Last December a report from the Open Technology Institute accused internet service providers of using the threat of network congestion to justify data caps when their real motive was profit — and now the former head of the Federal Communications Commission appears to have admitted as much. Broadcasting & Cable reports that Michael Powell — president of the National Cable and Telecommunications Association, and former FCC Chairman — told an audience earlier this week that the threat of network congestion was not a factor when it came to data caps. "That's wrong," he reportedly said. "Our principal purpose is how to fairly monetize a high fixed cost."
"You are going to pay more than your neighbor... It's only right."
The comments came during a panel at the Minority Media and Telecom Council's Broadband and Social Justice Summit. According to Powell, the "enormously high" fixed costs include not just the money required to dig up streets and lay down wiring, but the operational expenses as well. In either case, he said, customers are used to the concept. "If you buy a hot tub and string it up with a whole bunch of inefficient lighting and run it all night long," he said, "you are going to pay more than your neighbor who puts his thermostat at 68 percent and tries to conserve energy. It's only right."
He went on to characterize capped plans as an important tool in creating well-designed web applications — a web app relying on unlimited data, for example, wouldn't need to concern itself with efficiency — but not all of Powell's colleagues agreed. Democrat Michael Copps said during the panel that data caps should be approached with a "questioning" attitude, and that they should enter the conversation only after broadband infrastructure has been built out to reach all citizens.