For years, we’ve noted how regulators have paid empty lip service toward the problems with broadband usage caps, historically buying into the ISP narrative that they’re just “creative pricing exploration.” There are two problems with that: one, they can be (and have been) used to hurt internet video competitors and protect legacy TV revenues. Two, nobody is checking to ensure that meters are accurate, meaning there have been numerous instances where users are overcharged, or hit with usage overage fees when the power was out or their modems were off, with absolutely no repercussion.
Since they’re just glorified rate hikes, usage caps are just another symptom of a lack of competition in the broadband space. With the FCC on a bit of a consumer-friendly tear of late and finally addressing the issues with limited competition, there are indications that usage caps may finally become part of the conversation. FCC insiders now say the agency might start policing caps if Comcast begins to expand its usage meter ambitions:
“An operator the size of Comcast absolutely will draw scrutiny,” said our source. “If Comcast decides to impose its currently tested market trial plans on Comcast customers nationwide, the FCC will take a closer look. Under Title II, the agency is empowered to watch for attempts to circumvent Net Neutrality policies. Usage caps and charging additional fees to customers looking for an alternative to the cable television package will qualify, especially if Comcast continues to try to exempt itself.”
Right now, Comcast only imposes usage caps in a key number of less competitive Southern markets, but has shown every indication it would like to expand caps and overages nationally. As more and more users drop cable TV for internet video, and drop internet voice service for wireless only, ISPs will inevitably look to extract their pound of flesh through broadband rate hikes. Those rate hikes are easier to impose when you claim they’re necessary due to “fairness” or congestion (even though the cable industry itself admitted this was a bogus excuse back in 2013).
Of course, this is a nightmare scenario for ISPs, and they’ll be quick to suggest the agency is scrambling down the slippery slope of rate regulation, despite repeatedly stating it wouldn’t be using Title II in that capacity. Of course, preventing ISPs from using bogus congestion as a revenue generator is a key part of the agency’s net neutrality policies, and the agency has already been warning wireless carriers about using throttling and network management to drive unlimited users to more expensive plans. The FCC can correctly argue that caps are more about competition and net neutrality than rate regulation, and it would be right.
Having an FCC that actually cares about these kinds of issues is entirely new territory, since the agency has turned a blind eye to competition problems (and all of the residual symptoms of that disease) for the better part of fifteen years. Of course, an anonymous source promising to “take a closer look” doesn’t automatically equate to action, and even this new, more consumer-friendly FCC has remained largely mute on most pricing issues. Millions of DSL and cable customers currently face usage caps, per gigabyte overages and unreliable meters (not to mention obnoxious below-the-line stealth fees) every day thanks to no competition.
You can eliminate these symptoms by curing the disease that is a lack of competition, but with entrenched duopolies and regulatory capture making that a multi-decade effort, it might be nice if somebody, somewhere could protect broadband consumers from getting screwed in the interim.