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Summary:

The FCC chairman is concerned about data caps, but that may not mean he’s ready to take any action. At an event in Silicon Valley last night the chairman of the regulatory agency said he viewed anything that would depress broadband usage as a concern.

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Has FCC chairman Julius Genachowski changed his mind on the acceptability of data caps? As far back as 2010 he defended the idea of wireline ISPs using broadband usage caps as part of the network neutrality order and did so again in May at The Cable Show when he reiterated the position. The chairman has said he doesn’t mind the caps and is in favor of ISPs having the opportunity to experiment with different business models, but last night at a Silicon valley event it seemed like his mind has changed.

When asked about the impact of data caps on broadband innovation by my colleague Janko Roettgers and how his thinking had evolved on the topic, the chairman said he was concerned about data caps. He added, “Anything that depresses broadband usage is something that we need to be really concerned about.” And he further said, “We should all be concerned with anything that is incompatible with the psychology of abundance.”

Wow, that’s three “concerns” in a single answer, but does this mean the chairman is set to recognize the potential harms of data caps and goad the commission into any action? That’s less clear. The FCC did signal that the cap issue is one that bears watching last month when it released a notice that asked the public how it should view caps when the agency was measuring broadband quality.

However, the questions the FCC is asking in that notice, seem more in line with establishing a reasonable cap, as opposed to being concerned about their existence. And based on a conversation with an FCC official earlier this month, it’s unclear if the FCC thinks caps are a problem yet. The agency doesn’t offer up data on how much broadband people use and it’s unclear if it is collecting data on how much broadband people use as part of its current quality surveys that involve tracking broadband quality with an agency-supplied router.

Our readers tell us they are concerned about caps, not just as something theoretical, but as something they may soon or have bumped up against in real life. I’ve asked readers to share their broadband usage, which in some cases is close to come of the caps currently put in place by ISPs around the country. Our readers are generally more tech savvy and heavier broadband users (we have a whole show dedicated to cord cutters) but they are at worst the leading edge the wave of broadband users rather than gluttonous bandwidth hogs engaging in illicit file sharing.

This is my broadband usage from earlier this summer.

From the FCC’s perspective it appears there are two primary concerns around caps, one is that consumers get kicked offline or charged overage fees for using their broadband connections for legal activities, and the second is that caps cause some sort of economic and competitive disadvantage to firms trying to deliver broadband service.

Most of my sources in the industry feel that if the FCC plans to take action on the issue it will be in response to a firm such as Netflix being forced into a position where it can’t offer its services on a competitive basis when compared with ISPs own television offerings. Some may believe that moment has come, but so far Netflix has not made a federal case of it through formal FCC channels, although it is outspoken against caps.

With a whopping 64 percent of U.S. broadband subscribers under a cap (41 percent of you don’t count Comcast’s cap, which is suspended for the time being in most markets,) that can range from 50 GB a month all the way up to 500 GB, caps are something that the FCC and Silicon Valley should keep their eyes on. U.S. broadband isn’t exactly competitive, and all that stands between consumers and a cap that keeps them from freely enjoying the web may be the FCC.

  1. You used 125 GB in July? What on earth were you doing? Watching a lot of HD movies?

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    1. No kidding. How does one consume 125 GB in 1 month? Streaming porn in HD?

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      1. A single 1080p scene from Brazzers is 4 gigabytes.

        This gentleman would only need to have a subscription to Brazzers put a queue of 30 HD scenes into his download manager to easily blaze past 120 gigabytes. Brazzers has terabytes of content and with your membership you get unlimited access. This is the same for many porn sites.

        With 3 terabyte hard drives to be had under $150 there’s no excuse not to be pushing hundreds of gigabytes of data in a month.

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    2. Nope. I have three people in my house that are online on different devices. My daughter watches Netflix on Saturday morning for her cartoons and my husband is a fan of MLB.Live so he can watch his beloved Cardinals, and I work all day on the web downloading and uploading content. While we are online a lot I don’t think we’re too far from normal. Check out the story where I aske dothers their usage to get a feel for how people are consuming data: http://gigaom.com/2012/07/19/america-show-me-your-broadband-usage/

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  2. The reason there are data caps is b/c of data hogs. Ideally, everyone would be charged on the basis of consumption. Instead, you have modest consumers subsidizing the data pigs at the broadband buffet.

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  3. If they advertise 1.5Mbps down, 1.0Mbps up, and I pay for that, I should damn well be allowed to use that speed 24/7. If you don’t have the capacity, don’t sell it. Record profits, while increasing rates, then imposing caps and overages at the same time. Doesn’t make sense to a consumer.

    Also, 120GB would be easy to pull in a large home with SEVERAL dozen connected devices. Especially if Netflix or Hulu or another LEGAL streaming source was your main point for TV.

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  4. Reblogged this on ytd2525.

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  5. Now according to the Orange and Red and Hughesnet, only about 1% of all customers use more that 2 to 10 GB. It’s about time the FCC stands up and recognises the fact that people are being ripped off. Personally I don’t have a cap of any kind nor do I expect to ever have one again with this company but I was with Hughesnet for ten years and know what it is like to live under that curtain. My family probably still doesnt use over a dozen gigabytes a month simply because 10 years of satellite trained us to be conservative and the fact that we don’t have a cap yet satill hasnt trully sunken in.

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    1. And that’s what the FCC should care about. Making people question their online activity isn’t good for consumers and it’s not good for the development on new services — especially when places like S. Korea and Japan are providing superfast speeds and their populations are developing the apps that will use them.

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  6. Software scheduling could easily break down packet priority at the client (think BOINC, World Community Grid, etc.) where urban WISPs (assuming they don’t cap as well) could pick up the deferred packet ques. Grass root meshes, etc. will begin to spring up. A monopoly without a standing army is a temporary monopoly.

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  7. This article is evidence of GigaOm’s continued relationship with Google, and pushes Google’s corporate agenda: no caps on anything, even if ISPs lose money. The truth is that the total amount of data transferred is simply the integral of bandwidth used over time. Since bandwidth is limited and expensive, but one can count on the fact that not everyone will be running at peak capacity all the time, it makes very good sense to sell broadband by the byte. Nothing else is really fair.

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