I 

111TH CONGRESS 

1ST SESSION H. R. 2902 

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. 

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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Broadband Internet 

5 Fairness Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) Increased deployment and adoption of 

2 broadband, including high-bandwidth uses of 

3 broadband, is key to allow broadband stimulus funds 

4 to produce maximal economic recovery and growth, 

5 and is key to the network effects of economic benefit 

6 associated with the Internet. 

7 (2) No volume usage service plan for broadband 

8 Internet access can be just and reasonable unless 

9 charges are fairly based on the cost of the usage. 

10 (3) Volume usage charges for broadband Inter11 net access that are substantially above cost in a 

12 market without sufficient competition constitute an 

13 unfair and unconscionable practice, as substantially 

14 above-cost pricing has anti-competitive and anti-con15 sumer effects on Internet use, including in particular 

16 Internet use for online video delivery. 

17 (4) The market for video delivery is effectively 

18 controlled by companies operating both traditional 

19 cable delivery and broadband Internet access serv20 ices, increasing incentives to raise prices for Internet 

21 use in high volumes, to discourage consumers who 

22 may wish no longer to subscribe to traditional cable 

23 services. 

24 (5) The Federal Trade Commission Act author25 izes the Federal Trade Commission to investigate 


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1 and remedy consumer pricing practices that it deter2 mines to be unfair or anti-competitive, including 

3 pricing practices by Internet service providers, as 

4 Internet services are not provided on a common car5 rier basis and therefore are not subject to the com6 mon carrier limitation on Federal Trade Commission 

7 jurisdiction. 

8 SEC. 3. UNJUST, UNREASONABLE, OR UNREASONABLY DIS9 CRIMINATORY VOLUME USAGE SERVICE 

10 PLANS. 

11 (a) PROHIBITION.—It shall be unlawful for major 

12 broadband Internet service providers to offer volume usage 

13 service plans imposing rates, terms, and conditions that 

14 are unjust, unreasonable, or unreasonably discriminatory. 

15 (b) SERVICE PLAN ANALYSIS FILING REQUIRED.— 

16 Major broadband Internet service providers offering, or 

17 proposing to offer, volume usage service plans to any por18 tion of their service territory are required to file with the 

19 Federal Trade Commission a service plan analysis that— 

20 (1) identifies the different service tiers of 

21 broadband Internet service to be offered on the basis 

22 of different data transmission volumes; 

23 (2) specifies the different rates, terms, and con24 ditions to be imposed for such tiers; 


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1 (3) provides an analysis of the economic reason2 ableness and necessity for imposing such tiers— 

3 (A) based on assigning the capital costs of 

4 deploying the facilities needed to provide such 

5 different service tiers; 

6 (B) based on assigning different operating 

7 costs, if any, that are attributable to the provi8 sion of different service tiers; or 

9 (C) based on other factors and costs speci10 fied by the provider as a justification for the 

11 proposed volume usage service plan; 

12 (4) assess the impact of such service tiers on 

13 the ability of residential consumers to access widely 

14 used Internet services, including uses for agricul15 tural, medical, educational, environmental, library, 

16 and nonprofit purposes; and 

17 (5) specifies the basis upon which the different 

18 rates of charges under the service plan will be re19 vised over the following 3 years, and inflation factors 

20 or other variables that will be used to calculate or 

21 limit such revisions. 

22 SEC. 4. ENFORCEMENT BY THE FEDERAL TRADE COMMIS23 SION. 

24 (a) ENFORCEMENT BY FTC.—The Commission shall, 

25 in consultation with the Federal Communications ComVerDate Nov 24 2008 00:03 Jun 18, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2902.IH H2902

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1 mission, review each service plan analysis submitted under 

2 section 3(b) in order to determine whether the volume 

3 usage service plan is in violation of section 3(a). A viola4 tion of section 3(a) shall be treated as a violation of a 

5 rule defining an unfair or deceptive act or practice pre6 scribed under section 18(a)(1)(B) of the Federal Trade 

7 Commission Act (15 U.S.C. 57(a)(1)(B)). The Federal 

8 Trade Commission shall enforce this Act in the same man9 ner, by the same means, and with the same jurisdiction 

10 as though all applicable terms and provision of the Federal 

11 Trade Commission Act were incorporated into and made 

12 a part of this Act. 

13 (b) REVIEW AND REMEDIATION.—After an initial re14 view of any service plan analysis submitted under section 

15 3(b), if the Commission identifies any elements of such 

16 plan that appear to constitute a violation of section 3(a), 

17 the Commission shall notify the provider submitting such 

18 plan of such elements and of the steps the provider may 

19 take to correct such violations. The Commission shall, 

20 prior to initiating any action under subsection (e), review 

21 the steps taken by the provider to correct such violations. 

22 (c) FACTORS CONSIDERED.—In determining whether 

23 a major broadband Internet service provider has violated 

24 section 3(a), the Commission, in consultation with the 


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1 Federal Communications Commission, shall take into ac2 count, among other factors— 

3 (1) whether the service plan analysis filed with 

4 the Commission does not properly assign operating 

5 costs to each of the service tiers within the volume 

6 usage service plan; 

7 (2) whether the rates, terms, and conditions are 

8 not justified by the costs of deploying or operating 

9 the facilities required to provide and maintain the 

10 service tiers within the volume usage service plan; 

11 (3) whether the volume usage service plan im12 poses unjust, unreasonable, or unreasonably dis13 criminatory charges on residential consumers; 

14 (4) whether the volume usage service plan de15 ters or impedes— 

16 (A) the deployment of and access to widely 

17 used Internet applications and services; or 

18 (B) the participation of residential con19 sumers in the growth and development of re20 gional, national, and international economies; 

21 (5) whether the volume usage service plan un22 fairly penalizes consumers choosing to use high 

23 bandwidth Internet applications and services, includ24 ing those used for one-way or two-way video; 


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1 (6) whether the volume usage service plan has 

2 anti-competitive effects on the market for video de3 livery or the markets for Internet applications or 

4 services; 

5 (7) whether the volume usage service plan im6 poses anti-consumer rates, terms, or conditions that 

7 reflect insufficient competition in the local market 

8 for broadband Internet services; or 

9 (8) whether the volume usage service plan fails 

10 to comply with such other factors as the Commis11 sion, in consultation with the Federal Communica12 tions Commission, determines to be appropriate as 

13 set forth in the rules prescribed under section 5. 

14 (d) HEARINGS.—As a component of its review of each 

15 plan submitted under subsection (a), the Commission 

16 shall, after the provider submitting such plan has had an 

17 opportunity to take steps under subsection (b) to correct 

18 any violations identified by the Commission in its notice 

19 to the provider under such subsection, provide for the con20 duct of a public hearing by a Commissioner or other des21 ignated employee of the Commission, and for the collection 

22 of public comment and testimony with respect to such 

23 plan. Such hearing shall be conducted in a such a commu24 nity or communities in such State or States as the ComVerDate Nov 24 2008 00:03 Jun 18, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2902.IH H2902

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1 mission determines are most directly affected by the vol2 ume usage service plan. 

3 (e) CIVIL PENALTIES.— 

4 (1) Notwithstanding the penalties set forth 

5 under the Federal Trade Commission Act, any 

6 major broadband Internet service provider who vio7 lates section 3(a) shall be subject to injunctive relief 

8 requiring the broadband Internet service provider 

9 proposing or offering such plan to suspend, termi10 nate, or revise such plan. 

11 (2) In addition to injunctive relief, any major 

12 broadband Internet service provider who violates sec13 tion 3(a) may be subject to a fine of not more than 

14 $1,000,000, as the Commission determines is re15 quired to ensure ongoing compliance with this Act. 

16 SEC. 5. COMMISSION RULEMAKING REQUIRED. 

17 Within 180 days after the date of enactment of this 

18 Act, the Commission shall, by rule prescribed in accord19 ance with section 553 of title 5, United States Code, estab20 lish procedures for the review of volume usage service 

21 plans and for the conduct of public hearings pursuant to 

22 the requirements of this Act. 

23 SEC. 6. EFFECT ON OTHER LAWS. 

24 Nothing in this Act shall be construed to limit the 

25 authority of the Commission to bring enforcement actions 


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1 or take other measures under the Federal Trade Commis2 sion Act or any other provision of law. 

3 SEC. 7. DEFINITIONS. 

4 (a) IN GENERAL.—For purposes of this Act: 

5 (1) COMMISSION.—The term ‘‘Commission’’ 

6 means the Federal Trade Commission. 

7 (2) BROADBAND INTERNET SERVICE.—The 

8 term ‘‘broadband Internet service’’ means an Inter9 net protocol-based transmission service that enables 

10 users to send and receive voice, video, data, graph11 ics, or a combination thereof. 

12 (3) BROADBAND INTERNET SERVICE PRO13 VIDER.—The term ‘‘broadband Internet service pro14 vider’’ means any person who provides or offers to 

15 provide broadband Internet service, either directly or 

16 through an affiliate. 

17 (4) MAJOR BROADBAND INTERNET SERVICE

18 PROVIDER.—The term ‘‘major broadband Internet 

19 service provider’’ means a broadband Internet serv20 ice provider that, either directly or through an affil21 iate, provides broadband Internet service to 

22 2,000,000 or more subscribers, as further defined by 

23 the rules prescribed by the Commission pursuant to 

24 section 5. 


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1 (5) VOLUME USAGE SERVICE PLAN.—The term 

2 ‘‘volume usage service plan’’ means any choice of 

3 broadband Internet service offerings to a residential 

4 consumer that includes two or more different sets of 

5 rates, terms, or conditions that are directly or indi6 rectly based upon the amount of data actually trans7 mitted to or from the consumer within a fixed period 

8 of time. 

9 (6) RESIDENTIAL CONSUMER.—The term ‘‘resi10 dential consumer’’ includes any individual consumer 

11 who subscribes to broadband Internet services pri12 marily for purposes other than a for-profit business 

13 purpose, and includes subscribers that are nonprofit 

14 organizations or institutions of higher education. 

15 (b) COMMON TERMINOLOGY.—Except as otherwise 

16 provided in subsection (a), terms used in this Act have 

17 the meanings provided under section 3 of the Communica18 tions Act of 1934 (47 U.S.C. 153) and section 602 of such 

19 Act (47 U.S.C. 522). 

Æ 


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