FCC cancels Net Neutrality and Ajit Pai mocks protesters. Apple’s new iMac Pro costs a minimum of $4999 and goes up from there. Disney buys 21st Century Fox, gaining X-Men, Fantastic Four, and A New Hope, along with a 60% share of Hulu. Google cancels Tango as ARCore picks up steam. As public sentiment against it grows, even Facebook admits that Facebook is bad for you. Uber spies on everybody. Tweet storms made easy. Mirai botnet that took down huge swathes of the internet was built by college kids to cheat at Minecraft. Patreon apologizes. Secret Pentagon UFO program revealed.
All the highlights from Google I/O. Tim Cook has a blood sugar tracking watch. Facebook’s guidelines for content moderation. Biz Stone is going back to Twitter. What happened with WannaCry. Minecraft devs don’t want you to poison your birds. The FCC is going ahead with their plan to end Net Neutrality whether you like it or not. The internet is broken, and one of the men responsible is trying to fix it.
Jeff Jarvis went to Google I/O, and all he got was this t-shirt.
Mark Millian secretly hates the way Leo pronounces “Bloomberg Business Week”
Nathan Olivarez-Giles has mad street cred.
Google is warning that the Federal Communications Commission’s net neutrality plan could have unintended consequences that help Internet service providers charge Web services for sending traffic.
FCC Chairman Tom Wheeler’s plan would reclassify broadband providers as common carriers on two fronts, in the service they provide home Internet customers and their relationships with “edge providers,” companies like Netflix that offer content to consumers over the Internet. Classifying the ISP-edge provider relationship is, in the FCC’s way of thinking, supposed to provide additional authority so the commission can intervene when an edge provider claims it is being treated unfairly.
“[T]his issue must be viewed in light of the efforts by some ISPs, particularly abroad, to claim that they provide a service to content providers for which they should be able to charge under a ‘sender pays’ model—while still charging their retail customers for the same traffic,” Google Communications Law Director Austin Schlick wrote in a filing with the FCC. “To the extent the Commission encourages the falsehood that ISPs offer two overlapping access services instead of just one, or the fiction that edge providers are customers of terminating ISPs when they deliver content to the Internet, it may encourage such attempts at double-recovery. That could do serious, long-term harm to the virtuous circle of Internet innovation, thus greatly undermining the benefit of adopting net neutrality rules.”
Google is making an argument similar to one put forth by the advocacy group Free Press, which said that classifying the ISP-edge provider connection as a common carrier service is a legally dicey strategy. The FCC’s goal is to be able to intervene in interconnection disputes that harm Internet service quality. But both Free Press and Google argue that the FCC can oversee interconnection simply by reclassifying consumer broadband as a common carrier service.
It is not “necessary to imagine a non-existent service in order to reach ISPs’ interconnection practices,” Google told the FCC. “Should the Commission classify end-user broadband Internet access as a telecommunications service subject to Title II [of the Communications Act], that classification alone would enable the Commission to ensure that ISPs’ interconnection practices are just and reasonable. As noted, for instance, Section 201(b) requires just and reasonable practices ‘for and in connection with such communication service.’ If an ISP’s intentional port congestion or other interconnection practices denied end-user customers the full benefit of the two-way service they have purchased, then the Commission could take enforcement action.”
Interconnection is when two network providers, or an edge provider and an ISP, exchange traffic directly without a middleman. These transfers can happen with or without payment. This type of paid traffic transfer is different from “paid prioritization” deals prohibited by the net neutrality proposal, because interconnection doesn’t speed traffic up after it enters the ISP’s network. But interconnection can greatly improve performance because it provides a dedicated path into the ISP’s network.
Interconnection became part of the net neutrality debate only after a dispute between Netflix and ISPs caused consumers to have poor Netflix service for months, until Netflix relented and paid for direct network connections. The FCC is not proposing a ban on interconnection payments outright, but it wants to set up a complaint process in which edge providers could argue that they are being overcharged or that ISPs aren’t upgrading capacity quickly enough.
Google, which is both a content provider and an ISP, has argued that companies like Netflix should not have to pay for interconnection. But the FCC’s approach to interconnection is flawed, Google argued.
“Informal, settlement-free peering is the norm because it minimizes transaction costs and reflects the mutual benefit both parties receive from interconnection,” Google wrote. “Google has entered into peering arrangements with some of the largest US broadband providers insofar as we are unable to use transit to reach users on those networks with reasonable quality. These arrangements are individually negotiated, however, so they could not support classification of a common carriage service provided to Google or any other edge provider.”
The Federal Communications Commission is scheduled to vote tomorrow on a change to the definition of “broadband” and in so doing could leave about a fifth of the country without access to service that meets the new minimum standard.
At today’s broadband definition of 4Mbps downstream and 1Mbps up, only 6.3 percent of US households have no access to wired broadband. That doesn’t mean the other 93.7 percent are using broadband, but they could buy it from at least one wired Internet provider in their city or town:
Under the proposed definition of 25Mbps down and 3Mbps up (which is opposed by Internet providers), 19.4 percent of US households would be in areas without any wired broadband providers. 55.3 percent would have just one provider of “broadband,” with the rest being able to choose from two or more. Rural areas are far less likely to have fast Internet service than urban ones.
Only 25Mbps and up will qualify as broadband under new FCC definition
Broadband not being deployed “in a reasonable and timely fashion,” Wheeler says.
Most of the US has no broadband competition at 25Mbps, FCC chair says
But will the FCC block Comcast/Time Warner Cable merger? Wheeler doesn’t say.
In FCC parlance, broadband is “advanced telecommunications capability” that “enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.” The FCC determines a minimum speed.
Among the major wired Internet providers, a change in definition would disproportionately affect DSL service. Cable generally has no problem delivering 25Mbps; Comcast’s standard lineup does include an entry-level tier that goes up only to 6Mbps downstream, but its higher-priced tiers are advertised at 150Mbps down and 20Mbps up. Fiber networks also meet the proposed broadband definition with ease, with some offering a gigabit in both directions. (As always, speeds are “up to” the advertised numbers and don’t always hit them.)
It’s a different story for DSL, which is delivered over copper telephone lines. Bitrates decline over distance, so customers receive fewer bits per second if they’re far away from distribution points, but even under ideal circumstances DSL generally won’t provide 25Mbps service.
This means a big portion of AT&T and Verizon subscribers will no longer have “broadband” if the FCC changes the definition. The nation’s two largest traditional telephone companies have each deployed a lot of fiber, but still have plenty of DSL customers.
A proposal from FCC Chairman Tom Wheeler would block an attempt by Sprint and T-Mobile US to buy spectrum together in the incentive auction that will transfer airwaves from broadcast TV stations to cellular carriers next year.
FCC chairman regrets that AT&T and Verizon control the best spectrum
Incentive auction will help smaller carriers, free up unlicensed airwaves.
Announced on Friday, Wheeler’s proposal seeks to help the smallest wireless companies develop business partnerships with larger ones. But it would not allow partnerships between the biggest carriers, since more than 95 percent of US customers are served by either AT&T, Sprint, T-Mobile, or Verizon Wireless.
“Our goal is to promote the participation of as many parties as possible in the auction,” FCC Wireless Telecommunications Bureau Chief Roger Sherman wrote Friday. “If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition. Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed.”
That’s bad news for Sprint and T-Mobile. “The two rivals are working with separate teams and outside counsels to form a joint-bidding venture to participate in the Federal Communications Commission’s airwave auction next year,” Bloomberg reported last month. “The bidding alliance is part of a push by Masayoshi Son, whose SoftBank Corp. controls Sprint, to sway skeptical regulators as it tries to take over T-Mobile. By pooling their resources in the auction, the companies would be able to pay more to the federal government to acquire wireless spectrum—demonstrating that a full merger would help the companies make bigger investments in their networks, benefiting consumers.”
A Sprint/T-Mobile merger would result in the US having three major nationwide carriers instead of the current four. The companies haven’t finalized an agreement yet, but, if they do, it will face scrutiny from antitrust officials who previously blocked an AT&T/T-Mobile merger.
French company Iliad is also bidding on T-Mobile, but T-Mobile owner Deutsche Telekom has reportedly turned down Iliad’s offer.
Wheeler’s proposal would encourage smaller companies to participate in the broadcast TV auction and other spectrum auctions by letting them “leverage business partnerships with larger companies through more flexible leasing arrangements to gain access to capital and cash flow, not to mention operational experience,” Sherman wrote.
“Of course, this policy will have to be policed,” he continued. “Some may try to take advantage of this flexibility to gain a discount for large incumbents, which we will not allow. We will be on the lookout for such abuse and enforce our rules vigorously. Protection will come from the proposal’s focus on who is ‘calling the shots.’ The small business entrepreneur must exercise independent decision-making authority. If the small business is a stalking horse for another party, then the bidding credit will be lost.”
The U.S. Federal Communications Commission is looking into complaints from Netflix and some Internet backbone providers that several large broadband providers have been refusing for years to upgrade their backbone connections as a way to slow video traffic that competes with their own services.
Following a public spat this week between Netflix and Verizon Communications, FCC Chairman Tom Wheeler said the agency is collecting information about the so-called peering and transit arrangements that allow Web traffic to flow between networks and content providers.
Wheeler stopped short of calling the FCC review a formal investigation, but he said there is growing public concern about problems with peering arrangements. In recent months, Netflix, along with backbone providers Level 3 and Cogent, have accused large U.S. broadband providers, particularly ones that offer cable-like video services, of refusing to make inexpensive upgrades to their networks in order to accommodate growing video traffic from Web-based competitors.
Comcast, Verizon examined
The FCC staff is collecting information about peering arrangements and about recent traffic management agreements Netflix has signed with Comcast and Verizon, Wheeler said. Netflix officials have complained about those agreements, saying they shouldn’t have to sign side deals with broadband providers to deliver videos broadband customers ask for.
“Consumers must get what they pay for,” Wheeler said in a statement. “As the consumer’s representative we need to know what is going on. I have therefore directed the commission staff to obtain the information we need to understand precisely what is happening in order to understand whether consumers are being harmed.”
So far, the FCC is collecting information and “not regulating,” Wheeler added. “We are looking under the hood. Consumers want transparency. They want answers. And so do I.”
The bandwidth-intensive Netflix has caused some of its own problems by using low-cost backbone providers, Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, suggested during a net neutrality debate this week. Netflix is trying to get broadband providers to deliver its traffic at “zero cost,” he said.
Advocates of strong net neutrality rules are calling for the U.S. Federal Communications Commission to reclassify broadband as a regulated utility, but such a move would trigger a lengthy court fight between the agency and broadband providers, some telecom law experts say.
With net neutrality back on the FCC’s agenda in recent weeks, many net neutrality advocates—including digital rights groups Free Press and Public Knowledge—have resurrected their long-time push for the FCC to reregulate broadband as a traditional telecom service as an alternative to FCC Chairman Tom Wheeler’s proposed set of regulations, released in late April, that they view as too weak.
Despite a large public outcry—the FCC has received more than 45,000 public comments in the past month, with many calling for reregulation—some telecom law experts question whether the agency will take that step.
“People at the FCC refer to broadband reclassification as the nuclear option,” said Jonathan Jacob Nadler, a telecom regulation lawyer with the Squire Sanders law firm in Washington, D.C. “It’s just not going to happen.”
The FCC, in a public notice of proposed rules released earlier this month, asked for comment on Wheeler’s proposal, which would allow broadband carriers to engage in “commercially reasonable” traffic management, and also on whether the FCC should reclassify broadband as a common-carrier telecom service subject to utility-type regulations under Title II of the Telecommunications Act.
Is a legal backlash worth it?
But Nadler and some other telecom regulation experts expect a huge legal backlash if the FCC moves toward Title II regulation. “If the FCC were to reclassify broadband as a telecom service, lawyers for the major telcos and cable systems would immediately start lining up in front of the court of appeals and would file petitions for review within minutes after the order was published,” Nadler said.
Broadband providers would argue that reclassification is a “trillion-dollar bait-and-switch,” said Scott Cleland, chairman of the NetCompetition advocacy group supported by broadband providers. Providers would argue that a change in classification would be arbitrary and capricious, the classic language of a challenge to agency regulations.
“Promising an industry light regulation to encourage $1.2 trillion in private risk capital investment, and then after it’s built, breaking that promise, would be the [ultimate] arbitrary and capricious FCC action,” Cleland added. “Expect a tsunami of legal challenges against any FCC reclassification decision in multiple courts pursuing multiple different legal challenges and theories in order to stay and overturn the FCC decision.”
Harold Feld, senior vice president at Public Knowledge, downplayed potential arguments by broadband providers. In a handful of recent Supreme Court cases, justices have suggested the FCC has the authority to change its mind, he noted.
Asked if reclassification would trigger a backlash in Congress, Feld said it might, particularly if Republicans gain majority control of the Senate in elections later this year. But Congress would have a difficult time overturning the rules, he said.
Politics, as usual
“President Obama would still be able to veto any such resolution,” Feld said. “While one does not like to rely on a presidential veto, it is equally foolish to assume that a future Congress will automatically overrule any FCC classification. The tide on this is clearly shifting.”
A Republican Congress would likely attempt to overturn any net neutrality rules, Feld noted. Whether the FCC relies on reclassification or takes another route, it “makes no difference if the Senate flips, so you might as well do what you think is right,” he said.
Net neutrality advocate Marvin Ammori of the Ammori Group law firm also discounted the broadband providers’ chances of overturning reclassification.
“They’ll argue the FCC didn’t provide a reasoned basis for the policy tweak,” he said. “They’re very likely to lose that. Courts would defer to the FCC, and the FCC would win.”
Wheeler has defended his proposal, which uses Section 706 of the Telecom Act, a section giving the agency responsibility for robust broadband deployment, as a quicker way to restore net neutrality rules after the U.S. Court of Appeals for the District of Columbia Circuit struck down an old version of the FCC’s net neutrality rules in January.
The appeals court pointed to Section 706 as a way the agency could find authority for net neutrality rules, and Wheeler has argued that it makes sense to follow the court’s lead after judges there twice struck down the agency’s attempts to enforce net neutrality rules.
The case for reclassification: not a trivial one
Alternatively, reclassification would “not be as straightforward or easy as many assume,” said Berin Szoka, president of free-market think tank TechFreedom. Reclassifying broadband as a utility “would take, best guess, five to 10 years of back and forth between the FCC and courts,” he added.
The agency, to reclassify, would have to find a justification for changing its mind on its decade-old classification of broadband as a lightly regulated information service, Szoka said.
Reclassification would be additionally complex because the agency would also have to draw a line between broadband and other Internet services, Szoka said. The FCC would “have to explain why it should only reclassify broadband and not some edge services, too,” he added.
Like Nadler, Szoka questioned whether the FCC will reclassify broadband. The complexity and likely legal challenges are “all why I don’t think the FCC is serious about Title II,” he said. “I think they’re going through the motions of including it … so they can tell the angry mob outside their gates that they considered this option.”
Some opponents of reclassification have questioned whether the FCC has the authority to reverse a series of decisions in the early 2000s to classify cable broadband, then telecom broadband as an information service. But many telecom law experts say the agency does have that authority, as long as it justifies its reasons for the switch in policy.
Ironically, clear authority for the FCC to change its mind comes from the 2005 Supreme Court case that ruled the FCC had the authority to deregulate broadband and classify it as an information service. In the Brand X case, the Supreme Court ruled that the agency had reasonably interpreted the Telecom Act when classifying cable broadband as a lightly regulated service.
The Brand X case “makes clear that the courts must defer to any reasonable interpretation” of the Telecom Act that the FCC makes, Nadler said. Justice Clarence Thomas, writing for the majority in the Brand X case, also notes that government agencies can change their policies if they have a good reason.
Thomas quoted a 1984 Supreme Court decision in Chevron USA v. Natural Resources Defense Council, a major case in administrative agency authority: “An initial agency interpretation is not instantly carved in stone,” the 1984 decision said. “On the contrary, the agency … must consider varying interpretations and the wisdom of its policy on a continuing basis.”
When the Federal Communications Commission (FCC) adopted the Open Internet Order in 2010—forbidding Internet Service Providers from blocking services or charging content providers for access to the network—there was one thing the commission was careful not to do.
What the FCC did not do is declare that Internet service providers are “common carriers,” a classification that could have opened the door to even stricter regulations. Pre-dating the Internet by centuries, common carriage is “this age-old doctrine that says the person doing the shipping for you can’t mess with the contents,” said Matt Wood, policy director for Free Press, a group that advocates for “universal and affordable Internet access.”
The FCC has avoided calling ISPs common carriers for more than a decade, favoring a “light touch” regulatory approach that could protect consumers while (hopefully) appeasing political foes of net neutrality, Wood said.
That approach may be backfiring. Verizon recently challenged the legality of the Open Internet Order, and yesterday the company argued its case in front of a three-judge panel at the US Court of Appeals for the District of Columbia Circuit. A Verizon win would allow ISPs to block content or charge providers for a faster lane to customers.
Judges are skeptical of FCC reasoning
Wood is hoping the judges will uphold the Open Internet Order, but he believes that the FCC would be having an easier time defending itself if it declared ISPs common carriers in the first place. Most of the two-hour court session focused on the common carriage issue, he said.
The concept that “the person doing the shipping for you can’t mess with the contents” is “what I think most people want to have out of their Internet service if they’re getting it from Verizon or from AT&T or Comcast or somebody else who provides that wire,” Wood told Ars. “They don’t want to give in to Verizon’s claim that the ISP somehow has the right to edit the Internet and pick and choose where you can go and what you can say. The FCC has left that in doubt too much from its authority choices.”
While not proclaiming ISPs to be common carriers, the commission said it can make rules that sound similar to common carrier regulations because of the FCC’s legally mandated responsibilities to promote broadband deployment and adoption, to make sure video services are competitive, and to make sure wireless carriers serve the public interest.
Wood and others who observed the judges’ interactions with Verizon and FCC lawyers yesterday agree that the judges expressed skepticism about the FCC’s argument that the Open Internet rules don’t amount to common carriage-style regulations. Telecom analysts at Stifel sent a note to clients saying that the court seems likely to let ISPs charge for premium Internet links.
“We believe a DC Circuit panel majority signaled today at oral arguments that it’s inclined to pare back FCC Open Internet rules in a way that would allow cable and telco broadband providers to charge Internet edge providers for improved connections to broadband customers,” Stifel wrote. “At the same time, the panel seemed inclined to uphold the FCC’s authority to regulate broadband to some extent. … Such an outcome could give telcos and cable new flexibility to strike paid-prioritization deals for offering better service to Internet edge providers (e.g., Google, Amazon, Netflix), which could also include media companies (e.g., Disney, Fox, CBS, Viacom, Time Warner Cable). Whether it would be good or bad for edge/media providers would depend on their business plans and financial wherewithal, but it could create faster ‘toll’ lanes that give big edge players advantages over upstarts.”
Google is building a wireless network at its headquarters in Mountain View, California, using spectrum owned by Clearwire that’s suitable for LTE cellular deployments. The project is described in an application to the Federal Communications Commission, but many of the details are secret. In a letter accompanying the application, Google “respectfully requests confidential treatment.”
“Google has not made the information subject to this request available to the public or to any third parties, does not routinely disclose such commercially sensitive information to the public or to third parties, and has established procedures to protect such information internally,” the company wrote.
So what’s going on? What details we know are in Google’s application for an experimental license and a two-paragraph description accompanying it. “Google plans to test up to 50 base stations and 200 user devices,” wireless engineer Steven Crowley wrote yesterday in a blog post summarizing the application. “Base stations will be indoors and outdoors, with the range of each 100-200 meters, and 500-1000 meters, respectively. Both directional and non-directional antennas will be used. The experiment is to take place within a two-mile radius, so this is a quite dense network, which could have very high capacity for carrying data.”
Google requests use of frequencies 2524-2546 and 2567-2625 MHz, which are used by Clearwire for mobile broadband. “The only reason to use these frequencies is if you have business designs on some mobile service,” Crowley told the Wall Street Journal. Google has not revealed the output power of the devices used in the test, though, deeming the information “not applicable” in the application form. That “doesn’t make sense,” Crowley wrote. “The power is a fundamental quantity that should be disclosed so others may independently assess the potential for interference from the experiment to their services. FCC staff should ask Google to supply this information.”
The types of base stations and end-user devices used in the tests are also confidential.
Google, of course, has become an Internet provider with Google Fiber in Kansas City. There have also been rumors that Google is talking to Dish Network about offering cellular service. And just days ago, Dish offered to buy Clearwire, whose spectrum Google is using in this test.
Google’s previous requests for experimental licenses have used unlicensed frequencies such as those in the 2.4 and 5 GHz bands used by Wi-Fi. “This appears to be Google’s first experimental radio application using mobile broadband bands,” Crowley wrote.
The Federal Communications Commission last week said it will add 195MHz of spectrum to Wi-Fi’s 5GHz band. This move is designed to relieve congestion in Wi-Fi networks, particularly in areas of widespread simultaneous usage like airports and sports stadiums. It could help your home network too, but not right away—routers available in stores today may not be able to use the new spectrum at all.
Finding out definitively whether today’s routers will support the new spectrum is difficult, partly because the FCC still has to issue specific rules governing its use. We’ve hit up router vendors and other industry people to find out whether software updates might let current routers access the new spectrum. While the results were a bit muddled, it seems safe to say no one is guaranteeing today’s routers will get the benefit of the new 195MHz. Even the latest routers supporting the ultra-modern 802.11ac standard may be left behind.
Cisco refused to comment at all, telling us only “Cisco has not made any announcements about this so cannot discuss at this time.” Our inquiries to Netgear and Buffalo haven’t resulted in any information, either. The most detailed response we got from a router vendor was from D-Link, whose associate VP of Product Development Will Brown provided us with this statement:
After discussion with our current chip vendors, we understand that the industry is lobbying to move this licensed spectrum to unlicensed spectrum. In order to take advantage of this spectrum, the chip vendors are reporting that updated chipsets will be required if approved. Our product development philosophy is to provide our customers with the best value. Regardless, if we can achieve this additional feature by a firmware [update] we would commit to providing it as long as it doesn’t have detrimental effects on the devices’ current features and performance.
As this new feature (spectrum) is released there are a number of go-to-market items that we are evaluating including competitive requirements, cost of implementation, education to our customers, and standards compliance.
Given that D-Link says it may ultimately come down to chip vendors, we checked with Broadcom, Marvell, and Qualcomm Atheros to see what they have to say. So far, we’ve received a response from Qualcomm, which said “It is true that none of the existing routers can take advantage of the potential additional channels the FCC is planning to un-license. The reason for that is current dual-band routers and chipsets that are in them are designed to support already unlicensed spectrum. The new proposed 5GHz channels are in the higher 5GHz band so that new chips support to support this will be required.”
While current Qualcomm chips don’t support the additional (or newly “unlicensed”) spectrum, a revised version of the chips that will support it is in the works. “Qualcomm Atheros 11ac Wi-Fi products are designed to support these new additional channels of the 5GHz spectrum and will be ready when the FCC’s rulemaking process will be kicked off,” the company said.
Broadcom has weighed in a little more optimistically, saying “There is a possibility that our existing 11ac solutions could take advantage of the new spectrum. To determine this we need to wait for the FCC to release their detailed technical rules for operation at these new frequencies. We expect this to happen towards the end of February at which point we will have more clarity on the question.”