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Netflix wants annoying data caps to be illegal

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Sean O'Kane

Netflix wants you to be able to stream plenty of TV shows whether you’re at home or on a mobile connection, so it’s pushing for the US government to make some data caps illegal.

In a letter sent to the Federal Communications Commission last week, Netflix said that the commission should consider banning data caps on wired internet connections and banning "low" data caps on mobile connections.

"Data caps (especially low data caps) and usage based pricing discourage a consumer’s consumption of broadband and may impede the ability of some households to watch internet television in a manner and amount that they would like," Netflix writes.

Data caps "do not appear to serve a legitimate purpose," Netflix says

It argues that data caps on wired internet lines — like the home service provided by Comcast — "do not appear to serve a legitimate purpose." They are an "ineffective" tool for managing network congestion, Netflix writes.

Similarly, Netflix argues, "usage based pricing" — that is, charing by the gigabyte — is meant simply to get more money out of consumers. "Data caps and [usage based pricing] raise the cost of using the connections that consumers have paid for, making it more expensive to watch internet television," it says.

This is of course a key issue for Netflix, given that its success is directly reliant on people being able to stream as much of its video as they’d like. As it stands, people stream much less on mobile. Netflix is concerned about that, but it’s also worried that data caps could soon become widespread on fixed internet lines, too.

That’s already starting to happen to a limited extent. Comcast (which, full disclosure, is an investor in Vox Media, The Verge’s parent company) has been running a number of "trials" that put data caps on people in select cities. For a while, those caps were limiting people to 300GB, which was easy enough to hit. Then in April, it bumped caps up to a more reasonable 1TB.

With 4K video, data caps will be a huge problem

The initial cap, Netflix writes, is only enough to meet "the internet television needs of an average American," and that’s if you count out all other web browsing. A higher limit is necessary, it says, for families and 4K streaming. Netflix doesn’t comment in the letter on whether 1TB gets there, but its CEO said on Twitter earlier this year that 1TB would be high enough that he'll "never be able to watch enough to hit my cap."

Netflix’s letter is particularly interesting in light of the FCC’s revamped set-top box plan (which was announced after Netflix’s filing). The plan requires cable companies to build TV streaming apps for their subscribers to use; that’s totally fine on an internet connection without data caps, but on a capped connection, it’d limit how much someone is able to watch. At the same time, if TV and cable providers zero rate their own streams, so that they don't count against data caps, services like Netflix would be put at a huge disadvantage.

The FCC’s set-top box proposal doesn’t touch the issue of data caps at all. "If an issue should emerge, we would monitor possible consumer harm and could address under the general conduct standard of the Open Internet rules," Kim Hart, the FCC’s press secretary, tells The Verge in an email. "We recognize that different pay-TV providers will take different approaches. Some providers have indicated that they will transmit the video over different capacity than that used for internet access."

The FCC is already concerned about data caps

Access to streaming TV is something the commission is already keeping a close eye on. In approving Charter’s acquisition of Time Warner Cable, the FCC imposed conditions that limited the combined company’s ability to harm streaming services like Netflix. It also banned data caps or usage-based pricing for seven years, out of concern that these would curtail the rise of online TV just as it was getting started. Those restrictions were also enough to scare Comcast into raising its own data caps from 300GB to 1TB.

Netflix’s letter was in response to an FCC inquiry on the state of high-speed internet deployment. In particular, the commission is interested in standards for fixed and mobile internet. Netflix has been a longtime critic of basically anything that hampers internet access (with some strange exceptions), so it’s no surprise to see it taking on another big issue this year.