Friedman Makes Case For Flexible Broadband Pricing at FCC

ACA chairman pushes for consumption-based billing

American Cable Association Chairman Steve Friedman was at the FCC Tuesday making the case for flexible broadband pricing, including charging high-bandwidth users more than "occasional users."

According to ACA, he came armed with a study showing that consumption-based billing actually promotes broadband access better than flat rates that "unfairly spread costs equally among all users."

The study, by economists Kevin Hassett and Robert Shapiro in association with Georgetown University, concludes, among other things, that: "The link between prices and broadband adoption suggests that higher prices for all consumers will slow the drive to universal broadband and expand the gap that now separates white from African-American and the less affluent from wealthier citizens."

"Those who condemn consumption-based billing as a nefarious plot to corrupt the openness of the Internet should study the Hassett-Shapiro paper with great care," said ACA President Matt Polka. "Flat-rate billing shouldn't be mandated because the costs far outweigh the benefits."

“Universal broadband will not be achieved by price-gouging users who are considered to be 'heavy bandwidth users,'" said Derek Turner, research director for Free Press. "This report falsely assumes that under a system of Internet overcharging, carriers will give a price break to low users -- when it is likely they will just be charging all users even more. ..."

"The central flaw in this study is that any and all future network upgrades will require higher prices. Carriers' profits are right now more than ample to fund the network upgrades required to accommodate all users’ online needs. These Internet overcharging schemes have no relation to ISPs actual cost-structures, and are just an excuse for carriers to keep profits high without investing further in their networks.”