Netflix directly calls on the FCC to dump data caps calling them unreasonable and inhibitive
The executives at Netflix say – dump data caps on home internet services! These executives, unlike most people, have a direct connection to the Federal Communications Commission and Netflix has asked the FCC to dump data caps on the basis that they limit individual consumers’ ability to watch video online.
Netflix submitted a filing to the FCC last week during a review of the Telecommunications Act. The review is a mandated part of the act and is meant to ensure that new technologies are rolled out to regular citizens in a reasonable way. If something like high-speed internet isn’t reaching the people in a timely fashion, the FCC actually has the power to force providers to hurry it up. In this case, however, Netflix is claiming that internet providers should dump data caps because they are essentially blocking access to unfettered video streaming.
Netflix is urging the FCC to crack down on broadband usage caps, stating that they unfairly limit consumers’ ability to consume streaming video services. Netflix has long had an adversarial relationship with ISPs, and often for good reason. Usage caps on fixed-line networks are specifically designed to protect ISP TV revenues from Netflix competition, allowing an ISP to both complicate and generate additional profit off of the shift away from legacy TV.
Netflix’s filing comes as ISP’s increasingly turn to broadband usage caps to take advantage of the lack of broadband competition in many markets. Fearing FCC crackdown both Comcast and AT&T raised their caps to one terabyte, though many ISPs still cap usage at much lower allotments. High, low, or somewhere in between, Netflix highlights that there is no good reason to implement caps on well-managed fixed-line networks, despite a decade of ISPs trying to justify the price gouging.
“A data cap or allotment of 300 GB of data per month or higher is required just to meet the Internet television needs of an average American,” said Netflix. “An above average television watcher, a multi-occupant household, or a consumer wishing to watch in 4K requires a much higher cap.”
The FCC has historically shown very little interest in dealing with usage caps or potential anti-competitive abuse of them (zero rating). In fact, the agency has shown little interest in dealing with price packages of any kind. The FCC has not even dealt with the ISP use of misleading fees to covertly jack up advertised rates. As such the FCC is not expected to seriously police usage caps
“Data caps (especially low data caps) and usage-based pricing (‘UBP’) discourage a consumer’s consumption of broadband, and may impede the ability of some households to watch Internet television in a manner and amount that they would like,” Netflix wrote. “For this reason, the Commission should hold that data caps on fixed-line networks and low data caps on mobile networks may unreasonably limit Internet television viewing and are inconsistent with Section 706.
On the one hand, cable companies often use data caps as a way to limit streaming video and push viewers back onto their own TV service — a practice that Netflix claims is discriminatory and creates an incentive for ISPs and cable providers to keep their data caps low. On the other hand, Netflix obviously has a lot to gain by making sure everyone has unlimited access to all the Stranger Things they can binge on. Netflix also argued that a 300GB monthly cap on home internet service is barely enough for the average user in the US, even before you factor in non-video use like gaming or even standard web browsing. “Today’s ‘above-average’ Internet consumer is tomorrow’s average Internet consumer,” Netflix wrote.
Still, it is unclear how much power the FCC actually has to remove or raise data caps in this situation. In the past, the FCC has invoked the same Section 706 in order to boost the minimum broadband speeds, but more recently the Commission lost out on its attempt to protect municipal broadband service. For their part, the National Cable & Telecommunications Association responded that factors like “broadband subscription, performance consistency, and usage allowances” were “only tangentially relevant to broadband deployment or availability” and thus not covered by Section 706.