Coronavirus may prove that ISPs data caps aren’t needed anymore

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The coronavirus is forcing people to stay inside, meaning they are learning and working from home. This eventually results in more internet usage, or people exhausting their data limits earlier than usual. Internet service providers (ISPs), however, have come forward to help people in any way they can during this health crisis. A few ISPs have already abolished data caps, but experts believe that coronavirus may force the service providers to do away with the data caps forever.

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How are ISPs helping people?

In response to the outbreak, Comcast said that it is increasing the internet speed for low-income users. Comcast is mainly working on its Internet Essentials program, which offers internet to low-income Americans at just $9.95 per month. According to Comcast, new users now won’t have to pay anything for 60 days.

Also, the company is increasing the internet speed for all users under its Internet Essentials program. The speed would jump from 15/2 Mbps to 25/3 Mbps. Moreover, the company plans to maintain the same speed going forward as well.

AT&T, on the other hand, is taking a different approach by removing data caps for all its customers. Prior to the change, some AT&T users had caps ranging from 150 GB to 1 terabyte per month. Breaching the data caps attracted a penalty of $10 for 50GB, or more, notes a report from Motherboard. However, it is not known if AT&T plans to re-introduce the data caps once the outbreak is under control.

“Many of our AT&T Internet customers already have unlimited home internet access, and we are waiving internet data overage for the remaining customers,” a spokesperson for the company told Motherboard.

Not just in the U.S., but ISPs worldwide are taking similar actions to help people during the epidemic. For instance, ACT Fibernet in India has boosted the internet speed for everyone to up to 300 Mbps for no extra cost.

Are data caps needed?

As of now, there is no information if these ISPs will take back the benefits once the outbreak settles down. However, there are a few who believe coronavirus could prove an opportunity for the authorities to abolish the data caps forever.

In a tweet yesterday, FCC Commissioner Jessica Rosenworcel called on the agency to come up with quick action in response to the outbreak.

Though the tweet does not clearly say anything about lifting the data caps forever, one may infer that the actions could be for the long-term. One simple reason why there is a need for a change is that U.S. consumers pay among the highest prices for broadband when it comes to the developed world.

Moreover, these data caps are not required at all, and they exist only to squeeze more money from the customers, notes a report from TechCrunch.  Those in favor of this say that if ISP’s can switch off the data caps during the outbreak, it would mean that the network has enough capacity to do so on a permanent basis.

ISPs, on the other hand, argue that abolishing data caps would encourage bad actors to use the entire internet, and in turn, lead to congestion and slowdowns for others. Such an argument could have been true a couple of decades back when the internet was in its infancy. Now, the internet is more of a necessity.

Why should FCC abolish data caps?

Despite being a necessity, many U.S. residents don’t have access to broadband. A recent study from broadband availability tracking firm BroadbandNow found that about 42 million Americans don’t have any kind of access to broadband. This number is almost double FCC’s estimate.

A major reason why so many people lack access to broadband is that many just can’t afford it. As said above, the broadband price in the U.S. is among the highest in the developed world. Higher prices can be attributed to a number of factors, including lobbying, limited competition and absence of regulation.

Additionally, consumers also have to face hidden fees and usage surcharges.  These things, along with the rise of 4k video, game streaming, and massive software patches is pushing users’ broadband bills even higher.

Over the years, there have been many industry admissions, as well as leaked Comcast documents on Reddit, suggesting that the arguments in favor of data caps have no basis. Add to this the fact that the price of network hardware and bandwidth have been dropping continuously over the years.

It is not that the FCC is not aware of such practices by the ISPs. In fact, the FCC Commissioner told Motherboard that abolishing data caps is one of the policies that the agency should work toward, in order to reduce the financial burden on consumers.

Hopefully, suspension of data caps during coronavirus would make it clear for the FCC and for the public that data caps from ISPs aren’t necessary, and eventually, these will be abolished forever.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com

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