Taking the stance that if customers like their data caps, they should be able to keep them, Charter Communications has approached the FCC to champion allowing data caps. Charter is currently barred from imposing data caps, but is seeking the right to include them on its Spectrum Internet service in 2021, reports ArsTechnica.com.
Charter is treading upstream, attempting to fight back against consumer advocacy efforts that oppose data caps. “Contrary to Stop The Cap’s assertion that consumers ‘hate’ data caps, the marketplace currently shows that broadband service plans incorporating data caps or other usage-based pricing mechanisms are often popular when the limits are sufficiently high to satisfy the vast majority of users,” Charter informed the FCC.
Merger conditions prohibit Charter from establishing data caps, which it maintains is a “popular” plan provision. Charter claims that the lack of caps “prevents Charter from developing innovative service plans that are more tailored to consumers’ needs.”
Rival provider, Comcast, has capped plans in many regions, particularly those where it has few competitors. However, in regions like the northeastern United States, numerous providers make capped plans comparatively undesirable. If Verizon is offering its customers uncapped fiber-to-the-home FiOS service, there is little incentive for a client to seek out a capped plan for the same price. Evidence suggests that in a direct competition, consumers will be drawn to the plan without limits.
Charter is not being hobbled in its ability to innovate, according to ArsTechnica, and could investigate pricing plans by speed instead of data thresholds. While Charter argued on behalf of its ability to enforce data limits, it has also argued that it should be able to charge network-interconnection fees to large online video distributors [OVD’s]. Charter asserts that it is losing potential revenue, telling the FCC that “Residential data usage for Internet-only customers was 600 gigabytes per month, up nearly 20 percent from the fourth quarter of 2019 due to pandemic-related working and learning from home.”
Consumers and other industry players like Roku, a digital streaming service, oppose Charter’s call for data capping. In its communication to the FCC, Roku stated, “If it were to sanction data caps in the absence of competitive broadband internet access services, the Commission would not only allow Charter to act on its incentives to act anti-competitively but also signal to other broadband providers who are unconstrained by competition that they too are free to adopt anti-competitive measures. Data caps should become a relic of the past.”