Broadband Advocates Seek FCC Scrutiny Of Data Caps

The outgoing Federal Communications Commission chair, Julius Genachowski, frustrated many consumer advocates by refusing to condemn broadband pricing models that tie fees to the amount of data consumed.

On the contrary, Genachowski said more than once that he supported the concept of pay-per-byte pricing. Last year at an industry event he reportedly said that tiered pricing “could be healthy and beneficial.” 

Before then, when the FCC voted in 2010 to enact net neutrality rules, Genachowski also endorsed usage-based pricing.

Broadband advocates have always taken issue with that position, arguing that Internet service providers -- or at least the ones that also provide cable TV services -- have every reason to discourage people from watching video online. After all, if people can stream unlimited videos via Netflix, Aereo, Hulu, or other companies, they have less reason to pay for cable TV subscriptions.



Now, the advocacy group Public Knowledge has started a lobbying campaign, Don't Cap That, that opposes data caps. The group this week published a letter to the Senate, signed by a group of online video creators, that urges lawmakers to consider the potential harm of data caps when confirming a new FCC chair.

“It is critical that the next Chair of the FCC recognize the threat that data caps pose to the future growth of the internet, and to the growth of online video specifically,” the letter states. “We urge you to insist that the next FCC Chair commit to making a detailed examination of data caps a priority during his or her tenure."

The letter calls special attention to caps imposed by cable providers and other ISPs that also sell video subscriptions. “It is not hard to imagine a world in which online video offers consumers a direct replacement for current pay television offerings... Instead of being forced to choose a video provider who happened to run a wire to their home, viewers will be able to use their broadband connections to find exactly the type of video that appeals to them.”

The missive goes on to say that this shift will prove beneficial for video creators and consumers -- but not necessarily the companies that sell subscriptions to paid television. “When those companies also control the broadband connection that their competitors rely on to reach viewers, there is a strong incentive for ISPs to use their market power to prevent our innovative offerings.”

Already, some cable companies are rolling out pricing models that could discourage people from watching too much video online. Comcast, for instance, recently moved forward with a new pricing model that involves data caps ranging from 300 GB to 600 GB, depending on the subscription package. Users who exceed the limits face charges of $10 per 50 GB.

Currently, most users don't approach the caps. But that could change as people cut the cable cord. Public Knowledge estimated last year that replacing cable television with Internet-delivered video would require 648 GB per month, assuming that households consume eight hours of high-definition video a day.

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