This post originally appeared in TechCrunch
FCC Chairman Julius Genachowski wrote last week on TechCrunch about the importance of speed. Specifically, he highlighted the importance of speed in the next wave of Internet innovation. While he is right about the importance of speed, he missed one key point: broadband speed isn’t worth much if it is crippled by data caps.
All of the advances Chairman Genachowski pointed to – in-cloud computing, education, health care, energy, and public safety – will rely on fast broadband connections. 100 megabit-per-second networks could transform the way our society and economy function. But speed is not an end in and of itself.
The fastest car in the world won’t get you very far if you only have 20 feet of road, and a blazing-fast 4G LTE network is not worth much if you are limited to 2 GB of data per month. By and large, next-generation Internet technologies need high-speed networks because they need to move a lot of data quickly. Big Data is called Big Data for a reason – there is lots of it.
Unfortunately, while the FCC has taken steps to encourage the deployment of broadband networks, it has done little to ensure that people can make use of those networks without running into road blocks in the form of data caps.
Data caps impose real costs on consumers and society as a whole. At their most basic, they create a disincentive to use broadband. Instead of freely exploring new technologies, services, and ideas, data caps force users to decide if site, or app, or video is really worth using some of their valuable data.
Caps also have a tendency to freeze innovation. When they set their caps, most ISPs insist that “normal” users will not run into problems. Even if this were true, those caps have proven extremely slow to change. “Normal” usage patterns today barely include streaming video, let alone the types of next-generation innovation that we all look forward to. Under a data cap, that next-generation immersive and creative software to help children learn is reserved for “data hogs” willing to pay tens, or hundreds, of dollars a month in overage fees. That is not a recipe for widespread adoption of innovation.
We are also starting to see ISPs use data caps to pick winners and losers online. Whether it is Comcast exempting its own online video service from its data cap or AT&T offering to let developers buy their way out of its data cap by paying a fee, data caps become an excuse for ISPs to charge more people more money while shutting out disruptive innovators. Of course, it is also no surprise that cable companies are setting data caps well below what it would take to replace their TV offering with an over-the-top competitor.
Data caps are also beginning to create a second-class Internet for traditionally disenfranchised communities. Low-income communities, rural communities, and communities of color are increasingly relying on wireless internet connections as their only internet connection. Single digit data caps make it unreasonable to expect these connections to be used to access the “real,” data rich, Internet.
It is hard to find a positive benefit of data caps to balance out all of these costs. You do not have to be a network engineer to know that a monthly data cap is an inefficient way to address network congestion – something that happens at a specific time and place on a network. Monthly data caps cannot tell the difference between streaming a high-definition movie on a weekday evening and backing up data overnight during the weekend. There is no evidence that monthly caps shift usage away from congested periods – only that they reduce internet usage generally.
And while there may be some benefit in charging heavier users more, data caps are a bad way to do that. Most customers have no idea how much data a given activity requires. Even AT&T and Verizon disagree on how much data an hour of streaming video will consume. This uncertainty guarantees that consumers end up over-paying and under-using when it comes to broadband. If ISPs are going to charge heavy users more, they should at least use a metric that everyone – especially Chairman Genachowski – understands: speed. You may not know a megabit per second from a gigabyte per month, but when web pages start to load slowly you know that it is time for a faster connection.
However much we might wish things were different, limited competition between ISPs means that we cannot rely on market forces alone to ensure the internet remains an open platform that continues to enable innovation without permission. After all but ignoring the issue in the past, the FCC has just started the process of looking into data caps. For over a year, we have been urging them to ask ISPs basic questions about data caps: What is their purpose? How are they set? Once they are set, how are they evaluated against their purpose? What would cause them to change?
Without answers to those questions, we may end up with a blazing-fast network with everyone stuck in the slow lane.