Bill To Restore Net Neutrality Moves Forward, And The Public Is Still Pissed

from the the-will-of-the-people dept

A new bill that would fully restore the FCC's 2015 net neutrality rules took a major step forward this week.

Earlier this month Democrats introduced the Save The Internet Act, a three page bill that would do one thing: restore the 2015 net neutrality rules stripped away by Ajit Pai, as well as restore the FCC's authority over broadband providers. As we've long noted, the net neutrality repeal didn't just kill net neutrality, it gutted FCC authority over natural broadband monopolies, shoveling any remaining authority to an FTC experts have repeatedly warned lacks the authority or resources to adequately police giants like Comcast (the entire point of the lobbyist gambit).

This week the bill was marked up and approved by the House Subcommittee on Communications and Technology, though not before the telecom industry tried to shovel in some amendments to water down the bill. Those efforts didn't work, at least according to net neutrality activists, because of the attention ordinary folks kept on what would have otherwise been an ignored process if we were talking about any other tech-related markup effort:

"At one point nearly 40,000 people were simultaneously watching Fight for the Future’s mirror of the House.gov livestream, which crashed several times because so many Internet users were tuning in. The live counter eventually broke, but Vimeo showed that more than 300,000 had tuned in."

300,000 viewers of a committee markup and vote is pretty damn impressive. As we've noted for a long time, surveys repeatedly show that the bipartisan majority of Americans supported net neutrality and opposed the repeal. The giant middle finger delivered by Ajit Pai is pretty clearly still pissing people off. And at least some lawmakers at the hearing this morning understand that ignoring this unified opposition isn't a particularly bright idea with 2020 looming:

"Inside the beltway, this is really about maybe five companies,” Representative Anna Eshoo said during the hearing. “Across the country, the American people really get this. National polling shows that Republicans, Democrats, Independents support net neutrality. We’re still in the same old soup pot here. We need to take our lenses off and look across the country."

There are a lot of folks (including the telecom industry) that will continue to try and claim that net neutrality isn't important. Those folks are usually either shoveling an agenda, or they don't really understand that (as noted above) the repeal of net neutrality didn't just kill net neutrality. It crushed the government's ability to rein in natural telecom monopolies, already running amok thanks to decades of eroded antitrust enforcement and little real competition.

Granted the bill still has a long road ahead. While it may pass the House, it will have an uphill climb in the Senate, then needs to avoid a Trump veto. But even if it fails, the process will create a handy voter scorecard ahead of 2020 for those looking to see who actually supports the will of the public, and who couldn't give any less of a shit. That in turn could aid efforts to pass a real net neutrality law down the road if this restoration effort -- and the ongoing lawsuit to reverse the repeal (by Mozilla and 23 state AGs) -- both fall flat on their face.

Filed Under: broadband, congress, fcc, net neutrality, title ii

Hearing On New Net Neutrality Law Once Again Conjures Up A Greatest Hits Of Nonsense

from the round-and-round-we-go dept

As we previously noted, Democratic lawmakers recently just proposed a very simple, three page law. The Save The Internet Act would simply reverse the Ajit Pai repeal of net neutrality, and restore the FCC's 2015 net neutrality rules. It would again classify ISPs as common carriers under Title II of the Telecom Act, but, as an act of Congress, couldn't be repealed by the whims of future FCCs. It also locks the "forbearance" part of the original rules (which prevented the FCC from using Title II to regulate broadband rates) into permanent law.

Unfortunately at House Communications Subcommittee hearing for the new bill on Tuesday, all the stale tropes resurfaced, despite the countless years spent debunking them. Representative Bob Latta, for example, trotted out the longstanding claim that classifying ISPs as common carriers under Title II is some kind of fringe, extremist position:

"[I]nstead of engaging with us to try to solve the problem, my colleagues have retrenched back to the most extreme position in this debate. The idea that only Title II is a real net neutrality is dangerous and wrong," Latta said. "You have heard over and over again that we need to protect consumers from blocking, throttling and internet fast lanes. That sounds reasonable enough. Well, we can easily do all of this without giving the government free rein through the specter of Title II."

Except there's nothing "extreme" about Title II. As we've noted countless times ISPs have been classified this way on and off for many years, including the earliest part of the internet when broadband growth was the most intense. Many ISPs have actively sought this classification when it provides tax benefits or when it suits a specific legal agenda. It's yet another "debate" that isn't really a debate, exemplifying how no matter how long we bicker over net neutrality, the same debunked falsehoods simply won't die.

All the other claims against net neutrality made their obligatory appearance at the hearing, including the industry-repeated claim that Title II and net neutrality "stifled broadband industry investment." It's a claim easily disproved by SEC filings, ISP earnings reports, and even the public statements of more than a dozen telecom CEOs. Yet, like so many of these arguments, it somehow never dies, thanks to telecom lobbyists eager to mislead via repetition, and cultivate a general sense of futility and fatigue among debate observers.

We've long noted how framing net neutrality as a partisan thing is stupid. There should innately be nothing partisan about basic rules that prevent monopoly telecom operators from using their power as internet gatekeepers to harm competitors. And the FCC's 2015 rules were crafted after decades of hearings, countless debates, and numerous court battles already. But despite the bipartisan majority of Americans supporting the end result, ISP lobbyists have been very successful in framing the issue as partisan to stall consensus.

For their part, Congressional Republican opponents to net neutrality continued to insist that despite overwhelming public support, this bill isn't a good idea and a new "compromise" was needed:

"It's time for bipartisan legislation that could actually become law," Greg Walden, a Republican from Oregon, said at the hearing. "Unfortunately, my friends on the other side have decided not to work with us." Bob Latta, a Republican from Ohio and a ranking member on the committee, accused Democrats of retrenching "to the most extreme position in this debate."

One problem is that the FCC's 2015 rules, crafted over the better part of two decades, are the compromise. The other problem is that Walden's and others' preferred alternative "compromise" legislation has proven to be anything but. Most of these alternative proposed bills have been little more than bad faith gambits; net neutrality in name only. More often then not, these alternative bills have been industry-supported efforts packed with countless loopholes designed specifically to do one thing: prevent tougher, better state and federal laws from being passed.

As it stands, the Save the Internet Act has a solid chance of passing the House. It has an uphill climb in the Senate however, and would still need to somehow avoid a veto by Donald "Net neutrality is the fairness doctrine" (for the record it's not) Trump. Even if it fails to pass, it will serve another function: provide a handy scorecard ahead of the 2020 elections clearly highlighting lawmakers who think AT&T, Comcast, and Verizon's quest to behave anti-competitively is more important than the will of the public or the health of the internet.

Filed Under: broadband, congress, fcc, net neutrality

Much Of The Broadband Growth Ajit Pai Credits To Killing Net Neutrality Was Actually Due To A Clerical Error

from the whoops-a-daisy dept

So a few weeks ago we noted how the Ajit Pai FCC has been trying to pretend that some modest recent broadband growth is directly thanks to its unpopular policies -- like killing net neutrality. Except a closer look at the report shows the data they used was only accurate up to the tail end of 2017, when net neutrality wasn't even formally repealed until June of 2018 (read: the growth couldn't have been due to killing net neutrality yet, because it hadn't technically happened yet). A lot of the "record fiber growth" Pai also tried to credit his policies for was actually courtesy of the fiber build-out conditions affixed to the AT&T DirecTV merger by the previous FCC.

In short, Pai's office has been falsely taking credit for some modest industry growth in broadband availability it had nothing to actually do with. And in a few instances, the FCC tried to claim that broadband growth was due to "deregulation," when market intervention (merger conditions) was actually to thank.

Now some deeper analysis shows that another huge chunk of Pai's supposed broadband growth was thanks to a... clerical error. A deeper analysis of the FCC's broadband growth numbers by consumer group Free Press showed that a company by the name of Barrier Communications Corporation appears to have dramatically overstated its broadband deployment during the period in question by a cool 1.5 million locations:

"When conducting our initial analysis of the December 2017 Form 477 Deployment data, we noticed that a new Form 477 filer, Barrier Communications Corporation (d/b/a BarrierFree), claimed deployment of fiber-to-the-home (“FTTH”) and fixed wireless services (each at downstream/upstream speeds of 940 Mbps/880 Mbps) to Census blocks containing nearly 62 million persons. This claimed level of deployment would make BarrierFree the fourth largest U.S. ISP in terms of population coverage – an implausible suggestion, to put it mildly.

This claimed level of deployment stood out to us for numerous reasons, including the impossibility of a new entrant going from serving zero Census blocks as of June 30, 2017, to serving nearly 1.5 million blocks containing nearly 20 percent of the U.S. population in just six months time. We further examined the underlying Form 477 data and discovered that BarrierFree appears to have simply submitted as its coverage area a list of every single Census block in each of eight states in which it claimed service: CT, DC, MD, NJ, NY, PA, RI, and VA.

When contacted by Ars Technica, the company in question acknowledged it had made an error when filing form 477 data with the FCC, saying the data was "parsed incorrectly in the upload process." The impact was notable, with roughly 1.5 million of the supposed 5.6 million "new" areas where 25Mbps/3Mbps speeds had been deployed never having actually existed. As noted previously, the growth Pai credits to his own "deregulatory" agenda was actually well in line with past, pre-Pai periods, and in some instances actually slower. Once you factor in all of these errors the claims get even less impressive.

Of course the formal study Pai's basing these numbers on hasn't been fully released yet. These were all just claims made in an initial FCC press release featuring very-carefully chosen statistics. Whether these and other errors are fixed in the final report (which should drop later this month or early next) should give you a good luck at just how much the current FCC actually values data integrity.

Filed Under: ajit pai, broadband, fcc, growth, net neutrality
Companies: barrier communications, free press

Investigators, Reporters Close In On The Origins Of Those Fake Net Neutrality Comments

from the fake-plastic-support dept

As several Attorneys General and the FBI investigate who was behind the fake net neutrality comments that plagued the FCC website during the late 2017 repeal, reporters like Jason Prechtel and Gizmodo's Dell Cameron continue to slowly and methodically connect the dots. Last month, Cameron obtained leaked investigation data linking many of the bogus comments to several Trumpland-linked astroturfing and policy operations like "Free Our Internet," a bogus consumer-rights group specifically built by ex-Trump campaign staffer Christie-Lee McNally.

And this week, both Prechtel and Cameron leaned on FOIA data to discover that another sizeable chunk of the bogus comments were allegedly driven by both CQ Roll Call, a DC-based news and policy organization, and Center for Individual Freedom (CFIF), a "dark money" influence group with historical ties to defending tobacco companies:

"Founded in 1998, CFIF is a reportedly a dark-money group whose early roots lie in defending Big Tobacco, but which supported the repeal of net neutrality more recently and has campaigned aggressively against state laws requiring political groups like itself to disclose the sources of its funding. Along with CQ, the group is among the 14 entities subpoenaed by the New York attorney general last fall, as first reported by former BuzzFeed reporter Kevin Collier in October.

As late as last February, CFIF President Jeffrey Mazzella praised the FCC’s rollback of the Title II classification of broadband service underlying net neutrality in the Daily Caller, labeling the policy an “unprecedented power grab by the Obama administration,” which, he claimed, upended “two decades of bipartisan consensus for light-touch regulation of the internet sector."

You might recall that many of these efforts during the net neutrality repeal involved hijacking the names of both dead and living people (like myself), and using them to post comments supporting the repeal during the FCC open comment period. Most of these folks (obviously in the case of deceased) had never even visited the FCC website, much less heard about net neutrality. In one instance, a bot was used to pluck names from a hacked database of some kind, posting bogus, supportive-but-fake comments, name by name, in perfect alphabetical order.

In short, several groups were created by DC policy shops to generate the illusion of public support for a net neutrality repeal poll after poll shows was strongly opposed by a bipartisan majority of Americans. Especially since repealing those rules opened the door to ISPs using their network power to erect additional anti-competitive barriers for video competitors, driving up costs for everybody in the internet ecosystem.

None of this stuff is new. Telecom and other industries have spent decades creating entirely bogus consumer groups to prop up bad policy. And when companies aren't busy having DC policy shops create fake groups, they can often be found co-opting existing groups; promising cash infusions in exchange for quid-pro-quo support for company policy positions. Countless government agency proceedings have been plagued by similar fake comment issues, suggesting this sort of stuff is a pretty common option on the menu of many K Street lobbying and policy shops.

The goal is always the same: create the illusion of broad support for tech policy that consumers and actual experts strongly oppose, usually with very good reason. While that itself isn't illegal (whether it should be is a good conversation to have if we ever want to fix the country's garbage lobbying rules), identity fraud clearly is.

Of course identifying the dubious constructs acting as intermediaries is one thing. Connecting those constructs to entrenched broadband providers like AT&T, Verizon, and Comcast is something else entirely. Telecom operators historically leave layers upon layers of deniability between themselves and such groups, and aren't usually dumb enough to put much of this work in writing. As such, whether the NY AG, FBI, and other investigators are able to document a real money trail to the obvious beneficiaries of these shenanigans will be interesting to watch.

Regardless of the outcome, there are more than a few DC policy outfits that aren't sleeping quite as well as they were this time two years ago. They've been engaging in this sort of behavior for years, but the extreme unpopularity of Ajit Pai's assault on net neutrality likely brought significantly more light and attention to the sleazy practice than they've historically grown accustomed to.

Filed Under: dark money, fake comments, fcc, foia, lobbying, net neutrality, transparency
Companies: center for individual freedom, cfif, cq roll call

Zero Rating Actually Costs Broadband Customers More, EU Study Finds

from the ill-communication dept

For years now we've discussed how large ISPs have (ab)used the lack of competition in the broadband market by imposing completely arbitrary and unnecessary monthly usage caps and overage fees. ISPs have also taken to exempting their own content from these arbitrary limits while still penalizing competitors -- allowing them to use these restrictions to tilt the playing field in their favor. For example an AT&T broadband customer who uses AT&T's own streaming service faces no penalties. If that same customer uses Netflix or a competitor they're socked with surcharges.

The anti-competitive impact of this should be obvious.

But large ISPs have muddied the water by claiming that zero rating is the bits and bytes equivalent of a 1-800 number for data or free shipping. Customers who don't understand that usage caps are arbitrary nonsense from the get go often buy into this idea that they're getting something for free. And Ajit Pai's FCC has helped confuse the public as well by trying to claim that this model is somehow of immense benefit to low income communities.

Guess what: it's not. Studies from Mozilla have shown that zero rating isn't some mystical panacea. You might recall that Facebook has spent years trying to offer a walled-garden internet service to developed nations where select content is "zero rated," something that was banned in India when regulators realized that letting Facebook determine which content was most widely accessed was a decidedly stupid idea. Facebook's altruism on this subject was ultimately revealed to be a ham-handed attempt to dominate advertising in developing nations.

Now a new study (pdf) by the non-profit Epicenter.works has shown that zero rating models actually increase costs for the end user, the exact opposite of what incumbent carriers and Ajit Pai's FCC have claimed.

While the EU passed net neutrality guidelines back in 2016, it left actual enforcement to each country. Mirroring efforts in India and Japan, some EU countries prohibited zero rating entirely. Others took a more hands off approach and allowed such models (usually based on ISP promises that such practices aided low-income users). The study took a look at 30 EU nations and found that those that prohibited zero rating saw a double-digit drop in the cost of wireless data plans compared to countries that embraced the concept.

The study theorizes the higher costs are due to carriers being incentivized to jack up the cost of accessing normal, "non-zero rated" content in a bid to make zero-rated content seem more attractive. The EFF has been noting for years how this kind of gamesmanship distorts the market, putting natural telecom monopolies in a troubling position of determining which content and services will be cap-exempt (usually their own or whoever can afford to pay them). The EFF was particularly concerned this would be a cornerstone in the wake of AT&T's $86 billion acquisition of Time Warner. Its concerns proved well founded.

The EFF continued to make that same point on the heels of this latest study's findings:

"Zero rating by wireless carriers has effectively become a tool for them to direct their user traffic under the guise of giving consumers a benefit,” EFF lawyer Ernesto Falcon told Motherboard in an email.

“This EU study reveals that it actually is a more covert way to raise prices and increase their profits with the added benefit of anti-competitive self dealing,” he added. “This is particularly problematic with low-income users, which tend to be people of color, because they can only afford wireless broadband services and forgo wireline connections where zero rating is not a predominant practice."

You might recall that the FCC's 2015 net neutrality rules didn't specifically ban zero rating, but left the door open to thwarting such efforts if they were found to be clearly anti-competitive. But the FCC figured out too late that ISPs were already using zero rating to favor their own streaming services, and just as the former Wheeler FCC was about to crack down on the practice, Trump was elected, Ajit Pai was appointed to head the FCC, and the agency dismantled the country's first meaningful net neutrality rules entirely. AT&T's now doing exactly what critics predicted, and few seem to care.

Net neutrality supporters have since come to realize that any real net neutrality rules that don't thwart anti-competitive use of zero rating are useless. California's looming net neutrality rules, for example, allow zero rating if it applies to all classes of traffic (games, video, music), but prohibits it if it's used to specifically favor one company's content. Should Congress ever get its act together and pass a real net neutrality law (which still seems like long odds given telecom's lobbying grip), the patently obvious anti-competitive and cost impact of selective zero rating is something that shouldn't be forgotten.

Filed Under: broadband, consumers, data pricing, eu, zero rating

Bogus Net Neutrality Comments Linked To Trumpland

from the flood-the-zone-with-bullshit dept

As we mentioned last October, there's several state AGs now investigating who was behind those bogus comments that flooded the FCC's website during its controversial net neutrality repeal. Millions of those fake comments used the identities of dead or otherwise oblivious people, and were posted by a bot pulling from a hacked database of some kind. The goal appears to have been to flood the zone with bullshit, undermining trust in the public's only chance to comment on what may just be the least-popular tech policy decision in modern internet history (though SOPA/PIPA got pretty damn close).

Gizmodo's Dell Cameron, who has been an absolute marvel at digging through this bog, has dropped an impressive bombshell that fills in a lot of longstanding gaps in identifying who was behind this astroturfing effort. The subject is weedy, so here's the pertinent bit:

"An organization run by a former Trump campaign statewide director is being investigated by the New York attorney general’s office for its role in submitting potentially hundreds of thousands of fraudulent comments to the Federal Communications Commission during the agency’s 2017 efforts to rollback Obama-era net neutrality rules."

NY's AG had subpoenaed all of the companies that submitted bulk comments to the FCC during the repeal, including consumer groups. Groups on both sides of the debate used what I affectionately like to refer to as "outrage-o-matic" form letter systems, which simply let real people send a form letter comment of complaint or support to government. That's perfectly legal.

What may not be legal is identity fraud, as well as a lot of this murkier, coordinated behavior Gizmodo uncovered by astroturfing organizations like "Free Our Internet," a fake consumer-advocacy firm specifically built to apparently con the gullible into thinking net neutrality was some sordid "globalist" cabal:

"What’s remained unreported until now is the source of the 37 identical Sharpsburg comments, which match those submitted on behalf of more than 300,000 Americans nationwide. That comment, which rails against Google, its former chairman Eric Schmidt, and “global billionaires like George Soros,” was authored by a group known as Free Our Internet, according to a page on its website, which has since been deleted.

Free Our Internet’s campaign against net neutrality, which it presents as a conspiracy by “liberal globalists to take over our Internet,” was first announced in a now-deleted press release on the website of Raven Strategies, a political consultancy whose client list includes, among others, Donald Trump for President."

Christie-Lee McNally, the president of Raven Strategies and the executive director of Free Our Internet, was tapped by Trump two years ago to become his statewide director in Maine, where she formerly served as executive director for the Republican Party. According to the bio on her firm’s website, she also served on the 58th presidential inaugural committee, working with cabinet-level nominees on the day of Trump’s swearing-in.

Free Our Internet was just one of several Trump-linked organizations Gizmodo discovered flooded the FCC comment system, social media, and the newswires with bogus support for the FCC's historically-unpopular handout to big telecom. The utter nonsensical claim that protecting the health of the internet from Comcast and AT&T is a Soros-fueled globalist cabal to "silence Conservative thought" was then in turn parroted by none other than Roger Stone:

Who had also been seeding the field with intellectually incontinent editorials on the subject:

"The Tech Left, funded largely by George Soros, had decided to champion under the banner of a benign-sounding “Net Neutrality” campaign and seize a once-in-a-lifetime opportunity to grab the moral high ground in their determination to allow the giant edge providers to censor the Internet to suit their ideological preferences — ridding the Internet of conservative and libertarian content."

This claim is, as you know if you have even a fleeting understanding of net neutrality, complete and total dog shit.

Here in reality, giant ISPs like AT&T, Comcast, and Verizon have spent years abusing the lack of broadband competition to hamstring competitors and drive up your monthly bill in a variety of obnoxious ways. Net neutrality rules were just a stopgap measure to prevent this from happening until somebody in either party grows a spine, stands up to AT&T, Comcast, and Verizon, and embraces policies that actually drive more competition to a clearly broken market (no, this doesn't magically occur on its own if you gut overight of natural telecom monopolies).

Because nobody likes Comcast, Trumpland and the telecom sector needed to figure out some alternative messaging to confuse folks who likely didn't fully understand this complicated subject. It should be clear by now that one of the more favored tactics of Trumpland is to flood the zone with absolute bullshit in a bid to shake the very foundations of truth itself, distracting the easily distracted from what, more often than not, winds up being a ham-handed handout to giant, unpopular corporations. In this case, some of the least popular corporations in America (which is truly saying something).

Flooding the zone with nonsense to disorient those looking for true north is an effective disinformation tactic, especially in a country long-ago rendered intellectually mute by decades of facts-optional, intentionally-divisive partisan infighting. In this instance, Trumplanders (and likely ISP lobbyists) knew that killing net neutrality would result in a massive wave of anger by the bipartisan majority of Americans who (quite correctly) understand the move was little more than a grotesque handout to predatory telecom monopolies.

So Trumpland crafted "alternative" messaging, completely unhinged from the truth, and flooded the internet with it in the hopes this would diminish the impact of the real public backlash. It's not clear it worked, but it likely did achieve its primary goal: creating questions about the validity of user complaints to the FCC, thereby diminishing their importance as a permanent record of consumer anger. It seems that may have been the motivation for the FCC's decision to make up that fake DDOS attack (which you'll note tried to claim angry John Oliver viewers were "attacking" the FCC website) as well.

What's very clear is there's still a lot of information to come on this as numerous state AGs and the GAO continue their investigation into this ouroborus of bullshit, and a lot of these policy shops and lobbying outfits should be very nervous right now. What's also clear is FCC boss Ajit Pai, with his own links to many of these Trumpland allies, went well out of his way to stop law enforcement from learning more. How much coordination occurred between the Pai FCC, incumbent ISPs, and this tangled web of news outlets, lobbying firms, and policy shops is going to be the million dollar question.

None of this is going to be a great look for Pai's FCC as more details are uncovered, and the court system tries to determine whether his agency's hand out to big telecom, propped up by mountains of bogus telecom lobbyist claims, violated federal law or FCC rules.

Filed Under: ajit pai, christie-lee mcnally, comments, fake comments, fcc, identity fraud, net neutrality, open comments, trump campaign
Companies: free our internet, raven strategies

Comcast Network Investment Drops Despite Repeated Claims Killing Net Neutrality Would Trigger Investment Wave

from the ill-communication dept

Why it's almost as if the Ajit Pai FCC and broadband industry haven't been entirely honest with us.

This week we noted how Wall Street is predicting that the telco and cable industries will see notable declines in network investment next year, despite the FCC and industry's repeated, breathless claims that killing net neutrality would somehow spur network investment. This, as we've long noted, was based on the bogus industry claim that net neutrality somehow stifled such investment, a claim repeatedly disproven by public SEC filings, earnings reports, and even statements by more than a dozen major ISP CEOs.

Almost as if on cue, Comcast released the company's latest earnings report showing, you guessed it, that the company saw a 3% dip in cable network CAPEX last quarter despite all of that sweet, potent, "internet freedom" Ajit Pai claims to have been spreading around:

"Comcast's cable division spent 3 percent less on capital expenditures last year, despite promises that the repeal of net neutrality rules would boost broadband network investment. Comcast's cable division spent $7.95 billion on capital expenditures during calendar year 2017, but that fell to $7.72 billion in the 12 months ending on December 31, 2018."

That is, if you're playing a long at home, precisely the opposite of what Comcast and other large ISPs repeatedly proclaimed while successfully convincing the FCC to effectively neuter itself, shoveling any remaining authority to an FTC that lacks the authority or attention span to police bad actors in telecom. In 2014, for example, Comcast repeatedly proclaimed that the FCC's net neutrality rules (arguably modest by international standards) would devastate job creation, network investment, and innovation:

"The sheer uncertainty surrounding such a regulatory environment would produce ‘a profoundly negative impact on capital investment.’ By itself, reduced investment would inhibit job creation, hinder the deployment of broadband infrastructure, and undermine the ‘virtuous circle’ of innovation that the open Internet rules are designed to advance."

By that logic, the inverse should have happened in the wake of the repeal. Instead, facing the one-two punch of little broadband competition and little real oversight of a growing natural monopoly, Comcast and other ISPs did what everybody knew they'd do, pass that savings on to investors and executives, instead of shoring up their networks or historically terrible customer support. All while raising rates higher and higher. And, oh, laying off employees despite nabbing billions in both Trump era tax cuts and regulatory favors, the financial impact of the latter is largely incalculable.

None of this was hard to predict, especially if you've studied history (especially telecom history). This is the same pattern has played out time and time again in telecom. Promise the earth, sea, and sky in exchange for taxpayer subsidies, tax breaks, and regulatory favors, then use the regulatory capture to double down on all of the industry's worst habits. By the time the press and public has figured out you're full of shit, you're off to the next PR ploy, which, in Comcast's case, involves pushing for regulation that hamstrings online ad players you desperately want to compete with in the streaming ad wars to come.

You'd like to think this is a cycle of dysfunction we'd eventually learn our way out of, but there's simply no indication that's occurring any time soon.

Filed Under: ajit pai, capex, fcc, investment, net neutrality
Companies: comcast

Remember When Ajit Pai Said Killing Net Neutrality Would Boost Network Investment? About That...

from the head-fake dept

You'll recall that one of the top reasons for killing popular net neutrality rules was that they had somehow supposedly crushed broadband industry network investment. Of course, a wide array of publicly-available data easily disproved this claim, but that didn't stop FCC boss Ajit Pai and ISPs from repeating it (and in some cases lying before Congress about it) anyway. We were told, more times that we could count, that with net neutrality dead, sector investment would explode since carriers would be "unchained" from "burdensome regulation."

You'll be shocked to learn this purported boon in investment isn't happening.

A few months ago, Verizon made it clear its CAPEX would be declining, and the company's deployment would see no impact despite billions in tax cuts and regulatory favors from the Trump FCC. Both AT&T and Verizon have similarly announced massive workforce reductions as well. Some investment growth is happening in wireless as carriers prepare for fifth-generation (5G) wireless service (which they would have deployed regardless of the attacks on net neutrality). But even that's a bit lower than Wall Street and sector analysis expected.

And according to the latest analysis from MoffettNathanson, both fixed-line telcos and cablecos are expected to see notable declines in CAPEX and investment:

"Telco-related wireline capex, meanwhile, is slated to fall from $20.3 billion in 2018 to $19.6 billion this year. That slight drop comes as AT&T completes the fiber buildout commitments originally promised when it acquired DirecTV by July, and as Verizon redirects capital to wireless, Moffett said. Capital spending among the four publicly traded cable operators covered by the MoffettNathanson -- Comcast, Charter, Altice USA and Cable One Inc. -- is expected to decline significantly this year -- some 5.8%.

My math may be shaky, but a 5.8% decline in cable industry CAPEX doesn't quite sound like the investment revolution Ajit Pai and his squad of industry allies promised.

To be clear, there's a lot of reasons that ISP CAPEX rises and falls. When Pai and friends were trying to claim that net neutrality killed network investment back in 2017, we noted extensively how they were cherry picking very narrow windows of CAPEX decline that had nothing to do with net neutrality. For example, one company's CAPEX had dipped under net neutrality because it had just finished a cable set top box upgrade project.

The same is true here. As MoffettNathanson notes, some of this dip is thanks to AT&T shifting its focus toward paying off debt for its megamergers. Another chunk of it is because streaming competition is reducing the desire for the clunky old cable box. And in the case of the biggest dip at Charter Communications (Spectrum), it was in large part thanks to the completion of an all-digital transition in the wake of its costly acquisition of Time Warner Cable.

None of that changes the fact that Ajit Pai and a chorus of telecom industry sycophants repeatedly misled the public and Congress about the net benefits of their historically-unpopular policies. Repeatedly. Now, we're left with the end result; a coalition of natural monopolies with even less competition or accountability than ever, eager to get to work not on investing back into the network, but extracting higher and higher consumer and competitor costs courtesy of limited competition. Limited competition Ajit Pai and friends can't even admit is real, much less have a plan to do anything about.

I know this is a crazy thought, but it's almost as if when you appoint industry sycophants to positions of oversight, their primary goal is to improve carrier revenues, leaving everything else (competition, consumer welfare, innovation) foundering in the rear view mirror.

Filed Under: ajit pai, broadband, capex, fcc, investment, lies, net neutrality
Companies: at&t, verizon

No, BitTorrent's Plan for Cryptocurrency-Fueled Speed Boosts Doesn't Violate 'Net Neutrality'

from the ill-communication dept

For a subject we've been collectively discussing ad nauseum for the better part of two decades, it's kind of astounding how many people still don't really understand how net neutrality works.

Case in point: last week, BitTorrent (or what's left of it under new owner TRON) announced yet another business model revision, stating it would be integrating cryptocurrency into their BitTorrent platform. One of the goals of this "Project Atlas" is to develop a system that would financially-reward folks who seed files. TRON put the project plan this way:

"The new token, also called BitTorrent (BTT), will be issued by BitTorrent Foundation, established in Singapore and will enable users to exchange tokens to improve network speed. By providing users with the ability to use BTT tokens for faster downloads, the company aims to accelerate the overall speed of torrents. “BitTorrent token is the first in a series of steps to support a decentralized internet,” said Justin Sun, founder of TRON and CEO of BitTorrent. “In one giant leap, the BitTorrent client can introduce blockchain to hundreds of millions of users around the world and empower a new generation of content creators with the tools to distribute their content directly to others on the web."

Whether the blockchain can magically somehow make BitTorrent a sustainable business (a decade long quest at this point) is a subject for another day. More interesting to me was some of the reaction to TRON's announcement, including this piece over at TorrentFreak attempting to paint BitTorrent as a hypocrite for advocating for net neutrality, then itself embracing "fast lanes" on the internet:

"While details are scarce, it’s clear that with the BTT token users will be able to pay to speed up their downloads. It’s not clear how this will work, but it’s likely that a paying downloader will get priority over others. That sounds a bit like a “fast lane” and paid “prioritization,” albeit on a different scale. Large companies are not paying for faster access in this case, but ‘wealthy’ BitTorrent users are.

TorrentFreak asked both TRON and BitTorrent about their thoughts on this Net Neutrality argument and if it presents a problem. The TRON team said that it couldn’t comment on the matter, while BitTorrent didn’t respond at all.

The difference here is that users can choose to use another BitTorrent client if they're not happy with what BitTorrent is doing. That's not the case for broadband, where the lion's share of Americans only have access to one ISP at speeds of 25 Mbps or greater. Net neutrality violations are just a symptom of this limited competition, which lets giant telecom operators like AT&T or Comcast abuse their roles as natural monopolies. Net neutrality rules were simply a telecom-specific stopgap measure until somebody, anybody, is willing to actually challenge these companies politically and embrace real, pro-competitive policies.

Somehow, people take this telecom-specific paradigm and weirdly try to casually apply it to other sectors, as TorrentFreak does here. You'll often see the same mistake made when folks like Mark Cuban call for "search neutrality" or "app neutrality." Again, you can generally choose to not use a social media website or app store if you're not happy with the business decisions they're making. You can't do that in telecom. That's why net neutrality is a concept specific only to broadband and the lack of competition there that's plagued consumers for the better part of two decades. In broadband, users often have no other choice.

That's not to say there aren't valid criticisms for what TRON is doing here. But again, you can't call this a net neutrality violation because the term applies specifically to core telecom networks, not software platforms where users have the option of numerous other clients. The monopoly-dominated dance of dysfunction in telecom is a very unique animal, resulting in the creation of a very unique term in "net neutrality." It can't just be thrown about casually every time you see someone engaging in dubious behavior. That's not how any of this works.

Filed Under: bittorrent, cryptocurrency, net neutrality, tron
Companies: bittorrent