Data Cap Legislation Enters Congress

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A few weeks ago, Senator Ron Wyden of Oregon introduced a piece of legislation called the “Data Cap Integrity Act,” a move he elaborated on at the Consumer Electronics Show in Las Vegas.

As we’ve mentioned before, Socket doesn’t implement data caps for a variety of reasons. Senator Wyden’s legislation points out a few more things that consumers should know about the purpose of data caps, and what effect they actually have on Internet usage.

False Scarcity:

As we mentioned in a previous article, it can be argued that data caps discourage a few select users from hogging all the bandwidth. However, an issue of equal importance is when users are online. Capping data at 4 AM doesn’t solve any bandwidth issues – it just draws an arbitrary line where consumers can be charged extra for slipping up.

“There is a case for data caps that manage congestion – manage a scarcity of bandwidth – but they shouldn’t be used to create scarcity in order to monetize data,” said Senator Wyden in his speech at CES.

Anti-Competitive:

When a data cap forces users to make every download count, it can lead to some questionable business practices… at least, according to Senator Wyden. Comcast’s decision to make Xfinity, their Netflix equivalent, not count towards users’ data caps made some users question the fairness of such a deal. Wyden, though, considers it a more serious anti-trust issue.

“If a provider wishes to slow consumers’ Internet connections in order to discriminate against a provider of content, my view is that they should face the anti-trust laws. [We] are working on legislation to do just that -- to strengthen the anti-trust laws in order to ensure that the major ISPs cannot use their market dominance to pick online winners and losers.”

Lost Innovation:

Many of today’s exciting new Web applications are based on the availability of high-speed Internet, a tool that wasn’t as widely available half a decade ago. More users than ever are now able to Skype, stream high-definition video, play games in real-time, and more. However, by unnecessarily limiting the use of high-speed Internet, new applications will suffer or fail to thrive when they otherwise would.

“Future innovation will undoubtedly require consumers to use more and more data - data caps should not impede this innovation and the jobs it creates,” said Wyden, in a press release concerning his legislation.

Click here to read a complete transcript of Senator Wyden’s speech at CES, or here for his press release and the DCIA Bill text.