Public Knowledge

Consumers have a lot to complain about when it comes to their cable, broadband, and wireless services. But the issue that hits closest to home is their bills - they’re too high, too confusing, and larded with hidden fees. Cable industry billing practices are a big part of how the cable industry gets away with jacking up rates at more than twice the rate of inflation over the past twenty years. It’s 2016, and this has been a problem for far too long. You know it, I know it, and the American people definitely know it.

Sen Claire McCaskill’s (D-MO) office recently put out a very strong report addressing cable billing abuses and uncovering a plethora of abusive practices. And when they catch errors, not all companies fix them automatically - even when they know the bills are wrong. It’s up to consumers to catch the providers’ “mistakes” and demand refunds.

The week of Oct 24, the Federal Communications Commission made two huge moves to help consumers navigate the digital marketplace. The first was to finally pass its long-awaited landmark broadband privacy rules. But tucked inside that order was something equally important, if less high-profile: a commitment by the FCC that by February 2017, it will embark on a proceeding to address mandatory binding (or forced) arbitration clauses.

If these have flown under the radar for you, it’s because they are the epitome of fine print. Forced arbitration clauses are sneaky language injected into contracts, which can eliminate one of your fundamental legal remedies as a consumer: the class action lawsuit. Without the threat of a class action, consumers can be left without a practical legal remedy, which is critical in the event that a company pursues business practices that clearly rip customers off. This move was just the latest example of the FCC fighting for consumer rights in the face of continued pushback from corporate interests. Consumers should cheer loudly - but also remember that this is just the kick-off. Important issues for consumers remain on the FCC’s agenda, and it remains incumbent upon all of us to be vigilant -- to help the Commission enact yet another critical consumer protection in the telecommunications industry, which is central in our daily lives. And, much like in a class action itself, that’s something we can all get behind together.

We understand that AT&T, since its purchase of DirecTV and its announced launch of a new online streaming service, is trying to position itself as a stronger competitor to cable. However, there are good reasons to be skeptical that further consolidation in the communications industry could be good for consumers.

Vertical integration between programming and distribution in particular raises a number of issues: DirecTV, for instance, might favor Time Warner content, crowding out or refusing to carry alternative and independent programming that viewers might prefer. AT&T might also make it more expensive or difficult for competitors to DirecTV or to its streaming service to access Time Warner programmer, hoping to drive customers to its own platforms. AT&T could also give preferential treatment to its own programming and services on its broadband networks--indeed, it has already announced that it plans to zero-rate its upcoming online video service. Increased vertical integration could also increase AT&T's opportunities for data collection, which has relevance to FCC privacy initiatives. Similar sorts of self-dealing and discrimination issues have been at the center of the review of similar deals in the past, such as Comcast's acquisition of NBC Universal. Ultimately, it would be AT&T's job to try to prove that this deal would benefit, rather than harm consumers and competition. Potential industry consolidation highlights why the Federal Communications Commission must move expeditiously to develop thorough privacy protections for consumers so that major industry players do not abuse the sensitive information they collect from the customers, and emphasizes the need for the FCC to vigorously enforce its Open Internet rules."

After a proceeding that has stretched on for more than a decade, the Federal Communications Commission’s largest ever data collection, and numerous delays, the fight over business data services (BDS) reform (previously referred to as “special access” reform) could be nearing its end. FCC Chairman Tom Wheeler has repeatedly promised the FCC is finally set to reform the BDS market this year by lowering the rates that monopoly phone companies can charge to businesses, institutions, and wireless carriers, and promoting new competition and market entry. In Sept, Public Knowledge, along with other public interest and consumer advocates sent a letter to Congress urging Members to support the FCC’s effort in making the BDS market more competitive. Oct 4, we joined 11 other public interest and consumer advocates in a letter to the FCC.

Crucially, BDS reform must address excessive pricing for both legacy TDM services and high-capacity Ethernet services. Failure to address monopoly Ethernet pricing only preserves incumbent carrier monopoly pricing and green lights anti-competitive behavior in the future. Even with a wealth of information indicating that the BDS market is broken and controlled by monopoly telecom providers, opponents are still fighting to delay or kill the common sense reforms that business customers, consumers, wireless carriers, and the vast majority of the telecom industry have coalesced around. Opponents of BDS reform are using the only tool in their arsenal – calling for more delay and questioning the FCC’s process. These are losing arguments, and tired tactics. The evidence overwhelmingly shows there are only one or two BDS providers in a majority of customer locations. The FCC must act now to create much needed incentives for competition in the BDS market while protecting consumers and promoting economic growth. For too long, businesses and consumers have been hurt by exorbitant rates while BDS providers have seen windfall profits. It’s not often that both businesses and consumers benefit from new regulations, but in this case, BDS reform is a no-brainer for both sides.

The set-top box fight may be shaping up to be a prime example of how policymakers who don't want to anger their constituents can protect corporate interests without ever having to officially come out against consumers. You just delay a regulatory process so that the clock runs out and the Federal Communications Commission doesn't have the opportunity to vote to explode the set-top box monopoly.

This summer, and even now, we've seen the elements of this strategy play out. After FCC Chairman Tom Wheeler proposed rules to eliminate the set-top box monopoly and hundreds of thousands of consumers cheered the effort, House Representatives passed a spending bill prohibiting the FCC from completing new rules in 2016. Soon after, the Senate Appropriations Committee did something similar. Of course, they never outright said that they're against competition or more choices for consumers; they just label the issue as "very complicated," or they “have concerns,” or just say whatever they can think of to justify telling the FCC to take more time and not end this consumer rip-off in 2016. So here we are, either two weeks away from the FCC finally moving forward to break the cable box monopoly, or another delay. Stay tuned to see what happens, or dive right in and help us peel back the disinformation and stealth by demanding FCC action and no Congressional interference!

[Commentary] The Federal Communications Commission is required by law to promote competition in the TV set-top box market. Yet the fact that cable programming must be available on apps on competitive devices, on nondiscriminatory terms, is being framed as some kind of Federal Communications Commission overreach, or a "compulsory license," or as interfering with contracts or copyright.

But this is absurd -- especially considering that the apps-based approach is exactly what the cable and big content companies have been advocating for a while now. Neither copyright nor contract law work this way. Let's work through some aspects of the Chairman's app proposal.

[Bergmayer is a Senior Staff Attorney at Public Knowledge, specializing in telecommunications, Internet, and intellectual property issues]

[Commentary] The Ninth Circuit issued a fairly important decision limiting the authority of the Federal Trade Commission (FTC). Unfortunately, certain articles, combined with some overwrought commentary, have generated a lot of confusion. To summarize:
1) This has nothing to do with the Federal Communications Commission’s determination to reclassify broadband as Title II. The court was extremely explicit on this point.
2) There is no “gap in consumer protection” for broadband services – unless Congress or a future FCC reverses the Title II determination. As long as broadband remains a Title II service, the FCC can protect consumers from bad behavior by broadband service providers.
3) Beyond the broadband world, the case has fairly broad and uncertain applications. Arguably, Google could escape FTC jurisdiction by owning Google Fiber, and Amazon could escape FTC jurisdiction by registering its truck fleet as a common carrier freight company regulated by the FMCSA.

Ultimately, however, this case creates real problems for consumer protection by creating significant concerns about the FTC’s authority in a world where large corporations often engage in multiple lines of business – some of which may have “exempt status” under Section 5(a)(2). Hopefully, the FTC will seek review by the full Ninth Circuit, which would be wise to overturn this unfortunate case.

Public Knowledge, along with other public interest organizations [including the Benton Foundation], filed reply comments in response to the Federal Communications Commission’s Further Notice of Proposed Rulemaking on competition in the high-speed broadband “business data services” (BDS) market.

The record in the FCC’s BDS proceeding shows what observers have long known -- that the BDS market is overwhelmingly monopolistic and warrants increased FCC oversight. Incumbent BDS providers possess immense market power and use it to inflate prices, costing businesses, non-profits, community anchor institutions, wireless carriers, and local governments tens of billions per year in excess BDS charges. Ultimately, these costs are borne by all consumers and taxpayers. After a decade-long proceeding and the largest data collection in the history of the FCC, it’s now time for the agency to take action to reform the BDS market by promoting competition and protecting consumers, who bear the heavy burden of these costs.

Twice broadband providers have looked to the DC Circuit to stop net neutrality rules. Twice they have been told that a Title II based framework is the correct way to have strong rules and the FCC is empowered by Congress to do so. Now these trade groups are asking the DC Circuit yet again. There is broad consensus support for strong net neutrality rules, making this just another doomed attempt for trade groups to ignore millions of Americans. It’s time for these trade groups to move on -- net neutrality is here to stay.

[Commentary] The Lifeline program is essential to the public safety sector because it increases access to public safety communications by equipping more low-income users with traceable service-initialized cellphones. Lifeline is crucial to ensuring that all Americans, even those from low-income communities, can contact 9-1-1 during an emergency - regardless of their location. Furthermore, if a caller does not know his or her location, but calls from a service-initialized cell phone, the 9-1-1 dispatcher can contact the cell carrier and request a trace of a subscriber’s GPS coordinates. That information can aid a dispatcher in dispatching emergency services to an exact and precise location. During the critical moments of an emergency, time is of the essence and sometimes a rapid response can mean the difference between life and death.

It is essential that the Lifeline program remain intact, as equipping more people with cell phones greatly expands the accessibility of public safety communications, particularly to low-income communities.