An ISP funded by major broadband providers is pushing the FCC to remove a condition barring Charter from imposing usage caps. As part of Charter’s $79 billion acquisition of Time Warner Cable and Bright House Networks, the FCC broke from a long tradition of hollow merger conditions and banned the company from imposing usage caps for a period of seven years. That was a notable hit on Charter, given that other cable providers like Comcast have been rapidly expanding such arbitrary and unnecessary restrictions as the amount of telco competition in many markets decreases.
Now, the broadband industry funded think tank known as the Conservative Enterprise Institute is pushing new FCC boss Ajit Pai to kill the condition.In a recent petition to the FCC (pdf, hat tip, Stop the Cap), the think tank repeats the long-standing claim that usage caps are all about fairness — and not, as most of us realize, about giant broadband providers raising rates on uncompetitive markets, while protecting their TV revenues from streaming video competitors.
“As then-Commissioner Pai wrote in 2016, this condition is neither “fair” nor “progressive,” claims the group. “Instead, he called this “the paradigmatic case of the 99% subsidizing the 1%,” as it encourages Charter to raise prices on all consumers in response to costs stemming from the activities of a “bandwidth-hungry few.”
Right, but even many broadband CEOs have acknowledged that usage caps aren’t an effective way to manage network congestion. They’re also in no way tied to financial necessity, since flat-rate broadband has proven very profitable. What usage caps are: a glorified price hike on uncompetitive markets with a very real, anti-competitive impact on competing streaming video providers. In short, imposing confusing price hikes on all customers (even if some don’t reach the cap initially) isn’t about fairness, it’s about making more money off of all Charter customers.
Usage caps aren’t the only Charter merger condition the industry is trying to have killed. As part of the conditions Charter was also required to provide a low-income broadband option, adhere to net neutrality for a period of seven years (even if ISPs are successful at killing the FCC’s net neutrality rules during that period), and build out broadband to two million additional households (1 million of which needed to be overbuilds into competing ISP territory).
Pai is already looking to eliminate overbuild conditions that were part of the deal, but the CEI wants the entire condition package scrapped. To, uh, help consumers.
“These four conditions, among several others imposed by the Commission in its Order, will hurt consumers and are contrary to the ‘public interest, convenience, and necessity'”, the CEI argues in its petition. “The Commission should therefore reconsider these conditions and remove them from the Order.”
Surely Charter customers appreciate the CEI’s “help” and are eagerly awaiting paying more money for the same broadband, right?