An End to Data Caps?

All of the major ISPs that were enforcing data caps have lifted those caps in response to the COVID-19 crisis. This includes AT&T, Comcast, Cox, Mediacom, and CenturyLink. All of these companies justified data caps as a network management tool that was in place to discourage overuse of the network. That argument no longer holds water if these ISPs eliminate the during a crisis that is overtaxing networks more than we are likely to ever see again.

These companies eliminated the caps as a result of political pressure and from a mass public outcry. The caps were eliminated to make broadband more affordable in a time when millions of people are becoming unemployed. By eliminating the caps during this crisis, these ISPs have publicly admitted that the caps were about making money and not for any issues related to network traffic.

The lame justification these ISPs gave for data caps was always weak when other large ISPs like Charter, Verizon, Altice, Frontier, and Windstream never implemented data caps. A few ISPs on that list like Frontier and Windstream have some of the weakest networks in the country yet never sought to implement data caps as a traffic control measure.

AT&T has been the king of data caps. They have data caps that kick in as low as 150 gigabytes of monthly broadband usage on DSL lines. AT&T’s fixed wireless product for rural markets has a data cap that kicks in at 250 GB. Interestingly, customers buying the 300 Mbps on fiber have a 1 terabyte data cap while customers buying gigabit broadband on fiber are allowed unlimited usage. This also proves that the data caps aren’t about traffic control – the caps are removed from the largest data users. The AT&T caps are to encourage somebody buying 300 Mbps to upgrade to the faster service. AT&T is also the king of overage charges. For DSL and fixed wireless, the overage charges are $10 for each 50 GB, with a maximum monthly overage of a whopping $200. The monthly dollar cap on 300 Mbps service is $100.

Mediacom had the next lowest data caps at 400 Mbps. Comcast and Cox have had data caps at 1 TB. It’s been reported by customers that the companies aggressively enforce the caps. CenturyLink has mostly not billed the data caps, but the fact that they eliminated the caps during this crisis likely means they were billing it to some customers.

To put these data caps in context, OpenVault says that at the end of 2019 that the average households used 344 gigabytes of data, up from 275 gigabytes a year earlier. More germane to data caps, OpenVault says that nearly 1% of homes now use 2 terabytes per of data month and 7.7% use over 1 terabyte per month. The percentage of homes using over 1 terabyte climbed from 4% a year earlier. AT&T has likely been cleaning up with data caps charges while Comcast was just starting to see some real revenue from the caps.

What remains to be seen is if these ISPs reintroduce data caps sometime later this year. They can no longer make a straight-faced claim that data caps are in place to dissuade overuse of the network. If data caps had that kind of impact on networks, then during the crisis the ISPs should have tightened the data cap threshold to protect the many new households that are working from home or doing schoolwork remotely. The data caps have always been about money, nothing else.

Unfortunately, we have no recourse other than a loud public outcry if these ISPs renew the data caps. The FCC has completely washed its hands of broadband regulation and killed its authority to do anything about data caps. Most tellingly, when FCC Chairman Ajit Pai released a plea to ISPs to “Keep Americans Connected”, that plea didn’t even mention data caps. Chairman Pai asked ISPs not to disconnect customers for not paying and asked ISPs to provide more public hotspots.

I bet that when this crisis is over that the big ISPs will quietly introduce data caps again. Even before this crisis, almost 9% of homes routinely used more than a terabyte of data, and the data caps are a huge moneymaker for the big ISPs that they are not willingly going to give up. During this crisis, a lot of routine functions are going go virtual and I expect a lot of them will stay virtual when the crisis is over. It wouldn’t be surprising a year from now to see 20% of homes routinely exceeding a terabyte of usage each month.

I think these ISPs will be making a huge mistake if they introduce data caps a few months, or even a year from now. Millions of people found themselves unable to work or school from home due to poor broadband. In the current environment a big public outcry against bad ISP behavior has a high chance of bringing Congressional action. Almost nobody, except the most partisan politicians would vote against a bill that bans data caps. The ISPs should be afraid of other restrictions that might come along with such a bill.

4 thoughts on “An End to Data Caps?

  1. Sorry — given that the FCC was so totally in the pocket of the big ISPs and given that the elimination of net neutrality was, undoubtedly, *exactly* intended to enable data caps and slow lanes as a way for the ISPs to make money without adding any new value… I’m totally with you but I don’t see any hope of preventing their return to data caps after this subsides, to be followed by even more egregious rent seeking practices.

    The reality is, ISPs don’t have any growth model that works. Once they are in place, they’re dumb pipes. They don’t have any way to grow revenues as ISPs except by cutting costs or charging more for what they’re already delivering.

    In terms of branching into new businesses, they’re touting 5g, but the only one they really have in mind is trying to wedge into entertainment. ATT, of course, gave away their 5g game recently: ATT TV. Oh boy, when I think high quality entertainment, I think ATT.

    It’s as though everyone is *trying* to be Microsoft of the early 2000’s. It’s as if covid wasn’t depressing enough already, all by itself.

    Like

  2. Data caps are like selling you a shiny new car, but only allowing it to achieve 20 mph. Your car, you paid for it, but not allowed to ever “floor it.”

    Data caps are only to suck additional money out customers. Sell you X, but charge you for Y. Crap networks, anyway.

    Like

    • I like the car analogy, but I would go with this: data caps are like selling you a shiny new car, and it can go 100 miles per hour, but you’re only allowed to drive it for 223 miles per month. Sure you can drive really fast, but if you do you’ll use up your miles in the first two hours and fourteen minutes.

      Note: these are not arbitrary numbers but the real scenario for a user with 1 Gbps connection and 1 TB data cap – running at 1 Gbps exhausts the data cap in two hours and fourteen minutes.

      Like

  3. Being a HughesNet customer with a 50G cap and $3/GB overages with no maximum, it was common to spend over $200 per month before COVID. Now they claim they’ve lifted the cap and we are having Zoom meetings and streaming movies for the first time!
    In the case of satellite, with limited capacity, I suspect that network performance will indeed suffer. We have noticed Zoom quality has degraded and Netflix sometimes doesn’t works compared to two weeks ago.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s