Broadband Data Caps Mysteriously Disappear When Competition Comes Knocking

from the funny-how-that-works dept

We've noted for years how broadband data caps (and monthly overage fees) are complete bullshit. They serve absolutely no technical function, and despite years of ISPs trying to claim they "help manage network congestion," that's never been remotely true. Instead they exist exclusively as a byproduct of limited competition. They're a glorified price hike by regional monopolies who know they'll see little (or no!) competitive or regulatory pressure to stop nickel and diming captive customers.

The latest case in point: Cox Communications employs a 1,280 GB data cap, which, if you go over, requires you either pay $30 per month more for an additional 500 GB, or upgrade your plan to an unlimited data offering for $50 more per month. While Cox's terabyte-plus plan is more generous than some U.S. offerings (which can be as low as a few gigabytes), getting caught up in whether the cap is "fair" is beside the point. Because, again, it serves absolutely no function other than to impose arbitrary penalties and additional monthly costs for crossing the technically unnecessary boundaries.

And, mysteriously, when wireless broadband providers begin offering fixed wireless services over 5G services in limited areas, Cox lifts the restrictions completely to compete:

"With unlimited home wireless broadband from T-Mobile and Verizon starting to take a dent out of Cox Communications’ customer base, the cable operator is shoring up a defensive position by waiving its arbitrary data cap for existing customers signed up for gigabit speed service in select areas...The fact Cox is willing to waive its own arbitrary data cap for marketing and competition reasons further demonstrates that artificial limits imposed on internet service have nothing to do with congestion, “fairness,” or network management."

The problem, of course, is that 5G wireless competition isn't consistently available, and won't be for millions of Americans deemed too unprofitable to adequately serve. 83 million Americans live under a broadband monopoly that sees no competitive pressure. And whereas in a functioning market regulators would then step in to either regulate prices or embrace policies that drive more competition to market, the U.S. generally suffers from regulatory capture (aka doing whatever the regional and politically powerful telecom monopolies want). As a result, the U.S. remains mired in mediocrity in nearly every meaningful broadband metric except one: we exceed at charging U.S. consumers way more than the global developed nation average.

Like net neutrality violations, privacy violations, high prices, and terrible customer service, arbitrary, confusing, and punitive broadband usage caps are just another symptom of limited competition. But the majority of both U.S. political parties not only haven't been doing anything to fix that problem, it's fairly rare you can get anyone to admit the very obvious problem is even real. Instead, we get some nebulous hand waving about the "digital divide," billions more in tax breaks, subsidies, and regulatory favors thrown at entrenched regional monopolies, and little substantive change.

Filed Under: broadband, competition, data caps, network management

Broadband Provider Wide Open West Tries To Justify Unnecessary Broadband Caps Using... Pizza?

from the monopolies-are-like-pepperoni dept

For a long time now, we've explained how broadband usage caps are bullshit. They serve no technical purpose on the network, and aren't genuinely helpful in managing congestion. Their real role is several fold: one, they let ISPs charge US consumers (who already pay some of the highest prices in the developed world) even higher rates; two, they let ISPs falsely advertise a lower price than they actually charge; and three, they can be abused anticompetitively (exempting an ISP's own streaming content from caps while still penalizing a competitor like Netflix).

Despite this, regulators historically haven't much cared, even during a pandemic showcasing how affordable broadband is essential for survival. And ISPs keep slowly expanding the adoption of such caps across the states in the hopes nobody will notice (think of the boiling frog metaphor with you as the frog).

That includes Colorado-based Wide Open West (WOW), which recently announced it would be implementing new usage caps and overage fees for its subscribers starting June 1, 2021. Utterly tone deaf to the fact there's a pandemic and economic crisis going on, the ISP attempts to soften the blow by pretending that costly, confusing broadband caps and overage fees are akin to delicious pizza:

"What's a monthly data usage plan? Let us illustrate …

Imagine that the WOW! network is a pizza. Piping hot. Toppings galore. Every WOW! customer gets their own slice of pizza, but the size of their slice is dependent on their Internet service plan. While customers who subscribe to 1 Gig get the largest slices, those with Internet 500 get a slightly smaller piece, and so on. But, it's all the same delicious, high-speed pizza that you know and love."

To be clear, broadband is not remotely comparable to pizza. On a properly constructed and funded network you don't just suddenly run out of "pizza" because there's a few gluttons about. Smart network optimization technology is routinely used to ensure that doesn't happen. Also note that while WOW is busy talking about pizza, at no point can they be bothered to clearly state what their new, arbitrary usage limit is (1 to 3 terabytes depending on your plan):

"Now, say you're not full after your slice and you grab another. That extra slice is like a data overage. Don't worry—we got extra pizza... umm, data... just in case. If you exceed your data allowance, we'll automatically apply increments of 50GB for $10 to your account for the remainder of the current calendar month. Total overage charges will not exceed $50 per billing statement no matter how much data you use. Even better—the first time you experience a data overage, we'll proactively waive fees."

How nice of you to "proactively waive fees" from arbitrary and unnecessary restrictions (WOW used to use a lack of a cap as marketing bragging rights). Again, there's no reason for these restrictions to exist outside of boosting revenues. And it's a tactic that only works thanks to limited competition, as many of these customers will have no alternative ISP to switch to. ISPs also know people get bogged down in conversations about whether "one terabyte is generous," which distracts from the reality that these limits shouldn't exist at all on a properly built network.

ISPs spent many years trying to pretend that usage caps were necessary due to congestion. But after data scientists, network engineers, and even the industry's own leaked memos repeatedly proved that wasn't true, the industry finally stopped. These days, ISPs will usually just implement the restrictions without bothering to justify them, knowing there's no regulatory or competitive penalty. But if you're "lucky," you'll get an ISP which feels inclined to get creative as they try to pretend that screwing you over is something you should actively enjoy.

Filed Under: broadband, broadband caps, data caps, pizza
Companies: wide open west, wow

Comcast Expands Its Bullshit Usage Caps...In The Middle Of A Pandemic

from the read-the-room dept

Contrary to what some try to claim, broadband usage caps have always been bullshit. They serve absolutely no technical function, do not help manage congestion, and exist exclusively to nickel-and-dime captive customers in monopolized U.S. markets. Worse, they can be used by incumbent ISPs anticompetitively to hamstring competitors in the streaming video and other markets.

Comcast, for years, has been slowly expanding these unnecessary and costly restrictions in line with the frog in the boiling pot fable (you're the frog, unless that wasn't clear). The only area the company hadn't yet deployed the restrictions was in the northeast, largely due to the added competition Comcast sees in the area from uncapped Verizon FiOS. Apparently Comcast has gotten tired of waiting, so they've announced that they've implemented a new 1.2 terabyte cap across the Northeast, which will be fully implemented by March:

"...effective March 1st, residential customers will begin facing overlimit fees for exceeding their data allowance at a rate of $10 for each 50 GB of excess usage, up to a maximum of $100 a month. Customers will not be credited for unused data, cannot rollover unused data, or be charged less than $10 in overlimit fees, regardless if one used 1 MB or 49 GB over the 1.2 TB allowance.

Customers approaching their usage limit will receive email, text messages, and Xfinity X1 on-screen notifications upon reaching 75% (email only), 90%, and 100% of 1.2 TB of data usage. Overlimit fees that subsequently start accumulating will be noted in email and X1 on-screen notifications for each additional 50 GB of usage over 1.2 TB, up to the maximum overage charge of $100."

Folks will quickly (as usual) get caught up in a discussion about how 1 terabyte a month is "fair," ignoring, again, that these restrictions serve no purpose outside of jacking up U.S. broadband bills, which, even under flat-rate pricing, are some of the most expensive in the developed world thanks to monopolization and corrupt state and federal regulators. The industry doesn't even try to pretend that such restrictions "help manage congestion" (they do not). Nor do they help manage "heavy users," which can already be shoved toward more expensive business-class tiers when needed.

It's not a great look for Comcast during a pandemic when broadband is essential and countless Americans are already struggling to pay their bills. Comcast must have done the calculus and figured the outrage will likely be muted enough to prevent any meaningful backlash. After all, unless you live in a Verizon FiOS market in the Northeast, most of these users don't have any competing ISPs to flock to. And historically, neither party has much cared that entrenched monopolies routinely rip off American consumers with costly and confusing restrictions that serve no purpose outside of jacking up already high monthly bills.

With neither competition nor adult regulatory oversight to keep Comcast in check, who is going to do anything about it?

Filed Under: broadband, competition, covid-19, data caps, pandemic, streaming, usage caps, video conferencing
Companies: comcast

Bullshit Broadband Usage Caps Are Hugely Profitable During A Pandemic

from the fancy-that dept

We've noted for years how broadband providers have increasingly imposed arbitrary, confusing, and punitive usage caps and overage fees to cash in on the lack of competition in US broadband. Not only have industry executives admitted these limits aren't technically necessary, they've increasingly been abused to hamstring competitors. AT&T, for example, doesn't impose the limits on its broadband customers who use its streaming video service (AT&T Now), but will impose the added charges if you use a competitor like Netflix.

For more than a decade ISPs have slowly but surely imposed such limits hoping that consumers wouldn't notice (think of the frog in the pot of boiling water metaphor with you as the frog). But with most folks stuck at home during an historic health and economic crisis, bandwidth usage (and thereby profits gleaned by usage caps) has grown significantly. In fact, data from OpenVault indicates that the number of broadband "power users," or users who consume more than a terabyte per month, has doubled over the past year:

"In Q3 2020, 8.8 percent of broadband subscribers used at least 1TB per month, up from 4.2 percent in Q3 2019, according to a study released yesterday by OpenVault. OpenVault is a vendor that sells a data-usage tracking platform to cable, fiber, and wireless ISPs and has 150 operators as customers worldwide. The 8.8- and 4.2-percent figures refer to US customers only, an OpenVault spokesperson told Ars."

Cross this phony threshold and you wind up owing your ISP even more money, despite Americans already paying some of the highest prices for broadband in the developed world -- a notorious metric that doesn't even include the additional costs incurred by usage caps, overage fees, and other nonsensical surcharges the industry uses to falsely advertise a lower rate. If you're a telecom monopoly, this is all great. If you're an American struggling to pay your broadband bill, suddenly higher due to household video streaming, gaming, school work, regular work, and video conferencing, it's decidedly less so.

OpenVault of course advises ISPs to embrace caps because it means more users will be paying more money over time than ISPs that don't:

"In potentially bad news for customers, OpenVault seems to be urging ISPs that haven't imposed data caps to adopt them. "The goal for network operators is to ensure that subscribers who consume the most bandwidth are in faster, higher ARPU [average revenue per user] speed tiers," OpenVault said. "Usage-based billing operators are achieving this goal more, on average, than network operators who utilize flat-rate unlimited billing."

But again, the problem is that such restrictions are bullshit. They do not manage congestion. They aren't required for network management because they don't really help network strain. They're glorified price hikes by natural monopolies on captive customers who can't vote with their wallets. They're not even necessary as a product differentiator, as the heaviest users can already be shoved toward business-class tiers. They exist solely to extract an additional pound of flesh from uncompetitive U.S. broadband markets. And now they're being exploited during a national crisis.

The Trump FCC made some performative, empty gestures toward this problem earlier this year when it announced an entirely voluntary pledge with ISPs, who agreed they'd temporarily stop charging late fees or imposing usage caps. Many ISPs not only ignored their promise, but it was only a few months before most ISPs returned to business as usual, hitting struggling Americans with all manner of spurious additional charges.

Of course you'd never realize such limits are bullshit reading outlets like the Wall Street Journal, which recently parroted industry claims like caps are necessary to "keep the prices of internet packages stable by shifting the extra cost to heavy users," (nonsense, everybody pays more under such a model as the average usage rate creeps skyward), or "protect the majority of subscribers from having rates raised every year" (also nonsense, given U.S. broadband flat rate prices and other fees routinely increase your costs either way).

It's just monopolies being monopolies, and there's a sizeable industry of think tankers, consultants, academics, and lobbying firms funded by the U.S. telecom sector whose entire job is to pretend that's not actually a problem.

Filed Under: broadband, data caps, overage fees, profits, usage caps

Monopolistic U.S. ISPs Take Full Advantage Of The Covid Crisis

from the empty-promises dept

We've noted for years that broadband usage caps are bullshit. Leaked ISP documents and public executive statements have repeatedly made it clear that usage caps and overage fees are just glorified price hikes on the backs of captive customers, only made possible due to industry monopolization (and the regulatory capture and Congressional corruption that lets them get away with it).

This was a problem for decades, made worse during a crisis in which broadband is essential for survival (health care, work, remote learning). The Trump FCC made some performative, empty gestures toward this problem earlier this year when it announced an entirely voluntary pledge with ISPs, who agreed they'd temporarily stop charging late fees or imposing usage caps. Many ISPs not only ignored their promise, but it was only a few months before most ISPs returned to business as usual, namely ripping off captive customers with spurious fees and surcharges thanks to the accountability vacuum its net neutrality repeal created.

Apparently trying to "help" shed some light on the problem, the Wall Street Journal this week penned a piece discussing usage caps and how they impact ordinary people. Unfortunately, half the story is filled with bullshit industry claims that simply aren't true. Like here, where the Journal amplifies a purported expert who tries to claim that usage caps are necessary to recoup network investment costs:

"Data caps also help keep the prices of internet packages stable by shifting the extra cost to heavy users, according to Mark Trudeau, chief executive of broadband-data firm OpenVault, which tracks more than a million U.S. subscribers. “It protects the majority of subscribers from having rates raised every year,” he said."

This is nonsense. For one, U.S. consumers already pay some of the highest prices in the developed world for broadband due to monopolization, regulatory capture, and obvious Congressional corruption. That's before you even get to arbitrary usage caps, overage fees, or the ocean of misleading below the line surcharges big ISPs use to covertly jack up the advertised price post-sale. Caps don't "protect the majority of subscribers from having rates raised," they're entirely artificial constructs that make high prices, even higher. Worse, they are abused anti-competitively by incumbent ISPs.

Undaunted, the Journal also parrots the false claim that such restrictions are necessary to help "manage network congestion":

"On top of helping internet providers generate more revenue, data limits are a way to alleviate congestion and strain on the network. The internet’s backbone held up pretty well during the early days of the pandemic, despite significant pressure."

The U.S. internet held up pretty well because our core network infrastructure was solid (it's the "last mile" that sucks due to limited competition) and network engineers are smart. But as executives like Sonic CEO Dane Jasper have noted, static caps applied on all users don't actually help manage congestion. Leaked Comcast documents and independent research have repeatedly confirmed this, forcing the industry to back away from the justification entirely a few years back. Extremely heavy users certainly exist, but ISPs already have an option for driving those users to more costly plans: migrating them to business-grade service.

While it's nice the Journal could cover the problems created during Covid thanks to entrenched monopolies U.S. lawmakers refuse to do anything about, peppering the piece with bullshit justifications for price gouging (without once even mentioning a lack of competition or sky high flat-rate prices in the sector) only helps perpetuate bullshit business practices in the first place.

Filed Under: broadband, captive market, covid-19, data caps

Bizarre Court Ruling Helps Cable Broadband Monopoly Charter Tap Dance Around Merger Conditions

from the our-courts-might-be-broken dept

Eager to impose higher rates on its mostly captive customers, Charter Communications (Spectrum) has been lobbying the FCC to kill merger conditions affixed to its 2015 merger with Time Warner Cable. The conditions, among other things, prohibited Charter from imposing nonsensical broadband caps and overage fees, or engaging in the kind of interconnection shenanigans you might recall caused Verizon customers' Netflix streams to slow to a crawl back in 2015. The conditions also involved some fairly modest broadband expansion requirements Charter initially tried to lie their way out of.

But with the GOP having neutered FCC authority over broadband providers (including the axing of net neutrality rules), Charter obviously is eager to take full advantage. So on one hand, they've been engaged in some fairly dodgy lobbying of the FCC to scuttle the conditions, which already had a seven year sunset provision (they expire in 2 years anyway). On the other hand, the telecom-backed Competitive Enterprise Institute (CEI) took a different tack, and filed suit against the conditions, somehow convincing four Charter customers to sue under the argument the conditions (not the merger) raised consumer prices.

This being America, the telecom-backed think tank last week scored a favorable ruling thanks to the US Court of Appeals for the District of Columbia Circuit. In its ruling (pdf), the court completely bought into the CEI's arguments that conditions crafted by consumer advocates, aimed at protecting consumers, somehow hurt consumers. As such, the court vacated two of the conditions -- one banning Charter from having to offer lower-cost broadband plans, and one prohibiting ISPs from engaging in dodgy behavior out at the edge of the network (interconnection).

In its ruling, the court proclaims that the restrictions on interconnection drove up consumer prices:

"To begin, the condition plainly caused New Charter to forgo revenue from edge providers. Before the merger, Time Warner, the largest broadband provider among the merging companies, raised substantial revenue from paid interconnection agreements. So did Bright House. But the merger condition prohibits New Charter from using those same revenue sources."

But that's a misrepresentation of what the conditions did. If you'll recall, networks of all kinds for years engaged in settlement free peering. As incumbent ISPs faced more competition from the likes of Netflix in the TV space, transit and streaming video companies alike accused ISPs like Verizon and Charter of intentionally letting their peering points get congested to force companies to pay significantly higher rates if they wanted their traffic to reach an incumbent ISP's customers. The FCC's net neutrality rules and the merger conditions were fairly mild restrictions designed to prevent ISPs from using interconnection as a way to drive up costs for their competitors.

Whether you like the rules or their implementation, the argument that they harmed consumers is nonsensical, and it's not being made in good faith. Telecom mergers as a whole generally drive up costs. History is very clear on this point. Yet here we have the telecom sector and its think tank allies trying to claim it was the attempts to mitigate merger harms...not the damn merger itself that was the problem.

One of the other major conditions, a seven year ban on bullshit usage caps, was also singled out by CEI as some bizarre affront to consumer welfare. But the court refused standing on caps under the bizarre claim that Charter has purportedly no interest in imposing such profitable restrictions:

"Nonetheless, the consumers have failed to prove causation because there is scant evidence that New Charter would offer usage-based pricing if allowed to do so. Before the merger, its predecessor companies rarely offered it. Charter had specifically rejected it. Time Warner offered one plan with usage-based pricing, but abandoned efforts to expand the practice after “significant public backlash.” Id. at 6363. Bright House never offered it. Given the lack of evidence that New Charter’s predecessor companies had offered usage-based pricing before the condition was imposed, or that New Charter would offer usage-based pricing if allowed to do so, the appellants have failed to show traceability or redressability.

For one, the company's name is "Time Warner Cable," not Time Warner. And while it's good the court rejected the CEI's attempts to scuttle the ban on broadband caps (which again expire in two years anyway), the logic here doesn't make much sense either. It's abundantly clear that Charter is lobbying to kill these conditions in large part because not having them would allow the monopoly to raise prices. That this is something that's even debated by the court shows they don't really even understand the motivations of the players here. The only reason Time Warner Cable didn't succeed in capping usage previously was historic public backlash.

In short, a telecom monopoly-linked think tank filed a lawsuit claiming that post-merger prices went up because of some pretty modest conditions specifically designed to try and prevent that. And the courts, which routinely reject consumer group lawsuits built on far-more concrete logic, bought into that reasoning entirely (in large part because the Trump FCC refused to defend them). Nowhere does the court even faintly recognize the lawsuit is in bad faith. Nor does the court recognize that Charter lied so frequently about its adherence to the merger conditions it was almost kicked out of New York State.

It's another example of why it's often far easier to just ban problematic mergers, instead of trying to rely on a bunch of conditions that are difficult to enforce, don't fix what they profess to, aren't permanent, or can't be enforced due to regulatory capture and a slow but steady erosion of the U.S. court system.

Filed Under: broadband, broadband caps, competition, data caps, fcc, interconnection, merger conditions, net neutrality, overage fees
Companies: charter spectrum, chater, time warner cable

ISPs Finally Lifted Data Caps. It Only Took A Global Pandemic

from the oh-is-that-all-it-took? dept

During the catastrophic 2018 wildfires in California, Verizon made a painful and memorable gaffe: It throttled the Santa Clara Fire Department’s supposedly “unlimited” broadband data, causing the department to have to pay twice as much as usual to restore internet speeds that allowed it to deploy critical wildfire response.

Now, with the entire globe gripped by the coronavirus pandemic, internet service providers don’t want to repeat Verizon’s mistake. Several major ISPs all over the world have announced that, among other measures, they’re suspending data caps for the duration of the crisis.

It’s something consumers and activists have been calling for — for years. And it only took a global pandemic for ISPs to start listening.

But will data caps come back as soon as countries ease their lockdowns and workplaces and schools start going back to normal? Will ISPs resume their data capping practices even sooner than that?

We have plenty of reason to believe this is temporary. Rather than letting ISPs off the hook right now, we should be preparing ourselves for when some (or all) of them inevitably return to their old tricks. It only takes looking at the history of ISPs and consumer satisfaction to see why.

What Is Data Capping, and Why Do ISPs Get Away with it?

Data capping is a fairly common practice in the internet service provider industry, in which ISPs restrict how much data customers can use with their plans. This can take a couple different forms:

• Tiered plans, in which customers pay for a certain amount of data, and then have to pay overage charges if they exceed the cap.
• Throttling, in which customers pay for “unlimited” plans, but ISPs slow down their internet speeds if they exceed a certain amount of data transfer.

Historically, ISPs have asserted that data caps are necessary to conserve network capacity, but as technology and infrastructure have improved, industry experts have argued that that’s no longer the case.

More recently, ISPs that still use data capping have said it’s to make their services more “fair,” and prevent certain bad actors from “hogging” a network’s bandwidth. Some big players who have continued to use aggressive data capping — including AT&T and Comcast — have subscribed to this philosophy, justifying their caps by telling customers it’s how they address the “unfairness” of some customers using more internet than others.

But those arguments are tenuous at best. We know that data caps aren’t strictly necessary simply because some ISPs have refused to adopt them altogether. And the fact that companies are able to immediately suspend caps in times of crisis further reinforces that there’s no real reason for them — other than for ISPs to make more money from overage charges.

Why Are ISPs Suspending Data Caps Right Now?

On March 12, Vice’s Motherboard published an opinion piece that was pretty critical of ISPs who were still data capping amid the growing coronavirus crisis. Just hours later, AT&T announced it would suspend data caps “until further notice.”

The next day, Federal Communications Commission (FCC) Chairman Ajit Pai called for ISPs and phone service providers to sign his “Keep Americans Connected” pledge, which called on companies to open Wi-Fi hotspots to anyone who needed them, and not terminate service or charge late fees to customers who were unable to pay their bills due to the coronavirus crisis. The pledge didn’t say anything about data caps, but what followed was a wave of ISPs who not only signed the pledge, but suspended data caps, raised their speeds, and began offering free service to qualifying low-income customers.

It’s clear that amid growing pressure from the public and lawmakers, ISPs have, at least for now, answered the call to do something to help consumers weather the pandemic. None of them want to repeat Verizon’s mistake during the 2018 wildfires.

But are these moves really as pro-consumer as they seem? That would depend on whether data caps are coming back, and we have nothing but evidence that points to some (if not all) ISPs eventually reinstating them.

Are Data Caps Gone for Good?

Some industry experts think the pandemic will spell the end of data caps — permanently.

TechCrunch reported that “Coronavirus could force ISPs to abandon data caps forever.” Fast Company wrote, “The coronavirus might have just killed ISP data caps.”

We’re a little less optimistic than that, and it’s all because of the history and track record of the ISP industry.

2013 was the first year that the American Consumer Satisfaction Index (ACSI) included ISPs on its yearly survey of consumers. But that year, ISPs came in dead last out of the 43 industries ACSI surveys about — behind even health insurance providers, the postal service, and airlines.

Since then, ISPs have shown consistent year-over-year improvement in their marks on ACSI’s surveys, yet still came in dead last in the telecommunications industry in 2019. As the 2019 report put it, ISPs are “still falling short of providing good service at an affordable price.”

Online complaints and reviews complete the picture of how much trouble consumers have with their internet service providers. This map of the most hated ISPs in each state shows pretty alarming trends in why people feel so strongly about hating ISPs: They report unrelenting billing problems, deceptive pricing, slow speeds, poor service, and misleading sales tactics, even from the biggest ISP companies out there.

This history of bad acting by ISPs gives us pause when we see headlines applauding their efforts to keep people connected during the coronavirus pandemic. If ISPs want to truly do better by their customers, they need to make sweeping, long-lasting changes — like eliminating data caps altogether and for good.

ISPs Have a Long Way to Go

We’re certainly not criticizing ISPs for making things easier on their customers during a crisis.

But while this move is ultimately pro-consumer, the history of consumer dissatisfaction with ISPs should make us skeptical, or at the very least, cautiously optimistic, about how ISPs will act in the future. We have to remember they’re likely to go back to their old tricks, which means more money in their pockets, and a less free internet for all of us.

Christina Marfice has been a professional, freelance writer since college. She covers arbitration and consumer issues for FairShake. When she's not traveling the world or waiting in line at Disney World, she can be found at home snuggled up with her two cats and a cupcake.

Filed Under: broadband, competition, data caps, pandemic

Comcast Graciously Extends Suspension Of Completely Unnecessary Data Caps

from the how-sweet-of-you dept

After pressure from consumer groups, major ISPs last month announced that they would be suspending all usage caps and overage fees for 60 days in response to the COVID-19 pandemic. After all, US consumers already pay some of the highest prices for broadband in the developed world, and imposing draconian usage restrictions and overage fees created added hardships for consumers already facing unemployment and additional financial headaches due to the pandemic. Being the sweetheart it is, Comcast also stated it would temporarily stop kicking poor folks offline during the pandemic.

This week Comcast announced it would be graciously extending the suspension of said caps for another 60 days. This is, Comcast insists, part of the company's dedication to ensure people remain connected during a crisis:

"These extended measures will continue to keep Americans safe and ensure that households are equipped for students to learn and stay informed at home as the nation copes with this unprecedented disruption to our daily lives,” said Dave Watson, Comcast Cable Chief Executive Officer. “Our services have never been more important, and we’re doing everything we can to keep people connected to the internet."

The problem, as we just got done exploring, is that there's no justification for these limits in the first place. They never should have been imposed, therefore removing them, temporarily, isn't much of a concession or accomplishment.

Both leaked documents and industry executives long ago made it clear: usage caps don't actually help ISPs manage congestion. There's no technical purpose for them. There's no financial justification either, given that flat-rate broadband is perfectly profitable, and "differentiated pricing" already exists for the heaviest of users who need more than a residential connection can provide (aka: a business class line). Usage caps are little more than a cash grab on captive customers in uncompetitive markets, which is a major reason Comcast never implemented them in the Northeast, where uncapped Verizon FiOS is a major competitor.

Caps create an entirely additional problem in that incumbent ISPs can abuse these limits to give themselves an unfair market advantage. AT&T, for example, lifts these unnecessary restrictions for its broadband customers if they use AT&T's own streaming video services, but enforces them if the user uses a competitor's streaming video service like Netflix. Comcast has long exploited the restrictions in much the same fashion. In short not only are caps not technically or financially necessary, they open the door to an entirely new layer of anti-competitive behavior.

So while Comcast will likely grab kudos from press outlets and consumers that don't know any better, there's not much to celebrate about extending a temporary suspension of a business practice that was never justifiable in the first place.

Filed Under: covid-19, data caps
Companies: comcast