Commentary

Netflix Presses FCC To Condemn Data Caps

Netflix is calling for the government to crack down on broadband providers that impose data caps on their subscribers.

Data caps "discourage a consumer’s consumption of broadband, and may impede the ability of some households to watch Internet television in a manner and amount that they would like," Netflix says in a new filing with the Federal Communications Commission.

Netflix is urging the FCC to rule that all data caps on wireline networks, as well as "low" data caps on mobile networks, may "unreasonably limit Internet television viewing."

The online video company adds that data caps (as well as pay-per-byte billing) don't seem to have any purpose other than to make online video more expensive for consumers. Consumer advocates have made the same point, arguing that data caps don't help manage congestion on wireline networks, given that the caps aren't pegged to current network conditions.

The company's filing comes as broadband providers are increasing their use of data caps. Comcast, for instance, recently brought its data caps to several new markets, including Chicago.

Comcast's broadband customers subject to caps now face overages ranging from $10 to $200, if they consume more than 1 Terabyte of data per month. Until this April, the maximum amount that people could consume before getting slammed with overages was just 300 GB a month.

AT&T also recently stepped up enforcement of its wireline data caps, which start at 150 GB a month for DSL users, and range from 300 GB to 1 TB a month for U-Verse subscribers, depending on the speed of service.

Netflix says in its filing that watching 3.4 hours of its streams in high definition can use 10 GB of data, while watching the same amount in Ultra HD quality would consume almost 24 GB. "A data cap or allotment of 300 GB of data per month or higher is required just to meet the Internet television needs of an average American," the company writes. "An above average television watcher, a multi-occupant household, or a consumer wishing to watch in 4K requires a much higher cap."

Coincidentally, the same day that Netflix called for FCC action, AT&T said it would exempt DirecTV streams from mobile users' data caps. That move obviously gives AT&T's users an incentive to watch streams from DirecTV, which AT&T acquired last year, as opposed to Netflix, Hulu, Amazon or other providers.

Advocacy group Free Press, which previously criticized broadband providers for exempting their own material from data caps, was quick to condemn AT&T's move. "AT&T seems intent on favoring its own video content under the DirecTV brand," Free Press policy director Matt Wood said in a statement. "That harms both diverse content creators and internet users who already pay so much for their wireless service."

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