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Massa Introduces Bill to Review Volume Usage Service Plans of Major Broadband ISPs - Broadcasting & Cable

Massa Introduces Bill to Review Volume Usage Service Plans of Major Broadband ISPs

Broadband Internet Fairness Act argues that above-cost volume usage charges are unfair
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Rep. Eric Massa (D-NY) has 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 it is predicted to provide. The bill would define that as an unfair or deceptive practice that the FTC is empowered to proscribe by means of filing lawsuits and seeking consent decrees or other remedies.

It would make it illegal for a broadband Internet Service provider to "offer volume usage15 service plans imposing rates, terms and conditions that are unjust, unreasonable, or unreasonably discriminatory." To help the FTC 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.

It would also have to do an assessment on the impact of service tiers on "agricultural, medical, educational, environmental, library, and nonprofit purposes," which are all a part of the administration's push for universal broadband deployment.

The FCC would consult with the FTC in reviewing the plan.

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.

Time Warner put that test on hold after the issue boiled up, but Time Warner 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.

The bill's aim is to insure that ISPs do not set an unreasonably low monthly usage limit above which the service would be metered.

Free Press, which helped Massa promote the bill's introduction Wednesday, has been heavily critical of the Time Warner and AT&T tests of metered usage. While the group says it is not opposed to metering if the alternative is outright blocking of content, but Policy Director Ben Scott has said that the key is whether the rates are fair related to the costs of the service given what they say is a lack of competition as a governor on that price, which is what the Massa bill addresses.

The National Cable & Telecommunications Association had no comment on the bill.

Free Press Wednesday sent out an e-mail alert with a link to an online letter supporting passage of the bill.

The American Cable Association was not equally reticent about the bill.

"Consumption-based billing plans will give consumers the ultimate control over how much they spend each month for their Internet access.  Rep. Massa's bill would have a chilling effect on broadband operators offering these types of consumer-friendly options,” said ACA President Matthew Polka in a statement. “During his Senate confirmation Tuesday, Federal Communications Commission member Robert McDowell noted that Americans today are watching a staggering 17 billion online videos each month, a use of the Internet that he said is growing at 16% per month. With these increases coming, Internet usage payment models will allow broadband providers to better manage their networks by imposing higher costs on the heaviest users who often are the ones responsible for slowing speeds for all users on the Internet.”

ACA represents small and medium-sized cable operators. At its convention last month, ACA members made clear to reporters that consumption-based billing was definitely in their future.

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