Policy

Genachowski Strongly Defends Cable’s Usage-Based Pricing

5/28/2012 12:01 AM Eastern

Washington — Usage-based
broadband pricing
got a strong defense from
Federal Communications
Commission chairman
Julius Genachowski
last week.

That comes in the wake
of Comcast’s announcement
two weeks ago that
it was scrapping its capand-
cut-off policy with a
more flexible approach
that will allow for heavy
users to pay for their extra
bandwidth rather than
being capped.

While activist groups have slammed the practice, Genachowski
went into the Cable Show in Boston last week and
defended it, saying business-model experimentation was to
be expected.

He even encouraged the practice, because differential
pricing also meant that lighter users could get a break on
their bills.

Public-interest groups Free Press and Public
Knowledge complained that the chairman was
off base and should not be weighing in at all. But
Genachowski has been consistent on the issue dating
back from the open Internet order, in which the
FCC resisted calls to define tiered pricing as a form
of discrimination, saying usage-based pricing could
benefit lighter users and encourage more efficient
use of bandwidth.

The Phoenix Center put out a report last week arguing
that regardless of whether usage-based pricing
is instituted for congestion-management or
competitive reasons, the result is the same.

The chairman’s stand therefore was nothing new,
but given its time in the wake of recent complaints
from Netflix about the practice and Comcast’s announced
move to usage-based pricing, it was seen
as an important endorsement.

“It’s worth commending when a government official recognizes the need for regulatory humility,
especially when it comes to the Internet,” AT&T executive
vice president Jim Cicconi said in a blog post
last week. “It’s worth commending when a government
official recognizes the need for regulatory humility,
especially when it comes to the Internet.”

September