Tales of the Sausage Factory:
Apple v. Pepper: Can Illinois Brick Survive Ohio v. Amex, or Is Antitrust On Two Sided-Platforms Possible or Effectively Dead?

Last term the Supreme Court decided Ohio v. American Express, an antitrust case in which the Supreme Court held that when analyzing whether conduct harmed consumers (and is thus a cognizable injury under the antitrust laws based on the current “consumer welfare standard“), if the object of the case is a two-sided market, the Court must analyze both sides of the market, i.e., the consumer facing side and the merchant facing side, to determine if the conduct causes harm. If vertical restraints on the merchant side of the platform produce benefits to consumers on the other side, then the restraints do not violate the antitrust law — even if they prevent new competitors from successfully emerging. In Ohio v. Amex, the court reasoned that an “anti-steering provision” that prevented merchants from directing consumers to other credit cards with lower swipe fees (the amount a merchant pays the card) was offset by Amex providing benefits such as travel services (at least to platinum members) and various discount and loyalty reward programs. The court found this consumer benefit offset the cost to merchants of the higher swipe fees (as the dissent observed, the majority did not address the finding of the district court that these higher swipe fees were passed on to consumers in the form of overall higher prices).

While Ohio v. Amex dealt with credit cards, folks like Lena Kahn have argued that because digital platforms such as Facebook are also “two-sided markets,” this decision will make it extremely difficult to go after digital platforms. As long as the company justifies its conduct by pointing to a consumer benefit, such as giving the product away for free (or selling at a reduced cost in the case of companies like Amazon), it is hard to understand what harm to the folks on the other side of the market will satisfy the consumer welfare standard. Or, in other words, it would appear under Ohio v. Amex that even if a firm like Amazon or Facebook does things to prevent a competitor or extract monopoly rents from the non-consumer side, as long as consumers benefit in some way everything is cool.

Others have argued, however, that we should not read Ohio v. Amex as bleakly as this. Since the majority did not address the findings of the district court, the majority did not rule out that exercise of market power over the merchant side could never cause harm to consumers and thus violate the consumer welfare standard. Rather, taking the decision at face value, those more optimistic about the future of antitrust and two-sided markets maintain that the district court erred in Amex by focusing on the harm to competition, rather than how that harm directly impacted consumers (again, the dissent points out the district court did focus on the harm to consumers, but the majority makes no comment on these findings, so there is no negative case law about whether a merchant voluntarily passing on the higher swipe fees in overall higher prices is a cognizable harm).

Recently, the Supreme Court heard argument in Apple v. Pepper.  As I explain below, although Apple v. Pepper addresses standing rather than a finding of a violation of the antitrust law itself, it should provide further guidance on whether antitrust law remains relevant in the era of two-sided markets. More below . . . .

Some Background On Apple v. Pepper.

As just about everyone in the universe knows, Apple makes the iPhone and controls what applications (apps) can be loaded on the iPhone through control of the Apple “App Store.” Apple controls a substantial share of the smart phone market generally and, of importance here, Apple controls virtually the entire iPhone app market through access to its app store and control over the operating system, IOS. Critically, Apple takes a 30% commission for every app sold through its app store. 

Plaintiffs here are Apple customers, rather than app developers, so they represent the customer side of the platform. They claim to suffer harm because Apple, which exercises monopoly power over compatible applications through its control of the platform, imposes conditions that jack up the price of the applications. Assuming one can prove harm in a two-sided market, and assuming the court either accepts that iPhones are their own market or that they have sufficient market share to exercise market power over application developers, this would seem to satisfy the analysis in Amex. Consumers pay more than they would in a competitive market, consumers are bringing the action, and if the other elements of the antitrust law are satisfied, then it is an antitrust violation. So while antitrust actions may be harder to bring against two-sided platforms in a post-Amex world, it is not actually dead yet.

Hitting the Illinois Brick Wall.

The problem with this theory, as the district court found, is the 1977 Supreme Court Case Illinois Brick Co. v. Illinois. In that case, purchasers of buildings tried to sue the company that sold bricks to local area construction companies for violating the antitrust law and driving up the price of bricks. The Supreme Court ruled that those indirectly harmed by a violation of the antitrust laws did not have standing to sue, even if they suffered from the higher prices as a result. (“Standing” is a legal concept about who can bring a case. I won’t try to explain it here. Suffice it to say that no standing means you can’t bring the lawsuit.) Although the construction companies had standing because they had a direct relation with the company allegedly violating the antitrust law, the customers of the construction companies did not. Even though the construction companies passed through the higher prices to consumers (thus satisfying harm to consumers under the “consumer welfare” standard), the Illinois Brick Court ruled that Congress did not intend to allow antitrust law suits to proceed on a theory of “pass through” harm. Accordingly, an indirect purchaser, such as the purchasers of buildings made with the more expensive bricks, have no standing and cannot bring the antitrust case.

Apple argues that the iPhone customers are indirect customers of Apple and direct customers of the application developers. Because Apple operates a “two-sided market,” it allows app developers to set the price of the applications. Under this theory, Apple negotiates with the app developer for access to the Apple platform. The app developer then sells the application directly to the iPhone customer — with the App Store merely acting as an agent of the application developers. Apple collects the total fee, deducts its commission, and passes the rest back to the developer. The iPhone customers therefore lack standing to bring the case against Apple, since Apple is merely passing through the price set by the app developers the same way the construction companies passed through the price of the bricks.

The iPhone customers argue that Apple has a direct relationship with the iPhone customers, not merely with the application developers. Under their theory, Apple is much to involved in actually setting the terms under which the app developers will set the price and sell their goods. As an initial matter, these customers buy their applications via the Apple app store (unlike the purchasers of buildings in Illinois Brick, who had no direct contact with the brick manufacturer). Given that Apple controls so many aspects of the pricing and sale of the apps, the iPhone customers argue that they have a direct relationship with Apple as well as with the app developers, and therefore have standing to sue under the antitrust statute.

Implications For Future Antitrust Action In An Increasingly Two-Sided World.

Although no one directly mentioned Ohio v. Amex, this case has significant implications for the future of antitrust law and whether the Supreme Court is serious about looking at “both sides” of the two-sided platform. As the iPhone customers noted, this does not require the Court to overrule Illinois Brick. It requires the Court to recognize that — at least under the correct set of circumstances — the operator of the two-sided platform has a direct relationship with both the customer side and the merchant side of the two-sided platform, and can be held accountable for imposing conditions on the merchant side that make the platform a true middleman and not merely a pass through agent of the merchant. If the Court agrees with the iPhone customers, it provides a road map for antitrust lawsuits in the wake of Ohio v. Amex. Instead of focusing exclusively on the limitations imposed by the platform on the merchant side, antitrust lawsuits against two-sided markets such as Google or Facebook must focus on the level of control the two-sided platform exercises the relationship with the customer. If the platform exercises a sufficient level of control over the customer purchase of the product or service, then it is subject to an antitrust claim. While complicated, such an approach would at least be workable. True, the case before the Court merely permits the action to go forward. But if the Court sides with the Ninth Circuit Court of Appeals (and observers say that that is how the Court appeared to be leaning at oral argument) and allows the case to continue, we will at least know what kind of case antitrust plaintiffs need to show in order to mount a successful challenge to conduct by dominant two-sided market platforms.

On the other hand, if the Court sides with Apple and the district court (and the government, which filed an amicus brief in support of Apple; Thanks guys!) and determines that two-sided markets such as Apple are merely agents passing through the price set by the app developers on the other side of the platform, then it becomes extremely difficult to imagine what set of circumstances under existing antitrust law supports an action. On the one hand, consumers most show they are harmed by the platform’s control over merchants. On the other hand, if such harm is simply “pass through” from which Congress did not intend to allow a recovery, then what sort of harm satisfies the twin conditions of (a) impacting consumers; but, (b) subject to remedy under the antitrust laws as direct harm rather than merely pass through harm?

Conclusion

The good news is that, based on most press reports, oral argument went well for the iPhone customers. While one should always be wary of trying to read too much into oral argument, the majority of justices who asked questions seemed to favor allowing the case to go forward. On the other hand, even if the case does go forward, we still don’t know what evidence will satisfy the Court’s two-sided market examination. The fact that antitrust law would recognize a harm to consumers by a platform based on its control over merchants does not tell us the elements of the analysis, and how plaintiffs must account for the arguably pro-consumer impacts of the restraints on the merchant side.

Still, it is better to have some way forward than no way forward. Whatever happens, those interested in antitrust in the digital age will want to look very carefully at the outcome of Apple v. Pepper. It would be a shame for antitrust to hit an Illinois Brick wall just when we need it most.

Stay tuned . . . .

Tales of the Sausage Factory:
Tumblr, Consolidation and The Gentrification of Internet.

Tumblr recently announced it will ban adult content.  Although partially in response to the discovery of a number of communities posting child pornography and subsequent ban of the Tumblr ap from the extremely important Apple ap store, a former engineer at Tumblr told Vox the change has been in works for months. The change was mandated by Tumblr’s corporate parent Verizon (which acquired Tumblr when it acquired Yahoo! after Yahoo! acquired it back in 2013. Why did Verizon want to ban adult content on Tumblr after 11 years? According to the same Vox article, it new ban is an effort to attract greater advertising revenue. Tumblr has a reputation for adult content which translates to advertisers as “porn” (unfairly, in the view of Tumblr’s supporters), and advertisers don’t like their products associated with pornography (or other types of controversial content.)

 

I can’t blame Verizon for wanting to make more money from Tumblr. But the rendering of Tumblr “safe for work” (and therefore safe for more mainstream advertising) illustrates one of the often under-appreciated problems of widespread content and platform consolidation. Sites that become popular because they allow communities or content that challenge conventional standards become targets for acquisition. Once acquired, the acquirer seeks to expand the attractiveness of the platform for advertisers and more mainstream audiences. Like a gentrifying neighborhood, the authentic and sometimes dangerous character rapidly smoothes out to become more palatable — forcing the original community to either conform to the new domesticated normal or try to find somewhere else to go. And, as with gentrification, while this may appear to have limited impact, the widespread trends ultimately impact us all.

 

I explain more below . . . .

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Tales of the Sausage Factory:
Pai Continues Radical Deregulation Agenda. Next On The Menu — SMS Texting and Short Codes

In December 2007, Public Knowledge (joined by several other public interest groups] filed a Petition For Declaratory Ruling asking the Federal Communications Commission (FCC) to clarify that both SMS Text Messaging and short codes are “Title II” telecommunications services. Put another way, we asked the FCC to reaffirm the basic statutory language that if you use telephones and the telephone network to send information from one telephone number to another, it meets the definition of “telecommunications service.” (47 U.S.C. 153(53)) We did this because earlier in 2007 Verizon had blocked NARAL from using its short code for political action alerts. While we thought there might be some question about short codes, it seemed pretty obvious from reading the statute that when you send “information between or among points of the users choosing, without change in the form or content as sent and received” (definition of “telecommunications”), over the phone network, using phone numbers that it is a “telecommunications service.”

 

Sigh.

 

On the anniversary of the repeal of net neutrality, FCC Chair Ajit Pai now proposes another goodie for carriers – classifying both short codes and text messages as Title I “information service” rather than a Title II telecommunications service. As this is even more ridiculous than last year’s reclassification of broadband as Title I, the draft Order relies primarily on the false claim that classifying text messaging as Title I is an anti-robocall measure. As we at PK pointed out a bunch of times when the wireless carriers first raised this argument back in 2008 – this is utter nonsense. Email, the archetypal Title I information service, is (as Pai himself pointed out over here) chock full of spam. Furthermore, as Pai pointed out last month, the rise in robocalls to mobile phones has nothing to do with regulatory classification and is primarily due to the carriers not implementing existing technical fixes. (And, as the Wall St J explained in this article, robocallers have figured out how to get paid just for connecting to a live number whether or not you answer, which involves a kind of arbitrage that does not work for text messages.)

 

As if that were not enough, the FCC issued a declaratory ruling in 2015, reaffirmed in 2016, that carriers may block unwanted calls or texts despite being Title II common carriers. There is absolutely nothing, nada, zip, zero, that classifying text messages as Title II does that makes it harder to combat spam. By contrast, Title II does prevent a bunch of blocking of wanted text messages as an anticompetitive conduct which we have already seen (and which is occurring fairly regularly on a daily basis, based on the record in the relevant FCC proceeding (08-7). This includes blocking immigrants rights groups, blocking health alerts, blocking information about legal medical marijuana, and blocking competing services. We should therefore treat the claims by industry and the FCC that only by classifying text messaging as “information services” can we save consumers from a rising tide of spam for what they are – self-serving nonsense designed to justify stripping away the few remaining enforceable consumer rights.

 

Once again, beyond the obvious free expression concerns and competition concerns, playing cutesy games with regulatory definitions will have a bunch of unintended consequences that the draft order either shrugs off or fails to consider. Notably:

 

  1. Classifying texting as Title I will take revenue away from the Universal Service Fund (USF). This will further undermine funds to support rural broadband.

 

  1. Classifying texting as Title I disrupts the current automatic roaming framework established by the FCC in 2007.

 

  1. Classifying texting as Title I may, ironically, take it out of the jurisdiction of the Robocall statute (Telephone Consumer Protection Act (TCPA) of 1991).

 

  1. Trashing whatever consumer protections, we have for text messages, and taking one more step to total administrative repeal of Title II completely. Which sounds like fun if you are a carrier but leaves us operating without a safety net for our critical communications infrastructure (as I’ve been writing about for almost ten years).

 

I unpack all of this below.

 

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Tales of the Sausage Factory:
We Need To Fix Media, Not Just Social Media — Part III

This is part of a continuing series of mine on platform regulation published by my employer, Public Knowledge. You can find the whole series here. You can find the original of this blog post here. This blog post is Part 3 of a three part series on media and social media. Part 1 is here, Part 2 is here. This version includes recommendations that are my own, and have not been reviewed by, or endorsed by, Public Knowledge.

 

And now . . . after more than 6,000 words of background and build up . . . my big reveal on how to fix the problems in media! You’re welcome.

 

Somewhat more seriously, I’ve spent a lot of time in Part 1 and Part 2 reviewing the overall history of the last 150 years of how technology and journalism inter-relate  because two critically important themes jump out. First, the evolution in communications technology always results in massive changes to the nature of journalism by enabling new forms of journalism and new business models. Sometimes these changes are positive, sometimes negative. But the dominance of the large media corporations financing news production and distribution through advertising revenue is not a natural law of the universe or necessarily the best thing for journalism and democracy. The Internet generally, and digital platforms such as news aggregators and social media specifically, are neither the solution to the dominance of corporate media as optimists hoped it would be or the source of all media’s problems as some people seem to think. Digital platforms are tools, and they have the same promise to utterly revolutionize both the nature of journalism and the business of generating and distributing news as the telegraph or the television.

 

In Part 2, I looked at how activists and journalists connected to social media used these tools in ways that changed the way in which the public observed the events unfolding in Ferguson in 2014, and how this challenged the traditional media narrative around race and policing in America. Combining the lessons from this case study with the broader lessons of history, I have a set of specific policy recommendations that address both the continued solvency of the business of journalism and steps to regain public trust in journalism.

 

More below . . .

 

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Tales of the Sausage Factory:
Why You Should Treat Any Predictions About Telecom/Tech Policy in 2019 Skeptically.

Under Section 217, Paragraph (b), sub (1) of the “wonk code of conduct,” I am required to provide some immediate analysis on what the election means for my area of expertise (telecom/tech, if you were wondering). So here goes.

 

  1. Everyone will still pretend to care deeply about the digital divide, particularly the rural digital divide.
  2. The MPAA, RIAA and all the usual suspects are probably already shopping their wish lists. This is great news to any recently elected member of staffer who was worried about needing to get tickets to “Fantastic Beasts” or whatever other blockbuster they will screen at MPAA HQ.
  3. Everyone will still talk about the vital importance of “winning” the “race to 5G” while having no clue what that actually means.

These predictions rank up there with “New England Patriots will play football, and everyone outside of New England will hate them” or “The media will spend more time covering celebrity ‘feuds’ than on major health crises like the famine in Yemen or Ebola outbreak in Congo.” They are more like natural laws of the universe than actual predictions. As for substance, y’all remember that Trillion dollar infrastructure bill Trump was gonna do in 2017? I suspect predictions about how federal policy is going to sort itself out will be just as reliable.

 

Why? Because at this stage there are just too many dang meta-questions unresolved. So rather than try to predict things, I will explain what pieces need to fall into place first.

 

Also, it’s worth noting that we had action on the state level that impacts tech and telecom. Start with Phil Weiser winning the election for State AG in Colorado. As Jon Oliver recently pointed out, don’t underestimate the importance of state AGs. This is particularly true for a tech savvy AG in a techie state. Then there is California’s governor-elect Gavin Newsom, who tried to address the digital divide as Mayor of San Francisco with a community wireless network back when people were trying that. Will he continue to make digital divide a major issue? But I’ll stick to my forte of federal policy for the moment.

 

Anyway, rather than try to predict what the policy will be, here’s what is going to have clarify first.

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Tales of the Sausage Factory:
We Need To Fix News Media, Not Just Social Media — Part II

This is part of a continuing series of mine on platform regulation published by my employer, Public Knowledge. You can find the whole series here. You can find the original of this blog post here. This blog post is Part 2 of a three part series on media and social media. Part 1 is here.

 

In Part I, I explained why blaming digital platforms generally (and Facebook and Google in particular) for the current dysfunctional news industry and the erosion of public trust in journalism is an incomplete assessment and therefore leads to proposed solutions that do not actually address the underlying problems. To recap briefly, we have seen since the mid-1990s the steady decline in the quality of journalism and increasing public distrust of traditional newspapers and broadcast news. Massive consolidation financed by massive debt prompting an ever smaller number of mega-companies to cut costs by firing reporters and closing news rooms, shifting from hard news (which is more expensive to produce) to infotainment and talking head punditry, and the rise of unabashedly partisan talk radio hosts and cable networks were causing the public to increasingly silo themselves in partisan echo chambers. The relentless drive of these media giants to use the news to cross-promote their products, the increasing perception that the news industry had failed to question the Bush Administration’s justification for the invasion of Iraq and general perception that corporate media slanted news coverage to further their corporate or political interests (an impression shared by many reporters as well) all contributed to public distrust with the media and the general decline in consumption of news from traditional outlets long before online advertising was a serious threat to revenue. Finally, the unshakably wrong perception by corporate media that the public have no interest in substantive political coverage (despite numerous surveys to the contrary) prompted an audience hungry for real reporting to look to the emerging Blogosphere and away from traditional journalists.

 

Again, to be clear, there are genuine and serious concerns with regard to the potential gatekeeper and market power of social media and other digital platforms. The incentive of platforms to encourage “engagement” – whether by inspiring agreement or inspiring anger – warps both news reporting and news consumption. This incentive encourages these platforms to promote extreme headlines, hyper-partisanship, and radicalization, which in turn encourages those trying to attract readers to increasingly move to ever more extreme language and positions. These problems require a set of their own solutions, which I will reserve for a future installment. In this post, I want to focus on how we can begin to repair the problems with our dysfunctional news industry and the crisis of trust undermining journalism.

 

More Below . . .

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Tales of the Sausage Factory:
Hurricane Michael A Wake Up Call On Why Total Dereg of Telecom A Very Bad Idea.

Readers of Harry Potter should be familiar with Cornelius Fudge, the Minister of Magic who refuses to believe Voldemort will return because believing that would require taking precautions and generally upsetting lots of powerful and important people. Instead of preparing for Voldemort’s return, Fudge runs a smear campaign to discredit Potter and Dumbledore, delaying the Wizarding World from preparing to resist Voldemort until too late.

 

I was reminded of this when I read Federal Communications Commission (FCC) Chairman Ajit Pai’s statement of frustration with the slow pace of restoring communications in the Florida in the wake of Hurricane Michael. Pai explicitly echoes similar sentiments of Florida Governor Rick Scott, that carriers are not moving quickly enough to restore vital communications services. Pai is calling on carriers not to charge customers for October and to allow customers to switch to rival carriers without early termination fees.

 

What neither Pai nor Scott mention is their own roll in creating this sorry state of affairs. Their radical deregulation of the telephone industry, despite the lessons of previous natural disasters such as Hurricane Sandy, guaranteed that providers would chose to cut costs and increase profits rather than invest in hardening networks or emergency preparedness. That is how markets actually work in the real world (as opposed to in the delightful dereg fantasy land dreamed up by hired economists). But rather than take precautions that might annoy or upset powerful special interests, they chose to mock the warnings as the panic of “Chicken Little, Ducky Lucky and Loosey Goosey proclaiming that the sky was falling.”

 

Now, however, the Chicken Littles come home to roost and, as predicted, private market incentives have not prompted carriers to prepare adequately for a massive natural disaster. This result was not only predictable, it was predicted — and mocked. So now, like Cornelius Fudge, Chairman Pai and Governor Scott find themselves confronted with the disaster scenario they stubbornly refused to believe in or safeguard against. And while I do not expect this to change Pai’s mind, this ought to be a wake up call to the 37 states that have eliminated direct regulatory oversight of their communications industry that they might want to reconsider.

 

Still, as Public Knowledge is both suing the FCC to reverse its November 2017 deregulation Order, and has Petitioned the FCC to reconsider its June 2018 further deregulation Order, perhaps the FCC will take this opportunity to rethink the certainty with which it proclaimed that carrier’s have so much incentive to keep their customers that they would never cut corners and risk service going down. Or perhaps Congress will now pay attention and decide that their constituents need enforceable rights and real protections rather than promises and platitudes.

 

I provide a lot more detail below.

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Tales of the Sausage Factory:
The FCC Decides Rural America Has Too Many Broadband Options, So They Are Taking Away 5G Spectrum To Give To The Big Guys.

The FCC is about to take spectrum away from rural providers and we are making a last minute effort to stop it. Last week, my employer Public Knowledge sent a letter to FCC Chairman Ajit Pai asking him to change the draft Order altering the rules for the “Citizen’s Broadband Radio Service” (CBRS) to keep several of the old rules in place. Specifically, we want the FCC to keep at least some license areas at census tract size, rather than making them bigger and therefore unaffordable for small providers like wireless ISPs (WISPs). We also want the FCC to keep “use or share,” a rule that says that if the licensee is not using a piece of their license area it becomes open for general use on an unlicensed basis until the licensee actually starts using it. We’re also asking the FCC to leave the license terms at 3 years with no expectation it will be renewed (that is to say, it gets re-auctioned at the end of 3 years) rather than go to 10-year terms with an expectation of renewal. Finally, if the FCC is going to change the terms of the licenses as proposed, they need to have some meaningful build out obligations to ensure that rural areas get served.

 

I explain all this below, as well as linking to this nifty tool so you can contact your member of Congress and ask them to tell the FCC to leave rural America some useful spectrum so those who actually want to serve rural America can do so.

More below . . . .

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Tales of the Sausage Factory:
The Upcoming IPAWS “Presidential Level Alert” Test Is Not A Trump Thing — Really.

There is a bunch of hysteria running rampant about the September 20, 2018 test of the “Presidential Level Alert” functionality of the Wireless Emergency Alert System (WEA), which is part of the Integrated Public Alert Warning System (IPAWS).  (See FEMA Notice of Alert Here.) The thrust of the concerns is that Fearless Leader is creating a propaganda system that can blast through all cell phones and no one can opt out.

 

I ask everyone to please calm down. The fact that it is called a “Presidential Alert” has nothing to do with Trump. This all goes back to The Warning, Alert, Response Network Act (WARN Act) of 2006 (and tweaked by the Integrated Public Alert and Warning System Act of 2015).  That Act required that we integrate the old Emergency Alert System (EAS) which is on broadcast and cable with a newly created wireless emergency alert system (WEA) so that we could take advantage of the emerging communications technology (texting in 2006, broadened in 2015) to warn people in advance of disasters.

 

Most emergency alerts are local. Indeed, the primary challenge of EAS and WEA in the last few years has been focused on trying to get as narrowly targeted and hyper-local as possible, so that people who are not impacted don’t receive false alerts, while people who are impacted receive real-time instructions. There is also a long term element about incorporating new technologies capable of handling multi-lingual warnings (and not just Spanish) and other potentially life saving capabilities (such as locating the nearest evacuation shelter).

 

However, one element is the creation of an integrated national emergency alert system in the highly unlikely event that we might have some kind of national level disaster that requires immediate real-time communication of one set of instructions on a national basis. Prior to the WARN Act, such as capacity did not exist. It has now been developed, but it has never been tested on a national basis before. The test of this capability was scheduled for September 20, 2018 well before Hurricane Florence became a concern.

 

This absolutely has nothing to do with Trump. The WARN Act mandates that while users may opt out of other alerts, they may not opt out of  “Presidential Level Alerts.” This was decided way back in 2006, when Congress determined that people should not be able to opt out of anything so important that it triggers a nation-wide alert (although, annoyingly, they did give wireless carriers freedom to opt out of WEA entirely, which tells you a lot about the priorities of Congress back in 2006). See WARN Act Sec. 602 (b)(2)(E). This was not a choice by the Trump Administration. Nor can the current FCC allow people to opt out of “Presidential Level Alerts.” It’s in the WARN ACT of 2006.

 

The IPAWS Act of 2015 (Sec. 526(d)) further limits IPAWS (including Presidential Level Alerts) to messages relating to “natural disaster, act of terrorism, or other man-made disaster or threat to public safety.) And while it is entirely possible for President Trump to decide that generating support for his reelection campaign relates to either and act of terrorism or other man-made disaster, that still wouldn’t be enough to switch on IPAWS. As with many things, the request goes down the chain of command, with lots of safeguards along the way to prevent abuse of the system. Remember, this was modified back in 2015 by Republican Senator Ron Johnson when Republicans were convinced Obama was an evil socialist Kenyan out to destroy our way of life. You can bet they they put safeties in place.

 

So please, please stop spreading rumors about this. Please stop treating this as more evidence of Trump overreach with all kinds of possible sinister motives. The President can’t just press a button to send out a text. And while a determined President with enough effort can abuse any system, this is not something Trump can just decide to do with his morning Tweets.

 

We have enough real craziness going on in the world. We do not need to encourage people to freak out about a routine test of life-saving technology, or portray it as an abuse of authority or diversion of funds.

 

FULL DISCLOSURE: I was asked during the Obama Administration to apply to the FEMA IPAWS subcommittee to act as a consumer/privacy advocate (See IPAWS Act of 2015 (b)(2)(I)(IX)). My admission was not formally processed and approved until 2017. I have been an active member of the FEMA-NAC-IPAWS for approximately the last two years. This statement is entirely my own. It does not represent a statement of the FEMA-NAC-IPAWS or any other advisory committee or federal agency. This is just me asking people to stop panicking and resist the urge to see everything in the administration as an abuse of authority. Yes, the times warrant scrutiny. But there is a difference between laudable skepticism and scrutiny v. panic and conspiracy theory.

 

Stay tuned . . . .

Tales of the Sausage Factory:
Verizon California Throttling Mistake Shows How Radical Pai’s Repeal Order Really Was.

Congress created the Federal Communications Commission (FCC) in order to ensure we would have working communications infrastructure for, among other things, handling public safety. It says so right up front in Section 1 of the Communications Act. This critical authority has allowed the FCC to do things like impose 911 obligations on VOIP providers before Congress got around to it, and even set up the original High Cost and Lifeline Programs before Congress got around to it. So you would think that when Verizon throttled the Santa Clara Fire Department’s mobile broadband connection for coordinating response to the Mendocino Complex Fire — the largest wildfire in California history — that the FCC would naturally be all over it.

 

The vast and mighty silence you hear is the utter lack of response by the FCC — for the simple reason that last December the FCC utterly, completely and totally divested itself of all authority over broadband. This was, as I and others pointed out at the time, utterly, completely and totally unprecedented. Regardless of classification, every single FCC chairman prior to Ajit Pai asserted authority over broadband to prevent exactly this kind of disaster. Under Michael Powell and Kevin Martin it would be under Title I ancillary authority. Under Julius Genachowski and Tom Wheeler (prior to reclassifying broadband as Title II in February 2015), it would have been under Section 706. Under Ajit Pai — bupkis.

 

Which leaves us with a major problem. How the heck do we stop this (and other potential failures of our broadband infrastructure) from happening again when the agency Congress actually directed to handle this has decided to abdicate its responsibility entirely? I have been preaching for nearly 10 years now that Title II authority over broadband is absolutely necessary to protect and manage our critical communications infrastructure. As I keep saying, this goes way beyond net neutrality. As broadband becomes integrated into everything in our lives – including public safety – there needs to be someone other than a group of unaccountable private companies looking out for the public interest. Because, as this event demonstrates, we are not just talking about ‘Netflix and cat videos’ or about ‘innovation’ or any of the other industry deflections. We are talking about stuff that literally impacts people’s lives. According to this report from NPR, the Verizon incident occurred just at the moment firefighters were deploying to stop the Mendocino Complex Fire. It’s impossible to determine just how much this screwed things up and whether the fire could have been better contained at the outset if throttling hadn’t knocked out their entire command-and-control for hours at the outset. But it is certainly safe to say that the first few hours of organizing to contain a wildfire are critical, and having your ISP throttle your command center broadband connection down to effectively useless is like trying to organize a parade while wearing a blindfold, earplugs and a gag over your mouth.

 

Happily, we have an easy answer to the question of “how do we make sure someone is responsible from preventing these kinds of screw ups going forward.” Congress needs to vote the CRA and force the FCC to take back authority for broadband. Or, if you’re California and don’t like seeing your state literally go up in flames while on hold with customer support, then you need to pass SB 822 — the California net neutrality bill. Anything else is literally fiddling around while California burns.

 

Lots more below . . .

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