Congress Supporting Comcast Data Caps?

Poor-customer-satisfaction-272x300There is currently a bill in the House, HR-2666, that will do two primary things – stop the FCC from regulating broadband rates and exempt smaller ISPs from some of the reporting requirements from the net neutrality law.

For the life of me I can’t understand why nobody in the press sees this as a bill that would stop the FCC from regulating data caps like the one that Comcast is currently trialing. The Comcast data caps are massively unpopular and there have already been nearly 10,000 complaints about the data caps at the FCC even though the trials are only in a few markets. Since most people aren’t going to go to the trouble to officially complain, there are undoubtedly a whole lot more people unhappy with Comcast’s data caps.

And they should be. The data caps are being peddled by Comcast as a fairness issue when they are just a blatant price increase. I actually would be a little less incensed about what Comcast is doing if along with raising rates for large data users they also lowered the rates for smaller users. That would be rate rebalancing and could be argued as something fair. But since rates can only be increased this just means a lot more revenue for Comcast with practically zero additional costs to justify it.

I guess it’s not surprising that Congress would support the large ISPs over people since that seems to be the trend these days. This bill would also stop any action at the FCC against the very unpopular data caps on cellular data. While there is no guarantee that this becomes law, this seems to have bilateral support, so there is a good chance this could become law.

As also seems typical these days, the bill bundles something distasteful with something that few people are  against. The bill will excuse small ISPs from complying with the detailed customer notice requirements which are intended to tell people the truth about their broadband connections.

If you are a small carrier and have a good network you should not be afraid of this requirement, and in fact you ought to comply to point out the difference between you and your competitors. I certainly will be advising companies to comply with this requirement even if this law excuses them. If you have a good network and offer an honest broadband product you ought to crow about it in every way imaginable.

Interestingly, some of the small companies complaining about the notice regulations are WISPs, or wireless ISPs. While there are many very good WISPs, I also get reports from rural communities of WISPs who lie badly about broadband speeds. If I was a rural customer and a WISP was my only option, I don’t know that I would be happy that Congress wants to give them an out from telling me the truth.

And the bill is not only about data caps. All of the big cable companies have made announcements over the last year or two that they now consider themselves as ISPs rather than cable companies. Since they are almost all publicly traded firms they are under tremendous pressure to keep increasing revenues and margins year after year. The only way they are going to be able to do that is to start regularly raising broadband rates in the same manner that they have historically raised cable rates. This bill will give them permission to raise rates as much as they like and and I think we can expect broadband to be much more expensive in the future.

In a free economy companies are generally allowed to charge whatever they want and the market is supposed to punish the greedy ones. The problem with broadband is that there are too many markets in the country where a given broadband provider has a virtual monopoly. Cable companies have mostly won the speed war, and in most markets their only competitor is much slower DSL that is being sold at low prices to those willing to accept slow speeds for low rates. For most households the cable company is the only broadband alternative – and that makes them a monopoly.

The FCC is supposed to regulate monopoly abuse in the telecom world. They have eased up on regulations of telephone service as it became more competitive. But we are in the opposite situation with broadband with the cable monopoly currently growing stronger day by day.

I am certainly going to complain to my own representatives about this bill, but if this is going to be stopped, then a whole lot of people need to be yelling in a hurry. I can sense that the big ISPs want to get this enacted before people figure out what this bill does. And Comcast surely would like this passed before they introduce their very unpopular data caps everywhere – because then the outcry might be too great to get it passed. But hopefully the red flag can be raised before it’s too late to do anything about this. This is the day I wish my blog had 100,000 readers!

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