April, 22 2009, 02:06pm EDT
Free Press Urges Congress to Investigate Internet Pricing Schemes
Despite lower costs, AT&T and Time Warner Cable hike prices for consumers
WASHINGTON
Today, Free Press called for an investigation into controversial
pricing schemes from Internet service providers like Time Warner Cable,
AT&T and wireless carriers in a letter to the House Energy and Commerce Committee.
AT&T and Time Warner Cable are currently testing a new billing
model in Beaumont, Texas, where consumers pay large fees for exceeding
a low monthly Internet usage limit. AT&T's trial also includes
Reno, Nev. Though presented as a means to address a very small number
of heavy bandwidth users, these pricing plans would impact large
numbers of consumers.
The new pricing scheme is questionable given declining company
costs. Today, AT&T reported the lowest capital expenditures since
2006, despite a significant uptick in new broadband subscribers. Time
Warner Cable similarly reported that costs declined due to "a decrease
in per-subscriber connectivity costs" while high-speed Internet
subscribership increased.
"It makes no sense that many consumers are being asked to pay more
for Internet access at exactly the time that costs are going down and
profits are up," said Ben Scott, policy director of
Free Press. "We are not persuaded by the arguments from network owners
that these new penalties are necessary. Implementing new fees that will
limit the growth of Internet video smacks of anti-competitive activity.
It will discourage use and innovation on the Internet, right at the
time we need this sector to help pull our country out of recession."
The letter urges Congress to investigate the impact of these new
pricing practices on consumers, innovation and competition.
Specifically, Free Press is concerned that nationwide implementation of
anti-competitive pricing schemes will deter Internet adoption, stifle
video services and other innovative applications, and chill economic
growth.
Read the letter at https://www.freepress.net/files/FP_metering_letter.pdf
Free Press was created to give people a voice in the crucial decisions that shape our media. We believe that positive social change, racial justice and meaningful engagement in public life require equitable access to technology, diverse and independent ownership of media platforms, and journalism that holds leaders accountable and tells people what's actually happening in their communities.
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