Category: Policy

Go, Monopoly! Go! Go!

Screenshot 2015-11-17 17.02.48

I’m flying across the US today, enjoying in-flight Internet access along the way. Internet access in the sky changes the equation for travellers, particularly for business users, allowing them to stay in touch and productive, despite zipping along at 550mph.

While I’m feeling a bit spoiled by this handy access (and a bit disloyal to GoGo as I post this), the in-flight monopoly reminds me of some of America’s issues with terrestrial Internet access. Up here in the sky, I’ve got one choice, just as most Americans have just one choice for fast Internet access in their homes.

And just as consumers on the ground do by switching providers frequently, or calling for a better price every year, I’ve got to game the billing system in order to get a fair price. In my case, by connecting via VPN in order to buy a flight pass using the Sonic IP, yielding a much lower price than is offered onboard. (Is charging me more once I’m on the plane fair? Maybe @GoGo will respond with a comment below. Tip: If you forget to pre-purchase before your flight and are feeling gouged, buy 30 minutes of access, then use the Sonic VPN to connect to gogoair.com and buy more time or a segment pass at a lower cost than is offered onboard.)

At Sonic, our goal is to deliver more and more value for our members, at a fair and simple price. While we do from time to time run specials (like a month free, or a free Roku, or a monthly discount, or $5 off with a television bundle, etc) for new members, we don’t do the routine “call the cable company every year to threaten to cancel, fight, renew/re-negotiate” with our customers. No matter how you come in, you end up in the same place in the long run. That’s fair.

Why? Because we’ve got a mission: fixing the state of Internet access in America.

We want to partner with our members in that mission, and part of that is the financial support which you provide every month by being a member. Every dollar supports building a better product for you, our Sonic members.

Fixing the Internet will take a huge movement, which is why we work so hard to recruit new members to our mission. That’s is why we love seeing our members referring their friends, family, and workplace to Sonic. Thank you very much for spreading the word about our mission.

Together we can build a new Internet access model for America, beyond just one choice, beyond cable. One without artificial tiers and usage caps, with $40 gigabit fiber, while protecting the privacy of our lawful customers. It’s going to take time, and a lot of money. But it is possible, and I look forward to doing it, with the support of our members.

FCC validates Sonic robocall blocking efforts

Last year Sonic partnered with the award-winning Nomorobo robocall blocking solution for our Fusion landline phone service. Last Friday, the FCC validated that choice, affirming in a 3 to 2 vote a carrier’s right to offer robocall blocking to its customers.

The FCC’s Chairman, Tom Wheeler, wroteFor the first time, we clarify that there is no legal reason carriers shouldn’t offer their customers popular robocall-blocking solutions, so that consumers can use market-based approaches to stop unwanted calls.

Sonic was the first US telecommunications carrier to integrate and deploy Nomorobo, and we are pleased that the FCC and FTC have supported our consumer-friendly policies on annoying and often fraudulent robocalling. Until this decision last week, it was possible that our decision to offer this free feature would be challenged, so we appreciate the FCC’s decision, and we thank the commissioners for their action on this issue.

Sonic’s Nomorobo blocking feature has blocked over five million spam calls so far, saving huge amounts of time and frustration for our members. The Nomorobo feature is free for Sonic members, who can enable or disable it via our Member Tools.

To learn more about robocalls, see Federal Trade Commission’s Robocalls page, which includes a thorough infographic on how robocalls work. Sonic’s integrated Nomorobo solution was a winner of the FTC’s 2013 Robocall Challenge.

To learn more about Sonic’s Nomorobo feature, see the brief video here:

 

2014 Transparency Report

Protection of customer privacy is one of our core values at Sonic. We seek to provide as much transparency as possible regarding legal processes and customer privacy, so in furtherance of those efforts, we are releasing our fourth annual Transparency Report.

This year we saw zero civil subpoenas, as compared with one in 2013 compared with nine each in 2011 and 2012. Law enforcement subpoena activity increased again in 2014, but as in the past, Sonic’s membership is growing so it is challenging to make a direct comparison between the years.

This year we have added the broad bracket related to National Security Letter (NSL) items, where we are limited to a disclosure of a range, rather than a specific quantity. Sonic participated in filing an amicus brief recently on this topic, which can be found here.

We have also made a number of updates to improve our Sonic.net Legal Process Policy document. The update makes clearer our retention policies for various types of customer records, and provides additional customer notification information.

We have now begun tracking law enforcement orders which are subsequently withdrawn before customer information is provided. In 2014, three law enforcement orders which requested non-disclosure were withdrawn. One of these was re-issued under seal.

Finally, we are stating for the record our position regarding compelled inclusion of back doors, deliberate security weaknesses or disclosure of encryption keys. Sonic does not support these practices.

Internet and telephone service providers have a great responsibility both to protect their law-abiding customers and the public. We continually work to achieve both of these goals.

Protection of Customer Privacy

Protection of customer privacy is one of our core values at Sonic. We seek to provide as much transparency as possible regarding legal processes and customer privacy. Internet and telephone service providers have a great responsibility both to protect their law-abiding customers and the public. We continually work to achieve both of these goals.

Today, Sonic joins 43 other advocates, companies and organizations in urging the White House and Congress to move forward with reform of the National Security Agency’s methods for bulk collection of data. The NSA Coalition Letter calls for termination of these practices under the USA PATRIOT Act, a revised bill containing transparency and accountability mechanisms for company reporting as well as declassification for Foreign Intelligence Surveillance Court decisions.

See the letter to the President and members of Congress below for details.

Federal Communications Commission Votes in Net Neutrality

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I spent this week in Washington DC, focusing on policy and legislation. Comptel held its policy summit on Tuesday, and I lobbied in the House and Senate on Wednesday. Capping off the week, today the FCC voted for strong open Internet rules which will protect consumers from unreasonable behavior by carriers.

It is important to draw the distinction between regulation of the Internet, and regulation of carriers. The FCC’s order will disallow carriers from discriminating against sources of traffic that their customers choose to access via the Internet. This is common carriage at its core, and as a carrier, I am supportive of being regulated as a common carrier by the FCC.

I don’t believe we would have gotten here if the access marketplace in the US was truly competitive. Regulation became necessary because consumers have so few choices for their access to the Internet. If consumers could easily choose from many carriers, I believe this would have prevented the issues we have seen.

I take some responsibility for this marketplace failure, and I know that we need to work to deliver more consumers a great competitive choice from Sonic. We are working hard to expand our reach, to improve performance and to increase the value of our service. We will continue that mission with renewed vigor in 2015. Please tell a friend about Sonic today.

Net Neutrality is Just a Symptom

There are a number of threats to the Internet as a system for innovation, commerce and education today. They include net neutrality, the price of Internet access in America, performance, rural availability and privacy.

But none of these are the root issue, they’re just symptoms.

The root cause of all of these symptoms is a disease: a lack of competition for consumer Internet access.

Lets call it like it is: in most of America, we’ve got a broadband duopoly at best. And it’s simple economic theory and best-practice capitalism that in an unregulated near-monopoly, you will see manifestations of policies, practices and behaviors that are not always customer friendly.

If we accept that high speed Internet access is essential for modern life, the fact that we need a set of controls that assure that an entrenched operator won’t use their captive audience in an unreasonable way shouldn’t come as a surprise.

But policies on neutrality can only fix one symptom of America’s ailment. They won’t help with the issues like price, speed, rural access or privacy practices.

The real cure is an outbreak of competitive Internet access.

But in 2004, the FCC took steps to limit competition, turning away from key provisions of the 1996 Telecom Act. They set aside unbundling requirements which serve as a key bridge for competitive carriers. By circumventing Congress this way, the Bush-appointed Chairman of the FCC was able to turn back a competitive tide, creating an intentional duopoly on Internet access in the US.

The in FCC’s Triennial Review Remand Order of 2004, they wrote:

In our Triennial Review Order, we recognized the marketplace realities of robust broadband competition and increasing competition from intermodal sources, and thus eliminated most unbundling requirements for broadband architectures serving the mass market

(“Robust broadband competition?” Really??)

While neutrality is the topic of the day, the real fix is to reinvigorate competitive Internet access in America. Competitive access in Europe supported by legislation similar to The 1996 Act has resulted in lower costs for consumers and far more choices in Europe. What Michael Powell decided to do hasn’t worked out as well for Americans.

Today’s FCC should return to the roots of the Telecom Act, and reinforce the unbundling requirements, assuring that they are again technology neutral. This will create an investment ladder to facilities for competitive carriers, opening access to build out and serve areas that are beyond our reach today.

I call on the FCC to reconsider the decisions of that past era, and to take steps to reintroduce UNE-L (unbunded network element: loop) requirements, including access to available dark fiber, which is a critical backhaul component for competitive carriers. Copper unbundling is only fully viable when the middle mile fiber isn’t missing from the equation.

ps: Former FCC Chairman Michael Powell is now a lobbyist for the National Cable & Telecom Association. The Cable-company members of that association are the “robust” competition from “intermodal” (that’s cable) sources referenced above, and also provided a nice soft landing for a former FCC Chairman. How often does a regulator get the chance to create a monopoly, then go work for it? Too often.

Sonic Statement on Net Neutrality

On Monday, President Barack Obama announced his plan to protect net neutrality, asking the FCC to prevent Internet providers and cable companies from blocking or limiting access to websites. Obama said,

“They should make it clear … Internet providers have a legal obligation not to block or limit your access to a website,” he said Monday. “Cable companies can’t decide which online stores you can shop at, or which streaming services you can use, and they can’t let any company pay for priority over competitors.”

In a marketplace dominated by a few carriers, scarcity and tolls have become the new normal. This choice puts the the health of the Internet as an ecosystem for innovation, economic growth and education at risk. Consumers should not become captive pawns in a game to extract more value from the Internet as a whole.

Sonic continues to adhere to the net neutrality practices implemented since its founding in 1994:

  • We don’t disadvantage any source or type of traffic.
  • There are no per-circuit speed tiers and no usage caps.
  • We host content delivery equipment as close to our customers as possible.

At Sonic, we are continuing our growth efforts, including fiber construction, while continuing our focus on delivering reliable, neutral, secure and private Internet access.

See also: Net neutrality is dead. Long live net neutrality!

Net neutrality is dead. Long live net neutrality!

Congestion Ahead, Expect Delays

Netflix has begun paying a fee to deliver their site’s content to Comcast and Verizon Internet customers who want to access it. This is in addition to the fee which Comcast and Verizon customers themselves pay to access “The Internet”, which of course includes Netflix. The customers pay for Internet access, but the two carriers caused or allowed congestion on their networks in order to limit Netflix’s ability to deliver to their mutual customers.

The fix? A payment from Netflix to both Comcast and Verizon to assure that their traffic makes it to the end-user. Call it “protection”, if you’d like.

The FCC appears to be saying that this is okay, despite this sort of thing being the basis for network neutrality, the principal that all traffic should be treated equally and without discrimination. Net neutrality is dead.

Here at Sonic, we appreciate the Internet. The Internet is why you subscribe, and we are happy to be your choice to deliver a fast, friendly and reliable conduit to access the Internet sites and services that you want. While we do have a lovely home page and we provide a nice array of extras, we understand that the reason you subscribe is to access the Internet. (Thanks, Internet, for being awesome!)

So, we don’t disadvantage any source or type of traffic. Sonic Fusion service has no speed tiers and no usage caps. We deliver the fastest and most consistent performance possible at your location, regardless of the what you are downloading from the Internet.

We are also happy to host content delivery equipment as close to our customers as possible. By partnering with large content sources, we save money on Internet transit while delivering the best performance to our members.

At Sonic, we believe that this is not only the right thing to do, it is also a competitive advantage. (Please tell a friend!)

Long live net neutrality!

2013 Transparency Report

Protection of customer privacy is one of our core values at Sonic.net. We seek to provide as much transparency as possible regarding legal processes and customer privacy, so in furtherance of those efforts, we are releasing our third annual Transparency Report.

This year we saw far fewer civil subpoenas than 2012, with just one in 2013 compared with nine each in 2011 and 2012. Law enforcement subpoena activity increased in 2013, but Sonic.net’s membership is also increasing so it is challenging to make a direct comparison between the years. One DMCA content takedown notice was received and complied with. (Content takedowns are less common for Sonic.net because we primarily provide Internet access, and hosting is not a very large part of our business.)

Transparency Report 2013

We have also made one update to our Sonic.net Legal Process Policy document. The update makes clearer our policies by replacing “criminal subpoena” with “criminal legal process” in order to assure that we cover all possible forms of legal process.

Finally, we have now begun tracking law enforcement orders which are subsequently withdrawn before customer information is provided. We expect to release information in our 2014 report which includes more details about these situations.

Internet and telephone service providers have a great responsibility both to protect their law-abiding customers and the public. We continually work to achieve both of these goals.

Duopoly Carriers Aren’t Evil. They’re Public Policy.

Susan Crawford at Code for America

Susan Crawford at Code for America


Last week I attended a presentation by Susan Crawford, the author of Captive Audience, The Telecom Industry and Monopoly Power in the New Gilded Age. It was held, fittingly, at Code for America in San Francisco.

Ms. Crawford has a pragmatic outlook on the state of telecommunications in America, and I think she’s right on. In highlighting the outcomes of our largely duopoly telecom marketplace in America, in a recent NY Times article, she says “It isn’t evil, it’s just the way things work.”

The fact is, it’s not just the way things work, it is the way the appointed regulators at the FCC from 2001 to 2008 intended it to work. The goal during the chairmanships of Michael Powell and Kevin Martin was “robust, intermodal competition”, where Big Cable and Big Telco would complete, without the distraction of additional competition. In other words, duopoly. And, it’s what we got, by and large. (More on this later; Sonic is the exception.)

So, it’s not evil on the part of the two firms who dominate each regional market, it’s simply the outcome of our regulatory policy.

FCC Chairmain Powell’s BrandX and TRRO, and Chairman Martin’s Broadband Forbearance order together largely eliminated the potential for uniform nationwide competitive pressure on the two operators in each region. The goal was to limit competition in hopes of spurring investment by these two incumbents, with Martin saying about the Forbearance order:

“Promoting broadband deployment is one of the highest priorities of the FCC. To accomplish this goal, the Commission seeks to establish a policy environment that facilitates and encourages broadband investment, allowing market forces to deliver the benefits of broadband to consumers.” -FCC Chairman Kevin Martin

In other words, handing over a doupoly is supposed to encourage the two appointed competitors to duke it out.

I will concede that the policy has worked to some degree. Cable firms have rolled out DOCSIS 3.0 upgrades, and both AT&T and Verizon have made investments to catch up in video and increase broadband speeds. Even Centurylink has made some upgrades to their network.

In a recent article, Susan Crawford points out an op-ed by a Cable executive, titled “U.S. the leader on broadband“. Maybe by making it the headline, it becomes truth.

But, the fact is that we remain well below even the OECD median speed, and we are certainly no leader like Japan, Sweden or Norway. I suppose we can at least take solace that the offered broadband speeds in the US are not as bad as Mexico or Greece.

OECD Broadband Speeds Chart

OECD Broadband Speeds Chart

The policies which arguably helped drive these investments have come at a significant cost to consumers — Americans pay far more for their broadband and get less than citizens of most other developed nations. We pay more than three times as much per megabit as citizens of Sweden or Japan, and a whopping sixteen times as much as those in Korea. In fact, Americans pay more for broadband than residents of virtually all of the OECD countries. Only five countries do worse than US residents: Turkey, Chile, Poland, Greece and Mexico. We are in sad company when it comes to what we pay for broadband.

But, that’s not evil, that’s the outcome of our policy. Cost is the casualty when an intermodal duopoly is favored over full competition as a public policy goal.

OECD Broadband Prices Chart

OECD Broadband Prices Chart

The US median price per megabit is $5.42. Did we get enough performance in exchange for the creation of a virtual duopoly? Probably not, but that’s not evil on the part of our dominant broadband providers, that’s policy, and the way the marketplace was intended to work.

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Postscript:

But what about Sonic.net’s Fusion service?

Fusion is the sort of competition that the 1996 Telecom Act envisioned. And, we are still here despite the de-regulatory hit job by Powell and Martin. We are still here because the basic bones of the 1996 Telecom Act remain strong. While competitive access was curtailed by the intermodal duopoly agenda of the Bush-era FCC, competition is still possible under the Act, at least in metropolitan regions.

Sonic.net’s Fusion service offers competitive European style pricing and features, an “all-in-one” service delivering uncapped and unlimited broadband at up to 20Mbps, plus unlimited nationwide phone service together for one low price. When both the voice and data products are considered, it offers an advertised price about $1 per megabit, better than all but a few of the OECD nations, and less than one fifth of the US median price.

Fusion is available today to four million homes in ninety-six California cities around Los Angeles, the Bay Area and Sacramento. Join up. Then tell a friend. It’s a growing revolution.