realizing that a search giant with bottomless pockets probably did more for broadband in the last five years than our massive national broadband plan ever did. Google Fiber's deployment of symmetrical gigabit service for $70 a month has helped drive a new national conversation about broadband competition. It has also driven a number of previously sleepy, uncompetitive ISPs to drive upgrades users wouldn't have seen otherwise. And as MIT Technology Review notes, it's kind of miraculous that Google Fiber happened at all:

"The unnerving thing is that so much of the present and future of broadband has come down to the whims of a single company, and a company that, in many ways, doesn’t look or act much like most American firms. If Google didn’t have such a dominant position in search and online advertising, giving it the resources to make big investments without any requirement of immediate return, Google Fiber wouldn’t have happened. And if Google’s leadership weren’t willing to make big long-term investments in projects outside the core business, or if the company didn’t have a dual-share structure that preserved its founders’ power and somewhat insulated its executives from Wall Street pressure, gigabit connections would more than likely be a fantasy in the United States today."

Of course, while Google Fiber has received endless media adoration, the actual hard deployment impact is currently tiny, with only a few thousand users in Kansas City and Provo actually currently getting service (though Austin, Salt Lake City, Nashville, Atlanta, Charlotte and Raleigh/Durham builds are underway). A lot of the incumbent ISP response to Google Fiber has similarly been rather theatrical in nature ("fiber to the press release"), with carriers offering gigabit speeds to a few high-end housing developments and then pretending they're revolutionizing the broadband space, while millions of consumers remain stuck on sub 6 Mbps, $60 DSL lines with 150 GB monthly usage caps.

So make no mistake: the lack of competition is still a huge problem.

But Google Fiber's most important contribution has been two-fold. One, as Google intended, Google Fiber placed a huge, national spotlight on the nation's broadband market failures. Cities clamored on top of one another to be the next in line for service, every paper in the nation highlighting simultanesouly that the service they received from the regional duopoly simply wasn't very good, and that we could do something about it. Two, Google Fiber also brought the public's attention to an issue that most had spent the last decade ignoring: the fact that ISPs have spent the last fifteen years gleefully writing horrible protectionist state laws designed to protect their regional fiefdoms from the competition bogeyman.

Contrary to what some will say, the botched national broadband plan was not necessarily the fault of "government," just shitty government. Former FCC boss Genachowski was a professional fence sitter; so afraid of making tough policy decisions he'd make no decision at all, often dressing that inaction up as a mammoth accomplishment. It's easily arguable that current FCC boss Tom Wheeler has accomplished more for broadband in a little over a year in office (net neutrality and Title II reclassification, municipal broadband, and a notable crackdown on ISP fraud) than the last three FCC bosses combined.

But the real lesson from the last five years is that it was a collaboration between sensible, balanced regulation, risk-taking private industry and grass roots citizen activism that finally pushed the needle on broadband after fifteen years of dysfunction, which is how it's supposed to work when you're not (quite intentionally) distracted by a nasty case of partisan nitwit disease. Wheeler's building a basic framework to protect consumers in the absence of vibrant competition, Google Fiber's applying some much needed competition to apathetic incumbents, and municipal broadband operations are trying to shore up coverage and competition gaps in markets the incumbent providers couldn't care less about.

That seems notably more constructive than our broadband policies of the fifteen years prior, which vacillated between devising wimpy, elaborate plans that accomplished little to nothing, willfully pretending the broadband market wasn't broken, and proudly declaring that if we just left AT&T, Comcast and Verizon alone -- they'd collectively build us a magic free-market broadband Utopia powered by rainbows and puppy love.

Filed Under: broadband, competition, fcc, fiber, national broadband plan
Companies: google

40 Comments

Sprint Tries To 'Compete' By Throttling All Video To 600 Kbps, Then Talking Some Shit On Twitter

Wireless

from the when-in-doubt,-call-bullshit dept

Mon, Jul 6th 2015 2:42pm — Karl Bode

Sprint was the only one of the big four carriers to clearly support Title II and full net neutrality rules, but since the rules' passage the company's behavior has been a little bit strange. Last week, Sprint announced a new "All In" promotion that offers new users unlimited text, voice and data for $60 a month, plus a $20 device lease fee. The plan was supposed to be the company's game changing assault on current industry darling T-Mobile, but Sprint curiously included a small caveat in the fine print of the program; absolutely all video going over the Sprint network would be throttled to 600 kbps regardless of network congestion:

"To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network. Streaming video speeds will be limited to 600Kbps at all times, which may impact quality. Sprint may terminate service if off-network roaming usage in a month exceeds: (1) 800 min. or a majority of min.; or (2) 100MB or a majority of KB."

Users quickly made it clear that they weren't interested in an "unlimited" data plan with such limits, forcing Sprint CEO Marcelo Claure -- who claimed he was asleep in Tokyo during all the ruckus -- to reverse course and remove the 600 kbps limit. This flub came after the company's CEO had been making it perfectly clear Sprint is planning to kill unlimited data entirely, one of the few things people actually like about Sprint. In short, Sprint's trying very hard lately to act like the more-disruptive T-Mobile, but as the uncool "dad jeans" of the wireless sector, isn't quite sure how to go about it.

With the company's promo arriving with a thud, Sprint apparently tried to mimic T-Mobile in another way: mirror the trash-talking of T-Mobile's brash CEO John Legere. Sprint's Claure quickly decided the best course of action would be to head to Twitter and insist that T-Mobile's recent "uncarrier" efforts (specifically its handset early-upgrade program) were little more than finely crafted bullshit:

@JohnLegere I am so tired of your Uncarrier bullshit when you are worse than the other two carriers together. Your cheap misleading lease
— MarceloClaure (@marceloclaure) July 2, 2015

.@marceloclaure you mad bro?
— John Legere (@JohnLegere) July 2, 2015

The problem is that T-Mobile's amusing uncarrier efforts (which have included eliminating device subsidies, hidden fees, and other industry pain points) have been working. The magenta-hued carrier has been adding more new subscribers per quarter than any other U.S. operator, feeding a desperate consumer desire for better deals and less fine print. Sprint, meanwhile, has labored in last place in most network performance and customer satisfaction studies. As such, offering up some bullshit, then deriding other companies for engaging in bullshit, probably isn't the best way to reverse those lagging fortunes.

Filed Under: competition, john legere, marcelo claure, mobile, throttling, video, wireless
Companies: sprint, t-mobile

13 Comments

Seattle City Council Member Urges Grass Roots Broadband Revolution After Ten Years Of Failing To Fix Broken Broadband Duopoly

Broadband

from the don't-build-it-and-they-won't-come dept

Wed, Jul 1st 2015 3:48pm — Karl Bode

For most of the last decade Seattle, like many U.S. cities, has been painfully unhappy with its broadband options. If they're "lucky," Seattle residents have the choice of apathetic telco CenturyLink (formerly Qwest), or everybody's favorite dysfunction monolith, Comcast. CenturyLink historically can barely be bothered to upgrade its aging DSL networks, resulting in most of its users paying an arm and a leg for 3 to 6 Mbps DSL (which was quite cutting edge in 2003). And while Comcast has done a relatively better job upgrading its networks, their customer service documentably qualifies for inclusion as a new circle of hell.

So Seattle has, since 2005 and before, pondered whether it should get into the broadband business itself. The city has conducted study after study on building a citywide fiber ring to feed municipal operations and residential and business service, yet these efforts consistently die under the weight of bureaucratic incompetence and Comcast and CenturyLink pressure. At one point, Seattle even paid a company by the name of Gigabit Squared $55,000 in exchange for absolutely nothing of note (Gigabit Squared magically evaporated after also taking money from Chicago in exchange for doing nothing).

So basically year after year slips by, and each new Seattle politician publicly laments the horrible state of broadband competition to score political points, but, like most cities, nothing gets fixed. That's in large part courtesy of incumbent ISP lobbyists, who work tirelessly to make sure city politicians don't disrupt the profitable and uncompetitive status quo. Last year, Seattle Mayor Ed Murray (the money he received from Comcast was a hot topic leading up to his election) proudly proclaimed that he would be the one to fix Seattle's broadband woes:"My office is actively engaged in finding a path forward. We certainly need some short term options to bring a functional internet to neighborhoods that have almost no connectivity, and we’re looking at ways to bring service to those neighborhoods as soon as possible. We are looking at a number of policy changes and their impacts that could foster greater competition right now, like testing small neighborhood pilot programs, building off existing fiber, or increasing WiFi access."
Fast forward to last month, and Murray's office has released a viability study that cost the city $180,000 and took seven months to complete. It basically states that the effort would cost $500 to $600 million and isn't a viable project to take on alone. A memo by city budget director Ben Noble states the debt would "significantly constrain the debt capacity" for a number of critical city projects and hurt the city's credit rating. The study examined a variety of options, from partnering with the city's utility to using property taxes to fund a $45 per home gigabit service. The study concluded that none of these options were viable.

And if the math doesn't work it doesn't work, but remember the city has been throwing money (and time) for the last decade at exploring this theoretical network, and so far they've got little to show for it. And as city sports stadiums show (it should be noted CenturyLink field cost $430 million a decade ago), cities can build fairly amazing things when efforts take priority. The city did streamline regulations governing cabinet placement and city franchises, something Seattle CTO Michael Mattmiller insists is improving the city's broadband without pursuing the municipal option:

"To see that reducing regulatory barriers brought not one but two providers to the market who could start building fiber to the home has been very encouraging,” Mattmiller said. “I’ve seen the CenturyLink trucks around the city and am in talks with Wave about how they are approaching their build-out. It’s very encouraging that we are taking the right regulatory approach that still protects the city but allows providers to invest."

Except Wave's build out is condo-focused and modest, and CenturyLink is one of many ISPs that have responded to Google Fiber with what I affectionately call "fiber to the press release," or the practice of offering gigabit fiber to a few high-end developments, then pretending it's conducting a much broader rollout than it is. This usually fools the press and makes politicians look good, but the ruse often gets exposed when people actually try to sign up for service. CenturyLink's CEO recently had to apologize to Seattle residents for overstating gigabit service availability.

And while streamlining franchise agreements and eliminating bureaucratic burdens helps (and is something Google Fiber has been preaching), companies still wind up cherry picking only the most profitable neighborhoods. They're also not incentivized to upgrade uniformly or compete on price if there's no competitive pressure to do so. Most broadband investors and execs hate the slow returns from network builds, so the focus for years has been on aggressively raising rates and cutting corners to ensure improved quarterly returns.

That's why Seattle councilmember Kshama Sawant took to her blog recently urging Seattle residents to forge a grass roots movement to find some way to make Seattle municipal broadband happen:

"Seattle would be the largest city in the country to implement municipal broadband. We should expect Comcast and CenturyLink to go to every length to keep their unchallenged duopoly in Seattle. Countering them will require a mass citywide movement, much like the one we needed to win $15/hour last year by successfully overcoming the financial and political clout of fast food and retail giants...It is up to us working people to build a strong enough grassroots movement for municipal broadband to force elected officials to put Seattle’s need for universal, affordable high speed connectivity over Comcast and CenturyLink’s insatiable drive for profits."

Which is great, but if Seattle as a whole isn't willing to pay for service (and the tax-loathing public is easily swayed by ISP lobbyist and astroturfer vilification of such efforts), then the city's going to remain locked in its Kafka-esque duopoly logjam in perpetuity. At least unless it can find a deep-pocketed and marginally altruistic private partner to eat much of the bill, which seems to be what Mayor Murray and friends are placing their hopes on. But if cities can build multi-billion dollar churches to the NFL gods, surely a city as jam-packed with creative minds as Seattle can find some way to fund a giant kick in the incumbent ISPs' collective ass.

Filed Under: broadband, competition, grass roots, municipal broadband, seattle
Companies: centurylink, comcast

20 Comments

Audit Reveals Verizon Tried To Corner NYC Broadband Market By Striking Exclusive Landlord Deals

Broadband

from the you-knew-I-was-a-snake-when-you-picked-me-up dept

Wed, Jul 1st 2015 10:38am — Karl Bode

As we recently noted, New York City only just woke up to the fact that the lucrative 2008 Verizon franchise deal the city thought would bring fiber broadband to 100% of all five boroughs, has only resulted in Verizon cherry picking about half of the city's residents. Of course as we pointed out, if the city had actually bothered to read the closed-door agreement struck with former Mayor Mike Bloomberg (or listened to a few local reporters at the time), leaders could have noticed at any time that it contains oodles of loopholes allowing Verizon to wiggle over, under and around most of the obligations contained therein.

While most people know by now that taking subsidies and tax breaks for fiber that never gets delivered is Verizon's MO in Pennsylvania and New Jersey (ok, well everywhere), the city only just appears to be realizing the scope of Verizon's shenanigans. In addition to discovering that Verizon failed its build out obligations, analysis of the NYC Department of Information Technology and Telecommunications' audit (pdf) indicates that Verizon also tried to cajole landlords into exclusivity deals that may violate FCC rules:

"[T]wo of the interviewees’ statements supported the first property manager’s statement that Verizon was not completing NSIs because they wanted exclusive agreements for certain buildings before completion of the NSI," according to the audit report. "For example, one property manager from a well-known firm complained that Verizon would not complete the NSI at a building on Sutton Place unless 100 percent of the apartment dwellers committed to Verizon FiOS. This property manager also said only two of the eleven multiple dwelling properties he managed had Verizon FiOS and that installations took anywhere from six months to two years."

So yeah, in addition to pretending that homes "passed" with fiber were "served," Verizon actually refused to wire a lot of properties unless everybody in the building could be forced to only exclusively use Verizon services. This is something the FCC banned in a 2007 order (pdf) that's subsequently been held up during court challenges by cable providers. Verizon has long denied that it does this; in fact the telco has consistently tried to claim that landlords are solely to blame for the company's uneven deployment. This go-round, Verizon is blaming the city's findings on "miscommunication" (when it hasn't tried to dismiss the findings entirely as the unsubstantiated rabble rousing of labor unions).

But that's not all. In the week after the city's audit was made public, a number of competitors have come forward to complain that Verizon's been blocking access to key city infrastructure as well. In other words, Verizon's refusing to serve millions of people, but making it impossible for anyone else to do so either. If you've followed the municipal broadband debate, that's effectively the same logic the mega-ISPs have displayed on a national level, and this kind of behavior by incumbent ISPs (especially if you watched the ILEC/CLEC wars of the late 90s and early aughts) is a major contributor to the nation's utterly mediocre rankings in most broadband metrics.

Having watched telco lawyers get away with this stuff for the better part of fifteen years, it's clear to me few municipal leaders are actually reading the franchise agreements that they sign, and fewer still seem familiar with the laundry list of childhood fables warning them about just these kinds of business transactions.

Filed Under: broadband, competition, exclusive deals, landlords, nyc
Companies: verizon

EU Moves To Create Internet Fast Lanes, Pretends It's Net Neutrality By Redefining Basic Words

Broadband

from the if-we-just-call-it-net-neutrality,-maybe-no-one-will-notice dept

Tue, Jun 30th 2015 9:31am — Mike Masnick

In 2014, it really looked like Europe was moving towards strong net neutrality, while the US was going to allow for special fast lanes on the internet. In 2015... everything has gone the other way. The US passed real net neutrality rules, while Europe has not only decided to kill net neutrality, but has done so in a way where they pretend that they're actually supporting net neutrality.

In some way, this isn't a surprise. EU Digital Commissioner Gunther Oettinger recently mocked net neutrality and its supporters, saying they had turned it into a "Taliban-like" issue. Then a month ago, rumors started to fly that the weekly "trialogue" meetings between the EU Commission, the Council of the EU and the EU Parliament was looking to ditch net neutrality altogether. Instead, it appears that the final solution was actually to redefine net neutrality to pretend they were offering it, while really killing it. And, as a consolation prize, they're killing off roaming charges around Europe (which can be pretty extreme). But that is little consolation for the fact that they're actually destroying net neutrality in the process.

The little trick being pulled by politicians who apparently think the public is too stupid to understand this is to redefine net neutrality. First, they claim that the "open internet" is really important and they won't allow paid prioritization. This part all sounds good:

The rules enshrine the principle of net neutrality into EU law: no blocking or throttling of online content, applications and services. It means that there will be truly common EU-wide Internet rules, contributing to a single market and reversing current fragmentation.
Every European must be able to have access to the open Internet and all content and service providers must be able to provide their services via a high-quality open Internet.
All traffic will be treated equally. This means, for example, that there can be no paid prioritisation of traffic in the Internet access service. At the same time, equal treatment allows reasonable day-to-day traffic management according to justified technical requirements, and which must be independent of the origin or destination of the traffic.

Sounds good, right? But there's a pretty big catch. Those rules and the "open internet" don't cover what most people think of as the internet. Instead, it's been boxed in. Because the deal also creates a made up new categorization known as "specialized services" where such prioritization will be allowed.

What are specialised services (innovative services or services other than Internet access services)?

The new EU net neutrality rules guarantee the open Internet and enable the provision of specialised or innovative services on condition that they do not harm the open Internet access. These are services like IPTV, high-definition videoconferencing or healthcare services like telesurgery. They use the Internet protocol and the same access network but require a significant improvement in quality or the possibility to guarantee some technical requirements to their end-users that cannot be ensured in the best-effort open Internet. The possibility to provide innovative services with enhanced quality of service is crucial for European start-ups and will boost online innovation in Europe. However, such services must not be a sold as substitute for the open Internet access, they come on top of it.

Got it? The "regular" internet has no fast lanes. But... right over here, we have the "specialized services" part of the internet which, you know, kinda looks like a fast lane. Because it is. So, now, basically, in Europe you can buy your way into the fast lane by claiming your services are "specialized" and watching as the regular internet pokes along at slower speeds.

The agreement does a lot of handwaving to pretend this doesn't destroy net neutrality, but the more handwaving they do, the more obvious it is that the politicians here know exactly what they're doing:

By allowing the provision of innovative services, are we not promoting a two-tier Internet?

No. Every European must be able to have access to the open Internet and all content and service providers will be able to provide their services via a high-quality open Internet. But more and more innovative services require a certain transmission quality in order to work properly, such as telemedicine or automated driving. These and other services that can emerge in the future can be developed as long as they do not harm the availability and the quality of the open Internet.

Therefore it is important to have future proof rules which, while fully safeguarding the open Internet, allow market operators to provide services with specific quality requirements in order to provide them in safe manner. It is not a question of fast lanes and slow lanes - as paid prioritisation is not allowed, but of making sure that all needs are served, that all opportunities can be seized and that no one is forced to pay for a service that is not needed.

Oh, and of course, the new rules allow zero rating, which is the sneaky trick by which telcos use data caps to backdoor in preferential treatment to those willing to pay, while pretending this is some sort of benefit to consumers. The EU sees no problem with this, despite the fact that it enables large internet companies to squeeze out startups and smaller players.

What is zero rating?

Zero rating, also called sponsored connectivity, is a commercial practice used by some providers of Internet access, especially mobile operators, not to count the data volume of particular applications or services against the user's limited monthly data volume.

Zero rating does not block competing content and can promote a wider variety of offers for price-sensitive users, give them interesting deals, and encourage them to use digital services. But we have to make sure that commercial practices benefit users and do not in practice lead to situations where end-users' choice is significantly reduced. Regulatory authorities will therefore have to monitor and ensure compliance with the rules.

Of course, Digital Commissioner Oettinger inadvertently appeared to confirm that this is the end of net neutrality with his poorly worded tweet on the subject, in which he notes that this is "the end of roaming and net neutrality."

Obviously, he only meant "the end of" to apply to roaming, but having it cover net neutrality as well would be a lot more accurate. Either way, while Oettinger once compared it to a Taliban-like issue, his response has been more on the Orwellian side of things. So long as they redefine the words, the government hopes no one will notice what they actually did. It's the public officials' way of thinking that they're clever and that the public is stupid. That seems like an unwise assumption.

Filed Under: broadband, eu, europe, fast lanes, gunther oettinger, net neutrality, roaming, specialized services, zero rating

71 Comments

FCC Commissioner Legally Tasked With Bringing Broadband To All Americans Doesn't Think Broadband's All That Important

Broadband

from the you're-really-not-helping dept

Tue, Jun 30th 2015 6:23am — Karl Bode

Nobody could ever accuse FCC Commissioner Mike O'Rielly of being a consumer advocate. As one of five agency commissioners, O'Rielly (alongside former Verizon lawyer Ajit Pai) has voted down every single meaningful FCC effort to aid consumers and improve broadband market competition. Whether it's trying to protect net neutrality, or the FCC's attempt to stop ISPs from writing obnoxious protectionist state law, O'Rielly's sole function appears to be to oppose pretty much everything that could possibly help the American public, under the ingenious pretense of helping the American public.

More recently, the FCC has been considering revamping the $1.7 billion Lifeline program, which was created by the Reagan administration in 1985 and expanded by Bush in 2005 to help bring phone services to low-income Americans. Despite being a Republican proposal, it's frequently mocked (even by reporters) as being part of the "Obamaphone" program thanks to the nation's ongoing case of partisan nitwit disease. The FCC's initiative involves letting the program's 1.2 million participants use some of the whopping $9.25 monthly discount (per household) they receive each month on broadband instead of just voice. Really, it's not all that controversial, especially in the context of bigger budget government issues.

Yet while the contextually-more immense subject of military and intelligence funding is apparently immune to this type of criticism, the very notion of using taxpayer funds to aid the less fortunate fostered the usual amount of hand-wringing and assorted hysteria. Not all of it was without justification given the FCC's utterly shitty history of policing USF fraud. But after a fifteen year nap, more consumer-minded FCC boss Tom Wheeler has been cracking down on fraud, even if some of the fines being levied are relatively pathetic. Still, a big part of this new proposal involves cracking down on fraud further.

But even if you oppose subsidies to the poor (which I don't agree with but can understand), one still needs to answer the question of how we improve broadband competition, penetration, and deployment to the estimated 55 million Americans without broadband and the countless others stuck in uncompetitive markets. To illustrate the importance of this conversation, Wheeler several times has tried to argue that we're reaching the point where broadband needs to be thought of as a basic human right. This isn't that new or controversial either, really. Finland declared broadband a human right five years ago (and you'll note they lead many broadband performance metrics). The UN declared broadband a human right in 2011.

O'Rielly apparently takes deep offense at the use of such terminology:

"It is important to note that Internet access is not a necessity in the day-to-day lives of Americans and doesn’t even come close to the threshold to be considered a basic human right," he said. "People can and do live without Internet access, and many lead very successful lives."

And while that's not necessarily wrong (broadband provides no phytonutrients or Omega-3 fatty acids, after all), broadband is increasingly a vital tool to connect people to health care, employment data, government services and everything else under the sun, making it pretty god-damned important. Whether broadband should be thought of as a necessity, utility and luxury has always caused endless, idiotic hyperbolic debate in the telecom sector. Why? Because if you consider broadband essential, you then have to then reconcile the fact that we've done a horrible job at trying to expand and improve it, whether that's through incentives, public/private partnership or policies that encourage competition (all of which O'Rielly opposes).

So, as somebody that just wants the miraculous U.S. broadband free market to remain as is (expensive, slow, generally kind of shitty) to help shore up some inflexible and unrealistic political beliefs, O'Rielly's quick to declare the idea of broadband as a human right "demeaning":

"It is even more ludicrous to compare Internet access to a basic human right," said O'Rielly. "In fact, it is quite demeaning to do so in my opinion. Human rights are standards of behavior that are inherent in every human being. They are the core principles underpinning human interaction in society. These include liberty, due process or justice, and freedom of religious beliefs. I find little sympathy with efforts to try to equate Internet access with these higher, fundamental concepts."

And that's great and all, but O'Rielly's not sitting on the Supreme Court or teaching a Constitutional ethics class. He's employed by an agency that has, as one of its Congressionally-mandated goals, the responsibility to "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans." That's something we've failed at by any measure (unless you're blinded by politics, employed by an ISP or paid by an ISP to look the other way). And again, if you're going to oppose subsidy programs like Lifeline, you at least need to support or recommend policies that can help drive more competition and services to areas with a low rate of return on the ISPs' investment.

Except O'Rielly's done none of that. What he's done is sit on his hands, opposing essentially every attempt to shore up broadband connectivity that shows up on the docket. He's voted against raising the definition of broadband to 25 Mbps. He's voted against stopping giant ISPs from writing state laws that protect regional duopolies. He's even voted against fining AT&T for blatantly lying to its customers. O'Rielly's MO is to shut down every proposal that comes down the pike (including many that can help consumers), then proudly pat himself on the back for being a hero of the American public. That suggests he's probably the very last person we should be asking when it comes to determining what technology is or isn't absolutely necessary.

Filed Under: broadband, fcc, human rights, mike o'rielly

37 Comments

Charter Hires Leading Net Neutrality Advocate To Write Its Net Neutrality Commitments, Promises To Go Further Than FCC Rules

Broadband

from the who-are-you-and-what-have-you-done-with-the-cable-company? dept

Thu, Jun 25th 2015 1:36pm — Karl Bode

By and large, the mega-ISP version of net neutrality has unsurprisingly been a far cry from the consumer and small business definition of net neutrality. At the moment, most ISPs argue that net neutrality only means they won't throttle or outright block competing content. It's this vague, incomplete definition (in that it doesn't cover issues like usage caps, interconnection or zero rating) the incumbent carriers have used when they've told regulators they "promise to adhere to net neutrality" if the latest merger-du-jour is allowed to go through. That's why, when Comcast promised it would adhere to "net neutrality" if it was allowed to buy NBC (and more recently Time Warner Cable), it meant -- to use a highly-scientific term -- jack shit.

So it's interesting to see Charter Communications -- which is trying to gobble up Time Warner Cable after Comcast's failed merger attempt -- suddenly promising to adhere to real net neutrality to get their deal done. The company is apparently dedicated enough to the idea that they've hired leading net neutrality and consumer advocate Marvin Ammori to help hash out a meaningful commitment that would appeal to a more consumer-focused FCC. Ammori, if you're unaware, was basically the key player in making sure the FCC passed good rules instead of the original terrible rules.

According to a piece by Ammori over at Wired, he actually wound up writing Charter's commitment:

"Charter hired me—which, to be honest, took some humility on its part since I have helped lead public campaigns against cable companies like Charter—to advise it in crafting its commitment to network neutrality. After our negotiation, I can say Charter is offering the strongest network neutrality commitments ever offered—in any merger or, to my knowledge, in any nation. In fact, in the end, I personally wrote the commitments."

That in and of itself is pretty impressive; I've covered the broadband industry for the better part of a lifetime, and the vast, vast majority of ISP merger conditions are promises that are utterly, mind-bendingly meaningless. They're almost always fluff and nonsense, political show ponies written by ISP lawyers to sound good to the clueless, even if they accomplish less than nothing. So for a cable company to bring on board a fierce neutrality critic to pen their commitment to neutrality is unprecedented. What's more, while the FCC has so far turned a blind eye to more clever types of neutrality violations (like usage caps and zero rating, pretty much ground zero of the current neutrality debate), Marvin managed to get those included in Charter's commitment as well:

"Since zero rating favors some sites over others based on the broadband provider’s preferences (not the users’), my allies and I urged the FCC to ban zero rating in all forms, but the FCC didn’t go that far. Charter necessarily will. In fact, it will commit to no data cap at all–and no usage-based billing–therefore it will be unable to exempt any applications from those practices."

That Charter -- a company that's flirted with usage caps on and off for years -- has agreed to avoid not only zero rating but usage caps entirely is a pretty big deal. Most cable operators are aggressively eyeing usage caps to jack up consumer broadband bills, well aware that inevitably users will chose to cut the TV and cable VoIP cord in exchange for over the top data services. Though only catch here, as Ammori notes, is that the restrictions only apply to Charter for a three year span, after which (especially if the FCC's neutrality rules are killed by the courts) all gloves are off and the fight begins anew. It's also important to remember that while Charter's busy making these promises, it's actively engaged in suing the FCC to destroy the net neutrality rules as a member in the NCTA.

Still, that Charter's willing to go this far is night and day from Comcast's merger approach, which was to dazzle everyone with an endless parade of utter bullshit and hope that nobody was smart enough to see truth, buried as it was under a junk yard of meaningless promises.

Filed Under: commitments, conditions, data caps, marvin ammori, merger, net neutrality, open internet, zero rating
Companies: charter communications, time warner cable

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13:40	The First Net Neutrality Complaint Has Been Filed, And It's Stupid (But Important) (8)
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15:51	FCC Gives Cable Industry Just Enough Rope To Hang Itself (9)
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11:36	Reporting Net Neutrality Violations Is Now A Snap... Actually Identifying Them Not So Much (10)
Thursday
14:38	Appeals Court Rejects ISP Stay Of Neutrality Rules, Which Officially Go Live Tomorrow (9)
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10:38	FCC Commissioner Ajit Pai Just Loves Net Neutrality Rulemaking Transparency, Except When It's His Turn To Be Transparent (10)
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04:25	Dish Eyes T-Mobile Takeover, And That Could Be A Very Good Thing For Wireless Competition (12)
Thursday
08:21	AT&T Might Agree To Adhere To Neutrality Rules To Seal Its $49 Billion DirecTV Purchase, But Probably Not (20)
Wednesday
06:22	As Merger Mania Rises, Cable And Broadband Customer Satisfaction Worse Than Ever (21)
Tuesday
06:07	Comcast Was So Incredibly Full Of Crap During Its Merger Sales Pitch, The Government Is Considering Additional Punishment (22)
Monday
09:59	AT&T: Broadband Usage Caps Are Awesome, And Preventing Us From Abusing Them Is A Horrible Injustice (10)
Friday
06:19	Google Backs Off Zero Rating In India After Facebook Takes A Global Public Relations Beating (22)
Thursday
06:15	Net Neutrality On The Ropes In Europe As Some EU Members Wimp Out On Real Rules (6)
Tuesday
14:47	Charter Acquires Time Warner Cable, Promises It Will Suck Less Than Blocked Comcast Merger (25)
10:42	AT&T Argues Net Neutrality Violates Its First Amendment Rights (28)
Friday
12:51	FCC Signals It's No Longer Going To Nap On Broadband Privacy Issues (17)
Thursday
12:44	Facebook's Plan To Be The Compuserve Of Developing Nations Faces Mounting Worldwide Criticism (28)
06:04	Net Neutrality Rules Are Already Forcing Companies To Play Fair, And The Giant ISPs Absolutely Hate It (17)
Wednesday
06:13	Before Freaking Out About The FCC's New Neutrality Rules, Perhaps You Could Be Bothered To Actually Read Them (25)
Tuesday
15:49	North Carolina's Broadband Policy: Wasting Tax Dollars Pretending To Care About Wasting Tax Dollars (7)
07:58	AT&T Stops Pouting Over Net Neutrality, Backs Off Network Investment 'Freeze' That Never Was (7)
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15:49	Imagine If Everything Were Priced Like Cable Service (36)
08:01	European Mobile Networks Plan To Block Ads, Not For Your Safety, But To Mess With Google (68)
Friday
06:16	Mozilla: If Facebook Really Wants To Help Developing Nations, It Should Ignore Zero Rating And Fund Real Internet Access (20)

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