ISPs To Bring Back Usage Caps After Brief Pandemic Hiatus

from the useless-is-as-useless-does dept

While it required some nudging, major US ISPs announced last March they would be suspending their usage caps and overage fees for 90 days as millions of Americans hunkered down to slow the spread of COVID-19. They also struck an entirely voluntary deal with the FCC to not kick users offline during this period for nonpayment due to financial hardship, though given the fecklessness of the captured Trump FCC, many ISPs ignored these promises and saw no penalty for it.

Despite the fact that the pandemic is seeing explosive growth across most of the U.S. and financial hardship for many won’t be ending anytime soon, most ISPs will begin imposing usage caps and surcharges again starting in July:

“Major Internet service providers are scheduled to end their quarantine benefits soon, once again subjecting Americans to data caps and removing protections if they are unable to pay their bills.”

The FCC, so far, has made no comment on whether the hiatus on disconnections, late fees, and usage caps will be extended.

The problem with usage caps in particular is that they’re not technically or financially necessary in the first place. They’re little more than price hikes on captive customers in uncompetitive markets, and claims they were necessary due to congestion were debunked long ago. They’re not even helpful as a price differentiator, given that speed tiers and business class-tiers already perform that function.

ISPs crowed repeatedly about their networks performing incredibly well despite caps being suspended. Such limits routinely confuse customers, and the limits can be abused to give incumbent ISPs an unfair advantage in the streaming wars. In short, broadband usage caps are bullshit, and should be eliminated permanently.

Extending a hiatus on all late fees and disconnections is a thornier issue, given many smaller ISPs can’t afford to carry the debt for customer nonpayment indefinitely. That said, giant ISPs like Comcast and AT&T not only enjoy natural monopolies that result in sky high prices, they have received billions in subsidies, tax breaks, and regulatory favors during the Trump administration. As such the idea that not kicking struggling users offline during an historic crisis for another 3-6 months is some kind of extreme burden for them is laughable. AT&T received a $42 billion windfall from the Trump tax cuts alone.

It’s entirely possible that ISPs have to once again buckle to public outrage and announce an extension. Especially given the COVID-19 flare ups occurring in Florida, Texas, and California, and the chain of looming financial headaches (missed rent payments, the end of federal unemployment and stimulus assistance). But it’s also possible so much is going on that ISPs will be able to quickly revert to imposing arbitrary, unnecessary, and punitive surcharges thanks to feckless regulators and geographical monopolies, neither of which US “leaders” want to do much about.

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Comments on “ISPs To Bring Back Usage Caps After Brief Pandemic Hiatus”

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14 Comments
Anonymous Coward says:

just think of all the public money they were given (after lining the pockets of some members of Congress in order to get it!), yet they cant do anything in return, even after the gravity of the situation became clear and has continued to deteriorate, unless basically forced! what a complete bunch of assholes we have for broadband companies, for ISPs, for telecommunications and just about every other industry that is given the ‘Go Ahead’ to rip off the public!!

David says:

Perfectly understandable

"Major Internet service providers are scheduled to end their quarantine benefits soon, once again subjecting Americans to data caps and removing protections if they are unable to pay their bills."

Well, why should an ISP be forced to shoulder the incompetence of the government? They could just have offered to extend quarantine benefits for the duration a competently led civilized industrial nation takes to reasonably get infection rates and economic consequences under control.

Of course, competently led civilized industrial nations cannot stop laughing at the prices U.S. citizens pay for broadband after adding any amount of bullshit fees that elsewhere would constitute misleading advertising if not a straightout felony.

But that’s a different problem.

This comment has been deemed insightful by the community.
PaulT (profile) says:

Re: Perfectly understandable

"Well, why should an ISP be forced to shoulder the incompetence of the government?"

Because, in the US, they hold their monopoly positions due to that fact. In the EU where I reside, usage caps were neither in place before or after lockdowns, at least partially due to effective regulation.

Plus, in the US those ISPs have been raping the government for subsidies for years without ever delivering what was paid for. About time they paid back.

Mel Mevios (user link) says:

FCC

Well they better start thinking about another deal to ensure students have access to remote learning. Districts have already released their plans to teach remotely starting as early as August 6th. There are grants available to schools but the deadline was June 30th and I can guarantee that money wasn’t enough to provide tech and connection to the students in low income areas who didn’t even have computers to begin with. Doom , doom, doom.

Anonymous Coward says:

The ironic thing is Facebook stopped moderating some Conservative content maybe to placate trump,
In the hope that he, ll forget about changing section 230
and now it’s losing advertisers.
Big advertisers tend to flee when any website hosts
Extreme content of any kind.
One of the reason is section 230 is important is it allows each website to choose how it moderates content and allows it to mute or block users who post content that it does not approve of,

Mike says:

ISPs: "Let’s give ’em unlimited data for a few months so they’ll use more data than ever while stuck at home Then, just when they get comfortable using more and more data, we’ll slap the data caps back on ’em. Most of our captive customers won’t be able to use less data than what they were used to using the past few months. Since we don’t need data caps anyways, we’ll take the short term loss on overage fees and make even more millions in the long run. We’ll need another warehouse to hold all the money we’ll make from COVID-19. MWAH HA HA."

I would imagine that’s how the thinking went at most ISPs when the pandemic began.

Anonymous Coward says:

Re: Re:

Lucky you, imagine not having any other option except the overpriced capped crappy broadband that the ‘major’ isp’s are pushing.

According to the FCC, I have 7 options, realistically I have one that can provide service at my home… great job spending all those billions to get the ‘fake broadband coverage’ maps out there to make it ‘appear’ that there is viable competition (until you call the other 6 companies on the list and they say, "Sorry, we don’t provide service at your location."… well Fxxk You, the FCC says you do, and they ALWAYS TELL THE TRUTH…

Anonymous Coward says:

Monopolies - Is There Anything They CAN'T Do?

"The FCC, so far, has made no comment on whether the hiatus on disconnections, late fees, and usage caps will be extended."

Comcast on the other hand made its intentions clear today. The caps are back! For my account, the cap was raised about 22%, but I lost one courtesy overage month (June 30th, I could exceed the cap twice without charge – July 1st, I can only exceed the cap once…both changes were without warning or notice, and customer service has no explanation).

Once again, Comcast will vie strongly for worst customer service awards with zero repercussions. I want to own a monopoly when I grow up.

Professor Ronny says:

Fee Hiatus

Extending a hiatus on all late fees and
disconnections is a thornier issue, given
many smaller ISPs can’t afford to carry
the debt for customer nonpayment indefinitely.

This is actually incorrect. Almost all the cost for an ISP is fixed cost. That is, it does not change with a change in volume. The amount of variable cost to carry a customer is minimal, just what ever they have to pay for data that leaves their network. So, cutting off a customer for nonpayment only has a very minimal impact on their costs.

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