Politics and Law

The Federal Communications Commission is looking into how Google Voice treats calls to certain rural areas that landline phone companies are required to connect.

AT&T placed this complaint before the FCC, accusing Google of failing to live up to the Net neutrality rules it has long supported before the U.S. government. On Thursday, several members of Congress implored the FCC to look into the matter, and their concerns have been heard, according to a report from the Associated Press that Google has confirmed.

The dispute is over Google's practice of blocking calls to certain rural phone networks that are allowed to charge a disproportionately high rate for calls connected to those networks. Some rural carriers, in a practice known as traffic pumping about which AT&T has long complained, partner with companies that draw a high volume of network traffic, such as phone sex operators and conference-calling firms, charge a much higher connection rate, then split the revenue with them.

AT&T is required to connect such calls because it is considered a "common carrier" that is required to ensure open access to networks that were created with public money. "By openly flaunting the call-blocking prohibition that applies to its competitors, Google is acting in a manner inconsistent with the spirit, if not the letter, of the FCC's fourth principle contained in its Internet Policy Statement," Robert Quinn, AT&T's senior vice president focusing on federal regulation, said in a statement last month when it filed its original complaint with the FCC.

Google argues that it is not subject to the same laws because it's a software company and because Google Voice doesn't replace phone service; it still requires phone service to work properly. It addressed the inquiry in a blog post Friday.

"AT&T apparently now wants Web applications--from Skype to Google Voice--to be treated the same way as traditional phone services," wrote Richard Whitt, Google's Washington media and telecom counsel. "Their approach is what a former FCC chairman has called "regulatory capitalism," the practice of using regulation to block or slow down innovation. And despite AT&T's lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC."

So now it appears that the FCC will attempt to referee the matter. Google's no stranger to federal authorities at the moment, with just about everything it does falling under the watchful eye of an administration that seems determined to examine dominant companies in the tech industry.

A federal judge in San Francisco has tossed out a slew of lawsuits filed against AT&T and other telecommunications companies alleged to have illegally opened their networks to the National Security Agency.

U.S. District Judge Vaughn Walker on Wednesday ruled that, thanks to a 2008 federal law retroactively immunizing those companies, approximately 46 lawsuits brought by civil liberties groups and class action lawyers will be dismissed.

Congress has created a "'focused immunity' for private entities who assisted the government with activities that allegedly violated plaintiffs' constitutional rights," Walker wrote in a 46-page opinion. That has not, he said, "affected plaintiffs' underlying constitutional rights."

Wednesday's ruling is a bitter defeat to groups including the Electronic Frontier Foundation and the American Civil Liberties Union, which are coordinating the lawsuits over warrantless wiretapping. They had hoped to convince the judge that the law improperly infringed upon the separation of powers described in the U.S. Constitution and handed too much power to the executive branch.

The 2008 law, called the Foreign Intelligence Surveillance Amendments Act, was approved by a Democratic-controlled Congress last summer. As a senator, President Obama voted for the measure even though he had previously pledged to oppose it.

It says that no "civil action" may take place in state or federal court "against any person for providing assistance to an element of the intelligence community"--and will be automatically dismissed as long as the attorney general claims the surveillance was authorized.

Former Attorney General Michael Mukasey sent the court a letter saying the surveillance was authorized, but without offering any further information. The Justice Department under President Obama has not changed its position.

EFF said it would appeal to the 9th Circuit Court of Appeals. "We're deeply disappointed in Judge Walker's ruling today," EFF Legal Director Cindy Cohn said in a statement. "The retroactive immunity law unconstitutionally takes away Americans' claims arising out of the First and Fourth Amendments, violates the federal government's separation of powers as established in the Constitution, and robs innocent telecom customers of their rights without due process of law."

The ruling does not affect lawsuits that have been filed directly against the NSA or other government agencies, including the EFF's Jewel v. NSA case. (A congressional report accompanying the 2008 law explicitly says: "Nothing in this bill is intended to affect these suits against the government or individual government officials.")

Walker left one possible opening for EFF, ACLU, and their allies. Because the 2008 law exempts surveillance "authorized by the president" during the time from September 11, 2001 and January 17, 2007, telecom firms could be held liable if they surreptitiously cooperated with NSA or other agencies more recently.

He gave the plaintiffs 30 days to amend their complaint to focus on surveillance that took place after January 17, 2007, the date that President Bush decided to amend the program to include supervision by courts.

WASHINGTON--AT&T is making the largest ever commitment by an American company to purchase alternative-fuel vehicles, CEO Randall Stephenson told the Economic Club of Washington on Wednesday.

"My No. 1 job is long-term growth," he said. "I only know of one way to do that and that's by investing in areas that drive sustainable growth."

Companies like AT&T, Stephenson said, have an obligation to make investments that will drive the nation's economic growth and productivity, as well as to invest in America's workforce.

"The time to invest in America's future is not when (the economy) turns, the time is right now," he said. "By working together, I do believe we can accelerate the velocity of commerce in this country."

Stephenson commended President Obama's emphasis on expanding communications infrastructure, as well has his commitment to health care. He and other AT&T executives, however, cautioned against regulations on broadband funding that could stifle private investment, as well as further union reforms in the Employee Free Choice Act.

"Less regulation results in more investment," he said.

The company plans to make two investments amounting to $565 million to increase the number of alternative-fuel vehicles it uses from 100 to 15,000 by 2020.

Over the next five years, AT&T will spend $350 million to purchase 8,000 vehicles that run on compressed natural gas. The new vehicles AT&T will buy will be built by the U.S. auto industry and should produce 25 percent less greenhouse gas emissions than traditional vehicles, Stephenson said.

AT&T will also spend $215 million to replace nearly all of its 7,100 passenger vehicles over the next 10 years with alternative-fuel vehicles, starting with electric hybrids.

With these two investments, AT&T expects to reduce its gasoline consumption over the next 10 years by 49 million gallons.

The company continues to make large investments--which should amount to around $17 billion to $18 billion this year--expecting to weather the current economic downturn relatively well, Stephenson said.

AT&T's traffic has increased 50 percent year over year, largely in video and data. As an additional sign of its economic health, Stephenson pointed out the company has increased its dividends in all 25 years of its history, including during the 2001-2002 downturn.

"This environment is tough, but it really isn't much more difficult in our industry than what we experienced in the '01-'02 time frame," he said.

Stephenson said the company's growth lies in promoting mobility.

"Wireless is going to be a big opportunity inside and outside the United States," he said. "Everything you do on your desktop, over time your expectation is that it will be mobile."

Federal commitments to broadband infrastructure will help accelerate economic growth, Stephenson said, as long as conditions are not imposed that would deter private investment or influence companies to invest in the wrong technologies.

"The obsolescence curves we are riding are significant," he said. "We have got to make sure we get the policy right on this stuff."

AT&T is not actively seeking stimulus funds, said Tim Harden, AT&T's president of fleet operations, though it will take a look at what is available.

He said federal agencies will have to take inventory of available broadband before making any policy decisions and carefully consider definitions for undefined terms like "unserved" and "underserved." They will also have to be careful shaping the open-access conditions mandated for some stimulus funds.

"I would hope they would not seek to go farther than the FCC has already gone," Harden said.

Stephenson also said that, although more than half of AT&T's workforce is unionized already, the company opposes some aspects of the Employee Free Choice Act, a bill introduced Tuesday in Congress to make it easier for workers to join unions.

"Secret ballots we think are inherently important," he said. "How first contract arbitration manifests itself is very important."

While AT&T's overall workforce is declining because of the dismal economy, the company expects to add 3,000 new high-tech jobs this year that will be union-represented in its growth areas of wireless, broadband, and video. The added jobs will fulfill AT&T's commitment to bring 5,000 offshore jobs back to the United States.

Google's staff representatives in Washington, D.C., are famously mild-mannered. But they showed a flash of steel on Thursday in a response to an incendiary article written by a political adversary paid by AT&T, Comcast, Verizon, and other communications companies.

The article in question was written by Scott Cleland, who alleged that Google is not paying its "fair share of the Internet's cost." He calculated that it uses 16.5 percent of all consumer Internet traffic this year yet pays only a fraction of that in bandwidth costs.

Cleland's anti-Net neutrality group, NetCompetition.org, is paid by telecommunications and cable companies to be a full-time, 24-7 Google critic. Some examples of Cleland-isms: "Google steals," it connives in a "modern-day Machiavellian plot," and its executives dress funny.

Google has generally let those fusillades--and those creative astroturfing efforts organized against it--pass without much public comment. But Cleland's latest article prompted Richard Whitt, Google's Washington telecom counsel, to respond.

On the company's blog, Whitt lashed out at what he called Cleland's "payola punditry." He said: "We don't fault Mr. Cleland for trying to do his job. But it's unfortunate that the phone and cable companies funding his work would rather launch poorly researched broadsides than help solve consumers' problems."

And: "Mr. Cleland's calculations about YouTube's impact are similarly flawed. Here he confuses "market share" with 'traffic share.' YouTube's share of video traffic is decidedly smaller than its market share. And typical YouTube traffic takes up far less bandwidth than downloading or streaming a movie."

In other words, a low-quality streaming YouTube video takes only a small fraction of the bandwidth of a high-definition TV show, which iTunes is now offering. Another way to make that point is to realize that one company may sell a million vehicles and another may sell 100,000, but that doesn't say anything about the total vehicle weight--a million bicycles have nowhere near the same mass as 100,000 Mack trucks.

For his part, in two brief telephone conversations on Thursday, Cleland stands by his work. He says, regarding his corporate sponsors: "I am fully disclosed."

About the criticisms raised by Google, Cleland replied: "I took a difficult subject that's never been written about before...This was a straightforward, transparent attempt to estimate something of significance."

Don't think this debate is going to be over anytime soon. The telecommunications and cable lobbyists turned to Cleland around the same time as Google and its left-coast allies (eBay, Amazon.com) were on the legislative attack and demanding sweeping, intrusive Net neutrality laws. Congress rejected them at the time. But with the Democrats about to control the legislative and executive branches, and with President-elect Barack Obama's clearly stated views on the topic, look for round two in the Net neutrality wars, contra my earlier predictions, to erupt next year.

Disclaimer: Declan McCullagh is married to a Google employee.

The Electronic Frontier Foundation filed a lawsuit Thursday against the Bush administration on behalf of AT&T customers to halt what it called the "massively illegal" warrantless surveillance of Americans' Internet and telephone communications.

In addition to suing the National Security Agency, the nonprofit Internet advocacy group also names President George Bush, Vice President Dick Cheney, Cheney's chief of staff David Addington, and former Attorney General Alberto Gonzales, as well as others.

"For years, the NSA has been engaged in a massive and massively illegal fishing expedition through AT&T's domestic networks and databases of customer records," senior staff attorney Kevin Bankston said in a statement. "Our goal in this new case against the government, as in our case against AT&T, is to dismantle this dragnet surveillance program as soon as possible."

The EFF said the evidence it would present is the same evidence central to a class-action lawsuit it filed in 2006 accusing AT&T of opening up its telecommunications facilities to the NSA for use in spying on the phone calls and e-mails of "millions of ordinary Americans." Such a practice violates free speech and privacy rights spelled out by the U.S. Constitution and also runs afoul of federal wiretapping law, the EFF claimed.

The ACLU won a brief victory in a similar case filed against the NSA when a federal judge ruled in 2006 that the NSA's surveillance program "ran roughshod" over Americans' constitutional rights Americans and violated federal wiretapping law. However, the 6th U.S. Circuit Court of Appeals dismissed the suit in 2007 on narrow procedural grounds without addressing the legality of the program. The suit effectively died earlier this year when the U.S. Supreme Court declined to intervene in an appeal.

In July, the Senate approved a bill that would rewrite federal wiretap laws by granting retroactive immunity to telecommunications companies as long as the government claims the request was "lawful" and authorized by the president.

After the EFF's 2006 lawsuit was filed, reports of a secret room in an AT&T building in San Francisco surfaced and have become central to the nonprofit group's litigation.

Although EFF's lawsuit was filed before allegations about the room surfaced, reports of its existence have become central to the nonprofit group's attempts to prove AT&T opened its network to the NSA. Former AT&T employee Mark Klein released documents in 2006 alleging the company spliced its fiber optic cables and ran a duplicate set of cables to Room 641A at its 611 Folsom Street building.

The deleted portions of a legal brief accidentally released in 2006 sought to offer benign reasons why AT&T would allegedly have a secret room at its downtown San Francisco switching center that would be designed to monitor Internet and telephone traffic. (AT&T has publicly neither confirmed nor denied cooperating with the National Security Agency.)

Initial details of the surveillance program surfaced in late 2005 in a Los Angeles Times article that quoted an unnamed source as saying the NSA has a "direct hookup" into an AT&T database that stores information about all domestic phone calls, including how long they lasted.