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The FCC just signaled war against data caps

The FCC just signaled war against data caps


But there's a big catch

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The US government is about to approve Charter's bid for Time Warner Cable, and like similar mega-mergers in recent history, it's coming with plenty of strings attached. One of those strings is a prohibition on data caps, which have been a subject of frustration for thousands of broadband customers over the past year. But the FCC has been pretty quiet about them so far — until today, when it revealed a combined Charter / Time Warner Cable won't be allowed to impose them for seven years.

The FCC might not be able to turn back and impose similar restrictions on Comcast, even though the company has been the worst offender in imposing data caps recently. (Ironically, the FCC might have been able to impose that restriction had it instead allowed Comcast to buy Time Warner Cable, but here we are.) Still, it's a useful indication of what the most important regulatory agency in communications is thinking, and it will at least provide relief to the roughly 24 million customers the merged company will serve.

Risky mergers have given the FCC big regulatory opportunities

But zoom out a little and you can see the FCC's messy reality: as other efforts fail, big, risky mergers have provided the agency with some of the best opportunities to impose reasonable consumer-friendly regulations on broadband companies. Comcast fiercely fought the FCC's net neutrality rules for years, but when the company wanted to buy NBC Universal, the FCC was able to force it to submit to net neutrality guidelines through 2018. Comcast went from fighting net neutrality to acting like it had the idea all along — because complying with some consumer-friendly rules for a few years is a no-brainer if it gets you the power of consolidation and vertical integration.

This situation isn't new. When the FCC was sorting out the future of media ownership more than a decade ago, industry executives accused then-FCC Chairman Michael Powell of "regulatory log rolling" — or as The New York Times described it, "bargaining to help [companies] in one set of proceedings to gain their support in another." Passing regulations by approving huge mergers is pretty much the same thing, but rolled-up all in the same transaction. And while current FCC Chairman Tom Wheeler has showed more backbone than his predecessors, the Charter deal is proof that the agency still has to make some uncomfortable deals to get what it wants.