By Andrew Feinberg - 05/22/12 08:01 PM EDT
“There was a point of view a couple of years ago that there was only one permissible pricing model for broadband. I didn’t agree,” Genachowski said during a public Q&A session with National Cable and Telecommunications Association CEO Michael Powell.
The chairman’s remarks came after Powell noted that cable providers want to experiment with different pricing strategies. Comcast, for example, last week announced it would ditch its oft-criticized 250-gigabyte data cap for a 300 gigabyte "allocation" that consumers can augment by purchasing more bandwidth.
On Tuesday afternoon, an FCC spokesperson told The Hill Genachowski's remarks weren't meant to endorse the practice of data caps, nor any business model in particular.
"The Chairman's remarks today about usage-based pricing emphasized the importance of consumer choice; competition, which includes over-the-top video competition; and lower prices for consumers," the spokesperson said.
But Public Knowledge legal director Harold Feld says Genachowski's statement at the Q&A event presents a "false picture."
Feld said the question isn't whether or not there is one pricing model. The question, he said, is "will all the benefits of broadband Chairman Genachowski has articulated in the past ever happen in a world where broadband providers get a free pass on any pricing scheme or restriction if they use the magic words 'bandwidth cap? ' "
"If we really want to see students downloading textbooks or watching Harvard lectures online, it would be nice to know if they will ever have the bandwidth capacity to do so," he said.
Free Press policy director Matt Wood said "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."
"Comcast's recent actions show both the harms of these caps and the lack of any legitimate reason for them," he said, adding that Comcast "started out by exempting its own content from its own caps, while applying them to competitors like Netflix and other online video providers."
"Then Comcast changed course and suspended caps temporarily in all but a few markets — but promised to start overcharging any users there who exceeded these arbitrary limits," he said.
Wood said the trend in the wireline broadband space towards a cable monopoly makes broadband pricing "almost immune to market discipline and consumer response."
"If [the FCC] wants to see experimentation in pricing that actually benefits consumers, we need a competition policy that creates more experimenters."
But AT&T senior vice president for external affairs Jim Cicconi praised Genachowski for recognizing that "the broadband market is in fact working and benefiting consumers."
"Innovation is booming and choices are proliferating," he said. "This is how free and competitive markets should work, especially in the Internet space."
"[N]othing is broken in this market," Cicconi said, "certainly nothing that government needs to intervene and fix."
— This story was updated at 5:03 p.m. with comment from the FCC.