Free Press Troubled By AT&T Usage-Based Pricing Plan - Broadcasting & Cable

Free Press Troubled By AT&T Usage-Based Pricing Plan

While not as punitive, still a troubling symptom of an anticompetitive market
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Free Press Monday called on Congress
to investigate what it called "Internet overcharging schemes" to make
sure they were not anticompetitive.

The group was responding to
AT&T's announcement that, effective May 2, it will charge DSL
customers who use over 150GBS per month an extra $10 for
each 50GBS they exceed that amount.

AT&T points out that the average
user uses about 18GBS per month, and that currently this would affect less
than 2% of its customers.

But Free Press Research Director
Derek Turner in a statement called it a "poor solution to an unproven
problem," and said it would chill innovation and economic growth.

While Turner gives the plan some
props for not being as "punitive" as plans proposed by other ISPs, he
still called it a troubling symptom of an anticompetitive market. "At
worst, this is a plan designed to discourage cord-cutting and pad profits; at
best, this is another example of an antiquated phone-company business model
being forced onto an otherwise vibrant and limitless marketplace," he
said.

"We are committed to providing a
great experience for all of our Internet customers," said AT&T
spokesman Mark Siegel. "Less than 2 percent of our Internet customers
could be impacted by this approach - those who are using a disproportionate
amount of bandwidth.  We will communicate early and often with these
customers so they are well aware of their options before they incur any
additional usage charges."

AT&T says that it will give
plenty of warning to customers nearing their limit, something the FCC has said
is important customer information, and will even provide a grace period of two
overages before the overcharge is incurred. It will also give them tools to
track and manage their usage.

Among the elements of the FCC's
compromise network neutrality regs, which AT&T helped negotiate, was
the FCC's recognition of the value of usage-based pricing.

In the order, the FCC pointed out
that preventing tiered pricing and requiring everyone to pay the same
amount would result in lighter users subsidizing heavier ones or discourage
incentives for efficient network use. "The framework we adopt today does
not prevent broadband providers from asking subscribers who use the network
less to pay less, and subscribers who use the network more to pay more,"
the FCC said.

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