FCC Boss Mocks Unfair Comcast Broadband Caps At Industry Dinner, Still Hasn't Done Squat About It

As we've covered for some time, Comcast has slowly but surely been expanding the company's immensely-unpopular broadband usage caps. Primarily deployed to less competitive markets where consumers can't vote with their wallet, the caps restrict customer consumption to 300 GB per month, after which users have the option of either paying $10 per each additional 50 GB, or paying a $30 to $35 fee for the same unlimited data they used to enjoy. It's Comcast's charming way of imposing a glorified rate hike on uncompetitive markets while simultaneously using market power to protect TV revenues from Internet video.

And while arbitrary and unnecessary usage caps are bad enough, the company recently added a new wrinkle to the mix: it launched a streaming video service (creatively called "Stream") that won't count against Comcast's usage caps. That obviously puts competing services at a disadvantage, so it raised alarm bells among net neutrality advocates. Comcast, however, has argued that because Stream is a "IP cable service delivered over our managed network to the home," net neutrality doesn't apply. What has the FCC said? Nothing.

The FCC's neutrality rules don't specifically restrict zero rating, and the agency has said it will approach such issues on a "case by case" basis. So far, however, the FCC has been utterly mute on the subject of Comcast caps and zero rating of its own services. That was until last week's FCC Bar Association Chairman's dinner (aka the "telecom prom"), where lobbyists and regulators rub elbows and giggle over the year's events. FCC boss Tom Wheeler spent some time making fun of the industry's chicken little response to Title II, but also Comcast's usage caps (and its refusal to call them caps):

"Wheeler had hardly gotten warmed up when he turned his attention to Comcast, which had a table at the dinner. Wheeler said the custom at the dinner was "to drink as much wine as you want." Then he asked: "Where's the Comcast table," then repeated himself and scanned the crowd. When the table had identified itself, the chairman went to work. "Waiters, pay attention. If they want more wine, it's 35 dollars a bottle. And don’t consider it a wine cap. Just think of it as a wine usage plan."

That would be much funnier had the FCC taken any action over the last three years as Comcast has moved slowly to punish less competitive broadband markets with usage caps. In fact, not only has the FCC turned a blind eye to the inherent anti-innovation and anti-competitive impact of usage caps, it has ignored the fact that as ISPs bill by the byte -- nobody objective is checking to ensure usage meters are accurate. That has resulted in instances where customers were billed for usage even when their modems were off or they had no power.

It's possible the FCC is waiting for the dust to settle from its current legal battle with the broadband industry (which could demolish its rules entirely). Given that net neutrality abuses are a symptom of limited competition, it's also possible the FCC hopes its policies (like embracing municipal broadband) or a deus ex machina (Google Fiber) will somehow fix the market, making action unnecessary. But it's just as possible the FCC's current leadership thinks this kind of obvious discrimination is just "creative pricing." After all, the FCC's reaction to other zero rating plans has ranged from quiet, tacit approval to outright praise.

Still, the FCC has yet to seriously acknowledge the threat of using broadband caps as a zero-rated weapon against smaller competitors, and that could prove problematic for those expecting the FCC to actually use the net neutrality rules many fought so hard for.

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