Leaked Trump Plan To 'Nationalize' Nation's 5G Networks A Bizarre, Unrealistic Pipe Dream

from the intern's-brain-fart dept

There's been a lot of hand wringing and hyperventilation over a new report claiming that the Trump administration wants to nationalize the nation's looming fifth-generation (5G) wireless networks, despite the fact the proposal has a snowball's chance in hell of ever actually materializing. According to a leaked PowerPoint deck and memo drafted by a "Senior National Security Council official," the Trump administration wants the U.S. government to build and own a centralized, government-controlled 5G network in order to, purportedly, fight Chinese hackers.

More specifically, the memo claims this plan would be akin to the "21st century equivalent of the Eisenhower National Highway System," creating a "new paradigm" for the wireless industry and for national security. Fear of Chinese hackers drives the proposal from stem to stern, suggesting the plan needs to be completed in three years to protect American interests worldwide:

"The PowerPoint presentation says that the U.S. has to build superfast 5G wireless technology quickly because “China has achieved a dominant position in the manufacture and operation of network infrastructure,” and “China is the dominant malicious actor in the Information Domain.” To illustrate the current state of U.S. wireless networks, the PowerPoint uses a picture of a medieval walled city, compared to a future represented by a photo of lower Manhattan.

The best way to do this, the memo argues, is for the government to build a network itself. It would then rent access to carriers like AT&T, Verizon and T-Mobile."

And while the Trump administration running our nationwide wireless infrastructure seems both equal parts fascinating and terrifying, it's hard to take the proposal seriously.

For one thing, it ignores the technical realities of the telecom sector and the path to 5G. Individual carriers like AT&T, Verizon and T-Mobile already have their own 5G network builds well underway and spectrum already largely assigned, with commercial launches of the faster, lower-latency standard expected beginning in 2020 or so. Suddenly injecting the United States government into this process at this point makes little to no actual sense, at least for an administration that has stated repeatedly that telecom Utopia is achieved by government letting these entrenched carriers do whatever they'd like.

The proposal also tends to ignore political realities. AT&T and Verizon have more state and federal political influence than nearly any other companies thanks to their already extensive ties to domestic surveillance operations. They don't want their assets seized to help operate such a "nationalized" network, and any effort to do so would prove politically suicidal. That's why Trump's own FCC (you know, the agency that actually regulates publicly-owned airwaves) was quick to release a statement shooting down the proposal:

"I oppose any proposal for the federal government to build and operate a nationwide 5G network. The main lesson to draw from the wireless sector’s development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment. What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future."

US Telecom, a lobbying organization backed by AT&T, was just as quick to shoot down the proposal:

"There is nothing that would slam the breaks more quickly on our hard-won momentum to be the leader in the global race for 5G network deployment more quickly than the federal government stepping-in to build those networks. The best way to future-proof the nation’s communications networks is to continue to encourage and incentivize America’s broadband companies -- working hand-in-glove with the rest of the internet ecosystem, and in partnership with government, to continue do what we do best: invest, innovate, and lead."

When I first read the proposal, my instinct was that it was just the random brain fart of some natsec advisor who doesn't understand how telecom works or the mammoth influence companies like AT&T have over such policy. And that seems to be supported by subsequent leaks in the wake of the memo's release:

"As multiple White House officials confirmed to Recode on Sunday, the document as published is dated. They also stressed it had merely been floated by a staff member, not a reflection of some imminent, major policy announcement — and probably might never be."

To be clear, none of this is to say nationalizing networks couldn't work or be beneficial in an ideal world that actually respected civil liberties. Data has suggested a nationwide, taxpayer-funded fiber network where ISPs come in and compete (aka "open access") would potentially provide America with cheaper, better service than the pricey dreck currently passing as American broadband. Of course, given incumbent ISP influence that proposal will never actually materialize either, since to do it correctly would mean increasing competition in the broken telecom market, and we certainly wouldn't want that.

That said, the proposal does engage in all the usual hand-wringing about how the existing $700 billion defense budget isn't enough to counter the "Chinese threat" to American industry. So while the proposal isn't likely to result in nationalized networks, any runner up proposal is likely to just double down of all of our worst habits to date, including throwing countless billions at companies like AT&T, bone-grafting them to our global intelligence apparatus, then ignoring all the ways this power has been routinely and consistently abused.

Filed Under: 5g, china, cybersecurity, fcc, national security council, nationalize, wireless

Trump's New Rural Broadband Executive Order Doesn't Actually Do Much Of Anything

from the Comcastic dept

You have probably noticed by now that the biggest problem in the U.S. broadband market is a lack of vibrant competition in many areas. This lack of competition over the "last mile" is the core reason for the majority of the problems in the sector, from privacy violations to net neutrality infractions. And while lawmakers from both parties adore paying empty lip service to making broadband faster, cheaper, and more available, very few have the courage to stand up to AT&T, Verizon, and Comcast and actually implement policies that improve our competitive options.

More often than not, government's "solution" for the broadband market involves first ignoring that there's any real competition problem whatsoever, then hyping "broadband expansion" efforts that fail to truly address the underlying problems.

That's usually accomplished via programs with "goals" that would have been accomplished anyway. Like when Obama promised in 2011 to ensure wireless broadband reached 98% of the public (ignoring the problem of high prices and usage caps, or the fact this coverage was going to occur anyway), or when Obama's former FCC boss Julius Genachowski promised a gigabit ISP in each one of the fifty states (also something that would have happened without government involvement). Such efforts usually comically ignore how limited competition and high prices are the biggest problem.

Keeping this proud tradition alive, President Trump this week held a rally to hype his purported dedication to the nation's forgotten rural areas. This dedication, according to a breakdown by Reuters, will involve "making it easier for the private sector to locate broadband infrastructure on federal land and buildings":

"U.S. President Donald Trump was expected on Monday to sign an executive order to make it easier for the private sector to locate broadband infrastructure on federal land and buildings, part of a push to expand high-speed internet in rural America. Faster internet speeds in rural areas have long been seen as key to addressing the economic divide between rural and urban America, but the costs have so far been prohibitive."

But if you bother to read the actual order, the "new efforts" cited within are nothing new. They're simply part of a concerted effort to speed up construction and placement of cellular towers and other essential gear on government property at the behest of AT&T and Verizon, a priority at the FCC for several years now. In Trump fashion however, the President took ample time to insist this looming surge in "great, great broadband" was exclusively thanks to his leadership and the creation of this new executive order:

"Those towers are going to go up and you’re going to have great, great broadband,” Trump told the annual convention of the American Farm Bureau Federation. "Farm country is God’s country,” he declared..."Oh, are you happy you voted for me,” he added. “You are so lucky that I gave you that privilege."

While faster cellular tower placement is great and all, it doesn't solve the real problem in the sector: a lack of competition. FCC data indicates that two-thirds of American homes lack access to modern broadband (25 Mbps) from more than one ISP. Instead of addressing that problem, the Trump FCC has been actively working to undermine how broadband is measured in a blatant attempt to hide coverage and competition gaps. Trump's FCC has also started taking a hatchet to programs that help bring broadband to the poor, an increasing problem given that incumbent providers refuse to upgrade countless poor or rural markets.

Reuters' and other mainstream coverage of Trump's EO also ignores the countless problems that will be caused by the Trump administration's attack on net neutrality, elimination of consumer broadband privacy protections, or industry-backed efforts to gut nearly all meaningful oversight of entrenched telecom duopolies, something that history repeatedly tells us only makes service worse and more expensive. Unsurprisingly, reports fail to note the fact that the Trump FCC has taken steps to protect the entrenched monopoly at the heart of the cellular backhaul and business data services (BDS) markets, ensuring competition there remains tepid and cellular connectivity remains expensive.

Here's a tip: you'll know a politician's "broadband plan" is worth anything if it makes Comcast, AT&T and Verizon lawyers, lobbyists and lackeys angry. Any plan worth its salt would drive competition to the sector, eroding revenues for duopolies all-too-comfortable nursing the status quo. If they approve of it, it likely doesn't actually tackle the heart of the dysfunction that is the American broadband market.

Filed Under: broadband, cell towers, competition, donald trump, executive order

AT&T, Huawei Phone Partnership Killed At Last Second By More Unproven Accusations Of Huawei Spying

from the not-so-free-markets dept

If you remember a few years ago, there was ample hysteria and hand-wringing in Congress regarding Huawei's plan to compete in the American cell phone and network hardware business. But despite near-constant claims by certain lawmakers that Huawei was an intelligence proxy for the Chinese government, numerous, multi-year investigations found absolutely no evidence to support this conclusion. That of course didn't stop certain parties from repeatedly insisting that Huawei was a Chinese government spy, since we all know that in the post-truth era, what your gut tells you is more important than empirical evidence.

Never mind that almost all U.S. network gear is made in (or comprised of parts made in) China. Never mind that obviously NSA allegations show the United States spies on almost everyone, constantly. Never mind that reports have emerged that a lot of the spy allegations originate with Huawei competitor Cisco, which was simply concerned with the added competition. Huawei is a spy. We're sure of it. And covert network snooping is bad. When China does it.

Fast forward to this week. A new report in the Wall Street Journal indicates that AT&T and Huawei were about to announce a new cellphone sales partnership at CES. While Huawei phones are available unlocked in the States (and Huawei has helped Google build its own smartphones already), the deal would have marked the first major partnership between the company and a major cellular provider. But the deal was scrapped at the last second for reasons neither company wanted to disclose to the Journal:

"It was unclear why AT&T, the country’s No. 2 carrier by subscribers, changed its mind. An AT&T spokesman declined to comment. A Huawei spokesman declined to comment on conversations with AT&T, saying only that “Huawei has proven itself by delivering premium devices with integrity globally and in the U.S. market."

A paywalled report over at the Information appears to offer the real reason for the last-minute scuttling of the partnership: namely a letter sent to the Trump FCC by members of the Senate and House Intelligence Committees again claiming that Huawei is a spy for the Chinese government:

While it's certainly not impossible that Huawei is aiding Chinese government surveillance, the fact remains that there have been numerous, lengthy investigations into this claim (one of which was eighteen months long), none of which have actually resulted in the slightest bit of evidence proving the allegations. And again, what has been proven so far is that lobbyists for companies like Cisco have spent ample time pouring fire on these concerns in the minds of cash-compromised lawmakers, simply because they don't want to have to face another deep-pocketed competitor in the US hardware market.

That is, as some guy named Mike Masnick noted on Twitter, something we've long enjoyed criticizing China for:

AT&T, no stranger to domestic spying (bone grafted as it is to the United States own intelligence-gathering aparatus) may have been willing to kill the deal out of blind "patriotism" or the belief it could help gain regulatory approval for the company's $86 billion acquisition of Time Warner (currently being challenged by the DOJ in court). Nobody in this chain has much in the way of integrity or a history of truth-telling, and until evidence emerges that Huawei is the nefarious spymaster allegations have long alleged, a dash of skepticism seems warranted.

Filed Under: china, competition, congress, fcc, phones, senate intelligence committee, spying
Companies: cisco, huawei

Wireless Carriers Again Busted Collecting, Selling User Data Without Consent Or Opt Out Tools

from the privacy-no-longer-exists dept

A few years ago, Verizon and AT&T were busted for covertly modifying wireless user data packets in order to track users around the internet. Verizon used the technology to track browsing behavior for two years before the practice was even discovered by security researchers. It took another six months of public shaming before Verizon was even willing to offer opt out tools. And while the FCC ultimately gave Verizon a $1.3 million wrist slap, it highlighted how we don't really understand the privacy implications of what mobile carriers are up to, much less have real standards in place to protect us from abuse in the modern mobile era.

While notably different in scope and application, these same companies were again caught this week collecting and selling user information without user consent or working opt out tools.

Earlier this week Philip Neustrom, co-founder of Shotwell Labs, discovered something interesting and documented his findings in this blog post. Neustrom discovered a pair of websites that, when visited by a mobile device over a cellular connection, appeared to easily glean numerous personal visitor details, including the visiting user's name, some billing and location data, and more. Users simply needed to input a zip code, and the carriers providing your cellular service seemingly provide a wide array of personal data to these services without user consent or an opt out.

On the surface, the intention behind these services isn't particularly nefarious. These websites are examples of fraud prevention services companies like Payfone offer to companies, employers and organizations to help verify a visitor is who they say they are. Visitors to a specific website have their data immediately cross-referenced with billing, phone number, or even GPS data that's provided by wireless carriers. The problem, as Neustrom documents, is that mobile carriers don't appear to be adequately informing users this data is being collected or sold:

"But what these services show us is even more alarming: US telcos appear to be selling direct, non-anonymized, real-time access to consumer telephone data to third party services — not just federal law enforcement officials — who are then selling access to that data. Given the trivial “consent” step required by these services and unlikely audit controls, it appears that these services could be used to track or de-anonymize nearly anyone with a cell phone in the United States with potentially no oversight.

He also found that the existing opt out mechanisms used by T-Mobile, Verizon, AT&T and other mobile carriers don't do a damn thing to prevent this data from being monetized:

"AT&T’s “consumer choice” opt-out at https://att.com/cmpchoice didn’t appear to do anything to stop this, even after waiting the stated 48 hours. All of the demos were still working for me on the morning of 2017–10–15 after I had opted out on 2017–10–13. Many users on Twitter and elsewhere also report that AT&T’s opt-out process doesn’t do anything here. Verizon’s “opt-out” pages also may not do anything to prevent this, either (A, B)."

The report was seemingly a bit too obscure to get much mainstream media attention, but obviously hit a nerve all the same. Shortly after publication, both websites -- and their previously public API documentation were pulled offline by Payfone. Similarly, video of a joint AT&T Danal presentation from 2014 explaining how this technology works was pulled from YouTube. The security community was surprised to learn of the technology, with some offering more concise analysis than others:

You'll recall that for years mobile carriers like Verizon argued that we don't need meaningful privacy protections because they always self-regulate within the boundaries of good taste. Carriers re-used this justification earlier this year when they convinced the Trump administration and GOP to kill FCC broadband privacy protections. But it's hard to hold these companies accountable for privacy violations when even security researchers aren't aware it's happening, and unlike the realm of Google, Facebook or other advertisers, a lack of competition in the telecom sector means less organic competitive pressure to behave.

This week's discovery is just another example of how mobile carrier self-regulation isn't working, and some modest rules requiring more transparency (and mandatory, opt out or opt in tools) would have been of immense public benefit.

Filed Under: privacy, selling, user info, wireless
Companies: at&t, t-mobile, verizon

Mission Accomplished: Ajit Pai's FCC Declares Wireless Competition Issues Fixed

from the ignore-a-problem-and-it-goes-away,-right? dept

The FCC is required by law to offer an annual report on the state of competition in the broadband industry. Depending on who's in power, and how eager they are to downplay the lack of said competition to the benefit of industry, these reports often provide comical insight into how the regulator fiddles with data to justify policy apathy. Under George W. Bush's presidency, the FCC declared the wireless industry perfectly competitive. Under the Obama administration, the FCC refused to state one way or the other whether the sector is competitive. Neither party has what you'd call courage when it comes to calling a spade a spade.

Fast forward to this year, and you likely won't be surprised to learn that the Ajit Pai led agency has declared the wireless sector perfectly competitive -- for the first time since 2009. In a press statement, Pai declared (pdf) that the re-introduction of unlimited data plans, prompted in turn by a resurgent T-Mobile, is proof positive that the sector is perfectly healthy and "fiercely competitive":

"The 20th Report reviews many factors indicating that the wireless marketplace is, indeed, effectively competitive. I won’t repeat them here; that’s why we have the report. But looking at the bigger picture, most reasonable people see a fiercely competitive marketplace. For example, since the FCC’s last report in 2016, all four national carriers have rolled out new or improved unlimited plans. This is strong, incontrovertible evidence.

And looking at the wireless industry from a superficial level, many would likely agree. But look under the hood and things aren't quite as rosy as Pai would lead you to believe. For one, even with T-Mobile disrupting AT&T and Verizon, these companies still largely engage in theatrical non-price competition, resulting in Americans paying more money for slower speeds than most developed nations. There's also the fact that AT&T and Verizon have a duopoly stranglehold over the special access and tower backhaul market, allowing them to drive up operational costs for competitors like T-Mobile and Sprint.

Pai also just floats right over the other major elephant in the room: the looming merger between Sprint and T-Mobile, which is expected to be formally unveiled in a few weeks. Every analyst in telecom worth their salt expects Pai to rubber stamp the deal, despite the obvious, major competitive impact of reducing the number of major carriers in the space from four to three. Pai's fellow Commissioner Jessica Rosenworcel, who voted down the cocksure declaration of industry health, was quick to highlight this problem in her own statement (pdf) on the decision:

"Like everyone else, I read reports of mergers waiting in the wings. So while this report celebrates the presence of four nationwide wireless providers, let’s be mindful that a transaction may soon be announced that seeks to combine two of these four. While the Commission should not prejudge what is not yet before us, I think this agency sticks its collective head in the sand by issuing this report and implying move along, there is nothing to see here."

Oddly, news outlets like Reuters were quick to somehow insist that declaring the industry perfectly competitive (when under the surface it still really isn't) will somehow "help Sprint and T-Mobile to merge":

"A divided Federal Communications Commission on Tuesday approved a report that found for the first time since 2009 there is “effective competition” in the wireless market, a finding that could help Sprint Corp and T-Mobile US Inc to merge."

But on what planet does a partisan, arbitrary declaration of industry health make it OK to dramatically reduce sector competition further? That's the kind of flimsy logic and mindless megamerger cheer leading you're going to see a lot of the next few months as the industry -- and the policy folk and politicians paid to love them -- tries to convince the public that reducing wireless competition even further in the States is a really wonderful idea.

Filed Under: ajit pai, competition, fcc, mergers, wireless
Companies: at&t, sprint, t-mobile, verizon