Industry Says FCC Should Abandon Data Caps NOI

Capping data consumption may "be necessary to enable all consumers in a particular market to enjoy access to internet content," said the Wireless ISP Association (WISPA). Prohibiting providers from charging consumers based on data consumption "could have serious ramifications for the investments they have made to expand their networks to meet this demand," WISPA added. The group warned that regulating data caps is a form of rate regulation and the NOI should "be abandoned at the earliest opportunity."

Data consumption "varies greatly from consumer to consumer," said USTelecom: "Requiring all users to pay for unlimited data would raise prices for consumers who use little data." The U.S. Chamber of Commerce agreed. "[M]andating an unlimited amount of a given service will necessarily lead to higher prices or reduced profits," it said, adding that the FCC "lacks a clear mandate to impose broadband rate regulation." Limiting providers’ ability to offer plans with data caps "will not only cause prices to rise for most customers but would also harm businesses," the group said. ACA Connects agreed, saying acting on this issue "would only distort the marketplace, not protect consumers."

Usage-based pricing models are "common across the country," said NCTA, and "prohibiting this accepted practice would only reduce choice for consumers and drive up prices." There "is not, and never has been, an economic or legal basis for commission regulation of usage-based pricing," it added. "Usage-based pricing allows providers to give consumers more options to select plans tailored to their needs" and "attract customers who may not otherwise subscribe to broadband in the first place."

Opposing the proceeding, CTIA said, "Usage-based plans are pricing structures based on a given quantity of data, and they constitute broadband rates." Such plans attract consumers "because they generally cost less," CTIA added, noting the FCC's minimum service standards for Lifeline program plans "expressly permit usage allowances." Said the Competitive Carriers Association, broadband data caps also "serve an important network management function." They "play a critical role" in traffic management in areas with "limited backhaul capabilities."

"Usage-based pricing is a rate-setting choice, and any regulatory restrictions on its use would amount to harmful and most likely unlawful rate regulation of ISPs' services," said Free State Foundation. Such plans "expand the number of people subscribed to broadband services and further shrink any remaining digital divides," the group said.

TechFreedom called the proceeding the "latest voyage of discovery" for statutory authority to regulate broadband "that simply does not exist." The group noted that the "key statutory hooks for imposing regulations on data usage" are facing court challenges. The Information Technology and Innovation Foundation said the FCC should instead "change its policies that have disincentivized broadband investment, so consumers can benefit from increases in overall broadband network capacity."

A coalition of public interest groups argued that data caps negatively affect consumer experience. Data caps are a form of "price discrimination dressed up as network management," said Public Knowledge, New America's Open Technology Institute, Benton Institute for Broadband & Society and the National Consumer Law Center in joint comments. "Households should get the data they need without the fear of having to pay more, being cut off, or being throttled."

The FCC is "right to be concerned about any unjust, unreasonable or unnecessary barriers to maximal internet use," said Free Press. The group urged that the commission "collect all the data necessary ... to monitor and analyze ISPs' pricing and packaging decisions, and the impact that competition has on consumer welfare." Data caps are "primarily a tool used to extract additional revenue from consumers," said Consumer Reports. It added that caps "have the potential to stifle consumer adoption of innovative technologies."