Data Caps, Free Data Plans Important Tools for Carriers, CTIA Paper Argues
The FCC should refrain from clamping down on data caps or free data plans, two options for carriers that show the market at work, said a paper released Wednesday by CTIA, written by William Rogerson, a former FCC chief economist.…
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Both practices are "efficient carrier responses to competitive pressures, technical realities, and consumer preferences, and should be trusted over the predictive judgements of regulators when it comes to maximizing consumer welfare,” Rogerson wrote. The wireless industry is competitive, with four national carriers, he said. Industry churn shows competition at work, he said. The average monthly industry churn rates from Q1 2012 to Q2 2015 were between 1.44 percent and 1.85 percent, he said. “This means that the average provider has lost between 17 percent and 22 percent of its customers each year over this time period.” Data caps “help manage congestion and ration scarce capacity and provide incentives for content providers and subscribers to use the network efficiently,” Rogerson said. Zero-rated data services “result in expanded access to broadband, particularly for lower income consumers, by making internet access more affordable,” he said. The FCC has been exploring whether it should prohibit some versions of zero-rated services as part of net neutrality rules (see 1606230065).