Bill targets data-based Internet pricing

In the wake of Time Warner Cable’s botched attempt to test tiered internet pricing, a freshman U.S. lawmaker has introduced a bill to make these plans harder to implement.

The "Broadband Internet Fairness Act," proposed by Rep. Eric Massa (D-N.Y.), would require major Internet service providers to justify the cost of any subscription plan based on data consumption rather than connection speed. ISPs with over 2 million customers would have to file an explanation with the Federal Trade Commission, arguing that customer costs are fair compared to the actual cost of providing the service.

This bill would give the FTC power to decide whether an ISP may go through with tiered internet pricing. Crucially, ISPs would have to justify overage charges as well. This is a major point, because overage charges under Time Warner Cable’s proposed tests ranged from $1 to $2.

Bill targets data-based Internet pricing

All of this stems from Time Warner Cable’s failed attempt to test data-based internet pricing in several U.S. cities. After experimenting in Beaumont, Texas, the company saw a major backlash when it decided to expand testing to San Antonio and Austin, Texas; Rochester, N.Y.; and Greensboro, N.C.. In response, Time Warner Cable shelved the tests, but vowed to bring them back after taking another stab at "customer education."

Wired reached Time Warner Cable for comment, but the company only reiterated that its bandwidth caps on hold. Wired also notes that telecoms such as Verizon and Sprint — presumably along with cable Internet companies — will lobby hard against the bill, as such broad language on data plans could also affect mobile phones. Particularly, the so-called "unlimited" data plans with bandwidth caps could come under fire.

Indeed, the bill seems like a long shot, but cable companies should explain more thoroughly why they would need to raise prices so drastically for heavy internet users (Time Warner Cable’s proposals reached as high as $150 per month). It’s possible that Time Warner Cable really is planning massive, costly infrastructure changes, but the company hasn’t exactly been open about its plans. From the average consumer’s perspective, it just looks like the company is trying to make up for losses to online video.

That’s why consumers lashed out and caught Massa’s attention in the first place. If Time Warner Cable and other ISPs want to educate the consumer in any meaningful way, I’m all ears.