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."
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."
Former FCC Chairman admits data caps aren't about preventing network congestion | The Verge
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."
Former FCC Chairman admits data caps aren't about preventing network congestion | The Verge
