The Real Reason for Data Caps

Pull out your phone and check how much data you have left, if any, for the rest of this month. You, like many others, probably pay great sums of money on a yearly basis to one of the big carriers in order to fuel your Facebook, Snapchat, texting, or whatever other social media addiction only to be restricted each month with the amount of data you can use. People also fear paying the overly zealous overage fees so they quickly jump into paying for plans that are more expensive. Are these data caps actually required or are they just vehicles for larger profits for these carriers?

                A recent review of carriers’ policies on data usage and caps has concluded that such strict caps on customers are unnecessary. Recently, the big four carriers, Sprint, AT&T, Verizon, and T-Mobile, have been playing a round robin game of increasing the data caps on their shared plans from around 10GB per month up to 30 and even 100 GB a month in order to stay competitive with each other. During this period, so-called network constraints seemed to vanish. Carriers did not magically just double in capacity overnight nor do they need to. It might seem encouraging that carriers are remaining competitive with each other in their customers’ best interests. However, the same carriers have been saying that data caps have been implemented as a way to manage their networks. This simply cannot be the case if they can raise data caps so easily and so quickly.

                Carriers are using data caps to maximize profits in an easy and manageable way. The caps allow the carriers to tack on extra charges for every megabyte of data used past the limit. This either forces customers to watch their limits carefully or forces them into buying more expensive plans in order to gain access to more data usage per month. On the data provider side, content providers can actually pay carriers to allow users access to their services without affecting monthly limits. This two-sided business plan actually helps carriers make immense amounts of money easily. This is why carriers are pushing grandfathered users still on unlimited data plans to switch to capped plans.

                Management tools used by carriers to load balance their networks are much more difficult to implement than putting data caps in place. Utilizing tools that detect congestion at certain cell sites and throttle the heaviest users are much more complex than simply placing a limit on the amount of data each user can use. Carriers that are operating such large networks should have such tools in place instead of just pushing customers into restricted plans. The Federal Communications Commission (FCC) has been investigating the market and carriers in order to determine whether exploitations of the market are being made. However, the FCC has been more talk than action when it comes to protecting customers and the market overall. It will probably be a long time before carriers change their methods, but for the near future, we are simply subject to their regulations.