Ban On Data Caps Is 'Outdated,' Charter Tells FCC

A ban on data caps is “outdated and counterproductive,” Charter Communications argues in its newest filing with the Federal Communications Commission.

The company's statement comes in its bid to terminate two conditions of its 2016 merger with Time Warner Cable. When the FCC approved the deal, regulators required Charter to refrain from imposing usage-based billing until 2023. Regulators also required Charter to refrain from charging companies like Netflix fees to interconnect directly with Charter's servers.

“Marketplace developments have confirmed that the conditions are outdated and counterproductive,” Charter writes in its newest filing.

The company adds that data caps and interconnection polices of other broadband providers “have had no effect” on online video distributors' “ability to continue to flourish.”

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Charter also says the conditions place it “at a competitive disadvantage and could stand in the way of Charter’s ability to provide the best broadband internet access service possible.”

Earlier this year, Charter petitioned the FCC to terminate the merger conditions two years early, due to the recent growth of online video services.

That request is opposed by consumer advocacy groups, New York's utilities regulator, Roku and others.

Opponents argue that data caps are unnecessary, and that Charter could deploy data caps and usage-based billing in a way that gives customers economic incentives to purchase cable video subscriptions instead of services like Netflix or Amazon Prime.

Charter counters in its new filing that it “has no incentive” to harm online video distributors “for the simple reason that they are essential to its most important business -- broadband.”

The company notes that cord-cutting has made broadband key to its business.

“While video remains an important component of the business, Charter’s future will be driven by the success of its broadband service,” Charter writes.

Charter adds that in June, its internet-only subscribers consumed an average of 600 Gigabytes of data -- a figure Charter characterizes as “just over half of the industry standard one terabyte cap.”

(The country's largest broadband provider, Comcast, currently caps data at 1.2 TB per month, in 28 states.)

Charter says it “currently has no plans to change its business strategy,” but argues that usage-based billing could benefit consumers.

“There is also evidence that some consumers -- either those who do not consume a lot of data and/or those who are looking for a lower-cost plan -- may want a service where prices are based on the amount of data used,” Charter writes. “Other consumers may prefer a prepaid plan that can be renewed.”

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