

After a few weeks of intense criticism, Time Warner Cable last week temporarily halted most of its experiments in charging broadband customers by the byte. But the consumer advocacy group Free Press isn't mollified and is asking a powerful House committee to investigate whether such billing plans are anti-competitive.

Last Thursday, Time Warner Cable shelved plans to charge its customersa in four cities by the number of GBs of data they download a month, with penalties for going over the limit. But the company isn't giving up on the idea and says charging heavy users more money is only fair.

What data exists, however, shows that heavy downloading has little relation to a cable company's bandwidth costs. That leads critics such as Free Press to charge that the switch is intended to protect TWC's cable-television business from innovative online video services.

Free Press is now asking the House Energy and Commerce Committee (.pdf) to investigate whether Time Warner Cable and AT&T's trials of usage-based billing for home broadband is actually "price gouging in an insufficiently competitive broadband market." Less than two weeks ago, the group called generally for a Congressional investigation and asked its 500,000 members to send anti-cap letters to their representatives.

Imposing arbitrarily low usage limits and arbitrarily high usage fees on Internet access may have substantial negative impacts on competition, innovation, and long-term economic growth. These price gouging schemes will discourage consumers from using high-bandwidth Internet applications — especially video, damaging the nascent market for Internet delivery of video, a market that increasingly competes with traditional cable television services. Popular high-bandwidth services such as YouTube, Flickr and online gaming might never have flourished if each use resulted in an additional charge.

TWC and AT&T are both still testing caps in Beaumont, Texas.

The calorie-counting model is much like cellular phone plans, and is not unheard of in the United States or abroad. For instance, satellite and 3-G network cards impose low usage caps and high overage fees. Other examples include Lawrence, KS's Sunflower Broadband cable internet and DSL providers in remote areas.

TWC did not respond to a request for comment.

First-term New York lawmaker Eric Massa (D) promised to introduce legislation that would ban such pricing tiers, but has not yet released the text of the bill.

Graph: Wired.com/Dennis Crothers

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