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.
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 (s nflx) 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.