The regulator’s inquiry represents yet another front on which its legal authority is challenged after pushback on its interventionist, pro-consumer agenda
The FCC has launched an inquiry into data usage policies in fixed and mobile broadband tariffs
On 15 October 2024, the US Federal Communications Commission (FCC) issued a notice of inquiry describing its plans to study the use of data caps in fixed and mobile broadband tariffs. The regulator is interested in the impacts that tariffs with limits on data usage and related overage charges, referred to as data caps, have on consumers as well as competition. The launch of the inquiry comes almost a year after Chair Jessica Rosenworcel proposed the action and is now coordinated with the release of over 600 consumer testimonies on their experiences with data usage limits collected since 2023. Though the launch of a notice of inquiry does not necessarily require subsequent rulemaking, the continued focus from the FCC on data limits suggests additional action may be likely. The National Telecommunications and Information Administration’s (NTIA) decision to require operators to offer an affordable tariff without a data cap under the rules for funding through the Broadband Equity, Access, and Deployment (BEAD) Program also indicates a priority on the issue within the wider Biden Administration.
The regulator is seeking feedback both from industry and individuals on the impact of these policies on competition and consumers
The FCC frames its inquiry by describing what it perceives to be a disconnect between the continued use of data cap policies in tariff offerings and both consumers’ increasing data needs and operators’ technical capacity to offer unlimited data plans. Referring back to the COVID-19 pandemic and related industry responses as evidence, the regulator notes that as consumer data usage rose, operators suspended both hard data caps (policies that apply additional fees for data used beyond a given limit) and soft data caps (policies that apply speed limits or throttling policies for data use beyond a given limit) as a support measure for consumers. The regulator is also seeking further information on whether data cap policies impact competition among operators, both in the context of whether and how consumer purchasing decisions are changed by data cap policies and of whether and how operators apply data cap policies differently in regional markets where they encounter varying levels of competition. The FCC is inviting consumers to continue to submit accounts of their personal experiences with data usage policies. The regulator has already highlighted a number of these stories, particularly those related to larger data needs, such as from individuals with disabilities, families with children and professionals offering digital services such as telemedicine.
The inquiry is another piece of the Biden Administration’s overhaul of consumer protection, which has been challenged vocally by minority commissioners
In his statement on his dissent from the decision to issue the notice of inquiry, Commissioner Brendan Carr characterised the study as part of the regulator’s and the Biden Administration’s “inexorable march towards rate regulation”. Carr also states he believes the FCC lacks authority to pursue the inquiry, citing an ongoing legal challenge to the FCC’s Title II classification decisions that cite a similar legislative backing. That challenge represents a wider, rising scepticism of the FCC’s statutory powers from conservative leaders, especially when read alongside an ongoing lawsuit questioning the regulator’s authority to administer Universal Service Fund programming and the yet unknown implications of the decision in the Loper Bright Enterprises v. Raimondo case which could undermine regulatory authority broadly. This dissent also comes during a particularly active period for the FCC. The regulator’s other recent regulatory efforts include broadband labelling rules, rules against digital discrimination, all-in pricing requirements and pending restrictions on bulk billing practices in multi-dwelling units.
Piece by piece, the FCC has constructed a consumer protection regime that extends beyond European efforts during the course of the Biden Administration through its executive powers, mirroring efforts in South Korea to rebalance relationships between operators and consumers. However, it’s unclear if this regime has delivered on its objectives given the consistently high prices and variable quality of service faced by US consumers. Political uncertainty ahead of the upcoming election also brings into question whether this regime will have the opportunity to be fully implemented and then change market conditions. With the ongoing inability of the US Congress to reform or revisit the legislative footing of the agency, the next president, in addition to pending court cases, will be left to determine the fate of this consumer-focused agenda or pursue the rollback of much of the rulemaking undertaken in the past four years.
