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>The FCC proposed fining T-Mobile $91 million; AT&T faces more than $57 million in fines; Verizon is looking at more than $48 million in penalties; and the FCC

>The FCC proposed fining T-Mobile $91 million; AT&T faces more than $57 million in fines; Verizon is looking at more than $48 million in penalties; and the FCC said Sprint should pay more than $12 million So that's actually $200 million split between four companies and what really amounts to not much more than cost od business for them.

mikeyouse 7y ago
Lol - T-Mobile has $40B in annual revenue, does anyone think a fine of $0.09 billion covering years of wrongdoing is going to change their behavior? I'm sure 0.2% of their annual revenue will really sting.
- veeralpatel979 7y ago
  Something I read in another HN thread was that while $200M may not be much compared to T-Mobile's annual revenue, it's probably a lot compared to how much ISPs earn from selling user data. This doesn't factor in the ongoing PR cost of headlines like "FCC weighing fining ISP X", "FCC fines ISP X", "ISP X appeals fine", "ISP X loses appeal", etc. Still, I agree the fine could have been harsher.
  - JustSomeNobody 7y ago
    What PR cost? We don’t have any options, we have to use one of these sleazy companies.
    - veeralpatel979 7y ago
      Fair point. Typically I'm on the side of the free market and less government regulation, but this system breaks down if consumers have no choice but to use a small set of companies, who all have an interest in doing the same thing, and creating a new competitor is difficult.
      - dustinmr 7y ago
        Also known as not a free market.
        rectang 7y ago
        That's the No True Scotsman Fallacy. The only absolutely "free" market is a state of nature, without laws and where might is right. Once you impose laws, it's not completely free. The US telecom market could be more "free" than it is, but there are lots of options, none of which are perfectly "free".
        defnotashton2 7y ago
        It's not a free market or anywhere near and implying such is dishonest. Coops would be everywhere if it wouldn't be for rediculous city, county, state and federal regulations. Not to mention the miles and miles of dark fiber all over the country held up in ownership litigation, not to mention the federal government created this problem in the first place by heavily subsidizing bell and continuing to do so. The telco industry has always been a regulated monopolistic market and that is primarily caused and was created by regulation..
        rectang 7y ago
        > It's not a free market or anywhere near Right, agreed. > implying such is dishonest. /me raises eyebrow. Making utilities into something that consensus opinion would label a "free market" is incredibly difficult. Without regulation, you get monopolies. With regulation, you get monopolies. Implying that a "free market" can solve the utility problem is (I won't say "dishonest" because I don't believe you're arguing in bad faith) facile.
        maccam94 7y ago
        One nitpick: AFAIK the issues at the city/county level come from service contracts that guarantee exclusivity in return for things like providing service to sparsely populated (unprofitable) areas and discounted rates for the poor/disabled/etc. You can argue that those deals shouldn't have been made, but then the local government would have been allocating public resources (running wires under streets, conduits, etc) in a way that excluded their disadvantaged constituents. Anywho I am a proponent of Local Loop Unbundling. Limited conduit/pole space and complex webs of property easements make wired telecoms natural monopolies. Have the government own the conduits and fiber cables, and rent them to service providers instead.
- rubyfan 7y ago
  You should be bouncing that up against net income rather than revenue. T-Mobile was $3.5B for 2019 so a $91MM fine is 2.6% which feels like a material deterrent.
  - mikeyouse 7y ago
    Net Income is endlessly manipulated to avoid income tax, if you want to be generous, maybe compare against operating income which is $5.7B. But remember, they've been doing this for years so the most appropriate calculation would be against their operating income for the number of years that they've been abusing people's privacy. In any case, it results in a laughably small fine.
    - rubyfan 7y ago
      Seems like a reasonable approach would be based on how much they made from the sale of the data rather than how deep their pockets are. I don’t think it’s reasonable for the FCC to be levying excessively punitive fines that put businesses at risk just to make a point. The fine seems like it should be based on the violation. And unfortunately each of the big careers was doing this sort of thing. If we don’t like it then we should look to support congress passing some form of data privacy rules for carriers.
- bogomipz 7y ago
  Not only that but T-Mobile has already vowed to fight these "cost of doing business" fines. [1] [1] https://www.wsj.com/articles/t-mobile-vows-to-fight-fcc-fines-for-location-sharing-11582921450 https://www.wsj.com/articles/t-mobile-vows-to-fight-fcc-fine...
DevKoala 7y ago
Not only that, the penalty only takes place IF they didn't follow the "adequate precautions to secure the data".
JMTQp8lwXL 7y ago
I wonder if these companies collectively made more than $200M selling location data. It's the only way to evaluate how penalizing this is.
- nielsbot 7y ago
  I don't think the penalty should be based on the size of revenue earned, the fine should be a strong deterrent. So it should be significant compared to what they can afford.
  - djannzjkzxn 7y ago
    Do you mean more profitable companies should be fined more than less profitable companies for the same scale of wrongful behavior? If one wrongdoer happens to have other lines of business that generate a lot of cash but aren’t implicated in the misbehavior, they should get a more severe punishment? I think the endgame from such a punishment regime is companies will reorganize their corporate structure to section everything off from such liabilities.
    - rburhum 7y ago
      the goal is simply “fine them enough so that it hurts and works as a mea culpa, but doesn’t destroy them the first time”
    - _jal 7y ago
      The point is simply standard economic law analysis - the idea is to make (punishment * probability of being caught) > expected gain from the crime. The theory is that if you remove the incentive for the behavior you wish to discourage, people will cut out. There are many criticisms of the approach, but those are mostly about crimes committed by individuals, not corporations. When you're talking about HugeCo abusing customers, I think seriously punitive fines can work. But you need to make them painful enough that at least the board, and preferably the shareholders, want to ask questions about how exactly they know this won't happen again. > I think the endgame from such a punishment regime is companies will reorganize their corporate structure to section everything off from such liabilities. Of course they will. Any time a corporate entity can construct legal structures to capture more, shed externalities or shift risk, it will. Why wouldn't it? "We have a legal obligation to maximize profit..." But that's not the "endgame of such a regime", that's normal business.
mc32 7y ago
They should make repeat offenses harsher. Kind of like with road infractions.
- ClumsyPilot 7y ago
  Fines should go up exponentially for repeat offenses. 10th infringement? Might as well shut down the company.
  - Frost1x 7y ago
    I tend to agree with something to this effect. It should also be relative to specific company's financial factors. Something like Finland's progressive fines where speeding tickets are actually based as a percentage of one's income. Maybe based on revenue, profit, market cap, and/or something a lot more well thought out than what I throw together on my phone at a whim. Obviously when you specify certain factors like "income," they end up being gamed to minimize those factors and therefor minimize punishment so whatever factors you use need to be difficult to adjust around. Probably also need to account for recovery rates. Earning 1% back for one person may be trivial compared to the another which makes them more likely or at least financially capable to repeat the offense.

mikeyouse 7y ago

Lol - T-Mobile has $40B in annual revenue, does anyone think a fine of $0.09 billion covering years of wrongdoing is going to change their behavior? I'm sure 0.2% of their annual revenue will really sting.

veeralpatel979 7y ago
Something I read in another HN thread was that while $200M may not be much compared to T-Mobile's annual revenue, it's probably a lot compared to how much ISPs earn from selling user data. This doesn't factor in the ongoing PR cost of headlines like "FCC weighing fining ISP X", "FCC fines ISP X", "ISP X appeals fine", "ISP X loses appeal", etc. Still, I agree the fine could have been harsher.
- JustSomeNobody 7y ago
  What PR cost? We don’t have any options, we have to use one of these sleazy companies.
  - veeralpatel979 7y ago
    Fair point. Typically I'm on the side of the free market and less government regulation, but this system breaks down if consumers have no choice but to use a small set of companies, who all have an interest in doing the same thing, and creating a new competitor is difficult.
    - dustinmr 7y ago
      Also known as not a free market.
      - rectang 7y ago
        That's the No True Scotsman Fallacy. The only absolutely "free" market is a state of nature, without laws and where might is right. Once you impose laws, it's not completely free. The US telecom market could be more "free" than it is, but there are lots of options, none of which are perfectly "free".
        defnotashton2 7y ago
        It's not a free market or anywhere near and implying such is dishonest. Coops would be everywhere if it wouldn't be for rediculous city, county, state and federal regulations. Not to mention the miles and miles of dark fiber all over the country held up in ownership litigation, not to mention the federal government created this problem in the first place by heavily subsidizing bell and continuing to do so. The telco industry has always been a regulated monopolistic market and that is primarily caused and was created by regulation..
        rectang 7y ago
        > It's not a free market or anywhere near Right, agreed. > implying such is dishonest. /me raises eyebrow. Making utilities into something that consensus opinion would label a "free market" is incredibly difficult. Without regulation, you get monopolies. With regulation, you get monopolies. Implying that a "free market" can solve the utility problem is (I won't say "dishonest" because I don't believe you're arguing in bad faith) facile.
        maccam94 7y ago
        One nitpick: AFAIK the issues at the city/county level come from service contracts that guarantee exclusivity in return for things like providing service to sparsely populated (unprofitable) areas and discounted rates for the poor/disabled/etc. You can argue that those deals shouldn't have been made, but then the local government would have been allocating public resources (running wires under streets, conduits, etc) in a way that excluded their disadvantaged constituents. Anywho I am a proponent of Local Loop Unbundling. Limited conduit/pole space and complex webs of property easements make wired telecoms natural monopolies. Have the government own the conduits and fiber cables, and rent them to service providers instead.
rubyfan 7y ago
You should be bouncing that up against net income rather than revenue. T-Mobile was $3.5B for 2019 so a $91MM fine is 2.6% which feels like a material deterrent.
- mikeyouse 7y ago
  Net Income is endlessly manipulated to avoid income tax, if you want to be generous, maybe compare against operating income which is $5.7B. But remember, they've been doing this for years so the most appropriate calculation would be against their operating income for the number of years that they've been abusing people's privacy. In any case, it results in a laughably small fine.
  - rubyfan 7y ago
    Seems like a reasonable approach would be based on how much they made from the sale of the data rather than how deep their pockets are. I don’t think it’s reasonable for the FCC to be levying excessively punitive fines that put businesses at risk just to make a point. The fine seems like it should be based on the violation. And unfortunately each of the big careers was doing this sort of thing. If we don’t like it then we should look to support congress passing some form of data privacy rules for carriers.
bogomipz 7y ago
Not only that but T-Mobile has already vowed to fight these "cost of doing business" fines. [1] [1] https://www.wsj.com/articles/t-mobile-vows-to-fight-fcc-fines-for-location-sharing-11582921450 https://www.wsj.com/articles/t-mobile-vows-to-fight-fcc-fine...

DevKoala 7y ago

Not only that, the penalty only takes place IF they didn't follow the "adequate precautions to secure the data".

JMTQp8lwXL 7y ago

I wonder if these companies collectively made more than $200M selling location data. It's the only way to evaluate how penalizing this is.

nielsbot 7y ago
I don't think the penalty should be based on the size of revenue earned, the fine should be a strong deterrent. So it should be significant compared to what they can afford.
- djannzjkzxn 7y ago
  Do you mean more profitable companies should be fined more than less profitable companies for the same scale of wrongful behavior? If one wrongdoer happens to have other lines of business that generate a lot of cash but aren’t implicated in the misbehavior, they should get a more severe punishment? I think the endgame from such a punishment regime is companies will reorganize their corporate structure to section everything off from such liabilities.
  - rburhum 7y ago
    the goal is simply “fine them enough so that it hurts and works as a mea culpa, but doesn’t destroy them the first time”
  - _jal 7y ago
    The point is simply standard economic law analysis - the idea is to make (punishment * probability of being caught) > expected gain from the crime. The theory is that if you remove the incentive for the behavior you wish to discourage, people will cut out. There are many criticisms of the approach, but those are mostly about crimes committed by individuals, not corporations. When you're talking about HugeCo abusing customers, I think seriously punitive fines can work. But you need to make them painful enough that at least the board, and preferably the shareholders, want to ask questions about how exactly they know this won't happen again. > I think the endgame from such a punishment regime is companies will reorganize their corporate structure to section everything off from such liabilities. Of course they will. Any time a corporate entity can construct legal structures to capture more, shed externalities or shift risk, it will. Why wouldn't it? "We have a legal obligation to maximize profit..." But that's not the "endgame of such a regime", that's normal business.

mc32 7y ago

They should make repeat offenses harsher. Kind of like with road infractions.

ClumsyPilot 7y ago
Fines should go up exponentially for repeat offenses. 10th infringement? Might as well shut down the company.
- Frost1x 7y ago
  I tend to agree with something to this effect. It should also be relative to specific company's financial factors. Something like Finland's progressive fines where speeding tickets are actually based as a percentage of one's income. Maybe based on revenue, profit, market cap, and/or something a lot more well thought out than what I throw together on my phone at a whim. Obviously when you specify certain factors like "income," they end up being gamed to minimize those factors and therefor minimize punishment so whatever factors you use need to be difficult to adjust around. Probably also need to account for recovery rates. Earning 1% back for one person may be trivial compared to the another which makes them more likely or at least financially capable to repeat the offense.