With Trump Loss, Charter Backs Off FCC Request To Allow Broadband Caps

from the you-can't-always-get-what-you-want dept

To be very clear: American consumers don't like broadband usage caps. At all. Most Americans realize (either intellectually or on instinct) that monthly broadband usage caps and overage fees are little more than monopolistic cash grabs. They are confusing, frustrating price hikes on captive customers that accomplish absolutely none of their stated benefits. They don't actually help manage congestion, and they aren't about "fairness" -- since if fairness were a goal you'd have a lot of grandmothers paying $5-$10 a month for broadband because they only check their email twice a day.

Enter U.S. cable giant Charter (Spectrum), which has spent a good chunk of the last year trying to get the FCC to kill the merger conditions applied as part of its 2015 $79 billion acquisition of Time Warner Cable. Those conditions, among other things, required that Charter adhere to net neutrality (despite the fact that the GOP has since killed net neutrality rules), and avoid usage caps and overage fees. Both conditions had 7 year sunset clauses built in, and Charter, eager to begin jacking up U.S. broadband consumer prices ever higher, has been lobbying to have them killed two years early.

To get its way, Charter petitioned the FCC, falsely claiming that such caps are "popular" among consumers. They even employed the help of the Boys and Girls Club, which was apparently happy to petition the FCC on Charter's behalf even if that meant selling out their constituents. Unfortunately for Charter, COVID has brought renewed attention on the fact that usage caps are glorified price gouging bullshit. And with industry BFF Ajit Pai headed for the exits, Charter has been forced to back off its request:

"Spectrum internet customers can be assured of an additional two years of unlimited internet service after Charter Communications dropped its petition Tuesday with the FCC to allow the cable company to introduce data caps. The FCC’s Wireline Competition Bureau acknowledged receipt of Charter’s withdrawal of its petition to end a prohibition on the company imposing data caps and usage-based pricing mechanisms two years before the original agreement with the regulator expires on May 18, 2023."

Granted this doesn't mean that Charter won't simply turn around in two years when the conditions sunset and impose the restrictions anyway. The problem so far has been the optics of imposing predatory price hikes in the middle of a pandemic where broadband is seen as essential to survival. Even then, such concerns certainly didn't stop Comcast from recently expanding its own caps, or AT&T from restoring theirs despite the accelerating pandemic and millions of Americans still struggling to get online for work or education.

Even during COVID US broadband monopolies have tried to claim that such monthly usage restrictions are about "fairness." But they've never been about fairness. ISPs love to insist they just want to "experiment with price differentiation," but you will never see a giant ISP offer a super cheap plan for people like your grandma who only check the Weather Channel website and their email a few times a day. And they don't do that because the goal is to drive up the costs of everybody's connection over the longer haul to please investors' needs for higher quarterly returns.

Cable giants like Comcast and Charter can get away with this because in most U.S. markets, their only competition is a phone company that hasn't seriously upgraded its DSL lines since 2004 or so, or there's no competition at all. If the market actually saw competition and had functional regulatory oversight, you might see plans more closely tailored toward your actual usage. But in a market absent of real pricing competition and overseen by fecklessly captured regulators, what you get instead is endlessly higher prices, usually in the form of sneaky, misleading fees.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: broadband caps, competition, fcc
Companies: charter, charter spectrum