Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion
from the of-course-not dept
Of course, enough people have been calling this explanation out as completely bogus that it appears that even the broadband companies' own lobbyists may finally be dropping this line of reasoning. Former FCC boss Michael Powell, who is now the cable industry's chief lobbyist (president of the National Cable and Telecommunications Association -- NCTA), has finally admitted caps aren't about congestion:
Michael Powell told a Minority Media and Telecommunications Association audience that cable's interest in usage-based pricing was not principally about network congestion, but instead about pricing fairness...Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry's interest in the issue as about congestion management. "That's wrong," he said. "Our principal purpose is how to fairly monetize a high fixed cost."Of course, as Broadband Reports notes, Powell is jumping from one myth (congestion) to another (fairness) that is just as ridiculous. If it was true, we'd see at least some prices going down. But we don't.
Except the argument that usaged pricing is about fairness has been just as repeatedly debunked. If usage caps were about "fairness," carriers would offer the nation's grandmothers a $5-$15 a month tier that accurately reflected her twice weekly, several megabyte browsing of the Weather Channel website. Instead, what we most often see are low caps and high overages layered on top of already high existing flat rate pricing, raising rates for all users. Does raising rates on a product that already sees 90% profit margins sound like "fairness" to you?Data caps are about one thing only: increasing profits for the broadband providers, who already have massive control over the market with limited competition. It's nice to see them give up on one myth (even if we still see pundits repeating it without criticism), but it would be nice if we could get past the others as well.