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Summary:

Broadband caps are spreading like Kudzu but the FCC has no oversight of how ISPs implement them or who they affect. While, the agency is showing signs of waking up to the problem, we’ve laid out three areas where it needs to take action.

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In the four years since Comcast implemented the country’s first real broadband cap (it took effect on Oct. 1, 2008) the percentage of subscribers with caps on their broadband service has risen to 64 percent. Meanwhile, the FCC only began formally wondering if data caps might need some sort of oversight, or at least sort of qualifier in the last few months.

This is a dereliction of duty from the agency that’s supposed to ensure that broadband is available across the country, an agency whose chairman gives countless speeches emphasizing how important broadband is in the home and as a source for innovation. Yet as the basic pricing for broadband service has changed, the FCC has not kept up. It hasn’t distributed data on the consumers affected, established any sort of independent group to ensure that ISPs were tracking customers’ broadband usage fairly and doesn’t even insist that ISPs who implement caps provide meters to their customers.

And then there are the harder questions about why such caps are justified in the first place. But the FCC has been content to let this experiment in data caps play out with its tacit approval for the last four years, while more and more Americans became affected by them. There are signals that the agency may be waking up to the problem, so here’s what the FCC at a minimum needs to do if caps are going to be a way of life going forward.

1) If ISPs cap broadband, the FCC should track how those caps affect consumers.

How much data do you use each month? Most of us don’t know. How many people get caught by caps? No one knows. That’s right. The FCC doesn’t track data on how many people exceed their caps, nor does it distribute data on how much broadband people use each month, despite having a program that puts routers in people’s homes to measure for other broadband quality metrics such as speed and latency.

When asked about the growth of broadband caps, and if the agency planned to collect more data an agency spokesman declined to comment on the record. However, in a series of notices and speeches made in the last six months, the FCC has started asking questions about how it should think about caps in relation to broadband cost and quality. It has not asked or indicated that it plans on tracking information about how many people are snared by caps.

The FCC does have access to data from corporations that track broadband usage, and it collects data on average data use by speed tier, but it doesn’t know who or how often people are affected by caps. However, according to Sandvine, a company that sells deep-packet inspection equipment to ISPs, during the first half of 2012 on North American wireline networks, the median usage was 10.3GB, and the average usage was 32.1 GB. Note that this number includes Canada, where broadband caps are generally lower. Back in 2010 Cisco noted that worldwide monthly consumption averaged 14.5 gigabytes per month, based on data it collected from its ISP customers.

2) Would you like a meter with that cap?

When Comcast first launched its cap in 2008, there was outrage over the first U.S. implementation of a cap, even though Comcast’s cap at 250 GB was far more generous than those proposed by others at the time (Frontier had proposed a 5 GB cap while Time Warner Cable had proposed a tier that began at 5 GB and went up to 40 GB initially). But outrage moved quickly from the existence of a relatively large cap to the lack of any way for a user to measure their broadband use.

Comcast eventually rolled out a meter to its customers, but other ISPs — notably AT&T — still haven’t managed to give their customers the tools to measure their own consumption. AT&T defends its lack of meters by saying that it sends customers notification emails letting people know when they hit the 65, 90 and 100 percent threshold, but that’s like having your fuel gauge show you a blinking light when your tank is 65 percent empty and then 90 percent empty before the car just stops. Some people drive that way, but most of us would probably like the full picture.

When asked in general about the lack of meters and about AT&T’s strategy in particular, the FCC declined to comment on the record. However, one is free to file a complaint over a lack of meters with the FCC. The best rules to use would be the Open Internet Order, which most of us know as the network neutrality rules. Those rules require an ISP to be transparent about their network management practices. The FCC would then have to determine if AT&T is not being transparent enough about its caps by not including a meter.

Is anyone watching how ISPs cap?

3) If I have a meter, is it accurate?

Comcast’s meter was later than expected in part because it was getting a third-party to certify the accuracy of the tool. Time Warner Cable also had a third-party company ensure the accuracy of its meter, but there’s no rule or oversight to ensure that ISPs that deploy meters have made sure they work as advertised. The FCC doesn’t check meters for accuracy and it doesn’t require ISPs to certify them with a third-party. Obviously, if a customer has a complaint, they can file it with the FCC, but this Wild West approach, with no promise or rules around enforcement, doesn’t help the consumer.

The FCC again declined to comment on the record about whether it would eventually track and ensure the accuracy of meters, and also demurred when asked about the need for any sort of data collection around the topic. Those with the time and energy can use an alternate gigabyte counter on their router or an external software program such as NetWorx and see if it matches up with what their ISP tells them. If it doesn’t, the FCC would probably be happy to take your complaint.

So now what?

The FCC wasn’t the only organization sleeping on the job as data caps crept over the land. When I asked avid broadband users to send me their usage, I quickly discovered that most people don’t use the meters provided to them and have no idea how much data they consume. Outside of a few very public examples of people going over their caps, it doesn’t seem that most Americans are hitting a ceiling: at least for now.

But in implementing these caps, ISPs have changed the internet industry, as I lay out in this accompanying list of which ISPs are capping data and how they are doing it. So get out there and check your broadband usage. Then maybe it’s time to file a complaint with the FCC, or at least with your ISP. Maybe it’s not too late to get some accountability and maybe even action around data caps.

  1. History is full of good people who want to regulate businesses for good reasons. Yet with few exceptions, these lead to higher consumer costs, slower technological advancement, and unemployment. It has gone so far in the US that young girls get threats from bureaucrats for opening unauthorized lemonade stands.

    The road to hell is paved with good intentions. The same goes for regulating the Internet.

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    1. No one wants to regulate the Internet. Except when they do . . .

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    2. You people who think all regulation is bad are so naive. It makes me crazy.

      Without some regulation, there wouldn’t be any 911 service. Without some regulation, there wouldn’t be any affordable broadband for rural subscribers. I could go on…

      If you had been paying attention to the main point of this post, you would understand that it is about the FCC waking up to the need to consider regulating caps. That’s a good thing! The mobile caps in this country have made LTE pointless. 3G is fine for voice, email, IM, and basic web surfing. LTE is needed for video but video eats up current monthly caps in a day or two. ONE movie. Two or three video podcasts. One or two evenings with YouTube.

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  2. Satan's Little Helper Wednesday, October 3, 2012

    The price of wholesale internet bandwidth has been falling since the internet became public. It currently stands at just 3 cents per gigabyte. Industry predictions see it falling to near zero in the foreseeable future.

    That means a typical home broadband internet subscriber, who today uses 5-10 GB/month of bandwidth on average, actually costs his ISP only 15 to 30 cents per month. 15 to 30 cents. Source: http://tinyurl.com/3centsGB

    Yet because that same customer pays $50-$100 per month for his coax/copper/fiber internet connection, the broadband monopolies (Verizon, AT&T, Comcast, Time-Warner, Cox, Charter, Cablevision, CenturyLink, etc.) are absolutely robbing their subscribers blind for internet service, achieving 99% profit margins.

    And that is without taking bandwidth caps into account.

    Which makes bandwidth caps themselves positively criminal. They are an attempt by the home broadband monopolies to create very extreme levels of artificial scarcity where none exists, and to amplify and multiply many times over what already constitutes extreme price gouging.

    Bandwidth caps also allow the monopoly broadband providers to crush their competition from IPTV-based streaming television providers like Netflix, Hulu, Amazon, and the like, which are threatening the deeply entrenched, yet universally despised, cable television industry, a service that the public has begun to abandon in droves (“cord cutters”) due to its own very high prices, poor quality content, and history of reprehensible service.

    In summary: bandwidth caps are about amplifying already shocking levels of price gouging, creating artificial scarcity, and neutering legitimate competition.

    I find it very disappointing, and possibly suspicious, then, that this article almost seems to relegate the notion of (rightfully) abolishing bandwidth caps to the back burner, while primarily shifting the reader’s focus to the false paradigm of plea bargaining with the monopolies over how “fair” their outrageous caps ought to be. That is like saying armed muggers shouldn’t be criminalized, but merely regulated, so as to place limits on how many knife wounds they may inflict upon you while wrestling your wallet out of your hands. And sorry if that sounds like melodrama, but the analogy is exactly correct.

    I would suggest that you research the issue you’re reporting on more thoroughly. If you do, then like everyone else who has realized the circumstances surrounding bandwidth caps, I believe you will find yourself singing a very different tune.

    One of two things needs to happen:

    1. Abolish bandwidth caps through regulation. However, because this also opens the door (through precedent) to regulation of ISPs in general, it isn’t the best idea.

    2. Rather than regulating ISPs directly, demand that the government give the physical coax and fiber running past our homes — what the industry calls the “last mile” — “common carrier” status. This is how things work with the copper infrastructure. The copper “last mile” is considered a “common carrier,” and that is what allows competing ISPs to sell you DSL over copper. Before broadband, we had dial-up internet, and with dial-up internet, there were thousands of competing ISPs we could subscribe to all over the country. We need that situation restored, in the broadband world. We need there to be a situation where, on your coax or fiber drop, many competing ISPs can offer you internet service. This not only will drive prices down, but it will allow competition itself to eliminate the bandwidth cap phenomenon. Countries like Japan did this long ago. In Japan, you can purchase internet service from dozens of different broadband companies, all of whom have the right to sell people service over the fiber or coax running past their homes. The result: the Japanese pay $10 to $30 per month for hundreds of megabits per second-speed service, without caps. Same in many European countries.

    It’s time to end monopoly control over broadband. So let’s organize toward that end already, people.

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  3. Data caps should be outlawed, period.

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