internet data caps confusing
July 30, 2014

Most ISPs Use Data Caps, But Many Subscribers Are Confused By Usage Rates

redOrbit Staff & Wire Reports - Your Universe Online

While most of the larger ISPs in the US are now using monthly data caps, customers often overpay for services because they incorrectly estimate the amount of information they consume online, according to the findings of a preliminary US Government Accountability Office (GAO) report released on Tuesday.

According to Grant Gross of PC World, the GAO found that all four of the largest mobile carriers in the US (Verizon, AT&T, Sprint and T-Mobile) and seven of the 13 largest wireline broadband providers offered tiered subscription plans that institute upload and download limits on their customers.

When customers exceeded those data limits, the government watchdog’s report found that three of the mobile carriers and three of the wired service providers charged customers when their data consumption exceeds their monthly caps, while a fourth mobile carrier was found to throttle connection speeds, Gross noted.

The study, which was requested by California Representative Anna Eshoo, also found that ISP customers were often confused about which types of activities tended to consume the most data. As a result, they tended to either pay ISPs too much money for unused data, or were forced to pay overage fees for exceeding data caps, said Reuters reporter Alina Selyukh.

Eshoo told Gross that most broadband customers want to be able to watch streaming videos, download music and use video-conferencing apps without interruption, and that data cap plans could result in a “huge disruption” for subscribers. “While broadband providers are experimenting with these new business models,” she added, “consumers are left wondering if they’re going to have to foot the bill, and how much more it will be.”

Likewise, GAO physical infrastructure team director Mark Goldstein told PC World that many people simply do not understand the data caps, and while some ISPs offer Web-based tools or email alerts to help keep customers abreast of their usage, those tools “can be confusing.” Some members of the eight focus groups taking part in the study said that they did not want to face losing their connection by exceeding caps on lower-tier plans, he added.

Gross said the GAO focus groups, which were held in Baltimore, Des Moines, New York City and Las Vegas, discovered negative reactions to wireline broadband service data caps, with some individuals expressing concern they might be forced to limit data-light activities such as shopping online. Those individuals said that they were not used to data caps on home broadband connections and preferred not having to keep track of data usage.

“The full GAO report is due in November,” said Selyukh, but the preliminary findings were released Tuesday as the US Federal Communications Commission (FCC) is in the process of establishing new rules for how service providers should manage traffic on their networks.

“Some consumer advocates have expressed worries that ISPs may hurt competition by exempting affiliated services from data caps. The GAO's preliminary observations stated that usage-based pricing could limit innovation or creation of data-heavy apps because some consumers may restrict their Internet use to save money,” the Reuters reported added.

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