by: Jason Mick
Much of America have only one or two ISP service options. As a result of lack of competition, Americans see much higher prices. ISPs are looking to drive prices even higher with data caps. (Source: Ars Technica/Pew Internet & American Life Project April 2009 Survey)
U.S. representative Eric Massa is looking to reign in what he views as an anticompetitive industry -- the nation's internet service providers. Despite lobbyist threats, Rep. Massa has introduced a bill that would allow the FTC to veto predatory ISP data caps.
New bill looks to make sure customers get fair usage plans
Time Warner and other broadband internet providers have recently sought to impose data caps on users' "unlimited" connections. Customers exceeding these data caps would typically be hit with large fines. Meanwhile, many of these same companies have fought to outlaw municipal internet efforts that provided faster, uncapped service at better prices.
Congressman Eric Massa who represents a district in western New York is looking to take a stand against what he perceives as an abusive industry. He has written a bill, which is going to be introduced to the U.S. House of Representatives which would grant the Federal Trade Commission authority to veto ISP data capping plans.
In the bill Rep. Massa argues that broadband internet has become essential to the U.S.'s high tech leadership, being used for "agricultural, medical, educational, environmental, library, and nonprofit purposes." He argues that a prevalence of ISP monopolies or duopolies (such as the Time Warner Cable/Comcast duo in Rep. Massa's home district) threatens these uses.
In a press conference he warned, "Volume-based pricing is detrimental to our economy. I became aware of this issue when Rochester doctors said it would have a catastrophic impact. They rely on broadband for their professional work, and pricing would triple their bill. Volume usage charges for broadband Internet access that are substantially above cost in a market without sufficient competition constitute an unfair and unconscionable practice, as substantially above-cost pricing has anti-competitive and anti-consumer effects on Internet use."
Rep. Massa also suggests that without a ban on data capping, ISPs could use the tactic to stunt the growth of online video. This could be used as an anticompetitive tool to help them peddle their digital cable services, which most ISPs also provide.
Recent surveys seems to back Rep. Massa's claims. A study by the Pew Internet & American Life Project discovered that ISPs across America are benefiting from an escape from open capitalism; in markets where there's 2 ISPs or less, they make on average $120 per customer per year more than in areas with 4 ISPs or less. Many areas across America only have one or two providers, currently and ISPs are working to eliminate alternative providers, such as municipal efforts.
Meanwhile, Americans have shown to increasingly view internet services as essential. A recent study indicated many more Americans cut cable TV or phone service than internet service to make ends meet during the recent recession.
Rep. Massa faces a tough fight from colleagues who support the ISPs point of view and lobbyists. He says he's already been threatened and warned by lobbyists and senior colleagues. He says he's confident that he'll "be burned in Internet effigy", but remains undeterred.
