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Free Press, Public Knowledge Pan FCC Chair's Usage-Based Pricing Shout-Out

Usage-based pricing critics inside the Beltway were quick to
criticize or try to correct FCC chairman Julius Genachowski after he gave a
shout-out to price experimentation as an important business model.

In a conversation with NCTA president Michael Powell at the
Cable Show in Boston Tuesday, Genachowski praised the sort of flexible
broadband pricing
Comcast announced it was migrating to last week.

The chairman pointed out that he had never backed the one-size-fits-all
pricing model, and said that charging more for more bandwidth also meant
charging less for less, so it could be consumer-friendly as well as a driver of
innovation and consumer choice.

But there were no friendly smiles on the faces of activist
group representatives long critical of usage-based pricing.

Not one to mince words, Harold Feld, legal director for
Public Knowledge, said that the chairman's characterization of data caps as a
form of business model innovation presented a "false picture."

Feld said it was not an issue of only one model, but of
whether "all the benefits of broadband Chairman Genachowski has
articulated in the past ever happen in a world where broadband providers get a
free pass on any pricing scheme or restriction if they use the magic words
'bandwidth cap?'"

Public Knowledge called on the FCC last week to look into
how and why data caps were being set, and how they affect customers. Until the
commission does that, said Feld, it should not be endorsing the practice, which
he argues can drive up costs. He is also concerned about what does and does not
count toward the caps.

Comcast has been criticized for not counting Xfinity content
accessed through Xboxes, though the company maintains that content is not being
delivered over the public Internet and so is not subject to network neutrality
rule nondiscrimination prohibitions.

Free Press agreed with Feld. Policy director Matt Wood said
that the FCC should be investigating the caps, not endorsing them. "Cable
companies use them to penalize their subscribers and discourage them from using
innovative services that compete with cable TV," he said in response to
the chairman's shout-out.

Wood said he was not opposed to price experimentation, but
only in a competitive marketplace he says does not now exist. "Of course
broadband providers should be free to try different pricing strategies. But the
FCC's apparent endorsement of these plans only makes sense in a world with real
broadband competition. The FCC has turned a blind eye to this competition