Holding Up Traffic – Do Data Caps Work

Limits placed on internet services, called data caps, are a frustrating hindrance to broadband users. Consumers don’t know how much data they use, nor do they want to worry about exceeding set limits while they go about their daily lives.

According to Internet service providers (ISPs), data caps are necessary in order to control traffic during times of heavy usage. But are there other ways to combat network congestion without setting costly restraints on broadband users?

Hard Caps and Soft Caps: Effective Traffic Control?

There are two types of limits placed on data: hard caps and soft caps. If you use data beyond a hard cap, you may be penalized by having your account terminated. If you use more data than a soft cap allows, then you will be charged for any extra data that you use. Other soft caps allow a certain amount of broadband at optimal speeds, then slow down service after the customer goes beyond the limit. This is called “throttling”.

These restrictions are a response to high traffic. ISPs claim that data caps are necessary in order to control network congestion, but these restrictions don’t address the problem of heavy use during certain times of the day. Instead, they make all consumers pay the price. Data caps also allow ISPs to avoid the cost of implementing ways to keep up with demand.

Today’s Data Cap Won’t Work Tomorrow

Data caps entered the scene when Comcast introduced a hard cap of 250 GB on residential broadband users back in 2008. They enforced this restriction after warning their top 1,000 users to either cut back on their usage or be removed from the network. No matter how much data the top 1,000 used, those who were on the list more than one time within the period of a year were cut off and left to find another ISP.

In 2012, Comcast changed to a soft data cap, charging customers an extra $10 for every 50 GB over the imposed limit.

Wireless companies have followed Comcast’s lead by imposing soft data caps. The two largest wireless carriers, AT&T and Verizon Wireless, replaced unlimited data plans with tiered plans. Prices rise with the amount of data used each month, and overages incur a fee.

Data usage grows as technology advances. The amount of data the average user required years ago has increased dramatically over the years. Consumers who were once considered heavy broadband users are now average. For example, in 2008, Comcast’s average customer used about 2.5 GB monthly. Data usage has since increased to 8 to 10 GB per month. According to the Federal Communications Commission (FCC), Americans used close to 30 GB per month in 2012.

Higher Prices Don’t Reflect Actual Cost

Prices rise in spite of lower costs to providers. The cost to provide services has decreased 17 percent while the number of broadband consumers has increased by 25 percent. At the same time, both wireless and wireline customers have begun to use a growing variety of products that require broadband internet access.

Big profit margins have not led to improvements in infrastructure. Funds aren’t going toward building more cell towers, upgrading equipment, or promoting greater efficiency–actions that would address the issue of network congestion.

Broadband Restrictions Affect Everyone

Data caps stifle progress. These restrictions affect schools,  healthcare providers, and other institutions that improve the US as a whole. Since ISPs aren’t expanding capacity by upgrading networks, the benefits of limitations are enjoyed only by those on the receiving end of huge profits.

Data needs are quickly outgrowing the caps placed on the typical American home. Between computers, smartphones, tablets, and gaming consoles, data usage adds up. Factor in faster mobile speeds provided by 4G, and restrictions become an even greater problem.

Wireline providers notice the increase in broadband consumers who leave behind their paid-television subscriptions for over-the-top services like Hulu and Netflix. These services require more data, forcing them to choose the more costly alternative of subscription TV.

Data caps aren’t the best solution to congestion during peak hours. Increasing the number of cell towers, creating more efficient broadband technology, and changing the landscape of broadband to make it more effective for advancements and increased usage would be better for broadband users and society as a whole.