May 20, 2011, 11:28 AM — Consumer and small-business advocacy organizations are asking the FCC to step in and limit the ability of ISPs to put caps on the amount of data broadband customers can use, warning that 56 percent of all broadband connections come with data caps.
Data caps stifle competition and innovation by giving incumbent providers the ability to slow their own development at the expense of customers who would otherwise benefit from lower prices, more choices of provider and greater capabilities in the Internet connections they have to buy for telephone, TV and Internet access, according to a letter sent to the FCC by consumer-advocacy organizations Public Knowledge and New America's Open Technology Initiative.
Data limits specifically undermine many of the goals of the National Broadband Plan, which the Obama Administration issued in 2010 to set goals ensuring the widest availability and capability in both wired and wireless broadband connections.
Rather than using data caps to allow for reasonable expansion and upgrade without ruinous spending, carriers are using them to keep competitors such as Netflix off their networks to the greatest extent possible, and discouraging customers from using Internet services to the full extent for which they've paid, the groups said.
"The need to fully understand the nature of broadband caps is made all the more urgent by the recent decision by AT&T to break with past industry practice and convert its data cap into a revenue source," read the letter to the FCC, referring to high per-MB charges AT&T and other carriers apply to any data over a customer's monthly limit.
It's the effect on the competitive environment that is most destructive, however, the letter said: