Bill Would Limit Broadband Fees Based on Use

Grant Gross, IDG News Service

Wednesday, June 17, 2009 2:00 PM PDT

broadband legislationA new bill in the U.S. House of Representatives
would require large broadband providers to get permission from the
U.S. Federal Trade Commission before rolling out broadband
subscription fees based on bandwidth use.

The Broadband Internet Fairness Act, introduced Wednesday by
Representative Eric Massa, would prohibit volume usage plans if the
FTC determines that the fees are "unreasonable or discriminatory," and
it would require public hearings when broadband providers plan to
introduce volume-based pricing.

"This bill, frankly, is the result of very, very strong grass-roots
movements that demanded a fair billing practice with respect to their
Internet service providers," Massa, a New York Democrat, said during a
press conference. "Volume-based pricing, frankly, is detrimental to
our economy and to our Internet future."

broadband fees
Graphic: Diego Aguirre
The bill was prompted by Time Warner Cable's announcement in April
that the provider would begin charging customers in upstate New York
based on bandwidth use, Massa said. For some Time Warner customers,
the monthly price for cable-based broadband would rise from US$50 to
$150 a month under the plan, Massa said.

Massa received complaints from a group of doctors, who said they'd
have to pass the broadband rate increases on to their patients, he

AT&T has also experimented with volume pricing.

"That's just not acceptable by anyone," Massa said of volume-based

The bill, written with the help of consumer rights groups and Free Press, would prevent broadband providers from
"overcharging" and "gouging" customers, Massa said.
launched in upstate New York to oppose the volume caps.

Ben Scott, policy director of Free Press, praised the bill. "This a
really inspiring example where grass-roots activism in response to an
unfair business practice by a big corporation led to direct
intervention by a congressional leader," he said. "These kind of
Internet overcharges will cripple [Internet-based] development and
really set back communities by years if not more."

Massa introduced his bill the same day that the Pew Internet and
American Life Project released a survey showing that home broadband
rates are increasing in the U.S. The average home broadband bill in
April was $39, up from $34.50 in May 2008, the survey said. Broadband
users who said they had only one provider had an average monthly bill
of $44.70, while those with four or more providers had an average
monthly bill of $32.10, according to the survey.

An AT&T spokesman called the bill a "one-size-fits-all broadband
pricing model." Almost half of all Internet traffic is generated by 5
percent of broadband customers, said the spokesman, who asked not to
be named.

"There is no question that the Internet continues to experience
extraordinary growth as it increasingly becomes a vehicle not just for
e-mail and Web sites but also for photos, video, movie distribution,
VoIP and video games," he said. "Just one of these high-traffic users
consumes as much bandwidth as 19 typical households, and in so doing
contributes disproportionately to the risk of network congestion;
something all consumers experience as slower than normal Web surfing
or even broken up and scratchy streaming videos."

High-volume users should pay more, he added. "In their zeal to protect
high-volume users Free Press is abandoning the vast majority of
consumers who use the Internet in a more moderate fashion," the AT&T
spokesman added. "In other words, Free Press prefers that grandma --
who simply wants to download their grandchildren's online photos a few
times a month -- to pay for the heavy-using teenager who is
downloading HD movies."