data caps

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Cable ISPs compare data caps to food menus: Don’t make us offer unlimited soup

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“Commenters have clearly demonstrated how fees and overage charges, unclear information about data caps, and throttling or caps in the midst of public crises such as natural disasters negatively affect consumers, especially consumers in the lowest income brackets,” the filing said.

The groups said that “many low-income households have no choice but to be limited by data caps because lower priced plan tiers, the only ones they can afford, are typically capped.” Their filing urged the FCC to take action, arguing that federal law provides “ample rulemaking authority to regulate data caps as they are an unjustified, unreasonable business practice and unreasonably discriminate against low-income individuals.”

The filing quoted a December 2023 report by nonprofit news organization Capital B about broadband access problems faced by Black Americans in rural areas. The article described Internet users such as Gloria Simmons, who had lived in Devereux, Georgia, for over 50 years.

“But as a retiree on a fixed income, it’s too expensive, she says,” the Capital B report said. “She pays $60 a month for fixed wireless Internet with AT&T. But some months, if she goes over her data usage, it’s $10 for each additional 50 gigabytes of data. If it increases, she says she’ll cancel the service, despite its convenience.”

Free Press: “inequitable burden” for low-income users

Comments filed last month by advocacy group Free Press said that some ISPs don’t impose data caps because of competition from fiber-to-the-home (FTTH) and fixed wireless services. Charter doesn’t impose caps, and Comcast has avoided caps in the Northeast US where Verizon’s un-capped FiOS fiber-to-the-home service is widely deployed, Free Press said.

“ISPs like Cox and Comcast (outside of its northeast territory) continue to show that they want their customers to use as much data as possible, so long as they pay a monthly fee for unlimited data, and/or ‘upgrade’ their service with an expensive monthly equipment rental,” Free Press wrote. “Comcast’s continued use of cap-and-fee pricing is particularly egregious because it repeatedly gloats about how robust its network is relative to others in terms of handling heavy traffic volume, and it does not impose caps in the parts of its service area where it faces more robust FTTH competition from FTTH providers.”

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Cable companies and Trump’s FCC chair agree: Data caps are good for you

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Many Internet users filed comments asking the FCC to ban data caps. A coalition of consumer advocacy groups filed comments saying that “data caps are another profit-driving tool for ISPs at the expense of consumers and the public interest.”

“Data caps have a negative impact on all consumers but the effects are felt most acutely in low-income households,” stated comments filed by Public Knowledge, the Open Technology Institute at New America, the Benton Institute for Broadband & Society, and the National Consumer Law Center.

Consumer groups: Caps don’t manage congestion

The consumer groups said the COVID-19 pandemic “made it more apparent how data caps are artificially imposed restrictions that negatively impact consumers, discriminate against the use of certain high-data services, and are not necessary to address network congestion, which is generally not present on home broadband networks.”

“Unlike speed tiers, data caps do not effectively manage network congestion or peak usage times, because they do not influence real-time network load,” the groups also said. “Instead, they enable further price discrimination by pushing consumers toward more expensive plans with higher or unlimited data allowances. They are price discrimination dressed up as network management.”

Jessica Rosenworcel, who has been FCC chairwoman since 2021, argued last month that consumer complaints show the FCC inquiry is necessary. “The mental toll of constantly thinking about how much you use a service that is essential for modern life is real as is the frustration of so many consumers who tell us they believe these caps are costly and unfair,” Rosenworcel said.

ISPs lifting caps during the pandemic “suggest[s] that our networks have the capacity to meet consumer demand without these restrictions,” she said, adding that “some providers do not have them at all” and “others lifted them in network merger conditions.”

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Please ban data caps, Internet users tell FCC

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It’s been just a week since US telecom regulators announced a formal inquiry into broadband data caps, and the docket is filling up with comments from users who say they shouldn’t have to pay overage charges for using their Internet service. The docket has about 190 comments so far, nearly all from individual broadband customers.

Federal Communications Commission dockets are usually populated with filings from telecom companies, advocacy groups, and other organizations, but some attract comments from individual users of telecom services. The data cap docket probably won’t break any records given that the FCC has fielded many millions of comments on net neutrality, but it currently tops the agency’s list of most active proceedings based on the number of filings in the past 30 days.

“Data caps, especially by providers in markets with no competition, are nothing more than an arbitrary money grab by greedy corporations. They limit and stifle innovation, cause undue stress, and are unnecessary,” wrote Lucas Landreth.

“Data caps are as outmoded as long distance telephone fees,” wrote Joseph Wilkicki. “At every turn, telecommunications companies seek to extract more revenue from customers for a service that has rapidly become essential to modern life.” Pointing to taxpayer subsidies provided to ISPs, Wilkicki wrote that large telecoms “have sought every opportunity to take those funds and not provide the expected broadband rollout that we paid for.”

Republican’s coffee refill analogy draws mockery

Any attempt to limit or ban data caps will draw strong opposition from FCC Republicans and Internet providers. Republican FCC Commissioner Nathan Simington last week argued that regulating data caps would be akin to mandating free coffee refills:

Suppose we were a different FCC, the Federal Coffee Commission, and rather than regulating the price of coffee (which we have vowed not to do), we instead implement a regulation whereby consumers are entitled to free refills on their coffees. What effects might follow? Well, I predict three things could happen: either cafés stop serving small coffees, or cafés charge a lot more for small coffees, or cafés charge a little more for all coffees.

Simington’s coffee analogy was mocked in a comment signed with the names “Jonathan Mnemonic” and James Carter. “Coffee is not, in fact, Internet service,” the comment said. “Cafés are not able to abuse monopolistic practices based on infrastructural strangleholds. To briefly set aside the niceties: the analogy is absurd, and it is borderline offensive to the discerning layperson.”

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FCC Republican opposes regulation of data caps with analogy to coffee refills

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Simington argued that regulating data caps would harm customers, using an analogy about the hypothetical regulation of coffee refills:

Suppose we were a different FCC, the Federal Coffee Commission, and rather than regulating the price of coffee (which we have vowed not to do), we instead implement a regulation whereby consumers are entitled to free refills on their coffees. What effects might follow? Well, I predict three things could happen: either cafés stop serving small coffees, or cafés charge a lot more for small coffees, or cafés charge a little more for all coffees.

Simington went on to compare the capacity of broadband networks to the coffee-serving capacity of coffee shops. He said that tiered coffee prices “can increase overall revenue for the café,” which can be invested “in more seats, more cafés, and faster coffee brewing.”

Simington is against rate regulation in general and said that regulation of usage-based plans (aka data caps) is just rate regulation with a different name. “Though only a Notice of Inquiry, because it is the first step down a path toward further rate regulation, I can’t support the item we’ve brewed up here. I dissent,” Simington wrote.

Carr: Data-capped plans “more affordable”

Carr’s statement said, “I dissent from today’s NOI because I cannot support the Biden-Harris Administration’s inexorable march towards rate regulation and because the FCC plainly does not have the legal authority to do so.”

Carr pointed to the recent 6th Circuit appeals court ruling that blocked the Rosenworcel FCC’s attempt to reinstate net neutrality rules under Title II of the Communications Act. Judges blocked enforcement of the net neutrality rules until the court makes a final ruling, saying that broadband providers are likely to win the case on the merits.

Carr said the FCC is “start[ing] down the path of directly regulating rates… by seeking comment on controlling the price of broadband capacity (‘data caps’). Prohibiting customers from choosing to purchase plans with data caps—which are more affordable than unlimited ones—necessarily regulates the service rates they are paying for.”

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