WASHINGTON, DC — A freshman congressman from New York plans to introduce federal legislation that would prohibit broadband internet service providers from instituting metered billing based on gigabyte usage.Calling proposed usage caps by Time Warner Cable, Comcast and other ISPs large and small “greedy” and “an outrageous plan to tax the American public,” Democratic Rep. Eric Massa, a longtime blogger at DailyKos.com, said a “legion of activists” has encouraged him to act on a “national issue of generational consequences.”
Massa’s announcement came as Time Warner lays plans to test its controversial new pricing structure in Rochester, NY. Critics of usage caps say the schemes will cause internet access prices to skyrocket and stifle innovation on the Web, particularly in the area of video services that are bandwidth-intensive.
ISPs counter with statistics indicating a small percentage of the most aggressive internet surfers soak up the majority of all available bandwidth. They say power-users should pay for their appetites in ways that don’t penalize “average” users. In addition, ISPs say, per-gigabyte pricing will help fund improvements in their infrastructures, thereby benefitting everyone.
Hogwash, Massa countered on Tuesday. During a conference call with reporters, he referred to Time Warner and its brethren as “greedy, unregulated monopolies” and said his bill, the details of which have yet to be revealed, will stimulate competition among broadband providers and protect consumers from monopolistic practices.
“They are providing a utility and frankly, you should not be able to impose cascading rate increases without justifying them,” Massa said during the conference call. “What Time Warner is saying is not true, and their own [Securities and Exchange Commission] filings show that. This is AIG-style greed.”
Time Warner spokesman Alex Dudley told Wired.com that his employer would not comment on legislation it has not seen, but emphasized that the company’s about-to-be-implemented Rochester program is merely a test of one possible pricing structure.
According to Wired.com, Time Warner’s 2008 annual report actually indicated a 12-percent decrease in the company’s high-speed data costs during the previous year. At the same time, Time Warner’s subscriber count increased by 10-percent and revenues climbed by 11-percent.
Time Warner already has a tiered-pricing model in place in Beaumont, TX. In addition to Rochester, the company plans to introduce tiered pricing in San Antonio and Austin, TX, this summer. As structured now, service begins at $15 monthly for up to 1GB of data transfer, with a $2-per-gigabyte overage charge accruing on accounts that exceed their limits. The top tier in the pricing structure is a $150-a-month all-you-can-download option.
Comcast instituted a 250GB cap on all accounts last August; AT&T began testing monthly bandwidth caps and overage fees in November. New York’s Frontier Communications imposed a 5GB limit, although public pressure has discouraged the company from enforcing it to date.
