Tag: net neutrality

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Tech

Transparency cannot replace net neutrality

Earlier this month, the chief financial officer of Verizon, one of the nation’s largest internet service providers, discussed the build-out of the company’s broadband fiber network to homes.

The network, which goes by the name FiOS, “continues to be a very good product,” Matt Ellis, the CFO, told investors at a conference sponsored by UBS. According to Ellis, consumers who opt out of cable but who subscribe to so-called over-the-top services such as Netflix “want the best broadband experience you can get, and FiOS is the best broadband experience in the marketplace.”

Therein lies the problem with the action led by FCC Chairman Ajit Pai to repeal so-called net neutrality rules, which prevent ISPs from blocking, slowing or impeding content from providers they don’t own. The rules, to borrow Ellis’ phrase, help to assure the best broadband experience you can get regardless who owns the content you consume.

As the Republican majority at the FCC sees it, net neutrality constitutes “heavy-handed, utility-style regulation” that depresses investment and innovation.

Rather than order ISPs to keep their networks open – which, by the way, is the whole point of the internet’s decentralized design – the FCC will require ISPs “to disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking, throttling, paid prioritization, or affiliated prioritization.”

According to Pai, the market – backed by laws governing competition and consumer protection – will achieve the ends of net neutrality without the need for rules to achieve it.

The evidence suggests otherwise. Most of us connect to the internet through our ISP. And for most of us, the market for ISPs tends to be a monopoly. In the neighborhood where I live, you can choose Spectrum as your ISP. That’s the choice.

Last February, New York’s attorney general accused Spectrum of misleading consumers with promises of speeds for wired internet that, as it happened, were as much as 70 percent slower than promised. The company allegedly charged customers as much as $109.99 per month for premium plans that could not achieve speeds promised by Spectrum in its slower plans.

Consumers knew they were being ripped off. (You can test the speed of your connection.) But acting alone, there was little they could do to compel Spectrum to honor its promise.

Though a class action may force the company to reimburse consumers for the wrong, a rule that required Spectrum to serve customers at speeds the company promised would have allowed them to receive the service they paid for.

In short, all the transparency in the world won’t help if you’re served by a monopoly.

The internet is the infrastructure of our modern age and, for that matter, the medium of our democracy. It resembles the electric grid more than it does the entertainment, sports and social networks that stream across it.

As most consumers know, ISPs can (and do) charge as much for connections as the market will bear. Net neutrality asks in return that they not privilege one stream of content over another.

Categories
Tech

AT&T disregards the end of net neutrality

The U.S. elections of 2016 marked a shift in spending on political advertising as money for ads moved to cable TV and the internet, which allow campaigns to target with precision the audience for their ads and, in the case of the internet. to collect information from supporters.

Spending last year for political ads that appeared on mobile phones, across social networks and in search results grew 789% from 2012, to $1.4 billion, AdAge reported in January. Candidates and their allies spent roughly the same total on cable TV, where spending rose 52% from four years earlier. Purchases of ads on broadcast TV fell 20%, to $4.4 billion, over the same period.

Candidates “are engaging in more internet communications with each passing election, and citizens and civil society organizations are increasingly able to express their views and organize online,” Facebook told the Federal Election Commission in comments filed in November.

The shift points to more than political activity.

The internet is “the common medium,” as Reed Hundt, the former chairman of the Federal Communications Commission, predicted seven years ago that it would become. Forty-three percent of Americans get their news online, up from 38% a year earlier, the Pew Research Center reported in September. The gap between the share of Americans who get their news online as opposed to via TV shrank to seven points in the past year, down from 19 points in 2016.

Thus, the pushback by AT&T against a lawsuit by the Trump administration to block the company’s proposed purchase of Time Warner stands out.

Whatever you think of the merger and regardless (for the moment) of the administration’s motives for opposing it, the consequences for competition will be intensified by developments elsewhere in Washington, where the FCC is moving to scrap rules that prevent internet services providers from blocking or slowing traffic from companies they don’t own.

AT&T is among the world’s largest carriers  of content. Anyone who aims to reach readers, listeners or viewers relies on AT&T, Verizon and other ISPs. The ISPs set the terms of carriage.

Under a proposal likely to be adopted by the FCC this month, ISPs would need only to post their terms of service for all to see. “Individual consumers, not the government, decide what Internet access service best meets their individualized needs,” the FCC says in its proposed order.

But transparency only counts when consumers have a choice. Forty-six million households are served by just one provider of broadband internet, data from the FCC show. (Another 10.6 million households have no broadband service.)

“It’s an ‘open the champagne bottles’ moment for AT&T,” Tim Wu, a professor of law at Columbia who coined the term net neutrality to describe the principle of equal access to the internet, told the Times. “They can just tell people to pony up.”

Pony up is unlikely to be in the public interest, particularly for the internet, which serves all members of society. “Everybody in the internet community was extremely eager to operate under the delusion that government played no role in the growth of the internet,” noted Hundt, who listed some of the ways that government made the internet the common medium that it has become.

The government allowed computers to use the telephone network to connect to the internet for free, he noted. The government did not tax internet commerce and mandated that a portion of revenue from users be redirected to connect all Americans, including those in classrooms and libraries as well as those who live in tribal lands and rural areas.

A common medium is easy to use, reaches all people, fosters economic growth, provides access to the government, is full of news and – in the U.S. at least – needs to be private, Hundt observed.

AT&T is not Netflix, YouTube, Hulu or Facebook, to name several companies that AT&T cites as evidence of competitors who AT&T says are encroaching on its business. We look to those companies for content, but we count on AT&T and its fellow ISPs for connection.

Categories
Law Tech

DOJ endorses net neutrality

The Trump administration is leading a double life when it comes to competition in the market for content that arrives via the internet.

The Department of Justice on Monday sued AT&T and Time Warner to block a proposed merger between the two that the government charges would lessen competition in violation of federal law.

The lawsuit upends a transaction that the companies announced a year ago, when AT&T agreed to pay about $85 billion for Time Warner, which owns CNN, HBO, Turner Sports and other networks.

Jekyll and Hyde?

DOJ contends that the deal, which is riding on regulatory approval, would set back competition and lead to higher prices for consumers.

A day later, the Federal Communications Commission voted to roll back rules that prevent cable companies and other internet service providers from blocking or slowing websites or social networks that do not pay for priority.

“We have one government, but two separate agencies with opposing views,”  Spencer Kurn, an analyst at New Street Research, told the Times. “You’ve got one agency saying that marrying content and distribution results in too much market power, and another agency saying there’s no problem with a distributor favoring their content over someone else’s.”

Net neutrality, as the rules are known, prevents ISPs from prioritizing content from companies they own. The FCC chairman opposes the rules, saying they slow development of broadband networks by lessening the incentive of the companies that own them to add connections.

But the arguments advanced by DOJ in court seem to validate the concerns that net neutrality reflects. A combination of AT&T and Time Warner (the owner of CNN and HBO, among other networks) would give the combined company the ability to throttle programs that someone else owns, leading to higher prices for consumers, DOJ charges.

“After the merger, the merged company would have the power to make its video distributor rivals less competitive by raising their costs, resulting in even higher monthly bills for American families,” the government told the court.

That sounds like a defense of net neutrality.

The rollback at the FCC is a win for AT&T, which is vowing to fight the move by DOJ to block the company’s deal for Time Warner.

Categories
Tech

Apple TV 4K shows why net neutrality matters

Apple on Tuesday rolled out the latest generation of its set-top box and all I could think of was connectivity.

The device, dubbed Apple TV 4K, will cost $179 and be able to stream to TVs that offer double the vertical resolution and two times the horizontal resolution of high-definition models. It is said to be twice as fast as the version of Apple TV it succeeds, and features software that produces s0-called High Dynamic Range, which reportedly enhances color and contrast.

So far so good. But Apple TV, like all streaming media players, depends on a connection to the internet that in my neighborhood and many others struggles to support speeds that can allow video to stream smoothly.

I am currently able to download from the internet at about 260 megabits per second via my connection to the cable network. (The Federal Communications Commission defines broadband for so-called fixed wireline services as download speeds of 25 mbps and upload speeds of 3 mbps.)

My connection, through Charter Communications, a cable company, slows during periods of peak demand. Which means news and sports streamed at those times or that demand a lot of data – such as a State of the Union address or a Premier League soccer game – can appear with glitches.

Part of the problem ties to a lack of competition in broadband. About one-third (36%) of households in urban areas had access to at least two providers of broadband, as of the end of 2015, data from the FCC shows. (The percentage falls to only 6% in rural areas.) Absent competition, providers lack incentive to up the speeds they offer.

The neighborhood in New York City where I live has one provider. The city is suing Verizon, a rival, for allegedly failing to keep its promise to provide high-speed internet service to every household in the city.

In the meantime, the lack of a competitor leaves many of us with a choice: subscribe to cable for video or cut the cord and put up with video that starts and stops during telecasts that demand a comparatively fast connection in order to stream smoothly.

All of which starts to show why rules of competition in broadband matter. The FCC is expected to vote as soon as October on a proposal to do away protections for so-called net neutrality, which prevents cable companies and other internet service providers from blocking or choking traffic.

The agency’s current chairman opposes net neutrality, which he says is tantamount to regulating the internet. But as Tom Wheeler, his predecessor has noted, net neutrality sets “ground rules for the people who deliver the internet.” Doing away with the rules leaves consumers at risk of their internet service provider favoring content that benefits its business. To their credit (and to protect their businesses), Apple, Facebook and other tech giants have urged the FCC to keep the safeguards in place.

The latest set-top box from Apple suggests the tech industry will continue to improve the experience of watching video. But the promise of those devices will turn on whether the internet speeds up, not slows down.

Categories
Law Privacy

FCC to address Internet privacy

The chairman of the Federal Communications Commission announced in June that the agency plans this fall to address privacy in the context of consumers’ use of the Internet.

The spur for putting privacy on the agenda is the decision last winter by the FCC to enshrine the principle of an Internet open to all providers of content—a concept better known as net neutrality—within the agency’s authority to regulate common carriers pursuant to Title II of the Communications Act.

The decision included a determination that providers of broadband Internet service, including broadband delivered via mobile devices, will be subject to a section of the law that governs so-called customer proprietary network information (CPNI), which includes such things as the frequency, duration and timing of calls. In short, information that telecommunications companies know from providing service to customers.

Except for billing, emergencies and other exceptions provided by law, carriers cannot use CPNI without the approval of customers. But until the FCC’s net-neutrality ruling, the rules that govern use of CPNI applied only to services such as Voice over Internet Protocol—think Skype—that tie to the telephone network.

That seems likely to change. As the FCC noted in its net-neutrality ruling, the rules that govern use of CPNI by telephone companies would not be “well suited” to broadband Internet service. The reason: In recent years the FCC has revised the rules that govern CPNI after initially classifying broadband Internet service as a so-called information service, which exempted Internet service providers (ISPs) from common carrier status and later led a federal appeals court to order the FCC to revise its approach.

In addition, “the existing CPNI rules do not address many of the types of sensitive information to which a provider of broadband Internet services is likely to have access, such as (to cite just one example) customers’ web browsing history,” the FCC explained.

Until it can adopt rules that address the use of CPNI by broadband Internet providers specifically, the FCC says it “intends to focus on whether providers are taking reasonable, good-faith steps to comply” with restrictions on the use of CPNI set forth in the Communications Act. Note that CPNI does not include customers’ names, addresses and other personal information, the handling of which is governed by laws such as the Cable Television Privacy Act and the privacy notices that cable and phone companies deliver to subscribers.

So what protections for privacy should apply to broadband networks? In July, nine Democratic senators, including Elizabeth Warren and White House hopeful Bernie Sanders, wrote to FCC Chairman Tom Wheeler with some suggestions. The proposals include ensuring the definition of CPNI includes data pertaining to Internet usage, online activity and payments; directing ISPs to collect data transparently; requiring ISPs to obtain consumers’ express consent before sharing information; ordering ISPs to safeguard customers’ information and to notify customers in the event of a data breach; and giving consumers a clear process for resolving complaints.

“We call on the Commission to adopt a comprehensive definition of CPNI as it pertains to broadband,” the senators wrote. “Every click consumers make online paints a detailed picture of their personal and professional lives.”