Home » Regulation » Recent Articles:

Sen. John Kennedy (R-La.) Introduces Companion Bill for FAKE Net Neutrality

Phillip Dampier March 7, 2018 Consumer News, Net Neutrality, Public Policy & Gov't 1 Comment

Sen. Kennedy (R-La.)

Senator John Kennedy (R-La.) today introduced a companion bill that broadly copies an industry-favoring, fake net neutrality protection bill introduced last year in the U.S. House of Representatives by Rep. Marsha Blackburn (R-Tenn.).

The Open Internet Preservation Act is essentially the Senate version of Blackburn’s House bill, bringing along all the major flaws and industry favoritism one expects from Blackburn, a notorious defender of large telephone and cable companies and a favorite target for their campaign contributions.

Blackburn was naturally delighted.

“Sen. Kennedy brings leadership and focus to this discussion of preserving a free and open internet,” Blackburn said in a statement. ” I appreciate his work and his attention to this issue.  Title II 1930s era regulation was a heavy-handed approach that would stifle innovation and investment. This legislation will go a long way toward achieving the goal of protecting consumers.”

Kennedy made sweeping claims about the power of his bill to protect consumers — power not actually in his bill.

“Some cable companies and content providers aren’t going to be happy with this bill because it prohibits them from blocking and throttling web content,” Kennedy said in a statement. “They won’t be able to micromanage your web surfing or punish you for downloading 50 movies each month. This bill strikes a compromise that benefits the consumer.”

Except it won’t. We expect no cable company will oppose a measure that is based largely on the recommendations from the cable industry itself. Nothing in the bill would prohibit Comcast, AT&T, or other companies from “punishing” you for downloading 50 movies each month with a much higher bill as a result of exceeding your data cap and facing punitive overlimit fees.

Read Stop the Cap!’s detailed analysis of Rep. Marsha Blackburn’s net neutrality bill.

Even Kennedy admits his bill isn’t perfect, and considering it is based on a bill introduced by Rep. Blackburn that we analyzed last year, Kennedy is being modest.

“If the Democrats are serious about this issue and finding a permanent solution, then they should come to the table and work with me and Rep. Blackburn on these bills,” said Kennedy. “Does this bill resolve every issue in the net neutrality debate? No, it doesn’t. It’s not a silver bullet. But it’s a good start.”

It’s actually a very bad start, in our view. The industry would like to declare the net neutrality issue ‘settled’ with the passage of a bill it effectively wrote itself.

We urge readers to vehemently oppose both measures, which represent net neutrality in name-only. The best way to find a permanent solution for preserving real net neutrality will come at the next election, when voters can replace lawmakers that represent the interests of big telecom companies over those of their constituents. Allowing either fake net neutrality measure to proceed will make it exponentially more difficult to raise the issue in the future.

AT&T’s Argument It Was Untouchable by Federal Trade Commission Fails in Court

Phillip Dampier February 27, 2018 AT&T, Net Neutrality, Public Policy & Gov't 1 Comment

AT&T’s attempt to avoid oversight and enforcement of consumer protection laws by the Federal Trade Commission (FTC) failed in a federal appeals court Monday, overturning a 2016 decision that agreed with AT&T the FTC could not oversee or punish AT&T for its business practices.

In a unanimous 11-0 decision by the Ninth Circuit Court of Appeals, the court found AT&T’s interpretation of a law it said gave the Federal Communications Commission exclusive authority to regulate and oversee “common carrier” telecom companies was overly broad and based on a misinterpretation of the law. The decision means the FTC will continue to pursue AT&T in court to secure relief for AT&T’s wireless customers that the FTC claims were misled by AT&T’s unlimited data plan that was not truly unlimited.

“The phrase ‘common carriers subject to the acts to regulate commerce’ thus provides immunity from FTC regulation only to the extent that a common carrier is engaging in common-carrier services,” the court ruled Monday. In laymen’s terms, the judges found that the FCC does have the regulatory authority to oversee common carrier services like basic telephone service, but the law does not prevent other government agencies like the FTC to oversee AT&T’s conduct in non common-carrier services.

The FTC and the FCC both argued that allowing AT&T and the 2016 lower court opinion to stand would create a regulatory loophole through which virtually any corporation with even the slightest ownership stake in a common carrier telecommunications company could escape all oversight and enforcement of consumer protection laws.

The dispute began in 2014, when the FTC sued AT&T in court for intentionally throttling wireless internet speeds of millions of AT&T customers hanging on to their legacy unlimited data plans.

The FTC’s complaint alleged that the company failed to adequately disclose to its customers on unlimited data plans that, if they reached a certain amount of data use in a given billing cycle, AT&T reduced – or “throttled” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video –  become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said former FTC Chairwoman Edith Ramirez in 2014. “The issue here is simple: ‘unlimited’ means unlimited.”

According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleged that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The complaint accused AT&T of violating the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

AT&T responded in court asking the case be dismissed, arguing that the FTC could not bring a case against AT&T because, as a common carrier, only the FCC has jurisdiction over the company.

The case was largely decided on whether Congress intended to exempt common carrier companies from FTC oversight based on their “status” or their “activities.” AT&T argued the law clearly gave companies deemed to be common carriers a blanket exemption from FTC oversight. The FTC argued Congress only intended to exempt the specific common carrier “activities” or services sold by a company from FTC oversight, not the entire company. The three-judge panel of the Court of Appeals agreed with AT&T’s view, affirming AT&T’s claim it was untouchable by the FTC and dismissed the FTC’s lawsuit.

Judge Kozinski, questioning AT&T: “I’m regulated by the FTC and I don’t like it. I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The decision was a stunner in D.C. regulatory circles and opened a chasm-sized loophole for almost any company to completely escape the FTC’s oversight and enforcement of consumer protection laws just by providing a single common carrier service (or acquiring a small phone company that does) to secure blanket immunity. The FTC appealed the decision before the Ninth Circuit Court of Appeals.

Both the FTC and at least one judge hearing the federal agency’s appeal saw the potential impact of the earlier 2016 decision immediately.

“I’m regulated by the FTC and I don’t like it,” Judge Alex Kozinski said to AT&T’s attorney. “I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The FTC warned if AT&T’s view was upheld, any company could buy a common carrier and violate federal consumer protection laws with no recourse for consumers and no available FTC enforcement action.

This week’s decision, called “common sense” by the judge who wrote the summary of the court’s finding, restores the FTC’s authority over non-common carrier services at companies large and small, including AT&T. It is also a relief to FCC Chairman Ajit Pai, who earlier argued the FTC had jurisdiction over abusive ISPs and would effectively oversee broadband providers without any need to continue the net neutrality policies of his predecessor. Had the court ruled in favor of AT&T, Pai’s policy would have transferred oversight of internet services to an agency legally prohibited from overseeing most broadband providers.

The FTC was pleased with the decision.

“It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anti-competitive market behavior,” Maureen Ohlhausen, acting Chairwoman, said in an emailed statement.

AT&T was not, and claimed the court ignored the merits of the case.

“We are reviewing the opinion and continue to believe we ultimately will prevail,” the representative said in an emailed statement, which did not definitively state whether AT&T intended to appeal the decision.

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.

Rogers Ripoffs: Company Sells Internet Service to Customers Without Computers

Phillip Dampier January 15, 2018 Canada, Consumer News, Public Policy & Gov't, Rogers, Video 2 Comments

A special investigation by the Canadian Broadcasting Corporation found Rogers’ call center employees engaging in high pressure sales tactics, pushing customers to buy products and services they do not need.

In emails and interviews with Go Public, a CBC consumer investigations unit that seeks to hold corporate and government powers accountable, more than a dozen Rogers workers report they’re under “extreme pressure” to hit sales targets or risk termination.

“You’re supposed to look at a customer’s account and sell them cable, home phone, home security, a credit card — whatever is missing,” says an employee who currently works at a large Rogers’ call center in Ottawa and has asked CBC to conceal his identity to avoid retribution in his workplace.

Employees report they are constantly under stress to meet sales quotas, which are not eased even an employee is out sick. Employees know Rogers will terminate call center workers that do not sell enough products to customers, which has created an atmosphere where some desperate workers sign up customers for services they do not understand or cannot use to keep their jobs.

One employee told the CBC he will sign up seniors for internet service, and inform them a technician will come to their home  “to install a modem for their TV,” despite the fact modems are used with internet service, not cable television.

“We’re giving internet service to customers who actually do not have a computer,” he says.

The alleged corrupt business practices begin with the first job interview, where ex-employee Jessica Robinson was asked just how strongly committed she was to sell Rogers’ services.

CBC relied on several whistleblowers that are or were employees at Rogers Communications call centers. (Image courtesy of: Christian Patry/CBC)

“When I had my interview … they actually asked me ‘If an elderly lady calls in to cancel her sports package on her TV because her husband just died, are you going to convince her to keep it and add more?'” says Robinson.

Robinson echoed many other employees who told CBC they were expected to sell on every call, no matter the reason. If a customer calls to cancel service or report a service problem, before they get help, they will get a sales pitch.

To keep customers buying, representatives sometimes wrongly claim buying more products will result in a lower bill because of bundling discounts.

“Even customers who have home phone service, I say, ‘How about I add a second line for your home phone and I’ll give you a discount for your other product?’ Which makes no sense,” a representative said.

What the call center workers often don’t tell customers is they are also sneaking other items on to customer bills. The biggest are installation and activation fees for the services being pitched, which often run $25-50.

Customers are sure to call back 1-2 months later when a much higher-than-expected bill arrives, and those call center workers are trained to handle that as well.

That is what happened with Sheldon Nider in 2017 when the 72-year old resident of Richmond, B.C., called to upgrade his phone and inquire about adding a 25% corporate discount he was entitled to receive. After 90 minutes on the phone, a Rogers representative told him he did qualify and also sold him a phone for his granddaughter. The following month, a 17-page bill arrived in the mail. Nider’s bill unexpectedly jumped $135 a month and, just as bad, he did not get the corporate discount he originally called about.

“I think it’s a bait and switch because they bait you with a discount, then switch it and don’t give it to you. It’s as simple as that,” Nider told CBC.

Rogers later admitted in an email message to Nider the sales agent “misinformed” him, but that was all they were willing to do. When Go Public later contacted Rogers, the company grudgingly offered a $360 credit to address other issues, but still refuses to provide the corporate discount or end the expensive term contract he is now stuck with for the next few years. When Nider now calls for an explanation about other mysterious charges on his bill, the representatives seem empathetic, but don’t deliver customer satisfaction.

“They teach us how to be empathetic. To say things like ‘I understand how frustrating that must be,'” Robinson says about customers calling in to complain. “I’m like, why? We’re the ones screwing them over.”

Customers and workers are both left stressed about the insistent sales tactics. Customers don’t appreciate having to fight their way through a sales pitch to get their concerns addressed and employees are constantly worried they will be terminated because many customers either don’t want or cannot afford to add anything else to their bill.

Rogers employees claim their managers are well aware of these tactics and are also the source of much of the pressure. Despite a responsibility to monitor and manage ethical business practices on behalf of Rogers, managers are also rewarded for achieving sales quotas and bend over backwards to protect the most aggressive and unethical employees by avoiding monitoring their calls or questioning their sales.

Rogers sells cable TV, home phone, internet, cell phones, home security and other services. Its banking subsidiary even offers its own credit card.

“Managers know these reps are unethical,” says James Woodward, who worked in a Rogers call center two years ago. “So they try not to listen to those calls.”

Woodward told CBC managers don’t care what you sell as much as what you didn’t.

“I would get five cellphone activations in a day and sell a bunch of cable products, and then my manager would say, ‘No credit card?’ It was always what I didn’t do.”

When a customer calls to drop services or cancel altogether, there is a good chance that call will be dropped, because reducing your bill or closing your account will count against the employee’s sales targets.

“That’s why most customers have to call in three, four, five times to get a problem resolved,” says the employee working at Rogers’ Ottawa call center. “This is normal.”

At the end of each month, employees who fail to meet their targets can be forced to take “performance improvement” courses. If sales numbers still do not improve, they are likely to be terminated.

A Rogers spokesperson told the CBC the company’s sales targets are “achievable” and employees can be terminated for a number of reasons other than missing sales expectations. But Rogers’ Paula Lash added, “While we do not believe the concerns raised represent our values or sales practices, we take them very seriously and we will work with our team to respond to these concerns.”

An Ottawa-based public advocacy group, the Public Interest Advocacy Centre (PIAC) now wants the Canadian Radio-television and Telecommunications Commission (CRTC) to open a public inquiry on the matter. PIAC’s executive director John Lawford says the CBC report exposes a loophole in Canadian regulations, which do not currently cover industry sales practices.

Lawford says these sales tactics, and other similar incidents involving other large Canadian phone and cable companies, appear to directly target seniors, grieving spouses, and the visually impaired community.

“It’s completely appropriate for the CRTC to say, ‘We’re going to set out rules,'” adds Lawford. “I think it’d be quite eye-opening to have an open, public consultation at the CRTC about sales practices of big telecom companies.”

The former and current employees at Rogers who communicated with the CBC about the sales practices offered their own suggestion: “Stop increasing our targets. Stop pressuring us to try to make a sale on every call. And remove these [performance improvement] plans to get you fired.”

CBC-TV’s “The National” reports on Rogers Communications’ pushy sales tactics that sell customers services they don’t want or need. (4:09)

Fierce Cable Predicts 2018 Will Be A Year of Big Cable Mergers

Phillip Dampier January 2, 2018 Altice USA, Cablevision (see Altice USA), Charter Spectrum, Comcast/Xfinity, Competition, Consumer News, Public Policy & Gov't 1 Comment

While giant cable company mergers unexpectedly took a breather in 2017, Fierce Cable predicts this year isn’t likely to be a repeat of last year.

“With polls showing Democrats poised to begin sweeping back into power with the 2018 midterm elections, look for cable operators to make hay on the current regulatory climate and start turning their rivals into that most precious of resources: scale,” writes Daniel Frankel.

With time for large cable operators to get easy approval of merger deals from deregulation-minded Republicans potentially running out, 2018 could bring dramatic consolidation in the cable industry, with Comcast a likely buyer and Charter Communications a potential seller… if the offer is good enough.

Many industry observers expected the first year of the Trump Administration to be a banner year for cable mergers, especially with the entry of Altice, a European cable conglomerate known for its willingness to overpay to acquire cable operators. Altice has since run into significant financial challenges and investor blowback, forcing the company to shelve acquisition plans for now and focus on debt reduction and developing a stronger business plan to operate its ailing cable and wireless properties in Europe. Altice USA, which owns Suddenlink and Cablevision, has not shelved its plans to upgrade many of its customers to fiber to the home service, but is also no longer seen as an immediate bidder for Charter, Cable One, or WideOpenWest.

Fierce Cable expects Comcast to respond to AT&T’s merger with Time Warner, Inc., assuming the deal successfully overcomes Department of Justice objections in court, and 21st Century Fox’s asset sales to Disney. Both transactions threaten to consolidate programming production and distribution around an even smaller group of media giants, which could challenge Comcast’s NBCUniversal unit as well as the cost of cable programming networks. Comcast has shied away from acquisitions after an embarrassing failure of its attempt to buy Time Warner Cable a few years ago.

If Comcast wants to build scale, it would naturally target an acquisition of Charter Communications, the second largest cable company in the country. The deal would give Comcast dominance over the New York and Los Angeles media markets and broadband service provision across most major American cities. Comcast could also seek a less controversial acquisition of Cox Communications, one of the few major independent cable companies left. But Comcast could also seek acquisitions in Hollywood to bolster its production capabilities.

Most other cable acquisition options would be considered scraps by the largest operators. Altice could be persuaded to prematurely exit the American market and sell Cablevision and Suddenlink if convinced it has no chance of building adequate scale to stand with Comcast and Charter. Beyond that are smaller rural and regional operators including Mediacom, Midco, WOW!, GTT, RCN, and many others that serve fewer than one million customers.

Company executives may be hoping the objections to the AT&T/Time Warner deal are an anomaly for the Trump Administration. But it’s clear that whatever smooth waters exist for upcoming mergers will get choppy as the midterm elections approach. Should Democrats win back the House and/or Senate, life will get considerably more difficult for future media consolidation deals.

Search This Site:

Contributions:

Recent Comments:

Your Account:

Links:

Stop the Cap!