AT&T and Verizon: Data Caps On Home Internet Service Are Great For Everyone (Especially Us)



Verizon and AT&T are big players (and getting bigger) in broadband landline service, but they seem to take a mobile phone mindset with them everywhere they go. Not only do they think that home broadband doesn’t need to be faster than your phone, but also now they’re saying that data caps on your home internet use are perfectly reasonable, too.

Ars Technica points the way to the filings, which are part of an FCC look into broadband deployment across the United States.

In their reply comments, Verizon (PDF) and AT&T (PDF) stress not only that 4 Mbps is a perfectly acceptable home wired network speed, but also that data caps are reasonable and should not be considered as part of the definition of advanced broadband.

Despite ardently insisting elsewhere that broadband service has nothing in common with utilities and should never ever be treated like one, AT&T went straight to the utility comparison for discussing data caps.

“AT&T is not aware of tiered data plans that actually limit the amount of data a customer can use,” they wrote. “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.”

AT&T might actually not be aware, but as an annual look at data caps shows, at least one company — Charter — actually does cut off users who hit their limits. But AT&T is right that most don’t. They just charge more for each extra megabyte or gigabyte, or bump you up to a higher billing tier.

“In this respect,” AT&T continues, tiered data plans are no different from any other pricing model that relates charges to usage. Simply put, as is the case with countless products and services – electricity, gas, food, water, to name a few – those who use more, pay more.”

Verizon, meanwhile, argues that because broadband adoption has expanded at the same time that usage-based billing has become more common, that the latter cannot possibly be detrimental to the former. (It couldn’t possibly be because if your broadband provider has data caps you don’t like, you can’t just switch to another one, right?)

Since Verizon is also the nation’s largest mobile carrier, it’s unsurprisingly that they draw the direct comparison to cell phone use. “Usage-based billing is the norm for most subscribers to 4G LTE services,” their comment says, “and this service is among the fastest-growing in U.S. history, is experiencing exploding deployment, and is intensely competitive.”

The mobile playing field is indeed intensely competitive between wireless carriers. But it is not at all competitive as compared to traditional home wired broadband.

Both companies conclude that nothing at all needs to change, and that the status quo is a peachy-keen place to be.

AT&T and Verizon each claim repeatedly that bandwidth is a finite resource, that it needs to be metered and meted out to preserve the quality of service for subscribers, and that bandwidth caps are in fact good for consumers because with that higher quality service, subscribers will keep paying them money that they can then use to build more infrastructure.

It’s a fairly spectacularly ballsy argument, but it’s also mostly not true. Not only have studies shown that bandwidth caps are about cash, not congestion, but cable industry and lobby executives have even literally said that it’s not about rationing a resource, but about “how to fairly monetize a high fixed cost.”

AT&T and Verizon don’t like bandwidth caps because they make for more satisfied customers. They like bandwidth caps because every way to nickel and dime a customer who doesn’t have any good competition to jump to is a way to reap profit free from extra costs.

AT&T and Verizon defend data caps on home Internet service [Ars Technica]

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