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Old 14-07-21, 06:14 AM   #1
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Default Peer-To-Peer News - The Week In Review - July 17th, ’21

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July 17th, 2021

Netflix Quietly a Huge Winner in Biden’s Order Targeting Big Business

The streaming giant should welcome — even celebrate — the White House's efforts to promote competition. Why? Look closely.
Eriq Gardner

As just about everyone knows, the suits in Washington D.C. have it out for Big Tech these days. Listen to the cocktail conversations about antitrust reform. Or watch the marches into courtrooms where the main objective is to break ’em up. And now read the executive order being signed on Friday by President Joe Biden, determined to undercut these behemoths and shift power from corporate gatekeepers to American workers. Then again, one $235 billion company stands to benefit from Biden’s move — a tech giant that’s convinced everyone it’s not really a tech giant, the member of FAANG never invited to those grill sessions on Capitol Hill where lawmakers use tech executives as hamburger patties. Just how did Netflix get so lucky?

Netflix is far and away the leader in streaming these days. It’s also the star that everyone in the entertainment business with a telescope has been watching with envy. The last few years have brought one nascent streaming service after another. Except to succeed, Hollywood studios have convinced themselves they need scale. And so, we see both vertical integration as well as horizontal consolidation.

Now, through his executive order, Biden is directing federal agencies to get tougher on proposed mergers. Very solid and wise reasons exist for more vigorously blocking and even unwinding mergers. Nevertheless, one has to ask: What might be a side effect of putting up more formidable hurdles to large-scale transactions in the entertainment space?

Arguably (and yes, these arguments are almost certain to be raised in future legal challenges to blocked mergers), Netflix’s position as top dog becomes more entrenched. If the FTC takes Biden’s tip and pulls back on Trump-era guidelines for vertical mergers, that could hurt Amazon’s prospect for acquiring MGM and transforming its Prime service into Netflix’s toughest competitor. (Not that FTC chair Lina Khan needs any more reasons to stick it to Amazon.) And if the DOJ begins scrutinizing proposed mergers for how they impact labor markets, that could hold ramifications for WarnerMedia-Discovery or any other future tie-up that could threaten Netflix’s ability to win the streaming wars.

Netflix’s hardly going to mind if others find it more difficult to combine forces, and the good news for the company from Biden’s executive order hardly stops there.

For years, Netflix has been poaching top executive talent from its rivals. So much so that big studios including Fox and Viacom have hauled the streamer into court for tortiously interfering with contracts. In response, Netflix has argued that these employment deals are void under a California law that frowns upon non-compete provisions. Netflix hasn’t been successful thus far thanks to the judicial conclusion that there’s nothing illegal about a fixed-term contract so long as the non-compete doesn’t extend beyond termination. That conclusion is on appeal.

Now comes news that Biden is taking aim at non-competes. It remains to be seen if the FTC really is empowered to bar the types of contractual provisions that impede workers from switching jobs, but the development still amounts to wind behind Netflix’s sails. Plus, who knows? As Netflix continues to aggressively grow itself through recruitment, perhaps Netflix will have better luck with Biden-era federal agencies than it’s had with California courts.

Still not convinced that the Biden order is very Netflix-friendly?

Well, consider how Biden is urging the FCC to reinstate Obama-era net neutrality rules. Remember this used to be a huge policy priority for the bandwidth hog that is Netflix, and while the streamer has been a lot less vocal in recent years at the prospect of telecoms throttling its traffic, it surely still sees the development as a positive. Plus, should Biden eventually get around to nominating a third FCC commissioner, there’s always the possibility that the independent agency enacts net neutrality rules that favor Netflix by being even tougher than the set that came before. For instance, banning interconnection charges or stopping telecom data providers like AT&T and Comcast from “zero rating” owned content.

To be sure, not everything in Biden’s order will be advantageous to Netflix. For instance, the White House is encouraging the FTC to establish rules on data surveillance. The streamer, which famously collects a lot of data from users and has been a pioneer on the algorithmic programming front, will need to carefully navigate any future regulations on ensuring the privacy and visibility of data.

But insofar as this executive order being hyped as Biden’s big move to take on Big Business, Netflix should gladly take it. Almost a decade ago, legal scholar Tim Wu wrote glowingly about Netflix’s audacious, radical plan for the future. Now that the Netflix era has arrived, as the Biden aide who is serving as the administration’s technology and competition point figure, he’s doing quite a lot to ensure it carries forward.

Every Movie Theater vs. Streaming Release Is Riddled With Pros and Cons
Brandon Katz

On some level, every new major Hollywood movie release feels like a roll of the dice. Photo-illustration by Observer via Amazon, Paramount, Disney

In Greek mythology, Hecate was the goddess of intuition who possessed three-way perspective that allowed her to bridge the gaps between past, present and future. She was particularly useful at crossroads, as she could discern origins and determine where each of the two paths would lead. Yet even Hecate, with her third sight and intuition, would be left dazed and dizzied by the dilemmas facing the entertainment industry today.

Though the United States has largely emerged from the grip of the coronavirus pandemic, the industry issues raised by the unprecedented circumstances continue to engulf studios. The major Hollywood entities are now caught in a schism between traditional theatrical moviemaking and streaming video on demand (SVOD). Old school versus new with pros and cons aplenty.

Should studios relinquish the high-upside revenues of theatrical and go all in on streaming, the apple of Wall Street’s eye? Can SVOD replicate the financial success of a box office hit?

To better understand the multifaceted strategic choices studios must now make, we looked at the film industry’s shrinking theatrical windows, the divide between theatrical and streaming intellectual property, and the value of streaming subscriptions versus box office totals. This highlighted the conflicting approaches studios are taking to maximize the value of their IP in a landscape fraught with challenges and uncertainty.

Shrinking the theatrical window

With movie theaters largely shuttered during the majority of 2020, studios began releasing films directly to consumers via premium video on demand (PVOD) and various streaming platforms. This expedited the collapse of exhibitor’s outmoded exclusive window requirements. Hollywood has now shifted from a 60-90 day exclusive theatrical window where films didn’t arrive on SVOD platforms until roughly seven months after release to movies being rerouted to streaming after 45 days or less in theaters. It’s as seismic of a shift as Chuck Berry pioneering rock n’ roll music.

“So far, I see little evidence that the shattered theatrical windows are impacting box office performances of movies that were universally expected to be successful pre-pandemic and are currently pretty successful,” Scott Mendelson, box office analyst at Forbes, told Observer. Both A Quiet Place Part II (which has grossed $146 domestic since its Memorial Day Weekend debut) and F9 ($122 million since opening June 25) are performing relatively in line with his pre-COVID estimates.

“Right now, they love to double dip by getting their box office profits and an SVOD bang. But studios are increasingly realizing that shorter theatrical windows lead to bigger SVOD bangs.”

Most major blockbuster titles earn the majority of their gross within the first 38 days of release, which falls in line with the new windows. Current consumer behavior, which still exists within a vacuum of abnormality to a certain degree, seems to imply that the theatrical window for pre-determined successful features doesn’t appear to be affected by streaming, Mendelson argues. We’ll know more when Marvel’s Black Widow opens day-and-date in theaters and via Disney+ Premier Access ($30) July 9. But not every feature film has the benefit of a pre-established branded safety net.

Despite the optimism tentpoles such as Godzilla vs. Kong, A Quiet Place Part II and F9 have brought to executives hoping for a return to traditional distribution, the box office hasn’t rebounded as quickly as the national economy. Domestic ticket sales year-to-date in 2021 ($1.15 billion) are still 38% behind the same span in 2020 ($1.86 billion), per Comscore. The inconsistency is an added incentive for studios to hustle certain films into their streaming libraries. This is especially true with eight major SVOD combatants currently crowding the marketplace.

“Every studio recognizes that movies are important drivers of SVOD,” Rich Greenfield, partner at technology, media and telecommunications research firm LightShed, told Observer. “Right now, they love to double dip by getting their box office profits and an SVOD bang. But studios are increasingly realizing that shorter theatrical windows lead to bigger SVOD bangs.”

With streaming accessibility just a hop, skip, and a jump away, the entertainment industry is emphasizing direct-to-consumer models more and more. There’s a reason the major entertainment conglomerates have undergone significant restructures over the last year.

Deciding between the theater and the couch

Hollywood is running out of consistent big bucks franchises as the potential for IP to become a consistent blockbuster continues to narrow and diminish. Mid-budget fare, star-driven vehicles and original concepts have also faced increasing box office challenges over the last 15 years. If you thought the barren wasteland depicted in Mad Max: Fury Road was desolate and hopeless, take a gander at the entertainment industry’s thinning margins.

“Right now, Hollywood is in the same conundrum it was in two years ago,” Mendelson said. “Outside of Marvel and DC, there’s only about half a dozen big theatrical megabucks franchises.”

There’s only so much value that can be squeezed at the moment. Mendelson points to a best case scenario for an original film like Edgar Wright’s Baby Driver, which earned $227 million worldwide against a production budget of $40 million (discounting marketing) in 2017. With theatrical releases growing riskier and costlier, studios are questioning whether similar smaller-scale films can pull the same profit on PVOD, where the studios generally keep 80% of the revenue as opposed to the standard 50% split with exhibitors.

“Hollywood is in the same conundrum it was in two years ago. Outside of Marvel and DC, there’s only about half a dozen big theatrical megabucks franchises.”

Universal earned more than $500 million in 2020 in PVOD revenue from 10 films, yet Trolls World Tour accounted for roughly one-fifth of that total. The film surpassed Avengers: Endgame as the highest grossing PVOD title in history with north of $100 million. Yet Endgame generated $800 million in theatrical profits alone. The 10 most profitable films across 2018 and 2019 all yielded returns of at least $400 million to their respective studios. That doesn’t even account for revenue generated from secondary windows such as EST, VOD, DVD and Blu-Ray, and eventual SVOD sales. (Endgame earned an estimated $107 million in domestic home market performance, per The Numbers.)

Streaming simply cannot generate the same per picture profitability as a hit blockbuster first released in theaters.

SVOD is being championed as a way to circumvent the challenges of theatrical and, to an extent, it absolutely can. Paramount’s would-be franchise starter Without Remorse is a safer dice roll on Amazon than it is in multiplexes as a new-to-screen concept. Yet streaming platforms still sell themselves to consumers by promoting their collections of theatrical films. For example, Netflix thrives on pictures that were hits a decade ago or were box office bombs in theaters that audiences are now catching up on. Meanwhile, SVOD-only films lack staying power with the average movie losing 63% viewership per day from week one to week two, according Entertainment Strategy Guy. This telling chart from Ampere Analysis via WSJ speaks volumes about the minimal footprint left by streaming exclusive features.

Netflix films

Netflix and Sony recently agreed to a lucrative new licensing deal, with the latter reportedly receiving $1 billion over four years in the pact. The deal suggests that theatrical Pay-One features, which migrate to streaming after leaving theaters, must be valuable to Netflix. It provides the streamer with a steady pipeline of movies that receive prestigious theatrical rollouts and provides Sony with a financial cushion that enables the studio to continue taking bets on movies like Baby Driver and Quentin Tarantino’s Once Upon a Time in Hollywood. In that way, the relationship between streaming and theatrical can be extremely additive, to say nothing of the cross-platform opportunities for shared continuities such as Star Wars.

“I’m of the opinion that Netflix has done just fine with crappy IP.”

At the same time, Netflix spent $469 million to acquire Rian Johnson’s Knives Out franchise, which earned more than $300 million worldwide in its first outing. This removed a new and viable original franchise from multiplexes. Despite the roadblocks and uncertainty of theatrical moviegoing, the streaming powers that be recognize a valuable trickle down effect.

This is one reason why David Offenberg, Associate Professor of Entertainment Finance in LMU’s College of Business Administration, doesn’t believe Netflix’s lack of in-house IP is as concerning in the short-term as others might argue.

“I’m of the opinion that Netflix has done just fine with crappy IP,” Offenberg told Observer. “They’ve got so many movies with so many big stars that are coming from Sony, Lionsgate, etc. that I’m just not convinced they need to have the IP that Disney has to be successful.”

By the same token, it’s not as if studios always need a movie theater to create a phenomenon.

“The Mandalorian is the biggest breakthrough content franchise over the last few years,” Greenfield said. “It’s done more to help the value of the Star Wars brand than any of the recent movies without ever hitting theaters.”

We’re seeing examples of both symbiotic relationships between platforms and antagonistic swipes. It’s a constant struggle of protecting against the downside and swinging for the fences.

Streaming subscriptions vs. box office totals

The tug-of-war between streaming and theatrical should be its own Olympic event. The prospective benefits and pitfalls of each provide enough juicy drama-filled subplots to match an entire season of This Is Us. In the current climate, true value depends on the goals of a given studio.

“I think a successful theatrical run will always make more money on a bit by bit basis,” Mendelson said. “By default, raw revenue earned is more valuable than the perception of success in terms of high viewership on a streaming platform.”

Mendelson points to Eddie Murphy’s Coming 2 America, which garnered 41.6 million hours-watched in its first month of availability, per Nielsen data. Yet the impressive run did not net Paramount any additional money for selling the film to Amazon nor did Prime Video generate additional money outside of subscriptions. “The buck stops here in terms of revenue,” Mendelson surmised.

Despite theatrical ticket sales steadily declining in the U.S. since 2002, per The Numbers, the industry generated at least $10 billion in annual domestic ticket sales from 2009-2019. Worldwide box office totals have hovered around $40 billion in recent non-pandemic years. When healthy, there’s enough money to be made that even Gordon Gekko would be satiated.

But according to a forecast from Lightshed Partners, SVOD subscribers will nearly double from roughly 650 million worldwide at the end of 2020 to 1.25 billion by the end of 2024. By 2025, SVOD services are projected to generate $85 billion in global revenues, per The Wall Street Journal.

In a vacuum, streaming can’t replicate the immediate cash infusion of a box office hit such as Frozen II, which delivered Disney nearly $600 million in theatrical profit in 2019 as well as an estimated $80-plus million in domestic home market sales. But subscriptions represent monthly recurring revenue, which can be more valuable than a box office one-off. In December, analytical firm MoffettNathanson estimated that Warner Bros.’ decision to open its entire 2021 film slate day-and-date on HBO Max and in theaters would cost the company $1.2 billion in revenue for the year. With HBO Max’s monthly average revenue per user (ARPU) approaching $12 (~$144 in annual ARPU), the streamer would need to add 8.3 million new subscribers this year to cover the loss. As of late April, HBO Max was on pace for more than 11 million new subs in 2021.

Wall Street fawns over recurring revenue. For example, Netflix is valued at ≈ 9X annual revenue. If HBO Max adds 11 million subs at $144/year, it could potentially represent added company value of as much as $14 billion. (The WarnerMedia and Discovery merger changes the equation and implies that AT&T was conceding its entertainment ambitions).

M.G. Siegler, General Partner at Google Ventures, said at the time: “Essentially, [WarnerMedia CEO Jason] Kilar is saying the long-term value of HBO Max subscribers is worth more than the box office revenue of not just one of these movies but all of these movies. And if successful, he’s not wrong! But it’s an insanely risky bet to make right now. It totally upends the business.”

Greenfield points out that Netflix generated more revenue in 2019 ($20 billion) than the combined Disney and Warner Bros. film studios ($19 billion). Individual film titles may be devalued in a move to streaming, but they also become key additions to a collective library which can become its own ecosystem.

“You’ll reach more consumers every time,” Greenfield said of streaming. “The subscription business is a better business.”

Perhaps it’s telling that over the last 18 months, nearly every major studio is jockeying for position to be the next Netflix while Netflix isn’t in any rush to become the next dominant theatrical studio.

“I think beyond more cinemas carrying Netflix’s titles seven days in advance of the Netflix drop, the pandemic hasn’t changed much for them,” Kasey Moore, editor-in-chief of What’s on Netflix, told Observer.

Should studios emphasize their streaming services or theatrical studios? The more holistic and cynical answer may be to opt for whichever strategy Wall Street deems most valuable. It’s simply a matter of internal ambition, which varies from studio to studio.

“Stock price,” Offenberg said when asked which medium should receive top billing. “That’s the reality from the CEO’s perspective. The most important thing to them is keeping investors happy.”

In the current marketplace, Wall Street is enamored with the long-term upside of SVOD. With theme parks closed, cruise ships anchored, and movie theaters shuttered in the pandemic, the Walt Disney Company lost billions of dollars in 2020. Yet the company’s share price soared 70% to all time highs because of the explosive growth of Disney+.

For a media CEO of today, it doesn’t matter how many subscribers you have or how many Oscars your studio won, Offenberg argues. What matters most is if the stock price is okay and if the company can stay in business. Right now, as entertainment media conglomerates attempt to appease the whims of investors, that means focusing on streaming whether it’s fair or not.

Maximizing the value of IP

All this leads us to Hollywood’s primary quarry: maximizing the value of IP. Offenberg notes that, historically, studios have gone about this in two ways: price discrimination and ancillary revenues.

Price discrimination can be broken up into tiers with super fans paying a premium to see a film on opening night, a casual fan waiting for a reduced price matinee, and a passive fan waiting until the film comes out on cable. Ancillary revenue covers brand expansion efforts such as toys, merchandise, games, Broadway musicals, etc. All of that still exists. We know studios still value this approach since none of them have permanently given up on theatrical, which is critical for price discrimination.

But on a macro level, studios now face a fork in the road: do they support the theatrical experience or their streaming service (or even throw their weight behind cable channels, which still generate large revenues but are decaying)? If a studio decides that direct-to-consumer business is going to be its top priority, as former Disney CEO Bob Iger said the company would do in 2018, it’s going to need “scale, scale, scale.”

“If you don’t have scale, no one’s watching,” Offenberg said. “Without scale, you can’t compete and you can’t put yourself in that bundle of services that consumers remain subscribed too.” Netflix has scale—which can roughly be defined as the point at which a streamer is reasonably cash flow positive on a consistent basis—thus their churn is low. That’s what every streamer is chasing.

Netflix is the only major streaming service that has reached scale and is generating cash off of its streaming service. All the other major SVOD players are costing their parent companies money (Disney expects Disney+ to reach profitability in 2024; WarnerMedia projected HBO Max to hit that mark in 2024 or 2025 prior to merger). With the FTC and DOJ expected to regulate monopolies more stringently in the digital era, acquisitions are going to become increasingly difficult. Any thoughts that NBCUniversal, ViacomCBS or Lionsgate might have had about joining forces are clouded. If you can’t consolidate and you can’t create organic growth to reach scale through internal means, your streaming service will fold.

“Competing with Netflix, Amazon, Apple, and Disney is not easy,” Greenfield said. “I’m actually shocked how many are even trying to.” Sony Pictures surveyed the landscape and opted to become a content arms dealer raking in lucrative licensing revenue rather than try and play in the same sandbox.

So what’s the right choice?

Reprogramming consumers out of the habit of watching filmed entertainment at home is going to be incredibly expensive, time consuming, and difficult for studios. The pandemic has conditioned audiences to expect immediate gratification. In 2021, consumers practically demand to be able to watch anything, anywhere, at any time. Regardless of which path the major studios opt to take as the world continues opening up, providing flexible access to your programming is key to navigating this new normal.

If a studio opts to prioritize SVOD above all else, it is signaling a desire to intentionally disrupt its legacy media business and endure a significant financial squeeze in the short-term in an effort to gain long-term financial security through scaled streaming. This is a Herculean effort of difficulty given the enormous investment needed to compete. Few services will survive the gauntlet. Those that do will be in a position to generate massive annual revenues.

If a studio decides to continue hedging its bets or forgo in-house streaming all together, it’s a sign that the company is willing to gamble on a decaying business model that still boasts high upside on a film-by-film basis and as a sought after arms dealer. It’s not always quite as costly as a multi-billion dollar pivot to streaming, but it may also lower a studio’s ceiling in the long-term.

Not even Hecate would know what is going to happen next.

FTC Extends Probe of Amazon, MGM Deal

Amazon.com's (AMZN.O) deal to buy movie studio MGM for $8.5 billion is headed for an extended probe by the Federal Trade Commission, after a source familiar with the matter said on Friday the agency had issued a second request in its review of the merger.

Issuing a second request indicated that it would likely take months for the agency to rule on the deal.

The Information was first to report the lengthier probe.

Amazon said in May that it would buy the U.S. movie studio, home to the James Bond franchise, which would give it a huge library of films and TV shows to compete with streaming rivals like Netflix and Disney+. read more

In June, Amazon asked that FTC Chair Lina Khan be recused on antitrust matters related to the online retail giant because of research that she had done and her previous advocacy.

In addition to reviewing the merger, the agency is investigating Amazon as part of a series of probes underway into Big Tech.
Reporting by Diane Bartz Editing by Sonya Hepinstall

France Fines Google 500 mln Euros Over Copyright Row

• France slaps fine on Google in row with news publishers
• Google disappointed but will adapt its offers

France's antitrust watchdog slapped a 500 million euro ($593 million) fine on Alphabet's Google (GOOGL.O) on Tuesday for failing to comply with the regulator's orders on how to conduct talks with the country's news publishers in a row over copyright.

The fine comes amid increasing international pressure on online platforms such as Google and Facebook (FB.O) to share more revenue with news outlets.

The U.S. tech group must now come up with proposals within the next two months on how it would compensate news agencies and other publishers for the use of their news. If it does not do that, the company would face additional fines of up to 900,000 euros per day.

Google said it was very disappointed with the decision but would comply.

"Our objective remains the same: we want to turn the page with a definitive agreement. We will take the French Competition Authority's feedback into consideration and adapt our offers," the U.S. tech giant said.

A Google spokesperson added: "We have acted in good faith throughout the entire process. The fine ignores our efforts to reach an agreement, and the reality of how news works on our platforms."

News publishers APIG, SEPM and AFP accuse the tech company of having failed to hold talks in good faith with them to find common ground for the remuneration of news content online, under a recent European Union directive that creates so-called "neighbouring rights".

The case itself focused on whether Google breached temporary orders issued by the antitrust authority, which demanded such talks take place within three months with any news publishers that ask for them.

"When the authority decrees an obligation for a company, it must comply scrupulously, both in the spirit and letter (of the decision). Here, this was unfortunately not the case," the antitrust body's chief, Isabelle de Silva, said in a statement. She also said the regulator considered that Google had not acted in good faith in its negotiations with the publishers.

APIG, which represents most major French print news publishers including Le Figaro and Le Monde, remains one of the plaintiffs, even though it signed a framework agreement with Google earlier this year, sources have told Reuters. This framework deal has been put on hold pending the antitrust decision, the sources said. read more

The framework agreement, which many other French media outlets criticised, was one of the highest-profile deals under Google's "News Showcase" programme to provide compensation for news snippets used in search results, and the first of its kind in Europe.

Google agreed to pay $76 million over three years to a group of 121 French news publishers to end the copyright row, documents seen by Reuters showed.

It followed months of bargaining between Google, French publishers and news agencies over how to apply the revamped EU copyright rules, which allow publishers to demand a fee from online platforms showing extracts of their news. read more
Reporting by Christian Lowe, additional reporting by Supantha Mukherjee Writing by Mathieu Rosemain and Ingrid Melander; editing by John Irish, Keith Weir and Jane Merriman

Newport Man Sentenced in Multimillion-Dollar Video Pirating, Distribution Scheme

Talon White, 31, was sentenced Friday at U.S. District Court in Eugene.
Ted Sickinger

A Newport man was sentenced Friday to federal prison for pirating thousands of copyright-protected movies and television shows, illegally distributing them on the internet and evading taxes on his profits from the multimillion-dollar scheme.

Talon White, 31, was sentenced to one year and one day in prison and three years’ probation after being convicted of copyright infringement and tax evasion.

Investigators were tipped off in October 2013 that White was allowing paid subscribers to stream and download movies and television shows, some of which had yet to be released to the public, from numerous websites, according to a U.S. Attorney’s Office news release.

The Motion Picture Association of America demanded in 2014 that White cease the illegal activity — a demand he ignored over the next four years while moving his business and subscribers among websites to avoid detection, the U.S. Attorney’s Office said.

It was a lucrative scheme. In total, authorities say White netted more than $8 million.

Between February 2018 and September 2018 alone, he collected nearly $3 million in subscription fees from the websites.

When investigators served a search on his home and several bank accounts in November 2018, they seized $3.9 million from his accounts, $35,000 in cash and more than $1 million in cryptocurrency. White also filed false income tax returns between 2013 and 2017, underreporting his income by more than $4.4 million and failing to pay $1.7 million in taxes, authorities said.

White pleaded guilty in November 2019 to copyright infringement and tax evasion.

During his Friday sentencing in U.S. District Court in Eugene, he was ordered to pay to more than $4.3 million in restitution to the Motion Picture Association and Internal Revenue Service. He was also ordered to forfeit all the money and cryptocurrency seized by agents, as well his 2,248-square-foot Newport home, worth an estimated $415,000, that he purchased with proceeds from the websites.

In 2030, You Won't Own Any Gadgets
Victoria Song

Owning things used to be simple. You went to the store. You paid money for something, whether it be a TV, clothes, books, toys, or electronics. You took your item home, and once you paid it off, that thing belonged to you. It was yours. You could do whatever you wanted with it. That’s not how it is today, and by 2030, technology will have advanced to the point that even the idea of owning objects might be obsolete.

Many a think piece has been written about how Millennials aren’t as interested in owning things as their predecessors. After decades of Boomers keeping up with the Joneses, Millennials were supposedly “more about the experience” than physical goods. There’s a kernel of truth in that, but the shift to services was telegraphed a long time ago.

Back in 2016, the World Economic Forum released a Facebook video with eight predictions it had for the world in 2030. “You’ll own nothing. And you’ll be happy,” it says. “Whatever you want, you’ll rent. And it’ll be delivered by drone.”

“Everything you considered a product, has now become a service,” reads another WEF essay published on Forbes. “We have access to transportation, accommodation, food, and all the things we need in our daily lives. One by one all these things became free, so it ended up not making sense for us to own much.”

The WEF’s framing is overly optimistic, but this is the future we’re rapidly hurtling toward. I rent my apartment, and therefore, all the home appliances in it. If I wanted, I could rent all my furniture and clothes. Sure, I have my own computer and phone, but there are plenty of people who use company-issued gadgets. And if I didn’t want company-issued items, I could always rely on electronics rentals. I like cooking and grocery shopping, but I could just sign up for a meal kit service and call it a day. I wouldn’t even need appliances like toasters, rice cookers, blenders, air fryers, or anything beyond a microwave. To get around, there are Citi Bikes, Uber, and Zipcar.

You might be wondering—what’s the problem here? Consumerism is exhausting, and as far as housing goes, ownership isn’t the golden ideal it’s cracked up to be. In some ways, not owning things is easier. You have fewer commitments, less responsibility, and the freedom to bail whenever you want. There are upsides to owning less. There’s also a big problem.

You Don’t Own Your Software

When you don’t own anything, you’re trading autonomy for convenience. You only have to look to the Internet of Things to see where the narrative starts to crack.

To use a recent example, Peloton recalled its Tread+ treadmill after multiple children, pets, and adults were injured using the machine. Part of the solution was to release a software update, Tread Lock, that requires a 4-digit passcode to prevent unauthorized use—a factor that played into at least some of the reported injuries. However, there was a dust-up online when users read the fine print: The Just Run feature of the Tread+, which allowed Peloton owners to run without taking a class, had moved from a free feature to one locked behind a subscription paywall.

The internet loves to get mad, and it turned out that Peloton would be giving all Tread+ owners three free months of membership while it worked on a way to enable Tread Lock and Just Run simultaneously without requiring a subscription. Arguably, the majority of Peloton Tread+ owners weren’t even angry about it. But those that were cited the principle of the matter. They had paid over $4,000 for a treadmill and that should’ve given them the ability to use the Tread+ however they wanted. Who was Peloton to change the rules on them?

The reality is when you buy a device that requires proprietary software to run, you don’t own it. The money you hand over is an entry fee, nothing more.

Their Terms of Your Use

When everything is a lease, you also agree to a life defined by someone else’s terms.

In 2020, Sonos retired its legacy speakers, many of which were still functional. It sparked outrage. Again, users had bought hardware and expected that their one-time transaction meant they fully owned their devices. But they didn’t. By buying those devices, consumers bought access to Sonos’ services and Sonos effectively leased their hardware. That meant Sonos ultimately gets to decide when a device is at the end of its life.

Another company that does this is Whoop, a fitness tracker that focuses on recovery. The tracker itself costs nothing. Whoop will send that to you for free because it recognizes the tracker isn’t the product. The app is the product, and to get access to the app, you must pay a monthly $30 fee.

Connected devices require servers. Servers cost money. When you, the consumer, pay a one-time fee, that doesn’t help a company keep the lights on. It’s why planned obsolescence exists. It’s why Apple, a company that’s known for its hardware, started pivoting to services in 2019. It’s why Fitbit rolled out a premium subscription tier, Netflix is mulling cracking down on password sharing, and every other entertainment company is launching their own streaming service instead of licensing their content to Hulu.

Connected devices require servers. Servers cost money. When you, the consumer, pay a one-time fee, that doesn’t help a company keep the lights on anymore.

When hardware is merely a vessel for software and not a useful thing on its own, you don’t really get to decide anything. A company will decide when to stop pushing vital updates. It might also decide what you do with the product after it’s “dead.”

Even before Sonos retired its legacy products, the company offered a method for people to recycle older gadgets in exchange for a discount on newer devices. In the past, when you no longer wanted something, you could put it up for resale, donate it, throw it out, or let it collect dust in your basement. To get that discount, however, you had to agree to brick the device and either send it back to Sonos or drop it off at an e-waste recycler. (Sonos later reversed this decision, but only after significant backlash.)

With Sonos’ legacy devices, the company actually spelled out the four options users had, but stacked the deck to steer consumers in a particular direction. You could get rid of all the legacy devices. You could participate in the upgrade program. You could continue to use the devices, with the understanding that as time went on, Sonos would likely stop providing security updates. If you had a mix of old and new speakers, you could split them into two groups. That’s because Sonos’ new app didn’t support older speakers, and so consumers lost the ability to group new and legacy devices. Of all these, the second one makes the most sense if you want to continue using Sonos’ services. So really, your choice is to upgrade now, upgrade later, or leave.

This is the reality of a service-first world. The power has shifted so that companies set the parameters, and consumers have to make do with picking the lesser of several evils. Even then, users don’t really have a choice. The internet is now considered a utility, and it’s not like we can put connected devices back into Pandora’s box. You might be able to opt out now, but that’s going to be increasingly unviable. Really, you only have the illusion of choice. This isn’t new. As technology advances, we have fewer options to choose from even as companies tell us we have more choices than ever.
The Root of the Problem: DMCA

You can trace much of this back to Section 1201 of the Digital Millennium Copyright Act (DMCA), which basically makes it illegal to circumvent “digital locks” that protect a company’s proprietary software. It’s why it’s OK for Big Tech to void your warranty if you jailbreak certain devices or force you to spend more money to get a broken gadget repaired by an authorized shop. Activists have won exemptions to the DMCA over the past few decades—but there’s always a lag. The Copyright Office only reviews new exemptions every three years, and three years in the tech world is a mighty long time.

The utopian ideal of the future the WEF proposed can’t exist so long as anyone can legally own ideas. Companies have argued for decades that because they own the software, you’re only licensing hardware. If your smart home of the future comes with its own email address and operating system, what happens when the company controlling it pushes out an update you don’t like? What if they take away a feature you love and depend on? Switching from iPhone to Android, Google Assistant to Amazon Alexa, or macOS to Windows is already a pain. Now imagine doing that for your entire home and everything in it that can possibly connect to the internet. Your thermostat, your refrigerator, your light bulbs, your picture frames, your TVs, your beds, and all the connected gadgets we haven’t invented yet. Some people will have the willpower to do it, but most of us? We’ll probably just settle for the easiest choice.

Case in point: I moved to a new apartment recently. Thanks to covid-19 pricing, it’s in a bougie building with snazzy amenities. I get emails whenever packages arrive and when someone picks them up, I have a fob that grants me access to various parts of the building, and no less than seven separate apps to control doors, reserve a spot in the pool, pay rent, request maintenance, and access a mini social media network for everyone who lives in this building. It’s all very convenient until it’s not.

One day, the fob that grants access to enter and exit the garage malfunctioned. My husband and I were effectively trapped. Our choices were to wait for someone to find us, or seek the help of staff. I waited, he sought help. He then got trapped in an elevator because again—the fobs weren’t working. For a good half hour, we were separated, trapped, and had to hope building staff would eventually find us. It was a stark reminder that for as much as we pay in rent, we’ve only bought temporary access to this building. We don’t control whether our key fobs will continue to grant us access to the gym, pool, service elevator, outdoor gates, side doors, or common areas. We don’t control whether the management company will change or cut us off from the apps that allow us to pay rent, put in maintenance requests, grant friends and family access, or reserve common facilities.

But that’s the rub with renting, right? Surely, those of us who can afford homeownership are free of this nonsense? To an extent. One day in the future, if you buy a physical house, you will likely have to rent the software that operates it. You won’t really have a say in the updates that get pushed out, or the features that get taken away. You’ll have less of a say in when you renovate or upgrade, even if you want to continue using the house as is. You might not even have the right to do DIY repairs yourself. Just because you’ve bought a smart washing machine, doesn’t mean you’ll be allowed to repair it yourself if it breaks—or if you’ll be allowed to pick which repair shop can fix it for you. You only have to look as far as John Deere, Apple, and General Motors. Each one of these companies has argued that people who bought their products weren’t allowed to repair them unless they were from a pre-approved shop.

The scary thing is that only sounds terrible if you have the mental energy to care about principles. Making decisions all the time is difficult, and it’s easier when someone else limits the options you can choose from. It’s not hard to turn a blind eye to a problem if, for the most part, your life is made a little simpler. Isn’t that what every tech company says it’s trying to do? Make your life a little simpler? Life is hard enough already, and living in a home that maintains itself so long as you hand over control—well, by 2030, who’s to say that’s not what we’ll all want?

Verizon Wasn't Responding, so an Angry Customer Found a Brilliant Solution

Some customer service isn't too quick to reply these days. One Verizon customer decided to try something ingenious.
Chris Matyszczyk

Today, we're disappearing into the heart, soul, and mind of someone who had a little contretemps with Verizon.

No, he's surely not the first, nor the last.

He's also not the first nor the last to have had a similar contretemps with any of the remaining phone carriers.

I feel, however, that Kevin's solution to his customer service problem was markedly more ingenious than most could create.

Kevin is a long-time friend. A highly intelligent, deeply nerdy and, once in a while, gregariously opinionated friend.

He was going on vacation and he'd heard that AT&T's signal was poor at his remote east coast destination. He needed to ensure he had Wi-Fi, as he had an important meeting with extremely celebrated people. So he bought the most advanced Verizon jetpack and disappeared on his travels.

Sadly, the jetpack failed to function just before his big meeting started. But Kevin tried to be sanguine.

On his return, he received an email from Verizon. It told him to register for My Verizon in order to view his bills. It said in order to enjoy paper-free billing he must be registered.

"Registration is quick and easy," said the email. But when he clicked on "Sign up now," nothing happened.

Let's have Kevin take up the story: "So I called Verizon customer service and I couldn't talk to anyone because I didn't have a Verizon phone account."

It's likely that his Jetpack came with a phone number, but Kevin had been unaware.

"I thought all I would need was my social security number, my credit card, address, and all that," he told me.

He was, therefore, a touch frustrated.

"So I tried using chat," he said. "And I got through five people who didn't seem helpful."

"Why didn't they seem helpful?" I asked.

"They said I needed the account number and location number," he explained. "That's when I explained I didn't have them and repeated that I went to them trying to register my damn device."

To be clear, Kevin may have been at some fault here and knows it. He hadn't been aware enough to note the phone number attached to the Jetpack. You'd think, though, offering a few personal details would have got the process rolling.

The chatline, he said, went through sales and had only one recommendation -- to call customer service. So back there went Kevin.

It's currently true that many companies have long customer service wait times and often blame COVID-19 for this. Rather than, say, a lack of customer service employees.

When Kevin called customer service, he said he was on hold for more than an hour.

That's when he had an idea. As it turned out, it was the sort of clever idea that companies hope too many people don't have.

"I called collections," he told me.

"You did what?"

"Collections was a lot more responsive than customer service," he said. "I went to them and even though I wasn't in collection, I knew someone would answer the phone."

"How could you be so sure?" I wondered.

"They have people standing by to get money," he explained, quite pleased with himself.

"But didn't they send you straight back to customer service?"

"No, they were all too happy to register my device," said Kevin. "They were just disappointed that the money wasn't in arrears."

There's a certain poetry to the notion that the people who actually gave Kevin fine customer service were the same people who are there to try and get money out of him, if ever he was slow to pay.

Could it be that they work in collections because they have a surfeit of charm? And how was it that collections could register his device when the sales people on the chatline couldn't?

Of course this could have happened with any carrier and with any number of other service companies. This just happened to be Verizon.

Then again, over the last year I've heard from quite a few current and former Verizon customer service employees who aren't entirely happy with the way things are going at the company. Those who work in stores told me they think Verizon is trying to move all customer service online. I wonder how that'll go.

Ultimately, I marvel at Kevin's instinct that, if customer service is slow -- or even entirely AWOL -- there's always collections who'll pick up the phone.

I wonder if the collections staff get a bonus for performing customer service duties.

AT&T Will Let Unlimited-Data Customers Pay More to Avoid the Slow Lane

AT&T says users can soon "stay in the fast lane" on its priciest unlimited plan.
Jon Brodkin

On Monday, AT&T announced the end of data slowdowns for smartphone users who purchase "unlimited" data—but the perk is only for customers who buy AT&T's most expensive mobile plan. AT&T will continue to sell two other "unlimited" plans that can be put into a slow lane.

AT&T advertises three "unlimited" plans, each with different limits. The Unlimited Elite plan's advertised price is $85 per month for one line, while AT&T's "Unlimited Extra" plan is $75, and the "Unlimited Starter" plan is $65.

None of those plans come with unlimited data of the high-speed variety, but that will change this week. In a press release that says customers will soon be able to "stay in the fast lane with unlimited high-speed data," AT&T said that purchasers of the priciest plan "will now enjoy AT&T's high-speed data regardless of how much data they've used." AT&T said it will "start rolling out this enhancement this week and Elite customers everywhere will soon receive a text notifying them when the benefit has been added." While the change will be made with no extra fees for people who already buy the most expensive plan, other people will have to pay more to get onto the only plan with AT&T's new "fast lane" perk.

As the change hasn't yet taken effect, AT&T's website still says that Unlimited Elite comes with "100GB of premium data" and that "after 100GB, AT&T may temporarily slow data speeds if the network is busy." The Unlimited Extra plan comes with 50GB of premium data, while Unlimited Starter doesn't guarantee any amount of premium data. Unlimited Starter simply carries the caveat that "AT&T may temporarily slow data speeds if the network is busy" regardless of how much data a customer has used. Essentially, Unlimited Starter users get prioritized behind everyone else when they're connecting in congested network locations, even if they haven't used any data that month.

With yesterday's newly announced upgrade, customers on Unlimited Elite should never be prioritized behind other AT&T users, even if they go way past the soon-to-be-lifted 100GB threshold. There was no announced change for the other two plans, so Unlimited Extra users will continue to face potential slowdowns after 50GB each month, while Unlimited Starter users will continue to face potential slowdowns at any time regardless of usage.

All three carriers impose limits

AT&T is following in the footsteps of T-Mobile, which ended data slowdowns on its "Magenta Max" plan in February. T-Mobile still imposes thresholds of 50GB and 100GB before slowdowns on other plans. Verizon advertises entry-level unlimited plans that can be slowed down at any time and three pricier plans that come with 50GB of "premium" data before potential slowdowns.

AT&T ending its data slowdowns entirely when customers pay more demonstrates, if it wasn't obvious already, that the limits aren't necessary for network-management purposes. Imposing different levels of data slowdowns is one of the methods AT&T and other carriers use to create product differentiation among plans that all nominally offer "unlimited" data but cost different amounts.

Data service may still be fast enough to be usable when the limits are in place, but AT&T does not say what speeds customers should expect during slowdowns.

AT&T lifts video cap and raises hotspot data

AT&T is also lifting the video-resolution cap on the Unlimited Elite plan, allowing 4K streaming instead of limiting videos to 480p ("DVD quality") or regular HD. Currently, Unlimited Elite uses what AT&T calls "Stream Saver" to limit videos to 480p but provides a toggle that lets customers turn off Stream Saver and watch in high definition. Yesterday's announcement said that AT&T is "upping the video resolution to 4K Ultra High Definition" on Unlimited Elite. Unlimited Extra and Unlimited Starter always limit video to standard-definition 480p, according to this AT&T page. AT&T did not announce any video-resolution changes for these plans.

AT&T is also increasing mobile-hotspot data from 30GB to 40GB on Unlimited Elite. Unlimited Extra will continue to have 15GB of hotspot data each month. Customers can technically keep using hotspot data after hitting those limits, but it's throttled to 128kbps at most. Unlimited Starter does not include any hotspot data.

AT&T also provides a subscription to HBO Max with its Unlimited Elite plan and 5G access on all three unlimited plans.

Better than it used to be

We've been writing about AT&T slowing down speeds on unlimited-data plans for a long time, and it used to be a lot worse. Until 2015, "AT&T customers who used 5GB of data in a single monthly billing period were throttled for the rest of the month at all times, receiving barely usable service, despite paying for 'unlimited' data," as we wrote when AT&T implemented a more forgiving policy. The 2015 change ensured that "unlimited-data" users who exceeded 5GB would only be slowed down when the network was congested, similar to today's policies but with a different threshold before potential slowdowns kicked in.

AT&T's throttling practices were severe enough that the Federal Trade Commission sued the company for misleading customers, saying that AT&T made "unequivocal promises of unlimited data" while imposing "speed reductions of 80 to 90 percent for affected users." As the FTC said in its October 2014 complaint, AT&T's speed caps began at 128kbps in 2011 and were raised to 256kbps for 3G and HSPA+ devices and 512kbps for LTE devices in 2012. The FTC said the throttling affected 3.5 million customers.

Although AT&T loosened its slowdown policies, the telco claimed for years that the FTC had no jurisdiction over the company and tried to use its arbitration requirements to block class-action status in a lawsuit filed by customers. AT&T agreed to a $60 million settlement with the FTC in 2019 and a $12 million settlement in the class-action lawsuit in 2021. Throttled customers ultimately didn't get much back, as the FTC settlement typically provided $12 for each person and the class-action suit provided another $10 or $11 but only applied to residents of California.

Amazon has Acquired Facebook's Satellite Internet Team

It's the end of Facebook's plan for satellite internet and a boost to Amazon's.
Steve Dent

The race to develop satellite internet includes some pretty big players like SpaceX, Amazon, Softbank and Facebook. However, Facebook has now essentially thrown in the towel in that business, selling its internet satellite team to Amazon, The Information has reported. For Amazon, it's a significant step in its effort to develop its Project Kuiper satellite network and catch up with SpaceX's Starlink broadband constellation.

Like Starlink, Project Kuiper is designed to provide low-latency, high-speed broadband connectivity to users around the world. Amazon aims to have a 3,236-satellite constellation in orbit by 2029, with half of it launched by 2026. It also plans to build 12 ground stations around the world to transmit data to and from the satellites.

The company has said it will spend more than $10 billion to make all that happen and recently received FAA approval for the project. It also announced last year that it would use United Launch Alliance's ultra-reliable Atlas V rocket for the initial satellite launches.

Amazon has significantly ramped up hiring efforts for Project Kuiper at its Redmond headquarters, with 500 employees currently aboard and 200 open positions. The employees coming from Facebook are reportedly based in the Los Angeles area and include physicists as well as optical, prototyping, mechanical and software engineers. Facebook's former head of Southern California connectivity, Jin Bains, is now listed as a Project Kuiper director in his LinkedIn page.

Meanwhile, it seems Facebook is getting out of the satellite internet business and focusing on terrestrial programs, having invested in subsea and terrestrial fiber as well as wireless services like ExpressWiFi. The company recently launched an "Athena" satellite through its PointView Tech subsidiary, but it was only a test mission rather than the start of a satellite internet constellation. With the sale of its satellite team to Amazon, it appears that any ambitions it may have had in that area are over.

Virginia Will Use a $700 Million Grant to Roll Out Statewide Broadband

It's accessing the funding from the American Rescue Plan.
Igor Bonifacic

Virginia will use $700 million in American Rescue Plan funding to expedite broadband buildouts in underserved communities throughout the state, Governor Ralph Northam announced on Friday. With the investment, Virginia says it’s on track to become one of the first states in the US to achieve universal broadband access.

An estimated 233,500 homes and businesses throughout the Commonwealth fall under what the Federal Communications Commission would consider an underserved location. They don’t have an internet connection that can achieve download speeds of 25Mbps down. The state estimates the additional funding will allow it to connect those places to faster internet by the end of 2024, instead of 2028, as previously planned. What’s more, the “majority” of those connections will be completed within the next 18 months.

“It’s time to close the digital divide in our Commonwealth and treat internet service like the 21st-century necessity that it is — not just a luxury for some, but an essential utility for all,” Governor Northam said.

Across nine provisions, President Biden’s $1.9 trillion American Rescue Plan provides approximately $388 billion in funding for state and local governments to address the digital divide in their communities. Virginia is only one of the states across the country that plans to use that money to build faster internet infrastructure. In May, California Governor Gavin Newsom proposed a $7 billion investment in public broadband.

Japan Has Shattered the Internet Speed Record at 319 Terabits per Second

This could change everything.
Brad Bergan

We're in for an information revolution.

Engineers in Japan just shattered the world record for the fastest internet speed, achieving a data transmission rate of 319 Terabits per second (Tb/s), according to a paper presented at the International Conference on Optical Fiber Communications in June. The new record was made on a line of fibers more than 1,864 miles (3,000 km) long. And, crucially, it is compatible with modern-day cable infrastructure.

This could literally change everything.

The new data transfer method breaks signals up into various wavelengths

Note well: we can't stress enough how fast this transmission speed is. It's nearly double the previous record of 178 Tb/s, which was set in 2020. And it's seven times the speed of the earlier record of 44.2 Tb/s, set with an experimental photonic chip. NASA itself uses a comparatively primitive speed of 400 Gb/s, and the new record soars impossibly high above what ordinary consumers can use (the fastest of which maxes out at 10 Gb/s for home internet connections).

As if there's no limit to this monumental achievement, the record was accomplished with fiber optic infrastructure that already exists (but with a few advanced add-ons). The research team used four "cores", which are glass tubes housed within the fibers that transmit the data, instead of the conventional standard core. The signals are then broken down into several wavelengths sent at the same time, employing a technique known as wavelength-division multiplexing (WDM). To carry more data, the researchers used a rarely-employed third "band", extending the distance via several optical amplification technologies.

The new system begins its transmission process with a 552-channel comb laser fired at various wavelengths. This is then sent through dual polarization modulation, such that some wavelengths go before others, to generate multiple signal sequences — each of which is in turn directed into one of the four cores within the optical fiber. Data transmitted via this system moves through 43.5 miles (70 km) of optical fiber, until it hits optical amplifiers to boost the signal for its long journey. But there's even more complexity: The signal runs through two novel kinds of fiber amplifiers, one doped in thulium, the other in erbium, before it continues on its way, in a conventional process called Raman amplification.

The world's data infrastructure is in for a revolution

After this, signal sequences are sent into another segment of optical fiber, and then the entire process repeats, enabling the researchers to send data over a staggering distance of 1,864.7 miles (3,001 km). Crucially, the novel four-core optical fiber possesses the same diameter as a conventional single-core fiber, bracketing the protective cladding around it. In other words, integrating the new method into existing infrastructure will be far simpler than other technological overhauls to societal information systems.

This is what makes the new data transfer speed record really shine. Not only have the researchers in Japan blown the 2020 record out of the proverbial water, but they've done so with a novel engineering method capable of integrating into modern-day fiber optic infrastructure with minimal effort. We're nearing an age where the internet of the twenty-teens and early 2020s will look barbaric by comparison, in terms of signal speed and data transfer. It's an exciting time to be alive.

As Cubans Protest, Government Cracks Down on Internet Access and Messaging Apps

Various governments, including those in Venezuela and Iran, have in recent years sought to limit or block internet access during protests.
Kevin Collier

As protests grip Cuba, the country's government has taken steps to block citizens’ use of the encrypted chat apps WhatsApp, Signal and Telegram, researchers say.

The entire country went offline for more than 30 minutes on Sunday, according to researchers who study internet censorship. Since then, virtual private networks, which are tools used to reroute internet traffic that can circumvent some internet censorship, and popular communication apps in Cuba have been blocked.

Cubans have taken to the streets since Sunday to protest against the government in the midst of an economic downturn and a major health crisis, as the country still struggles to deal with the coronavirus pandemic. Many protesters have organized online and shared videos of police detentions.

But since the protests began, the country has experienced widespread online censorship.

Various governments including those in Venezuela and Iran have in recent years sought to limit or block internet access during protests.

Widespread internet use in Cuba is still relatively new, and Cubans mostly reach the web through their smartphones. The country only has a single major internet provider, the national telecommunications company ETECSA.

That means most Cubans have to rely on a single, centralized, government-affiliated hub, making government censorship substantially easier.

NetBlocks, an internet monitoring nonprofit, said Monday that it had detected disruptions to multiple messaging apps through ETECSA’s service.

ETECSA did not respond to a request for comment, and has not made a public statement about the outages.

A number of messaging apps, including WhatsApp, Signal and Telegram, are all blocked in Cuba, said Arturo Filastò, the project lead at the Open Observatory of Network Interference (OONI).

OONI, an international nonprofit, relies on volunteers around the world to install a program that probes for which types of internet use are being censored and how. Its data showed that ETECSA began blocking WhatsApp on Sunday night, then Signal and Telegram on Monday. All three were still blocked on Tuesday, Filastò said.

"We have never seen instant messaging apps being blocked in the country,” he said. "It’s sort of unprecedented that we would see such a heavy crackdown on the internet in Cuba."

Marianne Díaz Hernández, a fellow at the digital rights nonprofit Access Now, said some Cubans have reported that their specific SIM cards for their phones have been rendered useless, keeping them offline. And some virtual private networks have themselves been blocked, she said. Two major VPNs, Tor and Psiphon, appear to still work.

While Cuba has deployed various censorship techniques in the past, this is the first time they have all been deployed at the same time, Hernández said.

"Since they have had internet, this is the largest blackout in history," she said.

Grisel Martin, a native of the Cuban city of Matanzas who lives in Miami, said that the blackout has kept her from communicating with family there.

"The latest news I got from them was Sunday, July 11, 5:10 p.m. through WhatsApp, saying that my aunt had a fever the previous night," Martin said.

"We feel so desperate and powerless," she said.

Until next week,

- js.

Current Week In Review

Recent WiRs -

July 10th, July 3rd, June 26th, June 19th

Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.

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