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Trump Administration Official Proposes Nationalizing 5G Over Security Concerns

Phillip Dampier January 29, 2018 Community Networks, Competition, Consumer News, Public Policy & Gov't, Wireless Broadband 2 Comments

National security officials inside the Trump Administration dropped a controversial proposal on the desks of multiple federal agencies that advocates a federal government takeover of the nation’s forthcoming 5G wireless network.

Axios obtained a copy of an accompanying memo and PowerPoint presentation outlining the proposal that would nationalize 5G service and have taxpayers fund the construction of a single,  nationwide network that would allow federal officials to secure traffic from foreign economic and cybersecurity threats.

Some national security officials worry the Chinese have achieved dominant market positions in network infrastructure and artificial intelligence, and this could have security implications for emerging technologies like self-driving cars and machine to machine communications, which will likely use 5G networks.

“China is the dominant malicious actor in the Information Domain,” the presentation notes, adding that two Chinese manufacturers – ZTE and Huawei are dominant players in 5G infrastructure at a time when American manufacturers of wireless technology are disappearing.

That 5G technology and who makes it is becoming a national security issue, claims the author, advocating reduced risk by authorizing the United States government to build a single, nationwide 5G wireless network, on which America’s wireless carriers could lease secure access. The network concept could even eventually be shared with America’s allies to protect them from “Chinese neo-colonial behavior,” the author writes.

The author of the presentation, perhaps unintentionally, waded into the heart of a fierce debate between municipalities, broadband advocates and private cable and phone companies and their funded special interest groups, over the benefits of public vs. private broadband service.

Calling the taxpayer-funded effort “the 21st century equivalent of the Eisenhower National Highway System,” the author advocated first spending up to $200 billion to construct a national fiber optic backbone that would reach neighborhood 5G small cells. Additional funding would cover small cell placement and equipment.

The author implied the Department of Defense budget could be tapped for some of the money, quoting the Secretary’s interest in expanding secure communications. The author noted little of the military’s current $700 billion budget does any good for the American people in the information domain. Constructing a secured 5G broadband network would presumably change that.

The proposal suggests a national 5G network could be up and running within three years, if it became a government priority. ISPs and other users would then be able to obtain access on the network to service their respective customers.

If adopted, the Trump Administration would oversee the country’s largest public broadband project in American history, paid for by U.S. taxpayers, a concept that has traditionally been anathema to most Republicans and the broadband industry. Both have traditionally opposed public broadband projects if or when they compete with the private sector.

“This is coming from a Trump’s National Security Council,” tweeted Hal Singer, a principal at Economists, Inc. “If the same thoughts came from Bernie Sander’s NSC (or Elizabeth Warren’s), Republicans would be up in arms and Fox News would sound the socialism alarm.”

Commissioners at the Federal Communications Commission also roundly criticized the proposal.

“I oppose any proposal for the federal government to build and operate a nationwide 5G network,” wrote FCC Chairman Ajit Pai. “The market, not the government, is best positioned to drive innovation and investment.”

Pai wants the government to accelerate the allocation of additional wireless spectrum that could be auctioned off to wireless carriers to expand 5G.

The large wireless carriers remained silent about the implications of the proposal, claiming they had not yet seen it.

But by late morning, the Trump Administration was attempting to downplay the presentation, telling Recode the document was dated and had merely been floated by a staff member and was not a reflection of an imminent major policy announcement.

That did not stop four of the five commissioners at the FCC from hurrying out statements criticizing the proposal, and the fifth tweeting negatively about it. They apparently took it very seriously:

San Jose Mayor Quits FCC’s Industry-Stacked Broadband Deployment Advisory Committee

Phillip Dampier January 25, 2018 Astroturf, Broadband "Shortage", Public Policy & Gov't, Rural Broadband, Wireless Broadband Comments Off on San Jose Mayor Quits FCC’s Industry-Stacked Broadband Deployment Advisory Committee

Liccardo

San Jose Mayor Sam Liccardo has resigned from the Federal Communications Commission’s Broadband Deployment Advisory Committee (BDAC), claiming the panel has been stacked with telecom industry players that will advocate for the interests of the telecom industry, not the public.

“It has become abundantly clear that despite the good intentions of several participants, the industry-heavy makeup of BDAC will simply relegate the body to being a vehicle for advancing the interests of the telecommunications industry over those of the public,” Liccardo wrote in his resignation letter.

The corruption was baked in from the earliest days of the BDAC, originally created by FCC Chairman Ajit Pai in January 2017 to help resolve the digital divide between those who have access to internet service and those who don’t. BDAC was charged with providing advice and recommendations on how to accelerate the deployment of high-speed internet access. Pai used the BDAC partly as a front group to advocate for his own long-standing goal of reducing or eliminating what he believes are regulatory barriers to infrastructure investment.

Controversy erupted almost immediately as the BDAC member nomination process began. Pai and his staff packed the 30-member group with telecom industry corporate executives, trade groups, and free market scholars frequently funded or sponsored by telecom companies. According to the Center for Public Integrity (CPI), the FCC initially accepted only two of the 64 city and state officials nominated to serve on a committee that was likely to recommend major changes to local and state zoning and permitting laws. Liccado was one of the two.

CPI filed a Freedom of Information Act request with the FCC to force the agency to divulge detailed information about applicants and those approved to serve as panel members. They found three out of four members appointed worked for big telecom companies like AT&T, Comcast, Sprint, and TDS Telecom. Crown Castle International Corp., the nation’s largest wireless infrastructure company, and Southern Co., the nation’s second-largest utility firm, also have representatives on the panel. The “broadband experts” chosen as members largely came from conservative think tanks that have industry funding ties or connections with wealthy conservative donors like the Koch Brothers.

Liccardo sensed trouble on the committee as early as last August.

“It’s not lost on us that among the 30-odd members of the BDAC, only two represent local government,” Liccardo said. “We’ll see where things go in the weeks ahead, but it’s fair to say the footprints are in the snow.”

Gary Carter, who works for the city of Santa Monica, Calif., where he oversees City Net, one of the nation’s oldest publicly owned networks, thought he would be the perfect candidate to serve on the BDAC. The FCC didn’t think so.

“When I called [the FCC] to check on the status of the BDAC selection process [earlier this year] and identified myself as an employee from the City of Santa Monica, the gentleman on the phone laughed hysterically,” Carter said. “At first I didn’t get the joke. When I saw the appointees for the municipal working group—only three out of 24 positions were from local government—I got the joke.”

The corruption has not been a surprise to one telecommunications executive serving as a BDAC member. He candidly told CPI the committee was purposely “stacked” to guarantee findings and proposals that echo Pai’s anti-regulatory agenda.

“It’s definitely stacked towards private enterprise,” said the executive, who requested anonymity due to fear of retaliation from FCC officials. “It’s nothing new. The [current] FCC serves private enterprise.”

Nick Degani, senior counsel to the FCC and Pai’s wireline legal advisor, told BDAC members at a July meeting that only a few city officials were chosen because they are the ones that need guidance, not telecommunications companies.

City and state officials locked out of Pai’s panel warn that BDAC recommendations could soon lead to new rules that will ignore local residents’ wishes in favor of the interests of cable, phone, and wireless companies. Recommended rule changes could allow telecom companies to gain free or very low-cost access to public buildings on which it can place cell towers or the small cells that will end up on utility poles. Much of the equipment the industry wants to place threatens to clutter neighborhoods with unsafe, overloaded utility poles and some new infrastructure could block scenic views or be placed in sensitive environmental areas.

CPI spoke with many local officials who asked to participate as a member of BDAC, but were turned down:

“There are reasons you have to get a permit if you want to dig up the side of the street,” said David Frasher, city manager of Hot Springs, Arkansas, who also was nominated—but turned down—for a seat on the BDAC.

“The city needs to know if you’re going to block traffic or create a hazard to sidewalk users,” Frasher said. Maybe there’s a way to streamline those regulations, “… but with only 10 percent city government representation, how helpful will the end product be?”

The FCC also didn’t choose David Guttenberg, member of the Alaska state legislature. He said service providers writing local rules for internet deployment makes him fear for Alaskan residents, many of whom have such poor wireless service that they have trouble downloading emails.

“They [telecommunications companies] are only going to look after their own self interests,” Guttenberg said. “Find me the guy that works for telecommunications on this committee that’s going to sign onto a plan telling their business to do something they don’t want to do. Find me that guy.”

What Pai has done by packing the panel with industry representatives is, in the end, “pretty standard in Washington,” said Sarah Treul, a political science professor at the University of North Carolina at Chapel Hill. “The FCC expects certain outcomes from this advisory committee.”

Pai

That point was not lost by San Jose Mayor Liccardo, who finally had enough after witnessing several cases of BDAC’s industry members wielding veto power and unilaterally rewriting collaborative proposals to fit the agenda of large cable and phone companies.

“One working group, which did not have a single municipal representative among its 30+ participants, created a draft model state code that included provisions to eliminate all municipal control over when, how, and whether to accept industry applications for infrastructure deployment,” Liccardo complained. “Another working group had an industry representative dramatically re-write its draft municipal code in the 11th hour, pushing aside the product of months of the working group’s deliberations. The result, in each case, were provisions that plainly prioritized industry interests.”

Also dovetailing with Pai’s narrative, many telecom companies griped about the cost of complying with local rules and regulations. In April, Larry Thompson, CEO of the National Exchange Carrier Association, with 1,300+ local telephone company members, complained one member had to pay $700,000 in costs to comply with environmental laws, historical preservation rules, zoning, and construction-related paperwork.

A representative from Comcast worried that the BDAC’s work has been so polarized towards the telecom industry, excluded state and local officials will have every reason to resist the BDAC’s findings and recommendations and refuse to adopt them.

“If they don’t feel included, not only are they outside throwing [darts] at this process, but then in the end it’s those groups that we want to adopt these model codes,” said David Don, vice president of regulatory affairs at Comcast.

But Liccardo warns Pai and his Republican allies are laying the foundation to “steamroll” over local officials by bulldozing local control of zoning and code rulemaking. For that reason, he quit the committee.

“The apparent goal is to create a set of rules that will provide industry with easy access to publicly funded infrastructure at taxpayer subsidized rates, without any obligation to provide broadband access to underserved residents.”

If Pai does manage to enact new federal rules that are as industry-friendly as Liccardo and other city officials fear, the FCC could overrule local zoning and permitting rules on a scale never seen before.

“It’s obvious that this body is going to deliver to the industry what the industry wants,” Liccardo said.

That appears to be Mr. Pai’s agenda as well.

AT&T Scam of the Week: Advocating for Fake Net Neutrality

Phillip Dampier January 24, 2018 AT&T, Broadband "Shortage", Consumer News, Data Caps, Editorial & Site News, Net Neutrality, Public Policy & Gov't 7 Comments

After spending millions to kill net neutrality, AT&T today called on Congress to pass a new national law protecting AT&T’s idea of a free and open internet by regulating internet websites like Facebook, Google, and Amazon.

Full page newspaper ads taken out in several nationally known newspapers proclaimed AT&T CEO Randall Stephenson’s support for the first “Internet Bill of Rights,” conceived by some of the same lawyers and lobbyists AT&T paid to destroy the FCC’s net neutrality rules put into effect during the Obama Administration.

“Congressional action is needed to establish an ‘Internet Bill of Rights’ that applies to all internet companies and guarantees neutrality, transparency, openness, non-discrimination and privacy protection for all internet users,” Stephenson wrote in the ad.

AT&T’s proposal would attempt to include content regulation of websites under the guise of fairness, claiming that while internet service providers are expected to treat all content fairly, large websites like Google and Facebook currently do not. Critics of AT&T’s proposal call that a distraction that has nothing to do with ISPs seeking the right to establish paid internet fast lanes and favoring partnered websites with exemptions from data caps or speed throttles.

AT&T doesn’t inform readers of its own complicity in the “confusion” over net neutrality policies that have faced constant legal and political challenges from AT&T and other telecom companies. The telecom industry has furiously lobbied Congress and regulators to keep net neutrality from taking effect. Once it did, AT&T took the FCC to court to overturn the rules.

AT&T wants their own law for their own version of net neutrality.

AT&T’s campaign comes with some urgency as the company works to block states from enacting their own net neutrality laws to replace the rules abandoned by the Republican majority controlling the FCC. Despite assurances from FCC chairman Ajit Pai that the Commission would sue to pre-empt any state law that would re-establish net neutrality, AT&T and other large cable and phone companies prefer the regulatory certainty available from the quick passage of a federal law that would establish AT&T’s definition of net neutrality indefinitely. AT&T is also trying to rush passage with support from Republican congressional majorities and President Trump before the midterm elections threaten a Democratic takeover of the House, Senate, or both.

AT&T attempted to assuage customers of its good intentions by claiming it doesn’t block websites.

“We don’t censor online content. And we don’t throttle, discriminate, or degrade network performance based on content, period,” AT&T wrote (emphasis ours). But that claim opens the door to important loopholes:

  1. Speed throttles, data caps, and zero rating do not impact network performance. They impact your ability to equally access internet content, something AT&T does not promise here.
  2. AT&T only claims it won’t interfere with websites based on their content, but that was never the premise ISPs have used to demand additional payments from content creators. It isn’t the content ISPs are concerned with — it is the traffic those websites generate and, in the eyes of many net neutrality supporters, whether those websites compete with an ISPs own offerings. AT&T could have said it doesn’t throttle, discriminate, or degrade websites, period. But it didn’t.

AT&T alarmingly suggests that without predictable rules, next generation applications like virtual reality, telemedicine, and the Internet of Things will be threatened. Except that is not the message AT&T gives shareholders, arguing AT&T has robust capacity both now and into the future for next generation applications. AT&T has long promoted how lucrative it expects the Internet of Things marketplace will be.

Allowing the telecom industry to write its own “Internet Bill of Rights” met with harsh criticism from the consumer groups AT&T claims it wants to enlist in its efforts.

“Zero real net neutrality supporters are fooled by this,” wrote Fight for the Future executive director Evan Greer. “We had an Internet Bill of Rights. It was called Title II and AT&T’s army of lobbyists did everything in their power to burn it down.”

“AT&T’s hypocrisy knows no bounds,” said Free Press policy director Matt Wood. “Its phony bill of rights argument makes no sense based on the law, the policies, or the politics in play. AT&T’s head fake towards one-size-fits-all rules for all websites and content providers should fool no one. As soon as AT&T wants to stop lobbying against net neutrality, broadband privacy, and the other rights it has worked to kill at the Trump FCC and in this Congress, maybe people will stop laughing at desperate tactics like this. For now, all we can do is point out the company’s audacity in pretending that this hyper-partisan Congress can step in to fill the void of the net neutrality repeal by writing a new law tailor-made for AT&T.”

Verizon Has No Plans to Spend Tax Cut Bonanza on Network Upgrades

Phillip Dampier January 23, 2018 Verizon, Wireless Broadband 4 Comments

Verizon will spend most of the benefits gained from the Trump Administration’s tax cuts on writing off investments that will reduce the company’s tax exposure and boosting its dividend to shareholders.

Verizon’s chief technology officer Hans Vestberg told shareholders at an investment conference the company had no plans to spend the $3.5-$4 billion more in operating cash flow that will result from tax cuts on network upgrades, while it will continue to cut as much as $10 billion in costs out of its business over the next four years.

Verizon has attempted to converge its traditional wireline business with its wireless unit since buying out its partner Vodafone. As the two networks gradually merge, Verizon is continuing job cuts and expense reductions, even as the company will enjoy a $16.8 billion reduction in its deferred tax liabilities because of the new permanently lowered 21% corporate tax rate.

Vestberg argued Verizon was likely to waste money if it spent its anticipated windfall on accelerated network upgrades.

“You probably don’t want to have big spikes in the capital allocation because then in the end it drives inefficiencies. We want to be consistent,” Vestberg said. “From an execution point of view you want to be consistent. It’s not helpful to go up and down in capital allocation because it ramps up and down resources—money wasted … But we are always debating. And we should debate in a leadership team the size of Verizon.”

Verizon currently pays out more than three-quarters of its annual income to shareholders in the form of quarterly dividend payments. This morning, Verizon announced it would award 50 shares of restricted Verizon stock to virtually every employee except those in top management. On Tuesday, Verizon stock traded at around $53 a share, making the stock bonus potentially worth around $2,650 for each worker. But employees may not be permitted to sell their shares immediately. In earlier compensation packages that included restricted shares, the stock could not be sold for at least two years, and was subject to forfeit if an employee left the company during that window.

Verizon’s operating plan for 2018 includes a spending budget of $17 billion, an amount that has not changed as a result of the new tax law. Verizon is expected to allocate a significant amount of its budget towards its wireless services, particularly 5G development.

NY City Residents Can Watch Free Streams of 15 Local TV Channels… For Now

Phillip Dampier January 22, 2018 Competition, Consumer News, Online Video, Public Policy & Gov't 1 Comment

If you are a resident of New York City, you can now stream 15 over the air local television stations for free, at least until the station owners send their lawyers after the coalition running the new service.

Locast.org is owned and operated by Sports Fan Coalition NY, a non-profit organization best known for successfully petitioning the Federal Communications Commission to eliminate the Sports Blackout Rule that forced local broadcast stations near stadiums to black out a game if a team did not sell a certain percentage of tickets by a certain time prior to the game.

The group launched Locast to challenge the idea that those unable to receive good reception of over-the-air local stations need to subscribe to a pay television provider to get a clear and reliable picture. Cord-cutters, in particular, often fear the loss of local television stations when they drop their cable subscription. Locast is designed to make sure those relying on streamed entertainment can also get free broadcast television over their internet connection.

The service currently provides 15 channels that broadcast in New York City:

  • WABC (ABC)
  • WCBS (CBS)
  • WNBC (NBC)
  • WNYW (FOX)
  • WNET (PBS)
  • WLIW (PBS)
  • WWOR (MyNetworkTV)
  • WPIX (CW)
  • WPXN (Ion)
  • WNJU (Telemundo)
  • WFUT (UniMás)
  • WMBC (Ind.)
  • WLNY (Ind.)
  • WFTY (Justice Network)
  • WNYE (NYLIFE)

Viewers must live within the New York City television market to receive the service, and Locast enforces this with GPS and other similar location verification tools. Some residents of northern New Jersey complain they are unable to access the service, despite being within the New York City television market, a problem the group recognized and is attempting to fix. Viewers can watch the service on a desktop computer, mobile device, or tablet. There is no DVR service available at this time.

Stream quality is acceptable, but not stellar. In tests, we found the service suffered from occasional artifacts and was somewhat grainy. This would be particularly noticeable on a large screen television, much less so on portable devices. The picture was slightly better than Standard Definition. There were occasions when certain channels were unavailable and others suffered from streaming problems that caused portions of the audio or video to disappear. Remember, however, the service is new and free.

Locast offers a web-based interface.

The biggest challenge to Locast will not be the video quality of its streaming television channels. It will be dealing with lawyers.

Locast, like many similar services that came before it, relies on a novel interpretation of U.S. Copyright Law and the perceived loopholes it offers those who want to attempt to expand the definition of how consumers receive broadcast television signals. In this case, the service compares itself to a digital translator service similar to what some television stations use to distribute their signals to remote low-power translator stations that act as repeaters — providing better reception of stations that have trouble reaching parts of their local market.

Over the past two decades, several companies have tried and failed to offer independent online streams of television stations without the permission of station owners.

In 1999, iCraveTV provided more than a dozen Canadian and American television stations received over the air in Toronto made available to a nationwide online audience. The over-the-air stations (and the networks they affiliated with) in Buffalo, N.Y., promptly launched legal action against the company, challenging its claim it was entitled to offer the service because it was effectively a cable operator. International copyright law claims led to a preliminary injunction against the service and the threat of costly ongoing litigation convinced the owner of iCraveTV to stop the service in return for dropping lawsuits.

In 2011, ivi.tv streamed television signals from Seattle, Los Angeles, New York, and Chicago until a judge signed an injunction forcing those stations off the paid service. Several court actions against FilmOn.com, a similar service operating around the same time, also stripped most of its TV station lineup off the service.

The highest profile attempt to avoid getting permission from TV station owners to stream their programming came in 2012 with the launch of Aereo, which sought to exploit a perceived loophole in what constituted reception of a TV station. Aereo assigned a tiny antenna for each customer to receive over the air stations, starting in the New York City area. Stations received by that antenna were delivered to subscribers over an internet video stream. The idea was that Aereo was not distributing one TV signal for multiple customers. It was merely extending the concept of an ‘antenna’ to include internet delivery of signals to those verifiably living within the New York City television market.

Broadcasters ran up large legal bills to defeat Aereo in two major court cases. In 2014, the U.S. Supreme Court ruled against Aereo, claiming it breached copyright law. The service attempted one last effort to stay up and running, asking the U.S. Copyright Office for a copyright license after the Supreme Court seemed to call the service a “cable system.” Both the Copyright Office and a district court found Aereo was not entitled to a cable compulsory license and granted broadcasters a preliminary injunction that effectively put Aereo out of business.

All of these ventures attempted similar arguments that Locast is now using to justify why it should be allowed to distribute live streams of local television stations without the consent of station owners. The courts have traditionally bowed to the broadcasters and their allied lobbyists, television networks, and pay television providers that would feel threatened if a service like Locast gave away for free what they sell to consumers.

The Sports Fan Coalition’s legal justification comes from an exception Congress made to the copyright law’s insistence that permission from a station owner was required to redistribute their signal, unless one operated a cable system.

“Any ‘non-profit organization’ could make a ‘secondary transmission’ of a local broadcast signal, provided the non-profit did not receive any ‘direct or indirect commercial advantage’ and either offered the signal for free or for a fee ‘necessary to defray the actual and reasonable costs’ of providing the service. 17 U.S.C. 111(a)(5),” the group argues. “Sports Fans Coalition NY is a non-profit organization under the laws of New York State. Locast.org does not charge viewers for the digital translator service (although we do ask for contributions) and if it does so, will only recover costs as stipulated in the copyright statute. Finally, in dozens of pages of legal analysis provided to Sports Fans Coalition, an expert in copyright law concluded that under this particular provision of the copyright statute, secondary transmission may be made online, the same way traditional broadcast translators do so over the air.”

Traditionally, ‘secondary transmission’ has meant a building or complex owner receiving a station over the air from a rooftop antenna and providing it to tenants or residents over a Master Antenna TV coaxial cable connection (or similar technology). College campuses, hospitals, and other multi-dwelling unit owners often provide similar wired reception of over the air stations as well, to assure quality reception.

Translator stations that pick up and repeat a television station on an adjacent channel to offer better reception in difficult-to-reach viewing areas typically run with the full consent, or are owned by, the television station they rebroadcast.

Locast attempts to broaden the definition of ‘secondary transmission’ to include distribution over the internet through video streaming. Although their expert in copyright law believes this is permissible, there are multiple court cases where judges have ruled against these types of services when a broadcaster objects. Locast will likely face time in a courtroom arguing for its right to exist, something the venture readily admits is likely to happen.

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