An Explanation For Why Verizon Is Driving DSL Users To Competitors' Cable Lines

from the dumping-dsl dept

Karl Bode has an interesting story explaining how Verizon is willfully pushing its DSL customers over to cable broadband "competitors." It's worth reading the whole thing, but the short version is that Verizon wants desperately out of the DSL business. Now, some of that is to drive people to its popular FiOS fiber service. However, the company has basically stopped expanding FiOS entirely. The fact that most of the competition is gone couldn't possibly have anything to do with that, right? But the bigger vision appears to be to push people over to the company's wireless solution, LTE. Bode suggests a few reasons for this, with a big one being that LTE is much more expensive, and has relatively low caps and high overage rates. In other words, it makes a lot more money for Verizon, but is much more limiting for users (there's also the bit about how it switches from a "unionized" business to a non-unionized one).

In other words, Verizon will cut off copper in FiOS markets first (which makes sense given the lower maintenance costs of fiber). They'll then leave users in DSL-only markets un-upgraded, forcing them to buy a costly landline so that remaining on Verizon DSL becomes less attractive. Those customers will flee to the same cable companies Verizon just signed a massive new partnership with, with Verizon planning to sell those users more expensive LTE connection later. Verizon will continue to "compete" in FiOS areas for now, if you call winking and nodding when it's time to raise prices competition.

Rural areas could see the biggest impact from the shift, as Verizon pulls DSL and instead sells those users LTE services with at a high price point ($15 per gigabyte overages). Verizon then hopes to sell those users cap-gobbling video services via their upcoming Redbox streaming video joint venture. Expect there to be plenty of gaps where rural users suddenly lose landline and DSL connectivity but can't get LTE. With Verizon and AT&T having killed off regulatory oversight in most states -- you can expect nothing to be done about it, despite both companies having been given billions in subsidies over the years to get those users online.

The entire amazing transition becomes clearer still when looking at Verizon's quarterly earnings posted yesterday. The company added a whopping 3.2 million LTE users during the second quarter, a record for the telco. In contrast, thanks to a frozen FiOS expansion (with the exception of franchise obligations in urban markets) and their disdain for DSL, Verizon managed to add just a net 2,000 broadband users in the quarter, despite adding 134,000 FiOS users. Verizon CFO Fran Shammo gave several excuses during yesterday's conference call ranging from the economy to aardvarks -- but the reality is that DSL users are fleeing in droves, and Verizon wants them to.

Now, there is something reasonable about a company actually being willing to cannibalize its own older offerings with something more modern. But a key warning sign that something is wrong is that they're not moving customers to something that's better and cheaper -- which is what you normally see in a truly competitive, innovative market. Instead, they're moving them to a more limited, more expensive offering. That's what you tend to see when there's not nearly enough competition in the market, and a few established players whose customers have little choice.

Filed Under: broadband, cable, dsl, fiber, wireless
Companies: verizon

If You Go To The Olympics, You Can Bring Your iPhone Or Android Phone... But You Better Not Tether

from the wireless-police? dept

Among the latest bizarre limitations that the Olympics puts on people is a ban on any sort of private WiFi network via your mobile connection. That is, you're not allowed to tether your phone, turn it into a WiFi hotspot or use a device like a MiFi to create the same effect:

A first for any Olympic Games is the ban on personal or private wireless access points and 3G hubs, which are not allowed at London Olympics events and venues.

iPhones, iPads, and Android phones and tablets are permitted inside venues, but must not be used as wireless access points to connect multiple devices.

It's possible (or perhaps likely) that this is done to help local mobile operators from having their networks overburdened, but, really, you'd think that the mobile operators would be out in droves with those "cells on wheels" (COW) vehicles that provide significantly more cellular power at high traffic events. Still, I'm curious as to how anyone enforces such a ban. It's pretty easy to hide a MiFi. And turning your phone into a hotspot and slipping it back into a pocket would make it almost impossible to detect. The whole ban just seems pointless.

Filed Under: hotspots, olympics, tethering, wifi, wireless

AT&T May Try To Charge FaceTime Users, Raising Net Neutrality Questions

from the or,-time-to-find-another-carrier dept

One of the main concerns of those who worry about net neutrality is how a network provider might block or charge extra for competing services. For example, telcos who still make a fair bit of money from voice services might not like competing services like Skype. Or... Apple FaceTime. So it's interesting to see a report from 9to5Mac suggesting that AT&T may be planning to charge extra to use FaceTime over cellular. This came out when testing iOS6 and receiving a popup requiring "activation." Here's the screenshot of what 9to5 saw: This does not absolutely mean that they're going to charge. Currently, FaceTime only works over WiFi, but iOS6 is set to enable it for cellular. It's possible that this popup is just because iOS6 is still in beta, and it's just a generic message for a service that is not yet available. But it's at least raising concerns about the intentions of AT&T, with groups like Free Press already warning that this would violate existing (if contested) FCC rules on net neutrality (which, it should be noted are very, very limited when it comes to mobile services). To be honest, I'm not sure why AT&T would actually go down this path. It's already trying to cap and/or meter mobile bandwidth, so it already has a natural restriction on usage. Furthermore, since the iPhone is now widely available on other platforms, charging extra for FaceTime seems like a perfect strategy for driving iPhone users to other mobile operators.

Filed Under: charges, competition, facetime, ios, iphone, net neutrality
Companies: apple, at&t

California Legalizes Some Texting While Driving, Sort Of

from the will-it-reduce-accidents? dept

A few years ago, California outlawed texting while driving. On the whole, this is one of those things that certainly seems like a good idea. I'm still amazed that anyone -- law or no law -- thinks that texting while driving is a reasonable thing to do. It's a clear death wish. That said, like many laws, there appear to be unintended consequences. A few studies have suggested that states that put in place anti-texting while driving laws actually saw an increase in accidents compared to nearby states that had no such ban. How does that make sense? Well, it's because the law doesn't seem to actually get everyone to stop texting while driving. Instead, what it does is make them hide what they're doing, which generally means putting it down in their lap. Before that, they could hold it up and still see the road, even if they weren't paying close enough attention to it.

None of this is defending the ridiculously dangerous practice of texting while driving, but merely acknowledging that the law intended to make the roads safer could actually do the opposite.

With all that said, it's interesting to see that California quietly legalized some forms of texting while driving last week with very little fanfare. Basically, it allows totally hands-free texting -- such as dictating messages via a bluetooth headset or a car service like OnStar. Of course, unsurprisingly when dealing with lawmakers and lawmaking, there's a lot of confusion over the new rules -- with some wondering if it meant that something like Siri was now legal while driving. That resulted in the following amusing passage in the SJ Merc article about this, in which the staff of the sponsor of the bill is left to admit that no one there has an iPhone, so they didn't even really think about Siri:

On Friday, after much head-scratching and acknowledging nobody in Miller's office owns a Siri-equipped iPhone 4S, the assemblyman's aides concluded it will still be illegal to use your actual phone to text behind the wheel -- even by speaking the message directly into Siri.

The California Highway Patrol confirms that just the act of turning on the phone or selecting the phone's hands-free text app, like pushing the Siri button or Google apps on Android phones, is enough to warrant flashing lights in your rearview mirror and a $100-plus ticket. The same thing goes for using your phone to read texts.

"The phone can't be in your hands," said CHP spokeswoman Jaime Coffee. "Hands-free is the key."

Either way, this seems to suggest, once again, the difficulty in regulating any particular technology in a rapidly changing technology market. I still don't understand why we don't just do the simple thing: make dangerous and distracted driving illegal, and just teach people the human consequences of doing something moronic like texting while driving.

Filed Under: california, driving, sms, texting, texting while driving

South Korea Gives Mobile Operators Permission To Ignore Net Neutrality By Surcharging Or Blocking VOIP Services

from the what's-in-it-for-the-customers? dept

Net neutrality arguments are often couched in rather theoretical terms, and many people can't really see what all the fuss is about. A recent decision in South Korea gives a handy example of what the loss of net neutrality means in practice:

In a move that has critics crying that it is ignoring net neutrality principles, the Korea Communications Commission said last week that it will let three local mobile operators, SK Telecom, KT and LG U+, charge users extra fees for VOIP [voice over IP] applications or block their use entirely.

Among the VOIP services affected is the mobile phone messaging app KakaoTalk, which has a massive following in South Korea:

KakaoTalk has 36 million Korean users and 9.2 million international users. More than half of 50 million Korean cell phone owners use smartphones, according to the Korea Communications Commission.

In other words, thanks to this latest ruling, tens of millions of KakaoTalk users in South Korea will either be forced to pay more, or may even find the service blocked completely. It's hard to see why the South Korean telecom authority decided this kind of tilted playing field was a good idea: the only ones to benefit are the mobile operators who get to attack new entrants that threatened to disrupt their market, while huge numbers of Korean citizens will be worse off as a result. You could hardly hope for a better demonstration of why net neutrality matters, and is not some purely theoretical concern.

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Filed Under: net neutrality, south korea, voip
Companies: kakaotalk

UN Wants To Host 'Patent' Summit To Deal With Smartphone Patent Thicket

from the send-in-peacekeepers? dept

The UN's International Telecommunication Union (ITU) -- the same unit looking at very questionable plans concerning taxing the internet -- has apparently decided that it also needs to step in over the massive patent thicket around smartphones. It's convening a summit of many of the players involved in the various patent disputes to see if something can be worked out to settle down all of the patent lawsuits. Of course, from the sound of it, it looks like they're only inviting the big companies who make products, and leaving the many trolls out of it. Also, it's unclear from the description if the ITU really grasps the root causes of the problem: the system itself. Instead, it seems to think that bringing together all of these companies will magically get them to "settle their differences." That seems like wishful thinking.

Filed Under: itu, patent thicket, patent troll, smartphones, united nations

Mobile Operators Responded To An Astounding 1.3 Million Requests For Subscriber Info

from the you-have-no-privacy dept

We've talked for a while about just how often law enforcement seeks information from mobile operators -- often without getting any actual warrant -- knowing that it was astounding. But after an article from a few months ago in the NY Times noting that it was both routine and a big business for mobile operators, who charge law enforcement for each request, Rep. Ed Markey asked all of the major mobile operators just how often they get requests from law enforcement for subscriber info, and discovered that last year they responded to an astounding 1.3 million requests for subscriber info -- including location info, text messages and other data. And, apparently, this number likely undercounts the true size, because it notes that there was "incomplete record-keeping" in some cases. Oh yeah, and also, this just requests, not individuals -- a single request might include multiple people whose information was being sought. So, an awful lot of people were spied on this way.

Not surprisingly, the number of requests continues to rise drastically, with AT&T admitting that it had seen a tripling in requests in the last five years. As the report notes:

AT&T alone now responds to an average of more than 700 requests a day, with about 230 of them regarded as emergencies that do not require the normal court orders and subpoena.... Sprint, which did not break down its figures in as much detail as other carriers, led all companies last year in reporting what amounted to at least 1,500 data requests on average a day.

This isn't a huge surprise, but does raise significant questions about how reasonable these information trawling operations are. Do we honestly believe that law enforcement needed all of that info? This seems like a case where, of course, if the info is easy to get, law enforcement wants it. But is that reasonable?

And, telcos have little incentive to stand up for the rights of their users. They actually make money from these kinds of requests:

AT&T, for one, said it collected $8.3 million last year compared with $2.8 million in 2007, and other carriers reported similar increases in billings.

For a company that large, this isn't a major cash cow, but it is something. It's unclear how carefully the telcos review the request. At least one (smaller) telco, C Spire Wireless, reported that it had rejected about 15% of the requests, but most of the other operators didn't provide any info on rejections (and it makes you wonder if they ever rejected any requests at all).

None of this is surprising. When such a tool is available, it's almost impossible for it not to be abused. It's just too easy for law enforcement to snoop on anyone's location or text messages, and they can't resist doing so. It seems like telcos (1) could be a lot more transparent about this. While Google and Twitter both have voluntarily opened up to provide data on law enforcement requests, the only reason this info became public from the mobile operators was because of Markey's request. On top of that, it seems that the rules concerning an individual's privacy rights should also be a lot clearer, to give the telcos more ammo to push back against bogus requests.

Filed Under: ed markey, law enforcement, location data
Companies: at&t, c spire wireless, sprint

Debate Club: Should Police Need A Warrant To Get Your Location From Your Mobile Phone Provider?

from the debate-it-up dept

US News runs some online debates, in which they bring together a bunch of experts to debate a particular topic of interest, allowing readers to vote on which arguments they agree with most. This week, they're debating if police should need to prove probable cause in order to get a warrant to get your mobile phone location (and potentially track you). There's a great opening argument from Senator Ron Wyden, who worries about the possibility for abuse:

While having access to geolocation data is clearly useful for law enforcement agencies, without the resource limitations that used to discourage the government from tracking you without good reason, the limits on when and how geolocation data can be accessed are unclear. A police department, for example, might not have the resources to follow everyone who lives within a city block for a month, but without clear rules for electronic tracking there is nothing to stop it from requesting every resident's cellphone location history.

Obviously, we expect people to see us when we step out onto the street each morning, but we don't expect those people to track all of our movements over the course of days, weeks, months, or even years.

Also on his side (in this debate) is Rep. Jason Chaffetz, who makes a straightforward 4th Amendment argument, the ACLU's Catherine Crump, who not surprisingly focuses on the privacy arguments and Jennifer Granick from the Center for Internet and Society talking about how the lack of a warrant requirement leaves the system wide open to abuse by law enforcement.

Who can possibly argue against all that? Well, there's Joseph Cassilly, who had been the president of the National District Attorney's association. His basic argument is that having easy access to this data makes the job of law enforcement easier:

A recent example of this was in a gang shooting in my jurisdiction wherein an anonymous caller who feared gang retaliation if his identity was known gave the police the identity of two gang members who committed the murder. The police received cell phone information regarding these individuals from prior arrest reports. The cell-site historical information for the time of the killing shows that those two cell phones were hitting off the same tower at the same time in the area of the murder.

Nice story, but there is nothing in the Constitution that says we need to make law enforcement's job easier. In fact, it's the opposite. The reason we have a 4th Amendment is to make law enforcement's job more difficult. But that's a choice we make as a free society, recognizing that protecting our civil liberties and freedoms is an important barrier to inevitable law enforcement abuse.

Also in favor of easier spying on people is Rep. Trey Gowdy, who seems to argue that using your GPS data to track you is no different than other "advancements" like "DNA analysis, fingerprint analysis, voice exemplars, blood spatter, or court-approved wiretapping." Gowdy is a bit more middle-ground here, suggesting the importance of privacy, but saying he thinks that location data should require a "lower standard" for a warrant than probable cause. Of course, the problem there is that the whole "probable cause" bit comes to us from The Constitution. So, changing that is difficult.

Either way, you can check out the full arguments and vote for which ones you find most compelling...

Filed Under: aclu, debate, geolocation, jason chaffetz, joseph cassilly, mobile phone, police, trey gowdy

Judge Posner Rips Apart Apple's Patent Litigation Strategy: Being 'Really Annoyed' Is No Reason To Sue

from the get-out-of-court dept

A few weeks ago, we wrote about influential appeals court Judge Richard Posner, who was slumming it down in a district court for fun (appeals court judges do that sometimes) and gave a brief statement about his plans to dismiss a major patent lawsuit between Apple and Motorola Mobility (now owned by Google). The patent dispute was over smartphones, so given the Google/Apple battle, it was seen as a fight over whether or not Apple's iPhone-related patents might stop Android. After Posner initial announcement, Apple sought a further chance to convince Posner he was wrong, leading to a followup. However, late last week, Posner came out with his full ruling (embedded below) and it's pretty devastating.

The ruling itself is a bit technical, but basically, the companies did a horrible job trying to show any "damages," so Posner noted that the evidence on damages was inadmissable, but without that, what kind of case is there? Apple then tried to claim that they should be able to get "nominal damages," which is basically a tiny (meaningless) sum of money because there was no clear actual damages (or any statutory damages), but a "wrong" was still committed. In other words, Apple really really badly just wanted the court to say that Motorola infringed, even if it meant getting a dollar for it. Posner, while noting that there can be nominal damages awarded by a judge, it makes absolutely no sense to sue for nominal damages -- and thus chastised Apple:

It’s not as if nominal damages were compensation for a nominal harm. They are a symbolic recognition of a wrong that produced no harm, though it may have infringed a right. You can’t go into federal court and say you had a contract with X and X broke it and you’re really annoyed even though you sustained no injury of any sort (in fact you made money because you're contracted at a higher price) so please give me a judgment for $1 that I can pin on my wall.

Motorola, for its part, doesn't get off easy either. Its own damages expert (on its counterclaim) made some outrageous claims that Posner calls out as well, including a ridiculous claim that a single patent taking out of a much larger portfolio could get a license of "up to" 40 or 50% of the entire portfolio. Posner mocks the use of "up to" noting that it "covers a lot of ground." Then, Motorola's "expert" tries to change his story, claiming at least 40 to 50%. Posner notes that this is just as vague, but now vague on the upside, rather than down, and then chides the expert for giving no actual basis for this estimate, before bringing it back around to the obvious real reason for the crazy damages estimate:

“Going for broke” is the inescapable characterization of Motorola’s damages claim. Motorola claims to be entitled to a minimum royalty of 2.25 percent for a license for the patents in the portfolio that contains the ‘898. Though it’s the only patent in the portfolio that remains in this suit, Motorola claims to be entitled to damages equal to (or “up to,” or “at least”—it seems not to have made up its mind) 40 to 50 percent of 2.25 percent, which would be 0.9 to 1.125 percent of sales of Apple devices that infringe the ‘898.

Finally, with both sets of damages requests dismissed, there's the question of injunctive relief (blocking each other from making the product). There again, Posner finds the whole thing to be a waste of time. He goes back to the fact that both companies totally failed in putting forth reasonable damages claims, saying that it's not that it's impossible to do so, just that these companies went too far:

The problem is not that damages cannot be calculated, but that on the eve of trial, with the record closed, it became apparent that the parties had failed to make a responsible calculation.

He goes on to mock Apple's claim that it was losing marketshare to Motorola, noting that even if he granted an injunction, it would be so easy to change Motorola's smartphones to avoid infringement that it would have no impact on Apple's dwindling smartphone marketshare. He also points out that the "value" of most tech patents are really to be used defensively, rather than offensively, and suggests that it's silly to be fighting over such small pieces of the smartphone ecosystem. Basically, letting either party win is pointless, saying it would create a "windfall" for the other side.

Continuing in this vein, Posner again mocks Apple's claim that its brand recognition and goodwill suffered from this competition, relying on a case that focused on a small company that faced such troubles. Posner notes the ridiculousness of Apple using a ruling designed to protect a small company here:

Apple is not a “small company”; its market capitalization exceeds that of Google and Microsoft combined. To suggest that it has suffered loss of market share, brand recognition, or customer goodwill as a result of Motorola’s alleged infringement of the patent claims still in play in this case is wild conjecture.

And then notes that Apple seemed to want to turn this into a show trial about how people love the iPhone:

In its latest written and oral submissions Apple attempts what I told its legal team at a pretrial conference I would not let it do in the liability trials then envisaged: turn the case into an Apple versus Motorola popularity contest. Apple wanted me to allow into evidence media reports attesting to what a terrific product the iPhone is. I said I would not permit this because the quality of the iPhone (and of related Apple products, primarily the iPad) and consumers’ regard for it have, so far as the record shows, nothing to do with the handful of patent claims that I had ruled presented triable issues of infringement. Apple’s “feel good” theory does not indicate that infringement of these claims (if they were infringed) reduced Apple’s sales or market share, or impaired consumer goodwill toward Apple products.

As Posner notes, Apple may have suffered harm from having to compete against Motorola, but that "harm is a perfectly legal one" unrelated to the specific patents in question.

The notion that these minor-seeming infringements have cost Apple market share and consumer goodwill is implausible, has virtually no support in the record, and so fails to indicate that the benefits to Apple from an injunction would exceed the costs to Motorola. An injunction that imposes greater costs on the defendant than it confers benefits on the plaintiff reduces net social welfare.

In the end, he dismisses the case with prejudice (so they can't just refile it), arguing that to do otherwise would just give the companies a second shot at trying again to prove damages.

Filed Under: brand recognition, damages, richard posner
Companies: apple, google, motorola