Bill Targets Time Warner's Bandwidth Cap Plans

Proposed legislation would require large broadband providers to submit volume usage pricing schemes such as Time Warner's proposed broadband cap plan to the Federal Trade Commission for approval. If the FTC determines that a pricing plan is imposing rates, terms and conditions that are unreasonable or discriminatory, the agency would be given authority to can the plan.

Prompted by the grassroots support for his opposition to Time Warner's proposed broadband cap pricing scheme, Rep. Eric Massa introduced June 17 the Broadband Internet Fairness Act (H.R. 2902) to require phone and cable companies to disclose their pricing plans to the Federal Trade Commission.
The bill would give the FTC authority to prohibit a proposed volume usage scheme if the agency determines that the plan is imposing rates, terms and conditions that are unreasonable or discriminatory. The FTC would also be required to hold public hearings on the pricing plans submitted. The bill targets only broadband providers with 2 million or more subscribers.
"Access to the Internet has become a critical part of our economy and we can't let corporate giants limit the public's access to this important tool," Massa said at a June 17 news conference. "The Broadband Internet Fairness Act is all about protecting consumers from outrageous Internet overcharges and giving the public a voice in this process. I have taken lots of time to work on this bill and have consulted with my constituents and industry experts. Now the hard work of passing this bill begins."
Massa responded sharply April 7 when Time Warner said it was introducing a tiered usage cap plan in a three-state trial pricing program, including Massa's western New York district. At the time, Massa called it "nothing more than a large corporation making a move to force customers into paying more money." The next day, Time Warner said it would offer an unlimited usage tier.
The revised Time Warner plan added the unlimited usage plan to its previously announced 5GB, 10GB, 20GB and 40GB caps. Prices would range from $29.95 to $75.00 per month, and users would be charged an extra dollar for every additional gigabyte they downloaded, up to a maximum of $75. An unlimited bandwidth plan, therefore, would top out at $150.
AT&T is also testing a new pricing scheme in Beaumont, Texas, where consumers pay large fees for exceeding a low monthly Internet usage limit. AT&T's trial also includes Reno, Nev. Though presented as a means of addressing a very small number of heavy bandwidth users, these Internet charges would impact large numbers of consumers.
"Cable providers want to stifle the Internet so they can rake in advertiser dollars by keeping consumers from watching video on the Internet," Massa said. "But so long as Americans can't choose which cable channels they want to pay for, I don't think cable operators should be able to determine consumers' monthly Internet usage. Additionally, charging based on a bandwidth usage is a flawed model when the cost of usage is totally out of line with the price."
The grassroots groups that spearheaded Massa's protest in April were quick to praise the new proposed legislation.
"Customers should be able to use their Internet service without the fear of getting even higher monthly bills, especially on a product already making a lot of money for providers," said Phil Dampier, the Rochester resident who founded Stop the Cap, a consumer-driven Website dedicated to combating Internet overcharges. "At a time when the economy is hurting, we cannot afford to allow a handful of companies to gouge consumers and limit Internet access-just to increase shareholder value. That's why Congressman Massa's bill is so important."
Added Ben Scott, policy director of Free Press, "With monthly Internet bills on the rise, overcharges just add insult to injury. This is an inspiring example of grassroots activism fighting against a big corporation and a member of Congress siding with the people. We don't see it often enough. This bill sends a message that Congress is watching and can take action to protect consumers."