Ted Cruz Doubles Down On Misunderstanding The Internet & Net Neutrality, As Republican Engineers Call Him Out For Ignorance

from the open-your-mouth-and... dept

Last week, we mentioned Senator Ted Cruz's nutty tweet comparing net neutrality to "Obamacare." It was widely mocked -- even by many Republicans -- as it showed Cruz's ignorance of the subject at hand. In fact, one report detailed a number of comments on Ted Cruz's Facebook page from Republican/conservative engineers disagreeing with Cruz and pointing out that he's uninformed about net neutrality. Here's a sampling:







There's a lot more like that, but it highlights what we've seen before -- that while Congress likes to pretend that Republicans are against net neutrality while Democrats are for it, the reality is that net neutrality is a non-partisan issue with voters of both parties overwhelmingly supporting net neutrality.

Rather than recognize this fact, Cruz has decided to double down on it with a rambling and misguided opinion piece in the Washington Post that repeats the "Obamacare for the internet" line, and lumps in a variety of other tech issues in a confusing (and often self-contradictory) jumble. He warns against taxing internet access (good), but then joins in the total overreaction to the Commerce Department's decision to officially relinquish its (barely existent) control over ICANN, falsely claiming that this will allow the Russians, Chinese and the Iranians to control the internet. This is not true. In fact, by giving up the Commerce Department's link to ICANN, it helps cut off the path the Russians, Chinese and Iranians are trying to use to do an end run around ICANN, by giving more power to the ITU. In other words, Senator Cruz (once again) seems to not understand this policy issue at all, and is recommending a policy that is more likely to lead to the world he fears.

Then he gets back around to net neutrality, once again showing he doesn't understand it:

In short, net neutrality is Obamacare for the Internet. It would put the government in charge of determining Internet pricing, terms of service and what types of products and services can be delivered, leading to fewer choices, fewer opportunities and higher prices.

Not a single part of that is accurate. Under the proposed plan, the government would not be in charge of determining any of those. Rather, it would make it so that no one (including the internet access providers) could block what types of products and services can be delivered. It takes a special kind of wrongness to look at a plan that is focused on making sure that no one can be blocked and argue that it means the government gets to pick what services can be delivered.

Even more bizarre, Cruz's final point is to celebrate the victory over SOPA and PIPA as a great example of protecting free speech online, ignoring the fact that it's the very same people who made the victory possible who are now fighting for net neutrality.

In 2012, those who care about Internet freedom were shocked as bills such as the Stop Online Piracy and Protect IP acts, which would regulate speech on the Internet under the guise of protecting property rights, started gaining popularity in Washington. Thankfully, online activists were quick to mobilize to protect their free-speech rights. But we must remain vigilant. Intellectual property must be defended, but any threat to quell speech on the Internet must be treated seriously and subsequently defeated.

Yes, and it's the very same online activists now trying to "protect free speech rights" by making sure that the internet stays open via net neutrality rules. And, yes, it is a free speech issue, because letting internet access providers block or discriminate against certain companies, individuals, services or types of content (such as encrypted content) will stifle free speech.

So, Cruz claims to support online activists and their push to guarantee free speech online... but at the same time opposes those very same activists and their push to protect free speech online by calling it "Obamacare for the internet"? I don't know who Ted Cruz's tech staffers are, but they might want to educate themselves a bit -- and not from the lobbyists at AT&T and Verizon.

Filed Under: activism, free speech, gop, net neutrality, open internet, republicans, ted cruz

FCC Calls AT&T's Net Neutrality Bluff, Asks For Proof That Fiber Investment Has Stopped

from the data-or-it-didn't-happen dept

Earlier this week, we mocked AT&T's pouty and bogus announcement that it was "halting" fiber deployments because of "uncertainty" over the FCC's decision on net neutrality. As we pointed out, AT&T's fiber promises were mostly bogus in the first place -- using "fiber to the press release" in which it would announce fiber plans, but never actually deliver them (beyond, perhaps, a few carefully chosen developments). Furthermore, AT&T had announced that it was cutting back investment spending a week earlier, totally unrelated to the net neutrality stuff. Pretty much everyone saw AT&T's announcement as nothing but a ridiculously obvious ploy in response to President Obama's plan for real net neutrality.

However, it appears the FCC isn't going to just let AT&T get away with it. It has now sent the company a letter, calling its bluff, and asking for actual evidence that AT&T is really doing anything different as a result of net neutrality uncertainty. The letter notes that AT&T says it will only deliver fiber to the 2 million homes it committed to in hoping regulators would approve its DirecTV acquisition, and then asks for more detailed information on the plans beyond those homes:

(a) Data regarding the Company’s current plans for fiber deployment, specifically: (1) the current number of households to which fiber is deployed and the breakdown by technology (i.e., FTTP or FTTN) and geographic area of deployment; (2) the total number of households to which the Company planned to deploy fiber prior to the Company’s decision to limit deployment to the 2 million households and the breakdown by technology and geographic area of deployment; and (3) the total number of households to which the Company currently plans to deploy fiber, including the 2 million households, and the breakdown by technology and geographic area of deployment;

(b) A description of (1) whether the AT&T FTTP Investment Model demonstrates that fiber deployment is now unprofitable; and (2) whether the fiber to the 2 million homes following acquisition of DirecTV would be unprofitable; and

(c) All documents relating to the Company’s decision to limit AT&T’s deployment of fiber to 2 million homes following the acquisition of DirecTV.

You can almost hear the gritted teeth from AT&T's spokesperson claiming that the company is "happy to respond to the questions posed by the FCC." Yes, I'm sure happy is exactly how people there feel...

Filed Under: broadband, fcc, fiber, investment, net neutrality
Companies: at&t

Comcast Supports The President's Net Neutrality Plan, Except For The Only Part That Does Anything Meaningful

from the I-have-absolutely-zero-credibility dept

Most of the industry's biggest ISPs have spent the last week either threatening to sue over the President's surprising support of Title II, or in the case of AT&T, pouting like a child and making empty threats. Most of the biggest ISPs also spent the week insisting that the FCC should simply back away from meaningful consumer protections, leaving such heady tasks to a broken, bickering Congress awash in telecom lobbying cash.

Since then, Comcast's top lobbyist (sorry, Chief Diversity Officer) David Cohen has come out with a second blog post entitled: "Surprise! We agree With the President's Principles on Net Neutrality." In it, Cohen does yeoman's work trying to pretend that Comcast's, like, totally on board with what the President is selling:

"While some have been led to believe something else, we support net neutrality. And we’ve been consistent in expressing our strong support for an open Internet – in statements, speeches, blog posts, filings, and advertising."

Like that time we ham-fistedly throttled all BitTorrent traffic then lied about it repeatedly, leading to a massive national firestorm of criticism, remember? Good times! Comcast proceeds to insist that gosh -- there's no need for real neutrality protections moving forward because they're already doing all that great stuff out of the goodness of their giant, altruistic heart:

"What is remarkable is that if you compare the President’s articulation of his vision for net neutrality as set forth in the White House talking points released yesterday afternoon, we are on the record as agreeing with every point: Free and open Internet. We agree – and that is our practice. No blocking. We agree – and that is our practice. No throttling. We agree – and that is our practice. Increased transparency. We agree – and that is our practice. No paid prioritization. We agree – and that is our practice."

Yes, remarkable! Except Cohen forgets to mention that the only reason they're still adhering to the shadow of the FCC's original rules is because they're required to do so as a condition of their 2009 acquisition of NBC Universal, a condition they're promising to expand to get their $45 billion acquisition of Time Warner Cable approved. Again though, those promises and conditions don't mean much because the FCC's original net neutrality rules contained oodles of loopholes that ISPs can easily dance over, under and around -- just as long as they claim their behavior was for the safety and security of the network.

Comcast's faux support of real neutrality protections is not "game playing or sophistry on our part" insists Comcast's Cohen, who'd have you forget that at the same time they're professing to love "transparency," they're working to make sure details governing their controversial interconnection details with Netflix -- a form of paid prioritization they're working to ensure aren't covered by net neutrality rules -- aren't made available to us plebeians.

After breathlessly claiming the company supports Obama's plan, Cohen then proceeds to proudly announce that the company doesn't support the only meaningful part of it:

"There is one important technical legal difference of opinion between the President and Comcast: we do not support reclassification of broadband as a telecommunications service under Title II. Doing so would harm future innovation and investment in broadband and is not necessary to put in place strong and enforceable Open Internet protections. We continue to believe that Section 706 of the Telecommunications Act provides more than ample authority to impose those rules, as the DC Circuit made clear."

It's amusing to see an industry whose speeds, service and customer support are so bad claim that if the government simply does its job, all of the wonderful things customers are experiencing will be taken away. Like all of that "investment" Comcast puts into its customer support, resulting in not only the worst satisfaction ratings in telecom, but the worst customer satisfaction ratings across any industry. Carriers are definitely going to need some fresher talking points as the debate heats up the next few months, as "we'll continue to skimp on investment and quality if meaningful rules get passed" isn't working very well.

Judging from the rather desperate ISP responses this week to the President's support of Title II, it's becoming more and more apparent that ISP executives are terrified that net neutrality and Title II are starting to see the kind of intense, authentic grass roots support we witnessed during SOPA. Equally worrysome for ISP executives is that the partisan divides that have stalled meaningful neutrality rules in the past are starting to fall away, as people of all affiliations begin to realize that the broadband industry is so broken and uncompetitive, that Title II is the only path forward when it comes to protecting consumers from telecom industry shenanigans and skulduggery.

Filed Under: barack obama, david cohen, net neutrality, open internet, president obama, section 706, title ii
Companies: comcast

You Too Can Finally Join the Modern Broadband Era For the Rock Bottom Price of $20,000

from the pay-and-pay-and-pay-some-more dept

When the cable industry started laying coaxial cable and TV deployments were just beginning, local franchise agreements often required that the cable operators evenly build out networks so that as many people as possible could get service. Those requirements are one of the only reasons millions of people outside of the biggest metropolitan areas even have the cable and DSL duopoly or monopoly they so enjoy today.

When the phone companies entered the TV business back around 2006, AT&T and Verizon lobbyists went state-by-state convincing state lawmakers to pass franchise "reform." While some reform was absolutely needed (thanks largely to a smattering of greedy local governments abusing their authority in order to get paid), the telcos' version of reform involved not only gutting most even build out requirements -- but in places like Wisconsin gutting all consumer protections (and even in some cases eminent domain rights) entirely. Obviously making state regulators toothless benefited cable companies too.

Fast forward a few years and there's obviously more than a few TV and broadband landline connection gaps, despite tens of billions in entirely-unaccountable subsidies thrown at cable and phone companies to ensure these gaps didn't exist. Combined with the rise of Google Fiber and the somewhat theatrical industry fiber to the press release response, suddenly cherry picking your broadband deployments has become fashionable, creating a huge new chasm between broadband haves and broadband have-nots, especially when it comes to faster services (three quarters of the country has no competitive choice at speeds faster than 25 Mbps).

While both politicians and industry pay a lot of lip service to shoring up these gaps, the reality is that nobody really wants to fix them, and nobody wants to audit the carriers' deep history of subsidies. When many broadband have-nots then decide that they'd like to join the modern era and get wired, they often wind up being told they have to foot the often over-inflated bill. As Ars Technica recently explored, that bill can be almost comical -- such as $20,000 to run coax a third of a mile:

"Time Warner Cable’s (TWC) lines are a third of a mile from Walser’s house, and the company has received more than $10 million in state funding to bring broadband to underserved portions of New York over the past two years. But the company (which will be purchased by Comcast if the government approves the merger) told Walser they won’t do the construction unless he pays more than $20,000. That’s just to reimburse TWC for its troubles—the monthly access bill would be on top of that."

Because Time Warner Cable has no competition at those locations, the company will simply abuse their monopoly position and charge an obscene monthly rate for service on top of that. Considering the billions that telecom companies received to shore up service over the last twenty years (and again, nobody in the history of telecom regulation has ever bothered to do an audit), that's painfully obscene -- and it's a story I've personally seen repeated thousands of times over. Worse perhaps, Time Warner Cable, like so many of these companies, has worked tirelessly to pass state level laws that restrict these communities from building their own broadband -- even in locations they refuse to connect.

In other words, taxpayers got to pay billions in subsidies, then get to pay an arm and a leg a second time just to be held hostage by a company that repeatedly makes it very clear it hates their guts. When they decide to do something about it themselves, they run into state laws prohibiting their right to improve their own area's infrastructure. Yet we're told time and time again by the broadband industry that it's not only immensely competitive, but is a shining beacon to the rest of the world for technology innovation, creativity and government policy.

Filed Under: broadband, build out, fees, installation, universal service
Companies: time warner cable

Republicans And Democrats Alike Overwhelmingly Support Net Neutrality; Why Don't GOP Officials In Congress Recognize This?

from the who-are-they-representing dept

Within hours of President Obama's surprise call for true net neutrality rules under Title II, Republicans in Congress were in a full-fledged freakout. Beyond the nutty comparisons to Obamacare or suggesting that this will lead to greater oppression in Russia, China and Iran (no, really, that claim was made), a bunch of elected Republicans in Congress sent a letter to the FCC strongly opposing Title II, insisting that it would be "beyond the scope of the FCC's authority."

For years now, we've pointed out how ridiculous it is that net neutrality became a "partisan" issue. In the early days, when it was neither, there were interesting discussions about the pros and cons of it. Once it became a "blue team v. red team" issue, most reasoned debate went out the window, and we were left with ridiculous exaggerations about "regulating the internet" or "the death of the internet." That's not helpful.

But here's the thing: actual Republicans outside of Congress support net neutrality too (though, it helps not to call it "net neutrality.") Two separate studies have come out this week making this point. First up, there was a poll from the University of Delaware's Center for Political Communication, checking in with 900 adult US residents. When not using the term net neutrality, but asking if they "favor" or "oppose" allowing broadband access providers to charge websites or streaming video services extra for faster speeds -- across the board, only 17% favored or strongly favored that idea, while 81% were opposed (37%) or strongly opposed (44%) the idea. Digging down to just the Republicans, it turns out that even more Republicans were against this than democrats. Only 13% favored (11%) or strongly favored (2%) letting broadband players set up such tollbooths, while 85% were opposed (44%) or strongly opposed (41%). Meanwhile, a different poll released by the Internet Freedom Business Alliance (IFBA) and done by Vox Populi, surveying 1270 active voters, found similarly overwhelming results that conservatives and Republicans actually support (strongly) net neutrality:

Some 83% of voters who self-identified as “very conservative” were concerned about the possibility of ISPs having the power to “influence content” online. Only 17% reported being unconcerned. Similarly, 83% of self-identified conservatives thought that Congress should take action to ensure that cable companies do not “monopolize the Internet” or “reduce the inherent equality of the Internet” by charging some content companies for speedier access.

A few months ago, we wrote about a great argument made by a "self-identified conservative" arguing why Republicans should support reclassification, mainly to block out the harmful monopolistic tendencies of broadband providers. And it appears that conservatives and Republicans (and, of course, those aren't always the same thing, but there is a lot of overlap) intuitively agree with this position.

So why don't their elected representatives? The explanation that still seems to make the most sense is that the money is too good in opposing net neutrality.

Filed Under: broadband, democrats, net neutrality, open internet, politicians, public, republicans, voters

Guy Sues Time Warner Cable For Deceptive Acts & False Advertising Over Bogus Promotional Rates, Hidden Fees

from the transparently-non-transparent dept

For many, many years, plenty of people have complained about hidden fees and bogus promotional rates offered by various broadband companies. It appears that Jeremy Zielinski has had enough. He's actually sued Time Warner Cable in NY for "deceptive acts and practices" and "false advertising." Specifically, he signed up for Time Warner Cable at a promotional $34.99/month package, only to discover his first bill was for $94.45. The $34.99 had magically morphed into $39.99 plus a $5.99 "internet modem lease" fee and a $47.99 installation fee -- all of which he insists were never mentioned anywhere in the original offer. The modem lease and install fees are fairly common these days -- and it's ridiculous but they're the kinds of things that people should absolutely clarify before signing up for new internet service. The wrong promotional fee, though, seems really questionable. Zielinski then had a rather typical customer service experience with a big broadband player:

On or about the next day, Plaintiff called the defendant's customer service number to complain about the overbilling. Plaintiff specifically informed TWC that the prices and services billed for were neither advertised, explained, nor agreed to. After waiting on hold for some time, a representative claimed that the $34.99 was a "promotional price" that should not have been on the website anymore and that the "modem lease" fee and installation fee were "standard" and could not be taken off. Inexplicably, the representative nevertheless agreed to remove the $47.99 "Internet, Install fee" from the bill.

A few calls later, TWC promised to lower the price to the advertised $34.99, but did not (of course). After many more complaints, TWC did temporarily lower his bill to $19.99 (plus the "modem lease fee").

Zielinski also notes some other practices that he suggests are unfair or deceptive, such as leasing certain modems that the company insists will not work on its system if you buy them (thus pressuring people into the lease fee):

Another page on TWC's site, taken down at an unknown point in the last few months, contained a list of which modems TWC will "approve" if owned by a consumer and which modems TWC will "lease" to consumers. The list of modems which are compatible with its services is substantially larger than the "approved" list. Many modems which TWC falsely claims "will not work" because they are not on the "approved" list are the very same ones that TWC "leases" to consumers and charges them non-advertised fees for. Exhibit H.

For some modems, the only distinction between whether consumers can use it to receive TWC services is whether TWC or the consumer owns the modem. If the consumer owns it, TWC will not allow the consumer to use it, but if TWC owns it—and can charge the consumer a monthly "modem lease" fee for it—the modem is perfectly acceptable to TWC. There is no legitimate technological reason for this distinction.

Many of the modems which TWC falsely claims "will not work" with its services are substantially cheaper than the ones on the "approved" list. TWC's false statements about which modems are compatible with its services, and its refusal to "approve" consumer-owned modems which are actually compatible with its network, have no legitimate technological justification, and are intended to deter consumers from purchasing compatible modems and to coerce them into paying exorbitant and unnecessary "modem lease" fees.

He also claims that Time Warner Cable sold him a speed upgrade, which was never actually delivered, though the company continued to bill him for it.

Despite TWC's email, Plaintiff observed that his upload and download speeds did not seem to have improved in any noticeable way. He began conducting a series of speed tests and discovered that his upstream and downstream speeds were the same as they were before the upgrade, even though he was now being charged $10 per month more for TWC services.

Plaintiff then contacted TWC customer service using its online chat portal and spoke with several representatives attempting to resolve the problem.

The first representative revealed after checking Plaintiff's account that the modem TWC had previously provided was not compatible with the higher speeds. According to that representative, in order to receive the services advertised, Plaintiff would have to travel at his own expense to the local TWC office and swap out the modem for a newer one.

The second representative proposed the preposterous solution of giving Plaintiff a one-day credit for the services TWC was apparently incapable of providing, then canceling the upgrade and going back to the lower speeds.

When Plaintiff requested to speak to a third representative, that person initially said the first representative was wrong and that the modem was compatible with a "Turbo" Internet access line, then after a speed test showed the same sub-advertised performance it had a few minutes before, changed his mind and said the modem was not compatible.

One interesting note in all of this: early on, Zielinski made the decision to pro-actively opt-out of TWC's mandatory arbitration clause, which most customers just accept, and which would significantly limit the ability of most users to go to court. Here's one of the exhibits in his lawsuit filing: Companies like Time Warner Cable have been able to get away with these sorts of questionable and non-transparent practices for ages. If I had to guess, I'd imagine that this lawsuit won't get very far in court, but it's still interesting to see someone fighting back...

Filed Under: broadband, cable, deceptive practices, false advertising, jeremy zielinski, lawsuit, new york, promotional rates
Companies: time warner cable

AT&T Pouts, Freezes Mostly Bogus 'Fiber To The Press Release' Deployments In Net Neutrality Bluff

from the land-of-broadband-make-believe dept

Oh, AT&T. For a good thirty years the telco has used a halt in "network investment" as a bogeyman to scare government away from any and all consumer protection policies. Do something we don't like, AT&T will usually argue, and we won't invest in the technologies of tomorrow, leaving you all stuck in the stone age and regretting the day you tried to challenge us. Usually said network expansion is a phantom; the company will simply manipulate numbers to actually create artificial broadband gaps, then promise to fill those gaps each and every time they want a regulatory favor.

AT&T has been doing it again lately with the DirecTV deal -- promising to shore up broadband gaps that should have filled years ago (thanks to billions in government subsidies) if it's allowed to gobble up a pay TV competitor. Basically, I've watched for ten years as AT&T just shaves off a few million users from their existing or already-planned network build projections, then pretends these users will be new upgrades -- but only if AT&T gets deregulated, faces fewer price controls, gets some new subsidies, or is allowed to buy BellSouth, DirecTV, or T-Mobile.

This week, "the good time, down home AT&T network investment bogeyman stage show" came to town in the form of a pouting response to the President's clear support for Title II reclassification. AT&T CEO Randall Stephenson has breathlessly proclaimed that the telco is going to freeze fiber expansion because they're concerned about Title II network neutrality protections:

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," CEO Randall Stephenson said..."We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like," he added."

In other words, do what we want or we'll make sure the United States remains a broadband backwater. The problem? It's a childish, transparent bluff, as AT&T gave up on meaningful fixed-line fiber investment years ago.

Despite a decade of massive, sweeping telecom industry deregulation, AT&T's fixed-line network investment has consistently dropped like a stone as the telco focuses on wireless services, where socking users with overage fees and imposing bizarre new anti-competitive pricing models is far more profitable. In fact, AT&T announced yet another $3 billion fixed-line CAPEX investment cut just last Friday, long before the President announced he wanted to go to war over Title II. As for those "100 cities," AT&T says were getting fiber under the "Gigapower" brand? All AT&T's really doing is cherry picking a few high-end wealthy housing developments where fiber is already in the ground, then dressing up those deployments to make them look much, much larger than they actually are.

It's something I affectionately refer to as fiber to the press release.

When Google Fiber entered the market, pampered, competition-phobic, incumbent ISPs like AT&T, CenturyLink and Frontier began putting on a stage show, proclaiming that they too were joining the 1 Gbps race. Usually these announcements come in the form of a press release with absolutely no meaningful statistics in terms of timeline, coverage areas, or the actual number of users covered. That's again because it's largely bullshit: with a few exceptions, the companies are simply bumping speeds in housing communities where in many cases, fiber was in the ground as part of the building process. You'd be amazed (or perhaps not) just how well this works on the press, helping to craft the image AT&T's keeping pace as a next-generation broadband powerhouse.

But not only is AT&T not significantly upgrading the majority of its users to fiber, they're actively pulling out of vast swaths of the United States under the guise of something they're calling the "IP transition." As I've noted previously, AT&T's going state by state, promising state politicians amazing new levels of network investment -- but only if AT&T is completely deregulated and all consumer protections (like having to continue to offer dial tone to old people so they can call 911) is stripped off the books. In reality, AT&T's looking to sever the connections of tens of millions of DSL users they don't want to upgrade, which will only strengthen the cable monopoly in many markets.

This week, AT&T's once again pretending that if the government doesn't do what the pampered duopolist wants, they'll freeze fiber investments that were already stagnating by choice. It's a bluff that AT&T never stops using because the press, politicians and public seemingly never learn to stop believing it. Of the dozens of technology news outlets covering AT&T's announcement, only a handful could be bothered to mention that AT&T's 100 city promise was incredibly ambiguous and disingenuous to begin with, or the fact that AT&T had cut fixed-line investment projections already just days earlier.

Filed Under: fiber, fiber to the press release, net neutrality, randall stephenson, threats, title ii
Companies: at&t

Tom Wheeler Still Wants To 'Split The Baby'; Forgetting That The Point Of That Story Was Not To Actually Split The Baby

from the slamming-on-the-breaks dept

The Washington Post put up an article last night claiming that FCC boss Tom Wheeler is telling tech companies that he isn't going to follow President Obama's net neutrality plan, following the President's surprise announcement on Monday of his support for real net neutrality rules under Title II. We've heard from a few people who were at that meeting who claim that the Washington Post article isn't entirely accurate. It is true that Wheeler is still very interested in a potential hybrid plan that almost no one likes, but that much of Wheeler's statements at the meeting were actually more focused on delaying an official decision by the FCC, which many had expected to come in a December FCC meeting. Wheeler, it appears, wants more time to study the different options. Another FCC commissioner, Jessica Rosenworcel (who seems more likely to support a plan including Title II reclassification), has apparently been pushing for the FCC to stick to the existing schedule and to make a decision "without delay."

Still, it does appear that Wheeler wants more time to potentially explore the possibility of the hybrid option, or whether or not to really support the President's Title II plan. According to the Washington Post, he made this rather unfortunate analogy:

“What you want is what everyone wants: an open Internet that doesn’t affect your business,” a visibly frustrated Wheeler said at the meeting, according to four people who attended. “What I’ve got to figure out is how to split the baby.”

Except, first of all, no, he doesn't need to "split the baby." The whole point of the split the baby story is not about compromising and going down the middle, but about how such a plan for a compromise is actually a decoy to get parties to reveal their true positions, leading to the final result, which does not involve such a compromise. Perhaps Wheeler thinks he's playing the long game here, and his apparent attraction to the hybrid plan is something of a similar decoy, but it's not at all clear right now.

Meanwhile, the White House is making lots of noise about how the President is really serious in supporting Title II and "itching for a fight" if Congress tries to challenge such net neutrality rules:

Ultimately, the White House decided that telecom companies probably would challenge any strong FCC rules in court anyway, so why not fully support calls by the tech lobby for far-reaching rules protecting an open Internet?

The aides saw a political upside to a strong statement. A key contingent of the president’s base — young, tech-savvy progressives — would be energized by the action, and a strong statement on net neutrality could also help his relationship with congressional Democrats, according to government and industry officials.

Obama also saw a more immediate opportunity to retake the political high ground from Republicans, according to a Democratic congressional aide. Should GOP lawmakers vote to overturn any protections enacted by the FCC, a presidential veto would put Obama on the side of millions of consumers who have called on the FCC to adopt strong regulations.

“I see him almost salivating over a congressional fight, or a fight with the carriers, over this issue,” said the aide, who spoke on the condition of anonymity because he is not authorized to talk on the record. “This is a populist issue he thinks he can win on.”

If true, that's a good sign, but unfortunately, we've grown accustomed to promises to take on issues like this, not followed up by any actual actions. But hopefully the message is being made clearly to Wheeler at this point that there is political backing if he decides to take the most reasonable step and support reclassification.

Filed Under: broadband, fcc, hybrid, net neutrality, open internet, split the baby, title ii, tom wheeler

The Cable Industry Thinks Mindlessly Raising Rates Is A Good Idea In The Face Of Fleeing Subscribers

from the that'll-work dept

While cord cutting has been a small but important phenomenon for some time now, there are indications that the trend may be poised to accelerate in 2015 when a bevy of new live Internet video streaming options from HBO, Showtime, Sony, Dish and Verizon emerge. Cord cutting continued at a slow drip last quarter, with traditional pay TV operators losing a net 179,000 customers. Satellite companies Dish and DirecTV, which used to be immune to these defections, are no longer so; DirecTV lost 28,000 customers last quarter -- the first time they lost customers during Q3 in the history of the company.

Even industry analysts, who historically have ridiculed cord cutting as a hallucinated phenomenon reserved only for poor nobodies, have changed their tune. With the cord cutting trend clearly established and cable customers getting annoyed by often bi-annual rate hikes, how are many cable companies responding? Why, the one-two punch of denial and raising rates, of course!

New York's Cablevision is a prime example. At one time a cutting edge company that offered some of the fastest speeds at the best prices in the industry, over the last few years the company has resorted to winking and nodding at regional competitor Verizon every time it's time to raise rates on TV and broadband services. Company chief James Dolan recently declared that offering promotional rates and trying to compete on price was a "dead end" for the company, and as a result, a recent SNL Kagan study showed how Cablevision customers paid some of the highest prices for cable anywhere.

The result? Cablevision lost 56,000 video, 23,000 broadband and 33,000 Internet voice subscribers last quarter, but saw a 3.7% jump in net revenue. So stock jocks are temporarily happy, but that's not really a sustainable way to function long term -- unless of course your long-term goal is to sell your company to Comcast. James Dolan told analysts last last week he sees the cord cutting trend but isn't really worried about it:

"I don't know that it's necessarily disruptive to us yet as a multichannel provider, but we're keeping our eye on it. Ultimately, cord-cutting and going to over-the-top is something that we do believe is going to happen, and we're preparing ourselves for it. But I think that's all I can say about it at the moment."

Why aren't cable execs like Dolan worried about Internet video disruption? Because they know that because they see even less competition on the broadband side than they do on the TV side, they can continue raising rates there (inevitably in the form of technically unnecessary usage caps) relentlessly for the foreseeable future. In other words, cable companies are going to ride the pay TV cash cow right into the ground (while providing some of the worst customer support in any industry), then when Internet video takes off, shift their focus to new and creative ways to jack up prices thanks to the lack of competition in the field.

Filed Under: arpu, cable, cord cutting, increasing rates, rates
Companies: cablevision

T-Mobile's Ultra-Hip CEO Not So Ultra-Hip When It Comes To His Clumsy, Status Quo Opposition To Net Neutrality

from the phony-baloney dept

Ever since regulators rejected AT&T's dodgy acquisition justifications for the T-Mobile deal, T-Mobile has taken on new life, disrupting the wireless sector with a number of consumer-friendly policies that have included dismantling the traditional subsidized phone model. A big part of that consumer-friendly attitude has come in the form of CEO John Legere, whose often hilarious foul-mouthed tirades, Twitter rants and faux-punk rock attitude are a welcome change from the mindlessly-optimistic and rote recitations of most CEOs.

At the same time, more than a few people have pointed out over the last year that Legere (whose career started with a twenty-year stretch at AT&T and a notably more stodgy stint as Global Crossing's CEO) is really just performing a cartoon caricature whose revolutionary spirit only goes so far. Prime examples are not only the company's private admissions that it's loathe to compete on price, but also Legere's un-nuanced positions on net neutrality, illustrating the CEO is immeasurably more status quo than his persona would have the tech industry believe.

Earlier this year, T-Mobile announced with great fanfare they'd be exempting the most popular music services from the wireless company's usage caps. We were quick to point out that while perhaps appealing superficially to consumers, this practice violates net neutrality by giving larger, more popular services a leg up over smaller, less-known competitors. T-Mobile was also criticized by Public Knowledge for exempting speedtests from the company's caps in order to mask the company's throttling practices. At the time, Legere was "genuinely surprised" by the criticism, arguing that because nobody was paying T-Mobile to bypass the caps -- it wasn't a neutrality violation.

Fast-forward to this week, and Legere is showing again that he really doesn't understand what fundamental net neutrality is really about. Responding to the President's surprise unequivocal support of Title II reclassification, Legere went on quite a Twitter tirade about the perils of "overzealous" regulation, proclaiming that weaker, legally-dubious Section 706 rules were better than the Title II approach, because, well, "innovation!"

Don’t let the gov’t kill innovation. It has made us the fastest growing wireless company in America. #netneutrality

— John Legere (@JohnLegere) November 10, 2014

9/ I favor the 706 version, if regulated, because... did I mention how much I love innovation?!

— John Legere (@JohnLegere) November 11, 2014

In short, you've got a "pro-consumer" company that only exists because regulators prevented a duopoly from eating it -- complaining about regulatory intervention that's necessary to protect consumers from duopoly. As The Verge did an excellent job pointing out, Legere's simply engaging in "classic regulatory doublespeak" in order to protect his company's right to enact aggressive and anti-consumer pricing models sometime down the line. For examples of this ambition, you only need to look toward T-Mobile US's sister operations under Deutsche Telekom in Hungary, where T-Mobile recently started charging users more to access select content and services:

"Here’s how it works. T-Mobile offers access to areas of the Net to its users for a fixed fee per month. So for €5, for instance, a user may be able to use Spotify for the month; he or she can browse the open Internet at night for €10; and it can access DT’s IPTV for €3.20 per DAY. It looks like an a la carte cable company menu and it just breaks every possible rule and/or understanding of the way the Internet should be priced and nurtured."

While T-Mobile US's efforts are decidedly less ham-fisted than this, they're no less of an example of a carrier using arbitrary usage caps to fiddle with the user experience to its own ends. It's also a prime example of how easily people can be fooled into signing off on neutrality violations under the guise of creative pricing, and how rules need to be very clear in prohibiting this kind of behavior -- regardless of whether or not it's presented under a shiny veneer of purportedly consumer-friendly, ultra-hip paint.

Filed Under: broadband, competition, john legere, net neutrality, open internet, regulations, section 706, title ii, wireless
Companies: t-mobile