Moffett: FCC Net Neutrality Proposal Backs Usage-Based Pricing

Says that will be big boost to cable operators

By John Eggerton -- Broadcasting & Cable, 12/1/2010 9:33:20 AM

Saying that "broadband rationing is now the order of the day," Bernstein Research senior analyst Craig Moffett says that the FCC's just-circulated order on codifying and expanding network neutrality guidelines "specifically and expressly endorses usage-based pricing for broadband."

The item was circulated at around midnight Tuesday, just beating a customary deadline of three weeks before a public meeting, in this case the Dec. 21 meeting.

Moffett says that will be a big boost to cable operators, who should be able to boost penetration with lower-priced tiers, and help address the cord-cutting issue by migrating video customers to broadband, or discouraging cord-cutting altogether as broadband prices rose to offset the decline in video revenues.

"The tacit endorsement of UBP is, in our view, the biggest news of the day, and must be viewed as very positive for terrestrial broadband operators," Moffett said. "We would expect the introduction of UBP plans from major cable MSOs to follow in short order, and we would expect that their stocks will respond well to such introductions."

The National Cable & Telecommunications Association is said to support the chairman's proposal, though it would prefer no new rules.