ISP Data Caps Seen Making a Return Post KAC Pledge
Some 800 ISPs suspended broadband data caps during the FCC's Keep Americans Connected pledge. In many cases, they'll be back after KAC expires at month's end, experts said in interviews. Data caps aren't directly part of the commitment. The agency did urge ISPs to "relax" them. Providers including AT&T and Comcast opted to provide unlimited data through the pledge. Asked what happens after June 30, they and numerous other major providers, plus the FCC, didn't comment Thursday.
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Caps have never been popular with consumers, and the various consumer-friendly measures companies in the telecom sector and elsewhere have taken during the pandemic "haven't hurt these companies, either," said Consumer Reports Senior Policy Counsel Jon Schwantes. He said data caps appear to be a false scarcity issue since dropping them should have left U.S. data networks overrun, but they haven't. There's a stronger argument for data cap use among wireless providers than in fixed broadband, he said. The overage fees are "a profit center for the ISPs and they will probably return," Schwantes said.
"I just can't see [most ISPs] giving up on the extra money" by ending data caps, though some will drop them "for various public relations reasons," emailed CCG Consulting President Doug Dawson. "We won’t know until a month or two after the end of the pledge until people start seeing" such charges on bills again, he said.
Segmenting customers in part through data caps could ultimately benefit them because low-volume users don't subsidize others, said Michigan State University Media and Information Policy Department Chairman Johannes Bauer. But ISPs that suspended data caps likely will revert "not loudly but quietly," he said. He's Quello chair in media and information policy.
Typically, 4% to 5% of Antietam Broadband's customer base was affected by its data caps, and the company used them as a tool to urge heavy data users to higher-tier plans instead of instituting subscriber-wide rate increases, said President Brian Lynch. With the pandemic and a big upward movement in the Maryland cable ISP's broadband capacity needs, customers increasingly moved to higher-capacity tiers own their own, and it opted to drop the caps altogether permanently, Lynch said. It's part of Schurz Communications.
Data caps have been one of a variety of tools to nudge users to higher-revenue pricing tiers, emailed Harvard Business School Digital Initiative co-Chairman Shane Greenstein. They also can be useful in lowering the costs from "the oddball situation" such as a person downloading pirated movies and then setting up a server to share them, he said. But today, "a nudge with a cap will not be well-received" in situations with people out of work, children unexpectedly home and tight finances, he said. "On the other hand, when so many people are running Zoom calls out of their home six hours a day to keep their jobs, what is a provider supposed to do with that?," he said. "Tell people not to make a living when they cannot go back to their office yet?"
CenturyLink emailed that its excessive use policy "is a regular part of our internet service plans that was in place before the pledge and will be in place after it. To put this policy in context, you have to keep in mind that of the millions of CenturyLink broadband customers we have, a very small fraction have ever exceeded the 1 terabyte data limit. And, for those who do, we do not immediately cut off access. We are a customer-oriented company, which means we’re talking to our customers and, in the rare instance they continuously exceed the limit, we are already discussing options for a service that makes sense for how they use their broadband.”
The pandemic "has pressed all businesses to think and act differently about how best to meet their customers’ needs, and some of these new ways of doing business will most certainly persist beyond the emergency, and for the better," ACA Connects emailed. It said its members "are no different than any other business in this respect.”
The Wireless ISP Association emailed that its members "generally have no caps [but] there is no one size-fits all for our members, who use a variety of tools to meet the needs of their largely rural customers.” NCTA and USTelecom didn't comment. Comcast said it's extending through the year's end its 60-day free broadband offering that's part of its Internet Essentials program (see 2006180032).
Editor's note: This article is part of an ongoing series about how the novel coronavirus is affecting telecom and consumers. It includes past stories on consumer broadband: 2004060038 and 2003190042. It also has five articles on 911: 2004270046; 2004130032; 2003180033, with the most recent two published in the last several weeks. They are here and here in front of our pay wall (along with some other virus coverage). So is a recent article about FCC transparency during the pandemic: here. Other articles have discussed keeping customers and ISP technicians safe 2004100038, among other topics.