Cable broadband companies continue to insist that data caps are good for people with low incomes, pushing back against comments filed by consumer advocacy groups. NCTA—The Internet & Television Association urged the Federal Communications Commission to avoid regulating the monthly data limits and overage charges that cable firms such as Comcast and Cox impose on many Internet plans.
Advocacy groups "suggest that usage-based pricing disproportionately harms low-income users, reasoning that these users are least able to afford overage fees if they exceed data thresholds," the NCTA said in comments filed last week with the FCC. "However, in reality, usage-based pricing benefits low-income or price-sensitive consumers by providing additional options for less expensive plans."
The NCTA contends that "there is no basis for the assertion that regulation is warranted because low-income consumers are uniquely harmed by usage-based pricing. To the contrary, in many cases usage-based pricing provides more options for consumers, including lower-priced ones, which helps consumers stay connected."
The cable group argued that data-capped plans are "a way for providers to distinguish their offerings from those of their competitors, which is beneficial for consumers. The use of different pricing models by a broadband provider is no different than a restaurant choosing to offer a tasting menu, a buffet, or unlimited soup and salad as an alternative to a purely à la carte menu."
The cable lobby argument is similar to one made by FCC Republican Nathan Simington, who said that requiring unlimited data would be like requiring coffee shops to supply unlimited free refills.
“Many low-income households have no choice”
FCC Chairwoman Jessica Rosenworcel and fellow Democrats opened a proceeding to investigate and potentially regulate data caps in October. But President-elect Donald Trump's pick to replace Rosenworcel, Republican Brendan Carr, agrees with the cable companies and opposes regulation.
For now, the proceeding continues. The FCC also received joint comments before last week's deadline from advocacy groups Public Knowledge, the Open Technology Institute at New America, the Benton Institute for Broadband & Society, and the National Consumer Law Center (which said it is representing its low-income clients). The advocacy groups' joint filing said that comments filed by individual Internet users demonstrate the negative effects of data caps on people with low incomes.
"Commenters have clearly demonstrated how fees and overage charges, unclear information about data caps, and throttling or caps in the midst of public crises such as natural disasters negatively affect consumers, especially consumers in the lowest income brackets," the filing said.
The groups said that "many low-income households have no choice but to be limited by data caps because lower priced plan tiers, the only ones they can afford, are typically capped." Their filing urged the FCC to take action, arguing that federal law provides "ample rulemaking authority to regulate data caps as they are an unjustified, unreasonable business practice and unreasonably discriminate against low-income individuals."
The filing quoted a December 2023 report by nonprofit news organization Capital B about broadband access problems faced by Black Americans in rural areas. The article described Internet users such as Gloria Simmons, who had lived in Devereux, Georgia, for over 50 years.
"But as a retiree on a fixed income, it's too expensive, she says," the Capital B report said. "She pays $60 a month for fixed wireless Internet with AT&T. But some months, if she goes over her data usage, it's $10 for each additional 50 gigabytes of data. If it increases, she says she'll cancel the service, despite its convenience."
Free Press: “inequitable burden” for low-income users
Comments filed last month by advocacy group Free Press said that some ISPs don't impose data caps because of competition from fiber-to-the-home (FTTH) and fixed wireless services. Charter doesn't impose caps, and Comcast has avoided caps in the Northeast US where Verizon's un-capped FiOS fiber-to-the-home service is widely deployed, Free Press said.
"ISPs like Cox and Comcast (outside of its northeast territory) continue to show that they want their customers to use as much data as possible, so long as they pay a monthly fee for unlimited data, and/or 'upgrade' their service with an expensive monthly equipment rental," Free Press wrote. "Comcast's continued use of cap-and-fee pricing is particularly egregious because it repeatedly gloats about how robust its network is relative to others in terms of handling heavy traffic volume, and it does not impose caps in the parts of its service area where it faces more robust FTTH competition from FTTH providers."
Free Press called the idea of data caps helping low-income users "wishful thinking."
"The implication is that usage-based pricing schemes would allow lower-income users to reduce their network usage in order to keep their bills lower. Besides subjecting lower-income users to an inequitable burden that would discourage innovative and beneficial broadband usage, this hypothetical scenario is at best wishful thinking. As we've documented in this comment and in numerous other proceedings, there is nowhere near enough fixed-line competition to incentivize ISPs to serve all parts of the demand curve. ISPs' profit maximization efforts would not be as successful if they catered to price-conscious customers," the group said.
NCTA to FCC: Terminate this proceeding
The NCTA tried to dispute the Free Press argument about competition driving some ISPs to avoid imposing data caps, saying that "numerous providers have chosen not to offer usage-based pricing at all or to use it in large parts of their footprint without regard to intensity of competition."
"The fact that some rational acting providers choose not to offer usage-based pricing plans demonstrates that providers use multiple factors in determining whether to offer usage-based pricing," the NCTA said.
The cable group also wants the FCC to avoid imposing any new reporting or disclosure requirements, saying that the FCC "already has ample information on broadband pricing." The NCTA ended its filing by urging the FCC to terminate the proceeding.
"The record in this proceeding demonstrates that usage-based pricing is a reasonable pricing practice that benefits consumers and promotes competition. Commenters' claims that usage-based pricing should be regulated because it is merely a profit-maximization tool and disproportionately harms low-income consumers are incorrect and should be rejected. The Commission should also reject requests for additional data collections for usage-based pricing as redundant and a waste of Commission and provider resources. Instead, the Commission should terminate this proceeding," the NCTA said.
