Tag Archives: fcc

Your ISP now owns your information.

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Congress opened your kimono.

Privacy rules for Internet service providers are heading straight from limbo into oblivion. Last year, the Federal Communications Commission adopted rules that put strict limits on what ISPs can do with the data that customers transmit on their networks, significantly stricter than the restrictions on what most online businesses can do with consumer data.

Earlier this month, a much different FCC voted to put those rules on hold. Now, the U.S. congress has voted to scrap the rules altogether. In a party line vote, the house of representatives concurred with a U.S. senate resolution, and sent it on the president. In a blog post, the Washington Post’s Brian Fung summarises what it means for consumers…

If Trump signs the legislation as expected, providers will be able to monitor their customers’ behavior online and, without their permission, use their personal and financial information to sell highly targeted ads — making them rivals to Google and Facebook in the $83 billion online advertising market.

The providers could also sell their users’ information directly to marketers, financial firms and other companies that mine personal data — all of whom could use the data without consumers’ consent. In addition, the Federal Communications Commission, which initially drafted the protections, will be forbidden from issuing similar rules in the future.

FCC chair Ajit Pai praised the action while, ironically, criticising last year’s decision for being done on a party line vote. He characterised it as benefitting “one group of favored companies over another group of disfavored companies”. The rationale is that ISPs should live by the same privacy rules set by the Federal Trade Commission as do web companies, like Apple, Amazon or Google.

What that argument ignores is that consumers have a choice as to whether or not they do business with those companies, which compete against each other and against a long list of challengers. The broadband access industry, though, runs largely on a monopoly/duopoly model, and you don’t have a choice as to what information you do and do not give to your ISP. It sees everything you do and, shortly, will own your information.

FCC chair needs to upgrade his competitive thinking

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For a smart guy, Federal Communications Commission chairman Ajit Pai can be awfully obtuse at times. Particularly where telecommunications competition is concerned.

On the one hand he extolls its virtues, saying to a Pittsburgh audience last week that “a competitive free market is crucial to unleashing private-sector ingenuity”. Just so. But in that same speech, he endorsed giving government subsidies to incumbent telephone companies, called for less regulation of those monopolies and ripped the idea that spending money on building competitive infrastructure or supporting new competitors has any value.

You can’t have it both ways. To get from the current model of broadband service – monopolies with deteriorating infrastructure in rural areas and equally predatory duopolies in cities and suburbs – to a free market, competitors have to be nurtured. Otherwise, the only way to ensure access to modern service at affordable and economically justifiable rates in a failed market is via the poor substitute of regulation.

Pai is correct in favoring “light-touch” regulation over the heavier kind, and he seems to prefer no regulation at all. That’s fine too. If there’s sufficient competition to make a free market function.

You can find competition in the mobile broadband industry. The recent return of unlimited data plans is a good example of competitive forces at work. But four national mobile carriers compete for your business.

If there was only one mobile carrier with a national footprint plus one with urban/suburban coverage, you’d have a choice between an mid-speed, mid to high cost plan and a fast, expensive one, as you do with wireline telephone and cable company offerings, respectively. Unless you lived in a rural area where you’d either have nothing at all or slow and expensive service, depending on how the monopoly carrier’s profit maximisation calculations came out.

Rural monopolies and urban/suburban duopolies are the product of more than 100 years of public policy that delivered subsidies, including money and privileged access to public right of ways, to select, regulated cable and telephone companies. The regulation largely ended, but the rents – cash and in kind – continue, and U.S. broadband customers continue to pay the price of monopoly.

Pai needs to understand that if you subsidise something, you get more of it. If he continues to subsidise monopolies and dismiss bona fide competition, costs will continue to rise, and the gaps between the have and have not communities, and between the U.S. and other developed nations, will widen.

Give me the money, then I’ll give it to AT&T says Pai

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In his “first major policy address” as chair of the Federal Communications Commission, Ajit Pai urged congress to channel broadband infrastructure spending through him. Pai spoke at Carnegie Mellon University in Pittsburgh yesterday, and focused almost entirely on broadband, with particular emphasis on the mobile variety.

Broadband infrastructure is at the top of his policy agenda. If congress decides to fund it, Pai thinks that the FCC should run the program and channel the money through its existing, incumbent-centric subsidy programs

Any direct funding for broadband infrastructure appropriated by Congress as part of a larger infrastructure package should be administered through the FCC’s Universal Service Fund (USF) and targeted to areas that lack high-speed Internet access…

…our track record is frankly better than that of other agencies. The 2009 stimulus bill gave direct funding for broadband deployment to both the Commerce and Agriculture Departments. The Government Accountability Office found that many USDA projects were delayed and dozens wound up being cancelled altogether. Indeed, one profile of the USDA program used the headline “Wired to fail.” And the Commerce Department’s program fared no better—indeed, it’s best known for duplicating existing networks in Colorado and wasteful spending in West Virginia.

Incumbent telephone companies nearly always have first dibs on universal service fund money. To get it, they have a low performance bar to clear. The benchmark for the Connect America Fund program is 10 Mbps download and 1 Mbps upload speeds, for example, and there’s no requirement that they build or upgrade infrastructure beyond the absolute minimum needed. For AT&T, that can mean yanking out wireline networks and replacing them with fixed wireless access points bolted onto existing cell towers.

At this point, though, there’s no money on the table. A $20 billion broadband infrastructure program – run through the commerce and agriculture departments, as it happens – has been floated by U.S. senate democrats but not yet drafted into bill language and not likely to get far in a republican majority congress.

CenturyLink gets extortionate pricing bonus from Level 3 deal

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Level 3 is engaging in “extortionate pricing” for the middle mile fiber connections it leases to broadband companies, and the problem will only get worse if CenturyLink is allowed to buy it. That’s the claim made by Windstream, a relatively small incumbent telephone company, based in Arkansas, that also offers data networking and other telecommunications services to businesses outside of its primary coverage area.

Windstream filed comments with the Federal Communications Commission, as it decides whether CenturyLink’s proposed purchase of Level 3 will go forward. As did Frontier Communications, which got a big amen from Windstream…

Like Frontier, Windstream is concerned that the combined entity will use its augmented scale and market power to engage increasingly in these and other practices that are contrary to the public interest and fair and reasonable competition, and are detrimental to Windstream’s continued effort to invest in its network to provide robust and affordable broadband service, particularly in rural and high-cost areas. As Frontier notes, “[a]bsent conditions aimed at remedying these practices, the Commission should conclude that the proposed transaction will substantially frustrate or impair the Commission’s implementation or enforcement of [federal telecoms law], which requires carriers to engage in just and reasonable practices.

There’s not much the FCC can do about Level 3’s current pricing policies, even it it wanted to do so. Former chairman Tom Wheeler folded his hand on regulation of middle mile services shortly after Donald Trump won the presidency, and it’s a safe bet that the FCC as currently comprised won’t take it up again. The real question is whether the FCC will allow CenturyLink to buy Level 3, significantly reduce what little competition exists in the middle mile fiber market and kick its predatory pricing practices into overdrive.

Meanwhile, here in California, there’s no word on whether the California Public Utilities Commission will weigh in on the deal. No formal proceeding has been opened, which indicates that CenturyLink and Level 3 hope to slide their hook up through on a simple, administrative basis. Given the CPUC’s clear declaration that middle mile competition matters, allowing such a lawyerly slight of hand would be a travesty.

FCC preps a bipartisan bigfoot for cities and counties

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But only the bad actors. Honest.

Local governments will have even less to say about how and where broadband infrastructure will be built. That was the clear and bipartisan message from two members of the Federal Communications Commission when they testified in front of a U.S. senate committee on Wednesday. Michael O’Rielly, who reliably takes conventional republican positions, went straight for the jugular

Standing in the way of greater Internet access nationwide are barriers imposed by state, local, and tribal entities. These range from maintaining difficult permitting and approval processes, attempts to extract enormous sums for tower siting and access to rights-of-ways, and efforts to establish government sponsored networks accompanied by favorable land, tax, and approval procedures. While the vast number of communities see the benefit of broadband deployment and welcome providers seeking to serve their citizens, there are bad actors that will likely require preemptive measures by the Commission. This problem will become even more acute as providers seek to deploy the next generation, or 5G wireless services, that will bring greater capacity, higher speeds and lower latency, but will also require many more wireless tower and antenna siting approvals. I realize that preempting local community decisions is a difficult topic to contemplate, but it has become necessary and appropriate for the Commission to exercise authority provided by Congress to address this situation.

Mignon Clyburn, who stands firmly in the democratic mainstream, was more diplomatic, but just as clear

We recognized the need for efficient and streamlined processing of siting applications as well as localities’ interests in preserving the aesthetics of their communities and ensuring the safety of their citizens. Indeed, as I have said before, approving applications to site antennas and other infrastructure are difficult policy challenges for local governments…

I believe the Commission has a unique role to play in facilitating discussions and dialogue between industry and local communities about the benefits and challenges of small cell deployment.

There’s no practical difference, though, between exercising “authority provided by Congress” and “facilitating discussions and dialogue”. Either way it means the FCC will be step in once again and preempt state and local broadband policy.

FCC is still the privacy police, even without common carrier rules

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Ajit Pai steered away from discussing the plans, or at least the intent, he has to roll back the Federal Communications Commission’s classification of broadband as a common carrier service during his first congressional appearance as chairman yesterday. But he did indicate that the FCC might not be washing its hands of all responsibility for regulating what Internet service providers do with private customer information.

His appearance in front of the U.S. senate’s commerce, science, and transportation committee came two days after he met with Donald Trump and a day after the news broke that the president had re-appointed him to another five year term on the commission. Pai’s first term expires in June, although he could have kept his seat for another year and a half, or until someone else was appointed to take it. Trump can name someone else to the chair’s job anytime he pleases, but right now the way to bet is that Pai will keep it for the next four years.

According to reporting by Amir Nasr in Morning Consult, Pai told the committee that the FCC’s responsibility to oversee ISP privacy practices comes directly from federal law and does not depend on the FCC’s 2015 common carrier – aka network neutrality – decision…

Senate Commerce Committee Chairman John Thune (R-S.D.)…today asked Pai what would happen if the FCC’s rules “suddenly went away,” and if the FCC would still be “obligated to police broadband privacy practices under Section 222 of the Communications Act?”

“That’s correct, carriers would still have their obligations under Section 222 in addition to other federal and state privacy data security and breach notification requirements,” Pai responded.

In the prepared statement that kicked off his testimony, Pai rehashed the talking points he’s been pushing in recent speeches to industry groups – more broadband deployment, fewer nitpicking rules for telecoms companies to follow and greater transparency in the FCC’s decision making process.

Love or hate his agenda, but Pai makes good on transparency pledge

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Less than six weeks into his term as chairman, Ajit Pai is making significant, and welcome, reforms to the way the Federal Communications Commission does business. There’s plenty of room to take issue with the substance of some of the decisions that the new republican FCC majority has made, or plans to make, but the way it’s going about doing it is far more transparent than past practices were, including particularly those of recently departed chairman Tom Wheeler.

In the past, draft FCC decisions were kept secret, at least from the public. Well-heeled lobbyists always seemed to know what was in the works, and sometimes knew more than commissioners themselves. When democrats had control, Pai complained bitterly about Wheeler’s secrecy, and now he’s resisted the temptation to claim that power for himself.

For the first time in my memory, we know the details of all six of the major decisions that the FCC will be considering at its next meeting on 23 March 2017. Along with the tentative agenda, the FCC published the drafts last week. The language could change over the next three weeks and, unlike the California Public Utilities Commission, the FCC can still make and vote on major changes without disclosing them ahead of time, but at least we have a good idea of what those decisions will be.

Pai hasn’t been 100% squeaky clean and transparent. He was rightly ripped by democratic commissioner Mignon Clyburn for a Friday news dump, when he scrapped several orders and actions taken in the waning days of the Obama administration, including an enquiry into mobile carriers’ zero rating practices and a white paper that laid out a broadband development road map. But on the whole he’s keeping his promise to shine more light onto the murky deliberations and dealings at the FCC and he deserves credit for it.

Rosenworcel loses FCC nomination, again

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For the second time, Jessica Rosenworcel is out of the running for a seat on the Federal Communications Commission. Donald Trump withdrew her nomination, which was re-submitted to congress by Barack Obama in the final days of his administration. It doesn’t appear to be personal. Her name was on a long list of last minute appointments made by Obama to various jobs throughout the federal government that Trump reversed in a batch – a common move when a new president takes office.

Rosenworcel’s original term on the FCC expired in 2015, and Obama nominated her to a democratic seat on the commission again. However, republicans in the U.S. senate put her confirmation on hold, pending the results of the election in November. Again, that’s a common enough maneuver and had little practical effect at the time since federal law allowed her to remain on the commission through the end of last year, whether or not she was renominated and confirmed.

The game changed after Trump was elected. Once he took office, he would be able to fill any vacancies on the commission with up to three republicans. But if Rosenworcel was confirmed and Tom Wheeler decided to keep his seat, even though he’d lose the chairmanship, there would still be a majority of three democrats (Mignon Clyburn is the third). So republican senators refused to confirm her until Wheeler resigned. He didn’t, so her original nomination expired and she left the commission at the end of last year. Obama then renewed her nomination, but it was a purely symbolic move. And now it’s been withdrawn.

I’m not betting she’ll be renominated for a third time. Traditional practice is for congressional democrats to pick people to fill seats nominally reserved for their party, and their selection is then rubber stamped by the republican president (or vice versa). But it doesn’t have to be that way. Trump could pick a democrat he prefers, or he could chose someone with no party affiliation or who belongs to a third party. The only limit on his choice is that he can’t appoint a fourth republican.

It’s not a big deal in the grand scheme of things, but Trump isn’t the sort who throws bargaining chips away, no matter how small.

FCC scraps consumer privacy rules for ISPs

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Internet service providers won’t be held to a higher privacy standard. In a two to one party line vote, the Federal Communications Commission put consumer privacy rules it adopted in October on indefinite hold, and passed the buck over to the Federal Trade Commission. The new rules would have, for example, required ISPs to get affirmative, opt-in permission from customers before selling sensitive personal data, such as web browsing history.

In a joint statement, FCC chair Ajit Pai and (temporary) FTC chair Maureen Ohlhausen said consumer protection rules shouldn’t be in the FCC’s domain…

We still believe that jurisdiction over broadband providers’ privacy and data security practices should be returned to the FTC, the nation’s expert agency with respect to these important subjects. All actors in the online space should be subject to the same rules, enforced by the same agency.

Until that happens, however, we will work together on harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for other companies in the digital economy.

The joint statement also points out that scrapping the FCC rules leaves a big gap: the FTC’s privacy standards don’t apply to ISPs yet.

On first glance, it might seem eminently fair to apply the same rules to everyone in the Internet ecosystem. But there’s a big difference between ISPs and, say, Amazon. You choose to buy something from Amazon. If you don’t like its privacy policy, you can buy the same thing, probably for about the same price, from any number of other websites. Your ISP is another matter. Out of necessity, it knows that you’ve surfed to Amazon and can see what you’re doing there. And what you’re doing with any other web service that’s out there.

When someone has as much access to your private and personal information as an ISP does, a higher standard should apply. Your doctor has to follow different, and stricter, privacy rules than your auto mechanic. So should the companies and public agencies you use to communicate with your doctor. Or anyone else.

FCC dismantles itself along with common carrier broadband rules

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The common carrier rules imposed on Internet service providers in 2015 are now being peeled back a slice at a time by a very different Federal Communications Commission. On Thursday, the FCC voted on party lines to exempt ISPs with 250,000 or fewer subscribers from consumer transparency rules, and on Friday chairman Ajit Pai said that consumer privacy rules would be either put on hold or scrapped by the end of this week. Both the privacy and the transparency rules are descended from the 2015 common carrier decision.

The lone democrat on the commission, Mignon Clyburn, claims that the “smaller broadband providers” that are getting a pass on consumer transparency rules are actually the big incumbents

Many of the nation’s largest broadband providers are actually holding companies, comprised of many smaller operating companies. So what today’s Order does, is exempt these companies’ affiliates that have under 250,000 connections by declining to aggregate the connection count at the holding company level.

Pai’s decision to roll back the privacy rules appears to be his first meaningful step toward handing over some of the FCC’s responsibilities to the Federal Trade Commission, which has general responsibility for consumer protection and also has a court-recognised role in policing cyberspace. The FCC’s Friday press release points to FTC privacy standards as the ones that should govern ISPs, along with everyone else…

All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, [Pai] has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for others in the digital economy.

The Trump administration landing team that beamed down to the FCC last year included people who strongly believed in farming out responsibilities to other federal agencies, including particularly the FTC, as well as rolling back the 2015 common carrier decision. That’s clearly the direction that Pai and fellow republican Michael O’Rielly are taking.