Senator introduces bill to regulate data caps

Senator introduces bill to regulate data caps

Metering allowed only for congestion control; discriminatory data caps banned.
December 20, 2012
Originally published in Arstechnica

Ryan Radia and Fred Campbell, technology policy experts at the Competitive Enterprise Institute, argue against a bill sponsored by Sen. Ron Wyden (D-OR) that would regulate data caps imposed by broadband providers.

But Ryan Radia of the libertarian Competitive Enterprise Institute was less enthusiastic about Wyden's proposal. He believes that data caps can serve useful purposes beyond congestion control. "Setting prices based on demand, rather than on unit cost, is a beneficial business practice that's commonplace in network industries," he told Ars by e-mail.

He drew an analogy to the airline industry. "While the cost of filling an empty plane seat at the last minute is minimal, airlines often charge extra for such seats, due to last-minute flyers' higher willingness to pay." In this way, he said, metered broadband can promote fairness by encouraging "voracious Internet users to pay more than lighter users." In his view, the Wyden proposal "amounts to a price control based on discredited economic thinking."

Radia's colleague Fred Campbell agreed, and he blamed "bandwidth-hungry video advertisements" for network congestion. "If Senator Wyden wants to promote consumer control over data usage, he should start with a law governing the practices of search engines, websites, and application providers," he told us by email.

Radia's view is likely to be well-represented in Congress. Last year, House Speaker John Boehner (R-OH) pledged to oppose network neutrality regulations. The Republicans who control the House of Representatives may be similarly skeptical of Wyden's proposal.