A freshman Congressman has introduced a law that would require Internet service providers to submit price hike plans to the Federal Trade Commission (FTC), in consultation with the Federal Communications Commission (FCC).
The Broadband Internet Fairness Act is aimed at squelching cable companies' plans to move toward usage-based plans.
The bill was introduced Wednesday by Congressman Eric Massa (D-N.Y.). On his Web site, Massa explained that the Broadband Internet Fairness Act was drafted in response to thousands of constituents and industry experts who had voiced their concerns in regard to the increase in fees proposed by broadband providers. In April, Time Warner Cable announced a pricing scheme that would triple the cost of an unlimited Internet usage plan -- from $50 per month to $150 -- for some customers.
Not only are the rate hikes seen as unfair, but Massa also noted that they would discourage people from using Internet video sites, thereby impeding competition against cable networks. The bill charges that the market for video delivery is "effectively controlled" by companies operating cable delivery and broadband Internet access services. Raising prices for Internet use in high volumes will serve to discourage consumers from canceling cable services and subscribing to movie download services.
"Cable providers want to stifle the Internet so they can rake in advertiser dollars by keeping consumers from watching video on the Internet. 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," he wrote on his Web site. "Additionally, charging based on bandwidth usage is a flawed model when the cost of usage is totally out of line with the price. Consumers are much better served by plans based on the speed of the connection rather than amount of bandwidth used."
The bill prohibits volume usage plans if the FTC determines that these plans are imposing rates, terms and conditions that are unreasonable or discriminatory. Further, it mandates public hearings for plans submitted to the FTC; carriers that ignore the rules are subject to penalties. ISPs with more than 2 million or more subscribers would be affected.
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