June 21, 2017 at 5:00 am ET
Fixed broadband internet at home has revolutionized how we communicate with our friends and family, as well as how we access information, news and entertainment. Few things are more important for the development of our societies, economies and democracies than making sure that people have access to affordable unlimited broadband at home.
Yet internet providers everywhere are working untiringly to impose data caps — monthly limits on the amount of data you can use over your fixed broadband connection. In doing so, they are spreading the myth that fixed broadband internet is a scarce resource that should be charged per use. Fortunately, in Brazil, the Senate and the Consumer Protection Commission of the Federal Lower House have moved to ban data caps. That is something legislators and regulators everywhere should emulate.
Data caps have various shapes. When an internet user hits that limit, network operators will slow down data speeds, charge overage fees and even disconnect a subscriber. But whatever the variation of data cap, they all have the same effect: They discourage the use of the internet and the innovative applications the internet spawns.
Think of the effect data caps have on visual artists, for example. Films, photographs, images of paintings and other works of art are often data-rich, requiring significant bandwidth. These artists rely on the ability of new audiences to easily discover their work. But in a world with data caps, people may be less inclined to explore new things because of concerns about exceeding a data cap. This is even worse for low-income families: In Brazil, Telefonica wanted to sell broadband internet plans with a data cap of 20 gigabytes — when one hour of HD video consumes almost 3 gigabytes! Obviously, this would impose severe limitations for access to culture and civic engagement. This is an issue of social justice.
Internet service providers are acting as abusive oligopolies when they impose data caps. In Brazil, 85 percent of all fixed internet connections are controlled by Telefonica (Vivo), Grupo Oi and Telecom America (Claro/NET). In the United States, Comcast and Charter have roughly 70 percent of the fixed broadband market. Even in big American and Brazilian cities, consumers often only have one choice of broadband provider. If these firms change their services unilaterally and impose low data caps for consumers, there is little risk of “consumer evasion” — consumers moving to a different service. If there is no competition and no internet providers around with traditional pricing systems, the consumer has only one option: to accept data caps in order to continue with internet access.
The Brazilian debate on data caps has shown that there are no technical reasons for traffic limitations on fixed broadband internet. In fact, data caps should be understood as a special type of “artificial scarcity.” The Brazilian Ministry of Justice required ISPs to disclose information about how “heavy users” affected traffic congestion. No reliable technical study was presented by ISPs. On the other hand, engineers from the Brazilian Internet Steering Committee (CGI.br) argued that traffic congestion could be tackled by more investments in internet exchange points and content delivery networks. There are many policy options to increase the velocity of internet access and the exchange of data that do not involve adopting data caps as a pricing system.
The economic structure of this market suggests ISPs may be implementing data caps all over the world. It’s not surprising to learn that almost 2 million Brazilians signed a petition against data caps in 2016, and that 600,000 said “yes,” in an online poll conducted by the Senate, to a bill that creates a new right of “internet access without data caps.” Consumers know that data caps are not for their benefit, and that the technical arguments sustained by the ISPs are flawed.
The Brazilian Congress is about to change the famous “Marco Civil da Internet” — a federal law that became known as the “Constitution for the use of Internet” — in order to establish a new right: the right to connect at home without data caps imposed by ISPs. This could be a new type of “digital right” for the 21st century.
Brazil might kick off a global rally against market practices that harm consumers in excessive and unfair manners. In Brazil, as in other places, the law says that “internet access is essential for citizenship.” But this might not be enough. We must start talking about access conditions and affordability, too. Most importantly, consumers all over the world should ask one big question: “Isn’t it time to affirm the right to connect without data caps?
Agustin Rossi is the global policy director at Public Knowledge. Rafael Zanatta is the telecommunications policy analyst at IDEC, Instituto Brasileiro de Defesa do Consumidor (Brazilian Institute of Consumer Defense).
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