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Techdirt Podcast Episode 190: Should We Break Up Big Tech?

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A few weeks ago, we featured a panel discussion with Mike and others at the Lincoln Network's Reboot conference on the podcast. This week we're doing something a little different and featuring another panel discussion from that conference, but one in which Mike wasn't involved. Instead, it's an interesting — and at times contentious — debate about one big question: do the big tech firms need to be broken up?Follow the Techdirt Podcast on Soundcloud, subscribe via iTunes or Google Play, or grab the RSS feed. You can also keep up with all the latest episodes right here on Techdirt.


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posted at: 12:06am on 28-Nov-2018
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US Has Some Of The Most Expensive Mobile Data Prices In The Developed World

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While the U.S. wireless industry likes to talk a lot about how ultra-competitive it is, that's generally not the case. While there's more competition in wireless than in the fixed-line broadband sector (where there's virtually no competition at faster speeds due to upgrade-phobic telcos and cable's growing broadband monopoly), much of the competition in wireless tends to be theatrical in nature. Most of the major four carriers still usually outright refuse to compete on price, something you don't get to have a choice about in a truly competitive market.While T-Mobile's disruption of the market (which has its limits) has certainly helped improve some of the worst aspects of US wireless (like long term contracts and international roaming price gouging), Americans have long paid more money for mobile data than most of the developed world. A new report out of Finland by Rewheel has once again driven that point home. According to the firm's latest data, U.S consumers pay the fifth-highest rate on average per gigabyte for smartphone plans across OECD and European countries, and the highest prices on average for mobile data services provided via things like mobile hotspots.All told, U.S. smartphone plans are more than four times higher than in most EU countries, and up to sixteen times higher across much of Europe:

The study comes on the heels of another important study showing that streaming video quality over U.S. networks is some of the worst quality in the developed world -- in large part because carriers have begun erecting artificial barriers consumers then have to pay even more to overcome. For example, Verizon now throttles all video by default on its unlimited data plans to 480p (or around 1.5 Mbps), requiring you jump to a more expensive tier if you want streaming to actually work like the originator intended.The new Rewheel study was quick to point out that whereas the US market should see more serious price competition due to having four major carriers, that's not the case. US pricing tends to more directly compare to countries where there's just three major wireless competitors and real price competition is somewhat suppressed. And while the study doesn't explain why, we've noted repeatedly how much of this is thanks to the monopoly companies like AT&T, Verizon, and CenturyLink enjoy over the business data services (BDS) market that feeds everything from ATMs to cell towers.In other words, even if you're a scrappy competitor like T-Mobile that somehow manages to beat back the giants at spectrum auction and in DC lobbying, you'll still need to pay them significant sums just to connect your towers to core networks, tightening your margins and driving up your costs. The FCC's own data has indicated that roughly 79% of the BDS market is dominated by just one company, usually AT&T, Verizon, or CenturyLink.Meanwhile, having regulators like Ajit Pai who are now no more than giant rubber stamps for industry interests means none of these underlying problems are going to be fixed any time soon. In fact, Ajit Pai's "solution" to this problem was to literally redefine the word competition at the FCC to try and hide that the problem exists at all. With that kind of leadership, it shouldn't be too surprising why US consumer mobile bills are so high compared to their European counterparts.And researchers at Rewheel were quick to hint that it's going to get worse with the looming merger between T-Mobile and Sprint, which actually will reduce the sector to three competitors, proportionally reducing any genuine incentive to actually compete on price. The firm was quick to pour a little cold water on the idea that merger mania and fifth generation (5G) upgrades will somehow fix the sector's deep-rooted issues:
"Judging from the excessive gigabyte prices, US operators are charging today for 4G mobile broadband (see Verizon's striking $710 100 gigabyte hotspot plan--in Europe 100 gigabyte mobile broadband typically costs between 10 and 20) merger promises concerning affordable 5G home broadband should be critically reviewed and if verified must be made binding."
And this is all before you get to the real cost impact of killing things like the FCC's broadband privacy rules, net neutrality, and other consumer protections, which were some of the only things standing between US carriers and even more aggressive, creative nickel-and-diming of American consumers. Should ISPs and the FCC win the court challenge to the net neutrality repeal next Spring, you can expect a hell of a lot more "creative" efforts to jack up US consumer bills even higher.

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posted at: 12:04am on 22-Nov-2018
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Mexico Reverses Ban On Selling Roku Hardware After Absurd Piracy Ruling

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So just about a year ago the Mexican court system decided to ban all Roku streaming hardware from being sold in Mexico. The ban was the result of legal action taken by Mexican cable company Cablevision, which accused Roku of facilitating piracy. How? While Roku devices are more locked down than many of the more open home media PC solutions (also the target of endless pearl clutching and hyperventilation by the entertainment industry), users can install certain unofficial, third-party "private" channels that provide access to pirated live streams of cable content.While Roku went out of its way to try and lock down their hardware, some users paid hackers a few bucks to crack open and modify the devices anyway, letting them access the dubious third-party channels in question. While this obviously wasn't Roku's fault, Cablevision believed Roku should be punished for the behavior of the company's customers, and declared it was doing Mexican consumers a public service:

"Cablevision cannot allow the content that it licenses from domestic and foreign companies to be illegally used, Cablevision spokeswoman Maria Eugenia Zurita told Reuters via email. We would also like Roku Inc to better supervise the use of its software so that it's not used inappropriately."
Roku quickly appealed, and while a federal judge initially overturned the ban, a subsequent ruling restored it, so the ban has been in place for the better part of the year, costing Roku a notable sum. Roku subsequently jumped through all manner of hoops in a bid to please the courts, including building a new internal team specifically dedicated to cracking down on piracy, posting notable warnings to users who decide to install unofficial channels, and renaming the channels from "private" to "non-certified" in a bid to make it even more obvious Roku wasn't sanctioning the behavior of its users.Fast forward to this week, and the 11th Collegiate Court in Mexico City has ruled to again overturn the ban, opening the door to Mexican consumers being able to, you know, buy whatever hardware they like and use the devices as they see fit.
"The Court reportedly acknowledged Roku's efforts to keep pirated content away from its platform, an opinion also shared by Cablevision. However, should pirate channels appear on Roku in the future, Cablevision warned that it would take further legal action to have those sources blocked via the Mexican Institute of Industrial Property and other local authorities."
Again, consumers are just using a computer to access content online, and what that content is really shouldn't really be seen as Roku's responsibility. The irony here is that Roku has spent a lot of time kissing up to entrenched cable operators here in the States, helping them scuttle efforts to make traditional cable boxes more open. Of course much like the cable industry, the more locked down Roku makes its products, the more likely consumers are to flock to products that actually let them do what they want, which obviously doesn't necessarily include piracy.The same hysteria surrounding Roku has been doubly-applied to programs like Kodi, which (in much the same way that Roku is just a computer) is just software that (with the help of plugins) can be used to access copyrighted content... and a laundry list of other things. This nannyish approach to what hardware and software can be used and how is an unproductive and expensive game of Whac-a-Mole, which is why we've pretty consistently argued that embracing openness and innovation tends to be a notably more productive and profitable solution.

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posted at: 12:52am on 24-Oct-2018
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Apple Demands Retraction Of Bloomberg's Big 'Chip Infiltration' Story; Bloomberg Has Some Explaining To Do

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A few weeks ago, Bloomberg published a giant story claiming that Chinese spies did a somewhat daring supply chain hack on American big tech firms. The gist of the story was that servers from Super Micro had hidden chips that somehow were then used by Apple and Amazon (not to mention the US government), that allowed someone in China to access certain data. The story was a blockbuster that got everyone talking. But, almost as soon as it came out, a bunch of people started raising questions about the story. While the Bloomberg reporters claimed over a dozen sources, both Apple and Amazon came out with incredibly strong denials. Way stronger than is common in these situations. And while I know some cynical people insist that companies will lie about this stuff all the time, that is not actually true. Some companies may misrepresent things, or try to play down stories, but outright fabrication is not at all common (and the consequences of a company doing it would be severe). And here, both Amazon and Apple's denials were so clear, so specific and so adamant that it raised serious questions about the reporting.Since there was so much confusion over it all, we held off on writing about it, figuring more information would come out in the days and weeks after the initial story. And so far, nearly all of the "additional info" has only served to raise significantly more questions about Bloomberg's reporting. Various government and intelligence agencies all claimed they had no evidence to support these claims. Again, some will argue that they are lying, and (again) while those agencies may have a history of misrepresenting things, the denials here were clear and unequivocal. The UK's National Cyber Security Centre (a part of GCHQ) said they completely supported Apple and Amazon that no such attack occurred. The US Department of Homeland Security said the same thing. Dan Coats, the US Director of National Intelligence said the US intelligence community has seen no evidence of such an attack, which certainly undermines the Bloomberg story. Some of the folks quoted in the Bloomberg article even questioned the accuracy of the article with one going so far as to say the article that he is named in... "didn't make sense."Also, as reporter Nicole Perlroth noted, one of the reporters on the Bloomberg story -- Michael Riley -- had also done a story back in 2014 making bold claims that the NSA had exploited the Heartbleed bug, and multiple other reports ripped that story to shreds, with multiple people denying it and no one else confirming it.Now, with this story, Apple has done something it's never done before: asked Bloomberg for a retraction of the article. That's a pretty big move -- and Bloomberg says it still stands by its reporting (as it did with the Heartbleed story).However, at this point, Bloomberg has whittled away whatever benefit of the doubt there was left and set fire to the scraps. It's difficult to believe that Bloomberg's story was accurate, and the company and its reporters owe everyone an explanation -- or at least some additional evidence to support the reporting. I don't doubt that there is a kernel of truth in the story -- but given the vehement and thorough response from everyone, it certainly seems likely that the reporters on the Bloomberg piece misunderstood something big, leading to misreporting of things in a way that leads to a very inaccurate picture of what's going on. Bloomberg should, at the very least, appoint someone else to go through the work put in by reporters Michael Riley and Jordan Robertson, and explore whether or not the story really is accurate, and why it is that basically everyone is saying it's not.Reporters can, and do, make mistakes. How they respond to such mistakes is the real marker of the ethics they and the organizations they work for hold. Considering Bloomberg stood by that Heartbleed story, perhaps we shouldn't expect such a reckoning at the publication -- but, at the very least, it's going to lead plenty of people to write off Bloomberg as a credible source on issues like these, and that's unfortunate, given that there are some really big and important stories having to do with computer security right now. Having one major publication show itself to be untrustworthy in its coverage would be very bad.

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posted at: 12:51am on 20-Oct-2018
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