The U.S. Federal Communications Commission (FCC) announced on Tuesday the initiation of a formal inquiry into the practices of broadband providers that impose data caps on certain customers, assessing the implications for consumers and competition in the market.
“For most people in the United States, rationing internet usage would be unthinkable and impractical. Yet, for millions, limitations on online data usage are an ongoing concern,” stated FCC Chair Jessica Rosenworcel. While many consumers enjoy unlimited data plans, millions—particularly those on lower-cost options—face restrictions that could hinder their internet experience.
Rosenworcel emphasized that advancements in technology have made it easier and more cost-effective for broadband companies to offer unlimited data. She noted that data caps can adversely affect small businesses, impose extra fees on low-income families, and restrict individuals with disabilities from utilizing essential communication tools.
The inquiry follows Rosenworcel’s call for support from other FCC commissioners in June 2023 to further investigate the impact of data caps on consumer plans. A trade group revealed last month that Americans consumed over 100 trillion megabytes of wireless data in 2023, marking a 36% increase from the previous year—the largest annual jump in wireless data consumption to date.
Consumer complaints have emerged regarding challenges faced with internet providers benefiting from government subsidies. The FCC also released 600 consumer accounts detailing struggles with data caps imposed by wireless and broadband providers.
Rosenworcel pointed out that during the COVID-19 pandemic, many fixed and mobile internet service providers refrained from enforcing data caps, indicating that network capacity can accommodate consumer demand without such limitations. Some providers do not impose data caps at all, she added.
In May, a broadband subsidy program that supported 23 million households ran out of funding, shutting down after the White House’s attempts to secure an additional $6 billion from Congress were unsuccessful.
The FCC is seeking public input on the current state of data caps and whether they impede competition or consumers’ access to broadband internet. The inquiry will examine why data cap usage persists, despite the increasing demand for broadband and providers’ capabilities to offer unlimited data plans.
The FCC will focus on current trends in consumer data usage, the effects of data caps on consumers, how consumers are informed about data caps, and the potential legal authority the FCC has to regulate these practices.
In August, a federal appeals court blocked the FCC’s attempt to reinstate landmark net neutrality rules, indicating that broadband providers might succeed in challenging the regulations legally.
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