Does Net Neutrality Give The FCC Authority To Overturn Data Caps?

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While some cable companies, like Comcast and Cox, continue to run regional tests of data caps for their broadband services, at least one major industry analyst is egging the industry to establish harder data caps before the FCC’s new net neutrality rules go into effect in mid-June, even though the new rules don’t actually set any hard and clear guidelines about the Commission’s authority to intervene on the issue of data caps.

The Open Internet Order [PDF] does include transparency rules that require Internet service providers are clear with their customers about data caps and any repercussions for exceeding those limits. Some companies throttle users’ speeds after passing a monthly limit; some shut off service unless the customer pays for additional gigabytes.

All of this is supposed to be clear to the customer. If the ISP is hiding this information or making it difficult to understand, the FCC could intervene. However, it’s likely that the intervention would only extend to making sure the policies are made clear, not getting rid of the caps.

These transparency rules have actually been in place since the 2010 Open Internet Order, and the FCC has warned ISPs about violating them, but data caps have continued to proliferate.

The only way that the new Open Internet Order could result in the FCC eliminating or curbing data caps is if they are found to be in violation of the so-called General Conduct Rule.

The FCC does not specifically call out data caps in the Order, so consumers or content companies would need to make their case that a data cap puts either or both of them at an unreasonable disadvantage.

A simple example would be a cable company ISP with a data cap so low that a large number of subscribers approach the monthly limit through regular use. This could be seen as a cable company trying to make streaming video competitors less attractive to the benefit of its own pay-TV business. Another possible reason is that the ISP is trying to earn overage fees by taking advantage of a lack of competition for broadband access in the area. In either case, the ISP would likely need to demonstrate that its cap is set so low because of a genuine congestion issue.

For now, the above example is an extreme, as most cable ISPs with caps set them well above the monthly usage average. But as streaming video grows in popularity — along with the increased use of web-connected devices in the home — there will come a time when it might not just be data hogs bumping their heads against that ceiling every month.

A more complicated example of a possible future challenge to data caps would involve so-called “zero-rating” arrangements between ISPs and certain content providers. In these deals, the data from that content provider is not charged against a user’s data cap.

If Cable Company X has this sort of arrangement with Streaming Video Company Y, then Y’s competition could try to argue that consumers are less likely to use their services because that could put users over their monthly limits. In that case, an FCC ruling could impact both the use of data caps and zero-rating agreements.

In short, the answer to whether or not the FCC can get rid of data caps is that the Commission has the authority to investigate and respond to practices that may unreasonably disadvantage consumers and/or content providers, but data cap opponents are going to have to make a convincing case that these restrictions are so unfair as to fall into that category.

by Chris Morran via Consumerist