Data caps, limited competition a recipe for trouble in home Internet service

Government report urges FCC intervention, but the agency is reluctant to act.

Read the whole story

 

[ZippyDSMlee]

Why would the FCC do anything there's no profit in it......

 

[Arlondiluthel]

With today's technology, there's no reason for data caps. Period.

Per-gigabyte costs of data transmission have gotten so low, that even without data caps, the number of people who only use the internet for e-mail, basic browsing, etc. make up for the "high usage" customers by balancing out the profit margin. Any data cap that charges more for extra usage is just blatant price gouging and profiteering.

 

[evan_s]

I'm not against UBP and even appreciate it on cell phone plans. I'm happy my wife can be on a $40 a month T-mobile plan with limited data instead of a $80 a month unlimited plan as she doesn't even use up all the data on her relatively limited plan but for home internet providers it just seems like a total money grab.

Comcast has been testing usage-based pricing in several markets and said it will probably roll out such plans across its entire territory within five years. Caps are generally 300GB per month with $10 charges for each extra 50GB used. Comcast is also testing a "flexible data option" which lowers a customer's monthly cap from 300GB to a mere 5GB in exchange for a $5 credit on the monthly bill. "If customers choose this option and use more than 5GB of data in any given month, they will not receive the $5 credit and will be charged an additional $1 for each gigabyte of data used over the 5GB included in the Flexible-Data Option," Comcast says.

I just don't see how this works. Your normal cap is 300 gb and you charge $10 per 50 gb over that but if you want you can save $5 a month for having your cap lowered by 295 gbs a month. Just wait. Not only do you get charged if $1 per gb if you go over your cap but you also don't receive the $5 credit so that first extra gb actually costs you $6.

Which is it comcast? Does a GB cost 1.7 cents per gb (what you save per month from your discount on the capped plan), 20cents per gb (overage on a standard plan) or $1 per gb overage on a "flexible data plan" or the $6 per gb you get dinged for when you first go over the cap.

Give me an option for a plan with a 50 gb cap, the same $10 per 50 gb overage cost (or even better the same rate but billed per gb) and let me save $25 a month (half the overage cost of 250 gbs) and you might have something worth talking about but your offer of $5 off for completely nuking the cap and a huge penalty if you go over the cap is just a cash grab. If you want to be even more reasonable make the "cap" only apply during "peak" hours. After all that is really the only time it matters. Otherwise you've got spare capacity that is going unused and the cost per gb is almost nothing.

 

[Beckerjr]

Obama publicly stated how he was fully for Net Neutrality provisions...yet he was the one who nominated a former cable industry lobbyist in Wheeler to lead the FCC. So now this is what we are stuck with as consumers.

 

[shrike126]

ISPs have argued that consumers could benefit from caps or “usage-based pricing,” because consumers who use small amounts of data would pay less than customers who use a lot more, similar to how the cellular market works.

Except the ISPs have already demonstrated that they don't pay less ($5 off are you kidding me?) and that consumers don't even want to pay less for less. We want to pay the same or even less money, for MORE.

 

[zarakon]

Customers in general will never be OK with data caps because it's too hard to control how much you actually use.

1. Many things online use up bandwidth without explicit consent. Reading news or checking the weather seems innocent enough... until some video starts autoplaying. Then of course there's the fear of background programs, malware, or blissfully-ignorant family members using up all your data without your knowledge.

2. It's not obvious how much data various activities use. Most people know that video uses a lot, but they probably don't realize how much it can vary based on quality and content. Then how do images, gifs, and gaming compare? It would take far too much effort to accurately ration your usage.

3. Instead of ads being just annoying, you're now actually PAYING for them.

Really, anyone who pays or gets paid for online advertising should be opposed to the idea of data caps. If ad bandwidth usage starts showing up on cable bills, that's a huge incentive for more people to use something like AdBlock.

 

[Hinton]

I have 15/2 mbit DSL at the moment, no cap beyond what is technically possible.

For twice the price, or 30 USD more, I can get fiber. 200mbit/50mbit.

Well, but with that there's also a "fair use" clause of 1TB a month, or they'll send angry letters.


So how I see it, given that 15/2 is plenty for one person, I'd be paying more for less.

 

[evan_s]

Arlondiluthel[/url]":ir9e28z6]With today's technology, there's no reason for data caps. Period.

Per-gigabyte costs of data transmission have gotten so low, that even without data caps, the number of people who only use the internet for e-mail, basic browsing, etc. make up for the "high usage" customers by balancing out the profit margin. Any data cap that charges more for extra usage is just blatant price gouging and profiteering.

Yes and no. The cost of data isn't expensive and it just continues getting cheaper. What is expensive is the peak capacity needed to handle everyone streaming video and downloading stuff in the evenings. That is what is expensive, relatively speaking, and a general cap only indirectly addresses that. A peak usage cap, like the good old day time minutes on cell phones, on the other hand directly addresses that.

 

[arkiel]

All they need to say is that Brand-X decision applies to states as well as municipalities. That's the plain meaning of it, and would nullify the rules against municipal broadband nationwide.

 

[AlexisR200X]

Lets be real here everyone knows datacaps are simply a modified way to charge more without flat out raising the base price (Which depending on your provider its already more than high enough) To me its especially grating on my nerves how AT&T markets its overpriced data plans using the term "giga-intense" (Translated from an ad in spanish from Puerto Rico) Its equally revolting that Claro (The current telco incumbent is starting to use the term too) They even go so far as labeling families than need over 5GB of data per month as "Giga-intense" (Heavy data users) Give me a friggin' break here! I routinely use 5 to 6 GB in less than a week, I can probably be called a heavy user but a family could easily go beyond 5GB in a day just by having kids watching netflix and you tube for a few hours... That's not heavy use that is just normal these days.

 

[SFC]

There isn't a publicly traded company on this planet that is in the business of making LESS money. If the ISP's are greatly in favor of something, you can be 100% assured the public will suffer as a result.

 

[jbrizz]

Some were skeptical that UBP would be used to reduce prices for any customers.

UBP is only to make more money. Why would the ISPs change anything at all unless they could make money? They sure as hell aren't going to do it to make less money! We already know they don't care about user experience (see Netflix issues) and that their networks aren't congested (see this and many other articles).

I'm not just sceptical, I'm positive it's not going to lead to lower prices.

 

[AM16]

Here in the greater Seattle area, there's no option but data caps from all the ISPs.

There are only two reasons for data caps: Money grab and cable companies preventing them from going under from internet video.

This is the same reason they're double dipping with Netflix.

 

[Flynn Arrowstarr]

AlexisR200X - "I routinely use 5 to 6 GB in less than a week, I can probably be called a heavy user but a family could easily go beyond 5GB in a day just by having kids watching netflix and you tube for a few hours... That's not heavy use that is just normal these days."

Not to mention the size of games anymore. A typical modern game is somewhere between 5 - 20 GB, with some games for consoles and PCs upwind of 30 - 60 GB. With the shift toward digital services such as Steam and Origin, gamers are encouraged to download ever larger packages.

The choice in my area is CenturyLink DSL at "up to" 7 Mb (we get ~5) or Comcast at 20 Mb (but at a higher cost if you don't want TV and phone services). Neither one has data caps at the moment, but I wouldn't be surprised. We're cord cutters and can use a lot of bandwidth in a month depending on how much we watch and purchase. So UBP and data caps make us cringe a lot.

Flynn

 

[CraigJ ✅]

Caps aren't' currently a problem for me, what is a problem are the service issues I constantly have that my ISP can't fix. I have a new modem, all the cable in the ground and the house is new, all the splitters are new, and my levels at the modem are perfect dead center when it actually works. But my upstream is getting trashed frequently and I go off line and no internet for minutes to hours multiple times a week.

The problem is no competition. Because where I live if you want more than 8 or 9 Mb, Cox is it. There is no competition. So basically I have to accept the shit they are feeding me and say I like it (by paying the bill) or I get nothing. My only recourse is to sell my house and move.

Actual real competition would fix pretty much all issues with ISPs - this is the heart of why they don't want to get re-classified, because they know when competition is allowed to happen they will have to spend more on service and lower their prices and say goodbye to their insane profit margins.

I have written to my congressman about this and I get back the same old "regulation harms innovation" bullshit that all republicans seem to spew. The last email exchange I had to refrain from saying "but a government sanctioned natural monopoly is great for innovation, right you idealogical prick?"

Title II now. None of this Title II 'light' bullshit either - full blown fuck you you dumb pipes title II.

 

[evan_s]

UBP could be a way to provide more affordable plans and get a larger number of subscribers which helps to spread the basic infrastructure costs across a larger group of people which does make it cost less per subscriber. The laughable $5 discounts for huge reductions in caps and huge overage charges isn't anything close to this. UBP is more accepted when it comes to Cell phone plans because there is a meaningful difference for a customer between an $80 a month completely unlimited plan and a $40 capped plan. If the $40 plan meets your needs then there is real savings to be had. Saving $5 a month at the risk of overage charges that will quickly and easily eat up your potential savings isn't a good deal for anyone other than the ISP who gets to charge those huge overage fees.

 

[mlandsjr]

Its proven over and over again that cable/data providers when facing little competition abuse their monopoly status to price gouge customers. Its time they faced telecom style regulations like they should have all along.

Free markes work when there is healthy competition... Currently they're akin to utility monopolies and should be treated as such.

 

[Boskone]

evan_s[/url]":36xdl24v]

Arlondiluthel[/url]":36xdl24v]With today's technology, there's no reason for data caps. Period.

Per-gigabyte costs of data transmission have gotten so low, that even without data caps, the number of people who only use the internet for e-mail, basic browsing, etc. make up for the "high usage" customers by balancing out the profit margin. Any data cap that charges more for extra usage is just blatant price gouging and profiteering.

Yes and no. The cost of data isn't expensive and it just continues getting cheaper. What is expensive is the peak capacity needed to handle everyone streaming video and downloading stuff in the evenings. That is what is expensive, relatively speaking, and a general cap only indirectly addresses that. A peak usage cap, like the good old day time minutes on cell phones, on the other hand directly addresses that.

Which data caps and the thus-far proposed UBP schemes fail, completely, to address.

The providers have the ability to provide increased peak usage capacity without increasing consumer cost (they're hysterically profitable), they just don't want to. What they'd rather do is massively oversubscribe, wait for people to complain about lacking the bandwidth they're paying for, then shrug and say "Well, people are using too much data, we need caps!" while neglecting to mention that caps wouldn't help the issue.

 

[Falos]

Arlondiluthel[/url]":2y7lsmip]people who only use the internet for e-mail, basic browsing, etc. make up for the "high usage" customers

We could load-balance.

Zero-sum, of course. The farmer should still only get $X,000 for his crops.

Zero-sum, grandma's bill would plummet. Why bother, when we can already see grandma's clearly willing to shell out $80?

Edit: In case it wasn't clear, I'm more likely to launch flying monkeys out my ass than ever see Big Internet do this at zero-sum.

 

[EchtoGammut]

I was with Astound, whom implemented 300GB caps without notifying me. I would not have categorized myself as a high bandwidth customer, until I saw my actual data usage. Streaming Netflix (especially during the big releases like Arrested Development or House of Cards), VPN traffic to the servers I maintain, downloading updates, patches and pushing them back out after testing all added up to far more than 300GB a month. In order to avoid the huge overage charges, I ended up "upgrading" to 100Mb Cable from my previous 50Mb plan. In terms of throughput, I never touched 100Mb, but it bumped my cap and was cheaper than overage charges.

Now, I have moved to an area where I have the option of Frontier FIOS or Comcast. After numerous tech cancellations from Frontier I ended up signing up with Comcast. Reading the entire contract and website I am confused about their data policy. The contract, literally contradicts itself four times in regards to bandwidth usage. For the immediate future, I will stick with Comcast, but I will switch to the first provider that can offer me clear guidelines on their policy and either a self install kit or technician.

 

[msawzall]

"The US Government Accountability Office (GAO) warns in a new report that Internet service providers could use data caps to impose higher prices on consumers, especially in markets where ISPs face little competition."

In other news, water is wet, clowns scare the f**k out of me, and government is run on money. Here's Hal Storm with the weather.

 

[lamda951]

I've always found it offensive when they say oh you're a heavy user you should pay more, without regards to the underlying costs.

Generally the technically savy people who understand the connection are the cheap customers because it is the people who ring up for "oh i forgot my password" or "it isn't working, what do you mean i need to have it plugged in!" but then insist because they don't use it much it should be cheap for them.

I've always had data caps (which i can blame on US companies insisting the connection for data both too and from america should be paid for by australians but whatever) and you learn to live with them. How this happens is that you reduce your exposure to new things, oh netflix, I can't try that i've only got so much quota i don't want to have to pay more for the connection. So the isp has already won because the only way people try new things is if it is included. This is something that should be avoided against.

Now if i were an american I'd be writing to my congress critter saying my big concerns is that new ideas are no longer going to be coming out of america but europe (guess where skype originated) because that is where the environment will exist for enabling new ideas to grow. And this is what people need to realise is really at stake

 

[iamwhoiam]

Arlondiluthel[/url]":52ppn2nd]With today's technology, there's no reason for data caps. Period.

There's no need regardless except to nickel and dime everyone to death AND punishing the cord cutters.

 

[Just Joe]

One question I'm wondering but nobody seems to be asking: When is Tom Wheeler's term going to be over? Or is it ever?

If I-put-a-cable-lobbyist-in-charge-of-the-FCC-Uh-Oh-bama was serious about wanting to let net neutrality rule the land, he couldn't have made a more slap-my-head-I'm-stupid pick (actually he could have) than Tom Wheeler.

 

[TigerWolfe]

Something no one has mentioned. I put up with data caps on my cellular service, because I can supplement that with my wifi at home. I have a 2gb cap on my phone because 90% of the data I use on my phone is actually coming through on my Cox home internet. If Cox were to datacap me as well, I'd suddenly need to upgrade my cell plan as well.

 

[laststop311]

I am on a 50/5 cable connection. The fastest possible speed I can get at my residence. I routinely use between 750-1250GB of combined upload download bandwidth usage a month. I already pay 129.99 a month for 50/5 connection speed. Even tho I use an average of 1TB a month I feel paying 130 + taxes and fees is already more than my fair share. I am going to be very pissed off if they try to cap me at 300GB. What is even the point of getting the fastest connection when you can't use it?

They just want to find a way to stop people from torrenting. The main reason I dont mind paying the 130 is I was able to cancel my cable tv and cable phone so paying a lot for the fastest internet is still cheaper then having a lower tier and tv and phone. I can use torrents to download all my favorite shows and movies so no point to pay for cable tv. I use my cellphone for my telephone so no point to pay for land line. The site I belong to requires you keep at least a 0.85 ratio in downloaded to uploaded data. I've uploaded a total of 12.44TB and downloaded a total of 7.78GB. If I combine the stats of all the torrent sites i use I've uploaded 20.36TB and downloaded 10.14TB. This is over an 8 year period though.

I will be thoroughly pissed off if they take away unlimited data and will do my best to get on a long as possible contract with unlimited data before the switch and boost my ratio on torrent sites as much as possible.

 

[ktmglen]

Only two numbers matter to most ISPs: number of subscribers and average revenue per subscriber. Actually, the derivatives of those two numbers because Wall Street likes growth. With all the easy-to-reach broadband customers already subscribing, the only place to find more growth is increasing the average revenue per subscriber through “novel” business plans—like usage based pricing.

 

[Vapur9]

Comcast is also testing a "flexible data option" which lowers a customer's monthly cap from 300GB to a mere 5GB in exchange for a $5 credit on the monthly bill. "If customers choose this option and use more than 5GB of data in any given month, they will not receive the $5 credit and will be charged an additional $1 for each gigabyte of data used over the 5GB included in the Flexible-Data Option,"

This is essentially how banks function. Those who are least capable of affording penalties are punished the most.

 

[*ars technica username*]

I'm definitely opposed to caps, I just checked my modem usage care of time warner, I used over a terabyte in August and September, and close to 300GB the last few months. I use cloud backup for all my data and download games for my xbox/pc, which are all getting into the 20-40GB range these days.

I'm obviously a more avid internet user (or giga-intense as one commenter put it), but I think people who are on slower connections would be using more data if they could. Newer phones are taking pictures that are 4-7MB+, and taking 1080p video (or 4K video soon). One soccer game or birthday party for a kid could easily produce multiple gigabytes of picture/video data, and I'm sure those people have their icloud/google photo backup enabled. And due to wireless caps, they use their home wifi to upload of course.

Heck, as the generations get older, the grandparents of tomorrow will no longer be the stereotypical old person who checks their aol email once a week and uses 10MB a month. Technology will push its way up through the age barriers and then no one will ever need a 5GB/mo plan. Those caps are gouging regular customers, but the cheapo 5GB/mo plan is gouging people even worse.

 

[siliconaddict]

ZippyDSMlee[/url]":23xlr7pz]Why would the FCC do anything there's no profit in it......

Probably because the Repubs would throw a temper tantrum if they did. I'd say with the power they are about to get they'd probably go as far as to try and nullify the FCC just for vengeance.

 

[BobsYourUncleBob]

GAO Comments to FCC: ".... providers—especially those facing limited competition—could use UBP as a means to increase their profits which could result in UBP having negative effects, including increased prices paid by consumers, reductions in content and applications accessed by consumers, and increased threats to network security.”

ISP Industry Reaction: "Well you've clearly & concisely summarized our business model going forward. So what's your point?"

FCC Response to GAO: "FCC said that because the number of consumer complaints regarding UBP by fixed providers appears to be small and that UBP plans are less common for fixed Internet customers than mobile customers, it is unclear that any action is needed at this time,” the GAO report said. “FCC added it will continue to monitor its complaints and provider offerings for trends that might indicate that more action is needed.”

ISP Industry Reaction: "Excellent recitation; entirely on-script & delivered with an admirable, very convincing force of conviction!"

FCC Speaking Extemporaneously: "While we will certainly agree to track implementation of usage-based pricing, it's unfortunate that our existing data sources (glancing at ISP representatives) will not allow it to track the number of subscribers with usage-based pricing plans.

Regardless, there is no evidence of any existing problems that would warrant our attentions. Even if we had a longer, broader historical record from which to study market activity, we might get a much clearer picture of the current environment.

But many of these same companies were well established & quite active during our nation's preceding wireline telecommunications era & these providers assure us that even back then no patterns of predatory or disadvantageous behaviors were ever ...... what? ..... How's that again?

To summarize, it's unfortunate that we have a slim data set & NO historical record to use in our evaluations! "

 

[Spectre013]

After a month of watching Dexter and Sons of Anarchy on Netflix and just general usage we hit 468 GB for the month of November.

Now with that in mind how many deals will they be making to move services into the "Don't count against the cap zone". So they can get paid so many times over. Get paid by the customer, by the service for peering deals, paid by the service for "don't count against the cap" deals. Paid by the customer for going over the cap.

Time to open the lines and allow competition to happen, or else kiss the internet goodbye.

 

[adipose]

Monthly data caps have never been needed, anywhere. A more useful and realistic tiering is by bandwidth. Or, peak pricing like PGE might have some value. But what exactly is the benefit of capping? It doesn't help with bandwidth until the cap is reached... Realistically, this leads to the last X days of a month having better performance.

Sure, theoretically you might get some savvy consumers who watch their usage carefully, but most will just burn through it until it's gone. If you have a daily cap, it might work, but monthly?

The problem that needs solving is peak bandwidth, and caps don't solve that. Instead they become an overage generator for the ISP, which is almost certainly the only reason they are interested.

 

[theoilman]

evan_s[/url]":2wvwkpgu]I'm not against UBP and even appreciate it on cell phone plans. I'm happy my wife can be on a $40 a month T-mobile plan with limited data instead of a $80 a month unlimited plan as she doesn't even use up all the data on her relatively limited plan but for home internet providers it just seems like a total money grab.

[o

To play devils advocate, how would you feel if there was only unlimited as an option but instead of $80 it was $50. Realistically if that was the only option light users would subsidize heavy users bringing down prices for the majority.

 

[gomi no sensei]

I hate my ISP, ATnT. I'm in a REALLY nice apartment, yet we are trapped in an "exclusivity contract" so no new lines run since the 1970's. Stuck at 2.4 down, NO POSSIBILITY of ever getting faster speeds. As for the caps, no consumer will save ANY money, AT&T will just use some weird math and everyone will end up paying more for less, that's just what AT&T does. I used to work there, I was forced to lie to people every day about this stuff.

I had to get a "business" account JUST to get around their caps. I now pay $85 a month for 2.4 down with 5 static IPs. My "consumer" bill would be on average of 500-800 a month with the amount of data I use, much of it is for remote support. 500 feet away, inside the housing area (as opposed to my apartment) up to 50 mb is available from Cox but I'm locked out.

 

[evan_s]

theoilman[/url]":39cu9vqh]

evan_s[/url]":39cu9vqh]I'm not against UBP and even appreciate it on cell phone plans. I'm happy my wife can be on a $40 a month T-mobile plan with limited data instead of a $80 a month unlimited plan as she doesn't even use up all the data on her relatively limited plan but for home internet providers it just seems like a total money grab.

[o

To play devils advocate, how would you feel if there was only unlimited as an option but instead of $80 it was $50. Realistically if that was the only option light users would subsidize heavy users bringing down prices for the majority.

I'd still prefer to have my old $40 month plan. Yeah unlimited is nice in theory and $10 a month more isn't much but it would be paying more for something that would actually provide no additional value. My wife hasn't come close to the cap on her plan and it's a hard cap, no data once you hit the cap, so no overage charges to worry about.

 

[tzs]

You left out a very important part of the "save $5 by lowering your cap to 5 GB" option: they are only considering offering it to the people on their "Economy Plus" plan. That plan is their slowest, cheapest plan, with a 3 mbps download speed.

It's specifically marketed as being for people who only do light internet use from a single device.

Nationwide, about 5% of broadband users use less than 5 GB per month. For those who are on Comcast's Economy Plus plan, the percentage is surely much higher than that. For those people, that $5 off with a lower cap makes a lot of sense, for it will save them a fair amount of money.

 

[villageidiotintern]

Here it's Comcastic or 750kbps.