Data Cap Debate: Are ISPs Finally Backing Away From Usage-Based Billing?

As streaming services gain popularity, the shift towards usage-based billing by major Internet service providers has been as unpopular and inevitable as death and taxes. A few years ago, several ISPs began conducting trials and enforcing data caps in major metro areas across the South and Central United States. Customers in these areas, who faced overage fees for exceeding the limits of their data plan, found themselves rationing Internet in an effort to conserve cost. A recent Wall Street Journal article exposed the effects of these widespread data cap trials, painting a picture of families whose Internet usage was feast or famine, depending on the billing cycle of their provider. Sorry, sweetie. No My Little Pony today. Mommy only has 10 GB left. Why do Internet service providers use data caps? Depends on the provider. Satellite providers utilize caps to limit streaming and maintain speeds across their network. This is largely a factor of satellite technology and a valid concern for those providers if they intend to deliver on promised Internet speeds. Most broadband providers, however, have shied away from claiming data caps are imposed due to congestion. Instead, these ISPs have argued that usage-based billing helps ensure the people who use high-speed Internet the most are the ones who pay more. This rationale seems fair, but a closer inspection of how data caps are enforced belies this logic. Since overage fees are applied across markets and providers in a wildly inconsistent way, it seems unlikely to be the motivation behind usage-based billing. Most experts agree that broadband Internet providers are utilizing data caps to pressure potential cord cutters into keeping their cable TV. The Federal Communications Commission (FCC) has begun to take notice. In 2015, complaints about data caps submitted to the organization went from 863 to 7,904. Consumers were largely focused not only on the unfair application of data-based billing across various markets, but also the absence of any option that offered unlimited data to high-volume users. The industry standard has been to charge $10 for every 50 GB that a customer exceeds on their monthly data allowance. Most ISPs claim 90–95% of users will never use enough data to incur overage fees. But that is changing rapidly as streaming providers like Netflix, Amazon, and Hulu gain more dominance over the television programming market. Charter, an Internet service provider set to merge with Time Warner Cable later this year, has disclosed to the FCC that their customers are utilizing 40% more data than previous years.

“Where’s the Comcast table? Waiters, pay attention. If they want more wine, it’s 35 dollars a bottle. And don’t consider it a wine cap. Just think of it as a wine usage plan.”

Tom Wheeler, Federal Communications Bar Association Chairman’s Dinner

The Charter and Time Warner Cable merger,  recently approved by the FCC, has already transformed the data cap debate. What was once a practice that appeared inevitable, despite growing consumer ire, is now under fire. The FCC, using the opportunity of the unprecedented telecom merger that would make Charter the second biggest broadband provider behind Comcast, has begun flexing its regulatory muscles. Charter has committed to halt the practice of data-based usage for seven years as a condition of the merger. They’ve also agreed to concessions that would bring broadband to under-served areas, and they’ve promised not to engage in practices that bully streaming providers into paying for access to avoid throttling. Other Internet service providers have taken note and moved to position themselves more favorably. Several providers increased their data thresholds, including Comcast who bumped data caps from 300 GB in some markets to an impressive 1 TB just this week. While Comcast currently only applies data caps across roughly 12% of their national footprint, that’s still 23 million customers who will experience immediate relief when the new 1TB limit goes into effect June 1st. For now, it appears the FCC has won a victory for consumers in the most unlikely of places. Typically, consolidation in the telecommunications industry means less competition, which is never a favorable outcome for consumers. However, in this case, the Charter merger spells at least temporary relief for customers being squeezed between their desire to stream  Game of Thrones and their interest in an Internet bill that doesn’t cause hyperventilation. Want to know which Internet service providers currently don’t use data caps? Check out the chart below for details.
Provider Data Caps? Details
Frontier Fiber, DSL No (for now)
Optimum No
CenturyLink Fiber, DSL No (for now)
AT & T Fiber/DSL Yes Caps based on speed tier package, $30 unlimited plan, 1TB for fiber
CableOne Yes Consistent overage will result in automatic package upgrade
Suddenlink Yes 3rd overage incurs $10/50GB fee, unlimited available
Brighthouse No
Time Warner Cable No discontinued use last year
Cox No (except Cleveland) $10/50 GB overage charge
HughesNET Yes Satellite
Xfinity by Comcast Yes (select areas) 1TB limit, unlimited data $50
Charter No
Exede Yes Unclear
Windstream No Note this is unusual for a satellite provider
Mediacom Yes Courtesy warnings, $20 fee
Want to check out a provider in your area that doesn’t use data caps? Use our zip code tool to learn more.  

Author -

Kaz is a writer, blogger and social media junkie. She uses her tenacity to investigate the best of the Internets.

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