RCom boss opts to pay Ericsson bill rather than go to prison

Indian telco Reliance Communications owed kit vendor Ericsson millions of dollars but didn’t feel like paying up. The threat of jail time seems to have changed its mind.

At the start of the year Ericsson requested RCom Chairman Anil Ambani be locked up unless his company settles its debts but a couple of months later it still hadn’t coughed up. The Indian court gave him until 19 March to find the cash and now, with one day to spare, it’s being widely reported that Ambani managed to scrape together enough shrapnel to remain a free man.

The precise amount handed over was 462 crore rupees, which we’re going to take Reuters’ word for that being equivalent to around $67 million because we can’t get our head around India’s number system. That still seems to leave $10 million or so outstanding, but is presumably enough to placate the Indian courts for now.

Had he not paid Ericsson Ambani would have been held in contempt of court because it had been judged that he had the cash handy, but just felt like holding onto it. We’ve all felt that from time to time and, if we’re honest, sometimes it’s only the law that keeps us honest. RCom’s shares were down 9% at time of writing and are trading at around the quarter of their price a year ago.

Huawei CEO tries to deflect cybersecurity spotlight onto Ericsson and Cisco

It was just a matter of time before Huawei played the whataboutism card and Founder/CEO Ren Zhengfei couldn’t resist in a recent interview.

Chatting to CNN in Shenzhen Ren said the following when referring to the US ban on Huawei gear: “They have to have evidence. Everybody in the world is talking about cyber security and they are singling out Huawei. What about Ericsson, what about Cisco, don’t they have cybersecurity issues? Why has Huawei been singled out? There’s no Huawei equipment in the US networks but has that made the US networks totally safe? If not how can they tell other countries that your networks will be safe without Huawei?”

When Huawei announced its lawsuit against the US government we figured it would have a pop at Cisco sooner or later, but Ren decided to involve Ericsson for good measure (but not Nokia). He has a bit of a point, we suppose, but there are a couple of flaws in this fallacious approach. Firstly, if he thinks any other vendors might be a security risk then he is subject to the same burden of proof he is applying to the US. Secondly, even if they are dodgy that doesn’t mean Huawei isn’t.

The main theme of this resumption of the Ren roadshow was to augment the points Huawei made when in its lawsuit. Ren stressed he would rather shut the company down than let the Chinese state muck about with it and said US tactics will result in scaring away investment in the country. He also tried playing the martyr card, insisting that what doesn’t kill Huawei will make it stronger and even suggesting this aggro represents a timely wake-upcall for complacent Huawei employees.

Ren’s media tour coincides with parallel attempts to win hearts and minds among US allies, but it looks like those are being trumped by a more direct approach from the US. A recent report from Bloomberg reveals German spooks think Huawei is just too dodgy to be allowed into the country’s 5G networks.

Apparently the German intelligence officials remain unconvinced by Ren’s vows never to collaborate with the Chinese state and are also worried about upsetting the US. “It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” a Foreign Ministry official told some parliamentary committee.

On top of that the EU has recently been publicly expressing concerns about Chinese 5G kit in general so, for the time being at least, momentum seems to have swung back in US favour. Ren’s attempt to metastasise the aggro to other networking vendors must be causing some alarm, not least because it raises the prospect of them being caught in the orbit of the law suit. If we’re on a Huawei to hell, we’re taking you with us, seems to be the message.

 

The WWW inventor wants to reinvent the web

Father of the web Sir Tim Berners-Lee has launched the “Contract for the Web” initiative to rally the global community to revamp the web for the public good.

30 years after he proposed an “information management system” (pictured) while being a scientist at CERN, Sir Tim Berners-Lee believes that he could stand no longer what the web has become of lately. In 2018 Berners-Lee told the Vanity Fair magazine that he was “devastated” by the state of distortion of his creation. As a result, on the 30th birthday of the WWW, he decided to use his influence to bring the web back on the track he envisioned: it should be recognised as a human right and be built for the public good. “If we give up on building a better web now, then the web will not have failed us. We will have failed the web,” Berners-Lee said.

According to Berners-Lee, the dysfunction of the web in recent years has mainly been manifested in three ways:

“1. Deliberate, malicious intent, such as state-sponsored hacking and attacks, criminal behaviour, and online harassment.

“2. System design that creates perverse incentives where user value is sacrificed, such as ad-based revenue models that commercially reward clickbait and the viral spread of misinformation.

“3. Unintended negative consequences of benevolent design, such as the outraged and polarised tone and quality of online discourse.”

To counter these dysfunctional behaviours, the non-profit World Wide Web Foundation (or “Web Foundation”) led by Berners-Lee is launching a civil society initiative, “Contract for the Web”, that calls out to governments, businesses, and private individuals, to pledge their commitments to a better future of the web.

It has different requirements for the three types of constituencies.

It demands governments to ensure everyone can connect to the internet; keep all of the internet available, all of the time; and respect people’s fundamental right to privacy.

It asks businesses to make the internet affordable and accessible to everyone; respect consumers’ privacy and personal data; and develop technologies that support the best in humanity and challenge the worst.

It challenges individuals to hold the governments and businesses accountable; be creators and collaborators on the web; build strong communities that respect civil discourse and human dignity; and fight for the web so the web remains open and a global public resource for people everywhere, now and in the future.

Under these principles, a group of people are working on the specific commitments in each area. The group is open to input from all (institutions and individuals alike) who share the vision, and the results of the work are expected later this year.

Signatories so far include some of the world’s biggest internet companies (e.g. Google, Microsoft, Facebook), other non-profit organisations (e.g. W3C), private citizens and celebrities and former and current politicians (e.g. Sir Richard Branson, Gordon and Sarah Brown), telecom operators (Telefonica), and governments (Die Bundesregierung).

The level of endorsement and commitment the initiative may ultimately garner is yet to be seen and will depend on the specifics being developed. Some governments may be hesitant towards the demand for allowing its citizens to access all the information on the internet without filtering, while others may feel they would prefer to have access to some of the people’s private data to strengthen public security. The demands for businesses may be seen as threatening the very livelihood of some companies whose business models have built on monetising user data.

Sir Tim Berners-Lee never made wealth out of his invention, but his transformational role has been well recognised. Stephen Fry once identified Sir Tim as one of the two living Englishmen that have had the most profound impact on people’s lives worldwide, the other being Apple’s Chief Design Officer Jony Ive.

Nick Clegg defends Facebook’s business model from EU’s privacy regulation

Facebook’s head of PR reportedly had a series of meetings with EU and UK officials aiming to safeguard the social network’s business model heavily relying on targeted advertising.

Sir Nick Clegg, the former UK Deputy Prime Minister, now Facebook’s VP for Global Affairs and Communications, met three EU commissioners during the World Economic Forum in Davos and shortly after the event in Brussels, according to a report by the Telegraph. These commissioners’ portfolios include Digital Single Market (Andrus Ansip), Justice, Consumers and Gender Equality (Věra Jourová), and Research, Science and Innovation (Carlos Moedas). Clegg’s mission, according to the Telegraph report, was to present Facebook’s case to defend its ads-based business model in the face of new EU legislation related to consumer privacy.

According to a meeting minutes from the Ansip meeting, seen by the Telegraph, “Nick Clegg stated as main Facebook’s concern the fact that the said rules are considered to call into question the Facebook business model, which should not be ‘outlawed’ (e.g. Facebook would like to measure the effectiveness of its ads, which requires data processing). He stated that the General Data Protection Regulation is more flexible (by providing more grounds for processing).”

In response, Ansip defended the proposed ePrivacy Regulation as a complement to GDPR and it is primarily about protecting the confidentiality of consumers’ communications. In addition, the ePrivacy Regulation will be more up to date and will provide more clarity and certainty, compared with the current ePrivacy Directive, which originated in 2002 and last updated in 2009. Member states could interprete and implement the current Directive more restrictively, Ansip warned.

Facebook’s current security setup makes it possible to access users’ communication and able to target them with advertisements based on the communications. Under the proposed Regulation, platforms like Facebook need to get explicit consent from account holders to access the content of their communications, for either advertisement serving, or effectiveness measuring.

There are two issues with Facebook’s case. The first one is, as Ansip put it, companies like Facebook would still be able to monetise data after obtaining the consent of users. They just need to do it in a way more respectful of users’ privacy, which 92% of EU consumers think important, according to the findings of Eurobarometer, a bi-annual EU wide survey.

Another is Facebook’s own strategy announced by Zuckerberg recently. The new plan will make it impossible for Facebook to read users’ private communications with its end-to-end WhatsApp-like encryption. This means, even if consumers are asked and do grant consent, Facebook in the future will not be able to access the content for targeted advertising. Zuckerberg repeatedly talked about trade-offs in his message. This would be one of them.

On the other hand, last November the EU member states’ telecom ministers agreed to delay the vote on ePrivacy Regulations, which means it will be highly unlikely that the bill will be passed and come into effect before the next European Parliament election in May.

The office of Jeremy Wright, the UK’s Secretary of State for Digital, Culture, Media and Sport, did not release much detail related to the meeting with Clegg, other than claiming “We are at a crucial stage in the formulation of our internet safety strategy and as a result we are engaging with many stakeholders to discuss issues pertinent to the policy. This includes discussions with social media companies such as Facebook. It is in these crucial times that ministers, officials and external parties need space in which to develop their thinking and explore different options in a free and frank manner.”

The Telegraph believed Clegg’s objective was to minimise Facebook’s exposure to risks from the impending government proposals that could “place social media firms under a statutory duty of care, which could see them fined or prosecuted” if they fail to protect users, especially children, from online harms.

It is also highly conceivable that the meeting with the UK officials was related to influence post-Brexit regulatory setup in the country, when it will not longer be governed by EU laws. Facebook may want to have its voice heard before the UK starts to make its own privacy and online regulations.

Huawei launches its counter-attack by suing the US government

Another major front of Huawei’s counter-attack against the US government has been opened in the form of a lawsuit claiming the imposition unconstitutional sales restrictions.

Compared to China at least, the US has an open system of governance and judiciary and Huawei seems to have decided it’s time to test whether that system applies equally to foreign companies. This is taking the form of a challenge to the constitutionality of Section 889 of the 2019 National Defense Authorization Act (NDAA).

This is the bit of legislation, necessarily approved by the US Congress, that ‘not only bars all U.S. Government agencies from buying Huawei equipment and services, but also bars them from contracting with or awarding grants or loans to third parties who buy Huawei equipment or services, without any executive or judicial process,’ according to the complaint.

As previously reported Huawei has lawyered-up big-time for this choreographed counter-attack against the US, which includes a clear move to test the loyalty of its European allies. Its strategy for the US is to argue that its government’s actions in restricting Huawei’s activities violate the country’s own laws and even its written constitution. Essentially Huawei is publicly accusing the US of not playing fair.

“The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products,” said Guo Ping, Huawei Rotating Chairman. “We are compelled to take this legal action as a proper and last resort. This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers. We look forward to the court’s verdict, and trust that it will benefit both Huawei and the American people.”

“Section 889 is based on numerous false, unproven, and untested propositions,” said Song Liuping, Huawei’s Chief Legal Officer. “Contrary to the statute’s premise, Huawei is not owned, controlled, or influenced by the Chinese government. Moreover, Huawei has an excellent security record and program. No contrary evidence has been offered.”

“At Huawei we are proud that we are the most open, transparent, and scrutinized company in the world,” said John Suffolk, Huawei’s Global Cyber Security & Privacy Officer. “Huawei’s approach to security by design development and deployment sets a high standards bar that few can match.”

The official announcement goes on to stress how bad it feels for US consumers starved of Huawei’s lovely kit, which seems like a bit of a reach, but is probably included to augment the ‘unfair’ narrative. The absence of Huawei will delay 5G and cost the industry more due to the lack of competition, we’re told, and if that wasn’t enough of a dig at its competitors Huawei reckons it will leave US consumers paying higher prices for inferior products. Miaow!

For some reason Huawei has decided not to counter-accuse the US of behaving in a similarly dodgy way, in a further bid to expose perceived hypocrisy. If it wanted to it could mention that some US networking vendors don’t exactly have a spotless security record themselves, or that the US has been suspected of similar nefarious acts to those it accuses China of perpetrating. Maybe that will be a more clandestine front in this escalating conflict.

At the core of Huawei’s counter-attack for some time has been a challenge to the US to substantiate its accusations. The charges against the company related to the arrest of its CFO have been detailed, but they are unrelated to this broad US restriction. The US has yet to present anything close to a ‘smoking gun’ with respect to Huawei as a national security threat and has largely relied on a general suspicion of dodginess to justify its actions.

With this move Huawei is challenging that, using the US’s own rules, which is somewhat ironic since the relatively closed and secretive nature of the Chinese state is a major contributor to US suspicions. It’s also signalling to the rest of the world that the US doesn’t play fair and casting itself as a victim, which is a strong card to play in today’s cultural climate. You can see the full press conference below, from which we’ve extracted some juicy quotes underneath, in case you don’t fancy sitting through the full 37 minutes.

 

Guo Ping

“The U.S. Government has long branded Huawei a threat. It has hacked our servers and stolen our emails and source code. Despite this, the U.S. Government has never provided any evidence supporting their accusations that Huawei poses a cyber security threat. Still, the U.S. Government is sparing no effort to smear the company and mislead the public about Huawei. Even worse, the U.S. Government is trying to block us from the 5G markets in other countries.

“[Section 889 of the NDAA] is an abuse of the U.S. lawmaking process. This section strips Huawei of its due process, violates the separation-of-power principle, breaks U.S. legal traditions, and goes against the very nature of the Constitution. Section 889 infringes upon our rights and harms U.S. consumers. In enacting the NDAA, Congress acted unconstitutionally as judge, jury and executioner.”

Song Liuping

“Section 889 is unconstitutional in its singling out of Huawei by name, blacklisting it, damaging its reputation, and denying it any way to clear its name and escape sanction. Its attack on Huawei is purposeful and punitive. When the law was being passed, Senator Tom Cotton said that Huawei deserved ‘the death penalty’ and that it should be put ‘out of business in the United States.’ And Senator Marco Rubio smeared Huawei as a ‘Trojan horse’ that ‘shouldn’t be in business in the United States in any capacity.’

“Huawei has never had a fair chance to confront or cross-examine its accusers. Nor has it been allowed an impartial adjudicator. The U.S. Congress has simply acted as law-maker, prosecutor, and jury at the same time, contrary to the American Constitution.”

John Suffolk

“The solution to cyber security will come from openness, agreed international standards certification schemes and transparency. It will not come through political posturing.”

Yang Chaobin, President of Huawei’s 5G Product Line

“After researching in 5G for over a decade, we are at least 12 to 18 months ahead of our industry peers. We have more than 2,570 essential patents, signed over 30 commercial contracts for 5G, and deployed 40,000 5G base stations, making us the No. 1 5G vendor in the world.”

Li Dafeng, Executive Member of the Supervisory Board, and Director of the ICT Infrastructure Managing Board Office.

“Currently, Huawei has over a thousand employees working across seven offices in the US. We have also invested substantially in the American telecommunications industry, including by establishing partnerships with hundreds of U.S. companies. We purchase billions of dollars’ worth of components, equipment, and software from these companies every year. The NDAA law can only impair Huawei’s long-term commitment to invest more and hire more here.”

Glen Nager, lead counsel of the action and Partner at Jones Day

“In signing the 2019 NDAA, the President of the United States objected that provisions of the NDAA raise significant separation of powers concerns and reflect congressional overreach.”

President Trump had yet to publicly comment on Huawei’s announcement at time of writing. Perhaps he was taking the time to memorize the names of everyone involved.

Huawei lawyers-up in North America

Huawei’s CFO is suing Canada, while the company is also reportedly set to sue the US government.

While the US and Huawei kept their conflict muted during Mobile World Congress last week, they have wasted little time in picking up where they left off after that brief hiatus. Having said that there was widespread talk on the show floor last week that there were many representatives of the US government and other public institutions at the event, apparently canvassing for support.

Anyway, the BBC reports that last Friday Huawei’s CFO, Meng Wanzhou, filed a civil suit against Canada for breaching her civil rights when it arrested her late last year. The move coincided with the official commencement of her extradition process to the US, which wants to try her for a bunch of alleged crimes. Her case seems to rest on some perceived irregularities in the process by which she was arrested, but is probably part of a broader coordinated legal counter-attack by Huawei.

Meanwhile Huawei is also preparing to sue the US government, according to multiple reports, the first of which seems to have come from the New York Times. This suit is apparently unconnected to the latest US offensive, and concerns the much older ruling that banned US federal agencies from using Huawei products.

Once more, however, this would appear to be part of a greater legal push against the US by Huawei. In this case, by suing the US and therefore obliging it to defend itself, the cunning plan could be to bring specific allegations into the open, which Huawei could then refute. One of the biggest criticisms of the US war on Huawei has been a lack of specifics, so this seems like a plausible tactic.

At this stage it’s still really difficult to see how the war between the US and Huawei will play out. On one hand momentum seems to be against Huawei, with US allies feeling compelled to at least go through the motions of siding with it. On the other, if Huawei can publicly demonstrate that a significant proportion of the charges against it are unfounded, then maybe it can start to swing some Western public opinion its way. Either way both sides seem dug-in for a long conflict.

UK police are using AI to make precrime a reality

UK local councils and police forces are using personal data they own and algorithms they bought to pre-empt crimes against children, but there are many things that could go wrong with such a system.

A new research by Cardiff University and Sky News shows that at least 53 UK local councils and 45 of the country’s police forces are heavily relying on computer algorithms to assess the risk level of crimes against children as well as people cheating on benefits. It has raised many eyebrows on both the method’s ethical implications and its effectiveness, with references to Philip K Dick’s concept of precrime inevitable.

The algorithms the authorities sourced from IT companies use the personal data in their possession to train the AI system to predict how likely a child in a certain social environment is going to be subjected to crime, giving each child a score between 1 and 100, then classifying the risk level against each child as high, medium, or low. The results are then used to flag to social workers for intervention before crimes are committed. This does not read too dissimilar to the famous Social Credit system that China is building on national scale, though without the benefits of faster housing loans or good schools for kids as a reward for good behaviour.

The Guardian reported last year that data from more than 377,000 people were used to train the algorithms for similar purposes. This may have been a big underestimate of the scope. The research from Cardiff University disclosed that in Bristol alone, data from 54,000 families, including benefits, school attendance, crime, homelessness, teenage pregnancy, and mental health are being used in the computer tools to predict which children are more susceptible to domestic violence, sexual abuse, or going missing.

On benefit assessment side, the IT system to support the Universal Credit scheme has failed to win much praise. A few days ago, computer generated warning letters were sent out to many residents in certain boroughs, warning them their benefits would be taken away because they have been found cheating. Almost all the warnings turned out to be wrong.

There are two issues here. One is administrative, that is how much human judgement can be used to overrule the algorithms. Local councils insisted that analytics results will not necessarily lead to actions. Privacy activists disagreed. “Whilst it’s advertised as being able to help you make a decision, in reality it replaces the human decision. You have that faith in the computer that it will always be right,” one privacy advocacy group told Sky News. Researchers from Cardiff University also found that “there was hardly any oversight in this area.” Over-enthusiastic intervention, for example taking children away from their families in not absolutely necessary circumstances can be traumatic to the children’s development. Controversies of this kind have been long and hard debated in places like Norway, Sweden, and Finland.

Another is how accurate the output from the algorithms are. The police in Kent believed that among the cases pursued by their algorithm, over a third of all cases on the police’s hand, 98% have been accurate. If this is true, then either Kent Police has a rather relaxed definition of “accuracy”, or it knows something the technology world does not. IBM’s Watson, one of the world’s most advanced AI technologies, has been used by Vodafone to help provide digital customer service. It has won Vodafone prizes and was hailed as a big AI success by IBM during MWC 2019. Watson’s success rate at Vodafone was 68%

Late last year the Financial Times reported that one of China’s most ambitious financial service, Ant Financial, which is affiliated to Alibaba, has never used its credit scoring system to make lending decisions, despite that it had been four years in the making and had access to billions of data points in the Alibaba ecosystem. “There was a difference between ‘big data’ and ‘strong data’, with big data not always providing the most relevant information for predicting behaviour,” an executive from Ant Financial told the FT. A think-tank analyst put it in a more succinct way: “Someone evading taxes might always pay back loans, someone who breaks traffic rules might not break other rules. So I don’t think there is a general concept of trustworthiness that is robust. Trustworthiness is very context specific.”

It is understandable that the UK police and local councils are increasingly relying on algorithms and machine learning as they have been under severe spending cut. The output of algorithms could be used as helpful references but should not be taken at its face value. It is probably safer to admit that AI is simply not good enough yet to drive or guide important decisions as policing, criminal investigation, or social worker intervention. Getting Vodafone’s customer service more accurate is a more realistic target. Even if the bot still failed to help you set your new phone up properly, you would not end up queuing at the foodbank, or have your children taken away for “crime prevention” purposes.

EU set to proceed with controversial new online copyright rules

Inevitably the EU Copyright Directive, complete with its widely despised Articles 11 and 13, is continuing its glacial progress along the European rubber-stamping conveyor belt.

Last month we reported that the directive appeared to have hit a road bump, but this turned out to be a fleeting inconvenience, resolved by the most token of concessions. Yesterday both the European Commission and European Parliament announced a breakthrough in the fraught negotiations, from which a miraculous consensus was reached.

“To finally have modern copyright rules for the whole of EU is a major achievement that was long overdue,” said VP for the Digital Single Market Andrus Ansip. “The negotiations were difficult, but what counts in the end is that we have a fair and balanced result that is fit for a digital Europe: the freedoms and rights enjoyed by internet users today will be enhanced, our creators will be better remunerated for their work, and the internet economy will have clearer rules for operating and thriving.”

“This deal is an important step towards correcting a situation which has allowed a few companies to earn huge sums of money without properly remunerating the thousands of creatives and journalists whose work they depend on,” said MEP Axel Voss, who seems to speak for the European Parliament on this stuff.

“At the same time, this deal contains numerous provisions which will guarantee that the internet remains a space for free expression. These provisions were not in themselves necessary because the directive will not be creating any new rights for rights holders. Yet we listened to the concerns raised and chose to doubly guarantee the freedom of expression. The ‘meme’, the ‘gif’, the ‘snippet’ are now more protected than ever before.”

As you can see both spokespeople are doing a heavy sell on the directive because they know it’s unpopular. Not that it really matters because In place of actual democratic accountability, the EU has a self-reinforcing system of largely opaque bodies. This is apparently done to create the impression of rigorous due process but it’s very rare for the real power in Brussels – the European Commission – to receive any significant internal resistance once it has decided on a course of action.

The most unpopular part of the Directive is Article 13, which requires sites to either seek licenses for, or pre-emptively block the upload of, any material that may be copyright protected, or face the consequences of any breach themselves. Close second in terms of public derision is Article 11, which will require a license to reproduce all but the shortest snippets of written content and may apply to things like link previews.

Appropriately enough none of the announcements linked directly to the test of the agreement, but once more we indebted to MEP Julia Reda, who quickly blogged on the matter. “The history of this law is a shameful one,” she wrote. “From the very beginning, the purpose of Articles 11 and 13 was never to solve clearly-defined issues in copyright law with well-assessed measures, but to serve powerful special interests, with hardly any concern for the collateral damage caused.”

The special interests she referred to are big publishers, who she reckons have lobbied the EU to protect their traditional revenue streams. This theory would appear to be supported by the fact that smaller publishers and rights holders seem far less keen on the new rules. Reda, who you can see alongside a small number of other dissenting MEPs in the video below, thinks the Directive can still be stopped if the European Parliament can be persuaded to oppose it but this seems like a forlorn hope.

Zoey Forbes, Technology, Media and Entertainment Associate at law firm Harbottle & Lewis, offers another perspective. “On the surface, the agreed text was an early Valentine’s Day present for creatives and the wider content industry,” she said. “Copyright holders will receive additional revenues from the use of their works online as well as greater protection from online copyright infringement.

“However, as with all things, the devil is in the detail and some stakeholders feel the safeguards offered to the tech industry have not only watered down the EU’s original objectives but will actually leave copyright holders worse off. Conversely, the tech industry and those advocating for freedom of expression are not appeased by these safeguards and continue to oppose the directive on an ideological level.”

The EU is positioning all this as protecting the European little guy from voracious Silicon Valley giants who profit from traffic driven by third party content. There is some merit to that position, but it doesn’t seem to have consulted many little guys, nor thought more deeply about the mechanics of the internet, which rely heavily on the viral sharing of stuff. It’s not at all clear that the stated beneficiaries of this set of rules will, in fact, benefit, but the EU supertanker isn’t about to change course over such minor concerns.

 

AT&T claims its customers love 5GE

In response to rival US operator Sprint suing it for deception over its 5G Evolution move, AT&T has insisted it’s just thinking of the punters.

“We understand why our competitors don’t like what we are doing, but our customers love it, opened the AT&T statement. “We introduced 5G Evolution more than two years ago, clearly defining it as an evolutionary step to standards-based 5G.  5G Evolution and the 5GE indicator simply let customers know when their device is in an area where speeds up to twice as fast as standard LTE are available.  That’s what 5G Evolution is, and we are delighted to deliver it to our customers.”

Hmm. It’s hard to argue with the assumption that phone users like to know what kind of network performance they can reasonably expect at a given time and location. If you see a little ‘E’ or even ‘H’ at the top of your phone then you probably shouldn’t expect a web page to load anytime soon and video streaming is definitely out of the question. Seeing ‘4G’ up there, however, says its smartphone data party time.

AT&T seems to want to indicate to its customers when they can expect bandwidth an order of magnitude greater than regular, vanilla 4G, which is fair enough, but the way it has gone about it does seem somewhat deceptive. Why not go for ‘4G+’ or (shudder) ‘4.5G’? The decision to package faster 4G as nearly 5G feels like a reach and it’s highly debatable how ‘clearly defined’ this designation is to its customers and the wider market.

“We will fight this lawsuit while continuing to deploy 5G Evolution in addition to standards-based mobile 5G,” continued the statement.  “Customers want and deserve to know when they are getting better speeds. Sprint will have to reconcile its arguments to the FCC that it cannot deploy a widespread 5G network without T-Mobile while simultaneously claiming in this suit to be launching ‘legitimate 5G technology imminently.’”

That last bit seems to be a veiled threat that persisting with this suit may complicate Sprint’s merger with T-Mobile US. How imminent Sprint’s launch of ‘legitimate’ 5G is seems incidental to the matter of whether or not AT&T has indulged in deliberately deceptive behavior, so this feel like a FUD move. If Sprint does win this case it could set an important consumer protection precedent so it’s worth keeping an eye on.

Europe has not been great at net neutrality – report

Nearly three years after the EU net neutrality regulations came into effect, neither service providers nor national regulators have been role models in following the rules, a new report concluded.

The Vienna-based non-profit organisation Epicenter.works recently published a report to present its multi-year research into how the EU’s net neutrality regulation has been implemented. The report, titled “The Net Neutrality Situation in the EU: Evaluation of the First Two Years of Enforcement”, examined how the regulation was interpreted differently by the regulators and how the service providers have taken it into their own hands to decide what to implement, or not implement in the 28 EU member states as well as the three EEA nations ((Norway, Iceland and Liechtenstein). The results were not the most encouraging reading.

The EU regulation on net neutrality came into effect on 30 April 2016. The Body of European Regulators for Electronic Communication (BEREC) was mandated to lay down guidelines on the implementation for the national regulators. However, unlike other laws like GDPR, the net neutrality rules give member states the authority to decide the level of penalties if the rules are broken.  “This has lead (sic.) to a situation where some member states have not laid down rules for violations of net neutrality protections two years after the regulation entered into force,” the report says.

More specifically, 17 out of the 31 countries examined have not defined “effective and dissuasive penalties”, while in those countries that have defined monetary penalties, the amounts varied from a symbolic €9,600 in Estonia, to up to 10% of relevant turnover in the Netherlands or the UK. The report finds that, as a result of the less than strict implementation, “the largest telecom companies in Europe can choose not to comply with the law because it is financially advantageous for them.”

The area that the most offences were committed was differential pricing practices, in particular zero-rating data for selected applications and services. Although only Bulgaria and Germany have excluded “illegal commercial practices” (price discrimination when providing access to specific applications and services, in this case, zero-rating certain apps or services) from their penalty provisions, a total of 186 differential pricing products are being offered in all but three member states (Finland, Slovenia, Bulgaria), the majority (144 offerings) of them zero-rating (the rest are application-specific data volume). 17 countries’ regulators have started formal assessment processes into the differential pricing products offered by the service providers in their countries since the regulation came into effect, while the other 14 have not.

The report went on to analyse the impact of zero-rating offers on the consumer data price, and discovered that over a two-year period, the average data price (€/Gb) in countries with zero-rating offers largely held or slightly rose while the comparable price in those countries without zero-rating products went down by about 10%.

net neutrality data price

The reason for the steady price can be attributed to competition dynamics created by zero-rating, according to the report. Since the large service providers (e.g. Deutcshe Telokom) often have the biggest sway in partnering with content and application providers, the authors reckon, they create a “unique selling proposition” to attract consumers and no longer need to compete on the data package size or prize, which MVNOs and smaller operators can match their offers. This in effect has led to a slow-down in the growth of data package sizes or drop in prices in these markets.

It is not only the consumers that have been denied benefits by zero-rating, the authors find, there is also cost on the content and apps providers. In most zero-rating deals, the content and app providers will pay the fee for the traffic to the service providers (according to a report published by the Polish regulator UKE), which will then offer it to consumers at zero-rating. In this case, zero-rated data is actually sponsored data.

On top of the fees, in order for the billing to be correctly done, operators would require the content and app providers to make special data transport setup for the partnerships, e.g. change CDN contracts. This will also add operational cost to the content providers. In a high-profile case, when Vimeo did not participate in Deutsche Telekom’s “StreamOn” programme, it stated in an open letter to the German regulator that, although they are a 200 employee strong company, they cannot sustain co-operations with all the service providers whose customers they want to reach with their service through special programmes like this.

Two knock-on effects also come out of such partnerships. Due to the demand on fees and increased operational cost, most app and content providers can only afford to enter into limited deals. By the authors’ count, the large majority of app and content providers entered no more than three pricing programmes.

net neutrality number of programs

On the other hand, more often it would only be the Silicon Valley heavyweights that could afford to tie multiple partnerships with different operators in different markets, they occupy most of the spots on the leader table of differentially priced services being offered. “Among the top 20 zero-rated applications only three are from the EEA,” the report calculated.

net neutrality Silicon Valley heavy

The findings by the organisation has caught some attention. The Austrian regulator RTR will conduct its own research into the impact of zero-rating on data prices into more recent years and on operator level. The European Commission will also provide an evaluation report of the net neutrality provisions of the regulation by 30 April 2019, three years after the regulation came into effect.