US FCC opens probe into broadband firm caps on internet data use

By David Shepardson

WASHINGTON (Reuters) -The U.S. Federal Communications Commission said on Tuesday it was opening a formal inquiry into why broadband providers cap data use by some customers, and how it impacts consumers and competition.

"For most people in the United States, rationing their internet usage would be unthinkable and impractical. But, for millions, limitations on how much data they can use online is a constant concern," said FCC Chair Jessica Rosenworcel.

Many consumers face no data caps on internet service but millions -- especially those on lower-cost plans -- do face limits.

Rosenworcel said it is now easier and less expensive for broadband companies to provide unlimited data and noted that caps "can cut off small businesses from their customers, slap fees on low-income families, and prevent people with disabilities from using the tools they rely on to communicate."

Rosenworcel first said in June 2023 she was seeking support from other FCC commissioners to support a formal inquiry to learn more about how broadband providers use data caps on consumer plans.

Last month, a trade group said Americans used just over 100 trillion megabytes of wireless data in 2023, up 36% from the prior year, the largest single-year increase in wireless data consumption.

Some consumers have complained about their struggles with internet providers who receive government subsidies. The FCC separately released 600 stories from consumers about their struggles with wireless and broadband providers data caps.

Rosenworcel noted during COVID-19 many fixed and mobile internet service providers refrained from enforcing or imposing data caps "suggesting that our networks have the capacity to meet consumer demand without these restrictions. We know that some providers do not have them at all."

In May, a broadband internet subsidy program used by 23 million households ran out of money and shut down after the White House unsuccessfully urged Congress to dedicate another $6 billion.

Rosenworcel is seeking input on the current state of data caps and if they harm competition or consumers’ ability to access broadband internet and review why data cap use "continues to persist despite increased broadband needs of consumers and providers’ demonstrated technical ability to offer unlimited data plans," the FCC said.

The FCC will look at "current trends in consumer data usage; the impact of data caps on consumers, consumers’ experience with data caps, and how consumers are informed about data caps on service offerings; the impact of data caps on competition" and the FCC's legal authority to take action regarding data caps.

In August, a federal appeals court blocked the FCC's reinstatement of landmark net neutrality rules, saying broadband providers are likely to succeed in a legal challenge.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and David Gregorio)