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Public Knowledge Asks Companies For Data Caps Information

April 23, 2012

The
day before the Senate Commerce Committee holds a hearing about video
competition, Public Knowledge is sending letters to the heads of the largest
landline and wireless companies asking about implementation of caps limiting
the amount of data consumers can use without extra charges.

“Distribution
of commercial video is just one reason the internet has experienced such
enormous growth,” Gigi B. Sohn, president and CEO of Public Knowledge,
wrote in her letter, requesting information in a series of seven questions
about how caps are set, how they are evaluated, and how they may evolve over
time. 

Letters
were sent to the heads of wireless companies AT&T, Verizon, T-Mobile and
Sprint, and to landline companies Verizon, AT&T, Comcast, Time Warner Cable
and Cox Cable.

Separately,
PK released a white paper, “Know Your Limits:  Considering the Role of Data Caps and Usage-Based Billing In
Internet Access Service
.”  The
56-page paper reviews the development and implementation of data caps.  It suggests that caps should be
implemented in a more transparent fashion to consumers; could be implemented in
a more granular fashion, such as by time of day; and should not be considered a
means of creating an “artificial scarcity” of bandwidth.

“Our
letters and our white paper are an effort to shed some light on a very complex
topic,” Sohn said.  “We
need to know what barriers there may be to consumers making the best use of
high-speed Internet access generally, and to use of video specifically.  As the economy moves to more reliance
on broadband, the issues of caps and usage-based billing will become
increasingly more important.”

Also Monday, Free
Press, PK and Consumers Union told the Senate Commerce Committee that data caps
hurt consumers and are unjustified. 
In a letter to the Committee, the groups said, “If data caps had a
legitimate economic justification, they might be just a necessary annoyance.
But they do not have such a justification. Arbitrary caps and limits are
imposed by multichannel video providers that also provide broadband Internet
access, because the providers have a strong incentive and ability to protect
their legacy, linear video distribution models from emerging online video
competition.”