Congress wants to stop metered Internet, but it's putting effort into the wrong end of the problem

Rep. Eric Massa of New York today introduced a bill designed to put a stop to metered billing plans at large ISPs. The gist of it is that any ISP with more than 2 million customers must get FTC approval before doing any kind of consumption-based billing. Certainly companies like Time Warner and AT&T have gotten out of control with their miserly caps, but this is putting effort into the wrong end of the problem.

This proposal is just more of the same: highly restrictive regulation for the incumbents that gets constantly gamed and does nothing to promote better service provider choices. Given that the status quo of telecommunications regulation hasn’t ended up working so well, why on earth would we even entertain this idea? Lunacy is doing the same thing and expecting different results.

We should instead be focusing on how to increase competitive choices in the marketplace so that consumers have the option to pick their service provider. I’m confident that the only reason any service provider can get away with ridiculously low caps is because consumers can’t flee to another service. Once there’s some more competitive pressure, we’ll see those prices drop like a rock. In fact, markets with 4 service providers have prices that average about 25% less than markets with just two providers.

Let’s make sure our Congresscritters start focusing on the right part of the story. Competition is good. Regulation? Not so much.

Sticker Shock: Telecom Service Prices Rising All Over

Cox is doing it. So is Comcast. In fact, prices are rising all over the telecom industry as stock prices plummet and subscribers prove fickle (as AT&T found out with a loss of 3.9M landline customers so far this year). Many of them are also ramping up higher-speed tiers and premium services to pad the bottom line.

Unfortunately, prices are likely to continue to rise in our current anti-competitive telecommunications market. Byzantine phone regulations are used to block new voice carriers, the programming cartel consistently flexes its muscle to increase wholesale television rates and data providers continue to increase markup even as the wholesale rate of bandwidth drops to new lows. DSLReports lambasts the lack of competition in a scatching editorial that details why telecom has the lowest consumer satisfaction ratings of any industry in the nation. As we continue to support duopolies and exclusive providers via HOAs, the problem is only going to get worse.