Former FCC Chair Urges Shift To Metered Broadband Billing

Former Federal Communications Commission chair Michael Powell, now a lobbyist for the cable industry, apparently wants to see Internet service providers impose data caps as soon as possible.

He reportedly encouraged cable providers to move “with some urgency and purpose” in shifting to usage-based billing measures. “I don’t think it’s too late,” Powell said this week. “But it’s not something you can wait for forever.”

Of course, not all cable companies are waiting. Comcast, for instance, imposes monthly 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. The broadband and cable provider is still in the process of rolling out that pricing plan.

Comcast previously imposed caps of 250 GB a month, but suspended them last year, after stirring controversy with the decision to exempt data streamed to the Xbox through the Xfinity app. Netflix CEO Reed Hastings publicly criticized Comcast for discriminating against competitors. Advocacy group Public Knowledge filed a complaint with the Federal Communications Commission about Comcast's move, arguing that it could hinder online video companies from providing TV programs and movies to consumers.  "A customer could watch Xfinity-delivered online video 24 hours a day for an entire month and not run into a problem. With any other online video service, a customer could hit her cap before the end of the first week," the group said at the time. (Comcast's new tiered billing still raises those issues, but the company is now giving consumers the option to pay more in exchange for extra data.)

Time Warner is also experimenting with usage-based billing -- though on an opt-in basis. For now, the company is offering some subscribers the opportunity to save $5 a month on their bills by limiting their data transmission to 5GB per month. But some observers think it's only a matter of time until Time Warner moves to a mandatory tiered billing system.

For its part, the FCC has never said that usage-based billing poses problems. But consumer groups rightly point out that ISPs have no valid reason for metered broadband billing, especially because it isn't applied in the kind of targeted fashion necessary to address network congestion. Instead, it seems obvious that cable providers institute metered plans in hopes of squeezing more money from consumers, while also discouraging cord-cutting by people who plan to consume video online.

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