This past Friday The Verge reported on a disturbing admission by the former FCC Chairman, Michael Powell (who also happens to be the president of the National Cable and Telecommunications Association). The admission was about broadband data caps, and the reason they are being implemented. Every ISP in America has stated that their data caps are put in place to combat network congestion. Many experts have agreed that that line of reasoning is bogus, but we’ve never had someone with so much industry clout come out and say it.
When asked if network congestion a factor when it came to data caps, Michael Powell had this to say:
“That’s wrong. Our principal purpose is how to fairly monetize a high fixed cost.”
The Verge links to an article by Broadcasting & Cable, wherein there are even more B.S. reasons for the data limits. Powell compares data usage to the usage of hanging lights and energy waste, and even cites a concern for application developers using network traffic efficiently.
What the ISPs have effectively been doing is creating a commodity out of thin air. In reality there is no shortage of bandwidth and no network congestion to speak of; however, by creating a false shortage of resources, these companies are able to charge a premium for what should be considered normal Internet use and rake in billions of dollars without putting in any effort.
What a load of crap.