Data Caps Under Heavy Fire

With the nation’s two largest mobile providers having eschewed Unlimited Data plans in favor of tiered plans, Internet data caps have quickly become the norm for mobile users. And while some angry users have switched to other providers (or sued), many more have stayed loyal and adapted their data use to the new limitations. Perhaps it seemed like an easy victory to the providers, but recent months have shown that the battle over data caps is not finished.

Data Caps Criticism

In mid-December, the New America Foundation (NAF) published a critical white paper, questioning the motives of mobile providers who apply data caps (ostensibly to deal with network congestion), and furthering the idea that the caps are little more than a cashgrab. The paper highlights that both AT&T and Verizon have experienced a more than 50% increase in Average Revenue Per User (ARPU) since eliminating “Unlimited” options and argues that monthly data restrictions have minimal impact on congestion. The NAF attributes the success of what they see as a profit-oriented maneuver to a “woefully uncompetitive market.”

Just days after the paper was published, Oregon Senator Ron Wyden introduced a piece of legislation titled The Data Cap Integrity Act, aimed at regulating the fair use of data caps and providing consumers with real-time tools for monitoring their data consumption. In an email, Wyden said, “Data caps create challenges for consumers and run the risk of undermining innovation in the digital economy if they are imposed bluntly and not designed to truly manage network congestion.” The act would also work in favor of net neutrality, preventing ISPs from showing favoritism (or discrimination) toward data sources. The legislation has drawn support from advocacy group Public Knowledge, and criticism from the National Cable & Telecommunications Association.

T-Mobile Comes Out Swinging

Finally, T-Mobile used January’s International Consumer Electronics Show (CES) as an opportunity to step up its commitment to Unlimited (and unthrottled) Data. At the show, the company announced that they would now offer their popular Unlimited Nationwide 4G Data plan to users without requiring an annual contract. They also launched themselves into the limelight as the first official wireless company to sponsor the MLB. Whether that one-two punch will help them to win over customers from the larger providers remains to be seen, but it’s another potential blow to data cap acceptance.

The opposition to data caps certainly seems to be growing. As the skirmishes continue to escalate, there’s no doubt we’ll see some changes over the coming months and years, but the outcome is anyone’s guess. Buckle up: the battle over data caps is just beginning!

photo credit: pirateyjoe via photopin cc


Brent Urmey is an avid reader and writer on a variety of subjects, including social media, SEO, the Wireless industry, and life in Lancaster County, PA. He is a graduate of Drexel University and a survivor of the 2012 Mayan Apocalypse. You can connect with Brent on Google +.