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Do Data Caps Serve A Legitimate Purpose? Netflix Doesn’t Think So

By Trisha Faulkner
Published on: 13:18 PST, Sep 14, 2016

Netflix, one of the most popular ways to watch movies and television online, has decided to go to war with the United States government. More specifically, the company is going to war with the Federal Communications Commission (FCC).

The Verge reports Netflix has sent a letter to the FCC because the company does not believe the “annoying” data caps placed by some Internet Service Providers serve a legitimate purpose. In fact, Netflix believes these data caps are just in place to squeeze more money out of the Internet Service Provider’s customer base.

“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 wrote in the letter to the FCC, according to TIME.

Within the letter, Netflix argues to the FCC that placing data caps on wired internet lines – such as the home services provided by providers like Comcast – “does not appear to serve a legitimate purpose.” Netflix also refers to the data caps as an “infective” way to deal with a congested network.

Netflix also argues that Internet Service Providers are only adopting “usage based pricing” – meaning they get to charge by the gigabyte – as a way to get more money out of the consumer.

“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.”

In a different article, TIME reports that Comcast claims data caps are fair and hardly “caps” at all. Comcast claims data caps only charge more money to customers who use more data.

The biggest reason why this is such an issue for Netflix is because the company’s success stems from a person’s ability to watch as many television show episodes and movies as they want any time they want. As things stand currently, people already stream Netflix less on mobile devices because it costs them too much money – even though the monthly Netflix bill is hardly something people consider expensive. The biggest concern Netflix has is that if the data cap becomes widespread, people will cancel their Netflix subscriptions because they won’t be able to use them as much with the data caps in place.

The Verge goes on to report that the data cap issue has already started spreading to a very limited extent. Comcast has been running data cap trials in a handful of cities. Initially, the caps were set at 300GB. However, the caps were bumped to 1TB in April – which many considered to be a much more reasonable number. Unfortunately, Netflix knows all too well how quickly it will be to reach those “generous” data caps if you are someone who likes to binge watch television shows or movies.

The initial cap companies like Comcast have set in place is only going to meet the television watching needs of the “average American,” according to Netflix. Netflix wants to stress that this is the average for one person watching television and browsing the internet. This data cap, however, is not enough when you have a family streaming Netflix on a few different devices while children are doing research for homework or playing video games.

Another reason why Netflix has decided to go to war against the FCC about the data caps is because the FCC has revamped the top-box plan. This plan requires all cable companies to have a streaming app for their subscribers to use that can be used on the internet without worrying about any caps. If the person, however, were to stream television on Netflix – or some app other than the one made by the service provider – the cap would be in place. Naturally, Netflix does not like this idea because the last thing the company wants is for customers to cancel subscriptions to use Comcast, AT&T, or DirecTV streaming apps instead.

Chances are pretty good Netflix is only going to war with the FCC because it is going to cause them to lose customers if all of the major service providers adopt caps, but those who like to binge watch Netflix all night certainly appreciate the gesture.

How do you feel about the data caps service providers are trying to adopt? Are you glad Netflix is trying to fight this?

[Photo by Ken Ishii/Getty Images]

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