Archives for May 2021

FTC sues Frontier for delivering internet that’s too slow

The Federal Trade Commission and six states are suing Frontier Communications for not delivering the internet speeds it promised customers and charging them for better, more expensive service than they actually got.

In its complaint, filed Wednesday in federal court in California, the FTC said thousands of Frontier customers have complained that the company was not delivering promised speeds. Customers said they couldn’t use the internet service for the online activities they should have been able to.

The complaint concerns what’s called DSL internet, an older type of network that’s sent over copper telephone wires. Phone and cable companies today build networks which can handle much faster speeds. The FTC says Frontier provides DSL service to 1.3 million customers in 25 states, mostly in rural areas. It has about 3 million internet customers overall.

Involved in the suit are attorneys general from Arizona, Indiana, Michigan, North Carolina, Wisconsin and the district attorneys’ offices of Los Angeles County and Riverside County on behalf of California. The complaint was filed in the U.S. District Court for the Central District of California.

Frontier said the lawsuit is without merit and it will defend itself. The company said its internet speeds “have been clearly and accurately articulated, defined and described in the company’s marketing materials and disclosures.”

Customers have for years complained about the Connecticut-based company, which filed for bankruptcy in April 2020 and emerged from out of bankruptcy at the end of April with $11 billion less in debt.

The FTC’s complaint noted that Frontier has settled with West Virginia, New York, Nevada, Pennsylvania, Washington, and Minnesota in cases since 2015 in cases claiming the company was misrepresenting its internet speeds. It has denied wrongdoing.

The acting chairwoman of the FTC, Rebecca Kelly Slaughter, tweeted that while the case was important, the FTC could never “fully fill the regulatory gap” left after the Federal Communications Commission repealed net neutrality rules that oversaw internet service. The FCC repealed the rules under a Trump-appointed chairman in 2017. “Active oversight by the proper regulator may have prevented these violations,” she said.

The Minnesota attorney general’s office settled with Frontier last July over possible deceptive billing practices. The company agreed to disclose its prices to new customers before they get service and said it would pay $750,000 in restitution to customers. It also agreed to invest at least $10 million over four years to improve its broadband network in the state. West Virginia in 2015 required the company to spend $150 million to boost internet speeds for rural customers as part of a settlement.

Millions of Americans can’t get online because they have no access to high-speed internet or can’t afford it. The Biden administration has promised to tackle this “digital divide.”

Chicago mayor faces dashed hopes of her backers

CHICAGO (AP) — Lori Lightfoot had her work cut out for her when she became mayor of Chicago in 2019, running as a progressive Democrat and outsider who would bring big change to City Hall. Among her early challenges: a troubled police department, deep financial problems, entrenched inequality, a teacher strike and a president who liked to pile on via Twitter.

Then the job got really difficult.

Lightfoot acknowledged this week that she hasn’t accomplished much of what she hoped when she replaced former Obama chief of staff Rahm Emanuel as mayor of the nation’s third-largest city, promising to do the job better. The pandemic and protests over police violence upended many of those plans, she said, adding she is “unbelievably proud” of what her administration has done.

But as she reaches the halfway point of her four-year term on Thursday, she faces an abundance of critics over her performance, and hundreds of people plan to protest near her home. Lightfoot drew new scrutiny this week by announcing that she would do one-on-one interviews about her tenure so far only with journalists of color because of the “overwhelming whiteness and maleness” of city media.

Lightfoot’s struggles have ignited new questions over whether big city mayors’ problems these days mostly lie with flawed officeholders who overpromise or with the job itself. Some cities, especially Chicago, now seem to stagger from one mayor under attack to the next.

“The reality is, I’m the mayor. I’m the target,” said Lightfoot, 58, who is Chicago’s first Black woman and first openly gay mayor. “People are unhappy, people are angry. And criticism comes with the job.”

Lightfoot is dealing with limitations that have confronted other progressive Democrats elected in recent years as cities have grown more left-leaning — as to what political or legal power they actually have to get things done, said Richard Schragger, a University of Virginia law professor who has written about mayoral powers.

What these mayors want to do requires approval from state government or is constrained by the political realities of representing sometimes millions of people with different interests. A progressive mayor whose supporters have called for defunding police, for example, enters office with a slightly hostile relationship to police, even as the mayor needs to rely on officers to police the city or help implement reforms.

“They’re operating in an environment where making change is really hard,” Schragger said.

As for the campaign promises? “It’s very hard to run on a platform of ‘I’ll do what I can within the constraints that restrain me.’”

The pandemic highlighted some of the handicaps faced by Democratic mayors in states controlled by Republican governors. In Texas, for example, the Democratic mayor of Houston wanted to keep a mask requirement in place, but Republican Gov. Greg Abbott lifted the mask mandate statewide. But roadblocks exist even when mayors, governors and Legislatures are controlled by the same party. In New York, Mayor Bill de Blasio tried for years to raise taxes on the highest earners but met with resistance from a fellow Democrat, Gov. Andrew Cuomo.

Lightfoot has clashed with Democratic Illinois Gov. J.B. Pritzker. He recently signed union-backed legislation regarding firefighter pensions despite Lightfoot’s objection that it would add to Chicago’s financial stresses. She blasted the move as typical Springfield lawmakers “cutting backroom deals.”

Chicago Public Schools, which serves some 300,000 students and has a roughly $8 billion budget, has been a particular problem for Lightfoot, with its shaky finances and academic shortcomings — one of the inherited issues she was supposed to improve. The mayor controls the district through an appointed school board, but she has tussled repeatedly with the Chicago Teachers Union, which backed Lightfoot’s Democratic opponent in the 2019 mayoral runoff.

Democratic lawmakers in the state capital are backing a plan to wrest control away from the mayor’s office and create an elected school board in Chicago. Lightfoot, who said during the campaign she would support an elected board, is now pushing instead for a board with some elected but most appointed.

Cassandra Kaczocha, a mother of two who lives on Chicago’s North Side, was an early supporter of Lightfoot and voted for her over roughly a dozen other candidates, calling her “the anti-Rahm.” Emanuel was criticized as too hard-charging and business friendly at the expense of working class and poor residents. Lightfoot talked about equity and listened to people, Kaczocha said.

Now, her shift on the school board issue is the kind of broken promise that Kaczocha can’t accept.

“I thought she’d govern like she campaigned, and we didn’t get that,” she said. “We got a very dictatorial style of governing, just like we did with Rahm, and it’s disappointing.”

Lightfoot has also angered activists by opposing a plan for civilian oversight of the police department and over news that her administration spent roughly $280 million of COVID relief funds to cover the cost of police personnel, including for security at COVID-related sites.

Meanwhile, gun violence in the city has increased. She’s also seen a number of top staff leave her administration, including most recently the head of Chicago Public Schools.

Lightfoot is touting the things she has been able to accomplish, including battling COVID and providing vaccines “in a data-driven and equitable manner” and working with businesses and philanthropic groups to invest in certain neighborhoods on the city’s south and west sides. Her team’s work saved lives, she said.

“No easy decisions, not one, but I’m proud of the work that we’ve done,” Lightfoot said. “I go to sleep at night comforted in the knowledge that every day I have worked my tail off for the residents of this city and I will continue to every day.”

Colonial Pipeline confirms it paid $4.4M to hackers

NEW YORK (AP) — The operator of the nation’s largest fuel pipeline confirmed it paid $4.4 million to a gang of hackers who broke into its computer systems.

Colonial Pipeline said Wednesday that after it learned of the May 7 ransomware attack, the company took its pipeline system offline and needed to do everything in its power to restart it quickly and safely, and made the decision then to pay the ransom.

“This decision was not made lightly,” but it was one that had to be made, a company spokesman said. “Tens of millions of Americans rely on Colonial – hospitals, emergency medical services, law enforcement agencies, fire departments, airports, truck drivers and the traveling public.”

Colonial Pipeline’s CEO, Joseph Blount, told The Wall Street Journal he authorized the payment because the company didn’t know the extent of the damage and wasn’t sure how long it would take to bring the pipeline’s systems back.

The FBI discourages making ransom payments to ransomware attackers, because paying encourages criminal networks around the globe who have hit thousands of businesses and health care systems in the U.S. in the past year alone. But many victims of ransomware attacks, where hackers demand large sums of money to decrypt stolen data or to prevent it from being leaked online, opt to pay.

“I know that’s a highly controversial decision,” Blount told the Journal. “But it was the right thing to do for the country.”

Blount said Colonial paid the ransom in consultation with experts who previously dealt with the group behind the attacks, DarkSide, which rents out its ransomware to partners to carry out the actual attacks.

Multiple sources had confirmed to The Associated Press that Colonial Pipeline had paid the criminals who committed the cyberattack a ransom of nearly $5 million in cryptocurrency for the software decryption key required to unscramble their data network.

A ransom payment of 75 Bitcoin was paid the day after the criminals locked up Colonial’s corporate network, according to Tom Robinson, co-founder of the cryptocurrency-tracking firm Elliptic. Prior to Robinson’s blog post, two people briefed on the case had confirmed the payment amount to AP.

Blount told the Journal the attack was discovered around 5:30 a.m. on May 7. It took Colonial about an hour to shut down the pipeline, which has 260 delivery points across 13 states and Washington, D.C., Blount said. That helped prevent the infection from potentially migrating to the pipeline’s operational controls. But there are lingering issues. Blount said Colonial is still unable to bill customers following an outage of that system.

The pipeline system delivers about 45% of the gasoline consumed on the East Coast, and Colonial, which is based in Alpharetta, Georgia, halted fuel supplies for nearly a week. That led to panic-buying and shortages at gas stations from Washington, D.C. to Florida.

Colonial restarted its pipeline a week ago, but it took time to resume a full delivery schedule, and the panic-buying led to gasoline shortages. More than 9,500 gas stations were out of fuel on Wednesday, including half of the gas stations in D.C. and 40% of stations in North Carolina, according to Gasbuddy.com, which tracks fuel prices and station outages.

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Associated Press Writer Frank Bajak contributed to this report from Boston.

Gaza’s health system buckling under repeated wars, blockade

GAZA CITY, Gaza Strip (AP) — The Gaza Strip’s already feeble health system is being brought to its knees by the fourth war in just over a decade.

Hospitals have been overwhelmed with waves of dead and wounded from Israel’s bombardment. Many vital medicines are rapidly running out in the tiny, blockaded coastal territory, as is fuel to keep electricity going.

Two of Gaza’s most prominent doctors, including the No. 2 in Gaza’s coronavirus task force, were killed when their homes were destroyed during barrages since fighting between Hamas and Israel erupted 10 days ago.

Just as Gaza was climbing out of a second wave of coronavirus infections, its only virus testing lab was damaged by an airstrike and has been shut. Health officials fear further outbreaks among tens of thousands of displaced residents crowded into makeshift shelters after fleeing massive barrages.

At one U.N.-run school where 1,400 people were taking shelter, Nawal al-Danaf and her five children were crammed into a single classroom with five other families. Blankets draped over cords crisscrossed the room to carve out sleeping spaces.

“The school is safe from the war, but when it comes to corona, with five families in a room, everyone infects each other,” said al-Danaf, who fled Israeli tank shelling on the northern Gaza town of Beit Lahiya a few days ago.

Blankets and laundry dangled from the railings of the school’s balcony, as women looked down into a yard where children were playing and men sat chatting. No one wore a mask or could do any social distancing in the cramped quarters.

The Gaza Strip’s health infrastructure was already collapsing before this latest war, said Adnan Abu Hasna, a spokesman for UNRWA, the U.N. agency that provides vital assistance to the 75% of the enclave’s population who are refugees. “It’s frightening,” he said.

The sector has been battered by three previous wars between Israel and Gaza’s Hamas rulers.

This war began May 10 when Hamas fired long-range rockets toward Jerusalem in support of Palestinian protests against Israel’s heavy-handed policing of the Al-Aqsa Mosque compound, a flashpoint site sacred to Jews and Muslims, and the threatened eviction of dozens of Palestinian families by Jewish settlers.

Since then, Israel has struck hundreds of targets across the Mediterranean coastal strip, and Hamas has fired thousands rockets at Israel. Israel says it seeks to cripple Hamas by targeting its leaders, and military infrastructure, while trying to avoid civilian casualties. But the powerful bombs dropped on crowded Gaza have caused significant damage to the territory’s infrastructure.

During each of the wars, hospitals and clinics were damaged or destroyed, and medical personnel killed. And after each, authorities had to slowly rebuild, hampered by the blockade imposed by Israel and Egypt since Hamas took power in 2007.

Other turmoil also weighed on the system. More than two years of weekly Friday Palestinian protests at the border with Israel against the blockade produced a constant stream of casualties from Israeli fire — more than 35,000 injured, many with lifelong disabilities and around 100 still awaiting reconstructive surgery and amputations.

Now health facilities are struggling to handle both the casualties of war and the everyday needs of Gaza’s 2 million people.

“It’s layer-upon-layer of crisis. And there never is really enough time between each crisis to rebuild,” said Matthias Schmale, the UNRWA director in Gaza. “The (health care) system has gradually been quite significantly weakened. I wouldn’t say it’s on its knees, but getting close.”

Gaza health officials say at least 227 Palestinians, including 64 children, have been killed in airstrikes and more than 1,600 wounded. Twelve people in Israel have been killed by rockets.

The bombardment has driven more than 56,000 Gazans from their homes, fleeing into 59 schools run by UNRWA. The U.N. agency is providing them with water and basic hygiene supplies, including face masks. Unknown numbers more have taken refuge with relatives.

UNRWA learned from the last war, in 2014, when some 292,000 displaced people crammed into its schools and other shelters during 50 days of fighting. Since then, the agency has installed showers, more bathrooms and extra water and electricity capacity into some of the schools in case they might be needed again for shelters, officials said.

So far, the current onslaught has not been as directly destructive to health facilities as 2014, when multiple hospitals and clinics took direct hits from Israeli bombing, as did U.N. schools housing the displaced.

Still, Israeli attacks this time have damaged at least 18 hospitals and clinics, the World Health Organization said. Nearly half of all essential drugs have run out. Schmale said at least three health care centers have been leveled, including a trauma and burn center run by Doctors Without Borders.

Among the sites damaged was the main health care clinic, the only site in Gaza where tests detecting COVID-19 can be analyzed, said Dr. Majdi Dhair, head of preventive medicine at the Health Ministry. As a result, coronavirus testing has halted.

“It’s like a ticking bomb because people are not tested, and those who are infected won’t know that they are infected,” Dhair said.

As of Monday, when the clinic was damaged, Gaza had recorded more than 105,000 coronavirus infections, including 986 deaths. Some 80 people were in critical condition with the virus.

Gaza’s COVID-19 vaccination drive, already slow, has stopped, said WHO’s top official in Gaza, Sacha Bootsma.

Just under 39,000 people, or 2% of Gaza’s population, have received vaccinations. There are only enough doses to vaccinate another 15,000, and those expire in June, raising fears they will be unusable by the time they can be given.

“In a war, there are responsibilities to protect health institutions and health care workers,” Schmale said.

He said this week a senior lab technician who works at a main UNRWA health clinic was seriously wounded in an airstrike as he rushed home to help his wife evacuate. He is in intensive care with severe brain damage.

“The price the civilian population is paying is unbearable and unacceptable, and health care workers are an element of that,” Schmale said.

“Our staff are as terrified as the rest of the population. They are really afraid to go to work after heavy nights of shelling or bombing.”

Only about half of government-run primary care centers are operating. Sixteen of UNRWA’s 22 health care centers were working as of Wednesday. Most of Gaza relies on the U.N. centers, according to UNRWA.

All of the government’s 13 hospitals are running, though some have sustained damage, and as of Monday, 16 private or NGO-run hospitals were working.

But all are badly in need of emergency medical supplies. WHO listed some 40 key medicines and medical supplies that it is waiting for, including anesthetics, antibiotics, sutures and blood bags. Gaza’s border with Israel has been closed throughout the fighting.

Also urgently needed is fuel. Electricity output in Gaza has dropped some 60%, forcing hospitals to rely more on fuel-thirsty generators, UNICEF Executive Director Henrietta Fore said in a statement.

During one brief opening, UNRWA was able to bring in five fuel trucks, enough to help it run its facilities for a few weeks. But other trucks of food and medicine could not enter, reportedly prevented by ongoing shelling. Two days ago, Egypt sent in a supply convoy that included medical supplies and fuel, but that fuel is expected to run out Thursday.

If the border stays closed, supplies will begin to run out and “we will need so-called humanitarian corridors open to bring stuff in,” Schmale said.

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Batrawy reported from Dubai, United Arab Emirates.

Asian shares mixed after retreat on Wall Street

BANGKOK (AP) — Shares were mixed in Asia on Thursday after benchmarks closed broadly lower on Wall Street in a third day of retreat.

The price of Bitcoin and other cryptocurrencies declined further. Stocks rose in Tokyo and Sydney but fell in Hong Kong and Shanghai.

Japan’s government reported that exports rose 38% in April from a year earlier while imports climbed nearly 13%, indicating a recovery in overseas demand even as the country weathers its worst bout of coronavirus outbreaks so far.

Exports to the U.S. rose 45% while those to China jumped nearly 34% in a strong rebound after last year’s shocks from lockdowns and other precautions taken to curb the pandemic.

The Nikkei 225 regained lost ground, edging 0.2% higher to 28,067.53, while Sydney’s S&P/ASX 200 surged 0.9% to 6,993.90. In Hong Kong, the Hang Seng skidded 0.7% to 28,381.13 while Seoul’s Kospi declined 0.5% to 3,157.70. Shares rose in Singapore and Jakarta but fell in Taiwan.

On Wednesday, the S&P 500 index dropped 0.3% to 4,115.68 after recovering from a 1.6% slide earlier in the day. The benchmark index is on track for its second weekly loss in a row.

Bank stocks were among the biggest decliners. Goldman Sachs fell 1.7% and Wells Fargo lost 1.5%. Retailers and other companies that rely directly on consumer spending also pulled the market lower. Home Depot slid 0.7%, Gap fell 3% and L Brands dropped 3.1%.

Energy sector stocks, the biggest gainers so far this year, bore the heaviest losses as the price of U.S. crude oil skidded 3.5%.

The Dow Jones Industrial Average fell 0.5% to 33,896.04. The Nasdaq fared better than the rest of the market, shedding less than 0.1%, to 13,299.74.

Smaller company stocks also lost ground. The Russell 2000 index lost 0.8%, to 2,193.64.

Digital currencies fell sharply after China’s banking association issued a warning Wednesday over the risks associated with digital currencies.

Bitcoin’s price was down 6.2% to $38,140, well below its all-time high of over $64,800 reached a month ago, according to the crypto news site Coindesk. It swung in a huge range of as low as $30,202 and as high as $43,621 over the course of the day.

That the headline out of China rattled crypto investors suggests the market was already weak, said Willie Delwiche, investment strategist at All Star Charts.

“If Bitcoin had been holding up better, a headline like that would be dismissed more readily, but it comes at a time when Bitcoin was already well off its highs,” he said. “It gave people who were looking for a reason to sell cover.”

The Bitcoin skid comes after longtime Bitcoin advocate Tesla recently recently said it would no longer accept Bitcoin as payment for its cars, reversing its earlier position.

The selling was so intense that the web site of Coinbase, an online brokerage for digital currencies, was temporarily down in the morning. Coinbase’s stock dropped 5.9%, ending about 34% below the peak it reached on April 16, just two days after its IPO.

Investors continue to focus on whether rising inflation will be temporary or whether it will endure. Prices are rising for everything from gasoline to food as the economy recovers from its more than year-long malaise.

The fear is that the Federal Reserve will have to dial back its extensive support if inflation persists. That includes record-low interest rates and the monthly purchase of $120 billion in bonds meant to goose the job market and economy.

The minutes from the central bank’s April meeting of policymakers, which were released Wednesday afternoon, reaffirmed the view that the Fed’s decision to keep its benchmark interest rate ultra-low remains the best policy approach, though some officials cautioned that some factors pushing inflation higher may not be resolved quickly.

Treasury yields mostly rose. The yield on the 10-year Treasury note slipped to 1.66% from 1.67% late Wednesday.

In other trading, U.S. benchmark crude oil added 11 cents to $63.46 per barrel in electronic trading on the New York Mercantile Exchange. It dropped $2.50 on Wednesday to $63.35 per barrel. Brent crude, the international standard for pricing, rose 9 cents to $66.75 per barrel.

The dollar fell to 109.14 Japanese yen from 109.23 yen on Wednesday. The euro rose to $1.2185 from $1.2174.

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AP Business writers Alex Veiga and Damian J. Troise contributed.

Archives for May 2021

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