Artificial Scarcity: How Data Caps Harm Consumers and Innovation

Author(s): 
Danielle Kehl
Patrick Lucey
Publication Date: 
Monday, 2015, June 1

This report by Danielle Kehl and Patrick Lucey examines how bandwidth caps, in increasingly popular profit grabbing technique among the big ISPs, impact consumer decisions and usage. 

From the OTI press release:

In this paper, we examine the growth and impact of usage-based pricing and data caps on wired and mobile broadband services in the United States. We analyze the financial incentive that Internet service providers (ISPs) have to implement these usage limits and discuss research that demonstrates how these policies affect consumer behavior. In particular, we explain how data caps can make it harder for consumers to make informed choices; decrease the adoption and use of existing and new online services; and undermine online security.

In addition to their own data and conclusions, Kehl and Lucey provide information to many other resources that tackle the implications of bandwidth caps. As consumers' need for bandwidth increases with their changing Internet habits, this topic will only become more pressing.