Comcast, Charter, and the future of usage-based broadband pricing

[Commentary] With little fanfare, two big changes came to the world of fixed broadband pricing.

First, the Federal Communications Commission approved Charter Communications’ merger with Time Warner Cable and Bright House Networks, subject to (inter alia) the company’s agreement to refrain from usage-based pricing for seven years.

Second, Comcast raised its monthly data plan from 300 gigabytes to 1 terabyte in those markets where the company offers usage-based pricing plans, and capped its overage fees at $200 per month.

These are important developments, not just by themselves but also with regard to what they say about each other and what they reveal about the future of usage-based broadband pricing. The costs and benefits of usage-based pricing are context-dependent and subject to change when underlying drivers change. In this dynamic, competitive landscape, providers should be allowed the agility to adjust their offerings in response to these changes. Regulators should remain vigilant in investigating specific product offerings that they suspect are anticompetitive. But absent proof of actual consumer harm, the commission should continue to allow broadband providers to experiment with new and potentially more efficient ways to meet consumer needs through innovative pricing plans.

[Lyons is an associate professor at Boston College Law School]