Tag Archives: broadband

Frontier’s two buck suck tests FCC’s consumer protection claims

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

Frontier Communication’s broadband customers might want to take up the offer of fierce consumer fraud protection that the Federal Communication Commission made as it issued its network belligerence decision this week. They thought they were getting broadband service at a stated price, but Frontier surprised them by adding a $2 “Internet infrastructure surcharge” to their bills. Because it could.

The charge is an attempt by Frontier to advertise a low price for broadband service, while charging a higher one. According to a story by Karl Bode in DSL Reports, a Frontier representative told a customer that “this fee is to defray some of the costs of maintenance of the local network”. You know, the costs you thought you were paying for when you signed up for service. Silly you.

But fear not. The FCC has kicked the consumer protection can over to the Federal Trade Commission. As chairman Ajit Pai put it

We empower the Federal Trade Commission to ensure that consumers and competition are protected. Two years ago, the [net neutrality order] stripped the FTC of its jurisdiction over broadband providers. But today, we are putting our nation’s premier consumer protection cop back on the beat. The FTC will once again have the authority to take action against Internet service providers that engage in anticompetitive, unfair, or deceptive acts.

Well, it will if a federal appeals court reverses an earlier decision and allows the FTC to go after telcos and other companies that operate as common carriers under FCC authority.

Assuming it can, though, the FTC will have no shortage of deceptive Internet service advertising claims to investigate. Comcast is already embroiled in a San Francisco court case over similar practices. Anyone who has tried to figure out how much AT&T or Charter Communications or any of the other big ISPs charge per month for broadband service knows that pain. We’ll find out soon enough whether the FTC intends to do anything about it.

The Internet goes from ping to Pong as big cable, telcos take control

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

Pay to play.

A brief pause for a bomb threat aside, yesterday’s Federal Communications Commission vote to end broadband’s common carrier status as a telecommunications service, and net neutrality rules with it, went as expected. The three republican commissioners voted in favor of the change, the two democrats voted against and all five made speeches explaining why they were voting the way they always said they would vote (links below). There was no indication that the final order approved yesterday differed significantly – or at all – from the draft published three weeks ago.

Commissioner Jessica Rosenworcel, a democrat, warned of the consequences she believes will come

As a result of today’s misguided action, our broadband providers will get extraordinary new power from this agency. They will have the power to block websites, throttle services, and censor online content. They will have the right to discriminate and favor the internet traffic of those companies with whom they have pay-for-play arrangements and the right to consign all others to a slow and bumpy road.

Now our broadband providers will tell you they will never do these things. They say just trust us. But know this: they have the technical ability and business incentive to discriminate and manipulate your internet traffic. And now this agency gives them the legal green light to go ahead and do so.

There’s already a red flag warning that Comcast, the biggest Internet service provider in the U.S. is preparing to move out of its self declared net neutral zone, something democratic commissioner Mignon Clyburn called out in her speech. In a blog post Wednesday, Comcast’s chief corporate lobbyist fell all over himself promising “all of the benefits of an open Internet today, tomorrow, and in the future”, but then offered a weasel-worded explanation of what that means. What it doesn’t mean is making a categorical promise to not sell fast lanes to content providers willing to pay, and consigning the rest to the slow lane. If you don’t read his words carefully, you might think he did. But he didn’t.

If that happens, there’s not much anyone can do about it. ISPs will have to abide by the same general consumer protection and anti-trust rules as any other kind of company, but broadband-specific standards of behavior are gone and the FCC is handing off its specialist enforcement responsibilities to the ordinary cops on the beat. Which will be sufficient, according to republican commissioner Brendan Carr

Before the FCC stripped it of jurisdiction, the FTC—the nation’s most experienced privacy enforcement agency—brought over 500 privacy enforcement actions, including against ISPs. By reversing Title II, consumers get those privacy protections back…

Federal antitrust law will protect against discriminatory conduct by ISPs. As a former Obama Administration FTC Chairman recently said, this is a “formidable hammer against anyone who would harmfully block, throttle or prioritize traffic"…

State consumer protection laws will apply and state attorneys general can bring actions against ISPs. These authorities will provide another strong set of legal protections against unfair business practices by ISPs.

There will be a delay, likely a couple of months, before the order officially takes effect. Court challenges will come, but are by no means certain to succeed.

Downloads

Draft: In the Matter of Restoring Internet Freedom, Declaratory Ruling, Report and Order, and Order, 22 November 2017
Press release: FCC acts to restore Internet freedom, 14 December 2017
Oral statement of chairman Ajit Pai, 14 December 2017
Dissenting statement of commissioner Jessica Rosenworcel, 14 December 2017
Statement of commissioner Brendan Carr, 14 December 2017
Oral dissenting statement of commissioner Mignon Clyburn, 14 December 2017
Oral statement of commissioner Michael O’Rielly as prepared for delivery, 14 December 2017

“The fix was already in”: net neutrality ends on party line FCC vote

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

By a vote of three republicans to two democrats, the Federal Communications Commission declared that broadband is not a telecommunications service this morning. Broadband’s common carrier status is gone and network neutrality rules have been scrapped. If the FCC follows recent practice, the full text of the decision will be released in the next few days, but the draft was published three weeks ago and there’s no indication at this point that any significant changes were made. It was a meeting filled with emotional rhetoric on both sides, with democratic commissioner Mignon Clyburn declaring “it is abundantly clear why we see so much bad process with this item because the fix was already in”. It was interrupted by a security alert while chairman Ajit Pai was making his remarks, but commissioners returned, Pai finished and the vote was taken.

No last minute reprieve, no surprises as FCC heads for net neutrality vote

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

There seems no stopping the Federal Communications Commission’s republican majority plan to end broadband’s status as a common carrier service and, as a result, kill network neutrality obligations for service providers. The decision is scheduled for tomorrow morning, and FCC chair Ajit Pai has either ignored or explicitly rejected the three main arguments for delaying a vote.

One of those arguments should be ignored. Much has been made about the spam submitted along with substantive comments on the issue. It appears that people on both sides of the issue have hacked (in the honorable sense of the word) the FCC’s online comment system. That’s no big deal. There are enough substantive comments, on both sides, to inform commissioner’s deliberations, even if they were actually deliberating rather than digging in to well established, partisan positions. On both sides.

Among the substantive comments is a definitive rebuttal signed by people who really know what they’re talking about. They include Vint Cerf, Tim Berners-Lee, Steve Wozniak and a bunch of others you probably haven’t heard of but likewise invented the stuff that the Internet depends upon and that FCC chair Ajit Pai pretends not to understand. They should be taken seriously but won’t. At least not unless the federal courts decide to sort out the political arguments. Then, what they say will matter hugely.

The third argument involves the ninth circuit federal appeals court, based in San Francisco. It’s deciding whether companies that are reckoned to be common carriers, like, say, AT&T, should be subject to any consumer protection rules at all, regardless of whether the particular service involved – broadband, for example – is specifically classified that way. If the ninth circuit agrees with a previous ruling and exempts telecoms companies from consumer protection oversight, then tomorrow’s inevitable decision will free big telecoms companies from any rules at all.

The draft decision dismisses that possibility, and the FCC released a draft memorandum of understanding with the Federal Trade Commission on Monday that assumes the problem away. The draft MOU states the obvious – that the FTC would police general violations of consumer protection law – and talks about information sharing between the two agencies, in a hand waving, we’re all on the same team sort of way.

There’s no knowing which way the appeals courts or, eventually, the federal supreme court will rule. Delaying the decision until the court system resolves basic, underlying questions would be prudent, but that’s not in the cards either: tomorrow, the FCC will end net neutrality and other broadband common carrier obligations on a party line three-to-one vote.

PG&E must put all its fiber on the market, not just the bits it, or others, want sold

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

PG&E agrees with many of the restrictions that the California Public Utilities Commission’s office of ratepayer advocates (ORA) wants to put on its proposed telecommunications business plan. Without knowing the details of PG&E’s 2,600 mile fiber network in northern California, it’s impossible to know whether that climb down is a strategic retreat or a concession rendered meaningless by the simple facts of its infrastructure or business plan.

The CPUC is reviewing PG&E’s application for certification as a telephone company. Over the years, PG&E has built up an inventory of fiber optic assets, either because it had internal communication needs or because another telecoms company swapped fiber strands for access to PG&E’s electricity transmission and distribution infrastructure. It wants permission to put those assets on the market, either as simple dark fiber or the medium for lit transportation services.

ORA wants to ban PG&E from “using fiber lines installed in the power zone” of utility poles for its dark fiber and lit service business. The power zone is the uppermost area of poles, where wires used for electric service are installed. The area below it, where cable and telephone companies attach their wires, is the communications zone. But that’s only on poles used for distribution of electricity – low voltage, last mile service in telecoms terms. Poles used for transmission of electricity – middle mile, in other words – don’t have a communications zone. Any fiber installed on transmission infrastructure is, by definition, in the power zone.

The conditions proposed by ORA are in the context of utility poles used “for network distribution”. If what ORA wants and what PG&E is agreeing to only involves fiber installed on poles used for distribution, and not on transmission poles, or conduit of any kind, then it might be no big deal. PG&E might not have a significant amount of fiber in the power zone of local distribution poles. That’s an expensive proposition, compared to installing fiber in the communications zone, where safety concerns are fewer and construction costs are less. So it might not make a difference either to PG&E’s business plan or to its ability to be a competitive counterweight to telecoms incumbents with monopoly business models.

But if those conditions affect more than a trivial amount of last mile fiber, or in any way restrict PG&E’s ability (or willingness) to sell access to middle mile routes on its vast transmission infrastructure – the crown jewel of its network – then the CPUC should reject them. Instead, the CPUC should treat PG&E as the incumbent it is: all of its fiber should go on the market. Otherwise, allowing it to act as a telecoms company will not “enhance competition in the public interest”, as PG&E claims.

PG&E rebuttal testimony regarding its CPCN application, 8 December 2017

CPUC review of PG&E telecoms plan must focus on big picture, not narrow interests

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

Three groups filed testimony with the California Public Utilities Commission opposing PG&E’s plan to put its 2,600 miles of fiber on the market, as dark strands and for lit service (links are below). Caltel, a lobbying group for telecoms resellers – CLECs – offered quibbling and self-interested comments. The two others – the CPUC’s office of ratepayer advocates and TURN, an old school utility consumer advocacy organisation – urged the CPUC to either reject the plan or cripple it with nonsensical restrictions, on the basis of an outdated and narrow view of what utility regulation is all about.

For TURN and ORA, it’s about micromanaging PG&E’s fiber in the same way as its regulated, monopoly electric and gas business. They give no thought to the benefits of having an independent source of dark fiber or lit service in northern California. ORA and TURN make one dimensional arguments about what might or might not be fair to PG&E’s electric customers and, remarkably, to big incumbent telecoms companies, while ignoring the fact that electric consumers are also broadband and telephone subscribers. Protecting broadband companies that exercise unregulated monopoly and duopoly control over prices and products from PG&E’s limited competition will only hurt consumers.

Dark fiber is a critical resource for independent, competitive telecoms operators. Thanks to the CPUC’s reliance on TURN and ORA – instead of exercising its own initiative – CenturyLink will be rolling Level 3 Communications’ previously independent dark fiber into its monopoly-centric business model over the next two years. Ironically CenturyLink controls a significant amount of the capacity on PG&E’s fiber routes, via its acquisition of Level 3-owned IP Networks. The CPUC would not be serving the public interest if it protected CenturyLink’s monopoly by locking PG&E out of the telecoms business, or restricting its ability to fully use the fiber it owns.

The CPUC has the responsibility to maximise value, quality and availability across a range of utility services for Californians, individually and for the economy as a whole. It should fulfil its responsibility by independently evaluating all the pluses and minuses of PG&E’s telecoms plan, and not relying solely on the arguments of narrow interests.

Caltel testimony regarding PG&E CPCN application, 22 November 2017
Office of Ratepayer Advocates testimony regarding PG&E CPCN application, 22 November 2017, part 1
Office of Ratepayer Advocates testimony regarding PG&E CPCN application, 22 November 2017, part 2
Office of Ratepayer Advocates testimony regarding PG&E CPCN application, 22 November 2017, part 3
TURN testimony regarding PG&E CPCN application, 22 November 2017

End of net neutrality means more corporate control of Central Coast media and speech

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

I was asked to write a piece on net neutrality from a Central Coast perspective, for Santa Cruz TechBeat, and thought it might be worth reposting here, with some minor updating…

The Federal Communications Commission is on a fast and narrow track to repeal network neutrality rules and declare broadband industry regulation off limits. The three republican commissioners say they’ll vote on Thursday to scrap the broadband regulatory regime enacted during the Obama administration, also on a 3 to 2 party line vote.

It’s a particularly important decision for people on the Central Coast, where the broadband market is dominated by the three biggest providers – Comcast, Charter and AT&T – with the greatest incentive to use their control of the Internet’s plumbing to send more of their, um, stuff your way.

Comcast, which owns NBC/Universal, has already backed away from the net neutrality pledge it made while ever so humbly (and unsuccessfully) sought permission to add Time Warner and Charter cable systems to its domain in 2014. AT&T has a similar non-promise on the table, and can be expected to stick to it while it tries to buy Time Warner media and content companies. After that, all bets are off. Same with Charter, which is controlled by Liberty Media and likewise tied to content ownership.

The top level issue is whether broadband is a telecommunications service or an information service. It’s a telecommunications service and subject to common carrier style regulation if it involves “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received”, as federal law puts it. Otherwise, broadband is an information service and federal, state and local agencies, and particularly the FCC and California Public Utilities Commission, have very limited authority over it.

Twenty years ago, when Internet access was inextricably tied to the email, chat room, portal and home page features offered by the likes of AOL and CompuServe, the FCC decided it was an information service and left it alone. Looking back, it was both the correct decision and a good one.

Times have changed. Simple Internet access is now a discrete service, typically offered on a standalone basis with informational services strictly optional. The market, at best, is a duopoly collapsing into a monopoly – Comcast and Charter Communications account for 48% of U.S. wireline (and fixed wireless) broadband subscribers, and their share is growing. The next three biggest ISPs – AT&T, Verizon and CenturyLink – muster only a 28% market share, but that’s enough to put more than three-quarters of U.S. broadband subscribers in the hands of just five companies.

Fear of that kind of control led to the first attempt at network neutrality rules in 2010. Then, as now, those rules said that ISPs had to treat every bit sent or received by a subscriber equally. Comcast couldn’t, say, choke off another video distributor, like Netflix or a competing network, like CBS.

It didn’t last. A federal appeals court told the FCC that if it wanted to regulate broadband, it had to do so using common carrier rules – under Title II of federal communications law, as the jargon goes. Which meant reclassifying Internet access as a telecommunications service.

After intensive industry lobbying and partisan bickering, fulsome public comment and a viral John Oliver rant, a democrat-majority FCC obliged in 2015, and net neutrality rules were back. Then Donald Trump was elected, and a republican majority took over at the FCC, promising to take “a weed whacker” to Washington’s thick regulatory underbrush.

So what can we do?

There was a protest planned at the Verizon store on 41st Avenue in Capitola last week. (FCC chair Ajit Pai used to work for Verizon, so they’re the punching bag of choice). The Central Coast’s congressional delegation is solidly democratic, and most – senators Diane Feinstein and Kamala Harris, and representative Anna Eshoo – have spoken out against the FCC’s plan to end net neutrality. Republicans aren’t paying much attention, but even so, expressing thanks (or objections, if you don’t agree) is a way of adding your voice to the debate.

And go online. Social media, virtual protests and more are tools we have to made ourselves heard, without fear of corporate interference.

For now.

Comcast, AT&T have the traffic cones ready for Internet slow lanes

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

AT&T and Comcast are offering two good reasons for keeping broadband under the common carrier regulatory umbrella, and not scraping network neutrality rules. Not that they meant to do that. It’s just their nature.

Comcast is backing away from an unconditional promise to abide by net neutrality principles, regardless of whether or not federal rules require it to do so. That pledge was made in 2014, while Comcast was in the middle of an unsuccessful attempt to add cable systems owned by Time Warner and Charter Communications to its portfolio. According to an article in Ars Technica by John Brodkin, Comcast has opened the door to paid prioritisation – selling content companies fast lanes to broadband subscribers, while keeping everyone else in the slow lane…

While the company still says it won’t block or throttle Internet content, it has dropped its promise about not instituting paid prioritization.

Instead, Comcast now vaguely says that it won’t “discriminate against lawful content” or impose “anti-competitive paid prioritization.” The change in wording suggests that Comcast may offer paid fast lanes to websites or other online services, such as video streaming providers, after [the Federal Communications Commission] eliminates the net neutrality rules.

AT&T, on the other hand, announced good news: its online video service, DirecTv Now, just passed the 1 million subscriber mark. It’s good for AT&T, which is fighting to hold on to video customers, and it’s generally good for the industry and consumers. It’s more confirmation that there is a competitive market for over-the-top television, which should result in greater consumer choice.

Should.

If you’re getting broadband service from AT&T, you can freely choose between OTT platforms. But only so long as AT&T follows net neutrality rules. Once those are gone, it will have strong incentives – a million and counting – to shape its network traffic to favor DirecTv Now, while sending everyone else into the slow lane.

The FCC is still on track to vote on Thursday to scrap common carrier status for broadband service and with it, net neutrality rules.

AT&T, Frontier talk to CPUC about future networks, without putting all cards on the table

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

The California Public Utilities Commission looked at telephone company plans to replace copper networks and plain old telephone service (POTS) with new technology at a workshop in San Francisco yesterday. Representatives from AT&T and Frontier Communications talked about some, but not all, of those plans, as I pointed out in the remarks I prepared, and mostly delivered, at the workshop…

The copper-to-IP transition involves three discrete but inter-related issues. Only two of those issues were addressed today.

The speakers from AT&T and Frontier talked about the benefits of replacing copper networks with fiber, and legacy POTS systems with Internet protocol technology. They did a good job of explaining the technology, the economics and the benefits that fiber and IP-based service brings.

Fair enough.

But they ignored the third issue, despite the fact that it is at the heart of their business strategy. It is at the heart of their plan to use federal and state subsidies to lock rural communities into substandard service at monopoly prices for decades to come.

That unspoken, third issue is the replacement of copper networks, largely paid for with public subsidies, with fixed wireless service, also paid for with taxpayer and ratepayer money.

Although AT&T’s representative ignored it today, [the company has made no secret of its plans](https://www.tellusventure.com/blog/att-confirms-plans-to-replace-california-copper-service-with-wireless/). It intends to replace copper networks with *wireless local loop* technology in rural areas, claim it delivers the minimum 10 megabits down and 1 megabit up speeds required by the California Advanced Services Fund and the FCC’s Connect America Fund subsidy programs, and pocket the cash.

Frontier has been less straightforward. Despite promising the CPUC that it was a “dedicated wireline service provider”, during the regulatory review of its purchase of Verizon’s California systems, it is now testing its own version of wireless local loop technology, and its executives are speaking of it of as a means of meeting their Connect America Fund obligations.

At best, the fixed wireless systems that AT&T and Frontier are developing can support broadband service that’s on a par with legacy DSL upgrades; service that’s priced, though, on a par with faster and more reliable copper and fiber-based service. And they want to use [regulatory blessings obtained with promises of a fiber future to do it](https://www.tellusventure.com/blog/att-writes-its-own-permission-slip-to-end-california-wireline-service/).

Today’s focus on IP technology and fiber networks was driven, in part, by the CPUC’s regulatory authority over voice service. But the CPUC also has a legislative mandate to bridge the digital divide in California and bring fast, reliable and affordable broadband service to all Californians. It also has a new responsibility to monitor AT&T’s and Frontier’s compliance with Connect America Fund commitments.

The CPUC should hold AT&T and Frontier to account for everything they do, not just those things they choose to talk about.

Big telecom gets bigger while the small get teeny tiny, part 2

FacebookTwitterGoogle+PinterestLinkedInRedditEmail

Size matters in the telecoms business. That’s true when success is measured by broadband subscriber counts, as I explored in yesterday’s post, and it’s true for share prices too. Some companies might be heading for a very hard landing.

It’s the small and mid-sized telephone companies that are in the roughest shape. CenturyLink’s share price is down 41% since this time last year, which is the best of the middle of the pack. Its purchase of Level 3 Communications seems to be slowing its descent. The picture is much worse for Windstream (down 73%) and Frontier Communications (down 82%). That’s led to speculation that complete collapse might be just over the horizon, according to a story by Joan Engebretson in Telecompetitor

“The market anticipates that both these companies will go bankrupt in the not-too-distant future, judging by their sagging bond prices and nosebleed credit default swap prices,” said [MoffettNathanson financial analysts]…

Frontier’s issue, according to the researchers, is that in the residential and small to medium business market, it is competing using mostly obsolete copper assets against technologically superior cable HFC and wireless. And CenturyLink faces the same issue in those markets, although that company is not so reliant on those markets.

In the residential and SMB market, however, “the competitive endgame is preordained,” the analysts wrote. “The telcos are destined to lose this one.”

By comparison, the big telcos are performing pretty well, although not at the same level as the two cable giants. Comcast (up 15%), Charter Communications (up 22%) and Verizon (up 2.4%) have all seen their share prices increase over the past year. AT&T is the exception, with its share price dropping 5.4% over the past 12 months. But it’s still pursuing its troubled takeover of Time Warner, which has knocked its valuation around. At its most recent peak, before the feds dropped the hammer on the deal, AT&T’s stock market performance over the past year looked a lot like Verizon’s.

Although most small cable companies are still gaining broadband subscribers at least to a degree, the industry-wide downward trend in video subscriptions is hurting their business model. Their future upgrade paths – a choice between costly fiber to the home rebuilds or less pricey but less capable DOCSIS 3.1 technology upgrades – create uncertainty. Altice USA, which is also plagued by doubts about its rapid acquisition and expansion strategy, has lost 42% of its stock value since it started trading separately from its European parent company last June.