Search Results for: harms

Yesterday, the US Court of Appeals for the District of Columbia released its decision [186 pages, pdf] in Mozilla v. FCC, better known as the challenge to the FCC’s Restoring Internet Freedom order.

A few excerpts are notable from my initial read. Among the first paragraphs is this summary:

Petitioners––an array of Internet companies, non-profits, state and local governments, and other entities––bring a host of challenges to the 2018 Order. We find their objections unconvincing for the most part, though we vacate one portion of the 2018 Order and remand for further proceedings on three discrete points.

On the question of broadband investment being inhibited by heavy-handed regulation and being promoted under the FCC’s lighter-touch approach:

We are, in short, unpersuaded by Petitioners’ and Intervenors’ objections to the Commission’s finding and their implicit claim that uncertainties associated with that finding render arbitrary the Commission’s overall judgment—that there are net public policy benefits from reclassification, based not only on a likelihood of increased investment and innovation but also on the absence of any “discernable incremental benefit relative to Title I classification.”

The court discusses the economic analyses at length, including a criticism of “Mozilla does not address shortcomings of the Free Press figures, pinpointed by the agency, including for example its failure to exclude investment abroad.”

As to the benefits of a “light-touch” regulatory approach,

the 2018 Order’s transparency rules—combined with the deterrent effects of “market forces, public opprobrium, and enforcement of the consumer protection laws”—can “mitigate potential harms.”
…
In sum, a “light-touch” approach can in the Commission’s judgment secure Internet openness and encourage innovation at lower cost than the Title II Order, while yielding unique benefits.

The court’s decision is quite readable, as are the 2 concurring opinions and the third appended opinion that concurs in part and dissents in part (with respect to the part of the ruling that vacates the FCC’s preemption of state law. While a number of media accounts seem to suggest that the ruling will allow state-by-state regulation of net neutrality, this is an incorrect reading.

There are discussions throughout the court ruling that appear to be quite relevant to Canada’s regulatory environment.

In “Keeping out of the way”, I wrote: “I continue to look optimistically to the future. As I have written before [such as here and here], the future will be brighter for Canadian innovation if the government would try harder to get out of the way.”

The internet has long been hailed as a means for democratizing the expression of opinions. Everyone has the ability to express themselves on Twitter, on Facebook, on blogs, or in countless chat rooms.

No longer constrained by the availability of a Speaker’s Corner in a public square, on the internet, marginalized voices aren’t subjected to the discretion of a publisher seeking to conserve valuable column inches of newsprint, or limited minutes of airtime. On the internet, you are limited only by the ability to attract eyeballs interested in your perspectives.

And that creates a problem.

In order to attract an audience, people game various systems to improve positioning on search engines, or pay to ‘promote’ their posts on a variety of social media platforms. Because promoter capabilities are seen to be a software feature by the platforms (and not a bug), bad actors have been able to use these tools to spread misinformation. Many subscribers have been unable to differentiate between trusted sources of information and some commentators have charged that this influenced the results of the 2016 elections in the United States.

As a result, democracies around the world are turning their minds to the issue of regulating the kinds of communications being expressed on the internet. Earlier this week, the UK government issued its Online Harms White Paper.

In the wrong hands the internet can be used to spread terrorist and other illegal or harmful content, undermine civil discourse, and abuse or bully other people. Online harms are widespread and can have serious consequences.
…
This White Paper therefore puts forward ambitious plans for a new system of accountability and oversight for tech companies, moving far beyond self-regulation. A new regulatory framework for online safety will make clear companies’ responsibilities to keep UK users, particularly children, safer online with the most robust action to counter illegal content and activity.

The UK plan envisions an independent regulator to set safety standards and reporting requirements and armed with enforcement powers.

The UK White Paper has a section on The Duty of Care:

7.4 As indication of their compliance with their overarching duty of care to keep users safe, we envisage that, where relevant, companies in scope will:

• Ensure their relevant terms and conditions meet standards set by the regulator and reflect the codes of practice as appropriate.
• Enforce their own relevant terms and conditions effectively and consistently.
• Prevent known terrorist or CSEA content being made available to users.
• Take prompt, transparent and effective action following user reporting.
• Support law enforcement investigations to bring criminals who break the law online to justice.
• Direct users who have suffered harm to support.
• Regularly review their efforts in tackling harm and adapt their internal processes to drive continuous improvement.

7.5 To help achieve these outcomes, we expect the regulator to develop codes of practice that set out:

• Steps to ensure products and services are safe by design.
• Guidance about how to ensure terms of use are adequate and are understood by users when they sign up to use the service.
• Measures to ensure that reporting processes and processes for moderating content and activity are transparent and effective.
• Steps to ensure harmful content or activity is dealt with rapidly.
• Processes that allow users to appeal the removal of content or other responses, in order to protect users’ rights online.
• Steps to ensure that users who have experienced harm are directed to, and receive, adequate support.
• Steps to monitor, evaluate and improve the effectiveness of their processes.

It is clear that not all illegal content on the internet can be policed using conventional methods. For example, how can we deal with content that hosted in another country that violates our laws?

In its White Paper, the UK is consulting on the need to have some extraordinary tools to deal with the global nature of communications and the “particularly serious nature of some of the harms”.

• Disruption of business activities. In the event of extremely serious breaches, such as a company failing to take action to stop terrorist use of their services, it may be appropriate to force third party companies to withdraw any service they provide that directly or indirectly facilitates access to the services of the first company, such as search results, app stores, or links on social media posts. These measures would need to be compatible with the European Convention on Human Rights.
• ISP blocking. Internet Service Provider (ISP) blocking of non-compliant websites or apps – essentially blocking companies’ platforms from being accessible in the UK – could be an enforcement option of last resort. This option would only be considered where a company has committed serious, repeated and egregious violations of the outcome requirements for illegal harms, failing to maintain basic standards after repeated warnings and notices of improvement. Deploying such an option would be a decision for the independent regulator alone. While we recognise that this would have technical limitations, it could have sufficient impact to act as a powerful deterrent. The British Board of Film Classification (BBFC) will have this power to address non-compliance when the requirements for age verification on online pornography sites come into force. We are exploring a range of options in this space, from a requirement on ISPs to block websites or apps following notification by the regulator, through to the regulator issuing a list of companies that have committed serious, repeated and egregious violations, which ISPs could choose to block on a voluntary basis.
• Senior management liability. We are exploring possible options to create new liability for individual senior managers. This would mean certain individuals would be held personally accountable in the event of a major breach of the statutory duty of care. This could involve personal liability for civil fines, or could even extend to criminal liability. In financial services, the introduction of the Senior Managers & Certification Regime has driven a culture change in risk management in the sector. Another recent example of government action is establishing corporate offences of failure to prevent the criminal facilitation of tax evasion. Recent changes to the Privacy and Electronic Communications Regulations (PECR) provide powers to assign liability to a specific person or position within an organisation. However, this is as yet largely untested. There are a range of options for how this could be applied to companies in scope of the online harms framework, and a number of challenges, such as identifying which roles should be prescribed and whether this can be proportionate for small companies.

The UK White Paper is roughly 100 pages setting out a “vision for online safety, including a new regulatory framework to tackle a broad range of harms”. It appears to be applying serious thought to a serious issue.

There are significant policy issues to be explored. It is difficult to imagine how Canada could conduct a consultation and have a regime in place prior to the next federal election.

Canada’s Minister of Democratic Institutions has been socializing plans for “Safeguarding our Elections” and earlier this week warned “The world’s major social media companies are not doing enough to help Canada combat potential foreign meddling in this October’s elections and the government might have to regulate them”.

Shortly afterwards, Facebook banned a number of Canadian accounts, including one belonging to a former candidate for mayor of Toronto.

If the content of these pages cross the line that defines illegal content, then it is understandable why the pages should be banned.

But what if the content is merely offensive, without being illegal? How do we ensure that actions to block content are consistent with Canada’s Charter of Rights and Freedoms, which guarantees everyone’s “freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication”?

FCC Chairman Ajit Pai was unable to make it to Toronto for The 2017 Canadian Telecom Summit, but he sent a special video message, addressing the conference’s themes of Competition, Innovation and Investment and what the FCC is doing to promote each.

Greetings from Washington, DC, and thank you for this opportunity to address The 2017 Canadian Telecom Summit.

I’m sorry that I cannot be there in person. Mark Goldberg feels like a kindred spirit to me. He’s from Parsons, Kansas and moved to Toronto; I lived in Toronto and eventually moved to Parsons. And the last time I attended, I had the pleasure of listening to and learning from my good friend, former CRTC Commissioner Raj Shoan.

Let me begin by thanking our Canadian counterparts for your long standing friendship and collaboration on telecom issues. Our recent incentive auction is just the latest example. We jointly developed a uniform North American band plan for UHF TV signals and the new 600 MHz wireless band, paving the way for cross-border inter-operability of devices and networks. I look forward to continuing to work together to craft solutions that benefit Americans and Canadians alike.

Now, I see that the theme for this year’s Summit is Competition, Innovation and Investment, so I will take the radical step of talking about Competition, Innovation and Investment and what the FCC is doing to promote each.

Let me start with innovation. We begin with the premise that breakthrough advances are going to come from private sector entrepreneurs, not government policy makers. We want to empower inventors to bring their ideas to life. Now often that just means getting government out of the way. That also means promoting competitive markets and providing key inputs, like spectrum, that aid the incentives to create.

So, what exactly are we doing? For starters, we are reviewing the FCC’s rules across the board, from media to wireline, and deciding which ones still make sense in the digital age. As part of this review we are asking whether the costs of a rule outweigh the benefits. When the facts warrant, we won’t hesitate to revise overly burdensome rules or repeal them altogether. We’ve also put in place a process to ensure that, if an innovator seeks FCC approval of a new technology or service, we’ll make a decision within one year. That’s light-speed in our world.

We also began the process of allowing television broadcasters to use the next generation TV standard, ATSC 3.0, on a voluntary market-driven basis. This standard, which marries the best features of broadcasting and the internet, would allow broadcasters to fully enter the digital era.

On the spectrum front, we moved quickly to open up nearly 11 GHz of spectrum in the bands above 24 GHz for mobile use. This gives operators a clear path to launching 5G and other innovative millimeter wave services in the United States. And we’re currently considering opening up even more of this spectrum.

Now, as we move to 5G, regulators also must recognize something many people often don’t. Innovation isn’t limited to the so-called edge of networks. Innovation within networks is also critical, especially in the mobile space. To realize the digital future, we need smart infrastructure, not dumb pipes.

And that brings me to investment. For almost two decades, the FCC pursued a light touch approach to regulation, one that produced tremendous investment and innovation throughout our entire internet ecosystem, from the core of our networks to providers at the edge. But two years ago, the US Government’s approach suddenly changed. The FCC, on a party-line vote, decided to slap an old regulatory framework, called Title II (after the section of our statute where the rules are found) originally designed in the 1930’s for the Ma Bell telephone monopoly, upon thousands of internet service providers, big and small.

We’ve already begun to see the harms from this shift to more heavy-handed regulation. From 2014 to 2016, the broadband infrastructure investment in the United States dropped, the first decline ever, outside of a recession. Last month, the FCC voted to initiate a process to reverse the Title II decision and seek public input on how to secure the Open Internet that we all favour. I enter this process with an open mind, and we will go where the facts lead us, but I’m confident that this move puts us on the path to more broadband infrastructure investment, which would mean more Americans with high-speed internet access, more jobs building those networks, and more competition, the third topic that I wanted to discuss.

When it comes to competition, small ISPs are critical to meeting consumers hope for a more vibrant broadband marketplace and closing the digital divide. But the simple reality is that the smallest providers simply don’t have the means or the margins to withstand the Title II regulatory onslaught. Now, since we launched our proceeding, 22 small ISPs, each of which has about 1,000 broadband customers or fewer, told the FCC that the Title II order and utility-style regulation had affected their ability to obtain financing. They said that it had slowed, if not halted, the development and deployment of innovative new offerings, which would benefit our customers. And they said that Title II hung like a black cloud over their businesses.

In my first week as Chairman of the FCC, I proposed to relieve small ISPs from costly and overly burdensome reporting requirements associated with the Title II order. Reversing that Title II order altogether would encourage smaller competitors to enter the broadband marketplace or expand their networks. This would mean more competitive choices for the American people.

In short, America’s approach to broadband policy will be practical, not ideological. We’ll embrace what works, and dispense with what doesn’t. That means removing barriers to innovation and investment, instead of creating new ones. That means taking targeted action to address real problems in the marketplace, instead of imposing broad preemptive regulations. And that means respecting principles of economics, physics and law, and acting with humility as we regulate one of the most dynamic marketplaces history has ever known. This vision will unleash the massive investments that the digital world demands.

I am proud to reaffirm my nation’s commitment to promoting more competition, innovation and investment.

And I look forward to working with all of you to bring the benefits of the digital revolution to the people of Canada and the United States.

Thank you very much.

As the CRTC continues its process to develop a Code of Conduct for the Wireless industry, yesterday it released a draft Code working document, once again inviting the public to comment on it.

There is a section that caught my eye because of an inconsistency.

In Section D3, under the heading of “Contract cancellation, expiration, and renewal”, there is a complex paragraph that describes an option under consideration for the calculation of early termination fees (Option 2 of D3.3). I have inserted two additional line breaks to make the section easier to read:

Early termination fees may apply to fixed-term and monthly wireless services as follows.

{line break inserted}Fixed-Term Service: If the consumer received an economic incentive and cancels the fixed-term service before the end of the commitment period, the cancellation fee may not exceed the sum of (1) the price of the services provided up to the effective cancellation date, and (2) any remaining economic incentive balance. The service provider automatically reduces the economic incentive balance by an equal amount each month over the commitment period. This reduction equals the value of the economic incentive for that fixed-term service divided by the number of months in the commitment period, and the cancellation fee can therefore be calculated using the following formula: (Economic Incentive) x (Number of Contract Months Remaining/Total Months in the Contract).

{line break inserted} If the consumer did not receive an economic incentive and cancels their fixed-term service before the end of the commitment period, the cancellation fee will be the sum of (1) the price of the services provided up to the effective cancellation date, and (2) the lesser of $50 or 10% of the monthly rate for unexpired months of the commitment period.

I understand the payback of the economic incentive portion. In effect, the CRTC is setting up the free phone offer or the discount on a phone as a kind of zero interest payment plan over the life of the contract. If you leave the carrier early, then you have to pay the remaining balance on the device.

If you didn’t get a phone or other upfront incentive, then you have to buy-out the remaining term of the service commitment, by paying $50 or a 10% of the service fees times the number of months remaining.

But notice: there is no service penalty for customers who got an upfront incentive. They pay off the phone if they leave early, but they don’t have to pay an additional $50 or 10%  of the remaining balance on the service portion.

Why would you ever pay full price for a phone again? In fact, why would you ever buy a phone from anyone other than a phone carrier that offers a discount?

Was it the intent of the CRTC to end the sale of devices without subsidy, or did the CRTC fail to repeat the service portion of the early termination fee?

While some people may superficially view this as a consumer benefit, it is worth considering the alternative. View the device subsidy as a separate transaction from the service contract. Do you want the device “financed” by the carrier – no problem; or, shop around for the device – maybe the electronics stores will also offer financing or low enough prices to make the purchase from them more compelling. Then negotiate your services deal. Maybe you pay $5-10 a month less if you agree to a longer term contract and you separate the device discount from that discussion.

Would such a scenario lead to lower services prices for people who don’t get a new phone from the service provider with each contract?

The current reading of the termination fees could lead to unintended consequences that harms the sale of devices from independent electronics stores. These independent retailers help discipline the price of replacement phones, for those of us who drop them in the lake or leave them in the seat-back of planes.

Indeed, there could be a negative impact on the “no-contract” offers from alternate carriers that do not offer device subsidies. Will this ultimately lead to an increase in the price of devices?

Or was this just a typo?

Earlier this week, some reports suggested the EU is launching an investigation into internet traffic throttling and blocking. I read the source material differently. To me, this looks more like talk than action

First off, let’s remember that for the past 18 months or so, Canada has led the world in having an actual net neutrality regulatory framework in place.

The Associated Press reports that the EU has asked its member countries to investigate whether ISPs block or slow traffic in a way that harms consumers.

If national telecommunications regulators find that providers are not transparent enough about how they manage their services or make it too difficult for users to switch, the European Commission, the EU’s executive, may propose new legislation to protect the principle of “net neutrality.”

But there is already an acknowledgment from the EU that some traffic is OK to be managed:

In its report Tuesday, the Commission says “it is widely accepted” that providers have to slow down some services to allow others to work.

“A consumer’s experience is not affected if an email reaches him a few seconds after it has been sent, whereas a similar delay to a voice communication would cause it to be significantly degraded, if not rendered entirely useless,” the Commission said.

Another report suggests that the exercise may be to develop a “name and shame” list.

Be sure to review the actual releases from the European Commission, including the press release on ISP transparency, the briefing remarks, and the communication from the Commission to the European Parliament [pdf, 157 KB].

There is a recognition of the need to permit operators to determine their own business models, while seeking to offer consumers choice and the ability to easily switch service providers if they are not satisfied with their access to lawful content.

Any additional regulation should avoid deterring investment, or innovative business models, lead to a more efficient use of the networks and to creating new business opportunities at different levels of the internet value chain while reserving for consumers the advantages of a choice of internet access products tailored to their needs.

The briefing remarks seem to indicate that Commissioner Neelie Kroes would ideally like to see market forces used to enable consumer choice.

If I am not satisfied that consumers can counteract such practices by switching providers, I will not hesitate to introduce more stringent measures. That could be in the form of more prescriptive guidance, or even legislation if it is needed.

We’ll see how this investigation translates into new legislation or operator codes of conduct.