Usage-based pricing critics inside the Beltway were quick to criticize or try to correct Federal Communications Commission chairman Julius Genachowski's Tuesday after he gave a shout-out to price experimentation as an important business model.
In a conversation with NCTA president Michael Powell at the Cable Show in Boston Tuesday, Genachowski praised the sort of flexible broadband pricing Comcast announced it was migrating to last week.
The chairman pointed out that he had never backed the one size fits all pricing model, and said that charging more for more bandwidth also meant charging less for less, so it could be consumer friendly as well as a driver of innovation and consumer choice.
But there were no friendly smiles on the faces of activist group representatives long critical of usage-based pricing.
Not one to mince words, Harold Feld, legal director for Public Knowledge, said that the chairman's characterization of data caps as a form of business model innovation presented a "false picture."
Feld said it was not an issue of only one model, but of whether "all the benefits of broadband Chairman Genachowski has articulated in the past ever happen in a world where broadband providers get a free pass on any pricing scheme or restriction if they use the magic words 'bandwidth cap'?"
Public Knowledge called on the FCC last week to look into how and why data caps were being set, and how they affect customers. Until the commission does that, said Feld, it should not be endorsing the practice, which he argues can drive up costs. He is also concerned about what does and does not count toward the caps.
Comcast has been criticized for not counting Xfinity content accessed through Xboxes, though the company maintains that content is not being delivered over the public Internet and so is not subject to network neutrality rule nondiscrimination prohibitions.
Free Press agreed with Feld. Policy director Matt Wood said that the FCC should be investigating the caps, not endorsing them. "Cable companies use them to penalize their subscribers and discourage them from using innovative services that compete with cable TV," he said in response to the chairman's shout-out.
Wood said he was not opposed to price experimentation, but only in a competitive marketplace he says does not now exist. "Of course broadband providers should be free to try different pricing strategies. But the FCC's apparent endorsement of these plans only makes sense in a world with real broadband competition. The FCC has turned a blind eye to this competition problem."