by Daniel A. Lyons
Free State Foundation
November 19, 2012
Ultimately, data caps and other pricing strategies are ways that broadband companies can distinguish themselves from one another to achieve a competitive advantage in the marketplace. Innovative pricing models can spread network costs in new ways and can promote greater efficiency by consumers, content providers, and the network operator itself. Only through experimentation and empirical measurement will providers find the optimal pricing solution – which may vary dramatically by network. Thus far, regulators have correctly rejected the call to interfere with this pricing flexibility absent a showing of market failure and consumer harm. The newest move to data caps or tiered pricing business models should not provide the impetus to deviate from that reasoned stance.

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