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 has 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.
“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,” said Netflix in a new filing with the FCC.
“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.”
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.
“Data caps on fixed line networks do not appear to serve a legitimate purpose: they are an ineffective network management tool,” notes the company. (ISPs) have stated that data caps on fixed line networks do not serve a traffic management function….the Commission should recognize that data caps and UBP on fixed line networks are an unnecessary constraint on advanced telecommunications capability.”
Netflix is also quick to point out that as 4K streaming becomes the norm (not to mention services we haven’t even invented yet), seemingly “generous” usage caps will still likely limit consumer options.
“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 cracking down on usage caps or potential anti-competitive abuse of them (zero rating). In fact, the agency has shown little interest in cracking down or even highlighting price gouging of any kind. For example the FCC’s $300 million broadband availability map omits even including price data, and the agency has long turned a blind eye to the ISP use of misleading fees to covertly jack up advertised rates. As such, if you’re waiting on the FCC to seriously police usage caps (or even ensure ISP meter accuracy), you may not want to hold your breath.