I 111th CONGRESS 1st Session H. R. 2902 IN THE HOUSE OF REPRESENTATIVES June 16, 2009 Mr. Massa (for himself, Mr. Perriello, and Mr. Hinchey) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To authorize the Federal Trade Commission, in consultation with the Federal Communications Commission, to review volume usage service plans of major broadband Internet service providers to ensure that such plans are fairly based on cost.

1.

Short title

This Act may be cited as the Broadband Internet Fairness Act.

2.

Findings

Congress finds the following: (1)Increased deployment and adoption of broadband, including high-bandwidth uses of broadband, is key to allow broadband stimulus funds to produce maximal economic recovery and growth, and is key to the network effects of economic benefit associated with the Internet. (2)No volume usage service plan for broadband Internet access can be just and reasonable unless charges are fairly based on the cost of the usage. (3)Volume usage charges for broadband Internet access that are substantially above cost in a market without sufficient competition constitute an unfair and unconscionable practice, as substantially above-cost pricing has anti-competitive and anti-consumer effects on Internet use, including in particular Internet use for online video delivery. (4)The market for video delivery is effectively controlled by companies operating both traditional cable delivery and broadband Internet access services, increasing incentives to raise prices for Internet use in high volumes, to discourage consumers who may wish no longer to subscribe to traditional cable services. (5)The Federal Trade Commission Act authorizes the Federal Trade Commission to investigate and remedy consumer pricing practices that it determines to be unfair or anti-competitive, including pricing practices by Internet service providers, as Internet services are not provided on a common carrier basis and therefore are not subject to the common carrier limitation on Federal Trade Commission jurisdiction.

3.

Unjust, unreasonable, or unreasonably discriminatory volume usage service plans

(a)

Prohibition

It shall be unlawful for major broadband Internet service providers to offer volume usage service plans imposing rates, terms, and conditions that are unjust, unreasonable, or unreasonably discriminatory. (b)

Service plan analysis filing required

Major broadband Internet service providers offering, or proposing to offer, volume usage service plans to any portion of their service territory are required to file with the Federal Trade Commission a service plan analysis that— (1)identifies the different service tiers of broadband Internet service to be offered on the basis of different data transmission volumes; (2)specifies the different rates, terms, and conditions to be imposed for such tiers; (3)provides an analysis of the economic reasonableness and necessity for imposing such tiers— (A)based on assigning the capital costs of deploying the facilities needed to provide such different service tiers; (B)based on assigning different operating costs, if any, that are attributable to the provision of different service tiers; or (C)based on other factors and costs specified by the provider as a justification for the proposed volume usage service plan; (4)assess the impact of such service tiers on the ability of residential consumers to access widely used Internet services, including uses for agricultural, medical, educational, environmental, library, and nonprofit purposes; and (5)specifies the basis upon which the different rates of charges under the service plan will be revised over the following 3 years, and inflation factors or other variables that will be used to calculate or limit such revisions.

4.

Enforcement by the federal trade commission

(a)

Enforcement by FTC

The Commission shall, in consultation with the Federal Communications Commission, review each service plan analysis submitted under section 3(b) in order to determine whether the volume usage service plan is in violation of section 3(a). A violation of section 3(a) shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57(a)(1)(B)). The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction as though all applicable terms and provision of the Federal Trade Commission Act were incorporated into and made a part of this Act. (b)

Review and remediation

After an initial review of any service plan analysis submitted under section 3(b), if the Commission identifies any elements of such plan that appear to constitute a violation of section 3(a), the Commission shall notify the provider submitting such plan of such elements and of the steps the provider may take to correct such violations. The Commission shall, prior to initiating any action under subsection (e), review the steps taken by the provider to correct such violations. (c)

Factors considered

In determining whether a major broadband Internet service provider has violated section 3(a), the Commission, in consultation with the Federal Communications Commission, shall take into account, among other factors— (1)whether the service plan analysis filed with the Commission does not properly assign operating costs to each of the service tiers within the volume usage service plan; (2)whether the rates, terms, and conditions are not justified by the costs of deploying or operating the facilities required to provide and maintain the service tiers within the volume usage service plan; (3)whether the volume usage service plan imposes unjust, unreasonable, or unreasonably discriminatory charges on residential consumers; (4)whether the volume usage service plan deters or impedes— (A)the deployment of and access to widely used Internet applications and services; or (B)the participation of residential consumers in the growth and development of regional, national, and international economies; (5)whether the volume usage service plan unfairly penalizes consumers choosing to use high bandwidth Internet applications and services, including those used for one-way or two-way video; (6)whether the volume usage service plan has anti-competitive effects on the market for video delivery or the markets for Internet applications or services; (7)whether the volume usage service plan imposes anti-consumer rates, terms, or conditions that reflect insufficient competition in the local market for broadband Internet services; or (8)whether the volume usage service plan fails to comply with such other factors as the Commission, in consultation with the Federal Communications Commission, determines to be appropriate as set forth in the rules prescribed under section 5. (d)

Hearings

As a component of its review of each plan submitted under subsection (a), the Commission shall, after the provider submitting such plan has had an opportunity to take steps under subsection (b) to correct any violations identified by the Commission in its notice to the provider under such subsection, provide for the conduct of a public hearing by a Commissioner or other designated employee of the Commission, and for the collection of public comment and testimony with respect to such plan. Such hearing shall be conducted in a such a community or communities in such State or States as the Commission determines are most directly affected by the volume usage service plan. (e)

Civil Penalties

(1)Notwithstanding the penalties set forth under the Federal Trade Commission Act, any major broadband Internet service provider who violates section 3(a) shall be subject to injunctive relief requiring the broadband Internet service provider proposing or offering such plan to suspend, terminate, or revise such plan. (2)In addition to injunctive relief, any major broadband Internet service provider who violates section 3(a) may be subject to a fine of not more than $1,000,000, as the Commission determines is required to ensure ongoing compliance with this Act.

5.

Commission rulemaking required

Within 180 days after the date of enactment of this Act, the Commission shall, by rule prescribed in accordance with section 553 of title 5, United States Code, establish procedures for the review of volume usage service plans and for the conduct of public hearings pursuant to the requirements of this Act.

6.

Effect on other laws

Nothing in this Act shall be construed to limit the authority of the Commission to bring enforcement actions or take other measures under the Federal Trade Commission Act or any other provision of law.

7.

Definitions

(a)

In general

For purposes of this Act: (1)

Commission

The term Commission means the Federal Trade Commission. (2)

Broadband internet service

The term broadband Internet service means an Internet protocol-based transmission service that enables users to send and receive voice, video, data, graphics, or a combination thereof. (3)

Broadband internet service provider

The term broadband Internet service provider means any person who provides or offers to provide broadband Internet service, either directly or through an affiliate. (4)

Major broadband internet service provider

The term major broadband Internet service provider means a broadband Internet service provider that, either directly or through an affiliate, provides broadband Internet service to 2,000,000 or more subscribers, as further defined by the rules prescribed by the Commission pursuant to section 5. (5)

Volume usage service plan

The term volume usage service plan means any choice of broadband Internet service offerings to a residential consumer that includes two or more different sets of rates, terms, or conditions that are directly or indirectly based upon the amount of data actually transmitted to or from the consumer within a fixed period of time. (6)

Residential consumer

The term residential consumer includes any individual consumer who subscribes to broadband Internet services primarily for purposes other than a for-profit business purpose, and includes subscribers that are nonprofit organizations or institutions of higher education. (b)

Common terminology

Except as otherwise provided in subsection (a), terms used in this Act have the meanings provided under section 3 of the Communications Act of 1934 (47 U.S.C. 153) and section 602 of such Act (47 U.S.C. 522).