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Posted at 11:16 AM ET, 05/22/2012

FCC chairman supports broadband data caps amid Netflix protests

The chairman of the Federal Communications Commission said Tuesday that he supports tiered broadband Internet plans, a growing trend that has drawn criticism from Netflix.

Julius Genachowski said during a cable industry trade show in Boston that “usage-based pricing could be healthy and beneficial” for broadband and high-tech industries.

Cable service providers and wireless carriers have changed billing practices to charge users by how much data they use. They say they are moving away from unlimited data plans as users — particularly on wireless networks — congest networks with their heavy use of Internet services.

The issue was brought up by Michael Powell, a former FCC chairman and current chief executive of the National Cable and Telecommunications Association. Powell said cable providers want to be able to experiment with pricing plans based on tiers. Comcast last week said it would experiment with new tiers, and raised the cap for users to 300 megabytes for the lowest tier.

Public interest groups and Netflix CEO Reed Hastings have criticized the practice, saying users will be punished for watching streaming video services, for example, that tip them over their monthly limits. Hastings has also cried foul over how Comcast isn’t counting video use of its own XFinity services against data plans. That puts Netflix at an unfair disadvantage, Hastings has said.

Genachowski didn’t appear to feel the same outrage.

“Business model innovation is very important,” Genachowski said. “There was a point of view a couple years ago that there was only one permissible pricing model for broadband. I didn’t agree.”


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By  |  11:16 AM ET, 05/22/2012

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