Press Release
Free Press Urges Congress to Investigate Internet Pricing Schemes
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- Free Press has called for an investigation into controversial pricing schemes from Internet service providers like Time Warner Cable, AT&T and wireless carriers in a letter to the House Energy and Commerce Committee.
AT&T and Time Warner Cable are currently testing a new billing model in Beaumont, Texas, where consumers pay large fees for exceeding a low monthly Internet usage limit. AT&T's trial also includes Reno, Nev. Though presented as a means to address a very small number of heavy bandwidth users, these pricing plans would impact large numbers of consumers.
The new pricing scheme is questionable given declining company costs. Today, AT&T reported the lowest capital expenditures since 2006, despite a significant uptick in new broadband subscribers. Time Warner Cable similarly reported that costs declined due to "a decrease in per-subscriber connectivity costs" while high-speed Internet subscribership increased.
"It makes no sense that many consumers are being asked to pay more for Internet access at exactly the time that costs are going down and profits are up," said Ben Scott, policy director of Free Press. "We are not persuaded by the arguments from network owners that these new penalties are necessary. Implementing new fees that will limit the growth of Internet video smacks of anti-competitive activity. It will discourage use and innovation on the Internet, right at the time we need this sector to help pull our country out of recession."
The letter urges Congress to investigate the impact of these new pricing practices on consumers, innovation and competition. Specifically, Free Press is concerned that nationwide implementation of anti-competitive pricing schemes will deter Internet adoption, stifle video services and other innovative applications, and chill economic growth.
Read the letter at http://www.freepress.net/files/FP_metering_letter.pdf
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Free Press is a national, nonpartisan organization working to reform the media. Through education, organizing and advocacy, we promote diverse and independent media ownership, strong public media, and universal access to communications. Learn more at www.freepress.net
AT&T and Time Warner Cable are currently testing a new billing model in Beaumont, Texas, where consumers pay large fees for exceeding a low monthly Internet usage limit. AT&T's trial also includes Reno, Nev. Though presented as a means to address a very small number of heavy bandwidth users, these pricing plans would impact large numbers of consumers.
The new pricing scheme is questionable given declining company costs. Today, AT&T reported the lowest capital expenditures since 2006, despite a significant uptick in new broadband subscribers. Time Warner Cable similarly reported that costs declined due to "a decrease in per-subscriber connectivity costs" while high-speed Internet subscribership increased.
"It makes no sense that many consumers are being asked to pay more for Internet access at exactly the time that costs are going down and profits are up," said Ben Scott, policy director of Free Press. "We are not persuaded by the arguments from network owners that these new penalties are necessary. Implementing new fees that will limit the growth of Internet video smacks of anti-competitive activity. It will discourage use and innovation on the Internet, right at the time we need this sector to help pull our country out of recession."
The letter urges Congress to investigate the impact of these new pricing practices on consumers, innovation and competition. Specifically, Free Press is concerned that nationwide implementation of anti-competitive pricing schemes will deter Internet adoption, stifle video services and other innovative applications, and chill economic growth.
Read the letter at http://www.freepress.net/files/FP_metering_letter.pdf
###
Free Press is a national, nonpartisan organization working to reform the media. Through education, organizing and advocacy, we promote diverse and independent media ownership, strong public media, and universal access to communications. Learn more at www.freepress.net
