big tech – Techdirt (original) (raw)

FCC’s Carr Wrote A ‘Project 2025’ Chapter On Ruining The FCC And Taxing Tech Giants, Which May Have Violated The Hatch Act

from the hello-I-have-some-exceptionally-terrible-ideas dept

The leading candidate to head the FCC should Trump win re-election is facing calls for an investigation into Hatch Act violations after he helped co-author the controversial Project 2025.

Sixteen House Democrats have sent a letter to government officials arguing that Carr’s involvement in the openly political Project 2025 is a clear violation of the Hatch Act and should be investigated:

“The Misuse of Position Rule clearly prohibits federal employees from using their government positions, titles, or authority to sign letters, write op-eds, speak in their personal capacity, or—as it were—draft the blueprint for archconservatives to take over their agency.”

For his part, Carr claims he was only participating in the controversial project in his capacity as a citizen, and received the green light from FCC ethics officials before his participation. Even should he be investigated and found culpable, fines for Hatch Act violations are generally rather pathetic.

Project 2025 is, if you’re unfamiliar, a extremist proposal being circulated by key MAGA Republicans that calls for the mass firing of civil servants based on their ideological beliefs, a radical and undemocratic expansion of power for the president, the dismantling of the Department of Education, numerous new corporate tax cuts, draconian new abortion restrictions, and a ban on pornography.

FCC Commissioner Brendan Carr, who, you’ll recall, spends most of his time on cable news complaining about a company he doesn’t actually regulate (TikTok) in order to get attention, wrote a chapter about what should happen at the FCC under a second Trump term.

If you’re familiar with Carr there’s nothing too surprising here. Instead of proposing the agency do its actual job and protect competition and consumers from the whims of AT&T and Comcast, Carr instead calls for a dramatic expansion of the agency’s efforts to “rein in big tech” (which in Trump parlance means harassing any company that tries to moderate racist right wing political propaganda on social media).

Carr has a few sections of his chapter where he pretends he’s interested in “empowering consumers,” but again that mostly involves vaguely whining about tech companies and a dangerous dismantling of Section 230. It has nothing to do with “antitrust reform” or “reining in corporate power” and everything to do with bullying companies that don’t toe the increasingly unhinged authoritarian line.

Should Trump win the next election and Carr is appointed FCC boss, his biggest proposal will indisputably be a giant new telecom tax on tech companies. For half a decade now, AT&T, Comcast, Verizon and friends have used Carr as the spearhead for their plan to impose major new taxes on tech giants under the pretense of funding U.S. broadband deployment (sometimes called “sender pays”).

I’ve discussed (more times than how I can count) how this unserious policy is largely just a handout to subsidy-abusing regional telecom monopolies. It involves falsely claiming that tech companies get a “free ride on the internet” and should pay telecom giants billions of dollars for no coherent reason.

It’s a plan that drives up costs for consumers (since tech companies will simply forward the costs on to you) and effectively breaks the internet (just ask the Internet Society). In South Korea it drove companies like Twitch out of the country because they couldn’t afford to do business. All so telecom giants with a long history of subsidy fraud and abuse can get billions in additional subsidies.

I’ve written extensively on why Carr and AT&T’s call for a “big tech telecom tax” isn’t serious adult policy, but I’m still not entirely sure that “big tech” execs fully understand the scope. In the EU, telecoms have pushed proposals that would charge any internet service that accounts for over 5 percent of a telco’s average peak traffic billions of dollars in additional extra-government surcharges “just because.”

To be clear, the FCC’s Universal Service Fund (USF) program (which helps fund rural and school broadband) is in a dire need of a revamp, since the contributions historically came from levies on your home phone line.

And while Democrats and Republicans have flirted with the idea of including tech companies in that contribution base, I (as somebody that has studied this sector for decades) think it makes more sense to address widespread existing subsidy program fraud and abuse by industry giants and take direct aim at monopoly power (which is directly responsible for high broadband costs and stunted deployment).

That’s not stuff Carr is interested in because it’s not something AT&T and Comcast are interested in.

What Carr and AT&T are interested in is a big fat punitive, nontransparent, and badly managed tax that will be pocketed by subsidy-abusing telecom giants in exchange for fiber networks you’ll probably never actually see. And if Carr is Trump’s pick to head the FCC (a position Carr has been positioning himself for for the better part of a decade) it’s absolutely a policy that’s getting implemented on day one.

Filed Under: big tech, big tech tax, brendan carr, corruption, fcc, hatch act, project 2025, sender party pays, sender pays, tech, telecom

Big Telecom Still Pushing Hard For Broadband Tax On Big Tech

from the double-dipping dept

Fri, Jun 14th 2024 05:28am - Karl Bode

Telecom lobbyists have been working overtime for years in both the US and EU, trying to get policymakers to support the idea of “Big Tech” paying “Big Telecom” billions of additional dollars for no coherent reason.

This taxation effort always involves some variant of the claim that popular tech services are getting a “free ride” on the Internet, so it’s “only fair” that they help pay telecom giants for broadband expansion.

But what’s usually portrayed as a good faith adult effort to bridge the digital divide is, however, a several decade old quest by telecom monopolies to force tech companies to pay them billions of dollars in additional subsidies they haven’t earned and most certainly don’t deserve. Especially since they routinely waste or abuse the billions in taxpayer dollars they’ve already received.

With the recent death by Trumpublicans of a low income COVID broadband discount program, the opportunists at AT&T and other telecoms are ramping up these efforts once again. In several filings spotted by Ars Technica, US Telecom, primarily backed by AT&T, once again trots out the claim that tech giants are somehow freeloaders that should be subsidizing broadband:

“Through focusing on the Big Tech companies who benefit most from broadband connectivity, the Commission will fairly allocate the burden of sustaining USF.”

The FCC’s Universal Service Fund helps fund rural and school broadband expansion, and is primarily funded by a levy on traditional phone lines, which are obviously in decline. To shore up the program, there’s been a push to include a small tax on broadband and wireless lines, which the telecom industry opposes because it would only boost consumer annoyance at already high prices.

Instead, they consistently prefer that the levy be offloaded to tech companies, under the pretense that they’ve been freeloading. Except in U.S. telecom, nobody gets a “free ride.” Decades of consolidation and monopolization ensures that there’s muted competition, in turn ensuring that everybody pays significantly more than the developed nation average for broadband access. Tech companies included.

Here’s the thing: tech companies already pay billions of dollars annually not only for bandwidth, but for their own cloud, CDN, transit, undersea cable, and other infrastructure. Google technically is already a broadband provider when you factor in Google Fi (wireless) and Google Fiber.

Here’s the other thing: there’s nothing about this telecom lobbying effort that’s good faith, even though the news outlets that cover it can’t help but treating it as such.

Telecom is an industry that has waged a relentless, multi-decade war on both regulatory oversight and competition, ensuring that U.S. broadband prices are sky high. If policymakers truly cared about broadband affordability, they’d take aim at corruption and monopolization in telecom.

But that would involve standing up to telecoms patriotically tethered to our domestic intelligence and first responder networks. So instead, we basically throw billions of dollars at telecom giants in exchange for unaffordable fiber networks that are routinely left half completed.

So again, before policymakers expand the contribution base to this lazy subsidy parade, it makes a lot of sense to start implementing significant reforms. Including a survey of numerous school subsidy programs companies like AT&T have been accused of ripping off for decades. Do an honest audit there, then come back to consider expanding any telecom subsidy investment base.

It’s not that having big tech pay some amount of money to genuinely fund broadband expansion is the worst idea ever conceived. It’s that the telecom companies proposing this idea envision a program where they get billions in additional poorly managed dollars managed by feckless bureaucrats who lack the backbone to ensure this money actually goes where it’s supposed to.

In the EU, one big telecom proposal involves directly taxing tech companies that that account for over 5 percent of a telco’s average peak traffic. That plan includes no government involvement or oversight — just a massive wad of cash thrown annually at telecoms with minimal accountability. This is their ideal vision: just billions in unaccountable dollars and euros funneled from tech to telecom under the pretense of progress.

If Trump wins the Presidency, I think there’s an extremely good chance the FCC finally makes the telecom tax on big tech come true. Likely under the guidance of Commissioner Brendan Carr (who has never seen an AT&T idea he didn’t like). That we should reform and audit the billions in regulatory favors and subsidies already thrown at companies like AT&T curiously never enters into frame.

Filed Under: ACP, affordabile access, big tech, big telecom, digital divide, fcc, subsidies, telecom, usf

Wanna Make Big Tech Monopolies Even Worse? Kill Section 230

from the this-will-make-the-problem-you-think-you're-fixing-worse dept

It’s no fun when your friends ask you to take sides in their disputes. The plans for every dinner party, wedding, and even funeral arrive at a juncture where you find yourself thinking, “Dang, if I invite her, then he won’t come.”

It’s even less fun when you’re running an online community, from a groupchat to a Mastodon server (or someday, a Bluesky server), or any other (increasingly cheap and easy) space where your friends (and their friends) can hang out online, far from the unquenchable dumpster-fires of Big Tech social media.

But there’s a circle of hell that’s infinitely worse than being asked to choose sides in a flamewar: being threatened with a lawsuit for refusing to do so (or even for complying with one side’s request over the other).

At EFF, we’ve had decades of direct experience with the, uh, heated rhetoric that attends online disputes (there’s a reason the most famous law about online arguments was coined by the very first person EFF ever hired).

That’s one of the reasons we’re such big fans of Section 230 (47 U.S.C. § 230), a much-maligned, badly misunderstood law that protects people who run online services from being dragged into legal disputes between their users.

Getting sued can profoundly disrupt your life, even if you win. Much of the time, people on the receiving end of legal threats are forced to settle because they can’t afford to defend themselves in court. There’s a whole cottage industry of legal bullies who’ll help the thin-skinned, vindictive and deep-pocketed to silence their critics.

That’s why we were so alarmed to see a bill introduced in the House Energy and Commerce Committee that would sunset Section 230 as of December 31, 2025, with no provision to protect online service providers from being conscripted into their users’ online disputes and the legal battles that arise from them.

Homely places on the internet aren’t just a curiosity anymore, nor are they merely a hangover from the Web 1.0 era.

In an age of resurgent anti-monopoly activism, small online communities, either standing on their own, or joined in loose “federations,” are the best chance we have to escape Big Tech’s relentless surveillance and clumsy, unaccountable control.

Look, running online communities is already a thankless task that can convert a generous digital host into a bitter _ex_-online host.

The alternatives to Big Tech come from individuals, co-ops, nonprofits and startups. These cannot exist in a world where we change the law to make people who offer a space where communities may gather vulnerable to being dragged into lawsuits between their community members.

It’s one thing to volunteer your time and resources to create a hospitable place online; it’s another thing entirely to assume an uninsurable risk that could jeopardize your life’s savings, your home, and your retirement fund. Defending against a single such case can cost hundreds of thousands of dollars.

That’s very bad news indeed, because a world without Section 230 will desperately need alternatives to Big Tech.

Big Tech has deep pockets, which means that even if it creates a system of hair-trigger moderation that takes down anything remotely controversial on sight, it will still attract a staggering number of legal threats.

There’s a useful analogy here to FTX, the disgraced, fraudulent cryptocurrency exchange. Like Big Tech, FTX has some genuinely aggrieved users, but FTX has also been targeted by opportunistic treasure hunters who have laid claims against the company totaling 23.6 quintillion dollars.

We know what Big Tech will do in a post-230 world, because some of us are already living in that world. Donald Trump signed SESTA-FOSTA into law in 2018. The law was billed as a narrowly targeted measure to make platforms liable for failing to intervene in cases where they were aware of human trafficking. In practice, the law has been used to indiscriminately target consensual sex work, placing sex workers in harm’s way (just as we predicted).

Without Section 230, Big Tech will shoot first, ask questions later when it comes to taking down controversial online speech (like #MeToo or Black Lives Matter). For marginalized users with little social power (again, like #MeToo or Black Lives Matter participants), Big Tech takedowns will be permanent, because Big Tech has no incentive to figure out whether it’s worth hosting their speech.

Meanwhile, for the wealthy and powerful, a post-230 world is one where dictators, war criminals, and fraudsters will have a new, powerful tool to silence their critics.

A post-230 world, in other words, is a world where Big Tech is infinitely worse for the users who already suffer most from the large platforms’ moderation failures.

But it’s also a world where it’s infinitely harder to start an alternative to Big Tech’s gigantic walled gardens.

No wonder tech billionaires support getting rid of Section 230: they understand that their overgrown, universally loathed services are vulnerable to real alternatives.

Four years ago, the Biden Administration declared that promoting competition was a whole-of-government priority (and we cheered). Getting rid of Section 230 will do the opposite: freeze the internet in its current, monopolized state, creating a world where the rule of today’s tech barons is never challenged by a more democratic, user-centric internet.

Republished from the EFF’s Deeplinks blog.

Filed Under: big tech, competition, intermediary liability, section 230

from the be-careful-what-you-wish-for dept

There’s been this weird idea lately, even among people who used to recognize that copyright only empowers the largest gatekeepers, that in the AI world we have to magically flip the script on copyright and use it as a tool to get AI companies to pay for the material they train on. But, as we’ve explained repeatedly, this would be a huge mistake. Even if people are concerned about how AI works, copyright is not the right tool to use here, and the risk of it being used to destroy all sorts of important and useful tools is quite high (ignoring Elon Musk’s prediction that “Digital God” will obsolete all of this).

However, because so many people think that they’re supporting creators and “sticking it” to Big Tech in supporting these copyright lawsuits over AI, I thought it might be useful to play out how this would work in practice. And, spoiler alert, the end result would be a disaster for creators, and a huge benefit to big tech. It’s exactly what we should be fighting against.

And, we know this because we have decades of copyright law and the internet to observe. Copyright law, by its very nature as a monopoly right, has always served the interests of gatekeepers over artists. This is why the most aggressive enforcers of copyright are the very middlemen with long histories of screwing over the actual creatives: the record labels, the TV and movie studios, the book publishers, etc.

This is because the nature of copyright law is such that it is most powerful when a few large entities act as central repositories for the copyrights and can lord around their power and try to force other entities to pay up. This is how the music industry has worked for years, and you can see what’s happened. After years of fighting internet music, it finally devolved into a situation where there are a tiny number of online music services (Spotify, Apple, YouTube, etc.) who cut massive deals with the giant gatekeepers on the other side (the record labels, the performance rights orgs, the collection societies) while the actual creators get pennies.

This is why we’ve said that AI training will never fit neatly into a licensing regime. The almost certain outcome (because it’s what happens every other time a similar situation arises) is that there will be one (possibly two) giant entities who will be designated as the “collection society” with whom AI companies will have to negotiate or to just purchase a “training license” and that entity will then collect a ton of money, much of which will go towards “administration,” and actual artists will… get a tiny bit.

And, because of the nature of training data, which only needs to be collected once, it’s not likely that this will be a recurring payment, but a minuscule one-off for the right to train on the data.

But, given the enormity of the amount of content, and the structure of this kind of thing, the cost will be extremely high for the AI companies (a few pennies for every creator online can add up in aggregate), meaning that only the biggest of big tech will be able to afford it.

In other words, the end result of a win in this kind of litigation (or, if Congress decides to act to achieve something similar) would be the further locking-in of the biggest companies. Google, Meta, and OpenAI (with Microsoft’s money) can afford the license, and will toss off a tiny one-time payment to creators (while whatever collection society there is takes a big cut for administration).

And then all of the actually interesting smaller companies and open source models are screwed.

End result? More lock-in of the biggest of big tech in exchange for… a few pennies for creators?

That’s not a beneficial outcome. It’s a horrible outcome. It will not just limit innovation, but it will massively limit competition and provide an even bigger benefit to the biggest incumbents.

Filed Under: ai, big tech, copyright, licensing, monopolies

Trump FCC Pick Nathan Simington Wants You To Think Net Neutrality Is A Secret Cabal By Big Tech To ‘Censor Conservatives’

from the things-just-keep-getting-dumber dept

Wed, Oct 4th 2023 05:20am - Karl Bode

The modern authoritarian GOP knows its radical policies are widely unpopular, which is why it increasingly needs to rely on propaganda. That’s also why the party pretends that absolutely any effort to moderate online political propaganda is “censorship.” With young voters turning away from the GOP in record numbers, propaganda, gerrymandering, and race-baiting anti-democratic bullshit is all the party has.

It’s an argument that bleeds into pretty much everything these days, even net neutrality.

After the Biden FCC last week announced it would be restoring net neutrality, Trump FCC pick Nathan Simington came out with a rambling missive claiming that efforts to keep Comcast from screwing you over is, you guessed it, somehow an attempt to censor conservatives. Net neutrality is, Simington claims, secretly a way to help “big tech” censor poor, unheard right wingers:

“The leaders of Big Tech companies have anointed themselves the arbiters of which ideas are allowed to be expressed and which are not. These companies are, without a doubt, the biggest threat against freedom of speech that our country has faced in decades.”

So one, you’ll notice that Simington is incapable of talking honestly about telecom monopoly power and his party’s 40 year track record of coddling it. But his core thesis, that this is all secretly a favor to “big tech,” simply isn’t true. Why not? Because “big tech” companies documentably stopped caring about net neutrality a long time ago.

While Google used to care about net neutrality, it stopped somewhere around 2010. Once Netflix became successful, it too vocally stopped caring about net neutrality somewhere around 2017. While these companies originally supported net neutrality, once they became big and powerful they simply stopped caring. Facebook never cared, and long actively opposed net neutrality.

The GOP knows this, they just think (or hope) that you’re stupid.

Simington also tries to argue that because the internet didn’t explode into a rainbow of bright colors after the 2017 repeal of net neutrality (which required the use of fake and dead people to pretend the repeal had public support), that the consumer protection rules must not have mattered:

“It has now been nearly six years since we repealed the net neutrality rules, and as far as I know, no one has died yet, nor have any other of the solemnly predicted catastrophes come to pass.”

Folks opposed to basic consumer protection love to make this claim, but they’re actively ignoring that big telecom didn’t behave worse post repeal because numerous states rushed in to pass state level laws. Companies like Comcast didn’t want to implement major anti-competitive practices on their network, because they now risk running afoul of state net neutrality laws all along the west coast.

This gets conflated into “gosh, our removal of federal guidelines must not have mattered,” which is misleading bullshit. The FCC repeal of net neutrality didn’t just kill net neutrality rules, it gutted much of the FCC’s consumer protection authority. The GOP’s repeal even tried to ban states from protecting broadband consumers entirely, an effort the courts have subsequently shot down.

Focus on what matters: Net neutrality rules were imperfect, stopgap efforts to keep giant telecom monopolies from using their power over internet access to harm consumers and competitors. If you don’t support net neutrality, what’s your solution for concentrated telecom monopoly power? The GOP actively supports concentrated telecom monopoly power. There are 40 years of documentable evidence.

From Simington’s missive, do you gather he cares one fleeting shit about the problems created by telecom monopoly power? The high costs? They slow speeds? The patchy access in rural markets? The comically terrible customer service? The refusal of ISPs to upgrade poor, minority neighborhoods?

Simington can’t even be bothered to actually discuss the actual issue he’s trying to counter. Because what the modern GOP cares about is protecting its own power, and, at the moment, that requires propping up the delusion that anything the GOP doesn’t like is somehow “big tech censorship.” Even some basic, popular consumer protections designed to protect the public from big telecom.

Filed Under: big tech, broadband, fcc, high speed internet, nathan simington, net neutrality, propaganda

AT&T Once Again Wants ‘Big Tech’ To Pay For Broadband Upgrades

from the sorry-you-have-no-credibility-here dept

Thu, Sep 14th 2023 05:23am - Karl Bode

For decades AT&T has sought to shovel its broadband network upgrade costs on to the shoulders of other companies. It was the primary catalyst for the net neutrality wars, after AT&T made it clear it wanted to (ab)use its monopoly over broadband access to force companies like Google to pay an extra troll toll if they wanted their traffic to reach AT&T customers.

In recent years AT&T’s tactics have shifted.

The FCC’s Universal Service Fund (USF) program historically involves a small surcharge on voice and broadband lines that helps pay for broadband to rural schools and unserved regions. The program has been facing a shortfall thanks to the death of the landline, forcing many to suggest expanding the contribution base to include tech giants like Netflix, Google, and Facebook.

The FCC is having conversations about how to shore up the contribution base so funding for the program remains stable. AT&T, unsurprisingly, has been quick to enter those conversations with enthusiastic support for making tech giants pay for broadband upgrades. From the company’s policy blog:

“the biggest winners in today’s internet ecosystem should lead the way in funding its realization.

Contributions from large technology companies, edge service providers, and others that directly benefit from the nation’s universal service goals will ensure the fund is big enough to continue to support American connectivity needs and the USF’s objectives.”

As an aside, I’m impressed that AT&T policy folks wrote a blog post on this subject without accusing companies like Netflix and Google of “getting a free ride” on the internet, which suggests a more subtle approach by AT&T. Some variant of that claim almost always gets included in these arguments.

Here’s the problem.

A major reason U.S. broadband access is so spotty is that regional monopolies like AT&T spent decades attacking competitors, suing governments, undermining consumer protection regulators, effectively defrauding the government, refusing to upgrade old DSL lines in marginalized neighborhoods, and generally dismantling absolutely any effort that might encroach on the company’s monopoly power.

All while getting untold billions of dollars in regulatory favors (like the death of net neutrality and broadband privacy protections), subsidies, and massive tax breaks — often in exchange for network upgrades that are somehow always half-completed.

The reason U.S. broadband remains spotty, sluggish, and expensive in 2023 is concentrated monopoly power and the corrupt politicians who protect it (see: the entirety of the GOP, and a sizeable chunk of the DNC). Yet somehow when it comes time for the FCC to shore up the USF and expand access to affordable broadband, cracking down on monopoly power never even enters the conversation.

It’s literally not mentioned by careerist U.S. policymakers. As in, never.

The GOP has loyally protected America’s broadband monopoly problem for forty years. But even Democratic FCC officials like Jessica Rosenworcel, often heralded for her quest to “bridge the digital divide,” seem afraid to even acknowledge America’s obvious broadband monopoly problem (as of just a few years ago, something like 83 percent of U.S. households lived under a broadband monopoly).

Because AT&T is so tethered to both our first responder and domestic intelligence gathering apparatus, regulators are genuinely afraid to hold the politically powerful company accountable for much of anything. Needless to say, you can’t fix a problem you refuse to acknowledge.

Yeah, the USF needs updating. Yeah, having tech companies throw some of their untold billions at rural broadband deployment isn’t the worst idea (they routinely set piles of money on fire for far dumber ventures). That said, none of those efforts will fix U.S. broadband if policymakers don’t first take direct aim at concentrated monopoly power, and reform existing subsidy programs that have spent decades throwing billions at companies for AT&T, often in exchange for bupkis.

Filed Under: big tech, broadband, digital divide, high speed internet, telecom tax, usf
Companies: at&t, google, meta

US Broadband Monopolies Once Again Push Idea That Tech Giants Should Pay Them Billions For No Reason

from the please-pay-me-twice-for-no-reason dept

Mon, Jun 26th 2023 05:28am - Karl Bode

We’ve noted several times how European telecom giants have somehow convinced European policymakers that technology giants like Netflix and Google should annually give them billions of dollars… for no coherent reason.

The proposal is dressed up to sound like a sensible adult policy aimed at shoring up broadband access to the downtrodden. In reality it’s net neutrality 2.0: telecom giants using their leverage and power politically to try and offload network build and maintenance costs to someone else. Namely you, since companies like Netflix and Google will simply pass on the cost of this cash grab to consumers.

Emboldened by the success telecom lobbyists are seeing in the EU and South Korea, telecom lobbyists are trying to revisit the idea here in the states. Captured telecom regulators like the FCC’s Brendan Carr have been seeding lies in the US press for a few years about how tech giants are lazy free riders gobbling up bandwidth, and it’s only fair they give telecom monopolies billions for no reason.

We’ve examined how that’s bullshit in great detail, repeatedly, but that obviously doesn’t matter to lobbyists paid to be intractable.

Case in point: Jonathan Spalter, the CEO of AT&T’s pet lobbying and policy group, USTelecom, penned a blog post once again making the case that AT&T and companies like it are somehow owed billions of dollars by tech giants. He, again, pushes the lie that because services like Netflix and Google use up a big chunk of overall internet bandwidth, those companies aren’t “funding critical infrastructure”:

Today, six companies account for half of all internet traffic worldwide. These six companies have a combined market cap of $9 trillion. It’s a far cry from their garage start-up days, and without question, they are tremendous American success stories.

But three decades later, the question is being asked: Does it still make sense that the government and broadband providers alone fund this critical infrastructure? Is there no shared obligation from the primary financial beneficiaries of these networks – the world’s most powerful internet companies?

So again, the lie at the base of this proposal is always that these companies don’t already pay their fair share for bandwidth. That’s been a telecom industry policy lie we’ve spent decades deflating.

In reality, all of these tech companies invest billions in CDNs, undersea cables, transit routes, on top of the money they pay for bandwidth. Some of them, like Google, even own their own residential ISP. From consumers and local businesses to giant tech companies, everybody in the chain already pays more than their fair share for bandwidth. Often too much, in fact.

It’s important to understand that US consumers and businesses all pay telecom giants significantly more for bandwidth than most developed nations thanks to the fact that the US telecom market is heavily consolidated and monopolized by a handful of players, who exploit the lack of competition to drive up costs and saddle users with an absolute ocean in additional bullshit surcharges.

Still, the core lie in the telecom industry proposal is that tech companies somehow get a free ride. But when it comes to concentrated telecom monopoly power, nobody gets a free ride. You pay, and then you pay, and then you pay some more. Everybody pays. Ridiculous sums of money. Often for substandard, patchy service and terrible customer service.

Now there is an adult conversation to be had about whether Netflix, Google, and others could contribute to struggling FCC programs like the Universal Service Fund (USF) that help bring broadband to low income rural schools. The program genuinely is faltering as its primary contribution base, traditional phone service, has waned.

But that’s not what’s happening here despite Spalter’s attempt to wrap his post up in a shell of purported altruism. Whenever companies like AT&T or guys like Spalter actually get around to fielding concrete policy proposals, they unsurprisingly tend to favor telecom interests in dumb and strange ways.

In the EU, for example, telecoms are proposing a system that bypasses government entirely, and just has any company that accounts for more than five percent of an ISP’s peak traffic throw money directly at telecoms. And you can be assured, once AT&T implements its preferred program it won’t be altruistic; it will involve throwing billions more in subsidies at a company with a history of subsidy fraud.

AT&T, Spalter and US Telecom’s primary financial backer, has a long, long history of ripping off taxpayers in a wide number of ways, whether that’s taking millions for networks they never actually complete, getting huge tax breaks for jobs that never arrive, or systematically ripping off school broadband investment programs they then turn around and breathlessly pretend to be worried about.

If you’ve watched telecom giants behave, it’s painfully clear they’re not operating out of empathy for underserved rural school children. Since the net neutrality debate began, their singular goal has always been to double dip on already overpriced and monopolized broadband access, and increasingly offload the costs of upgrading and maintaining their networks to somebody else to please investors.

But if you genuinely want to shore up programs designed to expand U.S. broadband access, a good first step would be to start meaningfully cracking down on monopoly power, which is directly responsible for limited competition and soaring bandwidth costs in the first place. From there, the focus needs to be on cracking down harder on the endless subsidy fraud telecom monopolies have engaged in for decades.

Guys like Brendan Carr or Jonathan Spalter understandably don’t want to talk about the fact U.S. taxpayers have already spent billions on broadband networks that were routinely half delivered by powerful telecom monopolies empowered and coddled by decades of corrupt legislative and regulatory bureaucrats. That’s the core problem; but because these companies are tethered to our domestic surveillance and first responder networks, that conversation is curiously off limits.

If the EU proposal at a “big tech tax” succeeds, you’re going to see a massive, renewed lobbying effort here in the States to implement something similar. And, as Spalter demonstrates, it’s going to come wrapped in a shell of phony altruistic concern about the kind of rural, downtrodden customers AT&T, Comcast, and Verizon have historically and repeatedly shown they didn’t give two shits about.

Filed Under: big tech, big telecom, brendan carr, broadband, digital divide, fcc, high speed internet, jonathan spalter, net neutrality, sending party pays, subsidies, telecom, telecom policy, usf
Companies: at&t, us telecom

Telecoms Detail Their Dumb Plan To Force Tech Giants To Pay Them Billions For No Reason

from the give-me-huge-piles-of-money-for-absolutely-no-reason dept

Tue, May 23rd 2023 05:22am - Karl Bode

The EU is currently proposing a plan to tax Big Tech companies, and throw that money at Big Telecom companies. For no coherent reason.

The proposal is part of the EU’s efforts to craft digital policies for the next few decades. While this is purportedly for “broadband expansion,” it’s not… really. Both EU and U.S. telecoms have a long, proud history of taking billions in subsidies and then pocketing most of the proceeds, leaving everyone in the chain with substandard service.

In reality, the effort is a lobbying gambit by telecom giants once again looking to offload their network deployment and maintenance costs onto somebody else. It’s net neutrality wars 2.0: a dumb telecom gambit to extract money these companies don’t deserve and can’t be trusted with. All pushed by EU Internal Market Commissioner Thierry Breton, himself the former CEO of France Telecom.

Much like the net neutrality fracas of old, the effort generally involves first (falsely) claiming that tech giants eat up an unfair portion of available internet bandwidth, and should therefore pony up a significant chunk of cash to telecoms. Last week, telecom trade groups tried to pitch the EU on a plan that would let them directly tax tech companies that that account for over 5 percent of a telco’s average peak traffic.

Telecom trade groups want to skip any pesky government middleman, and have the money deposited directly from tech giants into their bank accounts:

The GSMA and ETNO seem to want direct payments from tech companies, rather than having tech firms pay into a government-operated fund that would distribute money to ISPs. “A contribution mechanism should be based on commercial negotiations enshrined in a framework that obliges the parties to negotiate, in good faith and based on common EU principles, a fair and reasonable contribution for traffic delivery,” the proposal said.

The problem, of course, is that the entire proposal is bullshit. Tech giants aren’t, of course, getting a “free ride” on the internet. They spend untold billions on their own cloud storage, transit routes, undersea cables, and even (in Google’s case) residential broadband access.

This traffic is also being demanded by consumers, who routinely pay more than their fair share for access thanks to regional telecom monopolization. When it comes to regional telecom monopolies, everybody — from tech giants to the consumer — pay far more than their fair share for access thanks to consolidated telecom power, limited competition, market failure, and incompetent regulators.

Stanford net neutrality expert Barbara van Schewick dropped a statement in my inbox pointing to a broader blog post on the proposal, noting that this was, once again, telecoms attempting to get paid twice for the same service:

“This dangerous proposal undoes 30 years of internet economics by requiring streaming companies like Twitch and YouTube, as well as service providers like Amazon Web Services to negotiate with and pay every broadband provider in Europe.

These network fees are unnecessary and violate the EU’s net neutrality law. Europeans already pay to get online, but now the ISPs want to get paid twice.”

As we saw in the older net neutrality wars, policymakers and the press have been fooled into treating this entire project as a serious, adult policy proposal instead of the transparent cash grab it actually is. Telecoms have always been envious of “Big Tech’s” fat ad revenues, and have always believed they’re inherently somehow owed a massive cut of their revenues. Even if that makes no sense.

Telecom lobbyists, and the captured regulators who love them, want everybody bogged down in policy minutiae that treats this stuff like a serious proposal. They’ve already convinced captured EU regulators that imposing errant fees on tech giants has nothing to do with net neutrality and therefore doesn’t violate existing net neutrality rules, which is absurd.

Telecoms have also successfully implemented a regulatory system in South Korea where ISPs feel emboldened to sue Netflix for extra money simply because some streaming TV shows are popular. If the EU proposal is successful, you can absolutely expect a similar renewed push here in the States (some captured U.S. regulators have been laying the groundwork for several years).

The end result: bigger revenues for telecoms, and higher broadband and internet service costs for everybody else. All because some giant telecom monopolies wanted to be paid even more money for what’s already routinely substandard service.

Filed Under: big tech, big telecom, eu, fair share, net neutrality
Companies: etno, google, gsma, meta

One More Time With Feeling: The GOP Never Seriously Supported ‘Antitrust Reform’ Or Monopoly Busting

from the past-is-prologue dept

Wed, Apr 26th 2023 05:23am - Karl Bode

For the last few years, press and policy circles were absolutely dominated by talk about how there was an amazing “new, bipartisan coalition” of folks interested in “reining in ‘Big Tech’,” meaningfully checking corporate power, and finally embracing competent “antitrust reform.”

The problem: it was largely all bullshit.

The GOP in particular, which has, for forty years, embraced and encouraged monopolization and consolidation at nearly every turn (see: telecom, banking, insurance, media, healthcare, air travel, energy, etc.), was repeatedly portrayed by some pundits and journalists as “very serious about antitrust reform this time.”

At least as it applied to “Big Tech.” There are countless U.S. business sectors where monopolies and anticompetitive behaviors are rampant that Congress simply couldn’t give any less of a shit about because crowing wildly about them generally doesn’t get you a prime-time spot on corporation-controlled cable news. Legitimate anger at “Big Tech” did provide an opening for dialogue.

For years, many of these same experts quite correctly pointed out that U.S. antitrust reform had grown toothless and frail, our competition laws desperately needed updating in the Amazon era, and “are consumers happy?” (the traditional consumer welfare standard) no longer meaningfully measured all aspects of potential harm in complex internet-connected markets.

The problem: the GOP’s interest in antitrust reform was never really genuine. Politicians like Senators Josh Hawley or Ted Cruz glommed onto a legitimate reform movement primarily to gain leverage over Silicon Valley tech giants, hoping (pretty successfully, as it turns out) to scare them away from moderating the kind of race-baiting hate speech and political propaganda increasingly employed by America’s growing conspiracy theory addled authoritarians.

Some folks, like popular monopoly buster Matt Stoller — the subject of a somewhat glowing profile piece in Politico last week — meaningfully bought into Hawley’s claim he actually cared about the public interest on this subject. The most generous interpretation is that Stoller saw it as an opportunity to develop a meaningful new bipartisan coalition on antitrust reform.

It didn’t go particularly well, something that anybody with even a fleeting grasp of fifty years of GOP policy history probably could have predicted:

For some of Stoller’s critics, the episode put in sharp relief the folly of his attempt to celebrate Hawley’s antitrust work. About ten days after the Capitol riot, a software engineer with his own interest in antitrust built a website — “Why Did Matt Stoller Shut Up About Josh Hawley Dot Com” — complete with a countdown clock noting that Stoller had tweeted about Hawley just before midnight on the 5th but not since.

Politico’s interpretation is that legitimizing and validating the GOP’s hollow performance on antitrust reform was somehow a helpful means to an end, and that, as a result, Stoller has been “winning over Conservatives” despite some strange looks cast his direction by other trustbusters:

The Hawley gambit is part of a broader effort to build a bipartisan consensus around the idea that government should use its might to challenge the power of big business. And amid what some on the right are calling the “Realignment,” which has some conservatives and Republicans reevaluating their orientation toward corporate power, he has a fresh opportunity to do just that.

The problem, again, is that the GOP was never actually interested in “reevaluating their orientation toward corporate power,” and claiming otherwise gave the party unearned policy credibility in the media and policy circles it never had to actually earn.

There’s fleeting evidence the GOP was every actually interested in any of the policy reforms Stoller and friends claimed they were shifting toward.

GOP party leaders are still out there, week after week, defending monopolization across countless sectors, dismantling the regulatory state, undermining the nominations of hugely popular reformers, stacking the courts to the benefit of large corporations, and coddling the most radical whims of unchecked corporate power across nearly every industry.

So unsurprisingly, not much ever actually came from the GOP’s sudden and completely uncharacteristic support of antitrust reform, despite two straight years of sound and fury by Stoller, Glenn Greenwald, and some major news outlets like Politico.

The results were some, sloppy bills, several specifically tailored to only apply to the biggest tech companies, which failed to gain necessary traction in Congress despite endless press rhetoric about a bold new “bipartisan” coalition that was destined to change everything. All while the GOP saw relatively little coverage of efforts like its propaganda-laden assault on FCC nominee Gigi Sohn.

To be clear, despite the press narrative to the contrary, I don’t think either party is particularly serious about antitrust reform. Congress is simply too grotesquely corrupt, and the combined cross-industry lobbying opposition to meaningful reform (see: consumer privacy) is too gargantuan to be overcome without a massive policy and cultural sea change, serious and unified lobbying and campaign finance reform, and an historic, voter-driven upheaval of the affluent, captured, congressional gerontocracy.

By absolutely every indication, we’ll all be waiting a while.

Some key Democrats, like Katie Porter and Lina Khan, do at least actually care about the issue. Some key Republicans, like Ken Buck, kind of care, but are so mired in bigoted partisan fever dreams (see his threat to use antitrust to punish “woke Apple” or his tendency to shoot his own legislation in the ass via strange missteps) he’s effectively useless as any kind of serious reformer.

The peril of taking the GOP seriously on this subject came with a nasty side effect: it normalized and legitimized insurrectionist pseudo-populists like Hawley, who were able to hide their real agendas — namely their assault on content moderation of increasingly unhinged authoritarian propaganda — under the banner of legitimate interest in anti-monopolization and antitrust reform.

That’s not to say there’s no value in bipartisan coalition building, or that even the most corrupt policy makers can never change their stripes. But that’s a far cry from what happened here: the legitimization and normalization of increasingly unhinged authoritarian bullshit artists with a generation-long history of supporting unchecked corporate power on nearly every level.

You needed only look at the last 50 years of GOP policy history to see how this gambit was going to turn out, something ignored by folks like Stoller (whose not so “progressive” China hawkery is ignored by Politico), keen on creating an illusory bipartisan coalition that never actually was.

Filed Under: antitrust reform, big tech, josh hawley, matt stoller, monopolies, monopoly busting, ted cruz, telecom

Meta Correctly Calls The EU Plan To Impose A Broadband Tax On ‘Big Tech’ Arbitrary Nonsense

from the please-pay-us-billions-of-additional-dollars-for-no-coherent-reason dept

Mon, Apr 3rd 2023 05:18am - Karl Bode

In case you’d missed it, the EU is currently proposing a telecom-industry backed plan to effectively tax Big Tech companies, and throw that money at Big Telecom companies for broadband expansion.

On the surface, the proposal is part of the EU’s efforts to craft digital policies for the next few decades, with an eye on shoring up lagging broadband access.

In reality, the effort is a lobbying gambit by telecom giants looking to offload their network deployment and maintenance costs onto somebody else. All being pushed by EU Internal Market Commissioner Thierry Breton, himself a former CEO of France Telecom.

It’s effectively an extension of the net neutrality wars, in which telecom monopolies insisted they should be paid even more money if you want to access their networks — for no coherent reason.

We’ve repeatedly noted there are several problems with the proposal. One, the whole effort is based on the lie that Big Tech companies “don’t pay their fair share” for broadband (in reality they pay countless billions for bandwidth, cloud storage, CDNs, transit, and even undersea cables). Two, it’s being driven by telecom monopolies with long, rich histories of bullshit on this subject (not to mention subsidy fraud).

It’s effectively yet another effort by the telecom lobby to “double dip,” dressed up as a serious, adult policy proposal. But throwing billions of dollars at telecom monopolies (without reforming existing broadband subsidy programs) in the hopes that this just magically fixes the digital divide this time is a fool’s errand. Yet here we are, having learned nothing from decades of policy experience.

Both Google and Netflix have come out swinging against the EU’s Big Tech tax, pointing out how the claim they “don’t pay their fair share” and should be directly responsible for paying to bridge the digital divide is telecom industry nonsense.

And now Meta’s Kevin Salvadori, VP of Network, and Bruno Cendon Martin, Senior Director of Wireless Technologies, have issued a blog post also pointing out that Facebook has spent more than $100 billion of capital expenditures and operational expenditures on global digital infrastructure:

proposals by some European telecom operators to impose network fees on Content Application Providers (CAPs) such as Meta are not the solution. Network fee proposals are built on a false premise because they do not recognise the value that CAPs create for the digital ecosystem, nor the investments we make in the infrastructure that underpins it.

Facebook/Meta has no shortage of dumb problems (including clumsy and sometimes predatory missteps on efforts to shore up global broadband access), but they’re correct here.

While broadband subsidy programs in the U.S. and EU do need shoring up, that shouldn’t necessarily be the job of Big Tech companies. Especially given that, in both the EU and U.S., telecom monopolies have routinely driven up the cost of essential broadband access for everyone through regulatory capture and relentless attacks on disruptive competition.

When it comes to telecom monopolies, nobody gets a “free ride.”

Some groups have warned that the EU’s telecom industry’s plan to tax Big Tech giants would simply drive up online costs for consumers, given Big Tech companies would just pass these added costs on to users already paying an arm and a leg for bandwidth. Some groups have warned the internet could also become less stable as online companies try to reroute their traffic around such fees.

And in South Korea, where telecoms convinced regulators to implement a similar tax on Big Tech companies, ISPs have taken to suing Netflix simply because Squid Game was popular with consumers and that resulted in a bandwidth consumption spike.

Content companies and consumers already pay an arm and a leg for bandwidth due to corruption, regulatory capture, and monopolization. It’s the telecoms’ responsibility to use that money — in addition to the billions in taxpayer subsidies they already get — to ensure their networks are ready for customer bandwidth demands. Suggesting it’s Netflix’s fault because you weren’t prepared is preposterous.

Again, if policymakers were serious about bridging the digital divide, they’d embrace policies that take aim at concentrated telecom monopoly power. They’d reform telecom subsidy programs that, for decades, have thrown billions of unaccountable dollars at these monopolies in exchange for networks that are always only half completed. And they’d more seriously police fraud by major telecoms.

Forcing tech giants to pay telecom giants billions of dollars for no coherent reason isn’t actually a solution for the digital divide, but telecom lobbyists have convinced many captured regulators otherwise. And if the push in the EU is successful, you can be absolutely assured it will see a renewed push in the U.S. by the likes of AT&T and Comcast, with captured regulators like the FCC’s Brendan Carr at the fore.

Filed Under: big tech, digital divide, eu, high speed internet, lobbying, net neutrality, regulatory capture, sender pays, telecom, thierry breton