Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion: ‘The reality is that data caps are all about increasing revenue for broadband providers — in a market that is already quite profitable.’
For years, the key rationale given by broadband providers for implementing data caps was that it was the only way they could deal with “congestion.” Of course, for years, independent researchers showed that this was bogus, and there was no data crunch coming. If you actually caught a technologist from a broadband provider, rather than a business person or lobbyist, they’d quietly admit that there was no congestion problem, and that basic upgrades and network maintenance could easily deal with the growth in usage. But, of course, that took away the broadband providers’ chief reason for crying about how they “need” data caps. The reality, of course, is that data caps are all about increasing revenue for broadband providers — in a market that is already quite profitable. But if they can hide behind the claims that they need to do this to deal with congestion, they can justify it to regulators and (they hope) the public.
Of course, enough people have been calling this explanation out as completely bogus that it appears that even the broadband companies’ own lobbyists may finally be dropping this line of reasoning. Former FCC boss Michael Powell, who is now the cable industry’s chief lobbyist (president of the National Cable and Telecommunications Association — NCTA), has finallyadmitted caps aren’t about congestion:
Michael Powell told a Minority Media and Telecommunications Association audience that cable’s interest in usage-based pricing was not principally about network congestion, but instead about pricing fairness…Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry’s interest in the issue as about congestion management. “That’s wrong,” he said. “Our principal purpose is how to fairly monetize a high fixed cost.”
Of course, as Broadband Reports notes, Powell is jumping from one myth (congestion) to another (fairness) that is just as ridiculous. If it was true, we’d see at least some prices going down. But we don’t.
I saw a comment on this story elsewhere on the internet that suggested another big reason they cap data is to basically “punish” people for watching movies/tv shows through sources other then their TV channels.
I’m inclined to agree, I probably wouldn’t use the word ‘punish’ but it’s certainly a way to try and discourage it.