[US]Bill Could Kill Broadband Meters

bealtine

http://www.lightreading.com/document.asp?doc_id=178176&site=cdnJune

June 17, 2009 | Jeff Baumgartner


Taking direct aim at earlier moves by Time Warner Cable Inc. (NYSE: TWC) and AT&T Inc. (NYSE: T), Congressman Eric Massa (D-NY) formally unveiled the Broadband Internet Fairness Act, introducing legislation that attempts to clamp down on metered bandwidth policies that are deemed unfair or anti-competitive.

The bill aims to authorize the Federal Trade Commission , in consultation with the Federal Communications Commission (FCC) , to review usage service plans of "major" broadband ISPs "to ensure that such plans are fairly based on cost."

Under the bill's definition, a major broadband ISP includes any that directly, or through an affiliate, provides broadband service to 2 million or more subscribers. (See Massa Intros 'Internet Fairness' Act.)

Any volume usage charges for broadband access found to be "substantially above cost… without sufficient competition constitute an unfair and unconscionable practice," according to the bill. (A copy of it in its entirety is available here.) Detractors of metered Internet billing also argue that such policies discourage the use of over-the-top Internet video services that compete with cable's traditional video services.

If any such policy is found to be discriminatory or monopolistic-sounding according to the bill's criteria, the offending ISP will be subject to an injunction requiring it to suspend, terminate, or revise the plan. On the civil end of the bill, violators will also be subject to a fine of "not more than $1,000,000."

Massa first came out against such policies and threatened to draft such legislation in April amid a public firestorm centered on TWC's original plan to extend metered Internet trials to Austin and San Antonio, Texas; Rochester, N.Y.; and Greensboro, N.C. The public pressure caused the MSO to suspend those plans "while the customer education process continues."

The MSO has also shelved its original metering trial in Beaumont, Texas, a TWC spokesman confirms. (See TWC Tees Up More Meters , TWC Dons Larger Consumption Caps, Congressman Mad About TWC's Internet Meter , and TWC Mothballs New Metering Trials .)

The National Cable & Telecommunications Association (NCTA) , which has recently taken the position that MSOs should have the right to experiment with Internet meters, had no comment on the intro of Massa's bill.

Massa has also been critical of similar trials AT&T has underway in Beaumont and Reno, Nev. (See AT&T, TWC Fit Beaumont for Caps.)

Massa, who says TWC's program, as originally proposed, would have raised the cost of the current unlimited Internet plan from $50 per month to $150 per month, stressed that his bill targets all broadband ISPs.

"I have malice towards no one, and that includes my friends at Time Warner," Massa wittily japed on a conference call this morning introducing the bill, but provided no expected timeline on when he expects it to pass. "We're here to enable competitiveness."

Although he's firmly against any usage-based Internet models considered unfair, Massa said he has no problems with broadband Internet tiers based on different speed thresholds: "I don't stand against that. I think there may be merit."

The bill doesn't appear to target hard consumption thresholds that don't charge based on consumption but instead aim to keep "excessive users" in check. Comcast Corp. (Nasdaq: CMCSA, CMCSK) installed a monthly 250 gigabyte cap last fall. (See Comcast Draws the Line at 250GB.)

— Jeff Baumgartner, Site Editor, Cable Digital News

clohamon

A Bill that includes phrases such as "substantially above cost" and "without sufficient competition" imply that an accountant and a regulator will be required to decide what's what. As we know they don't come cheap or necessarily do a good job.