Usage-based pricing gets FCC support

LAS VEGAS--Usage-based pricing models for wireless services may be a way to ease some congestion on cellphone networks, FCC Commissioners said today.

Verizon Wireless said it will likely have usage-based pricing for services on its LTE network, a faster wireless network it is rolling out later this year. That's because consumers will be able to connect to the network devices they did not buy in Verizon stores. So customers will be charged a base rate for using the network and will be charged based on who much bandwidth they use over a multitude of products, like laptops, e-readers, cellphones and appliances. Other carriers will likely follow suite on their own high-speed networks. Consumer groups have balked at the notion of usage-based pricing and say customers should pay a flat rate for unlimited data use. The pricing issue comes up as regulators are struggling to find enough spectrum to keep up with wireless demand. On the CES show floor, more products than ever rely on wireless Internet connections and new services, such as live video chats on cellphones, use an enormous amount of bandwidth, exacerbating the spectrum crunch.

FCC Commissioner Robert McDowell, a Republican, said companies should be able to experiment with different pricing models, especially if private carriers are expected to finance the building of faster, bigger networks to expand wireless broadband services. If people pay for the bandwidth they use, it could reduce congestion on the networks as well.

"Pricing freedom has to be essential," he said on a panel today.

A small number of users take up the majority of bandwidth. So charging some of the heavy users for that bandwidth makes sense, McDowell said.

"I think it's time to let that happen," he said. "Net neutrality proponents say it should be an all-you-can-eat price. But that will lead to gridlock."

Meredith Attwell Baker, a fellow Republican Commissioner, indicated companies could do other things to lighten the load on strained wireless networks.

"Maybe we move back to a world where people pay for roaming," she said.