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AT&T, Verizon comically claim that data caps are helpful to consumers
Several weeks ago, we discussed the absurdity of Internet Service Providers (ISP’s) fighting the FCC to keep the definition of broadband at the slowest speeds possible. To summarize, the FCC wants to force those ISP’s that accept government subsidies to offer at the very least 10Mbps down. AT&T and Verizon have been begging the FCC to abandon this proposal as it would show their lack of deployment and competition across the country.
The FCC’s proposal to raise the minimum broadband definition also asked the public to comment on whether the FCC should “consider latency and data usage allowances as additional core characteristics of advanced telecommunications capability.”
As Karl Bode notes at DSLReports, usage caps on fixed-line networks are signs of an uncompetitive market. In fact, ISP’s spent years telling us that usage caps were mandatory for network congestion. Now, the same ISP’s are quietly admitting that usage caps are, and always have been, about milking consumers out of as much money as possible.
AT&T and Verizon are responding to this proposal by asking the FCC to ignore data caps when defining whether internet service should be qualified as a broadband service. Ars Technica reveals filings sent to the FCC by AT&T and Verizon in which they give a rather laughable defense of usage caps.
In Verizon’s comments to the FCC, they claim that usage caps are about “getting users to make efficient use of available resources”:
“…Usage caps “encourage all users to make efficient use of finite network resources,. Usage caps encourage all users to make efficient use of finite network resources. Usage based pricing provides a way for consumers who are not heavy users to keep their costs down and increases incentives to invest in broadband networks. Because such pricing helps ensure a superior broadband experience for most consumers, it better enables providers to win and retain subscribers, thereby generating the revenue necessary to make broadband investments in the first place.” – Verizon, FCC.gov
Setting aside the fact that Verizon has spent tens of billions of dollars in starting and expanding FiOS service to a number of cities without the need to bill for usage, Verizon pushes the same myth that has been at the front of ISP’s argument for usage based pricing: The pricing helps users that don’t use much data save money!
Except, there is absolutely no proof that this is the case. In fact, I can’t find any sort of pricing plan from any ISP that truly saves a light user a significant amount of money. Usage-based pricing simply drives up costs for all broadband consumers.
AT&T can’t seem to get their story straight when commenting to the FCC. In 2011, AT&T began to put usage caps on DSL and U-Verse subscribers. But AT&T never really enforced these data caps for all subscribers. So now, AT&T is telling the FCC that data caps don’t really exist…..but price differentiation does exist. I am still not sure what AT&T really thinks is the difference between the two.
“As an initial matter, AT&T is not aware of tiered data plans that actually limit the amount of data a customer can use. Rather, to the extent providers use tiered data plans, those plans attach different prices to different buckets of data and require that customers who exceed the allowance associated with their chosen plan to pay for their additional usage. In this respect, tiered data plans are no different from any other pricing model that relates charges to usage.” – AT&T, FCC.gov
Comcast enforces data caps on some parts of the country but did not submit comments to the FCC on this subject. However the National Cable & Telecommunications Association (NCTA), of which Comcast is a member, has argued that the FCC should keep its broadband definition at 4Mbps and that there should not be any set latency or usage thresholds.
Then again, as we have written about previously, the NCTA is the same group that has pushed the FCC broadband definition to be defined by the speed advertised and not the speed actually delivered. Yes, not what consumers are being provided but what is promised to them.
…the Commission should continue to look at maximum advertised speed rather than some measure of “actual” speed. In the Notice, the Commission observes that advertised speeds “generally differ from actual rates, are not uniformly measured, and have different constraints over different technologies.” – National Cable & Telecommunications Association
Amazon, eBay, Facebook, Google, reddit, Netflix, Twitter, Yahoo and others, also wrote to the FCC asking them to monitor data caps because they “effectively ration consumer use of broadband.”
I think this YouTube video does a solid job showing the absurdity and stupidity of usage meters in today’s world.