We’ve noted for years how broadband data caps (and monthly overage fees) are complete bullshit. They serve absolutely no technical function, and despite years of ISPs trying to claim they “help manage network congestion,” that’s never been remotely true. Instead they exist exclusively as a byproduct of limited competition. They’re a glorified price hike by regional monopolies who know they’ll see little (or no!) competitive or regulatory pressure to stop nickel and diming captive customers.
The latest case in point: Cox Communications employs a 1,280 GB data cap, which, if you go over, requires you either pay $30 per month more for an additional 500 GB, or upgrade your plan to an unlimited data offering for $50 more per month. While Cox’s terabyte-plus plan is more generous than some U.S. offerings (which can be as low as a few gigabytes), getting caught up in whether the cap is “fair” is beside the point. Because, again, it serves absolutely no function other than to impose arbitrary penalties and additional monthly costs for crossing the technically unnecessary boundaries.
And, mysteriously, when wireless broadband providers begin offering fixed wireless services over 5G services in limited areas, Cox lifts the restrictions completely to compete:
“With unlimited home wireless broadband from T-Mobile and Verizon starting to take a dent out of Cox Communications’ customer base, the cable operator is shoring up a defensive position by waiving its arbitrary data cap for existing customers signed up for gigabit speed service in select areas…The fact Cox is willing to waive its own arbitrary data cap for marketing and competition reasons further demonstrates that artificial limits imposed on internet service have nothing to do with congestion, “fairness,” or network management.”
The problem, of course, is that 5G wireless competition isn’t consistently available, and won’t be for millions of Americans deemed too unprofitable to adequately serve. 83 million Americans live under a broadband monopoly that sees no competitive pressure. And whereas in a functioning market regulators would then step in to either regulate prices or embrace policies that drive more competition to market, the U.S. generally suffers from regulatory capture (aka doing whatever the regional and politically powerful telecom monopolies want). As a result, the U.S. remains mired in mediocrity in nearly every meaningful broadband metric except one: we exceed at charging U.S. consumers way more than the global developed nation average.
Like net neutrality violations, privacy violations, high prices, and terrible customer service, arbitrary, confusing, and punitive broadband usage caps are just another symptom of limited competition. But the majority of both U.S. political parties not only haven’t been doing anything to fix that problem, it’s fairly rare you can get anyone to admit the very obvious problem is even real. Instead, we get some nebulous hand waving about the “digital divide,” billions more in tax breaks, subsidies, and regulatory favors thrown at entrenched regional monopolies, and little substantive change.