Verizon’s data-sharing with AOL is worrisome, but not surprising

There was never any chance Verizon would refrain from bolstering AOL’s advertising network with the information it collects from its customers. The carrier paid $4.4 billion for an ad-dependent business; it’s not going to leave that business to its own devices, at least not where revenues are concerned.
So, it should come as little shock that Verizon planned to connect its “zombie cookies” — trackers that collect data from unencrypted connections unless a consumer opts out of the program — with AOL’s advertising network so it can better target specific demographics, as ProPublica reported earlier this week.
The zombie cookies allow advertisers to learn about someone’s “gender, age range, and interests.” When asked for comment on the information-sharing, a spokesperson linked to a blog post in which Verizon chief privacy officer Karen Zacharia says the data will only be shared to “Verizon companies, including AOL, and to a select set of other companies that help Verizon provide services.”
AOL’s Tim Armstrong defended the plan on Wednesday. “If consumers don’t trust you it’s not worth whatever you’re going to do with the data,” Armstrong said, according to a report from AOL-owned TechCrunch. “Verizon is probably more sensitive to data than most Internet companies.” He then compared data to oil and said information and fossil fuels can be used in good or bad ways.
Those defenses won’t carry much weight. There’s still something unsettling about knowing that one of the nation’s largest wireless carriers will be sharing information with an all-but-omnipresent ad network to assist its targeting. Verizon customers didn’t sign up for that when they decided to use the wireless network, nor when they visited any of the sites serving AOL’s advertisements.
Which lends some more credence to the idea that people might wish to install ad blockers. A spokesperson from Eyeo, the company behind AdBlock Plus, told me the tool “can technically help users to defend themselves against this kind of tracking.” Combine the desire to maintain a little bit of privacy with the time and money to be saved by using an ad-blocker, and it seems like a no-brainer.
Those benefits are especially funny when Verizon is involved. Using an ad-blocker to cut down on the amount of mobile data used could prevent many people from having to pay for going over their monthly data limit, while also preventing the company’s shiny multibillion-dollar acquisition of AOL from paying off because people don’t want its ad network to learn more about them.
Still, the company must be given credit for its efforts to let people know about the change. As Zacharia explains in her response to ProPublica’s reporting:

We are alerting customers who are eligible for these programs in the following ways: we’ve posted a notice on our website; customer bills will contain a message notifying them; and those customers for whom we have an email address will also receive an email notification.

I went through the process myself, and while it was frustrating having to “save changes” for every section within Verizon’s privacy controls, it was nice to have everything available right there. Who knows when I’ll have to switch everything off again (companies have a knack for forgetting someone’s preferences, at least where data collection is concerned) but for now it seems like everything’s good.
I’ll still leave the ad-blockers enabled, though. Verizon isn’t the only company trying to collect more information with what Walt Mossberg described as “a form of spyware, scooping up information about what people do online without their knowledge and permission.” So long as that remains true, it seems like a good idea to block ads, even if gives the media industry a series of panic attacks.

AT&T beats T-Mobile in latest J.D. Power network quality rankings

J.D. Power released a report on Thursday looking at which of the big four major U.S. carriers provide cellular service with the fewest lost calls, slow downloads, failed texts and other common issues.

As usual, the survey says Verizon has the highest mobile network quality. Verizon’s network had the fewest connection problems among the big four carriers in all six geographical regions that J.D. Power looks at. AT&T came in second place, taking the runner-up spot in all six regions.

Last year, T-Mobile started to take the second-place slot from AT&T in areas such as the Northeast and West. This year, though, AT&T reclaimed it in those regions. One way to explain that: Last summer, when the previous report came out, T-Mobile had been in the process of building a massive network expansion. However, T-Mobile’s been adding millions of subscribers since then, and the reduced network quality could be because its network is starting to show signs of saturation.

JD Power Northeast 2015 Q1

In the northeast region, for instance, Verizon subscribers can expect to see 11 problems per 100 connections; AT&T subscribers will see 13 problems per 100 connections; and T-Mobile lags behind with 16 problems per 100 connections. Last summer’s J.D. Power report suggested that T-Mobile only had 12, and AT&T had 14. Verizon stayed steady with 11 problems per 100 mobile interactions.

In the other five regions, the situation is similar. Verizon even improved its mid-Atlantic performance to take the top spot back from AT&T there. Overall, there have been more issues with network quality in the past six months than before. Out of every 100 network connection, across all four carriers, there is a problem with 13 of them. Last year saw an average of 12 issues per 100 connections.

Network quality isn’t the be-all and end-all for carriers, though. J.D. Power administers surveys looking at customer service as well, and T-Mobile came out on top of that last summer.

Charts for all six regions are available from J.D. Power.

Net Neutrality day is here: a guide to today’s vote

What is the right way to run the internet? After months of pitched debate over so-called net neutrality, the FCC will finally vote on a proposal that will prevent broadband providers from slowing down or speeding up certain websites.

While there’s little doubt about the outcome of the vote, Thursday’s FCC hearing could still bring some surprises. Here’s an overview of how the process will unfold, key issues to watch, and what will happen next.

When is the vote taking place?

The hearing begins at 10:30am ET at the FCC in Washington, where the five Commissioners will vote on two items. The net neutrality proposal is the second item (the first is about municipal broadband – update: which has passed 3-2), and a vote is expected to occur in the early afternoon.

What are they voting on?

The crux of the proposal is new regulations that will replace the net neutrality rules that a court struck down in early 2014. The new rules themselves (contrary to recent rhetoric) are rumored to be 8 pages long and, under FCC convention, are an appendix to a larger document that contains the Commissioners’ positions.

The FCC staff will summarize the key parts of the new rules, but the document itself is not likely to be available to the public for several weeks. This is due to agency protocol, which gives the Commissioners time to add final comments (though the substance of the rules will not change between now and when they appear).

How exactly does the vote take place, and what will be the outcome?

After the staff summaries, each of the five Commissioner will offer their comments in order of seniority. Republican Commissioner Ajit Pai, who has been an outspoken critic, is expected to speak for an hour so this could take some time. They will then take a vote, and hold a press conference.

The outcome will be a 3-2 vote on partisan lines, with the two Democratic Commissioners siding with Chairman Tom Wheeler. (Update: that’s exactly what happened)

What are the key things to watch?

While the outcome of the vote is a sure thing, some key details of the proposal are still unknown. The most high profile of these concerns what the FCC will do about so-called interconnection, and what the rules will do to prevent ISPs from forcing sites like Netflix to pay a toll in return for not having their streams degraded.

There is also the issue of “zero rating,” which is when phone and companies exclude certain apps or services (such as music) from a customer’s monthly data cap. While this violates the general principle of net neutrality, Chairman Wheeler has yet to explain how strictly the new rules will prevent this. (Read my colleague Stacey Higginbottam’s excellent overview of potential loopholes here).

Finally, since much of the recent net neutrality debate has been about theater, it will be worth watching to see how far Commissioner Pai (who has been waging a nasty political and social media campaign against Wheeler) will go to stir the pot during the hearing.

So will the new net neutrality rules go into effect right away?

No. According to Harold Feld of Public Knowledge, the rules only go into effect 30 days after they appear in the Federal Register, which could take a few weeks.

Will there be lawsuits?

Yes, buckets of them. Expect big telecom companies like Verizon or AT&T to sue in the coming weeks. Meanwhile, it’s possible that activist groups on both the right and the left may bring suits of their own.

What will be the effect of the lawsuits?

Feld says, in the event of multiple lawsuits, the first order of business will be for various appeals courts to decide which of them will take the case. After that, the telecom companies are likely to receive a brief stay of the rules until they can file their first round of arguments. At that point, the stay will likely be lifted while the court hears the case.

The court cases are likely to kick off in March or April, and a ruling on whether the new FCC plan is legal will probably come in late 2015 or early 2016. In the meantime, the net neutrality rules will be in effect.

I just can’t get enough of this stuff! Where can I learn more?

Gigaom will have updates on the days proceedings through Thursday. The FCC will have a live stream here (if the internet holds up!).

I’ll be tweeting about it here. Other Twitter accounts to watch are those of Gigi Sohn (FCC lawyer), Commissioner Pai, Public Knowledge’s Feld and Professor Tim Wu (who coined “net neutrality” in the first place).

For political flavor: The New York Times has opined on the FCC’s “wise new rules” here while the Wall Street Journal, on the other hand, hates everything about the FCC (paywall).

This story was corrected at 10:05am to note the court decision was in 2014, not 2013.

Does the FCC want to oversee peering deals like Netflix vs. Comcast?

The FCC will soon pass new rules for how ISP’s must handle broadband traffic and, while it’s expected to impose a policy of net neutrality when it comes to consumers, it’s been less clear how the agency will resolve another thorny internet issue: whether network providers can charge content companies to accept their traffic — and throttle their streams if they don’t pay. On Wednesday, a report surfaced that suggested how the issue will play out.

The issue, known in the industry as peering or interconnectedness, became a hot topic last year as Netflix feeds failed across the country, leaving consumers to shout at their screens and wonder who to blame. Big broadband providers like Comcast and Verizon sought to fault Netflix and the content companies, claiming they should have to pay a toll to offset the large volumes of internet traffic they create.

Netflix and traffic management services like Level 3, however, claimed that the ISPs has deliberately degraded their traffic by refusing to carry out low-cost upgrades to key internet ports. Calling the tactic a form of extortion, the content companies have also accused the ISPs of double-dipping — saying the ISP’s already charge consumers to receive the internet, and those charges should include all infrastructure fees on the backend.

Now, a long report from Bloomberg cited a source that claims to know how FCC Chairman Tom Wheeler plans to resolve this grand conflict.

According to the source, Wheeler is prepared to bless those paid peering deals as part of a larger framework of internet rules. But he will reportedly also do so in a way that permits the likes of YouTube or Vimeo to complain if the ISP’s are not being “fair or reasonable” with their agreements. As the report said:

FCC Chairman Tom Wheeler has decided the rules, scheduled for a vote next month, will permit the agreements but include a procedure for companies to ask for agency review, said the person, who asked to remain anonymous because the plan hasn’t been made public.

This pronouncement, however, may be premature.

Blanket ban or case-by-case?

No one will be surprised if the issue of interconnectedness appears in the first draft of the new FCC rules which, under law, must be circulated by Chairman Tom Wheeler to the other FCC Commissioners at least three weeks before a vote. These are expected to go out (and get leaked to the press) on February 5.

Indeed, Wheeler demanded data from the companies last summer, as part of an investigation into the public outrage that occurred over the stuttering Netflix streams.

The big question now is not just whether Wheeler will include peering agreements in a larger framework of rules, but the way in which such arrangements will be overseen.

According to a source familiar with the debate, ISPs are likely reconciled to the fact that their current paid arrangements with Netflix, which are currently unregulated, will come under the nose of the FCC in the future.

As such, they are now pushing to ensure that any enforcement occurs on a case-by-case basis over whether a given deal is “fair and reasonable,” rather than in response to a bright line rule that outlaws the sort of pay-for-service deals the ISP’s forced on Netflix last year.

The Bloomberg report, which does not cite any documents and on which the FCC declined to comment, suggests that Wheeler has decided to go with the case-by-case approach. While this would nominally ensure fair oversight, it would also allow the ISPs, as they have done in the past, to deploy their formidable legal teams to ensure any complaints would take years to resolve. In other words, this could be a case where ISPs are trying to make the best of a bad outcome.

As such, it’s unclear if the report is a bona fide insight into Wheeler’s thinking, or is instead just an opening salvo in what is sure to be a ferocious spin cycle as the day of the FCC vote gets closer.

How net neutrality rules can fix Verizon’s supercookie problem

The FCC is on the cusp of proposing new rules for the internet, and it may have a chance to kill two birds with one stone: along with preserving so-called “net neutrality,” the rules could serve to stop the use of “supercookies” that phone carriers like Verizon are using to track their wireless subscribers.

In case you’re unfamiliar, supercookies are akin to regular internet cookies, which advertisers use to create a record of users’ browser activities. The difference is that the supercookies are tied to a users’ mobile device at a network level, and create a permanent customer profile that can’t be deleted. The profiling process not only tracks web browsing, but also app activities, and it can’t be thwarted by using a browser’s “private” or “incognito” mode.

Carriers like Verizon use the supercookies to assemble marketing segments such as “low-income Spanish-speaking moms in the Bronx” (for instance), and offer them to advertisers. While this profiling feature can be a boon to marketers, it has also alarmed privacy advocates, who say supercookies are invasive and point out they are being abused by outside ad companies.

After an outcry, phone giant AT&T said in November that it would stop using supercookies. Its rival Verizon, however, has so far rebuffed calls to cease using the tool, known in the industry as unique ID headers, to tag and track users.

Verizon, which declined to comment for this story, has presumably calculated that the value of the marketing data from supercookies outweighs whatever privacy headaches they create. Most consumers, meanwhile, don’t know or care about cookies in the first place, so it’s unlikely that Verizon will suffer any sort of customer exodus.

Enter Title II

Verizon’s support for supercookies could one day lead to class-action lawsuits, as some have suggested. But in the meantime, the FCC may soon be in position to address the privacy implications of what the company is doing.

The opportunity comes about as a result of the current net neutrality debate, which is widely expected to result in the FCC reclassifying internet providers as so-called “Title II” companies.

The Title II designation is the only legal avenue the agency can use to stop broadband companies from favoring some websites over others, but it also contains important authority for the FCC to protect privacy.

“The critical provision is Section 222, which concerns customers’ proprietary network information,” said Harold Feld, a lawyer and telecom expert with the group, Public Knowledge, in a recent phone interview.

Section 222 is one of a list of rules that Title II imposes on phone companies and other “common carriers,” and serves to restrict companies from using customer communications data for marketing purposes.

According to Feld, however, it’s not certain that the FCC would include Section 222 as part of any reclassification process. Chairman Tom Wheeler has suggested that any action under Title II would include so-called forbearance measures, which could excuse the companies from many of the new obligations.

Feld suggested that if the FCC does choose to implement Title II without Section 222, it could fall back on the more general provision known as Section 201, which requires carriers among other things to act in the “public interest.”

The outcome of the final net neutrality debate, slated for a likely FCC vote on February 26, is far from certain. But the emergence of the supercookie issue could provide another argument for net neutrality supporters to urge the FCC to go-ahead with reclassification.

40 hours later, Verizon says its cloud is back …

After taking a ton of heat for what ended up being a 40-hour maintenance shutdown over the past two days, Verizon said the work it did will prevent these sorts of stoppages in the future.

This maintenance work, added what Verizon called “seamless upgrade functionality” that will enable similar major upgrades to happen without service interruption, according to a press release posted Sunday afternoon.

Going forward, Verizon said, “virtually all maintenance and upgrades to Verizon Cloud will now happen in the background with no impact to customers.” There wasn’t a ton of information about how this will work, but there you have it.

Last weekend, when Verizon advised customers a week in advance of  what it said could be a 48-hour shutdown for planned maintenance, all sorts of things hit the fan. The prevailing opinion was that cloud computing vendors should be able to handle upgrades and maintenance with a lot less downtime than that.

Verizon is trying to make a name for itself in enterprise-class cloud infrastructure.  In that market it must contend not only with other telco-rooted companies– [company]CenturyLink[/company], [company]AT&T[/company] et al — which are trying to pitch the same customers but with public cloud giant [company]Amazon[/company] Web Services, which has proved serious about winning corporate workloads.

As if that’s not enough, legacy IT powers like [company]Microsoft[/company] and [company]IBM[/company], which are already in virtually every enterprise account are pitching their own respective clouds aggressively.

In a cloud melee like that, Verizon, which launched this new Verizon Cloud last fall, had better make good on no-more-upgrade-shutdowns because people will be watching.

Cloud upgrades no big deal if deployment is done right

When Verizon said it might shutter its new Verizon Cloud for 48 hours this weekend for a major upgrade, users were shocked. Some promised to live-tweet the event which starts Saturday at 1 p.m. EST. Verizon’s subsequent qualifications — that 48 hours is the worst-case scenario, that customers received ample notice, that this work would make future upgrades less traumatic — eased the situation a bit.

Cloud vendors take these occasions — whether the issue is a planned-in-advance upgrade or more hastily put together patch  — to educate users about best deployment practices. They tick off a range of tips — that workloads should be deployed across availability zones and regions, for example. And third-party tools and management vendors likewise parlay these events to promote the use of their own products.

To mitigate downtime, plan, plan, plan

Cedexis, which offers a cross-cloud load balancing service, sent out an email Thursday with its own list of best practices. From the email:

Whatever your opinion on Verizon Cloud and the way they are rolling this upgrade out, what is true is that there is no reason for this type of system maintenance to impact the correctly configured enterprise. It is time for architects and designers to realize that cloud outages are a fact of life — just like Data Center outages.

In cloud, as in past IT deployment models,  disaster recovery “relies on the use of geographically diverse deployment of applications. Why would anyone adopting Cloud think single-homing an application is a reasonable practice?,” according to Cedexis.

Deploy across zones, regions and vendors

Cedexis goes further than the multi-availability zones mantra to say enterprises should use multiple cloud vendors as well. That’s something you probably won’t hear from [company]Amazon[/company] or [company]Microsoft[/company].

Vendor specific outages — whether the vendor is Amazon Web Services, Microsoft, Rackspace, IBM or Verizon — are “more common than ‘acts of God,'” according to Cedexis, so selecting multiple vendors with (of course) global load balancing protects the user from these events. [company]RightScale[/company] is another vendor who provides these cross-cloud management and deployment capabilities.

So go easy on [company]Verizon[/company], said Carl Brooks, an analyst with 451 Research. In a comment on Gigaom’s earlier story, Brooks wrote that the hubbub around Verizon’s planned upgrade was way overblown.

[company]Verizon[/company] is “telling a small subset of its customers to get the heck  out while they do some planned maintenance, which is miles better than the usual practices from cloud providers,” Brooks wrote.

“I’d bet real money they could do most of this upgrade without kicking users off … [company]Microsoft[/company] has planned monthly outages to patch and tells you if you’re in the target zone ahead of time. This isn’t so different, just a bit more ham handed. You know what AWS says to its [most of its] users before it upgrades and reboots a bunch of its platform? Nothing.” Brooks later amended his statement via email to say that most customers never notice routine AWS maintenance.

Update: A Verizon customer pointed out that at least one Verizon Cloud (compute and storage) shut down in September did, in deed, last two days. It kicked off at 11 a.m. CT on September 11 and services were not back on till 11:38 p.m. two days later, according to this Verizon support post.

Note: This story was updated at 1:43 p.m. PST with information on Verizon’s September 11 shut down and againa t 7:19 p.m. PST January 9 with Carl Brooks’ amended statement.

 

Verizon Cloud warns customers of 2 day (!) maintenance closure

Verizon’s enterprise cloud may go off line for 48 hours starting next Saturday at 1 a.m. EST for scheduled maintenance, notice of which got the Twitterverse in a bit of a tizzy this weekend.

A [company]Verizon[/company] spokesman confirmed that a major platform upgrade would take place starting January 10, but said the customer service rep probably overstated the amount of downtime they will experience. In a subsequent email, he said the work being done next weekend will enable future service updates to happen without impacting customers.

“We do these upgrades periodically, the last one being right before Thanksgiving and there was zero impact,” he said. In that case, all customer VMs were back up in 24 hours and most within 12 hours, he added.

Verizon had better hope that is the case because two days of downtime, even if the bulk of it happens over the weekend, is not anything any corporate account wants to experience.

Verizon, which initially got into “cloud” via its $1.4 billion acquisition of Terremark in 2011 and then last year announced a brand new written-from-scratch “enterprise cloud,” is trying to compete with Amazon Web Services and a raft of other competitors for corporate accounts. The shutdown impacts that new Verizon cloud, not the legacy Enterprise Cloud versions, another spokesman said in a follow-up email.

Planned shutdowns for cloud maintenance are not unheard of. And sometimes cloud providers have to react faster to more unforseen issues. For example:  Amazon Web Services, Rackspace, IBM and others all had to regroup in late September/early October to address a Xen hypervisor security flaw.

Note: This report was updated at 7:51 p.m. PST with additional comment from Verizon about the nature of next week’s service update and again at 12:01 p.m. PST January 5 to reflect that Verizon said its legacy cloud offerings will not be affected by next week’s action.

Google and Verizon sign patent deal and call for action on trolls

Verizon and Google on Tuesday announced a global patent cross-licensing agreement that will cover a broad range of technologies. The companies say it will lower the risk of frivolous patent litigation in the future.

“[T]he Johnny-come-lately owner of a single patent can threaten an entire innovative ecosystem,” [company]Verizon[/company] wrote in a blog post describing the deal. The post also states that the arrangement will reduce the number of potential patents available to so-called patent trolls.

The deal mirrors three earlier ones that Google signed with Cisco, Samsung and LG earlier this year. For Google, the goal of such deals is to show that cross-licensing is a better model than “patent privateering,” in which companies farm out patents to shell companies that then threaten to sue a broad range of targets.

Patent abuse has been an ongoing problem in recent years, in part due to the millions of low-quality patents flooding the system, and due to economic asymmetries in the litigation process that favor patent plaintiffs over defendants. The end result is often that companies simply pay to make dubious patent cases go away rather than bear the cost of fighting them.

Verizon’s blog post also noted that cross-licensing can be a protection against the “innovation tax that patent trolls often collect,” but added that such measure are not adequate, and called on Congress to pass patent reform.

While a reform bill called the Innovation Act enjoyed bipartisan support in Congress last spring, it ultimately failed at the hands of Senate Democrats. The new Congress, which will be controlled by Republicans, is expected to relaunch the measure in 2015.