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Telecommunications Policy

All articles with the "Telecommunications Policy" tag.

Published: Fri, 23 Feb 2018 00:00:00 -0500

Last Build Date: Fri, 23 Feb 2018 13:15:24 -0500


FCC Chair Throws Water on Crazy Plan for Feds to Seize Control of Our 5G Networks

Mon, 29 Jan 2018 10:45:00 -0500

Somebody in the National Security Council wants to use some nebulous threat from China as an excuse for the feds to seize control of the nation's mobile network. Reporters from Axios got their hands on the presentation and published the details Sunday evening. Axios summarizes: The PowerPoint presentation says that the U.S. has to build superfast 5G wireless technology quickly because "China has achieved a dominant position in the manufacture and operation of network infrastructure," and "China is the dominant malicious actor in the Information Domain." To illustrate the current state of U.S. wireless networks, the PowerPoint uses a picture of a medieval walled city, compared to a future represented by a photo of lower Manhattan. The best way to do this, the memo argues, is for the government to build a network itself. It would then rent access to carriers like AT&T, Verizon and T-Mobile. (A source familiar with the document's drafting told Axios this is an "old" draft and a newer version is neutral about whether the U.S. government should build and own it.) First of all, the idea that the federal government is going to be able to build this faster than the private market is utterly absurd, as can be demonstrated by every single government project that has gone over budget and taken much longer than expected. As Axios notes, the wireless industry is already deploying 5G networks to customers. AT&T started rolling out 5G service with the start of the new year. Experts told Axios that it will take a decade to roll out 5G networks altogether. This plan calls for it in three years, which seems wildly implausible. I suspect people in government think it's just like building highways: They just need to hire more people to make it happen. And how exactly would nationalizing this infrastructure make it more secure? Has everybody forgotten the hackers (allegedly Chinese) who breached the federal Office of Personnel Management and got their mitts on millions of records of government employees? They succeeded partly because the federal government had done such a poor job at protecting data security in the first place. Why would any sensible American trust them to protect the security of a national network? What is the mechanism for accountability should they fail? Fortunately, deregulation-minded Federal Communications Chair Ajit Pai recognizes how terrible this plan is. He put out a statement today: I oppose any proposal for the federal government to build and operate a nationwide 5G network. The main lesson to draw from the wireless sector's development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment. What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future. Nationalizing a massive chunk of a private industry is one of the crazier ideas to come out of the administration so far. Since this is a leak of a report, we have no idea how seriously the administration is taking it. They should back far away from this proposal.[...]

No, the FCC Isn’t 'Overturning Net Neutrality'

Tue, 05 Dec 2017 09:11:00 -0500

The left is in a veritable state of hysteria as the Federal Communications Commission (FCC) moves to vote on Chairman Pai's deregulatory "Restoring Internet Freedom" (RIF) order on Dec. 14. It's gotten so bad that incensed supporters of so-called "net neutrality" have taken to harassing commissioners' children and even threatening to kill a congressman. It's a nasty state of affairs, and it's one unfortunately driven by a lot of false rhetoric and outright fearmongering over how policy is actually changing. Telling people that a policy change will "end the internet as we know it" or "kill the internet" can agitate troubled people into doing crazy things. In truth, the Obama administration-era "Open Internet Order" (OIO) that the FCC is overturning has little to with "net neutrality" at all. In fact, the OIO would still allow internet service providers (ISPs) to block content—to say nothing of the many non-ISP tech companies that can and do openly suppress access to content. Furthermore, repealing the OIO does not mean that the principles of "net neutrality" will not be upheld, nor that ISPs will be "unregulated." Rather, the RIF will rightly transfer oversight of ISPs to other regulatory bodies in an ex post fashion. The OIO allows all kinds of content filtering One of the biggest misconceptions of the OIO saga is that it achieved "net neutrality." It didn't. While proponents like to spin a lot of rhetoric about "treating all traffic equally," the actual implementation of the Obama administration's regulations did nothing of the sort. As my Mercatus Center colleague Brent Skorup has tirelessly pointed out, the OIO did not require all internet actors—ranging from ISPs to content platforms to domain name registrars and everything else—to be content-blind and treat all traffic the same. Rather, it erected an awkward permission-and-control regime within the FCC that only affected a small portion of internet technology companies. Not even ISPs would be truly content-neutral under the OIO. Because of First Amendment concerns, the FCC could not legally prohibit ISPs from engaging in editorial curation. The U.S. Court of Appeals made this very clear in its 2016 decision upholding the OIO. ISPs that explicitly offer "'edited' services" to its customers would be virtually free from OIO obligations. It's a huge loophole, and it massively undercuts any OIO proponent's claims that they are supporting "net neutrality." But importantly, the OIO still allowed the vast majority of internet companies to filter and block away to their heart's content. Indeed, one could argue that content aggregators and search engines, like Facebook and Google, have proven to be much more draconian in their censorship of controversial but legal content than the ISPs over which so many agonize. Consider the recent incident where Twitter decided to block the political speech of a pro-life American politician. Most people are far more worried that social media companies will block their content rather than Comcast or Verizon. FCC Chairman Ajit Pai made this very point last week at an R Street Institute event on the repeal. Major edge service providers like Google, Facebook, Reddit, and Twitter have made their opposition to OIO deregulation loud and clear to their user base. Some have displayed automatic messages on their front pages, urging visitors to take action and encourage others to do the same. Yet at the same time, these services engage in kinds of content blocking that they say broadband providers could possibly do. This hypocrisy is relevant for more than just ideological inconsistency. It's about economic power. By encouraging harsh regulation of ISPs that effectively controls the rates that major tech companies can be charged for bandwidth, these companies are engaging in a kind of regulatory capture. (It should be noted that there is some division within these firms: Google's Eric Schmidt, for instance, famously discouraged the Obama administration from pursuing these regulations in 2014.) Not only is it unfair, i[...]

The Winners in the AT&T-Time Warner Merger Will Be Consumers

Mon, 04 Dec 2017 12:30:00 -0500

On October 22, AT&T and Time Warner announced they had reached an agreement to merge the two companies. The deal, valued at about $85 billion, would create a vertically integrated company that produces content (movies, TV shows) and provides access to content (through cable, fiber-optic, DSL and wireless Internet connections). But on November 20, the Department of Justice brought suit against AT&T and Time Warner, seeking to block the merger on the grounds that it would inhibit competition, harming consumers. AT&T and Time Warner formally responded to the suit last Monday, refuting these claims and arguing the merged company would be investing in innovations that would expand consumer choice. The DOJ's case is based on a fundamental misunderstanding of the dynamics of the market for both access and content. If it were to succeed it would likely impede competition, resulting in less innovation and choice for consumers. Consumers are shifting away from the kinds of access and content bundles that so concern the DOJ. And they are doing so because such bundles poorly match their preferences. AT&T recognizes the trend of falling subscription rates for its traditional TV bundles. That's why it wants to expand into content. It could have done that by licensing legacy content from others, arranging syndication deals for new content, and building its own studio, as Netflix and Amazon have done. It chose instead to merge with Time Warner. At the heart of the DOJ's complaint is an assumption that the merged entity would use its market power to raise the price of content currently owned by Time Warner, or threaten to withhold programming, including hit shows such as Game of Thrones and NCAA March Madness. Time Warner could already make such threats, but the DOJ claims it would have greater incentive because it could benefit from some subscribers switching over to AT&T's networks (DirecTV, U-verse and DirecTV Now). A merged AT&T-Time Warner could, in principle, refuse to supply content to some distributors in order to drive consumers to purchase its own access and content bundles, but it would not be in the merged company's financial interest to do so. As Geoff Manne notes in the WSJ: "More than half of Time Warner's revenue, $6 billion last year, comes from fees that distributors pay to carry its content. Because fewer than 15% of home-video subscriptions are on networks owned by AT&T … the bulk of that revenue comes from other providers. In other words: Calculated using expected revenue, AT&T is paying $36 billion for the portion of Time Warner's business that comes from AT&T's competitors. The theory seems to be that the merged company would simply forgo this revenue in a speculative hope that withholding Time Warner content from distributors would induce masses of viewers to switch to AT&T—and maybe, one day, put competitors out of business. That this strategy would actually work is unfathomable. "Game of Thrones" is good, but it isn't that good." When Comcast merged with NBCUniversal in 2013, the DOJ employed a "consent decree" (a legally binding agreement between the DOJ and the merged entity) to mitigate concerns regarding the potential for the merged entity to use its market power to charge more. AT&T and Time Warner have now made a similar commitment, as they told the DOJ: "contingent only upon the closing of this merger, Turner has formally and irrevocably offered its distributors licensing terms that, for seven years after closing, (I) entitle the distributor to invoke "baseball-style" arbitration if it is unable to reach a satisfactory distribution agreement for Turner Networks and (ii) forbid Turner from "going dark" on any Turner distributor during the arbitration process." This "eliminates even the theoretical risk that lies at the heart of the Government's case – the risk that, post-close, Turner would be more inclined to threaten to "go dark" on a distributor," according to the companies. The DOJ complaint focuses on hypothetical scenarios that assume the m[...]

How Denmark Has Overtaken the U.S. as a Telecom Policy Leader

Tue, 24 Oct 2017 08:30:00 -0400

In the 1990s, the world looked to the United States as a model for deregulatory telecom and tech policy. Not only was the country fortunate enough to house Silicon Valley's pressure cooker of internet innovation, but its policy makers seemed to deeply understand the need for a culture and regulatory approach that truly embraced experimentation and permissiveness. Regulators around the world took notice and strove to emulate the success of the U.S. approach. Denmark in particular styled its own telecommunications regulations on the U.S. model, slashing its chief telecom regulator altogether and assigning small regulatory functions to other departments. It was a smash success. Today, the Danes enjoy some of the highest quality broadband and mobile penetration in the world at affordable prices with little government intervention, explains a recent Mercatus research paper by telecom scholars Roslyn Layton and Joseph Kane. By eliminating a source of regulatory capture and streamlining regulatory obligations, regulators could dedicate resources to working on actual problems, like creating a lean, digital bureaucracy appropriate for the information revolution. Ironically, a decade later, the U.S. has since slid back into a precautionary mindset towards technology policy. Today, it seems that the Danish student has surpassed the American teacher, and the Federal Communications Commission (FCC) may well be turning to the Danish model to recapture some of our earlier progress. This was the takeaway of a recent event hosted by the Mercatus Center on the topic of Danish telecom deregulation as a model for U.S. policy. The discussion—emceed by yours truly—presented two panels on the respective topics of Denmark as a case study and the concrete lessons that the U.S. can extract from the Danish experience. Such great promise On the first panel, my Mercatus Center colleague Brent Skorup facilitated a dialogue with Layton, former FCC Commissioner Robert McDowell, and Phoenix Center president and telecom scholar Lawrence Spiwak on the Danish telecom miracle. Deregulation not only spurred a veritable renaissance of broadband investment and deployment, it also cut down on cronyism by eliminating a major target of corporate lobbying. Layton's policy recommendations were clear: "The job of a telecommunications regulator is to put itself out of business." At one point, the U.S. was moving close to that ideal. President Bill Clinton's extraordinary "Framework for Global Electronic Commerce" of 1997 outlined a hands-off posture toward Internet technologies that could have been drafted by Milton Friedman himself. Good riddance to the heavy-handed, precautionary regulation of the past. In its place would be a "market-driven arena" in which government involvement would be limited to ensuring "industry self-regulation and private sector leadership." The FCC started to turn over a new leaf as well. Unlike the booming new native internet industry, the underlying telecom infrastructure that made such developments possible were theretofore unfortunately burdened by antiquated telephone regulations established in the wake of the Great Depression. That government-first mindset changed with the ascendancy of Chairman William Kennard to the FCC in 1997. Kennard fully understood the potential of the internet to revolutionize commerce and daily life. More importantly, he was acutely aware of the potential for bad policy to stifle the amazing opportunities that digital technologies presented. In his view, the best way to promote fast, expansive, affordable telecom access was to "resist the urge to regulate" and allow the market to drive development. So Kennard steered the FCC to peel back bad regulations and leave as much space for innovation for new technologies as possible. The general goal was for the FCC to move "from an industry regulator to a market facilitator" by 2005, as Skorup cited from Kennard's 1999 strategy document. Straying from the course Yet, as McDowell and[...]

Net Neutrality Supporters Should Actually Hate the Regulations They're Endorsing

Tue, 18 Jul 2017 08:00:00 -0400

If you went on the internet at all last week, you could not help but miss some of the web's most popular websites publicizing their campaigns that defend the Obama-era telecommunications regulation known as the Open Internet Order (OIO). Last Wednesday, tech heavyweights like Google, Facebook, Twitter, Reddit, and even Pornhub held a "Day of Action" to support the controversial FCC rules. The websites bombarded users with blog posts encouraging folks to contact their representatives and popup messages bemoaning the future of a slow and tiered internet. But ironically, these websites' stated goals are in direct contradiction of the regulations that they ostensibly support. Simply stated, the OIO does not in fact secure the principles of "net neutrality" like so many of these websites implied to their users. In fact, the OIO may have the adverse effect of actively discouraging the principles of net neutrality through a loophole that would exempt motivated Internet Service Providers (ISPs) from OIO regulations. This cannot be emphasized enough: The OIO allows and encourages ISP filtering, a huge no-no in the world of net neutrality. This is a point that my Mercatus Center colleague Brent Skorup has made since shortly after the OIO rules were first introduced in February of 2015. It's a bit of a nuanced argument, and one that would not be immediately obvious to anyone who does not closely read all FCC reports and related court cases as a profession. But as the general public is whipped into a veritable frenzy to defend the OIO rules or risk Internet catastrophe, it's a critical fact to hammer home in the debate. To understand just how muddled the discussion surrounding "net neutrality" and the OIO has become, we need to know a bit about: 1) how the concept of net neutrality developed and what it means; and 2) the political pressures and compromises that were made in the run-up to the introduction of the OIO. First, the definition of "net neutrality" is incredibly hazy. You could almost say that more people agree that net neutrality is a good thing than can agree on any particular definition. The concept was first laid out by law professor Tim Wu in his seminal 2002 article, "A Proposal for Network Neutrality." Wu lays out hypothetical scenarios where ISPs block or throttle access to content for reasons ranging from cost to anti-competitive activities. His article attempts to distinguish content differentiation that he finds reasonable and should be allowed from those that he finds unjustifiable and should be prohibited. The article generated a fair bit of controversy even under this more limited framework—critics responded by pointing out some benefits of non-neutral Internet arrangements—but it was at least a relatively narrow and understood topic. From there, the concept of "net neutrality" morphed into something that was both utopian and unworkable. If you type the phrase into Google, the top definition provided is the "principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites." Yet this definition stands in sharp contradiction to the vision outlined by Wu, who noted that "a total ban on network discrimination, of course, would be counterproductive." This kind of extreme understanding of net neutrality has been dismissed by early Internet pioneer and MIT computer scientist David Clark as a "happy little bunny rabbit dream" that would be both impossible and undesirable to implement. Unfortunately, the unhinged understanding of "net neutrality" has since won the day. And it has fueled average people's nightmares about what the future of the Internet holds—even though it looks a lot like what we've always enjoyed. (After all, the OIO regulations were only proposed in 2015.) The core of these fears is a future where consumers are forced to purchase tiered package for Internet access of [...]

Plan to Roll Back Internet Regulations a Boon for Business and Innovation

Tue, 02 May 2017 00:30:00 -0400

Libertarians, rejoice—a U.S. regulator took the bold step of deciding that his office simply doesn't have the jurisdiction to control major parts of the internet. Last Wednesday, the free market-friendly Federal Communications Commission (FCC) Chairman Ajit Pai unveiled his plan to roll back the FCC's controversial 2015 Open internet Order (OIO), which granted the telecommunication regulator expansive discretionary authority over how internet Service Providers (ISPs) can operate and compete. Pai's plan is a real win for those who believe businesses should not need government permission before innovating. But don't expect the so-called "net neutrality" hardliners to accept this proposal without a major fight. Their reactions last week were predictably apoplectic. Sen. Edward Markey (D-Massachusetts) set the tone on Wednesday, promising a "tsunami of resistance" against Pai's deregulatory move. Sen. Al Franken (D-Minnesota) clutched his pearls and warned that rescinding the OIO would "destroy the internet as we know it." A writer at Gizmodo scoffed that Pai's position was one "only the strongest free-market libertarians" could support (is that supposed to be an insult?). The political group Free Press, a dogged OIO supporter, bemoaned that if Pai succeeds, "the internet as we know it will be gone for good." But hysterical critics have a hard time answering exactly how the internet was able to become the engine of innovation that it is today without the expansive FCC controls only granted through the OIO in 2015. Radical Regulation The 2015 Open Interent Order broke from years of established federal policy by reclassifying ISPs as "common carriers" for FCC purposes. In legal terms, the OIO applied Title II of the 1934 Communication Act to ISPs. This meant that web-service providers such as RCN and Time Warner were to be treated less like part of a competitive and cutting-edge industry and more like an arm of the Ma Bell telephone monopoly of Norman Rockwell's America. Specifically, the change would prohibit certain kinds of content-delivery differentiation, placing the FCC in the position of picking winners and losers by being able to determine which service innovations are allowed and which are not. For providers, the imposition of Title II regulations meant uncertainty, new fees and compliance costs, and a major new power center just waiting to be captured by commercial interests. For consumers, it meant less choice, higher prices, and a worrying channel for new government censorship of speech. For libertarians, it was merely more of the same: Yet another government regulator deciding that it should have more power to tell businesses and consumers what they can and cannot do. It is hard to overstate just how radical of a departure the OIO was from the preceding years of light touch regulatory authority over internet activities. For years, U.S. internet policy was guided by a remarkably laissez faire approach encapsulated by the Clinton administration's Framework for Global Electronic Commerce. This extraordinary document instructs the federal government to "encourage industry self-regulation wherever appropriate" and "refrain from imposing new and unnecessary regulations" on commercial internet activities. And if that's not clear enough, Section 230 of the Telecommunications Act states that any "service or system that provides access to the internet" should be "unfettered from Federal or State regulation" like the OIO. Accordingly, America today is home to the world's most successful and competitive technology companies, and consumers have access to a dazzling array of telecommunication services at affordable, competitive prices. (And thanks to Pai's new plan, we can continue to be.) But can you imagine what the internet would now look like if ISPs had been forced to ask the FCC for permission every time one wanted to roll out a new service over the years? We might not have much of an [...]

Denmark Proves We Don't Need the FCC

Tue, 04 Apr 2017 08:30:00 -0400

Americans often look to Scandinavian countries for examples of successful policy and governance. It's easy to see why: These countries boast some of the best quality-of-life rankings in the world. Denmark in particular is praised for its stellar telecommunications services. The country has topped the International Telecommunications Union's ranking of global information and communication technology (ICT) provision for years due to its expansive broadband and wireless penetration, fast Internet speeds, and ample provider competition. The Danish reputation got a boost among the American left in last year's presidential election, when none other than Bernie Sanders himself plugged the country as a model for the United States to emulate. But admirers of the popular democratic socialist politician may be surprised to learn exactly how Denmark was able to become an international leader in ICT delivery. It wasn't super-charged regulation, top-down "net neutrality" rules, or major government subsidies that did the trick. So how did Denmark do it? Deregulation. By virtually eliminating their equivalent of the Federal Communications Commission (FCC), Danes now enjoy some of the best ICT service on the planet. A new Mercatus Center working paper by Roslyn Layton and Joseph Kane describes precisely how Danish telecommunications officials undertook successful deregulatory reforms. It starts with Danish regulators who quickly understood the promise of digital technology and realized that government policies could quash innovative applications that would benefit consumers and businesses alike. From there, they developed a plan to prioritize competition and development instead of central control. This hands off-approach was so successful that eventually the country's National IT and Telecom Agency (NITA) was disbanded altogether. Committed to Competition In 1994, when most governments hadn't even started to consider the impending digital revolution, Danish authorities had already laid out a clear path for simple telecommunications policy. Their plan emphasized facilitating interactions between the public and private sectors instead of rushing to regulate. The Danish government also undertook early efforts to modernize their own services by digitizing government records, thereby becoming a key buyer of ICT services. Government services became more efficient, and the infant ICT sector got an enthusiastic and large client. Policymakers clearly stated their opposition to subsidy-driven "growth" and heavy-handed regulation. The country's state-owned telecommunications provider, Tele Danmark (TDC), was completely privatized in 1998 through the efforts of Social Democrat Prime Minister Poul Nyrup Rasmussen. The next year, a consortium of Danish political parties formed a "Teleforlig," or telecommunications agreement, that outlined their goals. It stated: It is important to ensure that regulation does not create a barrier for the possibility of new converged products… Regulation must be technologically neutral, and technology choices are to be handled by the market. The goal is to move away from sector-specific regulation toward competition-oriented regulation. And Danish regulators kept this promise. For example, following the privatization of TDC, NITA levied special regulations on the provider so that it would not abuse its previous monopoly to prevent new competition in wireless. TDC was therefore subject to controls on its access to mobile networks and call origins. But NITA discovered that the wireless industry was sufficiently competitive by 2006, with four active providers in the market. Remarkably, NITA then dissolved the TDC regulations. As one official stated, "We are obliged to remove the regulation when the competitive situation demands it. There is no need to regulate something that market forces can take care of." By 2011, Danish ICT provision had become so competi[...]

Danish Deregulators

Tue, 28 Mar 2017 21:15:00 -0400

(image) If you're interested in the shift from Scandinavian social democracy to Nordic neoliberalism (*), you should check out Roslyn Layton and Joseph Kane's new paper on Denmark's deregulation of the telecommunications industry. The Danes, they inform us, have not just shed the state's telephone monopoly but disbanded its telecom regulatory agency, refused to let the government fix telecom prices or push particular telecom technologies, and mostly avoided telecom subsidies.

As is often the case with reforms described as deregulatory, some of these changes did more to rearrange the state's role than to reduce it. (That regulatory agency, for example, had its duties distributed to other arms of the government.) And some weren't really changes at all. ("In Denmark's history there are only three instances of telecom subsidies," Layton and Kane write, "and they are for extremely small amounts targeted to remote areas.") But the net effect was less intervention in the marketplace, not just compared to the past but compared to nearby nations. Despite all the recent liberalization in Sweden, for example, the government there still owns a piece of the country's dominant telephone company.

In any event, it's an interesting case study. It used to be a cliché to suggest that socialism works better in Scandinavia than elsewhere. The best argument that that's true may be the ease with which Scandinavian socialists have moved toward markets.

(* I hate the word "neoliberalism," but alliteration must prevail.)

Facebook Has No First Amendment Right to Send Unauthorized Texts, Says Court

Fri, 10 Feb 2017 16:09:00 -0500

(image) "Today is Jim Stewart's birthday. Reply to post a wish on his Timeline or reply with 1 to post 'Happy Birthday!'" That's the text, from Facebook to Colin Brickman, that launched a legal battle between Brickman and the social-media giant.

You see, Brickman had opted out of receiving texts from Facebook via the platform's notification settings. In response to the unwanted birthday reminder, Brickman filed a class-action lawsuit against Facebook, representing "all individuals who received one or more Birthday Announcement Texts from [Facebook] to a cell phone through the use of an automated telephone dialing system at any time without their consent."

The suit, filed in the U.S. District Court for the Northern District of California, argues that Facebook's sending unauthorized text messages is a violation of the federal Telephone Communications Privacy Act (TCPA). "A valid TCPA claim requires plaintiff to allege (1) a defendant called a cellular telephone number; (2) using an automated telephone dialing system ('ATDS'); and (3) without the recipient's prior express consent," explains lawyer Jack Greiner in the Cincinnati Enquirer. "A text message is a 'call' within the meaning of the TCPA."

In its defense, Facebook alleged that the TCPA in unconstitutional. Citing the U.S. Supreme Court's 2015 decision in Reed v. Town of Gilbert, Facebook attorneys argued that the TCPA's allowed exceptions—for emergency communications and debt collectors—render it an umpermissable, content-based restriction on speech. But the judge, while agreeing that the TCPA's restrictions are content-based (and thus subject to strict scrutiny, legally speaking), found that the law passed constitutional muster nonetheless.

The case will go forward with Facebook defending its text messages on technical grounds; it argues that the texts were not automated because Brickman and others who received them had supplied Facebook with their phone numbers. But, for now, Facebook's argument that it has a First Amendment right to send people text messages against their will has been rejected.

The 9th U.S. Circuit Court of Appeals has twice found the TCPA to be constitutional in previous cases—Moser v. Federal Communications Commission (1995) and Campbell-Ewald v. Gomez (2016)—the Department of Justice pointed out in a memorandum in support of TCPA's constitutionality. In the latter case, the 9th Circuit rejected the idea that the government's interest with the law "only extends to the protection of residential privacy, and that therefore the statute is not narrowly tailored to the extent that it applies to cellular text messages."

"There is no evidence that the government's interest in privacy ends at home," ruled the 9th circuit in Campbell-Ewald. Furthermore, "to whatever extent the government's significant interest lies exclusively in residential privacy, the nature of cell phones renders the restriction of unsolicited text messaging all the more necessary to ensure that privacy."

Google, Facebook, Twitter Sued for Allegedly Helping ISIS Inspire Orlando Pulse Nightclub Killer Omar Mateen

Tue, 20 Dec 2016 21:52:00 -0500

One can understand the instinct, when the one who actually caused you tortious harm is beyond any judgment but the eternal one, to lash out at whatever hefty pockets seem within reach. Still, the legal gambit from the families of three of the people (Tevin Crosby, Javier Jorge-Reyes and Juan Ramon Guerrero) killed in Omar Mateen's murder rampage in June at Orlando's Pulse nightclub to sue Facebook, Twitter and Google because the tech services allegedly "provided the terrorist group ISIS with accounts they use to spread extremist propaganda, raise funds, and attract new recruits" should have any believer in free expression and the ability to technologically and legally facilitate it nervous. I certainly hope no U.S. judge sees any merit in it. The suit was filed this week in U.S. District Court in the eastern district of Michigan, as first reported yesterday by Fox News. What we all want out of communication networks like Facebook and Twitter and search services such as Google, and usually get at least in any way it actively affects us, is that they neither interfere with nor even worry overmuch about how we are using them. For them to be what we want them to be, they should be as neutral as possible. To the degree they choose not to be neutral, they open themselves up to these sorts of accusations that by providing a means for people to communicate or earn money via ads, they are somehow complicit in the nature of the communications or their real-world harms, if any. This should be a reason for such companies to be as effectively content-neutral as possible, though as the lawsuit itself notes, the entities being sued try not to seem to facilitate terror. Section 230 of 1996's Communications Decency Act has generally been interpreted, correctly, as indemnifying the providers of these communications services from being considered responsible for the content on them. The families' lawyer are arguing, though, that, as Fox puts it: sites like Facebook may be violating the provision with their heavily-guarded algorithms....this lawsuit alleges something much more nefarious behind one of the tech world's most secretive processes. "The defendants create unique content by matching ISIS postings with advertisements based upon information known about the viewer," [lawyer Keith] Altman said. "Furthermore, the defendants finance ISIS's activities by sharing advertising revenue."... While these social platforms have cracked down and deactivated accounts affiliated with terrorist groups in the past, Altman argued that another account will almost immediately pop up and that companies think they're not responsible because they are not ones producing the content. Yes, that is exactly the point, and no one who enjoys using any of those services would want them to have to act otherwise (even if some applaud them when they try to act otherwise in certain cases, even if the services don't, and shouldn't, admit that policing or barring certain content means they are responsible for everything they don't bar). If these companies felt the legal need to behave as if every use of their service is their legal responsibility, nearly everything good about them would be in danger. USA Today reports that this is not the first time this argument has been brought to bear: The lawsuit is the latest to target popular Internet services for making it too easy for the Islamic State to spread its message. In June, the family of a California college student killed in last year's terrorist attacks in Paris sued Facebook, Google and Twitter. Keith Altman, the attorney representing the three families in the Orlando nightclub lawsuit, also represents the family of that student, Nohemi Gonzalez, in the Paris terrorist attacks lawsuit. The services aren't always neutral in allowing their customers to use them, as noted a[...]

When AT&T Profits Off Government Snooping, Shouldn’t We Be Blaming the Government?

Tue, 25 Oct 2016 12:42:00 -0400

It is easy to forget that Americans had actually been clued in to the likelihood of domestic telecommunication surveillance by the National Security Agency (NSA) long before Edward Snowden's leaks. Snowden helped us understand the massive scope and many particulars about which we were unaware and really put the issue before the public in a way we hadn't seen before. But have we all forgotten Room 641A? That was the room in San Francisco where telecommunications company AT&T set up a system for the NSA to access the company's internet traffic for surveillance. It was exposed by the Electronic Frontier Foundation and a former AT&T technician all the way back in 2006, years before Snowden's leaks. That background is relevant again as The Daily Beast has a story that puts AT&T's cooperation with federal authorities with surveillance in a whole new light. The reason why AT&T has been so helpful to the government in providing data about its customers (or anybody who communicates with their customers) is because it has found a way to monetize it. The Hemisphere Project was first revealed in 2013 by The New York Times. Hemisphere was a database system provided by AT&T to help law enforcement officials access data from any call that passes through their system (which means not just their own customers). This data was then used by the government for drug busts. In order to participate in the program, government agencies were required by the contract to keep the existence of Hemisphere a secret and not reference it in any government document. This was not unlike the contracts we have been seeing from law enforcement agencies using "Stingray" devices used to track mobile phones. It's where we learned about "parallel construction," where law enforcement agencies kept this information they had received from surveillance secret, but used it to create a second chain of evidence that could be introduced in court cases. The Times story from 2013 mentioned that government paid AT&T for access to Hemisphere (and even for AT&T employees to embed with drug-fighting units to assist them), but the Times didn't know the cost. Kenneth Lipp from The Daily Beast provides that information today, along with news that the Hemisphere program was not just for fighting drugs. It's being used to fight all kinds of crime. And while the government can force telecommunications companies like AT&T to provide data about users with a subpoena, it appears AT&T took this all to the next level, turning it all into a program that can be marketed, and more importantly, sold to law enforcement agencies. They found a way to make money off government demands for data. And if you think the prices were modest, you obviously know nothing about government contracts: Sheriff and police departments pay from $100,000 to upward of $1 million a year or more for Hemisphere access. Harris County, Texas, home to Houston, made its inaugural payment to AT&T of $77,924 in 2007, according to a contract reviewed by The Daily Beast. Four years later, the county's Hemisphere bill had increased more than tenfold to $940,000. "Did you see that movie Field of Dreams?" [American Civil Liberties Union tech policy analyst Christopher] Soghoian asked. "It's like that line, 'if you build it, they will come.' Once a company creates a huge surveillance apparatus like this and provides it to law enforcement, they then have to provide it whenever the government asks. They've developed this massive program and of course they're going to sell it to as many people as possible." This reporting hits AT&T at a time when they're trying to plan a merger with Time Warner. There's a thought, one supposes, that this either might or should hurt AT&T's chances there, but given that this program is in full cooperation with the very federal go[...]

Airbnb Sues To Defend Itself from City Regulations; Santa Monica Latest Target

Fri, 09 Sep 2016 20:06:00 -0400

Airbnb (along with another company in the same space, Homeaway in a separate suit) sued the city of Santa Monica last week in U.S. District Court in Los Angeles. The company argued that regulations aimed at its service of matching buyers and sellers of short term rentals via website and app violated its 1st, 4th, and 14th Amendment rights. (I reported on the first conviction under those laws against an AirBnb host in Santa Monica in August.) This is the third such suit filed by Airbnb against California cities since June; they've also sued San Francisco and Anaheim. Anaheim faces a similar suit in state court from aggreived short-term rental housing owners. Alison Schumer, a spokeswoman for Airbnb, told the Los Angeles Times that "Santa Monica's clumsily written law punishes hosts who depend on home sharing to make ends meet and travelers looking for low-cost accommodations near the beach. The city is unwilling to make necessary improvements to its draconian law, so while this isn't a step we wanted to take, it's the best way to protect our community of hosts and guests." The challenged laws completely bar rentals of whole apartments for fewer than 30 days, strongly hobbling the business model. It also imposes rules forcing Airbnb hosts to post business licenses to operate on their online listings and pay a 14 percent hotel tax to the city, and holds the website liable for hosts violations. Part of the suit argues that "The ordinance seeks to hold Airbnb liable for content created by third-party users, by punishing Airbnb for listings posted to its platform where those listings do not comply with city law. As such, the ordinance unquestionably treats online platforms such as Airbnb as the publisher or speaker of third-party content and is completely preempted by the [Communications Decency Act] CDA." The San Francisco suit is based on a similar appeal to the CDA. The suit also insists that the Stored Communication Act and the 4th Amendment are violated by Santa Monica, since the law forces "disclosure to the City of certain customer information without any legal process or pre-compliance review." Courthouse News Service reports that: Airbnb already has paid $20,000 in fines [to Santa Monica], KPCC radio reported in late July...In its 22-page lawsuit, Airbnb says it "has paid all of the citations it has received under protest," and says the city should enforce its laws against the hosts who violate them, not Airbnb. The San Francisco-based company says the regulations force it to pay criminal fines without any evidence of intentional wrongdoing. "The city has impermissibly created a strict-liability crime for publishing third-party advertisements for rentals that prove to be unlawful for one reason or another, even if the hosting platform has no knowledge of the violation," the complaint states. It claims the city law and enforcement of it violate constitutional guarantees of due process, and that the city's demand for information about its customers constitutes unconstitutional search and seizure. Both companies seek declaratory judgment that the ordinance is unconstitutional, and an injunction against its enforcement. Consumerist reports on some more aspects of the Santa Monica regulations that harass AirBnb, which by law: must not only collect and remit taxes to the city, they must regularly provide the city with a list of all their properties in Santa Monica, along with the name of the homeowner, the length of each stay, and the price paid for each rental. Violation of the ordinance could result in penalties of up to $500 and six months in prison. Since the city enacted the ordinance, Airbnb says it has received multiple notices from the city demanding the removal of "hundreds" of allegedly unlawful vacation rentals. [...]

Court Rules FCC Cannot Overrule State Laws Limiting City-Run Broadband

Thu, 11 Aug 2016 11:30:00 -0400

A federal appeals court panel has ruled this week that the Federal Communications Commission (FCC) overstepped its powers by attempting to subvert and overrule state laws that forbid cities from developing and operating their own broadband networks and competing with private providers. This is a big deal in reining in an FCC that is attempting to intervene more and more in how Americans receive internet access, and it also represents a blow against a potential avenue for porkbarrel federal infrastructure spending in whatever projects the next president hopes to put into place (both Hillary Clinton and Donald Trump have each promised hundreds of billions of dollars in more federal spending in these areas). The Sixth Circuit Court of Appeals panel ruled unanimously (3-0) that the FCC did not have the authority to bypass state laws that restrict or forbid municipal development and operation of broadband. To be clear, though, this was a very narrow ruling. The court didn't rule that the FCC could never overrule these types of state laws. Rather, the ruling was that there was no federal authorizing legislation that specifically gave the FCC authority to do so. Congress could pass a law that would allow the federal government to preempt the state laws that preempt city involvement in broadband operations. But it hasn't done so, and the FCC's attempts to bend the rules to make it happen anyway were smacked down. FCC chairman Tom Wheeler complained about the outcome and ignored the legal issues that drove it: Wheeler criticized the decision that "appears to halt the promise of jobs, investment and opportunity that community broadband has provided in Tennessee and North Carolina." He said since 2015, "over 50 communities have taken steps to build their own bridges across the digital divide. The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price." Anybody who thinks that municipal broadband provides "acceptable service at an acceptable price" should read Kevin Glass' Reason piece from 2015 about what disasters and money pits government-operated broadband programs actually are. Far from competing with monopolies, many of them are proposed as revenue generators at the public's expense. Chattanooga, Tennessee's broadband program is typically invoked as a success story (one of the lawsuits in this case involved the city trying to expand its program beyond its territorial boundaries, forbidden by state law). But as Glass noted, the reason the city was able to avoid going into debt building their broadband infrastructure was due to a huge infusion of federal stimulus spending: What goes unmentioned is the cost. Chattanooga didn't build the network cheaply, nor did they even pay for it themselves. No, it took $111 million in federal tax dollars to get the network off the ground. This was doled out to Chattanooga as a part of President Obama's stimulus program. The success that Chattanooga has had in putting federal tax money to work was actually the impetus for the FCC's unilateral, unprecedented overturn of state-level municipal broadband laws; the Chattanooga EPB wants to bring its service beyond the lines of its current authority. We can see the folly in using Chattanooga as a model for how other municipal broadband projects could work. Not every city can use the federal government to extract money from taxpayers in other cities and states to pay for their government broadband projects. The money has to come from somewhere; the feds can't redistribute hundreds of millions to every city in the country, and the cost for these networks in larger cities would be mu[...]

How Privatization and Competition Freed the Web and Made the Modern World Possible

Sat, 11 Jun 2016 07:55:00 -0400

How the Internet Became Commercial: Innovation, Privatization, and the Birth of a New Network, by Shane Greenstein, Princeton University Press, 488 pages, $35  In 1991, the internet was one data communications protocol among many competitors. It had taken hold in a collection of research and education institutions serving less than 2 percent of the population. A small, government-funded backbone that tried to exclude all commercial use held its participating networks together. Twenty-five years later, the internet protocol is the lingua franca of the global digital economy. Nearly 4 billion people worldwide depend on it. It is the platform for the business giants of the 21st century—Google, Apple, Facebook, Ali Baba—and the site of monumental battles over regulation and governance. An entire digital ecosystem has grown up around the internet as it evolved from a government-sponsored research community to a commercial economy. Dozens of books, academic papers, and magazine articles describe different aspects of that change. What we've long needed is a comprehensive history that synthesizes all those elements into a single narrative. How the Internet Became Commercial, a new book by the Harvard economist Shane Greenstein, is an imperfect but noteworthy attempt to fill that gap. Greenstein asks: How did economic forces, government policies, and prevailing norms and institutions interact to encourage or discourage the decentralized innovation that we have come to associate with the internet economy? He devotes most of his attention to the economic part of this triad, with institutional analysis coming in a distant third. The narrative begins with the privatization of the National Science Foundation (NSF) backbone—the larger network connecting all the local and regional networks—from 1992 to 1995. This opened up what had been a fairly closed network for education and research institutions to commercial use, and it replaced a single government backbone contractor with multiple competing private connectivity providers. We see the emergence of private internet service providers (ISPs) and an unregulated, decentralized market for interconnection among them. We also see the importance of dial-up Bulletin Board Systems (BBSes) as entrants driving competition in the ISP market. Making the jump from BBS to ISP was relatively easy in terms of the capital investment and expertise required. As demand for internet access grew, what had been a small, localized BBS market for computer nerds exchanging files and messages became a mass market for web access. There is a useful, if stylistically labored, comparison of the early internet boom to the California gold rush. Greenstein is particularly good on the emergence of the World Wide Web and the commercialization of the web browser, including the early browser war between Netscape and Microsoft. Developed in research institutes while internet use was still primarily noncommercial, the web protocols for linking documents and other resources on the network, coupled with the browser's graphical user interface, pushed computer networking into mass adoption from 1992 to 1995. As internet content and applications increased and became richer, Greenstein shows the deepening of capital investment in the telecommunications infrastructure due to user demand for faster upload and download speeds. Dial-up modems went from 2.4 to 56 kilobits per second, and from there to broadband cable modems. Equally important, established firms such as IBM and brick-and-mortar enterprises adapted to the internet, which facilitated organizational efficiencies through more extensive access to relevant information about supply chains, work teams, accounting, and s[...]

Bill Named After Murdered Girl Fails House Vote. Thank Goodness.

Wed, 25 May 2016 11:25:00 -0400

The Kelsey Smith Act was named after an 18-year-old woman who was abducted from a Target parking lot and killed. For the last four years, Smith's family has been backing a bill to force telecommunications companies to hand over data about the whereabouts of a cellphone at the time of a call to law enforcement in emergency situations. Seems like this sort of thing should sail right though Congress, right? After all, we've got:  Tragic story about violence done to a young white woman: check! Grieving family on display at the Capitol: check! Bill named after the victim: check! Increased powers that law enforcement has been demanding for years anyway: check! Then, a surprising twist: The Kelsey Smith Act failed on the floor of the House this week with a vote of 229-158 (it needed two-third of the vote to pass, because it was considered "under suspension of the rules"). Smith's family was in the gallery, as The Huffington Post's Matt Fuller noted yesterday, adding a particularly embarrassing emotional layer to proceedings. Thank goodness. It was a bad bill and it deserved to be voted down. If you're thinking that I'm an insensitive jerk right now, congrats: You've been successfully manipulated by lawmakers and law enforcement who want to expand their power under cover of human tragedy.  People who backed this bill are surely well-intentioned, but here's the thing: The new powers granted to law enforcement in the bill would almost certainly have wound up being used primarily to track down everyday criminals, drug dealers, and, heck, probably people who say mean things about the size of Donald Trump's appendages—not just in rare emergency abduction scenarios. What's more, if the law had already been in place when Kelsey was abducted, it almost certainly would NOT have helped find her before she was killed. Current law already allows telecom providers to share info with police in emergencies if the user has given permission or if law enforcement clears a few existing bureaucratic and judicial hurdles to prove to the company that an emergency is indeed underway, as the R Street Institute has noted. This bill would have taken a bigger dent out of the Fourth Amendment by removing even those minimal barriers—which are designed to protect users' privacy—and leaving the definition of emergency up to law enforcement, as the ACLU noted earlier this year. The lawmakers who voted against this bill did the right thing. If there's anyone who should be ashamed about how this played out, it's the guys and gals who trotted out grieving family members to score political points. Handy rule of thumb: Bills named after victims (or those with cutesy acronyms) should raise red flags; they're more likely than usual to be classic examples of the legislative sub-variant of the "hard cases making bad law" principle. [...]