Rep. Eric Massa (D-N.Y.) last week introduced a bill that would direct the Federal Trade Commission to “review volume usage service plans of major broadband Internet service providers to ensure that such plans are fairly based on cost.”
The Broadband Internet Fairness Act argues that above-cost volume usage charges in markets without competition are an “unfair and unconscionable” practice that could threaten the increased deployment and adoption of broadband and the economic stimulus that is predicted to provide. The bill would define that as an unfair or deceptive practice.
It would make it illegal for a broadband Internet-service provider to “offer volume usage service plans imposing rates, terms and conditions that are unjust, unreasonable, or unreasonably discriminatory.” To help the Federal Trade Commission make that determination, cable, telco and other providers would have to file a “service plan analysis” that justifies the reasonableness and need for tiered service, including a breakdown of associated operating costs.
At a press conference last week, Massa said lobbyists had already been dispatched to pillory him, saying he expected to be “burned in Internet effigy.”
Massa was critical of a Time Warner Cable test earlier this year of meter-based Internet billing in Rochester, N.Y., which he said drew complaints from his constituents there, according to Free Press, which helped him publicize the bill’s introduction Wednesday. Massa said his concern was first spurred by doctors who complained their bills for Internet service would triple.
Time Warner Cable put that test on hold after the issue boiled up, but CEO Glenn Britt also said at the time that he thought a consumption-based model for billing bandwidth users could still be the best pricing model.
While the bill cites cable by name as being in a position to dictate pricing of tiered service, it would also include other ISPs such as AT&T, whose metered-pricing test also took some hits from Free Press.
AT&T was prepared to hit back. In an statement sent via e-mail, the company said it is investing billions in infrastructure to handle the increased traffic load from e-mail, photos, video, games and more, and that it faces the challenge of how to divvy up the costs among light and heavy users that does not make the latter pay the freight for the former, particularly given the relative minority of heavy users.
“Many studies now show that almost half of all Internet traffic is generated by just 5% of Internet users,” said AT&T, “and in so doing contributes disproportionately to the risk of network congestion.
“The Free Press solution advocates for a radical and unprecedented government mandate that will demand that consumers have only one all-you-can-eat pricing model for Internet services,” said AT&T. “In their zeal to protect high-volume users, Free Press is abandoning the vast majority of consumers who use the Internet in a more moderate fashion. In other words, Free Press prefers that grandma — who simply wants to download her grandchildren’s online photos a few times a month — pay for the heavy-using teenager who is downloading HD movies.”