On October 15, 2024, the FCC began a Notice of Inquiry (Notice) in Docket 23-199 into the data caps that exist for some consumer broadband plans offered by broadband Internet access service (BIAS) providers. According to the Commission,
Data caps are restrictions set by BIAS providers on the volume of bits that a consumer can transfer during a set period of time. Customers who exceed the imposed data caps may be subject to additional fees or reduced upload and download speeds. The terms “hard data caps” and “soft data caps” are often used to describe, respectively, data limits which incur additional fees, and data limits which result in reduced upload and download speeds, or throttling. When we refer to “data caps,” we include both types of arrangements as well as data limits that result in suspension or termination of access to broadband entirely. The use of data caps and their limits typically vary by BIAS provider even when they use the same underlying network technology to deliver BIAS. (Notice, at para. 4).
It is clear that the majority of FCC commissioners have a problem with data caps and the tone of the Notice is decidedly negative about them going forward. For example, as FCC Chairwoman Jessica Rosenworcel states,
For most people in the United States, rationing their internet usage would be unthinkable and impractical. But, for millions, limitations on how much data they can use online is a constant concern. And many are not happy about it. Restricting consumers’ data can cut off small businesses from their customers, slap fees on low-income families, and prevent people with disabilities from using the tools they rely on to communicate. As the nation’s leading agency on communications, it’s our duty to dig deeper into these practices and make sure that consumers are put first. (Docket 23-199, October 15, 2024, News Release).
To make its point about the “disastrous” effects of data caps in the lives of ordinary Americans, simultaneously with the release of the Notice, the agency posted hundreds of consumer experiences about the impact of data caps on their lives. These concerns were sent to a portal the Commission launched for consumers to submit their data cap stories so that the agency could hear from households and businesses impacted by limits on their broadband usage.
As anticipated, these submissions are virtually 100 percent negative about data caps. For example:
We have had to unplug our modem to prevent going over our data cap. We have to take our kids to find public wifi to complete their school work. We can’t afford $190 a month for unlimited internet.” – Arkansas
“[Provider] has a data cap on our internet and I provide telemedicine services with video for low income patients.…There is no other high speed provider in my area that is able to provide reliable internet for me to see patients so I have no choice but to bear the excessive costs they are charging.” – Michigan
Since it clearly intends to eliminate data caps, the most significant section of the Notice is concerned with whether the Commission has thelegal authority to do so. The agency makes clear that either under section 257 of the Telecommunications Act, which provides authority for it to address market entry barriers or under section 706 which allows it to promulgate rules to maximize broadband availability for all Americans, it will “find” the needed legal authority. But not all FCC commissioners are on board.
Brendan Carr believes that forbidding data caps is just another step toward the FCC establishing total price control over the Internet. He states that
In its decision to reinstate utility-style, Title II controls on the Internet, the FCC promised to forbear from all forms of price controls—namely, both ex ante and ex post rate regulation. The first crack in this commitment emerged immediately when the agency allowed New York’s price control law to move forward without the Commission stating the obvious—New York’s law is plainly preempted by the Communications Act and FCC precedent. And with today’s Notice of Inquiry, the FCC itself starts down the path of directly regulating rates. It does so by seeking comment on controlling the price of broadband capacity (“data caps”). Prohibiting customers from choosing to purchase plans with data caps—which are more affordable than unlimited ones—necessarily regulates the service rates they are paying for. Today’s NOI is legally infirm, too, for want of statutory authority. Indeed, the Sixth Circuit has stayed the FCC’s Title II decision, which is based on the same claims of authority that the FCC invokes today. At bottom, then, I dissent from today’s NOI because I cannot support the Biden-Harris Administration’s inexorable march towards rate regulation and because the FCC plainly does not have the legal authority to do so. (Dissenting Statement of Brendan Carr, released October 15, 2024).
Industry comments on the Notice are due on November 14, 2024. Reply comments are due on December 2, 2024. Regardless of how the industry responds, the only question going forward is when will ISPs appeal the upcoming FCC order banning data caps?
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