Data Caps are Not about Network Congestion

Broadcasting Cable reports on comments from Former FCC chairman Michael Powell (now president of the U.S. cable industry’s trade association) confirming what many have long suspected: data caps on internet service aren’t just about network congestion, but rather about ‘pricing fairness.’ ‘Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry’s interest in the issue as about congestion management. “That’s wrong,” he said. “Our principal purpose is how to fairly monetize a high fixed cost.” He said bandwidth management was part of it, though a more serious issue with wireless.’ Powell went on to say that ISPs had huge up-front costs which had to be allocated out to consumers, and those consumers were familiar with usage-based fees from paying their power bill or buying food. He was part of a panel with three other former FCC chairs. Dick Wiley agreed with his cost argument, adding that the marketplace was responding better than new legislation could. Michael Copps thought the FCC could question data caps a bit more, but wasn’t opposed in principle. Reed Hundt said he wants the FCC to focus on getting better, faster, cheaper internet to 100% of the population.