Corrupting The Process

In New York, a recent release by the Attorney General’s office reported the results of an  investigation into efforts by “Big Telecom” to defeat Net Neutrality. It seems that in 2017, major U.S. telecom companies pumped “millions of dollars into a secret campaign” to flood the FCC with millions of fake comments supporting the agency’s  repeal of net neutrality protections.

The product of a multi-year investigation, the new report (pdf) details an industry-backed effort to create the appearance of “widespread grassroots support” for then-FCC chair Ajit Pai’s broadly unpopular repeal of net neutrality rules.

I have written before about Ajit Pai who was put in charge of the FCC by the Trump Administration in furtherance of that administration’s intent to make online life easier–and more lucrative– for monied interests. Apparently, simply installing a tool at the FCC wasn’t seen as sufficient; so the industry’s “big guys” decided to give Pai’s efforts a boost.

“In 2017, the nation’s largest broadband companies funded a secret campaign to generate millions of comments to the FCC. Many of these comments provided ‘cover’ for the FCC’s repeal of net neutrality rules,” the investigation found. “To help generate these comments, the broadband industry engaged commercial lead generators that used prizes—like gift cards and sweepstakes entries—to lure consumers to their websites and join the campaign.”

“However, nearly every lead generator that was hired to enroll consumers in the campaign, instead, simply fabricated consumers’ responses,” the report states, noting that 8.5 million fake comments in favor of net neutrality repeal were generated by the effort.

New York AG Letitia James issued a statement that identified the danger of such campaigns: the fabrication of responses in order to influence public policies drowns out  actual responses from the American people, distorting public opinion and defeating passage of laws and regulations that should be responsive to that opinion.

“Today, we are taking action to root out this fraud and the impersonation that has been corrupting the process for far too long,” James continued. “From net neutrality rules to laws affecting criminal justice reform, healthcare, and more, these fake comments have simply been generated to influence too many government policies, which is why we are cracking down on this illegal and deceptive behavior.”

James also announced that the AG’s office had negotiated settlements with three of the companies that had generated millions of false comments on behalf of Big Telecom—Fluent, Inc, Opt-Intelligence, Inc., and React2Media, Inc. Those companies will pay more than $4.4 million in penalties and disgorgement; significantly, they will also be required to implement “comprehensive reforms in future advocacy campaigns.”

Supporters of Net Neutrality had suspected something of this sort, and this investigation confirmed those suspicions. Unfortunately, it confirmed something even more troubling–the extent to which presumably reputable American business interests engage in (or at the very least, wink at) corrupt behaviors.

I still remember how shocked I was when my middle son, who was then traveling through India, told me about the frustration of an Indian friend. The friend ran an orphanage and wanted to increase its capacity to care for abandoned children. In order to get a permit for the expansion, he was expected to pay a fairly substantial bribe to the official responsible for issuing such permits. My son said that such expectations were widespread, not particularly secretive, and just as applicable to “do-gooders” as to more profitable enterprises.

We Americans used to pride ourselves on the absence of such expectations in our dealings with government officials, petty and not-so petty.

When societies become desensitized to corrupt behavior, when “winning” and/or profiting are the only metrics that matter, it’s a short distance to the normalization of outright bribery and other highly unethical practices.

The corruption that attended the fight over Net Neutrality is so troubling because it may well be a “canary in the coal mine”– a very worrisome omen.


Saving Net Neutrality?

In the days and weeks following the midterm elections, the news has gotten steadily better. Undecided House races have been called for the Democrats; statehouses across the country have turned blue; and according to a couple of tweets from Nate Silver, the Democrats got as many votes in the midterms as Trump got in the Presidential election.

According to Silver, that’s unprecedented.

The news may also be good for Net Neutrality. According to the Brookings Institution, a combination of the Democrats’ win and a Supreme Court decision may restore non-discrimination rules to the Internet.

On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule. The industry groups that had long opposed non-discriminatory access to broadband networks had previously stopped such regulation at the D.C. Circuit. When they attempted the same thing with regard to the 2015 decision of the Federal Communications Commission (FCC), a three-judge panel ruled the FCC’s favor. The industry then appealed the panel’s decision to the entire D.C. Circuit and lost again. The industry then appealed that loss to the Supreme Court. The Supreme Court voted 4-3 (with Chief Justice Roberts and Justice Kavanaugh abstaining) to deny a writ of certiorari for the appeal. As a result, the lower court’s decision upholding the 2015 Open Internet Rule stands.

The FCC’s 2015 Open Internet decision declared broadband providers to be Telecommunications Services subject to the common carrier requirements of Title II of the Communications Act. Just like the telegraph and telephone companies that preceded them, internet service providers could not discriminate among those using the network. They could not, for instance, break the internet into fast lanes and slow lanes depending on how much a content provider such as Netflix paid them.

It will not surprise you to learn that in 2017, Trump’s FCC repealed the Open Internet Rule, and ruled that the agency had only minimal authority over internet networks. Under Trump’s FCC chief, former Verizon honcho Ajit Pai, the Commission announced it would exercise no oversight over internet access.

As former FCC chair Tom Wheeler explains, not only did the agency created by Congress to oversee the nation’s networks walk away from that responsibility, it joined the plaintiffs in asking the Supreme Court to overrule the D.C. Circuit’s 2015 decision.

The High Court declined to do so.

Add to that encouraging development the fact that Democrats will control the House of Representatives.

House Democratic leaders from presumptive Speaker Nancy Pelosi (D-CA,) to the new Chairman of the Energy and Commerce Committee Frank Pallone (D-NJ), to the new Chairman of the Telecommunications Subcommittee Mike Doyle (D-PA) have all been vocal supporters of strong net neutrality rules.

Reps. Pallone and Doyle will be able to conduct oversight hearings into the activities of  Trump’s FCC, and on the effect of eliminating the Open Internet Rule.

Since meaningful new legislation is highly unlikely, given the GOP Senate and Trump’s threatened veto, the Supreme Court’s refusal to overturn the Open Internet Rule means non-discrimination might survive anyway.

I say “might” because the D.C. Circuit will hear arguments in February in the lawsuit challenging the FCC’s elimination of the Open Internet Rule.  If the Circuit Court rules against the FCC,  the 2015 Open Internet Rule is reinstated—and the Supreme Court has declined to consider the matter, at least for now.

In their zeal to gut oversight of their activities, the internet networks and their Trump FCC allies may have shot themselves in the foot. There is a strong case that the Trump FCC acted in an arbitrary and capricious manner when it repealed the 2015 Open Internet Rule and walked away from any responsibility over the most important network of the 21st century. If the D.C. Circuit makes such a finding, net neutrality would once again be the law of the land. Although the Trump FCC would probably spitefully ignore its enforcement and even force adoption of a new rule to free the broadband companies, that action would simply bolster the Democrats in the House.

Research suggests that an overwhelming majority of Americans favor retention of Net Neutrality.

I favor neutering Ajit Pai.


Hard Cases And Bad Law

Lawyers have a saying: hard cases make bad law. A couple of pending cases over Net Neutrality offer a good illustration.

A bit of background: One of the many outrages perpetrated by the Trump Administration was the cynical elimination of net neutrality rules by Ajit Pai of the FCC, despite the fact that a huge majority of Americans supported those rules. Pai came to the agency from Verizon, where he’d been an executive; Verizon and other large telecom interests don’t want to be restrained by pesky regulations requiring that they treat internet users equally.

When the FCC eliminated Net Neutrality, more than 20 states filed lawsuits, arguing that the agency had acted arbitrarily. Those lawsuits are supported by companies like Mozilla, trade associations representing Amazon, Facebook and Google, and consumer groups like Free Press and Public Knowledge.

For its part, California responded to the elimination of Net Neutrality by passing a version of its own. On September 30th, The Washington Post reported

California on Sunday became the largest state to adopt its own rules requiring Internet providers like AT&T, Comcast and Verizon to treat all web traffic equally. Golden State legislators took the step of writing their law after the Federal Communications Commission scrapped nationwide protections last year, citing the regulatory burdens they had caused for the telecom industry.

That same Sunday, the Trump Administration announced that it would sue California to block that law, setting up what the Post characterized as a high-stakes legal showdown over the future of the Internet. The administration will argue that only the federal government has the authority to regulate the Internet, and that the reason Congress gave the federal government exclusive authority was to ensure that all 50 states wouldn’t write their own conflicting rules governing the web.

Fair enough. Fifty different regulatory approaches would be a nightmare for ISPs, and arguably impossible to enforce. On the other hand, the  federal government’s actions weren’t just bad policy that ignored the great weight of both expert and public opinion–its nullification of the net neutrality rules arguably constituted yet another gift by the administration to moneyed interests.

When the Justice Department announced that it would sue California, it set up a “lose-lose” “hard cases” scenario. In a sane world, the U.S. would have one comprehensive set of policies governing Internet practices–not 50. But in a sane world, the administration wouldn’t have repealed rules that were widely seen as necessary, reasonable and equitable.

If all this wasn’t bizarre enough, a couple of days ago, the FCC submitted its defense of the repeal in the lawsuit brought by the states by arguing that it had no authority to pass net neutrality rules in the first place.

Chairman Ajit Pai’s FCC argued that broadband is not a “telecommunications service” as defined in federal law, and therefore it must be classified as an information service instead. As an information service, broadband cannot be subject to common carrier regulations such as net neutrality rules, Pai’s FCC said. The FCC is only allowed to impose common carrier regulations on telecommunications services.

That argument would be a tad more convincing if the DC Circuit appeals court hadn’t ruled in 2016 that the rules were legal.

The argument also would seem to complicate the administration’s threatened preemption suit against California; lawyers defending the ability of states to pass rules say the FCC can’t preempt state laws that regulate conduct over which the FCC has no regulatory authority.

Does your head hurt yet? (Mine does.)

The various entities suing the FCC have until November 16 to file reply briefs. Final briefs are due November 27, and oral arguments are scheduled for February 1.

Oh what a tangled web we weave when trying to enrich an administration’s cronies.


File Under “We Told You So”

The Guardian,among other publications, recently reported that Verizon “throttled” the presumably unlimited data of California firefighters while they were battling the blazes that were–and still are–engulfing communities in that state.

California firefighters’ ability to battle a huge wildfire was impeded by Verizon Wireless throttling their internet connection, in a moment advocates say demonstrates the high stakes of the battle over net neutrality.

Santa Clara county fire department had paid for what Verizon described as an “unlimited” data plan for various internet-connected devices, but the data flow was throttled to about 1/200th of the typical speed – unusably slow for any meaningful data transfer.

This restriction created problems for a command and control communications vehicle called OES 5262 as firefighters battled the Mendocino Complex fire, the largest wildfire in California’s history, in late July. The vehicle – essentially a fire engine that is fitted with computers and communications equipment – gets internet access via a device that uses a Verizon sim card. It is used as a hub to “track, organize and prioritize routing of resources around the state and country to the sites where they are needed the most”, according to the Santa Clara county fire chief, Anthony Bowden, in a lawsuit over net neutrality protections, first reported by Ars Technica.

Net Neutrality rules put in place under the Obama Administration would have protected the firefighters (or at least provided them with recourse), but those rules were repealed by Ajit Pai, Trump’s appointee to the FCC.  Pai was a former executive at Verizon, and Verizon has been one of the “big telecom” companies lobbying for the repeal.  Pai argued that the net neutrality rules would stifle innovation, and that they had been established on “hypothetical harms and hysterical prophecies of doom”.

With Pai at the helm, the FCC simply ignored massive numbers of emails arguing against repeal, and ignored as well a number of surveys that found more than 80% of Americans supporting Net Neutrality.

The July incident wasn’t the first time Verizon had throttled the firefighters’ data connection.

They had previously contacted Verizon in June when they were dealing with the Pawnee fire and December 2017 when they were battling a grass fire near Prado regional park.

According to emails included in court filings, in June 2018, the fire captain Justin Stockman contacted Verizon requesting that the data connection for a critical piece of communications equipment was unthrottled. A Verizon account manager responded by trying to upsell the fire department from a $37.99 plan to a $39.99 plan.

The Santa Clara fire department is part of a larger lawsuit against the Federal Communications Commission; the lawsuit seeks to overturn the repeal of net neutrality rules that prevent internet service providers from blocking, throttling and prioritizing customers on the basis of pay. The suit represents plaintiffs in twelve separate lawsuits that were consolidated into a single suit. Those lawsuits were filed by more than three dozen entities, including state attorneys general, consumer advocacy groups, and tech companies.

Probably the best explanation of Net Neutrality–and the consequences of its repeal–can be found by watching comedian John Oliver who has devoted two of his shows to the topic.

I guess it takes a comedian to explain why the loss of Net Neutrality is no laughing matter.


Sinclair Media Encounters A Roadblock

In late July, the Washington Post ran a story that was tantalizing by virtue of what it omitted.

The paper reported that the FCC had raised substantial questions about Sinclair Broadcasting’s proposed merger with Tribune Media. In prior years, “substantial questions” by the FCC have been enough to derail proposals, and I was particularly surprised because up to this point, Ajit Pai, Trump’s appointee to head the FCC, has conducted himself precisely as one would expect a Trump appointee to behave, which is to say he has been a total tool of big telecom. For example, Pai engineered the repeal of Net Neutrality–despite the fact that his predecessor had strongly supported the policy (as do huge majorities of Americans) and despite the huge number of public comments protesting the move–an “accomplishment” that undoubtedly pleased Verizon, where he had been an executive before moving to the FCC.

Trump, of course, took to Twitter to express his disagreement, tweeting in his usual peevish and childish prose:

Trump said Tuesday that it was “So sad and unfair” that the FCC, an independent agency, did not approve the merger, a $3.9 billion transaction that would create a conservative television giant that originally hoped to reach roughly 70 percent of U.S. households.

In his tweet, the president stressed how the deal would provide a “conservative voice for and of the People,” though politics are not supposed to factor into merger considerations.

“Liberal Fake News NBC and Comcast gets approved, much bigger, but not Sinclair. Disgraceful!” the president tweeted.

Sinclair–dubbed the worst media company you never heard of by John Oliver--is a lesser known clone of Fox News; if it were allowed to become the country’s largest broadcaster, that would vastly increase the influence of its reactionary programming by adding millions of homes to its nationwide network. (Its original proposal had the company reaching 233 stations in 108 markets.)

So far, Pai has been a reliable Trump lackey, consistently siding with big business over the consumers whose interests his agency is charged with protecting.

Pai moved to allow more consolidation among TV stations last year by restoring an FCC accounting method known as the UHF discount. Under the discount, broadcast companies can own more stations before bumping up against a national audience cap limiting their reach to 39 percent of U.S. households. On Wednesday, a federal appeals court dismissed an effort by consumer advocacy groups challenging Pai’s decision.

That court ruling is a victory for Sinclair, even as its deal undergoes legal review. The company’s merger proposal depends on the UHF discount to stay compliant with the FCC’s national audience cap; after factoring in the discount, Sinclair has said, the combined company will reach 38.9 percent of U.S. households.

Some of Pai’s critics, including Democrats in Congress, have highlighted these and other policy moves in questioning the chairman’s relationship with the conservative broadcasting giant.

Sinclair has close ties to the Trump administration. During the campaign, according to Politico, the company made a deal with Trump in which it promised positive media coverage for preferred access. (Reputable journalists they are not.) Boris Epshteyn, who worked for Trump in the White House, is a company executive.

The FCC’s sudden concern about the merger raises two questions, one of which is: why? Has Pai suddenly discovered that the purpose of the FCC is not the empowerment of Big Telecom? Is he less of a pawn than he has heretofore seemed? Is there some history between him and Sinclair that might emerge to suggest a quid pro quo that would smear his reputation if he simply rubber-stamped the proposed merger?

Inquiring minds want to know!

When the “substantial concerns” were first announced, several media outlets asked: will the clear disapproval of the twit in chief cause Pai to back off? That question is now moot; yesterday, Tribune Media called off the merger and announced a lawsuit against Sinclair.

A good result, but a very, very curious chain of events….