It’s been a turbulent couple of days for AT&T, from massive acquisition news to government spying scandals.
Last weekend AT&T confirmed that it would acquire Time Warner for $85 billion, pending regulatory approval, creating a new telecom and media behemoth. The deal was immediately lambasted by politicians and consumers alike as a pocket lining deal that would be good for executives and shareholders but ultimately bad for consumers with less choice in the market and potentially higher prices.
It’s unified polar opposites. It is perhaps the one thing that Donald Trump and Bernie Sanders agree on—the deal is bad. “The administration should kill the Time Warner-AT&T merger. This deal would mean higher prices and fewer choices for the American people,” tweeted Sanders. At the same time Trump denounced the deal as putting too much media power into “the hands of too few”.
Hillary Clinton on the other hand didn’t exactly come out all guns blazing, but said the deal should face the rigors of law makers. However, critics of Clinton have pointed to Obama’s reportedly lax approach to contesting mergers as some kind of evidence that a Clinton presidency may not bring the hammer down on this deal.
Regardless, the hurdles will be plentiful for AT&T in the coming months and years but the company certainly has the legal means and resources to see it through to the end, whatever the outcome.
It’s facing another potential legal quagmire though—spying. On Tuesday, The Daily Beast broke the story that the telecom giant had been selling surveillance data on its customers to law enforcement.
The allegations center on Hemisphere, a surveillance program run by AT&T and the Drug Enforcement Agency (DEA). Hemisphere has been public knowledge for a number of years, first reported by the New York Times, but The Daily Beast’s report brings things a step further. The program was designed for investigating serious drug offenses with AT&T storing customer data as far back as 2008, much longer than its competitors.
Now it appears that Hemisphere data has been sold to local police departments investigating much lower-profile crimes like Medicaid fraud. And the taxpayer is paying for it.
Police departments are paying anywhere between $100,000 and $1 million a year to use Hemisphere, without a warrant and without needing to disclose its use, per the agreement with AT&T.
Nate Wessler of the American Civil Liberties Union told The Guardian said that it was “disturbing” the lengths that police and AT&T had gone to ensure Hemisphere’s use was kept a secret and had little safeguards put in place. It suggests both sides knew very well they would face a storm if this ever got out.
“The longer these kind of surveillance programs are kept from the public, the harder it is to ensure there are appropriate checks and balances in place.”
Evan Greer, of digital rights organization Fight for the Future, called the revelations worse than the Snowden leaks.
“It makes me sick to my stomach thinking about it,” said Greer. “Customers trusted AT&T with some of their most private information, and the company turned around and literally built a product to sell that information to as many government agencies and police departments as they could.”
Fight for the Future is calling for the Hemisphere program to be shut down immediately and the Department of Justice to launch an official investigation and a review of all court cases where Hemisphere was used.
Non-profit Electronic Frontier Foundation (EFF) is currently suing AT&T to make Hemisphere documents public. With the leak from the Daily Beast, this could add fire to EFF’s ongoing lawsuit.
The news breaks at a particularly potent time—and not just because of the Time Warner deal. We’re mere weeks removed from the emergence of a similar mass surveillance apparatus employed by Yahoo at the behest of the NSA, which allegedly scanned users’ emails for suspicious activity to inform law enforcement’s investigations.
In a post-Snowden world, it’s difficult to be shocked by cases of mass surveillance. The NSA revelations at the hands of the former contractor have somewhat numbed us to cases of indiscriminate snooping but the Yahoo and AT&T incidents have awoken something again.
The EFF along with the ACLU, Center for Democracy and Technology, the Sunlight Foundation and several other groups wrote a letter this week to James Clapper, director of national intelligence for answers on the Yahoo email scanning fiasco. It demanded answers on how and why authorities compelled Yahoo to do so and pushed for greater transparency. Many of its questions and concerns can be applied to AT&T as well.
It’s been several weeks since the Yahoo story first broke and we still don’t have answers over the what exactly the legal basis was for this mass surveillance (most have pointed to FISA). Reuters, who broke the original story, reported on Tuesday that House of Senate representatives are reluctant to pursue the matter. The whole thing is still being picked apart by lawyers and civil liberties groups but we shouldn’t expect any big reveal any time soon.
“This silence cannot be squared with the human rights laws that are binding upon the United States,” said Human Rights Watch in its excoriation of the US government and Yahoo.
Don’t hold your breath on AT&T.
So we’re left with more questions than answers. If large corporations like Yahoo and AT&T are carrying out mass surveillance for agencies like the NSA or local law enforcement, whether it’s thorough overreaching orders or for profit, it leaves us wondering what are other companies are doing?
Yahoo’s Silicon Valley peers have all made efforts to distance themselves from the spying scandal though—some more strongly worded than others. Microsoft and Google all denied ever receiving a similar sort of order from law enforcement while Facebook said it would take the necessary steps to fight such an order if it ever got one. Apple on the other hand pointed to a previous statement regarding its stance on data requests and left it at that.
Either way it calls for greater accountability and transparency when it comes to these matters. How long until the next mass surveillance scandal hits?
“If companies are allowed to operate in this manner without repercussions, our democracy has no future,” said Greer.
Add to this the ongoing scrutiny over the Time Warner deal; AT&T will hope to gain valuable data from Time Warner’s customers, combined with its own, to sell to advertisers. It’s a move that will also face regulatory nit-picking, especially for privacy infractions, and right now AT&T doesn’t exactly have the best reputation with that.