The FCC to Look at Data Caps

FCC Chairwoman Jessica Rosenworcel asked the other Commissioners to join her in opening an investigation into broadband data caps. According to FCC rules, a majority of Commissioners must agree to open any official proceeding. For those not familiar with the data cap concept, it’s where an ISP bills extra for using more than a defined amount of broadband in a month.

Not all ISPs use data caps. The ISP that gets the worst press about data caps is Comcast, but it doesn’t bill data caps in all markets – seemingly only where it doesn’t have a lot of competition. Charter would love to bill data caps, but it has been prohibited from doing so because of an arrangement reached with the FCC when it got approval to buy Time Warner. That agreement just lapsed on May 18 of this year. We’ll have to wait to see if Charter will impose data caps – but it seems likely it will do so since the company asked permission from the FCC to impose data caps in 2021.

AT&T imposes Data caps on DSL and on some fiber connections. Astound broadband charges data caps in Washington, Oregon, and California. Cox has data caps that kick in after a user exceeds 1.25 terabytes per month. Mediacom imposes data caps on many of its plans. All of the products of the high-orbit satellite companies, HughesNet and Viasat, have severe data caps. So do cellular hot spot data plans.

It’s an interesting request by the Chairwoman. Under current FCC rules, the FCC has no authority to do anything about data caps. This authority went away when the previous FCC under Chairman Ajit Pai eliminated the regulation of broadband by killing Title II authority. Chairman Pai went even further and pushed remaining vestiges of any broadband regulation to the Federal Trade Commission.

This makes me wonder why Chairwoman Rosenworcel would try to open this docket. I can see several possibilities. First, this could just be done to show that the FCC cares about an unpopular ISP practice. It’s clear that the public hates data caps. I saw that the press that covers the FCC immediately flooded the news after this was announced. I would hope the Chairwoman would not be so callous as to investigate something for which the FCC is powerless to make any changes.

That leads to the second possibility that Chairwoman Rosenworcel believes that adding a fifth Commissioner will provide the votes needed to reinstate Title II authority or some updated version of it. Starting the investigation into data caps now might sync up well with renewed FCC regulatory authority and let the FCC make a popular change in the future to ban or modify data caps.

I’ve written several blogs over the years that make the argument that data caps are nothing more than a way for ISPs to extract extra payments from customers. There is zero justification from a cost perspective that residential customers that use more data than average cause any significant incremental cost for an ISP. ISPs buy wholesale broadband based on the busiest times of the usage in a month. Within the pile of broadband purchased to meet that peak need, it doesn’t matter how much broadband customers use as long as it doesn’t push up the busy hour for the month.

Additionally, the big ISPs that use data caps also engage in peering arrangements where they directly hand off broadband traffic to the largest web services like Google, Netflix, Facebook, and Microsoft. While there is a cost to create the peering points, once established, the amount of data sent through peering arrangements saves a huge amount of money compared to shipping this same traffic through the Internet.

It’s harder each year for affected homes to avoid data caps. Data caps accumulate both download and upload usage, and homes are increasingly using upload bandwidth that most folks don’t even realize. According to OpenVault, the average home in the U.S. now uses over 560 megabytes of data per month, an amount that keeps climbing. The household average as recently as 2017 was only 273 megabytes per month.

This will be an interesting process to watch. Chairwoman Rosenworcel has created a form for folks to describe their data caps stories. I’m sure that everybody who does so will be hoping that the FCC can help them – but that remains to be seen. It means getting a fifth Commissioner who is willing to reintroduce broadband regulation – something that is going to have a lot of opposition.

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