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The FCC's track record on essentially meaningless fines

That $200 million sounds like a lot of money, but everything's relative.

FCC chairman Ajit Pai

The FCC fined the four major carriers over $200 million for selling customer location data without permission. "This FCC will not tolerate phone companies putting Americans' privacy at risk," chairman Ajit Pai said in statement.

Photo: David Paul Morris/Bloomberg via Getty Images

Even before the FCC announced Friday that it's fining the four biggest U.S. wireless phone companies $208 million for selling access to real-time location data of their customers without their permission, critics were already slamming the fines as too low.

In a statement Thursday, Sen. Ron Wyden called the proposed fines "comically inadequate fines that won't stop phone companies from abusing Americans' privacy the next time they can make a quick buck," and in a tweet, he reiterated the need for privacy legislation.

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The wireless carriers had continued to share their customers' coordinates even after telling members of Congress they would stop, prompting an investigation by the Federal Communications Commission, according to the Wall Street Journal.

Let's put the proposed fines in perspective.

  • T-Mobile: $91 million fine, which is less than 70% of the $131 million it brought in each day in the fourth quarter.
  • AT&T: $57 million, or a little more than a tenth of the $514 million in daily revenue it brought in during the fourth quarter.
  • Verizon: $48 million, which is 12% of the $382 million in revenue it had each day in the fourth quarter.
  • Sprint: $12 million, or 21% of the $57 million in daily revenue it had in the third quarter.

It's not the first time — and probably won't be the last — that FCC fines have been criticized for not being enough of a deterrent against future violations.

Other FCC fines that have been called toothless or inadequate include the following:

  • In 2012, Google had to pay $25 million over Street View's collection of personal data from unprotected wireless networks. The FCC also said the company impeded its investigation. The fine was equivalent to 68 seconds of profit for the giant tech company, ProPublica noted then.
  • In 2014, Sprint had to pay $7.5 million because the FCC found the company failed to honor people's requests not to be called by telemarketers. At the time, the commission called it a record fine. In the fiscal year that included that period, that works out to around 0.022% of Sprint's annual revenue of $34 billion.
  • In 2015, the FCC fined AT&T $25 million after some of its call center workers accessed and sold customers' personal information. That's equivalent to around 0.017% of the company's $146 billion revenue that year.
  • In 2018, the FCC announced what it called the largest civil penalty ever paid to the U.S. Treasury as a result of an investigation by the commission: $614 million imposed on Verizon over its company Straight Path's failure to use spectrum that was assigned to it. It remains the largest fine ever paid as a result of an FCC action. Still, the amount was around 0.46% of Verizon's 2018 revenue of $131 billion.

App store laws, Microsoft AR and Square buys Tidal

Welcome to this weekend's Source Code podcast.

Cole Burston/Bloomberg

This week on the Source Code podcast: First, an update on Google's user-tracking change. Then, Ben Pimentel joins the show to discuss Square buying Tidal, and what it means for the fintech and music worlds. Later, Emily Birnbaum explains the bill moving through the Arizona legislature that has Google and Apple worried about the future of app stores. And finally, Janko Roettgers discusses Microsoft Mesh, the state of AR and VR headsets, and when we're all going to be doing meetings as holograms.

For more on the topics in this episode:

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Sponsored Content

The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Power

Quibi’s failure is a bad omen for T-Mobile’s video plans

The mobile carrier once heralded Quibi as "the next big thing" — and hasn't had much luck with other video initiatives, either.

Better days: T-Mobile CEO Mike Sievert joined Quibi CEO Meg Whitman on stage at CES this year.

Photo: Janko Roettgers/Protocol

Quibi's shutdown announcement this week has been widely panned as the inevitable end of a service that never made much sense to begin with, much less during the pandemic. However, the company's demise is also a notable failure for T-Mobile, which was one of Quibi's biggest boosters, and even footed the bill for some of its customers as part of a "Quibi on Us" promotion.

"Quibi has been a strong partner with a unique mobile-first vision, and we're sorry to hear they will be winding down operations," a spokesperson told Protocol on Thursday. "Obviously, we will continue to monitor and ensure our customers with Quibi on Us are supported during this period and through any next steps needed."

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Politics

Here are some notable comments on Trump's Section 230 executive order

The agency has received more than 1,000 comments in response to a proposal to reform tech's legal protections.

Rifling through the filings provides an illuminating glimpse into how the fight over tech's prized legal protection is playing out following Trump's social media executive order, which he signed in May.

Photo: Bloomberg via Getty Images

Hundreds of comments flooded the Federal Communications Commission's website this week as companies, trade groups, advocacy organizations, passionate individuals and possibly bots scrambled to weigh in the future of Section 230 ahead of Wednesday's deadline.

As is typical with any regulatory process, many of those comments are identical to one another and appear to be copy-and-pasted from some original source. But rifling through the filings provides an illuminating glimpse into how the fight over tech's prized legal protection is playing out following Trump's social media executive order, which he signed in May.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

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