Netflix Isn't the Problem. Data Caps Are.

Netflix recently revealed that over the last five years it’s been degrading video quality for AT&T and Verizon customers who are streaming content on mobile wireless networks. And the telecom industry, which has long hated Netflix for its support of Net Neutrality, grabbed its collective megaphone to scream in outrage about the company’s “hypocrisy.”

This went beyond outraged cries when the American Cable Association asked the FCC to launch an inquiry to investigate Netflix. ACA claims that “the Federal Communications Commission’s approach to Net Neutrality is horribly one-sided and unfair because it leaves consumers unprotected from the actions of edge providers [like Netflix] that block and throttle lawful traffic.”

Uh … OK. There’s just one problem here: The Netflix issue has absolutely nothing to do with Net Neutrality — and everything to do with data caps.

The anti-Net Neutrality crowd has been happy to sow confusion for years, pretending that the content on the Internet is the same thing as the network connection that Internet service providers sell us. Here’s the difference: Websites and applications serve up the content on the Internet; they aren’t the same thing as the connection we pay cable and phone companies for every month to get online and access all that content.

It may be hard for the telecoms to grasp but open Internet advocates like Free Press don’t believe that everything that’s bad for consumers is a Net Neutrality violation. Yes, Netflix should have informed its customers that it was limiting the speeds for its own content. Even if the company simply wanted to prevent its customers from going over their data caps, it shouldn’t have kept its practice of downgrading video speed a secret (even if no one seemed to notice for half a decade).

But Net Neutrality rules apply only to ISPs like AT&T, Comcast and Verizon when they sell you a connection. No matter where you fall in the debate over Net Neutrality, I think we can all agree that Netflix is not an ISP. Netflix provides content, not a connection to the network. If you don’t like what Netflix is doing, you can choose one of its competitors.

But if you don’t like what your ISP is doing, what recourse do you have? Most of us can’t just ditch our ISPs and choose a different one because cable and phone companies have monopolies in our communities, and as carriers they provide the pathway to the whole Internet. This is one of the reasons we need Net Neutrality rules in the first place — and it’s why those rules apply only to the ISPs themselves.

Which brings us to the real problem here: data caps.

Data caps have been around for a while on mobile networks but have now made their way over to home broadband connections. ISPs like to promote these caps as “fair” but that’s an apt description only if you think these companies should be able to charge you twice for their service (once to connect and again to actually use the connection).

There’s no technical justification for caps like the ones AT&T and Comcast are pushing on to their home broadband customers; they're just another way for ISPs to exploit their customers. Comcast has rolled them out in about a dozen markets, with plans to take them nationwide. If you don’t like the cap you can pay an additional $30–35 a month to avoid it — regardless of how much data you actually use. AT&T just announced a similar program, but you can avoid the additional fee for unlimited data by subscribing to the company’s pay-TV service on DIRECTV or U-Verse.

On the mobile side, AT&T, T-Mobile and Verizon are all combining data caps with sponsored data programs. AT&T and Verizon are happy to exempt their own content streams from your monthly data caps, regardless of whether you stream one hour a week or leave it running in the background 24/7. And T-Mobile’s cap is different, but its exemptions apply only to video and music apps.

If an ISP can randomly exempt content from your monthly cap based on its source or type — regardless of how much data you consume — why do the caps exist in the first place?  

If you’re mad about Netflix, you have every right to be. It should have been upfront with its customers. As for me, I’ll be directing my rage at the ISPs for instituting these caps in the first place. My cellphone bill has done nothing but go up year after year and whenever I try to get the price lowered I feel like I’m trapped in this.

To protect consumers from harm, the FCC needs to take a serious look at data caps. There’s nothing fair about them.

Original photo by Flickr user Adam Fagen