Ransomware Attack Left DC Police Surveillance Blind Shortly Before The Innauguration

from the feeling-safer-yet? dept

Once exclusively the domain of hospitals with comically-bad IT support, crippling ransomware attacks are increasingly beginning to impact essential infrastructure. Just ask the San Francisco MTA, whose systems were shut down entirely for a spell last fall after a hacker (with a long history of similar attacks) managed to infiltrate their network, forcing the MTA to dole out free rides until the threat was resolved. Or you could ask the St. Louis public library network, which saw 16 city branches crippled last month by a bitcoin-demanding intruder.

We've also seen a spike in ransomware attacks on our ever-expanding surveillance and security apparatus, DC Police acknowledging this week that 70% of the city's surveillance camera DVRs were infected with malware. The infection was so thorough, DC Police were forced to acknowledge that city police cameras were unable to record much of anything during a three day stretch last month:

"Hackers infected 70 percent of storage devices that record data from D.C. police surveillance cameras eight days before President Trump’s inauguration, forcing major citywide reinstallation efforts, according to the police and the city’s technology office. City officials said ransomware left police cameras unable to record between Jan. 12 and Jan. 15. The cyberattack affected 123 of 187 network video recorders in a closed-circuit TV system for public spaces across the city, the officials said late Friday.

Brian Ebert, a Secret Service official, said the safety of the public or protectees was never jeopardized.

Right. An intruder managed to effectively blind law enforcement in the nation's capital for three straight days -- eight days before the inauguration of a new President, but hey -- no big deal. Fortunately the city was able to purge the malware and reboot the system without paying a ransom, though they still don't appear to have actually tracked down the intruder or his or her point of origin:

"Archana Vemulapalli, the city’s Chief Technology Officer, said the city paid no ransom and resolved the problem by taking the devices offline, removing all software and restarting the system at each site. An investigation into the source of the hack continues, said Vemulapalli, who said the intrusion was confined to the police CCTV cameras that monitor public areas and did not extend deeper into D.C. computer networks."

These intrusions are usually courtesy of an employee downloading something stupid, but the paper-mache grade security and default administrative credentials common on DVRs and other network-connected hardware also plays a starring role. The end result is an absolute laundry list of similar stories popping up all around the globe, from the Austrian hotel whose customers were locked inside their rooms thanks to a ransomware intruder, to the Texas police station that lost years of video evidence courtesy of poor security standards and a lack of redundancy.

And it's worth remembering that these are only the intrusions in which the intruder actually wants to make their presence known.

Overall, poorly secured internet-connected devices have not only contributed to a spike in ransomware attacks, but poorly-secured hardware is increasingly being infected and used as part of DDoS botnets, resulting in some of the largest and most devastating attacks we've seen to date. The IT security 2017 prediction du jour is a crippling attack that brings the internet to its knees sometime this year, with a loss of human life on some scale also seen as an inevitability. As several security analysts like Bruce Schneier have noted, our casual treatment of device security has created a security and privacy dumpster fire, and the spike in these DDoS and ransomware attacks is simply the check coming due.

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New FCC Boss Kills Zero Rating Inquiry, Signals Death Of Net Neutrality Enforcement

from the not-with-a-bang-but-with-a-whimper dept

Surprising nobody, new FCC boss Ajit Pai used a flurry of late-Friday announcements to roll back a number of consumer-friendly FCC initiatives the former Verizon lawyer (and the large ISPs that already love him) didn't like. Among them was the Wheeler-led FCC's attempt to crack down on zero rating, the practice of an ISP exempting its own content from its own arbitrary usage caps, while still penalizing competitors. The former FCC had just belatedly ruled that both AT&T and Verizon's zero rating efforts were anti-consumer, anti-competitive, and dramatically damaged the open streaming video market.

That was then, and this is now.

This new, Pai-led FCC wasted no time sending AT&T, Verizon and Comcast letters (pdf) proclaiming that all FCC inquiries into the anti-competitive impact of zero rating have been dropped. In a brief statement (pdf) issued to the media, Pai went so far as to imply he was doing this not because it's what giant ISPs wanted -- but because of a selfless dedication to the poor:

"Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers' free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings."

You'll find that taking an anti-consumer position on something, then insisting it was only done to aid the downtrodden, will be a common refrain from this new Pai-led FCC. In reality, zero rating data doesn't create "free data plans," it simply shifts the cost burden onto streaming video providers -- or more accurately, the customers of streaming video providers. Those customers suddenly face having to pay more money for competing services, which naturally funnels them to the streaming services of AT&T (DirecTV Now), Verizon (Go90), or Comcast (Stream TV).

ISPs like AT&T and Verizon had tried to argue that disadvantaging competitors in this fashion wasn't a big deal, because those companies could pay AT&T and Verizon a steep and unnecessary surcharge to cap-exempt their services too, putting themselves back on equal footing with ISPs. Given that many smaller companies couldn't afford such tolls, the former FCC's report (pdf) made it clear that this structure would be abused by giant, incumbent gatekeepers:

"Thus, it would appear that AT&T's practices inflict significant unreasonable disadvantages on edge providers and unreasonably interfere with their ability to compete against AT&T's affiliate, DIRECTV, The structure of Verizon's FreeBee Data 360 program raises similar concerns. We are aware of no safeguards that would prevent Verizon from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to Verizon's affiliated content on a zero-rated basis.

Again, for those confused, zero rating is simply incumbent duopolists using a lack of competition in broadband to impose arbitrary and unnecessary usage caps, then (ab)using those caps to dramatically tilt the playing field in their favor. Full stop. Zero rating has absolutely nothing to do with helping "low income Americans," innovation or "expanding broadband deployment," and Pai's claims to the contrary are transparent and insulting.

There's more than a little cognitive dissonance required in insisting you're a stalwart defender of "free markets," then immediately turning a blind eye to the demolition of a level streaming video playing field by giant, lumbering monopolists. And, of course, this is just the opening salvo in the latest battle against net neutrality; while Pai gets to work refusing to enforce the agency's existing FCC rules, the GOP is getting to work on a Communications Act rewrite that will not only kill the net neutrality rules, but defang and defund the FCC as a consumer watchdog altogether.

If you actually give a flying damn about net neutrality, broadband competition and a healthy, open internet -- 2017 is going to desperately need your help.

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Comcast, Verizon, T-Mobile & AT&T Issue Breathless Love Letter To Privacy With One Hand, Lobby To Kill All Privacy Protections With The Other

from the trust-us,-we're-Comcast dept

As we've been noting, broadband providers have wasted no time pressuring Congress to kill the FCC's new broadband privacy rules. These rules, passed last year, simply require that ISPs are transparent about what data they're collecting and who they're selling it to, while requiring they provide working opt-out tools. But the rules went further in requiring that broadband customers opt in to more sensitive data collection, including financial data. Given an informed, empowered consumer means less advertising revenue, ISPs quickly went to work throwing a monumental hissy fit.

This week, a coalition of broadband providers including Comcast, AT&T, T-Mobile and Verizon issued a breathless letter professing their absolute dedication to consumer privacy, apparently hoping that consumers haven't noticed they're simultaneously trying to kill the first meaningful broadband-specific privacy protections users have enjoyed in the history of the technology. As you might expect, the least-liked industry in America spends a notable part of the missive patting itself on the back for its selfless dedication to user privacy:

"ISPs understand the trust our customers place in us, and we are committed to protecting our customers’ privacy and safeguarding their information. For 20 years, we have implemented policies and practices that are consistent with the FTC’s widely respected and effective privacy framework and other federal and state privacy laws.

...We understand the importance of maintaining our customers’ trust. That is why we will continue to provide consumer privacy protections, while at the same time meeting consumers’ expectations for innovative new product solutions to enhance their online experiences.

Yeah, like that time Verizon was caught modifying user data packets to covertly track customers all around the internet without A. telling anybody or B. providing working opt out tools. Or that time AT&T began charging its broadband customers a steep premium just to protect their own privacy (something Comcast has shown repeated interest in as well). Or that time Cable One made it clear it wants to use user financial data to deliver worse customer service to low-income customers with bad credit. You can just feel the broadband industry's dedication to protecting your private data pulsing in the very wind itself!

In short the industry's trying to argue that the weaker, inconsistent privacy protections of the FTC are enough to protect consumers from wrongdoing. But as you saw in the last paragraph, the FTC (already overloaded and in constant risk of having its authority eroded) rarely has the time or interest in actually enforcing these rules anyway. The FCC's new rules were created specifically in response to these behaviors, and because the barely-competitive broadband industry creates some unique consumer protection challenges other industries and companies (like Google or Facebook, where users are free to use other services) don't face.

This idea that Congress will be somehow "streamlining" the FCC and eliminating duplicate authority will be the narrative du jour for most of this year. But in an outgoing interview with former FCC boss Tom Wheeler this week, the former dingo makes a point that's important for consumers and telecom journalists alike to understand:

"In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?

It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.

So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices.

To try and ease concerns among those that, well, have actually paid attention to the industry's bad behavior on this front, giant ISPs like Verizon and Comcast instead proposed a voluntary group of self-regulatory principles governing transparency, data security, notifications in the wake of hack attacks, and "consumer choice." The industry's promise to respect user privacy choices are framed as such:

"ISPs will continue to give broadband customers easy-to-understand privacy choices based on the sensitivity of their personal data and how it will be used or disclosed, consistent with the FTC’s privacy framework. In particular, ISPs will continue to: (i) follow the FTC’s guidance regarding opt-in consent for the use and sharing of sensitive information as defined by the FTC; (ii) offer an opt-out choice to use non-sensitive customer information for personalized third-party marketing; and (iii) rely on implied consent to use customer information in activities like service fulfillment and support, fraud prevention, market research, product development, network management and security, compliance with law, and first-party marketing."

In short, we're going to just keep doing what we're already doing, while hiding behind overlong privacy policies, "implied consent," and loopholes that broadly declare most data "non-sensitive" -- all while obfuscating the fact the FTC privacy enforcement hasn't worked. If FTC enforcement alone for broadband privacy actually worked, Verizon wouldn't have been allowed to covertly track consumers around the internet for two years before security researchers actually noticed it. If FTC oversight actually worked on this subject, AT&T wouldn't have been allowed to charge users up to nearly $800 more per month in some instances just to protect their own data.

And having a weak (and likely soon to be weaker) cop on the beat is particularly important to companies like Verizon moving forward, given it has been on a tear gobbling up failed internet brands like AOL and Yahoo as part of its master plan to shift its focus from broadband toward slinging video ads at Millennials (apparently not very well). Verizon and friends have tried to argue that the FCC's privacy rules created "asymmetrical regulation," but they consistently ignore that the lack of broadband competition creates risks you don't see in the markets inhabited by the companies Verizon's envious of (Facebook, Google).

Here's the thing. The broadband industry had it pretty good for most of the last decade in terms of doing whatever it wanted with consumer data. Regulators, regardless of party, generally looked the other way as these companies hoovered up every shred of location and browsing data -- using everything from DNS tracking to deep packet inspection -- then relied on FTC regulatory loopholes to sell this data to pretty much everybody. Only once the broadband industry began pushing its god-damned luck with incredibly stupid ideas (with ideas like charging users for their own privacy) did the FCC even feel the need to get involved.

So in short, if the broadband industry's looking for someone to blame for the FCC's relatively modest privacy rules, it should spend some time looking in the mirror. Granted that may all be a moot point now that we've decided to put a former Verizon lawyer with a disdain for facts in charge of regulating the broadband sector. Back in 2008 Verizon claimed that consumer privacy protections weren't necessary because "public shame" would keep the company honest. There's every indication we're about to truly put that theory to the test.

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How Comcast's Growing Broadband Monopoly Is Helping It Temporarily Fend Off The TV Cord Cutting Threat

from the innovation-through-monopoly dept

Comcast's earnings report this week indicated that the company managed to add 80,000 basic video subscribers during the fourth quarter, and 161,000 net video customers for the full year. And while news outlets were quick to proclaim that Comcast had magically bucked the cord cutting trend, you'd be hard pressed to find a single outlet that could be bothered to actually explain how. When an explanation is given, it's usually just regurgitation of Comcast's claim that the cable giant's fending off cord cutting thanks to the company's incredible innovation in the set top box market:

"The turnaround in the cable business helped Comcast beat profit estimates for the fourth quarter. Executives attribute the momentum in their cable-TV business largely to their new video platform, called X1, which makes it easier to search for shows and movies on TV and on Netflix from their cable set-top box."

Except it's not cable box innovation that's helping Comcast fend off cord cutting, it's the company's growing monopoly over the broadband last mile.

In countless markets Comcast competes solely with AT&T and Verizon, who have made it abundantly clear they're no longer interested in the fixed-line residential broadband business. Both companies have made slinging ads and content at Millennials their primary focus, as evident by Verizon's acquisition of AOL and Yahoo and focus on creative new snoopvertising technologies. As a result, these telcos are quite literally trying to drive many of these customers away with a combination of apathy and price hikes. If these users want broadband connections any faster than 3-6 Mbps, their only option is, increasingly, Comcast.

When these users arrive at the nation's biggest cable giant, they discover that signing up for TV and broadband is notably cheaper than just signing up for broadband alone. The problem is: while many have claimed that Comcast's "bucking cord cutting," there's no evidence that many of these users are even watching the cable connections they pay for, nor that they'll stick around as a traditional television viewer long term. Many just signed up because having television was actually less expensive than getting rid of it.

But should they try and get rid of it Comcast's got that angle covered too: the company's growing monopoly means less broadband competition than ever in many of its markets, allowing it to impose draconian and unnecessary usage caps on the company's customers. Caps that apply to competing streaming services, but not Comcast's own content. All told, between bundling and usage caps, Comcast's broadband monopoly means it simply doesn't feel the pain a company would feel in the face of real competition, which is why it has little to no incentive to fix its historically bad customer service.

Often Comcast obfuscates its growing monopoly over broadband and its ham-fisted implementation of usage caps with creative claims of incredible new innovation that gets gobbled up by the press. Like the company's announcement this week that it will soon be letting customers watch Comcast cable TV on Roku devices. This new beta is Comcast's attempt to quiet criticism that emerged during the FCC's failed attempt to bring competition to the monopolized cable box. And, in obedient fashion, the press was quick to highlight the partnership as a surefire example of Comcast's incredible innovation.

But upon closer inspection the service comes with a number of caveats, including the fact that users must subscribe to Comcast cable TV and Comcast broadband, and must pay Comcast an extra fee just to use Roku hardware they already own. Also buried in the FAQ for Comcast's new Roku beta is the proclamation that this service also won't count against Comcast's usage caps:

"Will the XFINITY TV Beta app use data from my XFINITY Internet Data Usage Plan?

No. The XFINITY TV service delivered through the XFINITY TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast's private, managed cable network, so it will not count toward your XFINITY Internet Data Usage Plan. Usage of any other apps on Roku devices, including any TV Everywhere apps accessible with your XFINITY TV credentials, do use the Internet and will count against your XFINITY Internet Data Usage Plan.

Comcast is effectively arguing that this isn't a net neutrality violation (for whatever that's worth with the rules about to be deep sixed by a duopoly-adoring Congress) because the data doesn't travel over the common internet. Still, the function of these added restrictions cumulatively remains the same: to tilt the playing field and keep customers in house and away from competing services. With a growing cable monopoly and the rise of rubber-stamping regulators under Trump, Comcast will soon face less pressure than ever before to shore up its miserable customer service or to lower prices.

That's great news if you're a Comcast executive or investor, but less stellar if you're one of the countless millions of consumers or competitors already bored to tears by several decades of Comcast's anti-competitive behavior and overall dysfunction.

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AT&T's Downright Giddy About Weaker FCC Oversight And The Looming Death Of Net Neutrality

from the who-doesn't-like-zero-accountability? dept

AT&T is pretty damn excited about former Verizon lawyer Ajit Pai, Trump's new industry-cozy pick to head the FCC. That's in large part because Pai has made it clear his goal isn't just to gut net neutrality, new broadband privacy rules and most of the other consumer protections pushed by former FCC boss and and former dingo Tom Wheeler -- but to help dismantle the agency's role as consumer watchdog entirely. Of course, AT&T put things a little differently in a blog post applauding the selection:

"Today, on his first official day in office, President Trump designated Ajit Pai as the new FCC Chairman. No one is more prepared to reframe the agency to address the needs of this rapidly changing marketplace. Chairman Pai will work with his fellow Commissioners to quickly and decisively put back in place the commonsense regulatory framework necessary to support the President’s agenda for job creation, innovation and investment."

Anybody who actually believes this has simply not been paying attention to Pai's tenure at the agency, during which he consistently refused to stand up to large ISPs in absolutely any capacity. That includes downvotes on numerous attempts to hold AT&T accountable for outright fraud, whether it was the time AT&T was caught actively making its bills more confusing to help make it easier for crammers and scammers, the time AT&T was caught ripping off a program designed to help low income families, or that time AT&T was busted for turning a blind eye to drug dealers running directory assistance scams on AT&T customers.

So sure. AT&T's pretty excited about the fact it's potentially facing little to no accountability for what's a well-documented history of anti-competitive behavior and fraudulent activity. But it's also just thrilled by the idea that net neutrality rules could soon be sent to the digital dustbin of history, allowing AT&T to, in its own words, "go hard" on this whole zero rating thing:

"With a new operator-friendly FCC chairman in place, AT&T CEO Randall Stephenson said to expect the operator to “go hard” with its controversial “zero rating” strategy for its virtual MVPD service, DirecTV Now.

“Our customers are loving this value proposition,” Stephenson said during AT&T’s fourth quarter earnings call Wednesday. “We have more than 200,000 DirecTV Now customers on it, the service is not counting against their data cap, and that’s a big deal."

Except the "value proposition" AT&T's presenting isn't much of a value at all. Sure, some consumers labor under the illusion they're getting "free stuff" because AT&T's graciously letting them stream AT&T's content without running afoul of its arbitrary usage caps. But in reality, AT&T's preferential treatment of its own content simply repositions the cost burden to competing services while distorting the overall competitive market. You know, like the outgoing FCC told AT&T when it sheepishly and belatedly told the company it was violating net neutrality and acting anticompetitively just a few weeks and a universe ago.

Moving forward, the name of the game for AT&T will be to play kissy face with the new administration in the hopes of blind, blanket deregulation, some lovely tax cuts, additional unaccountable subsidies (these telcos have received billions over the years for networks either barely or half-deployed), and approval for the company's $100 billion acquisition of Time Warner:

"I got to tell you, I was impressed,” Stephenson said (after meeting Donald Trump). “It was obvious I was meeting with a CEO. He has a very clear agenda—tax reform and regulatory reform. I can tell you that he’s focused on these things. And I left with a degree of optimism that this could be pulled off this year."

Describing himself as a “supply-side guy,” Stephenson added that “If you saw tax rates move to 20-25%, we know what we would do. We would step up our investment rate."

In regards to deregulation, he added, “Nobody thinks that regulations should go away. We all believe the customer needs protection. But the problem is that we’ve had regulation that’s unpredictable, and it’s interfering with how we’re designing products, how we enter markets."

AT&T's a master in promising broadband deployment it never actually delivers in exchange for regulatory favors and government handouts, and has been doing it for decades without much fact-checking from the media. AT&T's also incredibly good at bullshitting the press and public into falsely believing that massive telecom megamergers actually create jobs, despite thirty years of documentable history proving the exact opposite.

So despite Trump's campaign-trail promise to block AT&T's latest megamerger (largely believed to be little more than pouting over negative CNN coverage), there's an incredible opportunity here to field a merger sales pitch bullshit supernova -- the scope and scale of which we've never seen before.

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New York AG Sues Charter For Slow Broadband Speeds, Says Company 'Ripping Off' Users With Substandard Service

from the the-George-Carlin-definition-of-customer-service dept

For some time now, New York Attorney General Eric T. Schneiderman has been taking broadband companies to task for advertising broadband speeds they consistently fail to deliver. Last year, Schneiderman's office brought in Tim Wu, Columbia professor and the man who coined the term net neutrality, to help dig into the data. With Wu as the AG's "senior lawyer and special adviser," Schneiderman sent letters to NYC area broadband incumbents Verizon, Cablevision and Time Warner Cable -- questioning whether they actually deliver the speeds they advertise.

This morning, Schneiderman made his findings clear via a lawsuit against Charter Communications, which accuses the cable giant of "defrauding" millions of customers by advertising broadband speeds it's incapable of delivering. According to the AG's compiled data and full complaint (pdf), Charter routinely and consistently advertised "fast, reliable connections" that were anything but:

"The suit alleges that subscribers’ wired internet speeds for the premium plan (100, 200, and 300 Mbps) were up to 70 percent slower than promised; WiFi speeds were even slower, with some subscribers getting speeds that were more than 80 percent slower than what they had paid for. As alleged in the complaint, Spectrum-TWC charged New Yorkers as much as $109.99 per month for premium plans could not achieve speeds promised in their slower plans.

The complaint also alleges that Charter (now branded as Spectrum) and Time Warner Cable (recently acquired in Charter's recent $79 billion megamerger) knew full well they were shortchanging customers and lagging in necessary upgrades, and they just didn't give much of a damn:

"The AG’s investigation also found that Spectrum-TWC executives knew that the company’s hardware and network were incapable of achieving the speeds promised to subscribers, but nevertheless continued to make false representations about speed and reliability. The investigation further revealed that while Spectrum-TWC earned billions of dollars in profits from selling its high-margin Internet service to millions of New York subscribers, it repeatedly declined to make capital investments necessary to improve its network or provide subscribers with the necessary hardware."

It's worth noting that government data fairly consistently shows that ISPs usually deliver advertised speeds. Back in 2011, the FCC began recruiting volunteers who use custom-firmware embedded routers to provide real-world broadband connection performance data. Initially, the FCC found that many ISPs didn't deliver advertised speeds. But as the agency increasingly named and shamed the worst offenders, many ISPs began over-provisioning their broadband tiers -- effectively giving users more bandwidth than was advertised. The program was a relative success, but it's not likely to be continued under the new, more industry cozy FCC.

That said, the volume of traffic generated by New York City residents requires a little extra effort; effort that tends to not materialize when companies face limited competition. In New York, Charter acquired Time Warner Cable, whose biggest competitor was Verizon -- a company that has little to no interest in even being in the fixed-line broadband market, and has taken repeated heat from New York City officials for failing to uniformly upgrade the company's fiber network (taking subsidies and tax breaks then failing to do much with them has been Verizon's MO for a generation).

To be clear, Schneiderman drawing attention to Charter's failure is generally a good thing. That said, failures to track how subsidies are spent, failures to hold ISPs accountable for failed promises, the relentless thirst for consolidation, and the negative repercussions of blindly approving telecom megamergers -- are all ignored by most regulators (and Schneiderman) pretty much on a weekly basis. So when someone like this comes sweeping in late in the game to protect consumers, you should probably ask why they aren't doing more, more consistently, to protect telecom customers before the bill arrives.

With the priority in the telecom sector being megamergers, buying protectionist state laws and extracting ever-more money for the same relatively dismal service, it's not particularly surprising that the companies offer poor service at high prices, with some of the worst customer service in any industry in America. And with a Trump-era FCC preparing to let these companies dictate telecom policy for the forseeable future, and Wall Street gushing over the idea of a possible Verizon-Charter supermerger, you'd have to use some pretty creative mathematics to suggest this scenario gets better anytime soon, belated NY AG lawsuit or not.

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Congress Prepares To Gut Net Neutrality With Bills Pretending To Save It

from the who-needs-a-healthy,-open-internet? dept

As we've noted a few times, the Trump administration and new FCC boss Ajit Pai have made it abundantly clear net neutrality protections will be going the way of the dodo under their watch. Given the threat of activist backlash and the logistical complications of rolling back the rules via the FCC, neutrality opponents' (like Pai) first step toward eliminating net neutrality will likely be to simply refuse to enforce them. From there, ISPs have been lobbying Congress to pass new laws that either hamstring regulatory authority, or pretend to protect net neutrality while actually doing the exact opposite.

For example, the House last week quickly passed a trio of new bills that would not only allow Congress to roll back Obama-era regulations (including net neutrality) en masse, but would give Congress effective veto power over future regulations from a number of regulatory agencies (including the FDA, EPA, and FCC). But there's also indications the GOP is cooking up a Communications Act rewrite with an eye toward weakening the FCC's authority over industry giants like Comcast, Verizon and AT&T even further.

Over at Vox, readers were recently informed that "A Republican bill could be our best chance to save net neutrality." According to author Timothy Lee, we need Congress to write a quality set of net neutrality protections to establish permanent protections, avoiding the partisan patty cake that occurs each time FCC oversight shifts:

"Donald Trump’s FCC looks poised to repeal the net neutrality regulations Obama’s FCC passed in 2015. If a Democrat is elected president in 2020, it’s a near certainty that the FCC will reinstate a version of Obama’s rules. Then if a Republican is elected in 2024 or 2028, the FCC is likely to tear those rules down.

Having the rules switch back and forth unpredictably is a disaster for both sides in the net neutrality debate. A legislative compromise can solve this problem. Because passing legislation is a lot harder than changing an FCC rule, a rule passed by Congress with buy-in from both parties would have a much better chance of being permanent."

And while it's true that a Congressional net neutrality law would certainly be the preferred and more permanent solution, some of you might have noticed that Congress is so campaign-cash compromised that achieving this end has proven to be virtually impossible over the last decade. Case in point is the "compromise" net neutrality legislation Senators Thune and Upton tabled last year as a last-ditch effort to deter the FCC from tougher rules. The proposal was so stuffed with loopholes as to be arguably useless, but was lauded by industry as a "sensible compromise" to the endless debate over net neutrality.

The problem is that passing ultra-weak rules just to stop the endless game of partisan fisticuffs isn't much of an actual solution to the problem. Thune and the GOP are preparing to table new legislation that would once again profess to put this issue to bed, but is very likely to fail to address the areas where the net neutrality fight is actually occurring right now, including interconnection, usage caps, and zero rating. Still, Lee tries repeatedly to insist that this sort of flimsy legislation would be better than no legislation at all:

"Still, if the alternative is four or even eight years of no network neutrality protections at all, some net neutrality fans might take a deal. More importantly, big telecommunications companies give generously on both sides of the aisle. So there may be some centrist Democrats who are willing to take a deal despite pressure from liberal activists to reject it."

But it's simply not clear that's really true. It might feel good to pass new net neutrality rules professing to put the issue to bed, but if the rules don't actually address any of the actual issues of the day, it's at best just theater, and -- depending on how it's written -- could actually act to make many of the more controversial net neutrality violations legal permanently. And if attempts to defund and defang the FCC are embedded in this or other bills in sync, actually enforcing consumer telecom protections (net neutrality, privacy, or otherwise) could prove harder than ever.

Of course there's another utterly crazy solution: for Congress to finally realize that net neutrality has broad, bipartisan support, and that a healthy and open internet is good for everyone. It's certainly a wild idea, but Congress could put the issue to bed and prove it actually cares about startups, innovators and consumers -- by leaving the existing rules alone, and moving on to other more pressing issues of the day.

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Verizon Eyes Charter Megamerger, Because Who Likes Broadband Competition Anyway?

from the ma-bell-and-the-ill-communication dept

Charter Communications just got done spending $79 billion to acquire Time Warner Cable and Bright House Networks. And like most telecom megamergers, the promises made before the deal (more jobs! better service! incredible new innovation!) have only a fleeting resemblance to what's actually happening in the real world. Instead, acquired markets have enjoyed frozen broadband deployments, rate hikes and scaled back social media support. With Charter already having among the worst customer service in any industry in America, support in the wake of the merger has been precisely what you'd expect.

With the ink barely dry on that deal, the telecom sector is looking to consolidate even further. Charter stock took a nice joy ride this week on the news that Verizon has reached out to Charter to merge, consolidating the sector even further. The deal would create a telecom giant the likes of which the sector has never really known:

"Verizon serves 114 million cellphone subscribers, 4.6 million TV customers and 7 million Internet subscribers; Charter has 17 million TV customers and 21 million Internet subscribers. Together, the two companies' high-speed Internet businesses would add up to more than Comcast's 25 million broadband customers; at 21.6 million, their combined base of TV customers would be roughly on par with Comcast's. Both Verizon and Charter declined to comment."

Rumors of a Verizon and cable industry megamerger have been floating around the industry for several weeks, with Comcast also being tossed about as an M&A partner. Most of the analysis suggests that Verizon's either interested in using Charter's large footprint to help shore up the company's fifth generation (5G) wireless ambitions, or feels threatened from the cable industry's plan to jump into the wireless sector -- Verizon hoping to head off any additional wireless competition at the pass via M&A.

Less talked about of course is the fact that Charter and Verizon directly compete in many markets (like New York City), and the deal would result in an already relatively uncompetitive sector getting less competitive than ever. Or the fact that time and time again, promises of job creation and improved service in the wake of these deals never actually materialize. In fact, quite often the opposite is the result as redundant positions are eliminated and competitive incentive to compete (or, say, improve utterly abysmal customer service) is eroded further.

Of course the X factor in this latest megamerger rumor is whether or not the Trump administration will approve of the deal. On the campaign trail, Trump promised to not only block AT&T's $100 billion acquisition of Time Warner, but even went so far as to claim he'd somehow break up the already completed Comcast NBC merger, completed back in 2011. Most Wall Street and telecom analysts however believe Trump was just grousing over the negative coverage by NBC and Time Warner-owned CNN, and the ideological bent of his regulatory appointments (like new FCC boss Ajit Pai) suggest standing in the way of such super-unions won't actually be a formal administration policy.

Since historically companies like AT&T and Verizon have had incredible success conning convincing the press and public that these kinds of deals are a great boon for job growth and improved infrastructure, it seems rather likely that Trump will somehow approve and co-opt the deals under a flurry of promises that will never actually materialize. Should these kinds of deals be approved, the cognitive dissonance among Trump supporters still convinced he's somehow a champion of the little guy (despite clear intent to gut consumer protections like net neutrality and his laundry list of ultra-industry friendly administration appointments) should prove equal parts entertaining and terrifying.

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One More Time With Feeling: 'Anonymized' User Data Not Really Anonymous

from the we-can-see-you dept

As companies and governments increasingly hoover up our personal data, a common refrain to keep people from worrying is the claim that nothing can go wrong -- because the data itself is "anonymized" -- or stripped of personal detail. But time and time again, we've noted how this really is cold comfort; given it takes only a little effort to pretty quickly identify a person based on access to other data sets. As cellular carriers in particular begin to collect every shred of browsing and location data, identifying "anonymized" data using just a little additional context has become arguably trivial.

Researchers from Stanford and Princeton universities plan to make this point once again via a new study being presented at the World Wide Web Conference in Perth, Australia this upcoming April. According to this new study, browsing habits can be easily linked to social media profiles to quickly identify users. In fact, using data from roughly 400 volunteers, the researchers found that they could identify the person behind an "anonymized" data set 70% of the time just by comparing their browsing data to their social media activity:

"The programs were able to find patterns among the different groups of data and use those patterns to identify users. The researchers note that the method is not perfect, and it requires a social media feed that includes a number of links to outside sites. However, they said that "given a history with 30 links originating from Twitter, we can deduce the corresponding Twitter profile more than 50 percent of the time."

The researchers had even greater success in an experiment they ran involving 374 volunteers who submitted web browsing information. The researchers were able to identify more than 70 percent of those users by comparing their web browsing data to hundreds of millions of public social media feeds.

Of course, with the sophistication of online tracking and behavior ad technology, this shouldn't be particularly surprising. Numerous researchers likewise have noted it's relatively simple to build systems that identify users with just a little additional context. That, of course, raises questions about how much protection "anonymizing" data actually has in both business practice, and should this data be hacked and released in the wild:

"Yves-Alexandre de Montjoye, an assistant professor at Imperial College London, said the research shows how "easy it is to build a full-scale 'de-anonymizationer' that needs nothing more than what's available to anyone who knows how to code." "All the evidence we have seen piling up over the years showing the strong limits of data anonymization, including this study, really emphasizes the need to rethink our approach to privacy and data protection in the age of big data," said de Montjoye.

And this doesn't even factor in how new technologies -- like Verizon's manipulation of user data packets -- allow companies to build sophisticated new profiles based on the combination of browsing data, location data, and modifying packet headers. The FCC's recently-passed broadband privacy rules were designed in part to acknowledge these new efforts, by allowing user data collection -- but only if this data was "not reasonably linkable" to individual users. But once you realize that all data -- "anonymized" or not -- is linkable to individual users, such a distinction becomes wholly irrelevant.

One of the study's authors, Princeton researcher Arvind Narayanan, has been warning that anonymous data isn't really anonymous for the better part of the last decade, yet it's not entirely clear when we intend to actually hear -- and understand -- his message.

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Cable's Congressional Allies Quickly Urge New FCC Boss To Kill Cable Box Competition Plan

from the fighting-competition-for-the-people dept

Last year, the FCC unveiled a new plan that would require cable operators make their content available via app for third-party cable boxes and other streaming hardware. The goal was to bring a little added competition and openness to the clunky old cable box. But because the FCC's plan would have not only eroded the cable industry's walled-garden control over content -- but $20 billion in annual cable box rental fees -- the cable industry, broadcasters, Congressional allies and even the US Copyright Office got right to work lying about the plan -- repeatedly.

Via an absolute sound wall of disinformation, these collective allies claimed that the FCC's plan would violate copyright (false), confuse consumers (nope), harm minorties (not true), result in skyrocketing piracy (well, no), hurt puppies, and tear a giant hole in the time-space continuum. With these claims popping up in hundreds of newspaper op-ed sections and websites nationwide, the FCC's plan soon ran into some stiff headwinds, with even some of the initial FCC supporters of the plan backing away from it. It was, frankly, one of the most effective lobbying and disinformation campaigns the cable industry has ever fielded.

With the plan on life support, cable industry Congressional allies are now demanding the plan be formally put out of its misery. In a letter sent to new, ultra-industry friendly FCC boss Ajit Pai (pdf), Energy and Commerce Committee Chairman Greg Walden, Communications and Technology Subcommittee Chairman Marsha Blackburn, and Energy and Commerce Committee Vice Chairman Joe Barton urged Pai to close the docket on the set-top box proceeding.

The letter unsurprisingly mirrors most of the falsehoods used by the cable industry to derail the plan, including the idea that bringing competition to the cable box would somehow hamper the cable industry's incredible knack for innovation:

"The regulatory overhang of the set-top box regulation has cast a shadow over investment and innovation in traditional video programming delivery. [W]e urge you to close the proceeding and permit the industry to innovate and serve consumers free from the restrictions of a government-chosen platform."

Of course the whole point of the FCC's plan was to avoid "chosen platforms" entirely, giving consumers the ability to view existing cable content on any device. The letter then proceeds to stroll casually through all of the lies the cable industry has been spreading about the plan for most of the last year, including claims that cable box competition would harm minorities, would harm copyright, and result in nobody making decent television programming ever again:

"The FCC's proposal remains an unnecessary regulatory threat to the content creation and distribution industries. Content creators have argued that the proposed set-top box pan undermined their ability to protect copyrights and contracts. Without a clear indication that the Commission rejects this current proposal, content creators will be hesitant to invest in high-quality video programs. Minority programming creators, in particular, have argued that the Commission's proposal would rob them of audiences and the benefits of hard-negotiated contracts, ultimately limiting the availability of diverse programming to viewers."

That is, once again, all nonsense. This has always been about control, not copyright. The FCC's plan kept all the same copyright protection and licensing contracts intact. And providing consumers access to more content viewing options over less expensive and more open hardware would have only helped minorities and consumers. Meanwhile the claim that art creation will cease to occur completely should ring a few memory bells for those familiar with the recording industry's long-standing myopic frontal assault on natural market evolution.

For the record I never thought the cable box plan was the best use of the agency's time. To me, it seemed like streaming alternatives would force cable to adapt anyway, even if it would have probably taken half-a-decade longer without this FCC nudge. Instead, I thought the FCC would have been better served spending its regulatory calories on the real problem facing consumers and the streaming sector: the lack of broadband competition, and the resulting anti-competitive shenanigans this lack of competition helps cement -- from net neutrality violations to arbitrary and unnecessary broadband usage caps.

Still, the government's willful participation in a massive disinformation and lobbying campaign whose sole function was to protect the cable industry revenues from competition is no less disgusting. Particularly the involvement of the US Copyright Office, and the failure of media outlets to clearly highlight the cable industry financial tethers obviously affixed to countless op-eds and media missives aimed at undermining what really was just an attempt to bring a little competition to a monopolized hardware market.

Given that the new FCC boss is a former Verizon lawyer with a long, proud history of supporting incumbent ISPs and giant cable providers in absolutely everything -- it shouldn't be long before the FCC's cable box plan is finally put out of its misery. Following not-too-far behind should be the FCC's new broadband privacy rules, net neutrality, and, if Trump's advisors mean what they say, the FCC's role as a consumer watchdog itself. You know, to protect minorities, the children, and innovation.

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China Bolsters The Great Firewall, Cracks Down Harder On VPN Use

from the hiding-behind-a-wall dept

It sometimes takes a little while, but sooner or later most governments engaged in ham-fisted internet censorship get around to taking aim at VPNs. While VPNs certainly have numerous, legitimate uses (including an additional layer of security when on public WiFi), they're also great tools when it comes to preventing your government, ISP, or anybody else from nosily tracking your online behavior. As such, you'll see broadcasters or even Netflix quick to villify their use to enforce increasingly pointless geographical viewing restrictions.

But such crackdowns are also a favorite tool of more restrictive governments, whether it's to protect VoIP revenue for state-run telecom monopolies, or to prevent users from tap-dancing around state-mandated filters or other restrictions.

In China, home of the largest internet filter ever constructed, the Chinese government has ramped up its own long-standing war on VPNs by announcing a mass shutdown of VPN providers that have been helping citizens get around the great firewall.

According to China's Ministry of Industry and Information Technology, all VPN providers now need prior government approval to operate, a move toward effectively making VPN use illegal entirely. Moving forward, all basic telecom providers and ISPs are barred from setting up or renting special lines (including VPNs) to carry out cross-border operations unless previously arranged. The new effort, which lasts till March 31, 2018, appears to focus more specifically on companies providing VPN services to individuals.

This banning of a fundamental encryption tool is necessary, the Ministry said in a notice published to its website, to "strengthen cyberspace" and cure some ambiguous "disordered development" in the nation's telecom market:

"China’s internet connection service market ... has signs of ­disordered development that ­require urgent regulation and governance,” the ministry said. The crackdown on unregulated internet connections aimed to "strengthen cyberspace information security management."

This comes on the heels of Chinese police agencies increasingly declaring that censorship circumvention tools are terrorist software, a growing refrain among oppressive governments looking to justify draconian information crackdowns. Estimates have suggested that around 1-3% of China's 731 million internet users use tools like VPNs to access an uncensored internet feed. China's last major crackdown on VPN use was during last March's National People's Congress meeting in Beijing. This crackdown comes ahead of the once-every-five-year national congress of the Chinese Communist Party later this year, and the renewal of the Politburo Standing Committee in early 2018.

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Google, Ting, Netflix Dare To Suggest That Maybe Giant, Anti-Competitive ISPs Shouldn't Be Writing State Telecom Laws

from the pay-to-play-legislation dept

For years now, we've noted how state legislatures are so corrupt, they quite literally let giant ISPs like AT&T and Comcast write state telecom law. These laws, as you might expect, do everything in their power to keep the pricey, abysmal customer service broadband status quo in place by hamstringing any and every attempt to bring competition to bear on these complacent duopolists. That's particularly true of the anti-community broadband bills passed in more than 20 states that prevent towns and cities from upgrading their own local telecom infrastructure -- even in instances where incumbent providers refuse to.

This kind of protectionism is precisely what's going on right now in Virginia, where incumbent broadband providers have convinced (read: thrown a lot of money at) state Delegate Kathy Byron to propose HB 2108, aka the "Virginia Broadband Deployment Act." The act does nothing to improve broadband deployment; in fact it does the exact opposite, preventing ad-hoc community broadband solutions in light of market failure. It also saddles towns and cities with all manner of restrictions, forcing them to get approval by committees stocked with incumbent ISP lobbyists if they want to even strike public/private broadband partnerships.

Byron has been under notable fire the last few weeks by folks who believe, crazily, that perhaps you shouldn't let giant ISPs with decades of documented anti-competitive behavior write state telecom policy. While Byron has tried to claim that hamstringing towns and cities will somehow improve broadband expansion and pricing, other locals have been busy calling a spade a spade:

Opponents argue that the bill would discourage competition that would drive down broadband costs for poor Virginians and that it would hamper existing municipal broadband networks from providing a necessary service.

The Roanoke City Council unanimously condemned HB 2108 on Tuesday, claiming it would endanger a $9.6 million investment by the city and other local governments in the Roanoke Valley Broadband Authority.

“I’ll call it what it is – an effort by the legacy carriers to protect their turf,” Councilman Ray Ferris said, according to the Roanoke Times. “It’s crony capitalism at its finest.”

Opposition to Byron's bill includes incumbent competitors Google, Ting, Netflix and others, who collectively penned a group letter to the Chairman of the Virginia House Commerce and Labor Committee (pdf), noting that the measure actually makes broadband connectivity in the state worse:

"If enacted, HB 2108 would not only hurt Virginia’s localities and their residents, but it would also harm the private sector in multiple ways. Among other things, it would derail or unnecessarily complicate and delay public-private partnerships. It would interfere with the ability of private companies to make timely sales of equipment and services to public broadband providers. It would deny private companies timely access to advanced networks over which they could offer business and residential customers an endless array of modern products and services. It would also impair economic and educational opportunities that contribute to a skilled workforce from which businesses across the state will benefit.

The letter also proceeds to crazily suggest that maybe, just maybe, decisions on local infrastructure should be left up to the voters, not the CEOs of Comcast, CenturyLink, or AT&T:

Communities in Virginia are eager to work with willing established carriers, enter into public-private partnerships with new entrants, develop their own networks, if necessary, or create other innovative means of acquiring affordable access to advanced communications capabilities. These are fundamentally local decisions that should be made by the communities themselves, through the processes that their duly elected and accountable local officials ordinarily use for making comparable decisions. They should also be able to use their own resources as they deem appropriate to foster economic development, educational opportunity, public safety, and much more, without having to comply with the bottlenecks that HB 2108 would impose.

As we've noted repeatedly, ISPs have been extremely successful the last fifteen years in passing these kinds of laws by framing this as a partisan debate, intentionally sowing division. But getting better broadband and improved competition has broad, bipartisan support. As does letting local communities decide for themselves what to do about the local infrastructure impact of obvious private sector failure. And these bills don't solve any problems; in fact they make fixing the problem of spotty broadband coverage significantly harder.

Most consumers realize this, which is why, like so many tech policy issues incorrectly framed as partisan (net neutrality), these ad-hoc local solutions often see broad, bipartisan support among actual consumers.

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New Protectionist Virginia Law Would Keep Residents From Better Broadband

from the state-legislatures-for-sale dept

For years now we've noted how incumbent ISPs have written and purchased protectionist state laws in roughly twenty states. These laws were quietly passed by AT&T, Verizon, Comcast and other large ISPs as a response to communities that began considering building their own broadband networks. Granted these efforts only emerged because these communities were frustrated by the lack of competition, poor service, and high prices (aka market failure). Instead of shoring up service and competing, these ISPs found it more economical to simply buy legislation overriding local community rights.

Virginia is just the latest state to happily do the bidding of incumbent telecom giants with a new proposal that would hamstring towns and cities with all manner of restrictions should they decide to build their own networks, or strike a public/private partnership to that same end.

House lawmaker Kathy Byron has crafted the "Virginia Broadband Deployment Act" after receiving healthy campaign contributions from ISPs like Verizon and AT&T. But her proposal actually restricts broadband deployment -- or public/private partnerships like Google Fiber -- by preventing towns and cities from building networks if incumbent ISPs offer speeds of just 10 Mbps down, 1 Mbps up across 90% of their footprints:

...a locality wouldn't be allowed to offer Internet service if an existing network already provides 10Mbps download and 1Mbps upload speeds to 90 percent of potential customers. That speed threshold is low enough that it can be met by old DSL lines in areas that haven't received more modern cable and fiber networks.

Of course, because expensive, last-generation DSL and pricey satellite broadband service already likely meet that metric in Virginia, this is effectively a ban on all community broadband -- without the bill's authors having to overtly admit that's what they're doing. But in addition to that restriction, the law would saddle any new municipal broadband project with all manner of logistical caveats, while giving ISPs ample ammunition to sue and cajole any effort that makes it past this first hurdle:

Moreover, the legislation would give private ISPs grounds to challenge municipal broadband projects in court. Local governments seeking to offer broadband would have to file various documents with the state Broadband Advisory Council at least 120 days before construction and "an annual certification by July 1 of each year that any expansion to or changes in its projects or system since the preceding July 1 still qualify as broadband expansion services."

"Any person who believes that any part of such filings is incomplete, incorrect, or false and who is in the business of providing Internet services within the locality shall have standing to bring an action in the circuit court for the locality to seek to require the locality to either comply with the substantive and procedural content of the filings required by this section, or cease to provide services, and no bond shall be required for injunctive relief against the locality," the legislation says.

Many municipal broadband providers are sued right out of the gate by incumbent broadband providers. After the lawsuits inevitably raise project costs and delay timelines, those same ISPs come in and use these struggles as proof positive that community broadband is the pinnacle of dysfunction. Not too surprisingly, Virginia's bill is being heavily promoted by the Virginia Cable Telecommunications Association, which, like most telecom lobbying arms, implies they're just nobly trying to protect taxpayers from themselves:

The VCTA believes that the General Assembly should debate and establish a state policy to determine if local governments should be risking public dollars to build duplicative networks competing with the private sector that it also regulates, taxes and serves as the gatekeeper to the rights of way used to deploy broadband.

This idea that all municipal broadband deployments are automatically failures -- and that taxpayers need protection from themselves -- is a fairly standard argument from telecom industry lobbyists. But municipal broadband deployments are just business plans, and like any business plans -- some are good -- and some aren't. As such, poorly planned networks fail, and well-designed proposals succeed. But there's nothing automatically calamitous about community broadband; it's simply an organic local response to market failure in the broadband space.

These bills have been successful in large part because ISP lobbyists have managed to frame municipal broadband as a partisan issue, intentionally sowing division. But the majority of such networks are built in Conservative cities and states and have broad, bipartisan consumer support (hating Comcast is pretty damn near universal). The reality remains that if ISPs really wanted to kill municipal broadband, they simply have to do a better job. But again, it's much more efficient to buy state laws protecting your stranglehold over a failing market, than to actually stand up and deliver the kind of better service broadband consumers have been demanding for fifteen years.

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Outgoing FCC Boss Reminds Trump Supporters That Net Neutrality Is Good For Them, Too

from the burning-your-own-house-down dept

We've repeatedly noted how the idea of a healthy and open internet, free from the meddling of incumbent giants like Comcast, is a good thing. We've also noted that until we bring some real competition to bear on the broadband sector, the FCC's inconsistent protection is about the only thing separating you from a hearty "servicing" from Comcast corporation (whether that's usage caps or abysmal service). As such, the nation's net neutrality rules (which are really quite basic and if anything didn't go far enough) have broad, bipartisan support, and holding Comcast accountable is a bipartisan, very popular idea.

And while Trump's Presidential campaign endlessly promised Trump would focus on bringing power back to the people, Trump's new FCC boss Ajit Pai -- a former Verizon lawyer -- effectively represents the complete opposite of that. He's yet to seriously stand up to Comcast or any other ISP, adores media consolidation, wants to kill net neutrality, is incapable of admitting the broadband market lacks competition, and has promised to dismantle the FCC's consumer watchdog functions solely at AT&T, Comcast, Verizon and Charter's behest.

On his way out of office, former FCC boss Tom Wheeler had a message for Trump supporters: you need net neutrality protections and healthy broadband competition too.

"The Trump administration campaigned that they are the voice of the forgotten," Wheeler said in a phone interview with Ars yesterday. "Well you know, the half-dozen major carriers [lobbying against FCC regulations] are hardly forgotten."

The people who are forgotten are the "two-thirds of consumers in America who have one or fewer broadband choices," Wheeler said. "Where are those choices most limited? In the areas where Donald Trump got the strongest response, in rural areas, outside of major cities. If indeed this is an administration that is speaking for those that feel disenfranchised, that representation has to start with saying, 'we need to make sure you have a fast, fair, and open Internet because otherwise you will not be able to connect to the 21st century.'"

In many of these states, convincing people to vote against their own best interests has become an art form. Like in Tennessee, where Representative Marsha Blackburn has allowed companies like Comcast to write horrible laws protecting giant corporations from public accountability (the end result for the consumer should be obvious). Again: improving broadband networks shouldn't be partisan. Ensuring that these networks remain healthy and open shouldn't be partisan. Keeping Comcast from destroying level competitive playing fields should not be partisan. Yet here we are.

For his part, Wheeler responded to indications that the incoming administration intends to kill net neutrality and neuter the FCC with sadness and alarm:

"I think it would be tragic," Wheeler said of taking away the FCC's competition and consumer protection authority. "This is tragic for the American consumer and the competitive marketplace."

"We’re talking about a handful of companies who are lobbying for their own self-interest, and trying to say to the new commission, 'you need to listen to us, not to consumers, not to a competitive marketplace, not to those who could be affected by a network where we act as gatekeepers,'" Wheeler said. "And if they are successful, that will put in jeopardy tens of thousands of other companies that rely on open networks and millions of consumers."

Historically, most FCC bosses paid empty lip service to the competition problem in the broadband sector. Many, like former FCC boss turned top cable lobbyist Michael Powell, went comically out of their way to pretend the market was perfectly healthy. While his solutions were sometimes imperfect, Wheeler was at least capable of admitting that the core issue in the telecom sector is a lack of competition. A lack of competition not only in the last mile, but in the very cable boxes and closed hardware at the heart of the industry's control.

In contrast, Pai's entire platform rests on the idea that the real problem in the broadband sector is that government has been too hard on companies like Comcast and AT&T, and that these companies need less oversight than ever before. Of course, that kind of thinking is what helped create the Comcast and the pricey, annoying broadband and cable sector most consumers know and love today. Believing that dismantling the only government agency to stand up to Comcast this decade is going to somehow fix everything is precisely the kind of thinking that gave us Comcast in the first place.

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Baltimore Ravens Owner Has Ingenious Solution For NFL Ratings Drop: Stop Annoying Fans With Too Many Ads

from the evolve-or-pay-the-price dept

For a long time, the narrative du jour in cable and broadcast circles was that sports would save cable TV from the unholy threat of cord cutting and the associated ratings drop. Live sports and sports analysis was, the argument usually went, the one true piece of bedrock in the cable and broadcast empire that could protect the industry from sagging ratings and defecting customers. But as we've see by the NFL's 2016 ratings dip and ESPN's stumbling face-plant, sports simply isn't the panacea industry executives pretended it was. Of course, the industry likes to attack any messenger that points this out, but it doesn't make the underlying reality any less true.

With sports ratings in decline, the obvious question then becomes what to do about it. Most of the proposals being circulated by the industry have been relatively comical, like the NFL's decision earlier this year to simply shuffle the Titanic deck chairs a little and consider the subject closed:

"According to people familiar with the plan, the one-week test will reduce the number of commercial breaks from the standard five per quarter to four, while retaining the usual spot load. In other words, while football fans will have fewer opportunities to make kitchen runs and bathroom breaks, the ad pods that do air will eat up more clock."

So the industry's ingenious solution to complaints that there are too many ads? Keep the same overall ad load, but just shuffle the delivery up a little bit. That's kind of on par with the ingenious solutions the cable and broadcast industry has been using for years. When they're not responding to consumer annoyance by just increasing ad load, they've focused on editing or speeding up shows to fit in more ads. Obviously none of this is going to address the fact that streaming video has changed the entire game, and traditional television has to adapt or perish, even if this means initially losing revenue.

Baltimore Ravens owner Steve Bisciotti this week had a novel idea; how about the NFL stop shoving so many ads down the gullets of already frustrated users, most of whom pay an arm and a leg for cable?

"It doesn’t take a genius to figure out that nobody wants to see two minutes of commercials, come back, kick the ball and then go to a minute-and-a-half of commercials,” Bisciotti said Tuesday. “I’ve thought that was absurd since I was 20 years old."

You mean, fining teams for sharing video clips isn't going to fix things? Bisciotti goes on to note that yes, this will certainly result in a drop in initial revenue, but hey -- it won't hurt billionaire owners any, really:

“We’ve got to figure that out,” Bisciotti said. “Again, if you change that, it could mean a reduction in income, but that’s going to hit the players more significantly than it’s going to hit the owners. I still don’t know any owner that’s in this business because of the money.

“Everything is on the table, and if we have to go to ABC and NBC and say that we’ve got to cut some commercials out and give some money back and half of that money doesn’t go into the player pool, maybe that’s what we’re going to have to do. But our expenses would be adjusted accordingly too. So, I’d like to see some things cleaned up.”

What a novel idea. Actually changing your behavior instead of crucifying anybody that suggests you should adapt? Examining aggressive and creative solutions to the ongoing ratings and cord cutting slide, instead of burying your head deeply in the sand? Traditional cable providers and broadcasters are going to lose money in the face of increased competition and more consumer choice. The question then becomes, do these companies want to have at least some kind of direct control over this trajectory and evolution of their industry, or are they just going to do nothing, and stand there with dumb looks on their faces as customers flock to less expensive, more flexible, and ultimately less annoying entertainment alternatives?

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Report: President Trump Picks Former Verizon Lawyer Ajit Pai To Head FCC

from the populism-schmopulism dept

As many expected, Donald Trump has chosen former Verizon lawyer and current FCC Commissioner Ajit Pai to head the FCC, according to a report by Politico. According to two anonymous insiders "familiar with the decision," Pai, who met with Trump on Monday, should be formally announced as FCC boss in short order. Pai recently proclaimed that net neutrality's "days are numbered" under Trump, while stating that the reformed FCC would be taking a "weed whacker" to "unnecessary regulations" like the FCC's net neutrality rules and its new consumer broadband privacy protections.

Politico rather soft sells the controversy that Pai will represent to those who don't think technology policy should be dictated by Verizon, AT&T, Comcast and Charter Communications:

"Pai is already a familiar name in tech and telecom policy debates. He’s a fierce and vocal critic of many regulations passed by the commission's Democratic majority, including the 2015 net neutrality rules that require internet service providers to treat all web traffic equally and are opposed by the major broadband companies."

Let's be clear here. Pai has supported the incumbent duopoly providers on nearly every issue of substance. He has vilified net neutrality to an often-comic degree, falsely claiming the rules encouraged dictators in North Korea and Iran and led to a massive slowdown in industry investment. He has consistently refused to even admit the U.S. broadband market has a competition problem. He's made it abundantly clear he wants to eliminate every FCC consumer protection function, and, alongside fellow Commissioner Mike O'Rielly, has even repeatedly voted down holding AT&T accountable for outright fraud.

If you're looking for somebody who will rubber stamp every Comcast request shoveled in his general direction, Pai is certainly your man. If you're looking for an FCC leader who's going to care about consumer issues or the plight of the startup or small business in a word dominated by massive, ever-consolidating telecom conglomerates, you're about to get a master class in disappointment. The irony, of course, is that Pai is about as far from the "populist" rhetoric President Trump leaned on to get elected as one can get:

Yes, nothing quite says "man of the people" like a former Verizon lawyer who has fought tooth and nail against every single effort to hold large ISPs accountable to the public. On any given day, if the wind is right and with enough pressure, Pai may just be convinced to occasionally do the right thing. But as the leader of an agency tasked with keeping Comcast from viciously savaging both consumers and the competition, it's not really physically possible to make a more controversial and uninspired selection.

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Through Price Hikes And Annoyance, AT&T Still Waging War On Unlimited Data Users

from the competition-means-higher-prices! dept

Back in 2011 AT&T and Verizon killed off their unlimited wireless data plans, instead replacing them with usage caps and steep (up to $15 per gigabyte) over fees. And while these companies grandfathered the existing unlimited data users at the time, they've spent the lion's share of the last six years waging a not-so-subtle war on these users in an attempt to get them to switch to metered plans. This ranged from AT&T's decision to block Facetime completely for users on unlimited plans, to covertly throttling these users only after a few gigabytes of usage, then lying about it. Repeatedly.

Of course AT&T has also used vanilla rate hikes on these unlimited data plans to drive users to metered options.

In late 2015, AT&T announced a price hike for its grandfathered unlimited data users by $5 per month. Last week, AT&T confirmed it had tacked on yet another $5 increase. AT&T informed these users that they are still free to keep their unlimited data plan, but AT&T really hopes that you don't:

"If you have a legacy unlimited data plan, you can keep it; however, beginning in March 2017, it will increase by $5 per month," AT&T said. The unlimited data price had been $30 a month for seven years, until AT&T raised it to $35 in February 2016. The price increase this year will bring it up to $40. That amount is just for data: Including voice and texting, the smartphone plans cost around $90 a month."

Reports have indicated this attempt by Verizon and AT&T to annoy, cajole, and hammer grandfathered unlimited data users so they leave these plans has been hugely effective. Both companies have desperately tried to convince the public that they don't really want unlimited data anyway, with Verizon going so far last year as to hire an expert to pen a blog post claiming that the consumer desire for unlimited data was just a "gut feeling," and that it was simply technically impossible to offer simpler, easier unlimited data plans.

Even with limited spectrum, the rise of small cells, WiFi offloading, and more robust networks and intelligent network management tools means unlimited data certainly is technically possible. T-Mobile (even though its plans may technically violate net neutrality by throttling all video by default) has thrived thanks to its unlimited data plans. In fact, they've made consumer annoyance at AT&T and Verizon pricing the cornerstone of many of their media campaigns:Unsurprisingly, both AT&T and Verizon have been losing customers hand over foot to T-Mobile. It's telling (both about these companies and the overall quality of real competition in the space) that their reaction to this competitive threat is to raise rates, whether that's AT&T's price hikes for unlimited data, or Verizon's recent decision to jack up a number of service fees. Yes, AT&T and Verizon could offer unlimited data. It's just far more profitable to have your customers so terrified of going over their monthly allotments, that they sign up for fat, pricey data plans they probably don't need in the first place.

Update: Like clockwork, AT&T has followed Verizon and will also be bumping its activation and device upgrade fee as well. Competition!

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Netflix May Not Be Worried About The Looming Death Of Net Neutrality, But Startups Should Be God-Damned Terrified

from the what-broadband-competition-problem? dept

With Trump's telecom advisors and the remaining FCC Commissioners making it abundantly clear that they intend to gut net neutrality rules and dismantle pretty much all of the FCC's consumer watchdog functions, there are more than a few worried companies, startups and consumers concerned that the net neutrality fight is about to get downright stupid. One of Trump's telecom advisors doesn't even think telecom monopolies are real, which should speak volumes about our looming vacation to dysfunction junction.

One company that's busy pretending it's not worried is Netflix, which penned a letter to the company's shareholders this week (pdf) insisting that it doesn't expect the death of net neutrality rules to materially impact the company's revenues:

Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable.

Of course, that's easy to say when you're now the biggest pay TV provider in the United States, coming off one of your most successful quarters in history, while quickly expanding into hundreds of countries internationally. But what about the smaller, disruptive Netflix-like companies of tomorrow? They're about to face a future in which the government doesn't appear to give two flying shits about the wide variety of problems caused by AT&T, Comcast, Charter and Verizon's stranglehold over the broadband last mile. In fact, likely FCC boss Ajit Pai has made it repeatedly clear he does't even think any broadband competition issues exist.

Clearly, smaller companies and startups won't have the size or lobbying muscle to defend themselves from ISP efforts to use this very real competitive logjam as a weapon against competing services (see: usage caps, overage fees, interconnection shenanigans, and whatever other "creative" efforts ISPs haven't even birthed yet to allow them to double dip). And Netflix appears to have forgotten that the mere presence of the FCC's rules prevented ISPs from attempting to extract significant, new interconnection fees at the network edge. So really, even companies the size of Netflix will have plenty to worry about.

Fortunately Netflix does indicate the company isn't entirely oblivious to the advantage it holds, and proceeds to acknowledge that yes, a healthy and functioning internet free of obnoxious gatekeepers is kind of important:

However, strong net neutrality is important to support innovation and smaller firms. No one wants ISPs to decide what new and potentially disruptive services can operate over their networks, or to favor one service over another. We hope the new US administration and Congress will recognize that keeping the network neutral drives job growth and innovation.

If you've spent even five seconds reading comments made by Marsha Blackburn and other Trump telecom advisors, you should realize there's a snowball's chance in hell of that happening. The most likely path forward begins with the incoming FCC simply refusing to enforce the net neutrality rules on the books. After that, you can be fairly certain (said as somebody that has watched this industry for two decades) that the GOP will be pushing a new Communications Act rewrite (or some other new stand-alone legislation) packed with breathless platitudes toward broadband expansion, jobs, and net neutrality.

In reality this legislation will have one, singular, unwavering focus: eliminating any and all government oversight of some of the least liked, and least competitive companies in any industry in America. Any network neutrality provisions in this looming legislation will be comically hollow, much like the promises surrounding job creation, innovation, and broadband competition. If Netflix execs truly think they're going to be immune from the repercussions of this shift back to letting AT&T, Comcast and Verizon dictate internet policy, they've got a lot of painful learning to do over the next few years.

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Verizon Won't Complete Calls For Galaxy Note 7 Owners Who Refuse To Return The Flawed Device

from the spontaneous-combustion dept

Most of you recall that Samsung's Galaxy Note 7 suffered a bit of a problem with spontaneously combusting. That led to months of horrible press and an FAA ban on taking the device on airplanes. You might also recall that Samsung exponentially amplified its own PR disaster by then issuing a replacement phone that suffered from the exact same problem. Since then, carriers have been passing on a Samsung update that effectively bricks the device, preventing users from recharging the device. Most users have traded in the device for, you know, something that doesn't explode.

But there remain a few thousand Galaxy Note 7 owners that for whatever reason have chosen to ignore Samsung and the formal recall by the US Consumer Product Safety Commission. According to Verizon, there are still "thousands" of users on their network who continue to use the device, refusing to install the update that would render the device inoperable:

"In spite of our best efforts, there are still customers using the recalled phones who have not returned or exchanged their Note 7 to the point of purchase," a Verizon spokeswoman tells Fortune. "The recalled Note 7s pose a safety risk to our customers and those around them."

Interestingly, Verizon was initially the only wireless provider that refused to pass on the bricking update, insisting they didn't want to leave customers stranded for the holidays (despite the fact said users could have swapped out the device for free at any time). But Verizon has since taken a notably harder stance on the safety issues created by the device. As such, they've announced that they'll now refuse to connect any of the non-911 calls made via the Galaxy Note 7, instead routing every call to Verizon's customer service department:

"So now Verizon is going to go even further, putting the phones in a special category so that all outgoing calls not directed toward the 911 emergency service will only connect to customer service. Because Note 7 users have also already been reimbursed for the cost of the long-since recalled Note 7, Verizon is also saying it might bill the holdouts for the full retail cost of the phone."

It's a curious predicament. On the one hand, you can't feel particularly bad for customers who knowingly refuse to trade in a device that could spontaneously explode, hurting themselves or others in the process. On the other hand, these users are supposed to technically "own" this device, which a carrier is now refusing to connect to the network. And while users on device payment plans may technically still owe Verizon money for the device in Verizon's billing systems, users are arguing that Samsung has already reimbursed Verizon for these devices in the wake of the recall.

Verizon insists it needs to disable the device for public safety (though liability could still be a motivator), while Galaxy Note 7 owners apparently believe they have every right to be stupid, self-immolation be damned.

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Verizon Claims Its Millennial Ad Pivot Has Been Slowed By Its Breathless Dedication To Consumer Privacy

from the okey-dokey dept

So we've noted repeatedly how Verizon really wants to pivot from stodgy, old protectionist telco to Millennial-focused media and advertising juggernaut. The company desperately wants in on Facebook and Google advertising cash, and apparently believes this is possible by ceasing network fiber upgrades and gobbling up failed 90s internet brands like Yahoo and AOL.

Except Verizon's brand revolution so far hasn't been much to write home about.

Verizon began its pivot with a short-lived website that imploded after writers revealed they couldn't talk about net neutrality or mass surveillance. The company's acquisition of Yahoo has also been plagued with issues, from Yahoo's mammoth, undisclosed hacking scandal to revelations of the company's wholesale spying on user e-mail accounts for the government (not that this latter issue bothered Verizon much). And Verizon's Go90 streaming video service, the cornerstone of Verizon's effort, has been derided as "a dud" by Verizon's own media partners.

Needless to say, a generation of being a government-pampered telecom monopoly left Verizon ill-prepared for its marketing and media gambit, and the company's own incompetence and lack of innovative DNA have made for rough sledding early on. Verizon, for its part, has been stuck trying to explain to investors and the media why things aren't going particularly well. Kind of amusingly, Verizon Executive Vice President Marni Walden last week tried to claim the problems were because Verizon is breathlessly dedicated to consumer privacy:

"For the first year, we’ve worked on bringing Verizon data into AOL. Candidly, that’s been slower than I’d like it to be, and you’ll see us accelerate that this year. The reason for that is around privacy and transparency for our customers."

"We’ve got to make sure we don’t ever compromise that relationship with consumers, so we’ll do that in a very responsible way,” Walden continued. “But what we do know is that when you bring that kind of data, that rich set of data from Verizon into the platform, the result you get on targeted advertising is significantly better."

Just so we're clear: Verizon was caught last year actively modifying wireless user data packets to track consumers around the internet. It was tracking users and building entire profiles of customers for two years before security researchers even discovered it. The company refused to inform consumers this was happening, and refused to provide working opt out tools. And while Verizon was fined $1.35 million by the FCC for this behavior, these so-called "stealth cookies" remain in use -- and have since been expanded across the AOL empire.

This comes of course as Verizon has worked tirelessly to fight consumer privacy protections on every front, most recently in the form of the FCC's broadband privacy protections, which simply require companies be transparent about what they're collecting. Verizon has long proclaimed that privacy protections aren't necessary because public shame would keep the company honest (again though, the public was never told this data collection was even happening). AOL CEO Tim Armstrong also proudly declared that "the market" would keep the Verizon empire on its best behavior as it pertains to user privacy. Yeah, maybe.

Of course the real reason Verizon's marketing ambitions have been slow to blossom isn't Verizon's love of privacy, it's Verizon's inexperience in media -- and actual competition. In broadband, Verizon has been consistently allowed to ignore privacy (and any other consumer complaint) courtesy of a lack of last-mile broadband competition. Now Verizon's the pesky upstart in a new, unfamiliar market, where annoyed users actually have a choice in search, e-mail, streaming video and other services. It's frankly entirely unclear if the company has the competence required for the transition.

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