I’ll refer readers back to last week’s comment on this topic, even though the news has moved on a little. That item was about telcos lobbying for a change in laws regarding user data, whereas today’s news is about the Senate pushing through a bill that would enact the change, but the issues are the same. At root, the telcos have argued that they shouldn’t be regulated more tightly than the internet companies that already gather and sell lots of data on users, and that therefore regulations introduced last year should be overturned. Of course, both web companies and other entities like data brokers already gather, aggregate, and sell masses of user data, so there’s some merit to the argument that telcos shouldn’t be the only ones singled out here. ISPs have also argued that they’ve voluntarily agreed to codes of conduct which would bind them in similar ways without this regulation. Regardless, the optics of a move such as this bill are terrible both for the ISPs and for the (mostly Republican) senators who have backed it.
CTIA, which is the industry association that represents the largest US wireless carriers, is arguing before the FCC that it shouldn’t be subjected to new rules on sharing data it collects on its users. The carriers have argued that Google and other online service providers aren’t subject to the same rules (those companies are regulated primarily by the FTC rather than the FCC) and so for consistency’s sake the carriers should be treated the same way. This is really about a technical definition of the word “sensitive” – clearly the kind of data being talked about here is indeed enormously sensitive, but the real question is how disclosure of that data is regulated. This matters because, for example, AT&T as a fiber broadband carrier in certain parts of the country has offered a service discount for customers who consent to tracking of their web browsing history and so on, something which it argues Google does all the time without explicitly asking for users’ permission to do. What the carriers are arguing here is that it should be allowed to continue to do this kind of thing without having to ask users to opt in first. The carriers look likely to win given the current hands-off policy stance of the FCC, which means more erosion of user privacy for users, but the proper approach would be for the FTC and FCC to work together to craft a set of consistent rules that would apply to all players that get access to similar data, rather than each regulating in a vacuum.
via Ars Technica
1 million NYC homes can’t get Verizon FiOS, so the city just sued Verizon – Ars Technica (Mar 14, 2017)
This is a long-running dispute between Verizon and the city of New York over whether or not Verizon has lived up to a 2008 agreement that required it to “pass” all the households in NYC by 2014. Verizon says it has done so, because the definition of passing a building is to run fiber close enough that it could be hooked up to homes if building owners give permission, while the city is arguing that passing means actually hooking up the homes. The disconnect here is that most of New York is made up of apartment buildings where landlords and not tenants get to determine whether or not a telco or cable company can run fiber into the building to connect individual apartments. In many cases, landlords have existing exclusive agreements with another provider or simply don’t want the disruption of a new fiber build, so they resist. Verizon says it can’t be held responsible for not providing fiber in those situations and has asked the city to help persuade landlords to open up their buildings. The reality is likely somewhere in the middle – yes, Verizon has struggled to get landlords to agree to Fios installations, but it probably also hasn’t tried as hard as it might and likely also has some other buildings where it could hook up service but hasn’t. This is the flip side of the AT&T story I covered the other day – either cities don’t require any specific commitment to connect households and then there are complaints about favoring wealthier neighborhoods, or they do extract those commitments and then end up fighting over whether they’ve been met.
via Ars Technica
California DMV: Humans soon no longer required in self-driving cars – San Francisco Chronicle (Mar 10, 2017)
Michigan’s autonomous driving laws already allow testing of cars without drivers, and given that these two states are home to much of the testing going on, California clearly feels it needs to keep up. Those Michigan laws assume that carmakers are going to comply with all applicable regulations, and therefore require that any testing is done by or in partnership with those carmakers, while the proposed California law has no such restrictions (logical given the biggest local testers are tech companies and now legacy automakers). In both cases, the states are deferring somewhat to the National Highway Traffic Safety Administration to set the overall rules and to some extent approve cars for autonomous driving without a driver. This Chronicle piece quotes a spokesperson from Consumer Watchdog, which has been particularly harsh (perhaps deservedly so) on Uber/Otto, but also seems to be one of the main organizations demanding tougher regulation of autonomous driving in general in California. What’s interesting is that there are so few voices on the other side of this rapid push towards autonomous driving.
California and Michigan have to be the two states where the most testing of autonomous vehicle technology is being done, with the former home to most of the tech companies in the space and the latter the home of several legacy automakers. The FT is here citing data from the California DMV, which you can see in its raw form here. What’s fascinating is the mix of companies here, as I’ve said before – there are several traditional carmakers (VW, Mercedes, Nissan, BMW, Honda, Ford, and Subaru), several big names from the tech world (Waymo, Tesla, Uber, Baidu, Faraday Future, and Cruise [now part of GM]), and a variety of other smaller companies. But Waymo has by far the largest number of cars and miles driven (and most accidents). But the California DMV is certainly the source of some of the most interesting data on self-driving testing anywhere in the world right now.
via Financial Times
Uber has issued a statement announcing that it is ceasing the use of its Greyball platform for evading law enforcement and regulators, and that it’s in the process of responding to “organizations” (presumably regulators and law enforcement personnel in the cities where the platform previously did operate) who have enquired about it. This is striking because Uber’s initial response to the New York Times report was brazen in its lack of contrition – it had acted as though it saw nothing wrong, but has clearly now had a change of heart. The wording of today’s announcement certainly seems to concede that it did use the tool for evading regulators in the past, and even suggests it may continue to do so in the near future because of unspecified elements of how it works, which seems bizarre.
This case has been going on for a long time, and is another example of the tensions between US and Chinese tech companies, in the wireless space in particular. Though this case has nothing to do with the concerns about back doors in wireless networks I mentioned in the context of Huawei yesterday, it highlights another concern: that Chinese tech companies have often been willing to sell technology to some of the world’s repressive regimes, and have often had to cover their tracks in order to do so. ZTE got caught doing this in Iran a few years back and the US has taken action over breach of sanctions, as ZTE was incorporating US components. The worst case scenario here was that ZTE would be banned from exporting any US technology to use in its own products, which would have included Qualcomm chips apart from other things and would likely have been devastating. It avoided that outcome, but still has to pay a fine equivalent to its last two years of profits, which is pretty bad by itself. None of this is likely to make US wireless carriers more likely to place Chinese smartphones on their premium shelf space.
I think there may have been one day in the past week when there wasn’t some new negative story about Uber, and that’s just based on what I’ve written about here. The latest is reporting from the New York Times that Uber has a program called Greyball which identifies app users who may not be who they seem and serves up fake cars or otherwise obfuscates the real activity going on with drivers in the area. Although there are some legitimate reasons for Uber to do something like this – for a time, competitors were frequently ordering and canceling cars – it was deliberately used to evade law enforcement in places where Uber was breaking local laws. Its statement in the article suggests it sees nothing wrong with this behavior, but characterizes this last scenario as “opponents who collude with officials on secret ‘stings’ meant to entrap drivers”. One might, I suppose, make a similar argument about police running speed traps, but radar detectors are illegal in some places anyway. The legality of what Uber did here isn’t 100% clear, but it’s yet another example of Uber’s disregard for regulations and willingness to do almost anything to flout or circumvent them. On the other hand, it appears Uber’s PR department has lost the will to fight on yet another front and isn’t even disputing this story.
via New York Times
Well, well: a rare case of Uber caving to regulators and doing as they ask. It had seemed as though Uber had given up on San Francisco and California in general when it moved its self-driving Volvos to Arizona late last year, but it now appears that it is actually going to go through the steps necessary to gain DMV approval for testing self-driving cars in California after all. This all feels like a totally unnecessary rigamarole for all concerned – Uber has likely gained nothing and lost quite a bit of trust as a result of all this, and now it’s back where it started.
During the very brief period when Uber’s self-driving cars were operating in San Francisco, one of them ran a red light. However, the company at the time engaged in some audacious spin and claimed the car was being driven by a human at the time and that the incident just highlighted the benefits of autonomy. Now, however, the Times is reporting that the car was supposed to be driving itself at that time and the human driver merely failed to intervene in a timely fashion. If validation were needed that the California DMV made the right decision when it stopped Uber from testing its cars without a license, here it is. But this is also yet another case of Uber acting like the rules that apply to everyone else don’t apply to it, and outright lying when it gets caught. And that in turn makes it very hard to believe it when it claims it’s in compliance with rules, and it only has itself to blame. What a terrible few weeks for Uber, pretty much all of its own making.
A good reminder that even when an announcement is made, it often takes weeks if not months for it to actually take effect – Uber announced its move from San Francisco to the Phoenix area in December, but only now is it launching self-driving rides for paying customers in Tempe, a Phoenix suburb. In addition, we still have the disingenuous claims from the governor of Arizona that California was somehow not “open to business” for self-driving cars, despite being the home of the biggest trials in the country. The reality is that Uber wouldn’t comply with applicable regulation and made the decision to leave the San Francisco area rather than comply as others have done. For now, that must feel like good news for Uber – it gets to test its cars without the scrutiny or reporting requirements which would have been imposed in San Francisco. But whether this ends up being a good thing for the drivers and pedestrians of Arizona remains to be seen.
I linked to a news item a while back about a Massachusetts bill which was intended to find ways to tax autonomous and electric vehicles, and in doing so talked about the competition that’s emerged between states and municipalities over autonomous driving – some have been welcoming, while some seem determined only to see trials of the technology as a tax revenue opportunity. But the patchwork of regulations and policies across the US is also a major barrier to the launch of production autonomous vehicles, because any vehicle sold in the US needs to be able to drive across state lines. As such, major carmakers are today asking the federal government to do what it can to create a harmonized rather than fragmented regulatory approach across the US. It’s interesting that it’s the major legacy manufacturers rather than newcomers like Tesla, Uber, or Waymo making this request, but they would certainly all benefit if the government listened.
Consumer Watchdog asks California to take Uber’s self-driving trucks off the road – Recode (Feb 9, 2017)
This is what you get when you build a reputation for flouting regulation: people don’t believe you when you claim you’re operating within the bounds of the law. Uber ignored the regulations around its self-driving cars in San Francisco until its DMV registrations were revoked, and now Consumer Watchdog says Uber subsidiary Otto can’t be trusted either when it comes to its self-driving trucks. As I’ve said repeatedly, Uber’s flouting of taxi regulations was a very different animal from its disregard for regulations concerning autonomous vehicles – in the former case, it had consumers on its side and could make a strong argument for increased safety, but that’s certainly not the case when it comes to autonomous vehicles. And yet both its past anti-regulation stances and the San Francisco case will come back to bite it, as they are here. This is when unchecked narratives – especially ones grounded in reality – really become dangerous.
This is bad news for big content service providers like Netflix and Spotify. This first step appears relatively benign, because it’s simply about using services you’ve already bought while traveling through the EU. But it’s the first step down a slippery slope which is explicitly intended to lead to an eventual single “digital market” across the EU. That means no more charging different rates or offering different content by market, regardless of whether the content may be considered more or less compelling in different countries, or whether local spending power is lower (there’s more than a tenfold difference in GDP per capita between the poorest and richest countries in the EU). This will be hardest on video services, which tend to be very country-specific, than on music services (which tend to offer more or less the same catalog everywhere). No wonder the big providers are fighting it.
AT&T and Verizon just got a free pass from the FCC to divide up the internet – The Verge (Feb 3, 2017)
The Verge is what I call a strict net neutrality advocate – the only conception of net neutrality it considers acceptable is one under which there is no prioritization and no differential charging of broadband traffic for any reason. As such, it has taken a hard line on programs like T-Mobile’s Music Freedom and BingeOn programs, and especially on programs such as AT&T’s zero-rating of DirecTV traffic and Verizon’s zero-rating of its Go90 video service. The FCC began looking into these approaches towards the end of last year, but hadn’t reached any final conclusions, and new FCC chair Ajit Pai has now closed the investigations without taking any action except to void the preliminary conclusions that were reached. The FCC’s own NN order from 2015 explicitly contemplated but didn’t ban zero-rating and sponsored data, saying only that it would address these as and when they breached other standards such as “no-unreasonable interference/disadvantage”. It was under that broad remit that the FCC was investigating the carriers in late 2016, but Pai always opposed these investigations and has now closed them down. As I wrote a couple of weeks ago, how you feel about this depends on how strict you feel the definition of net neutrality should be – if, like the Verge, you’re a strict NNer, then you’re outraged, especially because this might be the beginning of a broader dismantling of net neutrality. If you take a narrower view of what NN should mean, this is not a problem per se.
via The Verge
One of those rare occasions when Uber isn’t able to bulldoze its way through local regulations and ultimately gets what it wants (see also Austin, Texas). In this case, it looks like Uber followed its standard playbook of working in a market despite opposition and even fines from a government which wanted better compliance with laws and regulations, but despite some recent concessions wasn’t able to convince the government to let it operate legally. As such, Uber is now backing out of Taiwan, and it’s not clear when it will be allowed back. Uber’s approach ruffles feathers, but it is often able to use pressure from drivers and riders to overturn opposition. Uber often paints those opposing its entry or presence in a market as wanting to thwart progress, and there’s no doubt the Uber experience is often an improvement over what it replaces, but that doesn’t always justify taking a stubborn approach to flouting local regulations, and occasionally that approach backfires. (On the same topic today, Uber is also struggling with regulation in India’s Karnataka province)
FCC Chairman Ajit Pai Scraps Set-Top Proposal – Variety (Jan 31, 2017)
This was inevitable – the STB proposal was one of two issues, along with net neutrality, which the incoming chair of the FCC was expected to dump as he took the helm. And along with net neutrality, these were popular issues championed by consumer rights groups and some big consumer technology companies. However, it’s also true that the impact of ditching these policy issues may not be as widespread as feared – I wrote a piece last week about the real likely impact of net neutrality rules being dismantled, and I’ve always been skeptical that the STB reforms proposed would actually bring about meaningful change in the industry. Previous attempts (see CableCard) had failed, and it wasn’t clear to me that the new approaches would be more user friendly or likely to deliver greater openness around the boxes we get to use to watch TV. Realistically, positive change in the TV market is more likely to come from increasing competitive pressure leading to concessions by major legacy players to the new world order (though we’re not there yet) – and now that the FCC has dropped STB reform that’s the only kind of progress we’ll see regardless.
These numbers get crunched every year, and are always an insight into the sometimes complex relationship between tech companies and the US government, as well as the very different strategies pursued by the various companies – Apple spends far less than some of its peers (less even than Facebook, which is a fraction of its size), while Google is always a big spender. The other thing I’m always struck by is the relatively tiny size of the spending – even Google’s $15.4m lobbying spending is minuscule in the context of its overall business – Apple’s spend was a fraction of a hundredth of a percent of its revenue for the year. It’s also interesting to see which issues the companies lobbied on: Apple lobbied mostly on technical issues directly related to its business, while Google lobbied more broadly on trade and immigration policy as well as several technical topics. All this will obviously potentially get a lot more complicated under the new administration, which has so far had a much more adversarial tone towards big tech companies than its predecessor.
Google Privacy-Policy Change Faces New Scrutiny in EU – WSJ (Jan 24, 2017)
Europe continues to be the locus of a lot of regulatory effort aimed at paring back perceived privacy invasions by big US online advertising companies, notably Facebook and Google. In this case, Oracle is part of a coalition that seeks controls on Google’s tracking of user data, and the focus of the current complaint is the change Google made to its terms and conditions last June, pursuant to which it now combines data on its users across its various services and DoubleClick. No action has been taken yet by European regulators, so this is only a complaint by one of Google’s biggest foes at this point, but this area has proven a thorny one for Facebook already, and could yet become one for Google too.
Trump’s new FCC chief is Ajit Pai, and he wants to destroy net neutrality – The Verge (Jan 23, 2017)
It’s the nature of the beast that all regulatory appointments quickly get seen through the very narrow lens of a single issue that’s important to the tech industry, and that’s the case here. Ajit Pai is, as is the case with the rest of the FCC commissioners, a smart guy with a set of nuanced views on a variety of complex subjects. Yes, he’s clearly going to do what he can to overturn the FCC’s net neutrality rulings, but his time at the FCC will be about far more than that. On net neutrality, how you feel about this appointment will depend on how you feel about net neutrality – not just whether you’re in favor of it in a vague, general sense, but the specifics of what you think it should cover. The reality is that there has never been much danger of the major US broadband providers doing some of the things basic NN regulations would prevent even in the absence of regulation. But there are NN purists who insist that any unequal treatment of traffic is unacceptable, and they likely will be disappointed by what happens under a Pai Commission – AT&T’s preferential treatment of DirecTV content, for example, will definitely be just fine with the incoming FCC. On the other hand, I don’t think we’ll see any carriers blocking competing content or anything else along those lines even if the net neutrality rules are thrown out.