| Tiers / Data Caps / Zero Rating
© Cybertelecom ::
Derived From: FCC Annual Video Competition Report 2013
"Some ISPs, including MVPDs and wireless providers, have initiated bandwidth caps or usage-based price tiers, using a variety of business models. During the first half of 2012, most major MSOs formalized bandwidth caps or usage-based/metered pricing. They generally adopted thresholds that exceed typical traffic and chose either to cap usage or to implement overage charges for customers who exceed the limits.
Carrier Data Caps AT&T imposed a monthly broadband data cap in May 2011, limiting legacy DSL subscribers to 150 GB and U-Verse customers to 250 GB.
- Merger Conditions
- AT&T / DirecTV 2014: "Recognizing that AT&T is the only major ISP that applies “data caps” across the board to all of its fixed broadband customers and that this merger increases the incentive of AT&T-DIRECTV to use strategies that limit consumers’ access to online video distribution services in order to favor its own video services, the Commission requires AT&T-DIRECTV, as a condition of this merger, to refrain from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet service."
- Application of AT&T Inc. and DIRECTV For Consent to Assign or Transfer Control of Licenses and Authorizations, Dkt 14-90, Memorandum Opinion and Order (2015), para. 205 (discussing applicants incentive to use data caps, and merger conditions) Para 210 (We note that today AT&T imposes usage-based data caps on its wireline broadband customers and is alone among the major ISPs in imposing such data allowances for all subscribers.)
- FTC v ATT Mobility, 9th Cir. Aug. 29, 2016 ("Through a practice referred to by the Federal Trade Commission as “data throttling,” AT&T Mobility LLC intentionally reduces the data speed of its customers with unlimited mobile data plans.1 A throttled customer receives data at a substantially reduced speed during a given billing cycle once the customer’s data usage during that billing cycle exceeds a threshold determined by AT&T. Unlimited data plan customers are throttled without regard to real-time network congestion.")
- Netflix Data: AT&T Caps Not That Generous After All, Gigaom 5/20/2011
- Want Better AT&T Cell Service? Now You Can Buy It, NYT 3/26/2010
- AT&T Again Hints At Bandwidth Crackdown - Peak, off-peak broadband minutes?, dslreports 9/16/2008
- Is AT&T Doing Bait & Switch On Broadband Caps?, Techdirt 4/21/2009
- AT&T's New 18Mbps U-Verse Tier - New tier likely 18Mbps/1.5Mbps for around $65?, dslreports 10/15/2008
- AT&T Jumps Into The Metered Broadband Game, Techdirt 11/5/2008
- AT&T Tries On Data Cap, Ecommerce Times 11/5/2008
- AT&T tests limits on subscribers' Web use, CNET 11/5/2008
- AT&T, An Update for Our Smartphone Customers With Unlimited Data Plans (press release), July 29, 2011 (announcing reduction in speeds for smartphone customers with unlimited data plans who exceed certain bandwidth thresholds);
- Julianne Pepitone, AT&T Raises Limit for Smartphone Data Slowdown, CNNMONEY, Mar. 1, 2012, (visited Dec. 21, 2012)
- AT&T, AT&T Gives Customers More Choice With New Shared Wireless Data Plans (press release), July 18, 2012
- "We note that today AT&T imposes usage-based data caps on its wireline broadband customers and is alone among themajor ISPs in imposing such data allowances for all subscribers." AT&T / DirecTV Merger Order, at 210 (2015)
- " AT&T imposed a monthly broadband data cap in May 2011, limiting legacy DSL subscribers to 150 GB and U-Verse customers to 250 GB." FCC Annual Video Competition Report 2013
- "in July 2012, both AT&T and Verizon Wireless announced plans to facilitate customers' sharing of data across smartphones, tablets, and other devices.936 The new shared data plans charge a monthly fee for each device and then charge for a shared pool of monthly data transfer ranging from 1 GB to 20 GB.937 Early evidence suggests that consumers materially increase their data consumption when upgrading to Long Term Evolution ("LTE") devices" FCC Annual Video Competition Report 2013
Cablevision as of 2012 had not established formal limits. CenturyLink imposed tier-based usage caps. Verizon, which relies on fiber-to-the-home architecture, does not impose bandwidth caps or usage-based-pricing.
- CenturyLink Follows Comcast, Begins Charging Overage Fees by Karl Bode DSLReports Jul 19 2016 ("CenturyLink has begun notifying customers in select areas that it will soon begin implementing usage caps and overage fees. The company already imposes usage caps ranging from 150 GB to 250 GB depending on the speed of your line, but until now had avoided charging users overage penalties. That's about to change.")
offer data tiers, tying caps to the speed of Internet service that consumers purchase.
- Karl Bode, Charter Confirms New Caps, DSL Reports (Feb. 4, 2009)
- Phillip Dampier, Charter Communications Quietly Eliminates Usage Caps That Were Rarely Enforced Anyway, Stop the Cap! (March 5, 2015),
Comcast In May 2012,announced that it is experimenting with different approaches to data caps and usage pricing through trials in some markets but for all markets raised the existing data cap from 250 GB to 300 GB per month.932 In the markets where Comcast is not experimenting with usage based pricing, it has suspended enforcement of its data caps.
- Comcast Expands Data Caps To Another 23 Markets Starting Nov. 1 Comcast Expands Data Caps to Another 23 Markets Starting Nov . 1, Consumerist 10/7/16
- Atlanta Comcast Users Now Have to Pay $35 Monthly to Avoid Caps, Comcast Oct. 16, 2015 ("At the beginning of this month Comcast added a small wrinkle to its slowly expanding usage cap "trials," forcing users in these markets to pay a $30 premium if they want to avoid usage caps (300GB, $10 per 50 GB overages)")
- New Comcast Throttling System From Sandvine? - New 'protocol agnostic' solution simply software update for existing hardware., dslreports 8/27/2008
- Cathy Avgiris, Executive Vice President and General Manager, Communications and Data Services, Comcast Cable, Comcast to Replace Data Usage Cap with Improved Management Approaches, Comcast Voices Blog, May 17, 2012, (visited Dec. 21, 2012). One approach, which Comcast launched in Nashville, TN, and Phoenix, AZ, begins with a 300 GB data cap, with increasing data allotments for each successive tier of high-speed data service. Customers have the option of purchasing additional gigabytes in increments (e.g., 50 GB for $10). The second approach increases the data cap to 300 GB for all tiers and also offers additional gigabytes in increments. Id. Customers who exceed the threshold will receive warnings from Comcast for up to three months in a twelve-month period, after which Comcast automatically bills them for the extra data they use. Broadband Bonanza: Comcast Has New Caps, Tiers, In-Home WiFi, CABLEFAX DAILY, Sept. 19, 2012
- offer data tiers, tying caps to the speed of Internet service that consumers purchase.
- Cox Customers In Florida, Georgia Now Have To Pay Up For Hitting Data Caps, Consumerist, Oct. 28, 2016
- Cox Plans to Throttle, mLabs to the Rescue, PK 1/29/2009
- Frontier DSL Stands By Its Caps... Even As It Decreases Broadband Speeds, Techdirt 2/18/2009
- Frontier Confirms Cap Plans - CEO: $1-$2 per GB only way to stay profitable., dslreports 11/5/2008
Suddenlink offer data tiers, tying caps to the speed of Internet service that consumers purchase. offers voluntary opt-in limits in exchange for a $5 discount on monthly charges across its Texas footprint, and
- Time Warner: No Metered Broadband... But We'll Kick You Offline If We Think You Used Too Much, Techdirt 4/28/2009
- Time Warner Cable Broadband Pricing Fight Rages, Internet News 4/16/2009
- Time Warner Cable Delays Texas Metered Billing - Austin, San Antonio get reprieve -- other markets don't, dslreports 4/14/2009
- Time Warner Customers Less Than Pleased With Usage Caps, PK 4/9/2009
- FCC REACHES $48M SETTLEMENT WITH T-MOBILE TO ADDRESS INADEQUATE DISCLOSURES OF 'UNLIMITED' DATA PLAN RESTRICTIONS. T-Mobile to Increase Transparency, Provide Consumer Benefits, Connect Public School Students and Pay a Fine. EB https://apps.fcc.gov/edocs_public/attachmatch/DOC-341800A1.docx
- T-MOBILE USA, INC. ORDER AND CONSENT DECREE. FCC reaches $48 million settlement with T-Mobile for failing to disclose restrictions on ?Unlimited' data plans. T-Mobile to increase transparency, provide consumer benefits, connect public school students, and pay a fine. Action by: Chief, Enforcement Bureau. Adopted: 10/19/2016 by Order/Consent Decree. (DA No. 16-1125). EB https://apps.fcc.gov/edocs_public/attachmatch/DA-16-1125A1.doc
- T-Mobile to throttle data plans after 5GB, Online 4/30/2010
- T-Mobile Ditches Overage Charges For Many Laptop Users - Instead will throttle back your speed should you exceed 5 GB a month..., dslreports 4/28/2010
- Shane Greenstein, Martin Peitz, and Tommaso Valletti, Net Neutrality: A Fast Lane to Understanding the Trade-offs, 30 J. of Econ. Perspectives, no. 2, Spring 2016, at 127,132 (“T-Mobile, a cellular provider in the United States, announced in November 2015 that it would exempt some video services such as ESPN, Netflix, and HBO from its data caps (but not others like Facebook and YouTube, for instance); however, to do so T-Mobile will stream the videos at lower quality, via a plan called “BingeOn” to which all customers are automatically opted in.”).
- BingoOn Under the Microscope: Understanding T Mobiles Zero Rating Implementation, Sigcomm 16
- T Mobile Bingeon Technical Criteria March 2016
- Verizon confirms tiered data plans and hot-spot charge for July 7, CNET 7/8/2011
- Verizon Has No Plans To Cap, Throttle - Fiber gives them breathing room -- For the moment, dslreports 9/25/2008
- Trefis Team, Crowded Pipes Prompt Verizon To Nix Unlimited Data Plans, FORBES, May 31, 2011, (visited Dec. 17, 2012).
- Brenda Raney, Verizon Wireless Executive Director of Corporate Communications, Updated Statement on Data Plans, Verizon Wireless News Center Blog, May 17, 2012, (visited Nov. 13, 2012).
Major wireless providers also have begun to impose data caps.935 For example, in July 2012, both AT&T and Verizon Wireless announced plans to facilitate customers' sharing of data across smartphones, tablets, and other devices.936 The new shared data plans charge a monthly fee for each device and then charge for a shared pool of monthly data transfer ranging from 1 GB to 20 GB.937 Early evidence suggests that consumers materially increase their data consumption when upgrading to Long Term Evolution ("LTE") devices.938
930 See Stacy Higginbotham, Which ISPs are Capping Your Broadband and Why?, GIGAOM, Oct. 1, 2012, (visited July 5, 2013).
931 Ian Olgeirson and Mari Rondeli, HSD Subs Tilt Toward Premium Tiers; Usage Constraints Gain Broader Foothold, SNL KAGAN, July 19, 2012. See also Netflix Comments at 7-8. Public Knowledge states that by some estimates, more than half of the United States' 75 million fixed broadband subscribers are already subject to some kind of usage cap. Letter from Michael Weinberg, Vice President for Emerging Innovation, Public Knowledge, to Marlene H. Dortch, Secretary, FCC, (Aug. 9, 2012) ("Public Knowledge Aug. 9, 2012 Ex Parte") at Attach. 1, Andrew Odlyzko et al., Know Your Limits: Considering the Role of Data Caps and Usage Based Billing in Internet Access Service, Public Knowledge, May 2012, at 4-5 ("Public Knowledge UPB White Paper"). Google states that in contrast to some broadband service plans criticized by Netflix in its comments, Google Fiber's service plans are not subject to data caps. Google Reply at 4, n.16.
933 Ian Olgeirson and Mari Rondeli, HSD Subs Tilt Toward Premium Tiers; Usage Constraints Gain Broader Foothold, SNL KAGAN, July 19, 2012.
937 John Fletcher, Bring on the Expensive Dumb Pipes, SNL KAGAN, Aug. 14, 2012.
938 William Densmore and Michael Weaver, U.S. and Canada Second-Quarter 2012 Wireless Metrics: Data Strategies Diverge, FitchRatings, Sept. 27, 2012, at 2.
Data Consumption Rates
- "Netflix explains that some subscribers could consume their entire monthly data allotment after just a single weekend of “binge watching” online video content" AT&T / DirecTV Merger Order, at 208 (2015)
"Light users subsidize heavy users"
- "The Applicants respond that data caps ensure that the lightest users of broadband do not subsidize the heaviest users" AT&T / DirecTV Merger Order, at 209 (2015)
Peak / Non Peak Rates the solution
- WIRELESS TELECOMMUNICATIONS BUREAU REPORT: POLICY REVIEW OF MOBILE BROADBAND OPERATORS' SPONSORED DATA OFFERINGS FOR ZERO-RATED CONTENT AND SERVICES. Sets Aside Policy Review Report. Action by: Acting Chief, Wireless Telecommunications Bureau. Adopted: 02/03/2017 by ORDER. (DA No. 17-127). WTB https://apps.fcc.gov/edocs_public/attachmatch/DA-17-127A1.docx
- Statement of Chairman Pai on Free Data Programs Feb. 3, 2017 (“Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers' free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”)
- AT&T Statement on FCC Wireless Bureau's Decision to Close Sponsored Data Inquiry, AT&T Feb. 3, 2017 “Today’s announcement is a win for the millions of consumers who are reaping the benefits of services made available through free data programs. We’re pleased that these innovative products will be able to continue to flourish in the marketplace.”
- Statement on Zero Rating Enforcement, Internet Association, Feb. 3, 2017“Protecting consumers and competition is what net neutrality is all about. While zero-rating can meet the consumer protection standards of meaningful net neutrality rules, when done improperly or left unchecked it can also be harmful to consumers and stifle competition online. "
- FCC Abandons Zero-Rating Investigation and Moves Backward on Net Neutrality, EFF Feb. 9, 2017 ("According to Pai, “These free-data plans have proven to be popular among consumers, particularly low-income Americans.” But that’s a red herring. That a service is popular doesn’t mean that rules protecting users’ freedoms shouldn’t apply to it. If anything, zero-rating’s supposed popularity among low-income users is another reason to make sure that it doesn’t further curb users’ Internet experience and funnel vulnerable users towards certain content.")
- POLICY REVIEW OF MOBILE BROADBAND OPERATORS' SPONSORED DATA OFFERINGS FOR ZERO-RATED CONTENT AND SERVICES. Action by: Wireless Telecommunications Bureau by REPORT. WTB https://apps.fcc.gov/edocs_public/attachmatch/DOC-342987A1.docx
- CISCO Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2016-2021 (Feb. 7, 2017)
- p. 27 Top 1% Users Generate What Percent of Traffic: 2010: 52$; 2011: 24%; 2012: 16%; 2013: 10%; 2014: 18% (reintroduction of unlimited plans); 2015: 8%; 2016: 6%
- p. 28: 2016: Top 20% of users generated 56% of traffic (13 Gigabytes); Top 10% generated 38% traffic (17 Gigabytes); Top 5% generated 25% traffic (23 gigabytes).
- Om Malik, GigaOM White Paper: The Facts & Fiction of Bandwidth Caps, GigaOm (Sept. 30, 2008)
- Adam Theirer, Bandwidth Cap Hysteria & the Alternative, PFF Blog (Oct. 4, 2008)
- Scott Wallsten, Managing the Network? Rethink Prices, not Network Neutrality (October 2007)
- Leonard Kleinrock, et. al., Realizing the Information Future: The Internet and Beyond, National Research Council 67 (1994) ("An issue closely related to enforcement is accounting for usage. Usage accounting could provide the basis of billing, a means to assess network allocation after the fact, and a means to assess usage and provide information for planning. A recurring question is whether adding to the current Internet additional facilities for usage accounting would yield sufficient benefits. Feedback to users on actual usage, even in the absence of usage billing, can encourage efficient and prudent use. However, there is a recurring concern that the addition of accounting tools will inevitably lead to usage-based billing, which is in some cases undesirable (see Chapter 5), and a separate concern that the cost of adding accounting tools to the Internet will greatly increase the cost and complexity of the switches and the supporting management environment.")
- FCC head Ajit Pai: You can thank me for carriers’ new unlimited data plans Ars Technica 2/28/17("There are, however, reasons to think that the FCC's zero-rating decision was not responsible for the new unlimited data offerings. For one thing, selling unlimited data harms the business case for paid data cap exemptions. If carriers don't limit the amount of data mobile customers can use each month, there's no reason for online content providers to pay the carriers for zero-rating. While data caps are hated by customers, they create a scarcity that can be monetized by carriers as long as the FCC allows paid zero-rating.")
- Groups Ask FCC To Investigate Broadband Data Caps, PK 5/9/2011
- 56% of Americans have Internet data caps; FCC asked to investigate, Ars Technica 5/9/2011
- "Bandwidth Hogs" Join Unicorns in Realm of Mythical Creatures, MAP 12/8/2009
- The Bandwidth Hog Does Not Exist - One blogger offers an invitation for ISPs to prove otherwise, dslreports 12/8/2009
- Bandwidth caps in US very restrictive compared to Japan, Muni 8/11/2009
- Shocker: Consumers Hate Broadband Caps - What's a gigabyte?, dslreports 9/30/2008
- Usage Caps & Metered Prices: Idealism v. Reality, IP Democracy 9/30/2008
- Bogus Consumer Group To 'Educate' You On Metered Billing - The quest to 'correct' your flawed perception begins..., dslreports 4/21/2009
- Law To Ban Broadband Caps Moves Forward, Techdirt 4/16/2009
- Congressman: there should be a law against Internet caps!, Ars Technica 4/14/2009
- Today's Bandwidth Hog is Tomorrow's Mainstream Internet Customer, Isen 12/2/2008
- Please Stop Telling Us How Many Emails Fit Under A Broadband Cap, Techdirt 11/13/2008
- HughesNet Widens Cap-Free Window - Users get a little extra download breathing room overnight, dslreports 11/13/2008
- On The Importance Of Unfettered Broadband, Techdirt 11/13/2008
- Another Broadband Tech Exec Says There's No Bandwidth Crunch, Techdirt 10/30/2008
- Broadband users reach their limit, BBC 10/23/2008
- Bandwidth caps, Telecom Industry and Regulation 10/15/2008
- If ISPs Meter, Who Verifies Meter Accuracy? - The ISPs? No thanks..., dslreports 5/7/2009
- The price-gouging premiums of Time Warner Cable's data caps, Ars Technica 4/9/2009
- Tom Lee, Let's Be Honest About Bandwidth Rationing, Techdirt(Oct. 3, 2008)