FCC Chairman Genachowski on board with usage pricing for broadband

BOSTON -- Federal Communications Commission Chairman Julius Genachowski said he supports cable and telecommunication companies adopting a usage-based pricing plan for broadband.

“Usage-based pricing could be a healthy and beneficial part of the ecosystem,” Genachowski said in an appearance at the National Cable & Telecommunications Assn.’s annual convention here. Genachowski, who was interviewed by former FCC Chairman and current NCTA Chief Executive Michael Powell, added that a tiered pricing approach may “increase consumer choice and competition” and “result in lower prices for people who consume less broadband.”

Genachowski made his endorsement of usage-based pricing for broadband consumption just days after cable giant Comcast Corp. said it would adopt that model. Comcast is going to introduce a fee for consumers who use more than 300 gigabytes a month. Comcast Executive Vice President David L. Cohen said the amount would likely be $10 for every 50 GB over the base allowance.

The FCC chairman also addressed concerns in the cable industry about increasing regulatory oversight of distribution negotiations between cable operators and broadcast television stations. The cable industry has been calling for an overhaul of FCC rules regarding so-called retransmission consent negotiations.

While Genachowski continued to indicate that broadcasters have the right to seek cash in return for distribution of their channels, he did question whether broadcasters have too much leverage in some negotiations.

For example, some television stations that have different owners have entered into what is known in the industry as a “shared services agreement.” Such arrangements can result in one company negotiating on behalf of as many as three television stations.

“That raises real issues,” Genachowski said.

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