Data Caps Could Face New FCC Scrutiny

Federal Communications Commission chair Jessica Rosenworcel wants the agency to investigate internet service providers' use of broadband caps, which limit the amount of data subscribers can consume each month.

“It’s time the FCC take a fresh look at how data caps impact consumers and competition,” Rosenworcel stated last week, when she announced that she has already circulated a proposed “notice of inquiry” on the topic.

If a majority of the FCC agrees, the agency will seek comment about the reasons for data caps, current trends in data usage, and the impact that caps have on consumers, among other topics.

The FCC is currently deadlocked politically, with two Republican commissioners and two Democrats, but telecom lawyer Anna Gomez could soon fill the long vacant fifth spot. President Joe Biden nominated her to the agency last month, and the Senate Commerce Committee is scheduled to hold a confirmation hearing for her on Thursday.

The tone of Rosenworcel's announcement makes clear that she is skeptical about the data restrictions.

“When we need access to the internet, we aren’t thinking about how much data it takes to complete a task, we just know it needs to get done,” she stated.

The proposed notice of inquiry seeks “to better understand why the use of data caps continues to persist despite increased broadband needs of consumers and providers’ demonstrated technical ability to offer unlimited data plans.”

Currently, numerous broadband providers impose some form of data caps on customers, although details tend to vary.

For instance, Comcast caps broadband data at 1.2 Terabytes per month -- but only across two-thirds of its footprint. Customers who exceed that cap are charged an extra $10 per 50 Gigabytes, unless they pay extra for an unlimited data plan.

Cox also caps monthly data at 1.2 Terabytes, and generally charges subscribers an extra $10 per 50 Gigabytes.

AT&T doesn't impose data caps on its fiber network, but caps data on other home-based plans.

Wireless companies typically offer a variety of data plans, including ones that claim to offer “unlimited” data but actually slow down connection speeds based on a combination of how much data subscribers consumed and network congestion.

Data caps have long been controversial, especially when deployed on robust wired networks that can handle a large amount of traffic.

Last year, Senators Ray Luján (D-New Mexico) and Cory Booker (D-New Jersey) introduced a bill that would prohibit internet service providers from either capping data or imposing pay-per-byte billing, except for “reasonable” network management purposes.

Consumer groups that oppose caps contend that they're arbitrary, discourage cord-cutting, and hinder people's ability to engage in a variety of online activities -- ranging from distance learning to telemedicine to gaming.

Advocates also say data caps (and pricing schemes that charge by the byte) don't help manage network traffic, unless tied to network congestion.

The advocacy organization Public Knowledge said last week that it hopes the FCC moves forward with the inquiry.

"In addition to burdening subscribers, these data caps potentially burden the economy as a whole,” Public Knowledge Senior Vice President Harold Feld stated. “By limiting the online activity of consumers, they severely limit the capacity for innovation.”

But even if the FCC launches the inquiry, the agency likely lacks the power to regulate providers' use of data caps unless it also reclassifies broadband as a “telecommunications” service, regulated under Title II of the Communications Act, Feld tells MediaPost.

Broadband is currently considered an “information” service, subject only to limited regulation under Title I of the Communications Act.

“It would be very difficult for them to do anything with broadband classified as Title I,” Feld says.

He adds that if broadband remains an information service, an investigation into data caps could “basically serve a shaming function.”

An investigation also may help persuade Congress to take action, he says.

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