The Federal Communications Commission says it will explore whether data caps imposed by some broadband Internet service providers (ISPs) are having a harmful impact on consumers and competition.
In a notice published on Tuesday, officials at the FCC said their formal inquiry was launched after the agency received hundreds of complaints from residential and small business users of some broadband services that “highlight how data caps are having tangible, adverse impacts on people’s lives.”
“For most people in the United States, rationing their internet usage would be unthinkable and impractical — but, for millions, limitations on how much data they can use online is a constant concern, and many are not happy about it,” FCC Chairperson Jessica Rosenworcel said in a statement.
Some broadband providers like Comcast, Cox and AT&T impose caps on the amount of broadband data a customer can use until they start accruing overage fees. Typically, the cap limits the amount of data to around 1 terabyte (TB) per month, which ISPs say is a generous amount that most households never use.
In the era of streaming video and online gaming, some customers do exceed that cap, particularly if they watch ultra high-definition (UHD/4K) video content or regularly play online games through Sony Playstation or Microsoft Xbox consoles. Data usage can also be impacted by the number of “smart” devices like cameras and doorbells in a household, and can even be influenced by the number of people connecting to a modem at a single time.
Nearly all the broadband providers that impose data caps also have plans that exclude them. AT&T has no hard data cap on its fiber-based Internet service, though the product is not available beyond a handful of major metropolitan areas. Comcast charges an extra $25 to $30 per month to remove data caps, but doesn’t enforce them on its prepaid Internet products or when customers enroll in a premium plan called “XFi Complete.”
In a separate statement on Tuesday, Rosenworcel recounted a story from an unnamed resident in Arizona, who said they work from home and have four children living in their household.
“Nearly every month I get a notice that we’re nearing our data cap, and then some months, we get a notice that we’ve gone over,” the resident said, according to Rosenworcel. “It’s so frustrating to get multiple texts and emails about this, and I know there really isn’t anything we can do. It’s not like we’re going to stop using the internet. You just know you have to suck it up and pay their overage fee…I shouldn’t have to experience this stress every single month.”
Broadband providers with data caps say they are necessary to prevent stress on their network. But Americans have increasingly told the FCC that the data caps are stressing them out.
“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, noting that many ISPs removed their data caps during the coronavirus health pandemic in order to accommodate the influx of Americans working from home.
It isn’t clear if the FCC has the legal authority to force ISPs to remove data caps. In a notice published this week, the agency said it is seeking public comment on that matter.
At least two FCC officials are already taking issue with the probe. In dissenting statements on Tuesday, FCC Commissioner Brendan Carr and Nathan Simington — both appointed by former President Donald Trump — suggested the FCC was acting beyond the scope of its authority by attempting to implement price control measures on ISPs that should otherwise be free to charge what they like for access to their services.
“With today’s Notice of Inquiry, the FCC itself starts down the path of directly regulating rates,” Carr wrote in a statement. “It does so 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.”
Simington characterized broadband data caps as “usage-based pricing,” and analogized the matter to a local café serving up coffee in different sized cups. If the FCC regulated coffee shops like they propose to do with ISPs and their data caps, Simington predicted cafés would “stop serving small coffee,” or “charge a lot more for small coffees,” or “charge a little more for all coffees.” His statement, which exceeded a page, continued to ramble about the price of coffee and attempt to explain why the two products are more similar than they appear.
“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,” he concluded.
