For many, many years we’ve pointed out that broadband usage caps are hugely profitable bullshit, used by regional telecom monopolies to rip off captive customers.
The limits serve no technical purpose outside of price gouging. ISPs like Comcast spent years pretending they were necessary to “manage network congestion,” but after numerous journalists, academics, executives, and even the industry’s own leaked internal comms pointed out that was technically and provably false, most big ISPs just stopped trying to justify them whatsoever.
The question then becomes: where were U.S. regulators during this thirty-year span?
This was, after all, regional monopolies clearly abusing a local lack of competition (they helped cultivate) to erect artificial barriers they then charged consumers extra to bypass. The limits are unfair and deceptive, harm consumer welfare, hamper broadband affordability, and create all manner of potential free market distortions by enabling ISPs to exempt their own services from the fake limits (see: the fight over net neutrality).
Only just this year has the Biden FCC started expressing any serious interest in taking direct action against the practice. This week, the agency issued a notice of inquiry (NOI) indicating that the agency is “looking into” the practice, and why “despite increased broadband needs” and the “technical ability to offer unlimited data plans,” such restrictions still persist.
To be clear, it’s not clear the FCC will do anything about the practice, but they at least acknowledge it’s a problem and are now educating the public about it. The agency is seeking public comment on what they could do about them, and whether they have the legal authority to do it in an era when a corrupt Supreme Court is intent on turning federal regulators into the legal equivalent of decorative gourds:
“We seek 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. We first seek comment on current trends in consumer data usage.
We next seek comment on the impact of data caps on consumers, consumers’ experience with data caps, and how consumers are informed about data caps on service offerings. We then look at the impact of data caps on competition. Lastly, we ask about our legal authority to take action regarding data caps.”
Again, as somebody who has written about this for decades, we know why these caps persist: monopoly power. The FCC’s NOI discusses the roundabout ways the FCC has nibbled around the edges of the problem (like its recent effort to implement “broadband nutrition labels” making it clear you’re being ripped off), but notably absent is any real effort to strike at the roots of monopoly power.
And the government generally doesn’t strike at the roots of telecom monopoly power because Congress is comically corrupt, state and federal regulators have been historically captured, and most of these companies are patriotically tethered to our domestic surveillance efforts making them too large and politically protected for serious, consistent accountability.
So generally what we get is something that winds up being a bit of a regulatory performance with a focus on transparency, not monopoly power. And with big ISPs leveraging recent Supreme Court rulings to try and declare all FCC consumer protection effectively illegal (I’m not being hyperbolic), it’s not clear how long even these more basic efforts will survive legal challenge.
That’s not saying the effort can’t bear fruit; the agency has created a new educational website tracking consumer stories about the expensive annoyance of usage caps, and continues to field public comment for additional ammunition should it someday actually take action. To submit your comment click here and plug the docket number (23-199) into the “proceeding” field.
