WASHINGTON, December 21, 2012 – The Nation Cable and Telecommunications Association, the trade group representing cable operators serving more than 90 percent of the nation’s households, on Friday released a statement criticizing the Data Cap Integrity Act introduced by Sen. Ron Wyden, D-Ore.
“Regrettably, this ill-conceived legislation ignores the substantial pro-consumer benefits of usage-based pricing,” according to the NCTA statement. “While congestion management may be one effect of tiered pricing, the primary benefits are consumer choice and fairness. Usage tiers give consumers more choices to better fit their bandwidth needs, and they rightly distinguish between low-volume users and high-volume users as is true for many products and services.
“Tiered pricing is common throughout our economy, consumers both understand and appreciate it and the FTC and FCC have said it is sensible and fair. Some consumers are light users that check email and Facebook while others prefer to stream music and movies for hours each day.
“In a new paper released last week, Michigan State University Professor and Economist Steven Wildman perhaps said it best in concluding that ‘There is good reason to expect that for broadband, as with other information goods, differential pricing will in most circumstances increase economic welfare…The substantial research literature on the subject of differential pricing based on usage and quality suggests that the effects of well-designed [usage-based pricing] plans on consumers are likely to be beneficial, as are the effects of UBP on investments in the broadband infrastructure.’”
Editor’s Note: Don’t Miss the February 2013 Broadband Breakfast Club, “Data Caps, Spectrum Shortage, Consumer Acceptance and Wi-Fi.” Register at http://broadbandbreakfastfebruary2013.eventbrite.com/