Questions – and Answers – on Data Caps
Questions – and Answers – on Data Caps
Questions – and Answers – on Data Caps

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    Today we have two big announcements on the data caps and
    usage based billing front.  The
    first is that our President and CEO Gigi Sohn has sent letters to the CEOs of
    our nation’s largest ISPs asking some simple questions about data caps.  The second is that, in an attempt to
    provide some answers of our own, we are releasing the whitepaper Know Your Limits: Considering the Role of
    Data Caps and Usage Based Billing in Internet Access Service

    Getting information about data caps is important because
    today we assume that the internet can support all of the innovation that we can
    imagine.  That is why businesses,
    governments, and everyday people are working so hard (and spending so much
    money) to move existing services online and create new online-only services.  If the networks cannot handle all of
    this innovation, we need to know that now.

    Data caps will also have a huge impact on the future of
    competition.  Video delivered
    via an internet connection creates and opportunity for thousands of competing
    video services to blossom. 
    However, many existing video distribution companies also control
    internet access.  If abused, data
    caps could be used to prevent that competition from manifesting itself.

    The letters are addressed to the heads of AT&T, AT&T
    Mobility, Comcast, Cox, Sprint, T-Mobile, Time Warner Cable, Verizon, and
    Verizon Wireless.  They contain a
    series of simple questions that are designed to help the public understand more
    about data caps. 

    Why are they
    imposed?  What are they designed to
    achieve?  Once they are
    implemented, how are they evaluated? 
    What would ever cause them to change? 

    We are asking for answers by May 25th.  Our hope is that the answers will allow
    us to begin to understand what is – and is not – realistic to expect from the
    internet going forward.

    Know Your Limits is
    a deeper dive into the world of data caps and usage based billing.  After examining the current trends
    towards usage based billing, it explores both the benefits of and the
    justifications for usage based pricing. 
    Next is a more in-depth consideration of relevant economic and
    historical perspectives.  We also
    raise some concerns, both in regards to competition and to national priorities
    such as broadband adoption, education, employment, and innovation more
    generally.  Finally, Know Your Limits concludes with specific
    recommendations on issues of transparency, implementation, and oversight.

    Data caps and usage based billing are tools and, like any
    tools, are not inherently productive or destructive.  What matters is how they are used.  Right now much of that use is shrouded in secrecy or
    obfuscation.  It is our hope that Know Your Limits today and the answers
    to the letters on May 25th will act as big steps towards clarifying how they
    are being used.