WASHINGTON, D.C. — Web users, you have a champion. New York Congressman Eric Massa has introduced the Broadband Internet Fairness Act, designed to prevent and possibly cap excessive Internet use charges.
Earlier this year, Time Warner proposed changing service plans from flat monthly fees to data usage tiers, not unlike the business model employed by mobile-device companies. The announcement came under fire from Internet user groups and some officials.
Freshman Democratic Rep. Massa said Time Warner would raise the cost of its unlimited Internet plan from $50 to $150 per month.
But such pricing changes and new billing structures wouldn't happen easily under the new bill.
The measure would require Internet providers to obtain permission from the Federal Trade Commission before shifting to usage-based pricing. Also, ISPs would have to hold public hearings — just like utilities — before they'd be allowed to raise rates.
In an issued statement, Massa also suggested the move by Time Warner is almost conspiratorial.
"The proposed increase in rates gouges customers and limits competition between Internet video sites and cable networks that offer identical content," the statement said. "The intended result of this increase would be to reduce the public's Internet usage and send customers back to cable television."
Massa said when Time Warner Cable announced the tier plans based on bandwidth usage, a group of doctors told the congressman that if the proposal was enacted, they would be forced to raise rates on their patients.
"Cable providers want to stifle the Internet so they can rake in advertiser dollars by keeping consumers from watching video on the Internet," Massa said. "But so long as Americans can't choose which cable channels they want to pay for, I don't think cable operators should be able to determine consumers' monthly Internet usage."
Massa called charging consumers based on a bandwidth usage "a flawed model" and said the cost of usage is totally out of line with the price.
"Consumers are much better served by plans based on the speed of the connection rather than amount of bandwidth used. Competition is crucial to our economy and I refuse to let monopolistic corporations dominate the market and gouge my constituents."
Time Warner has claimed that under its proposal, most customers would pay about the same amount they're paying now for high-speed Internet and it would only affect select users. Nonetheless, the company backed off when its announcement in April was met with massive public disdain.
If passed, the measure could put most ISPs in the hot seat, forcing them to justify increases when they are already reportedly reaping high profits.
Time Warner Cable brought in more than $1 billion in revenues from broadband subscribers in just its first quarter this year, while spending under $35 million to deliver the service.
It's not as though ISPs are suffering the way other businesses are under the current economy. According to Ars Technica, a Pew Internet & American Life Project report on broadband usage indicates the economic downturn has not impacted Internet use. The study said 63 percent of Americans have a home broadband connection, up 55 percent from 2008. Also, spending for that connection has gone up to an average of $39 a month compared with $34.50 a year ago.
Read a copy of the bill here.