The Federal Communications Commission (FCC) has initiated an inquiry into the use of data caps and other usage-based billing practices by wired and wireless broadband providers. This inquiry seeks to evaluate the impact of these practices on consumers and competition despite dissent from two Republican commissioners who question the FCC's authority in this area.

FCC Chair Jessica Rosenworcel acknowledged consumer frustration with data caps, noting that nearly 3,000 individuals have filed complaints over the past year. "We are listening," Rosenworcel stated. "Today, we start an inquiry into the state of data caps. We want to shine a light on what they mean for internet service for consumers across the country."

As part of the inquiry, the FCC said it would explore data caps on fixed and mobile broadband services, focusing on how they impact consumer access and competition. The Commission will also examine how ISPs measure data usage, enforce usage policies, and handle unused data in plans with data caps. Additionally, the inquiry will assess recent trends in household data consumption and the data needs for various services like video streaming, online gaming, telemedicine, and home security systems. "Lastly, we ask about our legal authority to take action regarding data caps," the FCC explained. The Commission has set a comment deadline of November 14, 2024, with replies due by December 2, 2024.

While some broadband providers suspended data caps during the COVID-19 pandemic, companies like Comcast, Cox Communications, Cable One, and Mediacom Communications continue to enforce them. Charter Communications, which was barred from implementing data caps for seven years under merger conditions, has refrained from reintroducing them since the restriction expired last May.

Rosenworcel highlighted how data caps affect consumers' daily lives, citing complaints such as one from a mother in Arizona who described the stress of frequently exceeding data limits. "The mental toll of constantly thinking about how much you use a service that is essential for modern life is real," she remarked.

The NCTA -- The Internet & Television Association defended usage-based billing, arguing that it provides flexibility in a competitive market. "Today's competitive internet marketplace offers consumers a wide range of service choices, including wired and wireless technologies, a range of speed tiers and innovative features, and flexible pricing options, such as usage-based billing," the NCTA stated. "This market-driven flexibility benefits consumers. Those who use less data can choose lower-cost options reflecting common-sense economics. Instead of launching a proceeding that needlessly questions the accepted, pro-consumer benefits of more competitive options, the FCC should return its focus to clearing the real obstacles that impede our national drive to bring internet to all."

Commissioner Brendan Carr strongly opposed the inquiry, cautioning that regulating data caps equates to rate regulation, which he argues the FCC lacks the authority to impose. Commissioner Nathan Simington also dissented, comparing the issue to regulating coffee refills, warning that limiting usage-based billing could reduce consumer choice and drive costs.

The FCC's inquiry will also address whether data caps deter consumers from using data-intensive applications and services. The goal, Rosenworcel said, is to ensure that consumers' concerns are heard. "We are going to identify what is happening now and what we can do next," the commissioner stated. "We are going to make sure that the consumers writing to us are heard. So, let's get to it."