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April 2017

Court Urged To Restore FTC's Power To Prosecute AT&T

In 2016, three judges on a federal appellate court issued a stunning ruling that blocked the Federal Trade Commission from prosecuting AT&T for allegedly duping customers. The judges said in their opinion that the FTC couldn't proceed against AT&T because the agency lacks jurisdiction against common carriers. The ruling stemmed from what appeared to have been a straightforward deception claim: The FTC argued that AT&T misled consumers by selling them unlimited data, but throttling their broadband connections after they used between 3 and 5 GB a month.

The most surprising thing about the appellate judges' ruling was that the alleged deception occurred between 2011 and 2014 -- before mobile broadband was considered a common carrier service. The FTC is now asking for a new hearing in front of at least 11 of the 9th Circuit's judges. That request is backed by lawmakers, public interest groups and a different federal agency -- the Federal Communications Commission. Late during the week of April 17, the FCC filed a new round of papers with the 9th Circuit, arguing that the three judges who issued the original opinion incorrectly interpreted the law.

Six definitions that are preventing consensus on net neutrality

[Commentary] Here are the core six terms with double meanings that torment net neutrality consensus: Internet, net neutrality, free, open, competition, and economics.

Internet: Internet service providers see themselves as an integral part of the Internet...[h]owever, proponents of net neutrality...want to define ISPs as Title II telephone utilities, and the physical hardware part of the Internet as the public switched telephone network, to effectively redefine the Internet on their terms as “the edge” made up of only “edge,” software or virtual providers.
Net Neutrality: The snowballing definition now has many net neutrality proponents seeing net neutrality as the same as 1934 monopoly telephone utility law which regulated telecommunications as a common carrier.
Free: Increasingly proponents of Title II net neutrality define “free” as no-cost or a price of zero. However, opponents define “free” as shorthand for individual freedom, since most people pay for Internet access most of the time.
Open: Proponents define open as the strongest possible utility regulation, and non-proprietary, like open-source software that confers no property rights. Opponents see an open market as a deregulated market.
Competition: Proponents and the previous Federal Communications Commission, defined broadband competition as government-managed competition where the government determines some prices, terms and conditions of ISPs to advantage edge providers. In contrast, FCC Chairman Ajit Pai defines broadband competition as market-driven competition between facilities-based providers of broadband Internet access, and where consumers pick winners and losers.
Economics: Many of the most ardent net neutrality supporters consider the Internet like a public common, ie online resources that do not require payment of permission to use. In contrast to most other people, including Chairman Pai and Commissioner Mike O’Rielly, believe in the market organizing principle of the economics of scarcity, where pricing must ultimately reflect total costs, not cherry-picked marginal costs, and supply and demand.

[Scott Cleland is president of Precursor LLC and the chairman of NetCompetition]

FCC Chairman Pai courts conservative groups ahead of net neutrality fight

Federal Communications Commission Chairman Ajit Pai has been lining up the conservative base to support him in the looming network neutrality fight. "The ask was, 'We would like for you to get engaged, it's up to you to decide what to say, but here's our view,'" according to a source who was in the room during Chairman Pai's meeting with conservative groups like the Heritage Foundation, Americans for Tax Reform and FreedomWorks. If Chairman Pai can can gin up the support of vocal conservatives to defend him — liberal-leaning advocates have been able to mobilize millions of consumers to file comments and arrange headline-grabbing protests during these battles — he'll have more momentum to push his proposal over the finish line.

AT&T Denies Request to Address Shareholders Over Redlining Allegations

Attorney Daryl Parks, who represented the family of Trayvon Martin, says AT&T has denied his request to speak at its shareholder meeting about his clients allegations of broadband redlining in Cleveland (OH). Parks recently said those clients would be suing AT&T over the issue and wanted to bring that to shareholders' attention personally. That comes as AT&T is trying to get its merger with Time Warner approved by the Justice Department, a point Parks made in announcing the suit.

"Yesterday I received a fax from AT&T’s Stacey Maris, Senior Vice President, Assistant General Counsel and Secretary in response to the letter we delivered April 24th," Parks said. "AT&T has specifically denied my request to speak at the annual shareholders meeting that occurs this Friday, April 28, 2017. Stating that 'The agenda for our Annual Meeting is already established, but if you attend our Meeting, I hope you find it informative and enjoyable.'" Parks said AT&T did not address his request for a meeting or the merits of the allegations. He said the company was stonewalling, that the issue "will not simply disappear," and that redlining was not confined to Ohio.

AT&T hopes you forget it's a phone company

With T-Mobile tearing up the wireless industry, what's a carrier to do? If you're AT&T, start looking outside the wireless business. AT&T doesn't want to be known as just a telecommunication company anymore. It's using its DirecTV Now streaming service to take control of what you watch and of how you watch it. AT&T owns one of the key services delivering you video through its acquisition last year of DirecTV, and with its pending deal to buy Time Warner, it wants to be the company behind "Game of Thrones" and Superman. But even the Man of Steel can't rescue AT&T as it continues to fall victim to stiff competition that's eroding its core wireless business. Smaller rivals Sprint and T-Mobile have been scooping up its subscribers. It's the same trend that has forced Verizon to make its own acquisitions, although Verizon's bets, like those in AOL and Yahoo, have been relatively smaller ones.

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