Verizon and bandwidth caps: The real story

Time Warner Cable's continuing faux pas over bandwidth caps and DOCSIS 3.0 is costing it good will, but the cable company's fumbling around has Verizon worried that the PR fiasco has triggered more than a black eye.

Link Hoewing, Verizon's VP on Internet and tech issues, was asked about broadband caps in an oblique way out at NAB while he was speaking as part of a panel about broadband and IPTV. After taking the obligatory low-key swipes at the cable companies - they have "network constraints," Verizon has been doing quite well selling flat-rate FiOS, thankyouverymuch - Hoewing started talking a lot about how wonderful competitive markets are and how it is nice to see complex markets work.

When Verizon starts talking faster about "competitive markets" and "complex systems," this is code for "Government regulation is unnecessary, unwanted and not needed."

TWC's efforts to inflict bandwidth caps upon Rochester, N.Y., attracted the attention of its Congressman and the senior Senator from New York. U.S. Rep. Eric Massa was going to draft legislation to make it illegal for service providers to charge customers based upon how much data they download, calling TWC "monopolistic."  

From a competitive and technology standpoint, Verizon has nothing - nada - to fear from bandwidth caps. FiOS and the underlying network whup cable plant -- even with DOCSIS 3.0  -- handily. 

However, if some angry Congressman starts passing laws about eliminating bandwidth caps, well, that may have all sorts of unintended consequences for Verizon. What if that law was applied to wireless services? What if Verizon wanted to offer an entry-level "capped" service? What if that law ended up being inadvertently applied to its wholesale division, where concepts such as burstable and oversubscription are part and parcel of the landscape?

Oops.

Add in a new administration and anything can happen. Until the new Chairman of the FCC is approved - and rumor has that not happening until August given some partisan bickering over other appointees - there's a lot that could go sideways.

- Doug

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