Charter Tells FCC Some Customers Enjoy Data Caps, Usage-Based Pricing

In recent comments to the Federal Communications Commission, Charter Communications continued to build a case for its request to lift a seven-year ban on implementing data caps and usage-based pricing. The petition has drawn criticism from consumer groups and industry players like Roku, which urged the FCC to deny Charter’s petition, claiming in a letter to the Commission that, “data caps should become a relic of the past.”

Elsewhere, the advocacy group known as Stop the Cap! submitted a letter to the FCC in which it criticized Charter’s reasoning for the petition and claimed that consumers “hate” data caps and usage-based pricing models.

In its response, last week Charter said there are some instances where customers might prefer data caps and usage-based pricing.

“There is also evidence that some consumers — either those who do not consume a lot of data and/or those who are looking for a lower cost plan — may want a service where prices are based on the amount of data used,” Charter said in its comments to the FCC.

It went on to say even some of its critics implicitly acknowledge data caps can be useful at times. In making that claim, Charter cited a statement from internet and competitive networks association INCOMPAS in which it said, “Data caps are also often unnecessary as they do not effectively impact network congestion.” In citing that comment, Charter appears to be focusing on the wording of “often unnecessary,” which (presumably) suggests there could be times where they are necessary.

Charter also pointed to competitor plans, including Comcast’s recently updated 1.2TB data caps, adding that such plans “are often popular when the limits are sufficiently high to satisfy the vast majority of users.” However, as Ars Technica mentions, that popularity may stem more from a lack of alternative choices and competition in a given area, rather than consumer preference for data caps. It’s also worth pointing out that Comcast currently doesn’t enforce its new 1.2TB data caps in certain areas, including the Northeast, where it goes head-to-head against Verizon’s FiOS internet service.

In its letter to the FCC, Stop the Cap! argued that the ban was put into place to help protect consumers and competition and concluded that not enough has changed since 2016 to warrant lifting the ban early.

“Stop the Cap! believes as of the date of this filing, there is still insufficient competition in the broadband marketplace. An early sunset of Charter’s prohibition on data caps will once again make the original merger deal not in the public interest,” the group stated.

In its comments last week, Charter also said filing its petition now is more about wanting the flexibility to explore data caps and usage-based pricing if needed in the future — and less about any concrete plans to actually implement them. The company pointed to conditions laid out in the 2016 merger deal, which stated that if Charter wanted to petition for lifting the ban after five years, it would have to do so between May 18 and August 18 of 2020 — suggesting that filing a petition now is a sort of “use it or lose it” option.

In any case, with the period to submit comments now closed, we’ll continue to keep an eye on Charter’s petition to see if the matter comes up for a vote in the near future.

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