Brazil Has To Pause Adoption Of Broadband Usage Caps After Consumers Revolt

from the pay-more-for-the-same-service! dept

It appears to have only taken the better part of the last decade, but we finally appear to be reaching the point where people have finally realized that broadband caps aren't about managing congestion, they're about turf protection. Here in the States, companies like Suddenlink, Comcast AT&T and CenturyLink have all rushed toward adopting caps and overage fees as not only a pointed weapon against streaming video competitors like Netflix, but as a nifty way to charge more money than ever for a product that's actually getting cheaper and cheaper to provide.

The same thing is happening in Brazil, where ISPs have convinced telecom regulator Anatel it's absolutely necessary to shift from flat-rate pricing to metered usage lest the Internet explodes (it's surely just coincidental that Netflix's popularity is soaring). And, like here in the States, regulators have been more than happy to help repeat broadband industry claims that you need low caps and overage fees because it's just not possible to continue offering unlimited broadband:

"...The president of the telecom watchdog Joao Resende told journalists at a press event yesterday that it is unlikely that Anatel will challenge operators, since "not all models can accommodate an unlimited service provision and also because the networks won't be able to cater for everybody." Resende added that operators are guilty for making users think that unlimited service provision would be available indefinitely.

The problem is that most consumers and press outlets are perfectly capable of reading earnings reports, and realize that flat-rate broadband has been perfectly sustainable, and that caps and overage fees are really just massive price hikes on uncompetitive markets:

"Companies argue that caps are needed to prevent network congestion, but continued investment in infrastructure to cope with forecast demand consistently announced by these same firms in recent years suggest that usage caps really have nothing to do with network congestion issues. In addition, bandwidth costs for telcos largely remain fixed, and despite major growth in their user base, providers such as Vivo are paying less today for raw bandwidth than they were a decade ago. So really, there is no technical or economic justification for a cap."

Anatel had been pondering regulation that would have codified this shift toward metered usage, but the unprecedented amount of public backlash appears to have the regulator re-thinking its agenda:

"According to Anatel, the decision to let service providers introduce the data limits has now been stalled due to the several complaints that were received, and will remain on hold until the proposals for the new plans have been submitted by operators and analyzed by the watchdog."

That doesn't mean Anatel won't ignore consumers anyway, but it does highlight how consumer activism and revolt can at the very least still give telecom regulators pause. Instead of letting ISPs wage war on innovative services with unnecessary usage caps, less beholden regulators have realized their focus should be on improving broadband competition, which in turn improves speeds (Akamai currently ranks Brazil 80th in overall broadband speed) but organically punishes neutrality violators and prevents carriers from being able to pummel captive markets with such glorified rate hikes.

Filed Under: anatel, brazil, broadband, data caps, usage caps