Greed Concern of ISPs Over Bandwidth Usage Triggers Legislation to Regulate ISPs

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It had to happen sooner or later. The heydey of the wild frontier Internet, where ISPs had unfettered artistic license to create the landscape they wanted, is over. Like Adam and Eve in the proverbial garden of Eden, it was theirs to lose, and lose it they are about to, it seems.

We’ve always said that the ISPs should not take for granted the privilege they had of being largely unregulated, unlike telephone, cable, and other similar services.

Now, as some Internet providers are moving to restrict bandwidth usage and charge outrageous amounts for “over usage” – much like the phone company once did, legislation has been introduced to regulate ISPs, and even to have a Federal agency oversee them – much like the telephone companies now do.

The bill, introduced by New York Congressman Eric Massa, authorizes the Federal Trade Commission, “in consultation with the Federal Communications Commission, to review volume usage service plans of major broadband Internet service providers to ensure that such plans are fairly based on cost.”

Make no mistake, folks. This is the first salvo in what is sure to be a long, drawn out, and likely costly battle for control of your Internet spending dollar.

If you don’t care much what happens one way or the other, you can stop reading now.

The rest of you, here is the full text of the bill, for your review, comment, and to serve as a basis on which to inform the letter or email that you will hopefully write to your own representatives, be it for or against regulation.

H. R. __________

To authorize the Federal Trade Commission, in consultation with the Federal Communications Commission, to review volume usage service plans of
major broadband Internet service providers to ensure that such plans are fairly based on cost.


Mr. MASSAintroduced the following bill; which was referred to the Committee
on _____________


To authorize the Federal Trade Commission, in consultation with the Federal Communications Commission, to review volume usage service plans of major broadband Internet service providers to ensure that such plans are fairly based on cost. Be it enacted by the Senate and House of Representa-

tives of the United States of America in Congress assembled,


This Act may be cited as the Broadband Internet Fairness Act.


Congress finds the following:

(1) Increased deployment and adoption of

broadband, including high-bandwidth uses of

broadband, is key to allow broadband stimulus funds

to produce maximal economic recovery and growth,

and is key to the network effects of economic benefit

associated with the Internet.

(2) No volume usage service plan for broadband

Internet access can be just and reasonable unless

charges are fairly based on the cost of the usage.

(3) Volume usage charges for broadband Inter-

net access that are substantially above cost in a

market without sufficient competition constitute an

unfair and unconscionable practice, as substantially

above-cost pricing has anti-competitive and anti-con-

sumer effects on Internet use, including in particular

Internet use for online video delivery.

(4) The market for video delivery is effectively

controlled by companies operating both traditional

cable delivery and broadband Internet access serv-

ices, increasing incentives to raise prices for Internet

use in high volumes, to discourage consumers who

may wish no longer to subscribe to traditional cable


(5) The Federal Trade Commission Act author-

izes the Federal Trade Commission to investigate

and remedy consumer pricing practices that it deter-

mines to be unfair or anti-competitive, including

pricing practices by Internet service providers, as

Internet services are not provided on a common car-

rier basis and therefore are not subject to the com-

mon carrier limitation on Federal Trade Commission




(a) PROHIBITION.It shall be unlawful for major

broadband Internet service providers to offer volume usage

service plans imposing rates, terms and conditions that

are unjust, unreasonable, or unreasonably discriminatory.


Major broadband Internet service providers offering, or

proposing to offer, volume usage service plans to any por-

tion of their service territory are required to file with the

Federal Trade Commission a service plan analysis that

(1) identifies the different service tiers of

broadband Internet service to be offered on the basis

of different data transmission volumes;

(2) specifies the different rates, terms, and con-

ditions to be imposed for such tiers;

(3) provides an analysis of the economic reason-

ableness and necessity for imposing such tiers

(A) based on assigning the capital costs of

deploying the facilities needed to provide such

different service tiers;

(B) based on assigning different operating

costs, if any, that are attributable to the provi-

sion of different service tiers; or

(C) based on other factors and costs speci-

fied by the provider as a justification for the

proposed volume usage service plan;

(4) assess the impact of such service tiers on

the ability of residential consumers to access widely

used Internet services, including uses for agricul-

tural, medical, educational, environmental, library,

and nonprofit purposes; and

(5) specifies the basis upon which the different

rates of charges under the service plan will be re-

vised over the following 3 years, and inflation factors

or other variables that will be used to calculate or

limit such revisions.


(a) ENFORCEMENT BY FTC.The Commission shall,

in consultation with the Federal Communications Com-

mission, review each service plan analysis submitted under

section 3(b) in order to determine whether the volume

usage service plan is in violation of section 3(a). A viola-

tion of section 3(a) shall be treated as a violation of a

rule defining an unfair or deceptive act or practice pre-

scribed under section 18(a)(1)(B) of the Federal Trade

Commission Act (15 U.S.C. 57(a)(1)(B)). The Federal

Trade Commission shall enforce this Act in the same man-

ner, by the same means, and with the same jurisdiction

as though all applicable terms and provision of the Federal

Trade Commission Act were incorporated into and made

a part of this Act.

(b) REVIEWANDREMEDIATION.After an initial re-

view of any service plan analysis submitted under section

(b), if the Commission identifies any elements of such

plan that appear to constitute a violation of section 3(a),

the Commission shall notify the provider submitting such

plan of such elements and of the steps the provider may

take to correct such violations. The Commission shall,

prior to initiating any action under subsection (e), review

the steps taken by the provider to correct such violations.

(c) FACTORS CONSIDERED.In determining whether

a major broadband Internet service provider has violated

section 3(a), the Commission, in consultation with the

Federal Communications Commission, shall take into ac-

count, among other factors

(1) whether the service plan analysis filed with

the Commission does not properly assign operating

costs to each of the service tiers within the volume

usage service plan;

(2) whether the rates, terms and conditions are

not justified by the costs of deploying or operating

the facilities required to provide and maintain the

service tiers within the volume usage service plan;

(3) whether the volume usage service plan im-

poses unjust, unreasonable, or unreasonably dis-

criminatory charges on residential consumers; and

(4) whether the volume usage service plan de-

ters or impedes

(A) the deployment of and access to widely

used Internet applications and services; or

(B) the participation of residential con-

sumers in the growth and development of re-

gional, national, and international economies;

(5) whether the volume usage service plan un-

fairly penalizes consumers choosing to use high

bandwidth Internet applications and services, includ-

ing those used for one-way or two-way video;

(6) whether the volume usage service plan has

anti-competitive effects on the market for video de-

livery or the markets for Internet applications or


(7) whether the volume usage service plan im-

poses anti-consumer rates, terms, or conditions that

reflect insufficient competition in the local market

for broadband Internet services; or

(8) whether the volume usage service plan fails

to comply with such other factors as the Commis-

sion, in consultation with the Federal Communica-

tions Commission, determines to be appropriate as

set forth in the rules prescribed under section 5.

(d) HEARINGS.As a component of its review of each

plan submitted under subsection (a), the Commission

shall, after the provider submitting such plan has had an

opportunity to take steps under subsection (b) to correct

any violations identified by the Commission in its notice

to the provider under such subsection, provide for the con-

duct of a public hearing by a Commissioner or other des-

ignated employee of the Commission, and for the collection

of public comment and testimony with respect to such

plan. Such hearing shall be conducted in a such a community

or communities in such State or States as the

Commission determines are most directly affected by the

volume usage service plan.


(1) Notwithstanding the penalties set forth

under the Federal Trade Commission Act, any

major broadband Internet service provider who vio-

lates section 3(a) shall be subject to injunctive relief

requiring the broadband Internet service provider

proposing or offering such plan to suspend, termi-

nate, or revise such plan.

(2) In addition to injunctive relief, any major

broadband Internet service provider who violates sec-

tion 3(a) may be subject to a fine of not more than

$1,000,000, as the Commission determines is re-

quired to ensure ongoing compliance with this Act.


Within 180 days after the date of enactment of this

Act, the Commission shall, by rule prescribed in accord-

ance with section 553 of title 5, United States Code, estab-

lish procedures for the review of volume usage service

plans and for the conduct of public hearings pursuant to

the requirements of this Act.


Nothing in this Act shall be construed to limit the

authority of the Commission to bring enforcement actions

or take other measures under the Federal Trade Commis-

sion Act or any other provision of law.


(a) IN GENERAL.For purposes of this Act:

(1) COMMISSION.The term Commission

means the Federal Trade Commission.


broadband Internet service means an Internet

protocol-based transmission service that enables

users to send and receive voice, video, data, graph-

ics, or a combination thereof.


VIDER.The term broadband Internet service pro-

vider means any person who provides or offers to

provide broadband Internet service, either directly or

through an affiliate.


PROVIDER.The term major broadband Internet

service provider means a broadband Internet serv-

ice provider that, either directly or through an affil-

iate, provides broadband Internet service to

,000,000 or more subscribers, as further defined by

the rules prescribed by the Commission pursuant to

section 5.


volume usage service plan means any choice of

broadband Internet service offerings to a residential

consumer that includes two or more different sets of

rates, terms, or conditions that are directly or indi-

rectly based upon the amount of data actually trans-

mitted to or from the consumer within a fixed period

of time.

(6) RESIDENTIAL CONSUMER.The term residential consumer

includes any individual consumer

who subscribes to broadband Internet services pri-

marily for purposes other than a for-profit business

purpose, and includes subscribers that are nonprofit

organizations or institutions of higher education.

(b) COMMON TERMINOLOGY. Except as otherwise

provided in subsection (a), terms used in this Act have

the meanings provided under section 3 of the Communica-

tions Act of 1934 (47 U.S.C. 153) and section 602 of such

Act (47 U.S.C. 522).

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