Michael Powell, former FCC head and currently the president of the National Cable and Telecommunications Association, revealed that the Cable industry’s demand for data caps is not about network congestion but for needed revenue.
For many years major Internet service providers have claimed that users demanding high speed Internet will result in an Internet bottleneck. By implementing data caps and charging higher rates, they claim it is the best way to combat the problem of over usage.
In December 2012 the Open Technology Institute lashed out at ISPs and accused them of making up a need for data cap. Writing in part, the OTI claims that cable companies are “motivated by a desire to further increase revenues from existing subscribers and protect legacy services such as cable television from competing Internet services.”
Now it seems that the OTI was quite accurate with their accusations and even the former FCC head, Michael Powell, admitted it recently in a roundabout way.
An article from Broadcasting & Cable recently suggested that Powell revealed that the cries of a brownout or bottleneck from cable companies had no real truth to it, but was really more about ‘fairness’.
In response to MMTC president David Honig’s question about the issue of data caps and how a lot of people felt it was about data congestion management, Powell stated:
"That's wrong. Our principal purpose is how to fairly monetize a high fixed cost."
Speaking mainly as an apologist for the cable industry, Powell expressed that the industry had to first spend millions of dollars in setting up the infrastructure that was not there before.
“It is a completely rational and acceptable process to figure out how to fairly allocate those costs among your consumers who are choosing the service and will pay you to recover those costs."
He also added that bandwidth limits is to help encourage app designers survey data usage more closely. Or simply put, ISPs must force people to observe moderation or discipline while working on-line or they will not do it on their own.
Many critics of high-speed ISPs, and especially the cable companies, are upset that most of the high-speed Internet is controlled by what equates to what they consider to be monopolies. Most cities have only one provider for high-speed cable, and you either accept what they are offering or you do without.