Tales of the Sausage Factory

Ninth Circuit Knee-Caps Federal Trade Commission. Or: “You Know Nothing, Josh Wright.”

Back in October 2014, before the Federal Communications Commission (FCC) reclassified as Title II, both the FCC and the Federal Trade Commission (FTC) brought complaints against AT&T Mobility for failure to disclose the extent they throttled “unlimited” customers once they passed a fairly low monthly limit. You can see the FCC Notice of Apparent Liability (NAL) here. You can see the FTC complaint, filed in the district court for Northern California, here (press release here). As some of you may remember, the FCC was still debating whether or not to reclassify broadband as a Title II telecom service.  Opponents of FCC reclassification (or, indeed, of any FCC jurisdiction over broadband) pointed to the FTC enforcement action as proof that the FTC could handle consumer protection for broadband and the FCC should avoid exercising jurisdiction over broadband altogether.

 

In particular, as noted in this Washington Post piece, FTC Commissioner Maureen Olhausen (R) and then-FTC Commissioner Joshua Wright (R), both vocal opponents of FCC oversight of broadband generally and reclassification specifically, tweeted that the FTC complaint showed the FTC could require broadband providers to keep their promises to consumers without FCC net neutrality rules. Wright would subsequently reiterate this position in Congressional testimony, pointing to the FTC’s enforcement complaint under Section 5 of the Federal Trade Commission Act (FTCA) (15 U.S.C. 45) as an “unfair and deceptive” practice to prove that the FTC could adequately protect consumers from potential harms from broadband providers.

 

Turns out, according to the Ninth Circuit, not so much. As with so much the anti-FCC crowd asserted during the net neutrality debate, this turns out (pending appeal) to be dead wrong. Why? Contrary to what some people seem to think, most notably the usual suspects at Cable’s Team Rocket (who are quoted here as saying “reclassifying broadband means the FTC can’t police any practices of common carriers, at least in the Ninth Circuit” which is either an utterly wrong reading of the case or an incredibly disingenuous remark for implying that reclassification had something to do with this decision. You can see their full press release, which borders on the Trump-esque for its incoherence, here.)

 

As I explain below, the Ninth Circuit’s decision did not rest on reclassification of broadband. To the contrary, the court made it explicitly clear that it refused to consider the impact of reclassification because, even assuming mobile broadband was not a Title II service, AT&T Mobility is a “common carrier” by virtue of offering plain, ordinary mobile voice service (aka “commercial mobile radio service,” aka CMRS). The Ninth Circuit agreed with AT&T that because AT&T offers some services as common carrier services, AT&T Mobility is a “common carrier” for purposes of Section 5(a)(2) of the FTCA and thus exempt from FTC enforcement even for its non-common carrier services.

 

Given that Tech Freedom and the rest of the anti-FCC gang wanted this case to show how the Federal Trade Commission could handle all things broadband, I can forgive — and even pity — Tech Freedom’s desperate effort in their press release to somehow make this the fault of the FCC for reclassifying and conjuring an imaginary “gap” in broadband privacy protection rather than admit Congress gave that job to the FCC. After all, denial is one of the stages of grief, and it must come as quite a shock to Cable’s Team Rocket to once again see that Team PK-chu was right after all (even if it doesn’t make me particularly happy that we were, for reasons I will explain below). But this is policy, not therapy.  As of today, instead of two cops on the beat for broadband consumer protection access, we have one — the Federal Communications Commission. Fortunately for consumers, the FCC has been taking this job quite seriously with both enforcement actions and rulemakings. So while I consider it unfortunate that Ninth Circuit has cut out the FTC on non-common carrier related actions by companies offering a mix of common carrier and non-common carrier services, the only people who need to panic are Tech Freedom and the rest of the anti-FCC crowd.

 

OTOH, longer term, this does create a more general concern for consumer protection in more deregulated industries (such as airlines) covered by the exemptions in Section 5 of the FTCA. Yes, I know most folks reading this blog think the universe revolves around broadband, but this decision impacts airlines, bus services, private mail services like UPS, and any other company offering a common carrier service “subject to the Acts to regulate Commerce.” (15 U.S.C. 45(a)(2))  (Also meat packers and a few other named exceptions). So while I am hopeful the FTC appeals this to the full Ninth Circuit for en banc review (and even the Supreme Court, if necessary) from a general consumer protection perspective, the only direct result of this case for broadband policy is to underscore how important it is for the FCC to do its job despite the industry nay-sayers and their Libertarian cheerleaders.

 

More below . . .

 

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Tales of the Sausage Factory

Farewell To AT&T’s Jim Cicconi.

It may seem odd for me to say, and meaning no offense to his replacement Bob Quinn, but I am sorry to see Jim Cicconi retire from AT&T at the end of this month. For those who don’t play in this pond, Cicconi has been AT&T’s Lobbyist in Chief here in D.C. since 2005. It may therefore seem odd that I am sorry to see him go, particularly since Cicconi was so damned good at his job. But, as I have said many times before, I’m not here because companies are evil, nor do I believe the people working for them necessarily delight in crushing consumers, strangling puppies and tossing destitute widows and orphans on the street in rags in the dead of winter. (At least not in telecom, the copyright folks, on the other hand, were ready to screw over the blind a few years back just for giggles. But I digress . . .).

 

 

More below . . .

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Tales of the Sausage Factory

Update on Muni Broadband Decision. The Fate of Pinetop, N.C.

Last week, I wrote about the 6th Circuit’s decision in the muni broadband caseTN v. FCC. I mentioned in passing that the opinion pretty much keeps the status quo. Then I found from a reader about Pinetop, N.C.

 

As reported here and here, Greenlight, the muni provider of Wilson, N.C., took advantage of the FCC’s 2015 Order and began offering gigabit broadband in Pinetop, population 1400. Pinetop lies in Edgecomb County, next door to Wilson County. Under the 2010 N.C. anti-muni law, Greenlight could serve anyone in Wilson County but not go outside Wilson County to neighboring Edgecomb  County. But Wilson decided to take a shot and honor Pintetop’s request to provide service (Greenlight already provides electric service in Pinetop as a muni electric provider, so it wasn’t much of a leap).

 

The legal situation on this is now somewhat complicated. The 6th Cir. had not stayed the FCC’s preemption order in 2015, so it was totally legal for Greenlight to offer service. What is unclear now is how to read NC law now that it is “un-preempted” by the Sixth Circuit overturning the FCC. I admit I have no idea how to even begin to answer this question.

 

But it’s not an abstract legal question. The availability of broadband in Pinetop matters a great deal to the people of Pinetop.

 

Stay tuned . . . .

Posted in Cable, How Democracy Works, Or Doesn't, Life In The Sausage Factory, Series of Tubes, Tales of the Sausage Factory | 1 Comment (Comments closed)

Tales of the Sausage Factory

FCC Loses It’s Muni Broadband Test Case. What Comes Next?

Sometimes the law is clear. Sometimes it isn’t.

 

While that seems obvious, we often miss it in policy debates. But it is rather important to keep in mind when reading Tennessee v. FCCIn a case released August 10, the Sixth Circuit reversed the Federal Communications Commission (FCC) 2015 Order preempting restrictions the state of Tennessee and the state of North Carolina imposed on their municipalities with regard to providing broadband service. While Commissioners Pai and O’Reilly are certainly entitled to their victory laps, it is equally important to applaud Chairman Wheeler and Commissioners Rosenworcel and Clyburn for doing what they believed was both the right policy and the right call under the law. The petitions from the City of Wilson, NC and from the Electric Power Board of Chattanooga, TN raised novel questions of law. The FCC’s Order was a test case. On a very narrow and murky legal question, the FCC majority bet wrong — at least according to the 6th Circuit.

 

For myself, not surprisingly, I thought the FCC majority had the better argument. But I can’t say the Sixth Circuit was utterly wrong in holding the contrary. The limits of the Tenth Amendment and preemption power are generally unclear. The interpretation of Section 706 (47 U.S.C. 1302) as providing authority to the FCC remains relatively undefined. Based on the language in the dissent in Verizon v. FCC, which inspired munibroadband proponents to bring the petition and support the case, it looked like a good shot. Similarly, the facts of the case — already existing munibroadband providers, clear demand for them to expand their services, a willingness to expand service but for the relevant state laws restricting service — made this a favorable fact pattern.

 

Unfortunately, sometimes the best bet in the world doesn’t pay off. But that is why people bring test cases — to try to resolve questions in the law that move policy in the direction those bringing the case favor. It is neither an overreach nor illegal for Petitioners to bring test cases, to have an agency resolve them, and for the agency and those who brought the petition to the agency to defend them in court. To the contrary, this is how the rule of law works under the principles of the common law.

 

I stress this point because whether you bring conservative test cases to challenge laws and test limits or progressive cases to challenge laws and test limits — or cases that don’t easily fit in the conservative/progressive paradigm — we want agencies to actually address these cases in a timely fashion. As I remarked many years ago, when the FCC’s efforts to encourage competition in the 700 MHz auction resulted in a mixed result, we need  agencies to be willing to actually address novel circumstances and try new things because otherwise the law will ossify and we lose one of the most important elements of administrative law, the ability of an agency to respond to changing circumstances and provide a suitable record for Congressional action where necessary.

 

Bellow, I give a brief recap of the case and a forecast on what comes next for the muni broadband movement . . .

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Tales of the Sausage Factory

NCTA Shocked — SHOCKED! — to Discover Ex Parte Process At FCC.

Every now and then, I am reminded that the cable news networks such as Fox and MSNBC are members of NCTA. But seeing this recent blog post reminded me. While faux outrage and hypocrisy are hardly rare in Policyland, you rarely find this level of self-righteous sanctimony outside of cable news.

 

As some folks may recall, I recently opined that AT&T choosing to sulk like Achilles in his tent rather than engage meaningfully in the ongoing rulemaking process. NCTA — which also opposes the BDS proceeding and has adopted the same strategy of acting like a disappointed 6 year old — chooses to deliberately misconstrue this as something other than the FCC’s standard, open ex parte process. What magnifies this almost to the level of self-parody is that NCTA is engaged in exactly this behavior on set-top boxes (STBs), where it has popped out with a sudden alternative #ditchthebox to the FCC’s #unlockthebox proposal.

 

In all cases, of course, NCTA paradoxically insists that any refusal to negotiate around their proposals is somehow a sign that the FCC has impermissibly pre-decided. But if the FCC considers anyone else’s response to their proposals, or engages with stakeholders outside of the comment and/or reply comment period, it is a “smoke filled room.”

 

Mind you, hypocrisy and faux outrage are pretty standard stock in trade for NCTA, as I’ve noted before. But for those who don’t follow how the Sausage Gets Made here in Telecomland, I provide a review of the relevant process below. For the tl;dr version. Let me just quote NCTA’s own blog post:

 

“First, it’s jaw-droppingly hard to conceive that an advocate who has consistently complained about the “ILEC monopoly” in the BDS market for more than a decade would suggest that the biggest ILEC should join the second biggest ILEC in negotiating a regulatory regime that raises obstacles to emerging competitors.”

 

I couldn’t have said it better myself. It is rather jaw droppingly hard to conceive that I have suddenly abandoned all principles and advocacy of the last 15 years to behave as NCTA suggests. That ought to suggest to folk genuinely interested that NCTA has chosen to knowingly and willfully utterly misinterpreted what I said. Likewise, it is rather “jaw-droppingly” obvious that NCTA has no more interest in promoting transparency than it does in letting go of its monopoly control over set-top boxes.

 

A bit more about how FCC processes actually work, and what I meant (and continue to mean) when I call on stakeholders and the public to continue to actively engage, below . . . .

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Tales of the Sausage Factory

The FCC Sets the Ground Rules For Shutting Down The Phone System — And Sets the Stage For Universal Broadband.

Here’s the funny thing about the world. The two Orders the FCC will vote on tomorrow (Thursday, July 14) probably have more impact on the future of our communications infrastructure than the Title II reclassification of broadband. But like most momentous things in technology, no one notices because they are technical and everyone’s eyes glaze over.

 

In particular, no one notices the sleep inducing and incredibly vaguely named item “Technology Transitions,” we are talking about the conclusion of a 4 year proceeding on how to shut down the legacy phone system and move all our national communications platforms to a mix of digital platforms. That does not mean we’re getting rid of copper and going to all fiber (a common misconception). In fact, in many communities, the old copper lines might get pulled out and replaced with wireless technologies (what we call wire-to-wireless transition). Those who still remember when Verizon tried this after Super Storm Sandy on Fire Island will understand why so many of us wanted to make sure we have an organized transition with quality control and federal oversight.

 

But most people don’t remember this anymore. And, if you are not one of the 60 million or so people (mostly rural, poor or elderly) who still depends on the traditional copper line telephone, you may wonder what this has to do with your life. The short answer is: the old phone system still provides the backbone of our communications system of shiny digital thingies we take for granted. The old copper line phone system is also the workhorse of most ATMs, retail cash registers, and thousands of other things we take for granted every day. Why? Because the old copper line network has been around forever. It’s an open system everyone can – by law – plug into and no one ever imagined would go away.

 

But even more important for the future of our communications infrastructure – the Federal Communications Commission made this a values driven transition. In a bipartisan unanimous 5-0 vote back in January 2014, the FCC rejected the idea of making the Tech Transition a “get out of regulation free zone” and adopted four basic principles to guide the transition: Universal Access, Competition, Consumer Protection and Public Safety.

 

As a result, for once, for once, we actually have a chance to prevent the inequality before it happens. It took 100 years, but if there is one thing Americans took for granted, it was that we all had the same phone system and could all communicate with each other on equal terms. The rules the FCC adopts will make it possible to preserve this principle of universal access. Because this network forms the backbone of the broadband network, if we work together and don’t blow it, we can achieve the same success with broadband that we achieved with basic telephone service.

 

I dig into this below . . .

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Tales of the Sausage Factory

AT&T’s BDS Hissy Fit Is Bad Strategy.

Hell hath no fury like an ILEC scorned. So it is perhaps no surprise that AT&T has decided to heap much scorn on Verizon for playing smart and flipping sides on the debate on how to improve regulation of the Business Data Serve (BDS), nee special access. While perhaps understandable from an emotional perspective, this response is — to use a techncial legal phrase — silly. Worse, taken to its logical extreme, it has the same corrosive effect on rulemaking as the accusation of “flip flopping” has on politics. We keep saying we want people to actually negotiate and look for compromises that reflect the changing reality. But when someone actually says “OK, you know what, lets recognize that reality isn’t so black and white as people make it out and we should look for a workable compromise,” then everyone is like “Flip Flopper! How can we possibly take you seriously now that you will no longer fight to the death!”

 

As I explain below, AT&T (and other ILECs) would gain much more by joining Verizon in negotiating for a transition away from the ILEC monopoly on the high capacity data circuit to a more competitive market structure. Rather than throwing a hissy fit, AT&T should embrace its usual path of shrewd negotiation . . .

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Tales of the Sausage Factory

Free Internet Is NOT For Porn — And Isn’t Broadband Access

As some folks may have heard, New York City has begun a really awesome project in free broadband access with it’s LinkNYC program. NYC is replacing no longer used pay phone kiosks with free WiFi access points (and an available interface built into the kiosk for those who cannot afford a smart device).

 

In a surprise to no one but the bright eyed innocents who set up the program, homeless people followed the advice of Avenue Q and decided that the Internet was indeed really really great — for porn. On the plus side, this certainly silenced those critics of the program who alleged that LinkNYC would only serve rich tourists. On the downside, the sight of the unwashed whacking hordes gathering around WiFi access points like pigeons clustered around lonely people with breadcrumbs on Central Park benches was not exactly the “proof of concept” the City hoped to get. So, once again to no one’s surprise, LinkNYC decided to install filters to block porn sites.

 

 

As has been the case since we first started debating Internet blocking in 2008, some folks raise the argument that net neutrality will prevent people from blocking porn sites. I testified on this back in 2008 at the FCC’s open hearing at Stanford University when folks claimed that if Comcast couldn’t block file-swapping sites it couldn’t block porn. Naturally, it also got debated in the lead up to the 2010 Open Internet Order and the 2015 Open Internet Order. So it’s not like we never thought of this before and it’s not like we don’t know the answer: free access sites can block porn (or otherwise filter) no problem. Indeed, as others have observed in the past, free access sites (like coffee houses or libraries) do not count as broadband Internet access providers and free Internet access is not Title II broadband Internet access service (BIAS).

 

Why? See below . . .

 

UPDATE: LinkNYC made this reply to my post through their official twitter account.

 

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Tales of the Sausage Factory

Broadband Privacy Can Prevent Discrimination, The Case of Cable One and FICO Scores.

The FCC has an ongoing proceeding to apply Section 222 (47 U.S.C. 222) to broadband. For those unfamiliar with the statute, Section 222 prohibits a provider of a “telecommunications service” from either disclosing information collected from a customer without a customer’s consent, or from using the information for something other than providing the telecom service. While most of us think this generally means advertising, it means a heck of a lot more than that — as illustrated by this tidbit from Cable One.

 

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Tales of the Sausage Factory

How DSRC Makes Us Less Safe: Privacy and Cybersecurity (Part 1)

As I discussed previously, the auto industry and the Department of Transportation (DoT) via the National Highway Traffic Safety Administration (NHTSA) plan to mandate that every new car include a technology called “Dedicated Short Range Communication” (DSRC), a device that talks to every other car with a DSRC unit (something called “vehicle-2-vehicle” or “v2v” communication). The auto industry fully supports this mandate, which is surprising (since industries rarely like mandates) until you (a) read this report by Michael Calabrese showing how the the auto industry hopes to monetize this with new services and harvesting your personal information (while piously claiming the mantle of saving lives); and, (b) the mandate helps DoT and the auto industry avoid sharing the spectrum with potential unlicensed uses (which actually do contribute to saving lives, but I will save that for latter).

 

As it happens, in addition to being a full time spectrum nut, I spend a fair amount of time these days on privacy, with just a touch of cybersecurity. So I started to dig into the privacy and cybersecurity implications of mandating DSRC on every car. My conclusion, as I discuss below, is that the DSRC mandate as it now stands is a disaster for both cybersecurity in cars and for privacy.

 

Yes, NHTSA addresses both privacy and cybersecurity in its 2014 Research Report on DSRC in terms of evaluating potential risks and solicited comment on these issues in their “Advanced Notice of Proposed Rulemaking” (ANPRM). It is in no small part from reading these documents that I conclude that either:

(a) NHTSA does not know what it is talking about; or,

(b) NHTSA does not actually care about privacy and cybersecurity; or,

(c) NHTSA is much more interested in helping the auto industry spectrum squat and doesn’t care if doing so actually makes people less safe; or,

(d) Some combination of all of the above.

 

As for the auto industry and its commitment to privacy and cybersecurity, I will simply refer to this report from Senator Markey issued in February 2015 (and utterly unrelated to DSRC), find that the auto industry (a) remained extremely vulnerable to cyberattacks and infiltration by hackers; (b) the auto industry had no organized capability to deal with this threat; and, (c) the auto industry routinely collected all kinds of information from cars without following basic notice obligations, providing meaningful opt out, or adequately protecting the information collected. (You can read this article summing up the report rather nicely.) For those who think the auto industry has no doubt improved in the last year, I refer you to this PSA from the FBI issued in March 2016 on vulnerabilities of cars to hacking.

 

I note that these remain problems regardless of whether the FCC permits sharing in the band, although it does call into question why anyone would mandate DSRC rather than rely on the much more secure and privacy friendly technologies already on the market — like car radar and LIDAR systems. But if the auto industry and NHTSA insist on making us less safe by mandating DSRC, the FCC is going to need to impose some serious service rules on the spectrum to protect cybersecurity and privacy the way they did with location data for mobile 911.

 

And, just to make things even more exciting, as explained in last week’s letter from the auto industry, GM is rushing out a pre-standard DSRC unit in its 2017 model cars. Because which is more important? Creating facts on the ground to help the auto industry squat on the spectrum, or making sure that DSRC units installed in cars are actually secure? Based on past history of the auto industry in the cybersecurity space, this is not a hard decision. For GM, at least, spectrum squatting rules, cybersecurity drools.

 

On the plus side, if you ever wanted to live through a cool science fiction scenario where all the cars on the highway get turned into homicidal killing machines by some mad hacker baddy, the NHTSA mandate for DSRC makes that a much more likely reality. In fact, it’s kinda like this Doctor Who episode. And lets face it, who wouldn’t want to drive in a car controlled by Sontarans? So, trade offs.

 

I explain all this in detail below . . . .

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