FCC Chair’s Stance on Data Caps Rankles Watchdog Groups

FCC Chairman Julius Genachowski's comments about data caps at Tuesday's NCTA conference drew fire from watchdog organizations

Last Updated: May 22, 2012 @ 3:45 PM

FCC Chairman Julius Genachowski irked watchdog groups on Tuesday with his public endorsement of broadband caps during a major cable TV industry conference in Boston.

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Under the cap concept, cable operators and other broadband service providers want to limit the amount of data — including streaming video services — that subscribers can access via their broadband services in a month, with the provider assessing extra charges for exceeding those limits. 

During an on-stage interview at the National Cable & Telecommunications Association’s annual conference, Genachowski (pictured) said he thought the caps were a legitimate pricing option.

“Usage-based pricing could be healthy and beneficial,” Genachowski said, responding to a question posed by NCTA CEO Michael Powell. Powell, a former FCC chairman, said the cable TV industry wanted the flexibility to experiment with broadband pricing based on tiers.

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Watchdog group representatives charged that caps hurt subscribers.

“What problem are caps trying to solve besides making more money for the [broadband service] providers?” Art Brodsky, a spokesman for the watchdog group Public Knowledge, told TheWrap.

“The data caps being pushed by the biggest cable companies are bad for consumers, and the FCC should be investigating these caps, not endorsing them,” added Matt Wood, policy director for Free Press, in a statement.

“The chairman’s remarks today about usage-based pricing emphasized the importance of consumer choice; competition, which includes over-the-top video (video streaming services such as those offered by Netflix); and lower prices for consumers,” an FCC spokesman said in a statement.

Comcast Corp. recently announced that it is lifting its cap on monthly bandwidth use in favor of a model that will enable subscribers to buy as much bandwidth as they want.

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Netflix has complained that Comcast discriminates against the video rental and streaming giant by favoring its own services.

Netflix’s concern partly stems from Comcast’s exempting its XfinityTV app on Xbox from the bandwidth caps. Comcast Executive Vice President David Cohen says that Comcast’s XfinityTV app is legal and appropriate.