Home » Regulation » Recent Articles:

Republican-Controlled House Votes 215-205 to Repeal Internet Privacy Regulations

Phillip Dampier March 29, 2017 Consumer News, Public Policy & Gov't, Reuters 5 Comments

U.S. House of Representatives

WASHINGTON (Reuters) – The U.S. House voted on Tuesday 215-205 to repeal regulations requiring internet service providers to do more to protect customers’ privacy than websites like Alphabet Inc’s Google or Facebook Inc.

The White House said earlier Tuesday that President Donald Trump strongly supports the repeal of the rules approved by the Federal Communications Commission in October under then-President Barack Obama.

Under the rules, internet providers would need to obtain consumer consent before using precise geolocation, financial information, health information, children’s information and web browsing history for advertising and marketing.

Last week, the Senate voted 50-48 to reverse the rules in a win for AT&T Inc, Comcast Corp and Verizon Communications Inc.

The White House in its statement said internet providers would need to obtain affirmative “opt-in” consent from consumers to use and share certain information, but noted that websites are not required to get the same consent. “This results in rules that apply very different regulatory regimes based on the identity of the online actor,” the White House said.

Websites are governed by a less restrictive set of privacy rules overseen by the Federal Trade Commission.

FCC chairman Ajit Pai in a statement praised the decision of Congress to overturn “privacy regulations designed to benefit one group of favored companies over another group of disfavored companies.” Last week, Pai said consumers would have privacy protections even without the Obama internet provider rules, but critics say they will weaker.

The American Civil Liberties Union, which opposes the measure, said companies “should not be able to use and sell the sensitive data they collect from you without your permission.”

An Internet & Television Association statement called the repeal “an important step toward restoring consumer privacy protections that apply consistently.”

One critic of the repeal, Craig Aaron, president of Free Press advocacy group, said major Silicon Valley companies shied away from the fight over the rules because they profit from consumer data.

“There are a lot of companies that are very concerned about drawing attention to themselves and being regulated on privacy issues, and are sitting this out in a way that they haven’t sat out previous privacy issues,” Aaron said.

Representative Michael Capuano, a Massachusetts Democrat, said Tuesday that Comcast could know his personal information because he looked up his mother’s medical condition and his purchase history. “Just last week I bought underwear on the internet. Why should you know what size I take? Or the color?” Capuano asked. “They are going to sell it to the underwear companies.”

Comcast declined to comment.

Representative Michael Burgess, a Texas Republican, said the rules “unfairly skews the market in favor” of websites that are free to collect data without consent.

Republican commissioners, including Pai, said in October that the rules would unfairly give websites like Facebook, Twitter Inc or Google the ability to harvest more data than internet service providers and thus further dominate digital advertising. The FCC earlier this month delayed the data rules from taking effect.

(Reporting by David Shepardson. Additional reporting by David Ingram and Stephen Nellis in San Francisco; Editing by Chizu Nomiyama and Grant McCool)

“50 Shades of Grey” Community Broadband Ban Bill Ties the Hands of Missouri Communities

Phillip Dampier March 13, 2017 Broadband "Shortage", Broadband Speed, Community Networks, Competition, Consumer News, Editorial & Site News, Public Policy & Gov't, Rural Broadband Comments Off on “50 Shades of Grey” Community Broadband Ban Bill Ties the Hands of Missouri Communities

Emery

It’s 2017 and a lot of Missouri residents are still tortured by the lack of access to basic broadband service, and if a community broadband ban bill becomes state law it will remain that way for years to come.

SB 186 is essentially a copy of last year’s community broadband ban that eventually died in the legislature. Just like last year, many of the sponsors and promoters of the latest attempt to impose a municipal broadband ban have close ties to the American Legislative Exchange Council (ALEC) and receive copious amounts of money from Missouri’s largest telecom companies. Some even win awards from the state’s biggest telecom lobbyists.

State Sen. Ed Emery (R-Lamar) loves the headlines he attracts from throwing ideological bombs into the public debate (he called homosexuality a mental illness, compared public education to slavery and a pathway to prison, and questioned whether former president Barack Obama was actually an American citizen). But he is not in touch with the rural residents in his state who have had their pleas for broadband service ignored by AT&T and other telecom companies for years.

Emery is a big fan of ALEC and serves as a Missouri state chairman. In 2015 he told an audience at an ALEC event he found the group’s efforts inspiring and helpful. ALEC acts as a giant clearinghouse for corporate-inspired legislation that ends up in the hands of friendly state legislators. ALEC’s model bills, including one banning municipal broadband, win passage in part because state legislatures do not get the kind of media attention and public scrutiny seen in Washington. SB 186, its predecessor, and other similar bills introduced in other states are frequently ghostwritten by telecom company lawyers and lobbyists and are designed to stop municipal broadband networks before they can get started.

Emery’s current bill is designed to apply a “scorched earth” response to communities trying to find ways to get rural broadband service up and running after a decade of being ignored by private telecom companies. It’s corporate protectionism and welfare at its finest, with a thicket of language that would force public providers into price and speed regulation. Emery’s bill would interfere with the types of loan agreements communities could contemplate to provide the service, and the language required for a mandatory referendum is heavily slanted to suggest such service is redundant and unnecessary. Emery’s bill also offers assurances his business friends could get gigabit speeds from community-owned providers, but not necessarily consumers.

Like the failed broadband hit bill introduced in Virginia, SB 186 is an ironic piece of legislation, heavy-handed with regulation and micromanagement and anchored with bureaucratic requirements designed to guarantee disappointment and costly failure. Emery’s career in public life has been spent railing against costly and unnecessary overregulation, yet his bill exemplifies both in action.

SB 186 also protects the status quo for broadband in Missouri, which is dreadful outside of major cities. It would assure incumbent telecom companies won’t face any service-improving competition and keep municipalities off their turf. For example, Columbia Water and Light has a “dark fiber” institutional fiber network at its disposal that is woefully underutilized. In addition to helping provide some connectivity for local government functions, the city-owned network also leases connections to hospitals and other public buildings, as well as some businesses. But the utility does not sell internet service itself.

The city believes much of the fiber network’s capacity is sitting un-utilized and could prove a valuable asset to the local connectivity economy. With the fiber already in place, expanding the network could be a cost-effective/common sense way to reach city residents that want better internet service than what incumbents are offering, and the city is more than willing to open the network up to those incumbents as well. SB 186 could eliminate that option in Missouri, just to protect the same private companies that have delivered underwhelming service for years.

In cities like Centralia, now exploring enhanced smart grid technology to improve the area’s electricity infrastructure, SB 186 would make the upgrade much more costly. Smart grid technology relies on fiber optic technology, often laid deep into neighborhoods and office parks. Only a tiny portion of that capacity is used to monitor utility infrastructure. The rest of the bandwidth on the fiber optic cable — already in place, could easily offer gigabit broadband service to every resident and business, especially if the city wires fiber to or near individual utility meters. That wouldn’t be allowed under SB 186 either, so communities like Centralia could not recoup some of the cost of the fiber optic technology by selling broadband service. That’s great news for companies like AT&T, CenturyLink, and Charter Communications. It’s also a relief for the phone companies who need not invest in their networks to offer something better than 20th century DSL.

Rural America: not a broadband-a-plenty

Emery offers two contradictory defenses for his bill:

  1. It is necessary to protect taxpayers from municipal broadband which Emery calls “unsuccessful, leaving ratepayers to cover debt costs.” But when asked by local media for any examples of a Missouri public broadband project that has failed, he could not.
  2. “We need more private-sector opportunities and not drive them out or hinder offerings coming into a community.”

In other words, Emery believes all public broadband networks are failures -and- they represent a major threat to private telecom companies that will be discouraged from investing in broadband expansion because a publicly owned competitor could be ready to “drive them out.”

Of course, neither is true. In rural Missouri there is no line of eager telecom companies seeking to expand broadband service into unprofitable rural communities and where only one broadband provider exists, there is no pressure to improve service quality or speed. In the first instance, there is no investment by private companies to discourage and in the second, the presence of a new provider encourages upgrades and investment. It’s a concept called “competition.” Sen. Emery would have a difficult time providing the name(s) of telecom companies that exited a community because of the presence of a municipal broadband alternative.

Rural farms are among the least likely places to get adequate internet service.

Sen. Emery’s family has a feed and grain business background, and those businesses (as well as Missouri’s farmers) are among the hardest hit economically by the lack of suitable broadband. But Emery is now far away from the business his father and grandfather ran. These days, he harvests big dollar contributions from some of the country’s largest corporations and much of his last campaign was financed by just two families — one with a vendetta against unions and the other — Rex Sinquefield — bucking to be Missouri’s own version of the Koch Brothers, who has his own private agenda he’d like enacted into law. Sinquefield has close ties to the Grow Missouri PAC, that also has close ties to the Club for Growth, ALEC, and the Koch Brothers’ backed Americans for Prosperity. Birds of a feather flock together.

Missouri’s biggest telecom companies are also generous contributors to Sen. Emery, which isn’t a surprise considering his bill and voting record directly benefits their businesses in the state. That may explain why the Missouri Cable Telecommunications Association — the state’s top cable lobbying group — gave Emery its Legislator of the Year award. Not to be outdone, the phone companies’ Missouri Telecommunications Industry Association gave Emery its own Leadership Award. Anyone who can introduce a bill that eliminates the best prospect of competition in suburban and rural Missouri for years is probably worthy of both.

In return for favors like that, some familiar names appear at the top of Emery’s list of campaign contributors:

  • AT&T ($6,000)
  • Comcast ($4,000)
  • Verizon Communications ($4,000)
  • CenturyLink ($3,500)
  • Charter ($2,000)
  • Time Warner Cable ($1,500)
  • Charter Communications ($1,325)
  • Sprint ($1,000)

Emery clearly listens to their interests more than average Missouri consumers still searching for broadband service.

The St. Louis Post-Dispatch reported last summer that there are significant gaps in broadband coverage even in St. Louis County, where one million residents live. “Fringe suburban spots” too costly to meet Return On Investment requirements guarantee no service, indefinitely. In St. Clair County, 5,000 homes are without broadband for the same reason. In large parts of the state, what constitutes broadband no longer meets that definition — 25Mbps, as established by the FCC. Every telephone ratepayer pays a “universal service fee” on their phone bill, in part to extend broadband into rural areas. But that extension has been spotty because not every phone company accepts the money and the conditions that come with it to broaden their reach. That leaves many rural Missourians with <1Mbps DSL service. That’s the case in Wildwood, where streaming media is out of the question because internet speeds are too low.

The Broadband Berlin Wall: Wildwood, Mo. — Broadband service is easily available to the east of Highway 109. But to the west, service is spotty to non-existent.

Wildwood — in western St. Louis County, is living in “Third World conditions,” even though “we’re not in rural Timbuktu,” according to resident Marilyn Gilbert. It’s also comparable to Cold War-era Berlin, except in reverse. Eastern Wildwood offers residents broadband options from both Charter and AT&T. But the Broadband Berlin Wall dividing the community — Highway 109, separates the broadband haves’ from the have-nots’. The larger part of Wildwood to the west, now growing with new housing and businesses, is a broadband swamp with few, if any choices for local residents.

Gilbert “enjoys” AT&T DSL and speeds that never come close to 1Mbps. It is her only option.

“I tried to download my Windows update and it timed out,” she said. “The amount of time you waste waiting for things to open up or download!”

Remember, this is in St. Louis County, the old home for the headquarters of Charter Communications, which dominates the city of St. Louis.

Despite earning billions every year from the broadband business, Charter has refused to extend its lines of service into the western half of Wildwood, despite efforts to attract the company that date back six years. Residents report broadband availability is among their top concerns taken to local officials, who have in turn sought help from Charter, AT&T, and the state legislature.

The city of Wildwood’s efforts were met with a demand by Charter to pay the cable company $3 million in taxpayer funds to extend service. The city said no.

“The comment we hear constantly is that kids need high-speed (internet) in order to access their school work,” said Wildwood councilman Larry McGowen. “These days, internet is just like another utility. It has become every bit as important in people’s lives as electricity.”

But it apparently is not important enough to allow Wildwood and other communities the option of constructing their own local broadband solutions for residents if Emery’s bill becomes law.

Ironically, the same companies that refuse to extend their service into rural Missouri are also vehemently opposed to letting local governments do it in their absence.

The stalemate has caused some residents to sell their homes and move, just to get internet access. David Norell left town because he couldn’t survive with satellite internet service, which costs $80 a month and offers spotty service with a low data allowance.

That makes Emery’s bill, and others like it, a travesty. Banning local communities from doing the job large for-profit companies won’t seems nothing short of corporate protectionism. After all, as critics of Emery’s bill charge, how can a local government unfairly compete with a company that doesn’t compete at all? Also of concern is the fact those residents that do get token DSL service from AT&T may be trapped using it forever if Emery’s bill keeps better and faster service from co-ops and other public broadband options off the table.

If it seems like Sen. Emery is putting the interests of big telecom companies – many dues-paying members of ALEC – above those of his constituents, perhaps he is. Consider the fact Emery is a state chairman at ALEC, an organization that included this loyalty pledge in its draft state chair agreement:

I will act with care and loyalty and put the interests of the organization (ALEC) first.

Emery has taken heat for his ongoing love affair with ALEC before, including an ethics complaint about a $3,000 meal at the Dallas Chop House where Emery ate. ALEC’s corporate members picked up the tab. That kind of unethical conflict of interest, along with the aforementioned loyalty pledge, infuriated the St. Louis Post-Dispatch:

Mr. Emery and his ilk can believe what they want, but they should play no part in allowing corporations to hide their agendas, and their lobbying expenses, by pretending to be something they are not. The proof is in ALEC’s actions, which as Washington Post columnist Dana Milbank outlined, hid itself behind closed doors in a meeting last week in the nation’s capital, pushing reporters away while claiming they had nothing to hide.

No, ALEC exists solely to hide. To hide money. To hide agendas. To hide its hijacking of democracy.

Lawmakers who care about the constitution and their commitment to voters should be fleeing faster than the corporations who realize ALEC is simply a bad investment.

Emery at a 2015 ALEC event.

It was not an isolated incident. Ed and his wife Rebecca Emery also enjoyed a $141.10 meal paid for by the Missouri Telecommunications Association. It’s safe to assume nobody had just a small salad. Other meals and drinks were courtesy of AT&T and CenturyLink. (Peabody Energy footed the bill for the Emerys’ taxi rides back and forth.)

When the wining and dining ended, the lobbyists were back with campaign contribution checks in hand.

These kinds of municipal broadband bans are toxic to economic development for rural communities that already face built-in economic and infrastructure disadvantages. The 21st century digital knowledge economy has the potential to make rural America equally competitive, assuming there is adequate infrastructure in place to participate.

Relying on private investment alone can work in urban areas where broadband profits are easy because the essential infrastructure to provide the service was constructed and paid for decades ago, originally to deliver telephone and television service. Rural areas suffer from deteriorated wireline infrastructure some phone companies want to abandon altogether and no cable broadband service at all.

Charter and AT&T first answer to shareholders. Local governments answer to their residents. Legislators are supposed to do the same. For Mr. Emery, loyalty to the interests of ALEC and the state’s telecommunications companies seems clear. It’s too bad his bill suggests a lot less loyalty to the voters in his district that need internet access or better broadband are will assuredly not get it if this bill ever becomes state law.

Ajit Pai Starts FCC Chairmanship by Clear-Cutting Pro-Consumer Policies, Cheap Internet for the Poor

Pai

Like President Donald Trump, Ajit Pai is a busy man. He’s spent his first month as FCC chairman gutting his predecessor’s legacy, reversing pro-consumer policies, ending forays into set-top box competition, fair pricing for inmate phone calls, cheap internet access for the poor, ending reviews of data caps and zero rating practices, and threatening to terminate Net Neutrality with extreme prejudice.

No wonder Bob Quinn, AT&T senior executive vice president of external & legislative affairs applauded President Trump’s appointment of Pai, proclaiming he will “quickly and decisively put back in place the commonsense regulatory framework necessary to support the President’s agenda for job creation, innovation and investment. We look forward to working with him and his team and the FCC to support President Trump’s growth agenda.”

AT&T’s only growth agenda is sending customers ever-increasing bills, and with Mr. Pai at the helm of the FCC, they are sure to get their wish.

Over their terms at the FCC under the Obama Administration, Republican Commissioners Ajit Pai and Michael O’Rielly frequently complained their minority voices on the Commission were ignored and newly proposed regulations or policies would come before the FCC so quickly, there was inadequate time for public review. But since Pai teamed up with O’Rielly to abolish many of the most important achievements of his predecessor, Chairman Thomas Wheeler, they have reportedly all but ignored the sole remaining Democrat currently serving on the Commission — Mignon Clyburn.

Last Friday, Clyburn accused Pai of hypocrisy for complaining about policies being rushed for a vote without explanation before doing the same thing himself late last week.

FCC Commissioner Mignon Clyburn

Clyburn

“Today is apparently ‘take out the trash day.’ In an eponymous episode of the West Wing, White House Chief of Staff Josh Lyman stated: ‘Any stories we have to give the press that we’re not wild about, we give all in a lump on Friday . . . Because no one reads the paper on Saturday,'” Clyburn said in a statement. “Today multiple Bureaus retract—without a shred of explanation—several items released under the previous administration that focus on competition, consumer protection, cybersecurity and other issues core to the FCC’s mission. In the past, then-Commissioner Pai was critical of the agency majority for not providing sufficient reasoning behind its decisions.”

Clyburn’s office asked for more than the allotted two days to review a dozen items that suddenly appeared on the FCC’s agenda.

“We were rebuffed,” Clyburn wrote.

Clyburn then accused Pai of violating the Administrative Procedure Act, which requires adequate public notice and a comment period for public input. When she asked the chairman to comply with the “reasoned decision-making requirements of the APA,” she was told ‘No deal.’

Mr. Pai’s regulatory rollback agenda has moved with breathtaking speed, according to some FCC observers. Consumer group Free Press today called Pai’s progress “Orwellian.” Over less than a month, Pai — with the help of Commissioner O’Rielly — has:

  • Announced the formation of a Broadband Deployment Advisory Committee that is expected to be stacked with industry stakeholders that will recommend reform the FCC’s pole attachment rules, identify “unreasonable” regulatory barriers to broadband deployment, encourage local governments to adopt “deployment-friendly” policies, and develop a “model code” for local franchising, zoning, permitting, and rights-of-way regulations for telecom infrastructure like cell towers. Few expect the eventual “model code” to stray far from Big Telecom companies’ wish lists;
  • Near-unilaterally loosened rules allowing AM radio stations to continue making their presence felt on the overcrowded FM band through the use of low-power FM “translator” stations that rebroadcast the AM station’s programming;
  • Changed FCC policies to give broader notice of upcoming agenda items and policy proposals, ostensibly to improve public access to FCC rulemaking procedures. But observers suggest the change will primarily benefit industry lobbyists who will have advance detailed notice about the FCC’s upcoming agenda items, allowing them time to lobby for or against the proposals, or suggest changes;
  • Rescinded “Improving the Nation’s Digital Infrastructure,” a policy paper promoting rural broadband deployment and other broadband improvements released just prior to the inauguration of President Trump. On Feb. 3, the FCC set “aside and rescinds the Digital Infrastructure Paper, and any and all guidance, determinations, recommendations, and conclusions contained therein. The Digital Infrastructure Paper will have no legal or other effect or meaning going forward.”
  • Rescinded “in its entirety and effective immediately, earlier guidance provided in a March 12, 2014, public notice, DA 14-330, “Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests,” which attempted to limit ongoing media consolidation controversies including allowing one TV station to effectively operate and provide content for so-called ‘competing’ stations in a local area.
  • Closed the FCC’s investigation into wireless carriers’ zero-rating policies, which allow subscribers free access to “preferred provider content” without it counting against their data plan. Critics call zero rating an end run around Net Neutrality, because providers treat their own content as “preferred.” AT&T charges other content providers to participate in its zero rating program.
  • Instructed the FCC’s legal team to stop defending court challenges to its authority to ensure fair and reasonable telephone rates for incarcerated prisoners held captive to using a single carrier to make phone calls at prices much higher than what the public pays. Those rates were as high as $5.70 for a 15-minute in-state collect call placed from an incarceration facility in Kentucky. In that state alone, consumers effectively paid $2.79 million in kickbacks to state prison systems or a county jail. In contrast, a similar 15-minute call placed from a West Virginia jail or prison would cost $0.48. As a result of Pai’s actions, companies like Global Tel*Link, Securus, and Telmate “can continue the practice of price gouging prisoners and their families,” according to Prison Phone Justice;
  • Ended former FCC Chairman Wheeler’s attempt to force competition in the cable set-top box marketplace, allowing consumers to take a bite out of the $20 billion cable companies make in rental fees annually. At least 99% of subscribers now pay an average of $231 a year to lease the boxes, even after the company has fully recouped their original cost. Customers in Canada can buy their own set-top boxes and DVRs.
  • Killed an expansion of the FCC’s Lifeline program to offer discounted internet access to the poor. Pai reversed approvals made to nine providers — none accused of waste, fraud, or abuse — including Kajeet, Spot On, Boomerang Wireless, KonaTel, FreedomPop, Applied Research Designs, Liberty Cablevision of Puerto Rico, Northland Cable Television and Wabash Independent Networks. Pai later defended the move claiming his predecessor rushed through approval of the providers and he was rescinding those “midnight rules” as current chairman. Many Republicans are seeking a complete elimination of the Lifeline program.
  • Rescinded the latest progress report on modernizing the Universal Service Fund’s E-Rate program, which is designed to subsidize telecom services for schools and libraries. It could be the first step in eliminating or dramatically reforming the Fund;
  • Gave two violators of the FCC’s rules on properly collecting and reporting information about the source of political advertising aired on stations air a free pass.
  • Threw out a white paper from the FCC’s own Homeland Security Bureau advising the agency on cybersecurity issues. Pai doesn’t think the FCC should be involved in cybersecurity, so anything contrary to his agenda of reducing the role of the FCC is likely destined for the nearest wastepaper basket.

FCC letter to AT&T’s Bob Quinn letting him know the company is off the hook with the FCC on zero rating.

“Ajit Pai has been on the wrong side of just about every major issue that has come before the FCC during his tenure,” said Craig Aaron, president of Free Press. “He’s never met a mega-merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an inveterate opponent of Net Neutrality, expanded broadband access for low-income families, broadband privacy, prison-phone justice, media diversity and more. If Trump really wanted an FCC chairman who’d stand up against the runaway media consolidation that he himself decried in the AT&T/Time Warner deal, Pai would have been his last choice — though corporate lobbyists across the capital are probably thrilled.”

Meet America’s Next FCC Chairman, An Ex-Verizon Lawyer That Snuggles With AT&T’s Talking Points

Phillip Dampier January 24, 2017 Editorial & Site News, Public Policy & Gov't 1 Comment

Ajit Pai

Meet America’s next chairman of the Federal Communications Commission Ajit Varadaraj Pai (born January 10, 1973): a lawyer formerly representing Verizon who wants to take a “weed-wacker” to Net Neutrality, thinks data caps represent innovation, opposes almost every consumer protection measure introduced by his predecessor Thomas Wheeler, and believes the best solution to improving broadband is to take pressure off companies like Comcast, AT&T, Charter, and Verizon.

Pai has been a commissioner at the FCC since 2012 where he and his fellow Republican Michael O’Rielly have strongly opposed most of Chairman Wheeler’s pro-competition agenda and broadband reforms:

  • Pai and his chief of staff Matthew Berry vocally opposed efforts by Wheeler to monitor and manage providers’ implementation of data caps and zero rating schemes that exempt provider-preferred content from usage allowances or speed throttles. Pai said Wheeler’s inquiries to carriers regarding zero rating practices showed “the era of permissonless innovation is over,” followed by a Tweet from Mr. Berry complaining that, “If you come up with an innovative service, you will be hauled into FCC to explain yourself.” In 2012, Pai decried allowing Net Neutrality to take hold because it could lead to eventual regulation of usage-based pricing policies.
  • Pai fiercely opposes Net Neutrality and told an audience at the conservative Free State Foundation in December he will remove “outdated and unnecessary regulations” and “fire up the weed-wacker and remove those rules that are holding back investment, innovation, and job creation.”
  • In 2015, Pai cut and pasted large sections of AT&T’s website into a dissent over the FCC’s plan to fine the phone giant $100 million for deceiving customers about its “unlimited data” plan. Pai’s statement defended AT&T’s business practices and blamed consumers for not understanding AT&T’s definition of “unlimited.”
  • Pai voted against the Charter – Time Warner Cable/Bright House Networks merger not because he opposed it. He was upset that Chairman Wheeler insisted on a seven-year ban on Charter implementing data caps. “Chairman Wheeler’s order isn’t about competition, competition, competition; it’s about regulation, regulation, regulation. It’s about imposing conditions that have nothing to do with the merits of this transaction. It’s about the government micromanaging the Internet economy,” said his spokesperson.
  • Pai partly dissented from the AT&T buyout of DirecTV because he didn’t like the deal’s conditions mandating affordable internet access for consumers, marketplace protections for competing online video services, and a strongly empowered compliance officer assigned to make certain AT&T met its obligations — a lesson the FCC learned after Comcast was accused of skirting its obligations in its acquisition of NBCUniversal.
  • Complained Comcast’s efforts to buy Time Warner Cable would be dead on arrival ‘because the Obama administration has shown itself much less likely to approve major telecom mergers — such as the blocked AT&T-T-Mobile merger — than a Republican administration might be.’
  • Opposed Wheeler’s effort to force open the set-top box marketplace to competition so consumers can buy their own cable boxes at a lower cost.
  • Called Wheeler’s push to have the minimum broadband speed standard reset to 25Mbps “incoherent,” claiming that 71 percent of consumers who can already buy access at those speeds don’t want or need it and that there was no need to push wired providers to deliver faster access because Verizon and AT&T already offer 4G LTE service to 98.5% of America.

Where your next FCC complaint will likely end up.

“Ajit Pai has been on the wrong side of just about every major issue that has come before the FCC during his tenure,” noted Craig Aaron, president of Free Press. “He’s never met a mega-merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an inveterate opponent of Net Neutrality, expanded broadband access for low-income families, broadband privacy, prison-phone justice, media diversity and more.”

In contrast, Comcast was thrilled with President Trump’s appointment.

“We commend [Pai’s] tireless efforts to develop and support policies that benefit American consumers and spur greater investment and innovation in broadband technologies to connect all Americans and drive job creation,” said David Cohen, senior executive vice president and chief diversity officer at Comcast. “This is a terrific appointment for the American consumer and the companies the FCC regulates and we look forward to continuing to work with Chairman Pai in his new role.”

That may not be too surprising, considering he spent his formative years in Washington as an associate general counsel at Verizon, where he helped the company deal with pesky regulatory matters. Pai has already given the public clues about how he is likely to respond to consumer complaints about the state of American broadband.

In January 2016, Pai complained the FCC should not be responding to the whims of public interest and consumer groups that “protest a particular [provider] offering,” referring to T-Mobile’s zero rating plan, claiming the “agency is going to jump to the tune” as a result. When the FCC starts scrutinizing providers over their “highly competitive and innovate service[s],” that represents the “very definition” of regulatory uncertainty.

For Pai, the ultimate sin seems to be bothering the incumbent telecom giants, who in his view seem to know what is best for America. So he is very likely to stay out of their way.

Wall Street Analyst Craig Moffett Unhappy “Unwelcome” Phone Subsidies Are Back

Phillip Dampier January 12, 2017 Competition, Consumer News, Data Caps, Public Policy & Gov't, T-Mobile, Wireless Broadband Comments Off on Wall Street Analyst Craig Moffett Unhappy “Unwelcome” Phone Subsidies Are Back

Moffett

Craig Moffett, a Wall Street analyst specializing in telecommunications stocks, has lowered his opinion of T-Mobile after the wireless company successfully topped analyst estimates of subscriber growth, in part by giving customers a better deal than its competition.

Moffett is concerned T-Mobile’s subsidized holiday price cuts on the latest Apple iPhone and a new flat rate plan delighted customers but threatened profits.

“[…]Even as the wireless stocks were rising in November and December, handset subsidies were quietly making their unwelcome return,” said Moffett in a report to his clients. “T-Mobile’s new ‘All-In’ pricing plan opens yet another front in the battle over service plan pricing, leaving us incrementally more cautious about ARPU (average revenue per user) forecasts for all operators, not least T-Mobile itself.”

T-Mobile has ditched promotions for all of its usage capped data plans and is now advertising T-Mobile One, an “unlimited” (but throttled for very heavy users) data, text, and calls for an all-inclusive price of $40 per line. Customers can still buy a limited data plan, but T-Mobile’s website strongly de-emphasizes that option.

While T-Mobile added 1.2 million postpaid customers in the fourth quarter, exceeding estimates, Moffett isn’t happy with the prices those customers are paying because it may force other carriers to reduce their pricing as well. That hurts everyone… on Wall Street.

T-Mobile USA John Legere has become a perennial and profane thorn in the side of his competitors.

That kind of marketplace disruption the wireless industry could do without, so analysts on Wall Street are taking bets on what company will acquire T-Mobile and get things back to business as usual. Moffett believes all signs point to an unprecedented wave of deregulation, lower corporate taxes, and money-fueled industry consolidation under the incoming Trump Administration.

Sprint is a rumored favorite to acquire T-Mobile, but then so is Comcast, which may seek to enter the wireless space through a large acquisition. Companies repatriating billions in excess funds stashed in overseas banks at the special low tax rate President-Elect Trump is proposing may be what drives the next buyout frenzy.

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!