Detekteien

Private detective agencies. A Spiegel.de article dated 2008 said this was an unregulated and unsupervised but burgeoning security industry in Germany, sometimes employing former Stasi cooperators. The authors estimated there were ~1500 private detective companies in Germany in 2008 and about a dozen key world players, including the New York-based Kroll and London-based Control Risks. Many of these companies earned game-changing amounts of money in Iraq after the second U.S. invasion. They could be hired via law firms protected by attorney-client privilege, and subcontract jobs to other firms, obscuring cause-and-effect. A new C.E.O. of Control Risks said they were also hiring journalists to spy on other journalists.

A Detektei called Network Deutschland was “involved” in the German rail company Deutsche Bahn’s data privacy scandal when it was caught spying on its employees in 2009, leading to the retirement of C.E.O. Hartmut Mehdorn. Network Deutschland was also involved in the former-monopoly phone company Deutsche Telekom’s so-called “Telekom data scandal,” which is confusing but included T-mobile’s years of archiving communications data of members of its own supervisory boards, such as the head of the German trade union association Deutsche Gewerkschaftsbund. T-mobile was especially interested in any phone interactions with journalists. Deutsche Telekom was also accused of using private detectives to spy on journalists in other ways.

The 2013 Snowden revelations might provide some insight into the means private detective companies could have used to access these communications and banking data. Online ads and tech articles seem to be indicating that powerful N.S.A.-type tools are now trickling down into the regular economy, being sold to smaller and smaller entities.

N.B.: How early did the notoriously technophilic and well-funded U.S. National Football League know about some of these capabilities?

An English-language Spiegel.de article dated 2008 speculated about the separate huge data hoards controlled by the national rail (Deutsche Bahn), national airline (Lufthansa), post office (Deutsche Post) and phone company (Deutsche Telekom), all companies found to have made questionable investigations and hired detective agencies. The magazine couldn’t show that they had combined their data in 2008 though; they also only connected up e.g. that Deutsche Bahn and Deutsche Telekom hired the same detective agency but Lufthansa and (Telekom?) investigated the same journalist (Tasso Enzweiler from Financial Times Deutschland, which folded in 2012). The Spiegel article wanted to but could not show that the four big corporations also investigated each other, but it reminded us they were well positioned to investigate each other and anyone else in Germany. The Spiegel.de article didn’t want to feed conspiracy theorists but hoped the German government wasn’t asking these companies for access to their sensitive customer data. All four used to be state-owned and the German government still held large stakes in Deutsche Bahn and Deutsche Telekom.

(Day tect EYE en.)

Beibehaltung

Retention.

April 2013: After it became known the chair of the supervisory board [Aufsichtsrat] of Germany’s richest and most successful soccer team, Bayern Munich, was under investigation for voluntarily reporting himself [Selbstanzeige] as having an insufficiently reported and taxed ~500 million euros in a Swiss bank account, there seem to remain some loose ends in his origin story for where the half billion came from*. Yet on 06 May 2013 Bayern Munich’s supervisory board voted not to accept Uli Hoeneß’s resignation as its head. Members of the supervisory board who supported Mr. Hoeneß at this meeting included: Herbert Hainer, C.E.O. of Adidas. Rupert Stadler, C.E.O. of Audi. Timotheus Höttges, chief of Finances and Controlling at top Bayern sponsor Deutsche Telekom. Martin Winterkorn, C.E.O. of Volkswagen. Edmund Stoiber (C.S.U.), former candidate for German chancellor in the C.D.U./C.S.U. party.

10 May 2013: Mr. Hoeneß is suing the responsible prosecutor’s office for being the source of the press’s discovery of the investigation into the mysterious half billion euros, in April 2013.

30 Jul 2013: Uli Hoeneß has been charged with alleged tax evasion. The Economic Crimes Chamber [Wirtschaftsstrafkammer] of the second Munich Landgericht [Münchener Landgericht II] must now decide whether it will allow the trial to proceed and whether to open the main trial. The decision is expected in late September 2013.

04 Aug 2013: The president of the German Soccer Association [Deutscher Fussballbund e.V., D.F.B.], Wolfgang Niersbach, declared his support for Uli Hoeneß.

07 Aug 2013: Stern.de report that an anonymous informant told the second state prosecutors office in Munich [Münchener Staatsanwaltschaft II] that Mr. Hoeneß’s untaxed millions are not limited to one account at the Swiss Vontobel bank (said by prosecutors to have contained 500 million Swiss francs but said by Mr. Hoeneß in April 2013 never to have exceeded around 15 to 20 million euros, tops). Stern.de reported the informant said Mr. Hoeneß’s Vontobel account had balances consistently [“durchgehend“] exceeding 500 million Swiss francs in years before 2008 and also supplied information about stock dealings and transactions involving numbered accounts at three other Swiss banks: Crédit Suisse, Julius Bär and the Zürcher Kantonalbank.

The whistleblower said Deutsche Telekom stock with which Mr. Hoeneß participated in so-called dividend stripping was also involved.

04 Nov 2013: Mr. Hoeneß will have to “answer before a court” after all, starting ~10 Mar 2014. Landgericht Munich II’s “Economic Chamber” [Wirtschaftskammer] announced it will allow trial of charges against him of tax evasion and providing inaccurate answers. His Selbstanzeige earlier this year “contained errors.”

Frank Bräutigam, ARD tagesschau.de’s excellent legal correspondent, said the trial will evaluate the correctness of the Selbstanzeige (timeliness, completeness and accuracy). If the court determines that the Selbstanzeige was not properly executed, next it must decide how much money was improperly handled and what penalties could be imposed.

The Bayern Munich football club’s supervisory board reconfirmed that they want to retain Mr. Hoeneß as president of the club.

14 Mar 2014: Uli Hoeneß’s trial for 3.5 million euros of tax evasion was this week. In the two weeks before the trial started on Monday, he apparently gave prosecutors 50,000, some said 70,000, pages of Vontobel bank account statements previously withheld. On Monday he surprised reporters by announcing he’d actually not paid 18 million euros tax, but this was the ultimate number, no more revelations. On Tuesday, an auditor testified that the amount was actually 27 million. He was found guilty of 28.5 million euros in tax evasion and sentenced to 3.5 years, which will probably be in an open prison. On Friday, he said he would not appeal. The prosecutors may still decide to appeal. Uli Hoeneß resigned as president of the FC Bayern Munich soccer club and chair of FC Bayern Munich Inc.’s supervisory board.

Mr. Hoeneß’s salary tended to be about 10 million euros per year. The Vontobel account never had more than 150 million euros in it at one time.

(BY beh HALT oong.)

* Mr. Hoeneß said he netted 500 million euros between 2000 and 2012 by compulsively playing the stock market starting with a 10-million-euro combination gift/loan in 2000 from a now-deceased friend, a former C.E.O. of Adidas.

“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

Zwei-Klassen-Internet

“Two-class internet,” Deutsche Telekom’s third current scandal: they plan to charge content providers for not slowing down their content’s delivery, ultimately giving large, financially-established firms an advantage over smaller firms and startups.

By also “throttling” consumers’ internet access speeds, Telekom was planning to cash in at both ends of the pipe. Deutsche Telekom has now conceded to the outrage by announcing they won’t throttle consumers’ internet access as hard or as fast as originally announced.

Meanwhile, the Wall Street Journal wrote on 19 Jun 2013 that large US content companies have already been paying tens of millions of dollars per year per company to large phone and cable internet companies in the USA to keep the network operators from slowing down delivery of their content. The same large content companies could be blackmailed by similar network controllers in every country in the world.

(Tsv eye CLOSS en Internet.)

#Drosselkom

Twitter hashtag for snark about Deutsche Telekom’s second current scandal, their unilateral decision to choke new flat-rate customers’ Internet tubes after 02 May 2013.

Telekom’s decision against net neutrality might have given permission to its competitors to take similar steps. In April, internet policy activists were concerned that Arcor purchaser and important ISDN competitor Vodafone had started looking into data throttling as well, but that company responded by saying it was not currently considering so doing.

In a 30 May 2013 interview with the Frankfurter Allgemeine Zeitung, the president of the German anti-cartel authority [Bundeskartellamt] said that if Deutsche Telekom planned to allow providers to buy their way out of Telekom’s plans to slow down data to its flat-rate consumers, this might be anticompetitive because smaller providers might have trouble paying the new fees charged to resume normal data access or “purchase a priority treatment” as he put it. Yet the anti-cartel authority had decided to neither investigate nor prosecute for anti-competitive market access limitations in this case, merely to get “the clearest possible picture” of the situation. They were concerned that Telekom provide better information to its customers about whether they were close to exceeding data limits and about which services were counting toward customers’ volume limit (companies have until 2016 to make priority partnership agreements with Telekom to have Telekom stop counting their content toward Telekom customers’ volume limits). Also, the president of the anti-cartel authority said, the networks authority [Bundesnetzagentur] would be determining whether network neutrality was being violated enough to require further investigation. The F.A.Z. noted that Telekom is considered a major market player because it controls ~45% of the German DSL market, with ~12.4 million connections, according to the Bundesnetzagentur.

(DROSS ell com.)

Das Vectoring

In the first of its two current scandals, Deutsche Telekom wants to use so-called “vectoring” technology to reduce interference between bundled strands in copper-wire DSL internet connections by increasing and decreasing signals to balance out a more efficient overall electric signal transmission. “Vectoring” requires the Kabelverzweiger, the “cable brancher” or “cross connect” gray box by the side of the street, to be connected to a fiber optic line. Powerful computing is required at the phone company end to “precalculate” the “error suppression” for all transmissions on all DSL lines in the bundle simultaneously in real time. Maximum efficiency requires one central administration of all DSL lines, by one company in other words.

Telekom claims its vectoring only works when a single company controls all the lines at the gray box; “no other companies could then install their own technology there,” the F.A.Z. wrote, voicing the worry about fairness to companies in competition with Telekom. Fairness at the consumer end is also an issue, inter alia because vectoring requires modems specially modified for vectoring technology. Manufacturers such as AVM are already shipping only “vectoring-friendly” modems.

Just before the long Christmas break in 2012, Telekom submitted a request to the Networks Agency (Bundesnetzagentur, BNetzA) to modify BNetzA rules to allow its vectoring. After receiving the petition, the Bundesnetzagentur asked companies in the sector to amicably agree on solutions amongst themselves in order to reduce regulatory intervention to a minimum. Deutsche Telekom also tried to calm remonopolization fears by e.g. saying that if competitor companies had connected their own fiber optic lines to gray branching boxes, they could use its vectoring technology too. It also had some new last mile products it wanted to rent out to them.

On 15 May 2013 the Bundesnetzagentur issued a draft approving the partial deregulation—which still must be approved by the EU Commission and the regulatory authorities of the Member States which would have one month to review the proposal after BNetzA’s 24 Apr 2013 hearing—allowing Deutsche Telekom and its competitors to use Telekom’s vectoring while imposing conditions intended to mitigate the old monopoly’s sole control of branching boxes, though the items in this list indicate apparently not to mitigate possible data privacy repercussions caused by the central computational process managing the balancing out of every DSL line. These conditions included:

  • Around questionable boxes, at least one other provider must market a fast internet connection, such as television cable.
  • For Telekom to use vectoring at a box, more than one competitor must be connected to that box.
  • Telekom’s competitors in turn are required to use Telekom’s vectoring in all boxes to which they have connected. Does this give Telekom’s servers access to all those end consumers and their data?

Alternatively, non-“vectoring” options for speeding up DSL connections include so-called “bonding,” bundling in which incoming data packets are distributed through two of the usually four available lines of a DSL connection rather than just being sent through one. Routers that can bundle the unsorted incoming packets will have two DSL inputs instead of just one. There is also a “phantom bundling” option that can take two (four-line) DSL connections and use one line from each connection to create a third, “phantom” circuit that will suffice to “modulate up” DSL signals. It is claimed that Deutsche Telekom’s “vectoring” would be faster than these bundling alternatives and/or speed them up by balancing away the signal bleed between copper wires.

Some Germans are concerned that their internet service providers already are claiming internet speeds they don’t actually deliver or secretly throttling cheap connections; to address these concerns the Bundesnetzagentur studied German broadband quality in 2012 and posted a link to a “broadband test” and a “net neutrality test” (that can’t be run on a wireless network) for consumers on an “Initiative Netzqualität” website scheduled to be shut down in late June 2013. The net neutrality test requires Java. Both tests are for stationary internet connections; neither can be run on a mobile network. Speaking of mobile internet: now that Deutsche Telekom has received approval from US antitrust authorities to merge T-Mobile with competitor Metro PCS, they plan to use some of Deutsche Telekom’s new cash liquidity to build mobile infrastructure in the USA.

Datendrosselung

“Data throttling.” Deutsche Telekom, whose subsidiary T-Mobile stood out from other US telephone companies because it was never explicitly mentioned in the press as having given its customers’ data to the George W. Bush administration, has announced that starting May 1, 2013, it will slow down internet traffic for its flat-rate German customers above a low monthly data limit of 75 GB. There will be no appeal. People are furious. Critics say there may be a competition issue because Telekom’s own online content, such as from its entertainment channels, will not count toward the monthly data limit. If so, this might be a case for the Bundesnetzagentur, the German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads (BNetzA).

Update on 30 Oct 2013: A Cologne court forbade Deutsche Telekom to slow down the data supplied to its flat-rate internet customers, in a lawsuit brought by the North Rhine-Westphalian Consumer Protection Agency [Verbraucherschutzzentrale Nordrhein-Westfalen e.V.]. Deutsche Telekom was planning to reduce these household internet connections to as low as <10% of normal surfing speeds.

Süddeutsche.de reported that the court said Telekom could slow down its customers’ internet access but not without changing its current marketing. Without fixing the problem, “Drosselkom” had tried several responses to the outrage sparked by these plans this year, including offering a second more expensive flat rate plan that really, they swore, this time, would not be subsequently decelerated. Competitors 1&1 and Kabel Deutschland have been capping their customers’ internet connections too, SZ reported. They quoted a pundit as saying the Cologne Landgericht’s verdict was important for starting to create limits to contracts that have been being arbitrarily changed by companies. Telekom plans to appeal.

(DOT en DROSS ell oong.)

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