A recent Wall Street Journal (WSJ) article (requires subscription) chronicles the increasingly problematic effect of data caps on the quality of residential subscribers' Internet access experience.

Also known as a bandwidth cap, a data cap is a monthly bandwidth usage limit Internet Service Providers (ISPs) sometimes impose on subscribers at their standard monthly rates. While some ISPs charge customers more for exceeding their monthly bandwidth caps, in other cases ISPs may even cut off a customer’s service completely.

The problem is also harming companies like Netflix and Sling TV who are losing customers who can’t justify paying for a high capacity video streaming service that’s only available until they hit their data caps partway through the month. In response, Netflix lowered the video quality for users on ISP networks that use data caps as a way to help them avoid the limitations. The plan worked, but in the process Netflix angered customers, who blamed both the ISPs and the streaming service for the lowered video quality.

It's Not All About The Money

The problem goes beyond the extra fees charged to customers who use a lot of data. The WSJ article cites two Internet users who’d like to join the growing number of “cord cutters” who are dropping television service for Internet-based video. As one man put it:

“I wouldn’t have regular TV if not for the data cap,” he says. “Comcast has got me by the throat.”

Another added:

“I was planning to cut the cord when my DirecTV contract is up,” he says. “This is essentially a ploy to keep people from cutting cable in my opinion.”

An increasing number of subscriber complaints and suspicions about the accuracy of measuring bandwidth usage heighten concerns.

Feds Take Notice

The Government Accountability Office released a report at the end of 2014 expressing their concern about ISPs abusing the use of data caps. At the time, the FCC said that they had not received enough complaints about the problem to merit action. In 2015, as this new WSJ article notes, the FCC received an unprecedented number of complaints about data caps. The problem is...

A recent report by Victoria Rideout and Vikki S. Katz from the Joan Ganz Cooney Center at the Sesame Workshop delves into detail on the experiences of lower income families and Internet access. The report, “Opportunity for all? Technology and learning in lower-income families,” points to the promises of digital inclusion for educational opportunities, but also to the current inequalities in Internet access. 

The researchers highlight several key findings from the study in an effort to inform policymakers of the root causes, and effects, of these inequalities on lower-income families. They include issues of race (families headed by Hispanic immigrants are less connected), of access (mobile-only and inconsistent connectivity), and of affordability (despite the existence of discounted programs).

Discounted Programs Not Working

We’ve written several times about the failings of the large corporate providers’ discounted programs for Internet access. Over the past few years, Comcast’s Internet Essentials program has been a prime example. We reported on the Consumerist article that highlighted how the program benefits Comcast more than lower-income families. In 2013, our Lisa Gonzalez shared her own family’s experience with the program. 

Rideout and Katz’s report again show the real impact of these programs’ failures. Only 5% of those surveyed had ever signed up for the programs although many met the eligibility requirements. Even those that did receive the service sometimes found that it could not meet their needs. After all, the program only provides up to 5 megabits per second (Mbps) in download speeds. A parent of a seventh grader in Colorado explained to the researchers (page 11): 

I had (Internet Essentials) because (my children) had assignments that they needed the computer for... I hated it. It wasn’t working. It was too slow, it would freeze and they couldn’t get anything...

For seniors, low-income residents, and the disabled in Saint Paul, Minnesota, a Comcast discount within the city's franchise agreement is not all it was cracked up to be. The Pioneer Press recently reported that, as eligible subscribers seek the ten percent discount guaranteed by the agreement, they are finding the devil is in the details - or lack of them.

This is a warning to those who attempt to negotiate with Comcast for better service. Comcast may make deals that it knows are unenforceable. 

"No Discount For You!"

For years, Comcast held the only franchise agreement with the city of St. Paul. In 2015, the city entered into a new agreement with the cable provider and, as in the past, the provider agreed to offer discounts for low-income and senior subscribers. Such concessions are common because a franchise agreement gives a provider easy access to a pool of subscribers.

It seems like a fair deal, but where there is a way to squirm out of a commitment, Comcast will wriggle its way out. 

Comcast is refusing to provide the discount when subscribers bundle services, which are typically offered at reduced prices. Because the contract is silent on the issue of combining discounts, the city of approximately 298,000 has decided it will not challenge Comcast's interpretation:

The company notes that the ten percent senior discount applies only to the cable portion of a customer's bill. Comcast has maintained that it is under no legal obligation to combine discounts or promotions, and that bundled services provide a steeper discount anyway.

Subscribers who want to take advantage of the discounts will have to prove their senior status and/or their low-income status. In order to do so, Comcast representatives have been requesting a copy of a driver's license or state issued i.d. 

CenturyLink Picks Up the Baton

In November, the city approved an additional franchise agreement with competitor CenturyLink. That agreement also provides that seniors, low-income households, and disabled residents are eligible to receive a ten percent discount. CenturyLink can, in the alternative, offer a discount of $5 off a subscriber's cable bill if a subscriber applies for the low-income discount. In order to receive this discount, the...

Reports have recently surfaced from The Detroit News and Patch.com that a town in Michigan is now fighting Comcast over who owns their network.

The Backstory

Fifteen years ago, West Bloomfield, Michigan, population about 65,000, wanted an Institutional Network (I-Net) to connect all the important services, like emergency response, police, fire, and water, with a dedicated high-speed network. The town entered into a franchise agreement in order to share the construction costs with the incumbent cable company, which at the time was MediaOne. According to the township, MediaOne offered to contribute $400,000 to the cost of construction as part of that agreement.

The agreement was transferred to Comcast in 2000; Comcast acquired MediaOne in 2002. MediaOne and successor Comcast have provided "free high-speed bandwidth transport as well as interconnectivity" during the life of the network claims Comcast in a letter submitted to the court. The cable giant also describes the practice as a "benefit not provided by Comcast's competitors" and wants it to stop. The franchise agreement expired on October 1 but was renewed until 2025.

To The Courts

Comcast and the town are now fighting over ownership of the infrastructure. With Comcast demanding new fees, the town is bringing a lawsuit. Comcast, however, maintains that it owns the I-Net that the town uses for all its important communications. The Detroit News reports that the township is coming out swinging:

The township said it is illegal to use public funds for private commercial purposes and insists there was never any reference to a cable company ever retaining ownership of the I-Net and said it has paid all other costs including upgrades and maintenance of the system which is “imperative to public safety operations of the...