Broadband Bandwidth Data Caps Aim To Rip Off Customers

Bandwidth data capping is an unnecessary practice used by some ISPs to pad their own profits, that’s the message delivered in a new paper published by the New America Foundation.

The think tank suggests that ISP policies are used for nothing more than increasing profits out of thin air.

The paper suggests:

“Data caps, especially on wireline networks, are hardly a necessity,” and “the costs to provide broadband service are also declining, including the cost of Internet connectivity or IP transit as well as equipment and other operational costs.”

The New America Foundation specifically points out that bandwidth caps are being implemented at wireline internet ISPs even though their overall capital expenditures have shrunk as a percentage of overall revenues.

A portion of the study specifically focused on Verizon whose wireline CAPEX dropped by 5% from 21% of revenues in 2009 to 16% of revenues in 2011.

Researchers conclude:

“Policymakers need to promote policies that enable new competitors to enter the market and encourage competition from both the private and public sectors”

Researchers suggest that wireless spectrum licenses should come with provisions in the future which ensure proper pricing based on expenditures and other factors.

The wireline broadband sector isn’t alone, wireless carriers continue to implement further data caps while increasing the overall cost of mobile data for their customers. In some cases mobile data can cost upwards of $30 per 2GB. Mobile carriers continue to increase data pricing while making it more simple to deplete user data. For example, 4G LTE customers often run out of data more quickly because quicker mobile data speeds allow for higher definition video and audio, which in turn depletes user data.

At this time there are no upcoming laws that restrict the type of plans offered by ISPs, despite the fact that some areas are left with very few ISP choices.

[Image via zatznotfunny]