THE BLOG
10/24/2007 08:19 pm ET Updated May 25, 2011

Silence of the Regulatory Lambs

There was an itty-bitty story in the New York Times this morning (Wed.). There was a similar itty-bitty story (in the print version of the Washington Post -- a longer one online). They were, on the whole, disappointing. Miracles should really be given more coverage.

The story came out of the office of the Attorney General in the state of New York, Andrew Cuomo. Unusual for the telecommunications industry, Cuomo had actually brought Verizon to task for misleading consumers. It seems as if Verizon's "unlimited" cellular data plan really wasn't "unlimited." Customers were misled, and the company was called to account, at least a little, for its actions.

In principle the allegation was fairly straightforward. The agreement noted: "A customer who saw an advertisement for 'unlimited' internet access would not expect the service to have categorical limitations on usage or quantitative data usage caps." And yet, some customers exceeded the mythical caps. Over the last three years, Verizon disconnected 13,851 customers around the country for going over usage limits they never knew existed. Granted the $1 million Verizon will pay to reimburse customers and the $150,000 in penalties and fees to the state is lunch money for a company that size, but they also had to stop the deceptive advertising. That's significant.

"This settlement sends a message to companies large and small answering the growing consumer demand for wireless services. When consumers are promised an'unlimited' service, they do not expect the promise to be broken by hidden limitations," said Cuomo. "Consumers must be treated fairly and honestly. Delivering a product is simply not enough - the promises must be delivered as well."

Now then, let's stand back a minute and see if any of our Federal regulators have applied such a principle in areas over which the Federal Communications Commission (FCC) or the Federal Trade Commission (FTC) have jurisdiction. That would be a no.

There was the case not long ago as reported in the Post of a woman whose Comcast Internet service was cut off for using too much bandwidth. There was no way the woman could have known she had a limit. The Comcast terms and conditions say nothing about any limits on usage. Instead, the service descriptions posted on Comcast's web site advise customers: "For restrictions, minimum requirements and details about service and prices, call 1-800-Comcast." So we did, and talked to a nice customer service representative in Silver Spring, MD. We asked the simple question: "Are there any limits on how much you can download?" The reply: "No."

Did any vigilant regulators take a look at this story and inquire what else might be going on? Did the FTC, which has jurisdiction over deceptive trade practices, and which has been trying desperately to find room for itself in Internet issues, so much as bat an eye? Not that has been seen publicly.

And what about the FCC, which has jurisdiction over all sorts of things? Did they do anything when wireless customers were misled? That would be another no. One could argue that deceptive trade practice is outside of the jurisdiction of the FCC. We could give that one a pass. But how about something much more serious?

Not long ago, Verizon blocked the group NARAL Pro-Choice America from getting the short codes necessary for the group to send text messages to its members. The New York Times put the story on the front page. After first defending its practices, Verizon backed off. Has the Commission said anything about this? No, it hasn't shown an interest, even though the issue is squarely in its wheelhouse.

The FCC regulates wireless services. It doesn't regulate broadband wireless services. Text messaging isn't a broadband service, as Marjorie Heins from the Free Expression Policy Project points out. The FCC shouldn't depend on page-one stories in a newspaper to guarantee consumers' rights. It should step in and, at the least, figure out what happened, see what other carriers are doing, and give some guidance as to what is acceptable and what is not. Senators Byron Dorgan (D-ND) and Olympia Snowe (R-ME) have asked FCC Chairman Kevin Martin what role the FCC has in the text messaging scandal.

The FCC has similarly been silent on the latest act of anti-consumer activities -- Comcast's throttling of customers using BitTorrent, Gnutella and, if this is to be believed, Lotus Notes. The first two are peer-to-peer services that are good for shipping around large filed. Comcast has admitted using hacker-like technology to stop, or to delay, data transfers. Comcast had its computers send instructions as if coming from the downloaders and uploaders to stop the transaction.

Investigations by the Associated Press and Electronic Frontier Foundation found that some of the files being stopped were as small as 4 mb and that there was nothing obvious in the records of the users Comcast affected that warranted their targeting. Comcast admitted doing the throttling in the name of network management -- of wanting to have the best service for the most people.

That's a laudable goal. Using "spoofing" to accomplish it isn't a laudable method. Targeting specific applications isn't laudable. In fact, it appears as if the actions might have violated the FCC's vaunted policy principles of Internet freedom from September 23, 2005. Here are a couple of relevant ones:

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to access the lawful Internet content of their choice.

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement."

We know this is an issue about Net Neutrality, about which the Commission does not care. But is Comcast's throttling of traffic a violation of the principles that do exist? Does the Commission even care about those? From these regulatory lambs we have not heard a peep.