NY AG fines three companies $615K for faked net neutrality comments that swayed the FCC

In Featured News by Wireless Estimator

Mockups the digital advertising company created in advance of the campaign, illustrating its claimed ability to capture user information within a banner ad.

Broadband advocacy groups reviewed mockups created before the campaign, illustrating the companies’ claimed ability to capture user information within a banner ad.

New York Attorney General Letitia James announced yesterday that her office had secured $615,000 from three companies, LCX, Lead ID, and Ifficient, that supplied millions of fake public comments to influence a 2017 proceeding by the Federal Communications Commission (FCC) to repeal net neutrality rules. Net neutrality prohibits broadband providers from blocking, slowing down, or charging companies to prioritize certain content on the internet.

An investigation by the Office of the Attorney General (OAG) found that the fake comments used the identities of millions of consumers, including thousands of New Yorkers, without their knowledge or consent. Collectively, the three companies have agreed to pay $615,000 in penalties and their ill-gotten gains. This is the second series of agreements secured by Attorney General James with companies that supplied fake comments to the FCC.

“Public comment opportunities are a chance for Americans to give their input on important government policies, and these companies abused that for their own selfish purposes,” said Attorney General James. “No one should have their identity co-opted by manipulative companies and used to falsely promote a private agenda. Through this agreement, we are holding three more companies accountable for impersonating Americans without their knowledge or consent. We will always fight to ensure that consumers’ identities are protected, and fraudulent companies are stopped.”

The agreements result from an investigation by OAG that uncovered widespread fraud and abusive practices surrounding efforts to sway the FCC in the agency’s 2017 net neutrality rulemaking proceeding as detailed in a report by OAG, the nation’s largest broadband companies funded a secret campaign to generate millions of comments to the FCC in 2017. These comments provided “cover” for the FCC to repeal net neutrality rules.

To help generate these comments, the broadband industry engaged commercial lead generators that used advertisements and prizes, like gift cards and sweepstakes entries, to encourage consumers to join the campaign. However, nearly every lead generator hired to enroll consumers in the campaign instead simply fabricated consumers’ responses. As a result, more than 8.5 million fake comments that impersonated real people were submitted to the FCC, and more than half a million fake letters were sent to Congress.

Two of the companies, LCX and Lead ID, were each engaged to enroll consumers in the campaign. Instead, each independently fabricated responses for 1.5 million consumers. The third company, Ifficient, acted as an intermediary, engaging other lead generators to enroll consumers in the campaign. Ifficient supplied its client with more than 840,000 fake responses it had received from the lead generators it had hired.

The OAG’s investigation also revealed that the fraud perpetrated by the various lead generators in the net neutrality campaign also infected other government proceedings. Several lead generation firms involved in the broadband industry’s net neutrality comment campaigns had also worked on unrelated campaigns to influence regulatory agencies and public officials. In nearly all of these advocacy campaigns, the lead generation firms engaged in fraud. As a result, more than 1 million fake comments were generated for other rulemaking proceedings, and more than 3.5 million fake digital signatures for letters and petitions were generated for federal and state legislators and government officials nationwide.

The FCC voted along party lines, 3–2, on December 14, 2017, to enact the Restoring Internet freedom rules and repeal the 2015 Open Internet Order.

LCX and Lead ID were responsible for many fake comments, letters, and petition signatures. For example, across four advocacy campaigns in 2017 and 2018, LCX fabricated consumer responses used in approximately 900,000 public comments submitted to the Environmental Protection Agency (EPA) and the Bureau of Ocean Energy Management (BOEM) at the U.S. Department of the Interior. Similarly, in advocacy campaigns between 2017 and 2019, Lead ID fabricated more than half a million consumer responses. These campaigns targeted various government agencies and officials at the federal and state levels.

The agreements announced yesterday require the three companies and their principals to pay penalties and disgorgement. LCX and its principals will pay $400,000 in fines and disgorgement to New York and $100,000 to the San Diego District Attorney’s Office. Lead ID and its principal will pay $30,000 in penalties and disgorgement to New York. Finally, ifficient will pay $63,750 in fines and disgorgement to New York and $21,250 to Colorado.