Data caps are the least of America's internet problems

Data caps are the least of America's internet problems

Summary: As American customers get themselves into a lather over the impost of fixed internet data caps, the reality is that soon, most internet users won't care or think about them.


Middle America, 2016 — For two years, Terence Rollins has sat in anger that his right, as an American internet customer, to unlimited data was tragically snatched away from him by his cable company.

Each month, Terence struggles on a paltry 500GB allocation rationed to him by the corporate overlords at Comcast. This ration breaks down to a mere 16GB of download quota per day, which depending on the encoding and compression used, is a tad over a depressing 3 hours of HD video from Netflix daily.

As for the latest in 4K streaming services, forget it. Those three hours will have to do for Terrance, and SD doesn't even enter the entertainment equation as watching content in high-definition is an entirely degrading experience.

For over twenty four months Terence has held the line, refusing pay for a higher quota or unlimted data as it would giving into what he sees as corporate double dipping and attempts to exhort him for an extra $30 to $60 a month profit. That extra cash saved each year has seen massive returns for Terence's bitcoin portfolio, as the cryptocurrency is set to head to the moon again — and how he wishes more retailers would "get it" and provide payments facilities in his small town to allow him to spend his new wealth.

If only the local congressperson, clearly in the palm of big business and the telecommunications lobby, understood how difficult it was for cord-cutters to survive on 500GB.

Little wonder then that the Comcast/AT&T cabal have taken out the bottom two slots in customer satisfaction surveys for the past three years.

Back to the reality of 2014, and English-speaking internet is awash with anger and desperation as a set of American cable companies, which also happen to be the sole ISPs in a number of places, look set to put data caps on their customers.

As a long-suffering "victim" of data caps, it is frankly, much ado about nothing within the greater scheme of things.

I was a witness in 2010 and 2011 as Canada sought to bring in usage-based billing, a scheme that was going to be an anathema to Canada's usage of the internet and destroy Netflix usage before it had properly taken off.

And what is the current state of play? In 2014, Canada's incumbent telecommunications company, Rogers, a company loved in the special way that only long-term incumbent that buy out any sort of potential disrupting company can, has only managed to weasel an extra CA$25 per month to upgrade plans from their baseline quota to "unlimited usage".

Were I looking to drop subscription television in Canada, I'd be very happy indeed to do so and only have to pay CA$25 to stream my heart out on Netflix and YouTube.

In my home country of residence, Australia, data caps have been part of the reality of internet usage for decades. Although they have never been loved, they are begrudgingly accepted and folks get on with life.

At the present time, my data quota is somewhere in the hundreds of gigabytes, I think. For AU$15, the price of 4 small "Joe Hockey" beers a month, I have a cap that is far above the monthly bandwidth usage of my partner and I. Although, to be fair, I am resident in a country that is without an official launch of Netflix.

But even so, it is possible in Australia to purchase an uncapped fibre-to-the-premise 100Mbps down, 40Mbps up connection for a little over AU$100 a month.

This is possible because Australia has a heavily regulated open access policy for fixed infrastructure — thanks, in part, to the privitisation of the public telco monopoly provider, what is now Telstra, during the 1990s and 2000s — and is in the process of creating a new wholesale provider in the form of NBN Co.

Thus, at least a handful of retail providers are able to compete for the majority of customers across the country, while underhanded rent seeking is lowered somewhat.

In contrast, beyond the major urban centres in North America, choice in internet provider can be but a dream of a more egalitarian future.

It is the lack of competition and small number of entrenched players that allow concepts like net neutrality to gain the momentum and pose the threat that they do.

Were a similar situation to arise in Australia, such as Telstra slowing down YouTube clips, then the vast majority of customers would have the option to move over to a more fitting telco whenever they choose to.

Yet in the regional dominions that exist for cable and internet access throughout North America, the telco and cable companies are able to try these ideas on because of the lack of choice that consumers have. It's a lot easier to do over customers when all the major players decide to make the same regressive decisions.

It is strange times indeed when the heavily regulated and soon to be public infrastructure in Australia is able to offer regular consumers more choice than that in the self-branded land of the free.

Salvation maybe at hand in the form of Google Fiber, but the scale and pattern of its rollout means that the impact is only felt in areas lucky enough to be on the deployment list.

In perfect world, there would be a handful of Google Fiber-esque companies across the US sending the integrated cable companies into a panic to lower prices, and give exasperated customers decent service for a change.

Taking a wider view of the issues facing America's internet access at the present time, data caps are merely a symptom of a much bigger problem — a terrible lack of competition.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

Previously on Monday Morning Opener

Topics: Broadband, Government, Telcos, NBN


Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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  • thoughts

    "As a long-suffering 'victim' of data caps, it is frankly, much ado about nothing within the greater scheme of things."

    Except the very future of the Internet. I suppose if you rationalize the Internet as unimportant, you could claim this.

    Heck, I don't even know what my usage is. PCs aren't really equipped to track that. But I do know that I love to download Steam games, which are 10s of GB, and I love to watch YouTube, which can stream in at 1080p. I'm considering Netflix.

    And Netflix is popular enough that you can't ignore it. It's not a small percentage of traffic - it's most of Internet bandwidth. If it were a small minority of users, we probably wouldn't even be talking about this.

    "It is the lack of competition and small number of entrenched players that allow concepts like net neutrality to gain the momentum and pose the threat that they do."

    Net Neutrality is not a "threat." It's largely how the Internet has worked for the longest time, and it's been wildly successful, and I dare say even responsible for the popularity of the Internet.

    The threat is really that which threatens net neutrality.

    Lack of choice and competition, on the other hand, is a real problem. Very few people live in an area where competition is a real factor.

    "Taking a wider view of the issues facing America's internet access at the present time, data caps are merely a symptom of a much bigger problem — a terrible lack of competition."

    This I can agree with.
  • I quit reading when I saw the idiot

    thought unlimited bandwidth was an American right.

    Here's a little mental food for you to chew on. When you begin insisting some tangible good or service is a right, you are also demanding that someone provide you that tangible good or service without compensation or at a compensation you decide. Another word for that is slavery.
  • A Product Manager's Perspective

    From the perspective of a product manager, this issue regarding usage caps is ridiculous. The obvious fair way to allocate the costs of the internet is on the basis of how much each person uses it. The problem is that the ISPs should be charging somewhere in the neighborhood of $0.001 to $0.0001 per megabyte for bandwidth usage (I absolutely know how much bandwidth costs). Obviously the issue is that the ISPs are trying to use pricing schemes to rip-off the internet users with excessive high prices that cannot be justified. If AT&T and Comcast can't provide high-quality, low-cost internet connectivity then the Federal Government will have to hire some teenage geeks to run the internet.
  • Shocked

    I'm shocked that anyone outside the telco and cable companies themselves would see Net Neutrality as a "threat".

    I pay Comcast for my Internet access, I pay Netflix for the service of providing streaming video. Now Netflix has to pay extortion money to Comcast so Comcast won't squeeze their bandwidth to the point the service is unusable and Netflix goes under. Netflix then has to turn around and charge me more money to subsidize said extortion. So I'm really paying Comcast twice for the same service.

    Net Neutrality would restrict ISP's from pulling a fast one like this. Because of the lack of competition I'm not able to take my business to someone else so it's up to the government to regulate ISP's on our behalf. I'd rather allow market forces to rule but we are still in monopoly conditions and it is not in the telco/cable companies interest to allow Net Neutrality.
  • Free internet No Cap is it possible?

    Yes i live in holland we have a so called fair use pollicy, it works can dowload 30 to 50 GB a day without any problem. All providers have this pollicy which has been made a law by the government. So guess answer is to move to Holland and Yes fiber is nationwide in every corner of the country.
  • no cap in holland

    ohh yes forgot too mention it cost me 50 dollars (aussie) a month unlimmited data - 50 down 5 up inclusive telephone and cable tv (70 channels) :)