The GAO finds a few problems with broadband data caps


Consumers aren’t keen on wireline data caps and they are doubly unsure how much data they are using. Those appear to be the common themes discovered by a preliminary report issued by the U.S. Government Accountability Office as part of a multimonth study requested by Representative Anna Eshoo (D-CA). The final report will be issued in November, but possibly not in time to influence the decision around the Comcast and Time Warner Cable merger.

The GAO conducted eight focus groups and interviewed several experts (I was interviewed by the GAO as part of the report) to try to understand why data caps exist, what effect they have on the consumer and how they might influence innovation. The study covers both wireless and wireline, although already it seems a bit dated given that the findings only mention one wireless carrier throttling speeds, when all carriers now do so.

"Annual Broadband Subscribers Under Data Caps (Q1-14)"

But it’s the wireline side that concerns me, mostly because data caps aren’t a good tool for managing network congestion but are an exemplary tool for getting consumers — especially heavy users — to pay more for data. The report notes this, but spends most of the time highlighting how confusing consumers find the idea of guessing how much broadband they use.

During focus groups, the GAO found that may consumers estimated they were using a lot of data even when they were doing something relatively light, such as online shopping. They also had misconceptions about how much data having an app like Twitter or Facebook might use while open in the background. More troubling is that ISPs weren’t doing a great job on the education front.

The GAO found that its review of ISP tools showed “varying data-use estimates for similar applications.” The report also mentions that while consumers are worried about applications that aren’t using their gigabytes, they might miss the “hidden” applications such as backup services that could consumer up to 30 percent of their data allowances.

It also cites figures from Sandvine that show how cord cutters tend to be heavy users of data, almost near the caps provided by some ISPs, and discusses how the proliferation of more devices in the home could push people over their caps and into paying overage fees. We’ve worried about that too.

As a start, I’m glad Congress is looking at how data caps are affecting consumers and ultimately the development of new applications and services delivered via broadband. Absent true competition, that allows customers to avoid falling under a cap, having the threat of regulation might be the only thing keeping ISPs in line.

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