FCC Chairman Tom Wheeler proposed Thursday to eliminate loopholes that allow Dish Network to score a multi-billion dollar discount in a recent airwaves auction.

Bidding discounts for smaller carriers would be capped under the new rules and a loophole that allowed Dish to essentially fund the bids for smaller companies would be eliminated, Wheeler’s aides said Thursday.

Bidding credits will be capped at $150 million for small businesses and at $10 million for rural wireless service providers, Wheeler’s aides said Thursday. They also proposed new limits on joint bidding between providers, saying that such bidding would only be permitted by “non-nationwide providers” and that “multiple applications by one party or by parties with common controlling interests” wouldn’t be allowed.

The rules will apply to an auction of TV airwaves set to happen next year. Verizon, AT&T and other carriers desperately want to win those airwave licenses because they could be used to help build out LTE networks across the U.S. The airwaves are coveted by wireless carriers because signals travel for long distances on them, which means that companies don’t need as many towers to build a reliable network.

Notably, Wheeler rejected an attempt to further limit how much spectrum wireless giants AT&T and Verizon would be able to acquire in the upcoming auction. T-Mobile and other smaller carriers have been pressing agency officials in recent weeks to increase the amount of airwaves licenses reserved for smaller carriers from 30 Mhz to at least 40 Mhz.

On Wednesday, the Justice Department and a group of Democratic senators suggested that the agency should consider increasing the amount of airwaves set aside for smaller carriers, saying that would lead to a more competitive wireless market for consumers.

In a blog post, Wheeler said the current reserve size “balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants” and that “there will be significant spectrum made available in all markets of the country to all bidders.”

The FCC’s five commissioners are set to vote on the new proposal at their regular monthly meeting next month.

This article originally appeared on Recode.net.

Justice Department antitrust officials fired off a letter to federal regulators Wednesday suggesting that they ought to consider how many airwave licenses will be set aside for companies not named AT&T or Verizon in an upcoming TV airwaves auction.

Federal antitrust officials didn’t explicitly say the FCC should increase the amount of airwaves being held in reserve for bidding by T-Mobile and smaller wireless carriers. The FCC currently has set aside 30 Mhz of airwaves for smaller carriers but T-Mobile and others want at least 40 Mhz.

But the Justice Department suggested the FCC should give “considerable weight” to concerns that allowing AT&T and Verizon to acquire most of the airwaves in the auction could limit competition in the wireless market for years to come.

It’s not a new sentiment from Justice Department officials, but the fact that they publicly released this letter now, as FCC Chairman Tom Wheeler and his aides try to finalize rules for the upcoming auction of TV airwaves next year, is notable. It adds some pressure on FCC officials to reconsider a decision to set aside 30 Mhz of airwaves for bidding by smaller carriers.

Noting that some companies (i.e. T-Mobile, Sprint and smaller regional wireless carriers) want the FCC to set aside at least 40 Mhz of airwaves licenses for bidding by companies other than AT&T and Verizon, Justice Department officials carefully avoided weighing in but still hinted they wouldn’t be opposed.

“The Department recognizes that the Commission must balance competing policy priorities in setting the appropriate reserve levels,” Justice Department lawyers wrote in a June 24 letter. “In balancing these priorities, the Department urges the Commission to give considerable weight in determining the amount of spectrum included in the reserve to protecting and promoting competition, and the well-established competition principle that those with market power may be willing to pay the most to reinforce a leading position.”

It’s not a new sentiment from the Obama administration’s Justice Department, which famously killed AT&T’s bid to acquire T-Mobile in 2011. Federal antitrust officials have said several times that it’s important to keep AT&T and Verizon from hogging all of the so-called low-band airwaves, most of which were previously used by TV stations and now host carriers’ LTE networks.

In April 2013, Justice Department antitrust officials urged the FCC to use its policies “to preserve and promote competition and to ensure that the largest firms do not foreclose other rivals from access to low-frequency spectrum that would allow them to improve their coverage and make them stronger, more aggressive competitors.”

Justice Department antitrust chief William Baer reiterated those comments in a May 2014 letter to the FCC.

T-Mobile and its CEO John Legere have been waging a wonky campaign to get customers to weigh in on the issue. Sprint and other carriers have also joined a lobbying coalition aimed at getting the FCC to set aside at least half of the airwaves set to be auctioned off for smaller carriers.

“There’s no more spectrum coming down the pike after this auction,” said Steve Berry, president of the Competitive Carriers Association, which represents smaller wireless companies, in a recent interview. Unless the agency changes its rules, “two companies will be able to dominate the market,” he said.

Earlier on Wednesday, a group of five Democratic senators also asked the FCC to “continue making competition your priority moving forward with this historic auction.”

Like Justice Department officials, however, the senators also didn’t flat-out call for a bigger set aside for smaller carriers.

Instead, the lawmakers, including Sen. Al Franken of Minnesota and Sen. Ed Markey of Massachusetts, wrote that the FCC should “continue to evaluate its auction rules to ensure they prevent excessive concentration of spectrum among the nation’s largest wireless providers.”

This article originally appeared on Recode.net.

T-Mobile found a new way to mess with rival AT&T Tuesday, asking federal regulators to reject a plan by the wireless giant to expand its network in parts of Kentucky.

T-Mobile filed a petition with the Federal Communications Commission asking the agency to reject the deal, saying essentially that it’s not a good idea to let AT&T get bigger there.

Last month, AT&T asked the FCC for approval to acquire some airwaves licenses in three rural or semi-rural markets currently held by East Kentucky Network, which operates under the name Appalachian Wireless. The licenses cover parts of Kentucky, West Virginia and Ohio and could be used to expand AT&T’s LTE network.

Given the FCC last year passed rules for an upcoming auction designed to promote more competition in the wireless market, the deal should be scuttled, T-Mobile said, because of “harms that result from precisely the type of excessive spectrum concentration AT&T proposes in its application.”

The acquisition would give AT&T more than a third of the best airwaves for LTE services in the market areas of Huntington-Ashland and Lexington-Fayette, T-Mobile says in its petition. In Lexington, AT&T already controls more than half of the so-called low-band airwaves licenses, T-Mobile complains.

“T-Mobile needs access to low-band spectrum in order to better compete in that area against AT&T’s commanding market share,” the company said in the filing. T-Mobile said it has about 42,000 subscribers in the Lexington area, which equates to a 4 percent share of the market.

T-Mobile did try to acquire those licenses, a T-Mobile spokesman said via email, adding that “once again, AT&T played keep away with low-band spectrum, foreclosing the ability of us to compete.”

Small acquisitions by AT&T or Verizon of licenses like this from smaller carriers generally don’t get much attention. But T-Mobile is currently waging a lobbying fight to get federal regulators to set aside more airwaves for smaller carriers in an auction of TV airwaves scheduled next year.

The FCC already opted to set aside a portion of airwaves for bidding by T-Mobile, Sprint and other smaller carriers in the auction. But T-Mobile wants a larger chunk of licenses to be set aside for bidding by small carriers, saying that’s the only thing that will bring more competition in the wireless market. The FCC is expected to make a decision on the request in the next few weeks.

AT&T and Verizon have been pushing back against that proposal, saying there’s no reason to set aside more airwaves for smaller carriers, particularly T-Mobile and Sprint, which have well-funded foreign owners in Deutsche Telekom and SoftBank, respectively.

In response to T-Mobile’s petition, AT&T put up a blog post entitled “T-Mobile Should Stop Complaining and Start Investing in Rural America.” AT&T said the acquisition would allow it to improve its network in those areas and offer “faster and higher quality services to its rural customers.” It also wouldn’t run afoul of FCC limits on acquiring certain airwaves, the company said.

This article originally appeared on Recode.net.

Federal Communications Commission officials announced plans Wednesday to fine AT&T $100 million for misleading subscribers about unlimited data plans.

It’s the largest such fine the agency has ever proposed under rules that require broadband providers to clearly disclose information about their services to consumers.

On Wednesday, the FCC alleged AT&T’s practice of slowing the speeds of unlimited data plan users and failing to tell them that their speeds could be slower than other customers violated transparency obligations under the agency’s old net neutrality rules, which have been in effect since 2010.

(While a federal appeals court threw out most of the 2010 net neutrality rules last year, it upheld the section that requires Internet providers to clearly tell subscribers about data speeds and other details of their service.)

A senior FCC official said that unlimited data customers who used more than 5 gigabytes of data experienced a drop in speed to just 512 kbps for the rest of the month. On average, those customers experienced reduced speeds for an average of 12 days, the official said.

“Consumers deserve to get what they pay for,” said FCC Chairman Tom Wheeler, in a prepared statement. “Broadband providers must be upfront and transparent about the services they provide.”

The FCC alleges AT&T violated the 2010 Open Internet rules by “falsely labeling these plans as ‘unlimited’ and by failing to sufficiently inform customers of the maximum speed they would receive” under the company’s new throttling policy, which was announced in 2011. The agency said it has received “thousands” of complaints from AT&T’s unlimited data plan customers since the policy took effect four years ago.

The Federal Trade Commission sued AT&T last year over the same issue, saying the company’s plan to cut subscriber speeds if they downloaded too much data during a billing cycle wasn’t clearly disclosed and violated the concept of having an “unlimited data” plan.

In a statement, AT&T said it will “vigorously dispute the FCC’s assertions.”

The company said the FCC had previously “identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers, and has known for years that all of the major carriers use it.” The company added it has been “fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”

In response, an FCC senior official said that AT&T’s consumer notifications were not sufficiently detailed enough to allow subscribers to make informed decisions.

While the proposed $100 million fine is the largest in FCC history, there’s a good chance it could drop in size as the complaint goes through the FCC’s internal judicial process and a likely court fight.

Any money recovered by the government won’t go to AT&T subscribers, however, it will be kept by the U.S. Treasury. A senior FCC official said the agency has asked AT&T to come up with a plan to compensate affected unlimited data subscribers.

The FCC’s two Republican members voted against the proposed fine, making arguments that it wasn’t clear AT&T actually violated the agency’s transparency rules or that the alleged violations warranted such a large fine.

(Updated: with more details about the alleged violations, historical context and the dissent by the agency’s two Republican members.)

This article originally appeared on Recode.net.

Do you think your Internet provider is deliberately slowing your connection or trying to block your access to a site or service? Now that new net neutrality rules are in effect, the Federal Communications Commission has appointed a new ombudsperson to field any complaints.

Parul Desai, an FCC staffer in the consumer division, has been named the new handler of net neutrality complaints, the agency announced Monday afternoon.

The new rules stipulated that a new ombudsperson would be in charge of handling complaints from consumers and making sure any net neutrality issues don’t get lost at the highly bureaucratic agency. The new ombudsperson “will work as a point of contact and a source of assistance as need” but “not as an advocate,” the FCC said Monday.

Given that Desai was a long-time consumer advocate before joining the FCC — she previously worked on telecom issues at Consumers Union, publisher of Consumer Reports, and Media Access Project, a now-defunct consumer group — broadband providers may not take much comfort in her appointment.

If you think you have a net neutrality violation to report, you can file a complaint with ombudsperson@fcc.gov or call 202-418-1155. To file a complaint online, go to consumercomplaints.fcc.gov and select the “Open Internet” option under the “Internet” portion of the site.

This article originally appeared on Recode.net.

A federal appeals court shot down an emergency effort by broadband providers to stop new net neutrality rules from going into effect Friday, saying the companies hadn’t met the “stringent” bar for such a stay.

The decision by the U.S. Court of Appeals for the D.C. Circuit was mostly expected. The new net neutrality rules are designed to prevent anticompetitive behavior by broadband providers, not to address an urgent, current problem.

The ruling also doesn’t forecast how the court might rule on the central question of whether the new rules are legal. The court did grant a request to consider the case on an expedited basis, which means that this debate can be settled a bit quicker.

Broadband providers wanted to delay the rules from going into effect until after the court rules on the larger decision — probably next year — about whether the rules are legal.

The move was a something of a setback for broadband providers which had hoped to stop the new rules from going into effect tomorrow. Public interest groups and Internet companies that supported the rules had urged the court to allow the rules to go into effect on time.

Last week, Miguel Estrada and Ted Olson, two top Supreme Court litigators who have been hired by the National Cable & Telecommunications Association, told reporters that they wouldn’t be surprised if the court declined to delay the Federal Communications Commission’s new rules from going into effect.

“You sue not to get a stay but to win,” Estrada told reporters, adding that he expected the court would simply try to move forward on an expedited basis to resolve the legal challenges.

Cable companies and other Internet providers sued the FCC in March to block rules approved earlier this year to prevent broadband providers from blocking or slowing legal traffic. The FCC essentially re-regulated Internet lines under a section of the law written for phone networks.

Consumer groups, Internet companies and net neutrality proponents cheered that move, but it infuriated broadband providers, which have argued that there’s no need for heavy-handed regulation.

FCC Chairman Tom Wheeler released a statement calling the court’s decision “a huge victory for Internet consumers and innovators!”

On the other side, broadband providers sounded somewhat resigned.

“While the stay decision is disappointing and a loss for consumers, securing a judicial stay is always a challenge given the extremely high standards,” said Meredith Attwell Baker, CEO of CTIA, the wireless association, in a statement. USTelecom president Walter McCormick said his members were looking forward “to providing the court a more fulsome, detailed accounting of the legal problems with the commission’s order.”

Meanwhile, on Thursday a House appropriations committee approved a budget bill which included language that would prohibit the FCC from using its funding to enforce the new rules until after the federal court challenge has been concluded. It’s not clear that the language will actually stay in the legislation, but the move has infuriated net neutrality activists.

This article originally appeared on Recode.net.

T-Mobile CEO John Legere has had considerable success getting wireless consumers on his side, but he faces an uphill battle in his latest quest: Convincing them to care about an upcoming spectrum auction and the rules that govern it.

Next year, the Federal Communications Commission will oversee an auction of wireless airwaves currently held by TV broadcasters. Legere wants regulators to set aside more spectrum for smaller carriers rather than giving AT&T and Verizon the potential to bid on the bulk of the available spectrum.

In a video blog Thursday, Legere urged people to make their voices heard to the FCC, which is in the process of finalizing the rules for the auction, slated to take place next year.

“There’s some serious shit about to go down in D.C., and if you’re one of the 180 million Americans out there using a smartphone and you’re not pissed off right now, then you’re not paying attention — but you need to,” Legere said, kicking off his case for why Verizon and AT&T shouldn’t be allowed to potentially run the table.

Spectrum is, as Legere says, the lifeblood of the wireless industry. It is key to calls and texts going through as well as to the fast data speeds that consumers crave.

Legere and T-Mobile’s lobbying team have been making the same point for months now, but they don’t appear, so far, to have swayed FCC officials to their side.

Here’s the problem Legere’s argument has been running into in D.C.: Last year, the FCC set aside upward of 30 megahertz of airwaves licenses (which is a huge chunk of space) for smaller carriers (i.e., T-Mobile and Sprint) to bid on in the auction. FCC officials settled on that 30 MHz figure during negotiations about rules for the auction and got plenty of grief about it from AT&T and Verizon, which also wanted to bid on those airwaves.

T-Mobile and smaller carriers have continued to lobby for a larger set-aside of airwaves, however, arguing that the current allocation wouldn’t really allow multiple carriers to win airwaves and build more competitive LTE networks. Once again, AT&T and Verizon are fighting this effort.

T-Mobile, in particular, needs low-band spectrum to boost its rural coverage. Low-band spectrum is also key to improving indoor coverage, which is important to all the carriers.

But it’s also ethereal and invisible and tough to get consumers riled up about. That said, Legere is entertaining and his video is worth a watch.

https://www.youtube.com/watch?v=KRcH0d5JpY4

In response to Legere’s most recent arguments, Verizon’s lobbyists suggested that he watch his potty mouth in a new blog post published Thursday.

“Mr. Legere was in D.C., hat in hand, asking that more discounted spectrum on the taxpayer’s dime be included in the set-aside. We think this is a bad idea,” Verizon wrote in the post. “The FCC doesn’t need to give additional handouts to global companies with the financial wherewithal to compete.”

This article originally appeared on Recode.net.

It’s not okay to raise thousands of dollars through Kickstarter and keep the money without producing anything, the Federal Trade Commission said Thursday as it took its first consumer protection action on a crowdsourcing campaign.

The FTC case involved Erik Chevalier, an Oregon man who launched a business called The Forking Path. He launched a Kickstarter campaign in 2012 to produce a board game called “The Doom That Came to Atlantic City!” which had been designed by two prominent game artists. Chevalier promised that if he raised $35,000, backers would get rewards such as a copy of the game or pewter figures.

He ended up raising $122,000 from 1,246 backers, most of whom paid $75 or more so they could get rewards. Despite offering updates on production of the game, Chevalier announced about 14 months later that he was cancelling the project. Despite promising to refund the money, he didn’t do so. FTC investigators found that he spent most of the money on personal expenses, including a move to Oregon.

Most of the funders were eventually offered a free copy of the game, thanks to another publisher which took over the project.

Even though crowdfunding campaigns involve some uncertainty, “consumers should able to trust [that] their money will actually be spent on the project they funded,” said Jessica Rich, the director of the FTC’s Bureau of Consumer Protection, in a statement.

The action is notable because it’s the first time the FTC had waded into the world of crowdsourcing campaigns and suggests that the agency is looking to do more to ensure that donors aren’t duped into giving money for fraudulent campaigns. Until now, policing of fraudulent crowdfunding campaigns have either been done by the sites themselves or by state attorneys general.

Under the FTC settlement, Chevalier was fined $111,793, but that judgment was suspended because he has shown he’s unable to pay it. He’s also barred from making any customer personal information public, misleading people in future crowdfunding campaigns or not honoring stated refund policies.

This article originally appeared on Recode.net.