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Republican FCC Commissioners Love Metered Broadband
Not coincidentally just as Verizon makes another push for caps and overages...
by Karl Bode Wednesday 13-Jan-2010 tags: fcc · business · wireless · Op/Ed · caps
Speaking almost in lock sync with the nation's largest wireless carriers (and Verizon CTO Dick Lynch earlier this week), the FCC's two Conservative Commissioners, Robert McDowell and Meredith Attwell Baker pushed hard for usage-based wireless pricing at CES this week. According to The Hill, McDowell insisted that "pricing freedom is essential," and that flat-rate pricing "could lead to gridlock."

Of course these are the same arguments we've been debunking as hyperbole and nonsense for years. For one, the Internet won't explode if carriers aren't allowed to charge you more money. Carriers make more than enough money under the flat rate pricing model to fund network upgrades for decades -- and that's a fact anybody can verify by looking at carrier earnings and 10-K data.

While consumers might actually like to pay for what they use, and carriers pretend this is the model they want too -- the metered models actually imposed by carriers are usually designed more to nickel and dime users than to deliver any real consumer value.
The "let us do what we want or the Internet explodes" argument, more commonly known as the "Exaflood," is a scarecrow concocted by industry lobbyists to justify bad behavior. McDowell should think for himself instead of reading from a wireless industry script. Two, wireless carriers only currently pretend to offer flat-rate "unlimited" pricing. In reality, all wireless carriers already impose caps and overages -- with more such plans on the way.

While consumers might actually like to pay for what they use, and carriers pretend this is the model they want too -- the metered models actually imposed by carriers are usually designed more to nickel and dime users than to deliver any real consumer value. Only charging customers what they use would result in the majority of wireless customers (who use very little bandwidth) paying very little money.

Instead, what both wireless and landline carriers want are plans that give them the best of all worlds: high monthly prices combined with low usage caps and higher per-byte overages. The plans are specifically designed to push both light and heavy user bills ever skyward in an elaborate song and dance, where consumers are offered plans that create the illusion of value. The last thing carriers want is for you to actually only pay for what you use.

So what really has Verizon and loyal handmaiden McDowell and Baker in such a tizzy? Companies like Verizon are afraid that new FCC network neutrality rules will prohibit carriers from being creative in their pricing models. That's always been very unlikely, given the FCC's (so far) timid approach to rocking the status quo boat. It seems even more unlikely when you've got two of the five Commissioners essentially cheering for higher consumer prices.


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