Charter Spectrum Tells FCC Broadband Caps Are 'Popular' As It Tries To Kill Merger Conditions Preventing Them

from the bad-things-are-good-for-you dept

To be very clear: American consumers don’t like broadband usage caps. At all. Most Americans realize (either intellectually or on instinct) that monthly broadband usage caps and overage fees are little more than monopolistic cash grabs. They’re confusing, frustrating price hikes on captive customers that accomplish absolutely none of their stated benefits. They don’t actually help manage congestion, and they aren’t about “fairness” — since if fairness were a goal you’d have a lot of grandmothers paying $5-$10 a month for broadband because they only check their email twice a day.

Enter U.S. cable giant Charter (Spectrum), which is currently in the middle of trying to get the FCC to kill the merger conditions applied as part of its 2015 $79 billion acquisition of Time Warner Cable and Bright House Networks. Those conditions, among other things, required that Charter adhere to net neutrality (despite the fact that the GOP has since killed net neutrality rules), and avoid usage caps and overage fees. Both conditions had 7 year sunset clauses built in, and Charter, eager to begin jacking up U.S. broadband consumer prices ever higher, has been lobbying to have them killed two years early.

Charter’s lobbying tactics so far have included giving money to groups like the Boys and Girls Club in exchange for gushing support for the elimination of the merger conditions, despite the fact that doing so would harm these groups’ constituents with higher prices.

Charter’s other major play apparently involves trying to tell the FCC that U.S. consumers really like monthly usage caps and annoying fees, restrictions the cable monopoly claims are “popular.” From a filing (pdf) spotted by Ars Technica:

“There is also evidence that some consumers?either those who do not consume a lot of data and/or those who are looking for a lower-cost plan?may want a service where prices are based on the amount of data used… These different plans are proliferating in the market because they offer consumers a cost-effective alternative to unlimited data plans that are more than adequate to meet their needs. The DC/UBP [data caps and usage-based pricing] Condition, however, prevents Charter from keeping pace with its competitors and offering consumers the kinds of plans they are looking for.”

This is a cute bit of logic U.S. broadband monopolies have long used that attempts to imply that caps and overage fees are about “fairness.” But they’ve never been about fairness. ISPs love to insist they just want to “experiment with price differentiation,” but you will never see a giant ISP offer a super cheap plan for people like your grandma that only check the Weather Channel website and their email a few times a day. And they don’t do that because the goal is to drive up the costs of everybody’s connection over the longer haul to please investors’ needs for higher quarterly returns.

And they can get away with this because in most U.S. markets, their only competition is a phone company that hasn’t upgraded its DSL lines since 2004 or so, or no competition at all. If the market actually saw competition and had functional regulatory oversight, you might see plans more closely tailored toward your actual usage. But in a market absent of real pricing competition and overseen by fecklessly captured regulators, what you get instead is endlessly higher prices, usually in the form of sneaky, misleading fees. Charter’s filing tries to tap dance around this problem as well:

“Opponents? claims that the BIAS market is not competitive are beside the point and overstated. The Conditions are unnecessary regardless of the level of BIAS competition because Charter, like other broadband providers, lacks the incentive or ability to discriminate against OVDs. OVDs are critical to the BIAS business and far too large and powerful to thwart with data caps or interconnection fees.

Only a cable monopoly with a 20 year track record of overcharging captive customers could try to argue that a lack of competition is “beside the point.” Incumbent telecom monopolies, eager to protect their dwindling TV revenues, have every incentive to use usage caps anti-competitively. And they already are. AT&T, for example, exempts its own streaming video service from its arbitrary usage caps, while financially penalizing users that use Netflix, Amazon, or any other competitor.

There is zero doubt that Charter wants to follow down this path as well. And it certainly will; it just wants to do so slowly to minimize backlash (picture the boiling frog fable with you as the frog). There’s also not much doubt that the captured, fact-phobic Trump FCC is eager to help them, proclaiming that letting a cable monopoly price gouge captive customers is about “restoring internet freedom,” or whatever half-baked justification is on the menu this week.

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Companies: charter, charter spectrum

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Comments on “Charter Spectrum Tells FCC Broadband Caps Are 'Popular' As It Tries To Kill Merger Conditions Preventing Them”

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johathanpritchard (profile) says:

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Bob Buttons says:

"…a service where prices are based on the amount of data used"

1) The fact your bill doesn’t go down when you use less shows they’re full of crap when discussing pricing based on usage.
2) If they were to move forward with this, it’s not as if people who use low data would get a killer deal. They’d charge what they’re charging now and then increase the price for higher usage so the customers benefit in ZERO ways from this. Just a cap added to their current bill.
3) Comcast & Time Warner Cable already attempted this with their Internet Essentials plans and guess what? Nobody wanted it.

asscombinator (profile) says:

Re: Re:

amount of data used does not mean divide the total bill by the nulber of bytes. there are large fixed costs per customer, such as digging and wires. there are also small per-byte expenses.

look at your electric bill when you’re out of town. it’s not zero.

so no, the fact that your base cost for gramma checking email is not reduced does not prove your point. what happens now, is gramma’s neighbor downloads 2tb of video, and and gramma splits the expense of that with him, by everyone having a higher fixed bill.

as opposed to everyone paying a fixed cost, and the people using more resources paying for those. and yes, users do support that as the cable company claims. there are a few loud nerds online being purposely dense, but like in highschool, no one listens. they’re too ugly to be listened to.

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Anonymous Coward says:

Re: Re: Re:

The primary costs for communications are:
1)Capital costs of building the network.
2)Labour costs, for maintenance,sales, billing etc.
3)Electricity, property taxes, etc.

Any costs due to bits vanish in the above, and the big bit consumers pay the network costs to deliver the bits to the ISP’s.

However if the Intent is to try and protect a cable TV business, and/or ISP streaming businesses, the data caps are useful, as they make using competitors more expensive. But that has nothing to do with network costs, and everything to do with anticompetitive behaviour.

nasch (profile) says:

Re: Re: Re:

there are also small per-byte expenses.

Yes, extremely small. So small that there is no justification for usage caps. The cable companies are trying to have it both ways:

  • Our expenses are mostly fixed so we can’t offer you an extremely cheap package for minimal usage

and at the same time:

  • We have to charge you extra if you use more than 1TB per month because it’s so expensive for us to support that additional usage
This comment has been deemed insightful by the community.
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DannyB (profile) says:

Popularity

While it may be true that Broadband Caps are very popular, they are still less popular than Death.

When looking at the numbers alone, Death is the all time most popular single thing in human history! (it is appointed unto man once to die. Heb 9:27)

While Taxes are also extremely popular, they are second to Death, but somewhat higher in popularity than Poverty or Slavery.

While vast numbers of people have chosen ISPs that have broadband caps, thus proving the popularity of broadband caps, some of them then discover they have the problem that they cannot wear both their Broadband Cap and their MAGA cap at the same time.

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Anonymous Coward says:

"the merger conditions applied as part of its 2015 $79 billion acquisition of Time Warner Cable and Bright House Networks"

They agreed to the terms and conditions, now they do not want to meet one or more conditions. Are they willing to give up the merger then? What are they giving up in return? Is this bait ‘n swap?

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That Anonymous Coward (profile) says:

This amazing free market we have in cable is what they think should replace the post office.

How the hell do people this far removed from reality keep getting reelected?

Imagine how many small towns could make the providers cry if we gave grants to them to run fiber in their towns from the USF. Then we might end up with a free market where there actually is competition causing lower prices & better features…. but they are still trying to say 56K modems qualify as broadband so…

Anonymous Coward says:

Re: Re:

How the hell do people this far removed from reality keep getting reelected?

Because people only give a crap so long as doing so:

A. Requires no real action or commitment on their part.

B. Makes them look good / feel righteous.

Americans gave up on any control they did have long ago because eternal vigilance was inconvenient and hard and they were tired.

Imagine how many small towns could make the providers cry if we gave grants to them to run fiber in their towns from the USF. Then we might end up with a free market where there actually is competition causing lower prices & better features

Most Americans tuned you out after the word Imagine. What was left tuned you out after the word make. Again, things could be better, but that will never happen because Americans can’t be bothered to care for something. Case in point: Don’t vote for something, vote against something. An active political argument being made today. Constantly voting against really just means you’re picky about who is implementing legislation and don’t care about what the legislation implements.

Anonymous Coward says:

Re: Re: Re:

Well, given the monopoly/duopoly standard in elected office, the corporations involved very rarely give us something worth voting for.

Not that i think enough USAnians give a toss about anything other than their unenlightened self-interest for more than 5 minutes ever, but that’s a bad case in point.

bshock says:

Does anyone else really despise liars?

Maybe it’s just me. Maybe everyone else accepts serial lying as normal, natural, and perhaps even beneficial to this apparently terminal society that we’re all clutching onto with our dying breaths. The president lies multiple times every time he makes a public statement. Everyone associated with him does that same. Every billionaire bastard lies constantly or sends out paid shills to lie for them.

And every corporate executive lies through their teeth — "broadband caps are popular." Seriously? If broadband caps were a person, I would have to struggle with my self control just to avoid beating them to death with a baseball bat.

Oblate (profile) says:

There is also evidence that some consumers—

Any such statement that is not supported by a reliable reference (i.e. actual supporting evidence) should be dismissed out of hand, along with whatever drivel follows it. Maybe the FCC could implement Bullshit Caps and charge Charter Spectrum/etc. for excessive bullshit filings? After the first month of surprise charges (but they were in the fine print!) the FCC could probably fund the USPS!

K`Tetch (profile) says:

easy tell

There’s one absurdly easy way to tell that Charter’s claim that "customers want caps" is a lie.

If it were true, I’d have gotten an email from Charter (as would all their other customers) asking us to tell the FCC that.

In fact they’ve kept it hidden. Almost like they don’t want us to know, because they think we might oppose it or something.

ECA (profile) says:

Balance

Its fun to look at numbers, and Charge Everyone for Going past caps.
But you have Many that dont use, or dont know HOW to turn off Cellphone Wireless.
If you gathered allt he numbers NOT Cherry picked.. the balance would Probably LEAN allot to NON-USE. But they want to Charge those that DO go over, more and more.

But what programs will break your cap? Watching Video’s for more then 2-3 days?? Chatting, TEXT??(dout that), I KNOW.. sending 21mb Pictures back and forth of body parts…

Logic of Fast and slow..
Fast internet means the company can send you files in an instant, IF’ its fast enough.
Slow is Allot of people getting SLOW restricted speeds, and sitting waiting.
There are problems on both sides.
Where a Fast connection to a fast server to a Fast site download, means you can handle Lots of people quickly, THERE IS A MAX from the Download server. Either people SIT and wait for a turn, or get a slower connection That speeds up when its ready for YOU.
Then there is the MAX on your side, how many System only have 10/100mbps Network controls? 1000mpbs??
So, we can connect 10 persons at 100mbps,
100 persons at 10mbps..?

Even if you open it up to max speeds on Wired internet..
Yes, you can get a Download in a few minutes..and then the next person and next…
OR send Many people a fair speed and it averages out.

But Lord help us. Games are how BIG?? 80gig?? PLUS?
100mbps = 10MBps(this is taking a bit to Bytes, with abit of overhead) 80,000(meg<< thats gigs)/ 10(meg)= 8,000 seconds. 133 minutes if you DONT do anything to slow it down..2+ hours.
And even if you have faster connections, its still over 1 hour.

Samuel Abram (profile) says:

Re: Re:

If everybody had choice such as yours, we wouldn’t need net neutrality protections. The reason why we need net neutrality is because very rarely are the big ISPs not monopolies (whereas I could use DuckDuckGo or not shop on Amazon (in fact, the only time I shop on Amazon is if a family member wants to utilize Amazon Video to watch CBS Prime, but other than that, I don’t shop on Amazon at all unless there’s a product I want or need that’s exclusive to Amazon)).

asscombinator (profile) says:

Re:

amount of data used does not mean divide the total bill by the nulber of bytes. there are large fixed costs per customer, such as digging and wires. there are also small per-byte expenses.

look at your electric bill when you’re out of town. it’s not zero.

so no, the fact that your base cost for gramma checking email is not reduced does not prove your point. what happens now, is gramma’s neighbor downloads 2tb of video, and and gramma splits the expense of that with him, by everyone having a higher fixed bill.

as opposed to everyone paying a fixed cost, and the people using more resources paying for those. and yes, users do support that as the cable company claims. there are a few loud nerds online being purposely dense, but like in highschool, no one listens. they’re too ugly to be listened to.

ECA (profile) says:

Re: Charter

Capitalism at its best..ITS BEST, not ours.

https://www.economicshelp.org/blog/5002/economics/pros-and-cons-of-capitalism/

There is allot to add to that article, esp if you can lock a country Down to YOUR PRODUCT ONLY. restricting markets. Cutting corners. CONTRACT WORK/esp for top workers.
Taking advantage of the Smart/creative and Dumping them.

Making every Extra penny, goto the top, and never touch anyone on the way up.

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