Data Caps and Vulnerable Populations

Today, most Internet service providers (ISPs) have implemented some form of a data cap.(1) These caps limit the amount of access a consumer has to data before they are charged surplus fees or cut off from the network. Although there is little clarity as to why such caps are necessary, their unintended consequences could be disastrous for vulnerable populations.

There are many well-documented economic and competitive concerns about data caps. Caps are not popular with consumers, nor are they an effective means of managing network congestion. In fact, when one Comcast engineer was asked why the company’s caps had been set at current levels he responded that he had “no idea,” as he was involved only in the technological aspects of the company, not “business policy.”(2) This open admission that there is no technological necessity for data caps goes to show that ISPs’ decisions to implement caps is primarily driven by profit.

How Do Data Caps Affect Low-Income Consumers?

Data caps are particularly problematic for low-income individuals who rely on their connectivity for healthcare, job and education opportunities. They may find themselves facing unexpectedly large fees at the end of the month as a result of surpassing a data cap.

A 2012 study of data caps by Microsoft Research and the Georgia Institute of Technology(3) suggests that the uncertainty associated with invisible balances, mysterious processes, multiple users, and the ways in which these factors affect bandwidth usage can add a layer of confusion to service. This confusion can lead to huge costs to consumers, and have particularly large impacts on low-income consumers, who may already have stretched their budgets to afford broadband service and cannot afford overage fees.

The opaqueness of data caps can further lead consumers to make poor purchasing decisions as they may be unclear as to which data plan to buy, causing them to buy too much or too little data. A Government Accountability Office (GAO) report states, “if consumers do not understand their data usage, they may choose plans that include allowances that are too large — and cost more — than needed. Alternatively, they may purchase too little data and potentially face overage charges...This can lead to difficult and unnecessary budgeting tradeoffs, especially among lower income and minority households.”(4)

According to Sandvine, in 2014 bandwidth consumption for a North American household averaged 54GB per month. However, a report by Open Technology Institute (OTI) reveals,

A household that signed up for Time Warner Cable’s “Essentials Internet” discount on a standard broadband package and limited its total usage to 5GB would save $8 a month on its bill. But the price discount is hardly proportional to the bandwidth reduction. For a 23 percent discount on the monthly bill, an average household would have to reduce its data consumption by 91 percent, and if an Essentials Internet user consumed the average amount of bandwidth one month, he or she would face $25 in overage fees.(5)

A recent report by the Pew Research Center found that nearly thirteen percent of low-income American adults are smartphone dependent, meaning their phones are their primary means of accessing the Internet. These individuals are negatively affected by data caps at a much higher rate than non-dependent individuals. With no other means of accessing health care, education and career information online, nearly fifty-one percent of smartphone dependent users frequently or occasionally reach their cap, as opposed to thirty-five percent of non-dependent users.(6) These caps can have a much larger impact on low-income consumers, and the fees associated with surpassing a cap are unacceptable for low income families trying to access essential services offered online.

How Do Data Caps Affect Job Seekers?

Data caps can negatively affect attempts to find employment opportunities. Job applications are moving online, and many companies no longer accept applications that have not been submitted online. A report from the Social Science Research Council states,

Conversations with employees and managers at local chain store branches suggest that this preference for electronic application is increasingly the norm, with comments ranging from ‘it’s all electronic based’ to ‘everything is online’ and ‘standardized.’ This was especially true at stores such as Family Dollar, Home Depot, Target, Walgreens, and Walmart, which only accept online applications.(7)

Low-income individuals must use precious data to research a company online, find an application and fill it out. If they exceed their cap, they may not be able to finish job applications due to suspended service, may have to pay exorbitant overage fees or spend additional time on the applications if service is throttled.

Many interviews now require an interview that is conducted over Skype or other videoconferencing services. These services use even more data than typical browsing, and low-income consumers may find themselves reaching their cap even faster in the post-application stage. A recent report from OTI states that while a 15 minute voice-over-IP call uses 7.5 MB, a 15 minute SD video may use upwards of 175 MB and a 15 minute HD video may use 588.8 MB.(8) This usage can cause consumers to meet their data cap faster than they anticipated, and if they meet the cap during a video interview they may be unable to complete it due to throttling or disconnection from the network.

For job seekers who depend on just wireless connections, app usage for the purpose of finding a job may cause further problems. There are an increasing number of apps flooding into the market aimed at connecting individuals with career opportunities. These apps allow users to export résumés, geo-target to identify specific industry contacts, and network online. Between regular use and routine software updates it can be difficult for these mobile-dependent users to tell just how much of their data an app has used. If a user is frequently interacting with an app for the purpose of finding a job and he exceeds his data limit, the fees and/or throttling can be debilitating to his job search.

Low-income individuals should not be penalized for data used to find employment, and yet they may end up feeling punished by bills at the end of the month. Low-income individuals should be aided in, not deterred from, their job search as much as possible.

How Do Data Caps Affect Deaf Consumers?

Data caps can be particularly debilitating for the deaf and hard-of-hearing. Many in this community use Video Relay Service (VRS) in order to communicate and this can use up data at much higher rates than a typical phone call. VRS uses video conferencing services to connect a hard-of-hearing individual with a sign language interpreter to facilitate phone calls. While VRS uses only 5-10 megabits of data per second, this can quickly add up when coupled with normal browsing and app usage.(9)

The Federal Communications Commission has implemented measures that strive to create an equal playing field for both hearing and deaf consumers, but it has not yet tackled the effect of data caps on VRS usage. Those in the deaf and hard-of-hearing community argue that they should have equal access to communications and because phone services do not apply towards a cap for hearing people, neither should VRS services for the disabled. Utah Valley University ASL and Deaf Studies program coordinator, Dan Hoffman, said “Hearing people can call using their phones any time they want to…they don’t have any cap like that.”(10)

How Do Data Caps Affect Healthcare?

The prevalence of online health care is on the rise and doctors across the nation are beginning to offer their services virtually for follow-up appointments, urgent care and routine ailments. This access can reduce medical costs through video technology, support real-time treatment by first responders through the use of wireless devices, and enhance senior wellness and preventative care through telemedicine and remote in-home monitoring.

Health insurance providers are quickly involving themselves in the new technology. The nation’s largest insurer, UnitedHealthcare, and Anthem, which covers 16 million individuals nationwide, have both rolled out plans to expand their coverage of virtual visits.(11)

Dan Diamond, a family practitioner at an urgent care center said of virtual visits, “I don’t have people knocking on the door and saying, ‘Doc, we need you in another room’...I’m able to focus on that one patient, without all the commotion that happens in an urgent care or an emergency room.”

But these services require large amounts of data and may cause consumers to exceed a cap more quickly, limiting access to health care. As noted above, the use of Skype and other videoconferencing services can cause consumers to reach data caps quickly. In times of medical need, should a user face throttling, he may not be able to get the care he needs, or he may face costs that exceed what he would have paid if he went to see a doctor in person. Particularly for low-income and rural consumers, the connection to telehealth resources can be vital, and meeting a data-cap can mean the difference between health and illness.

How Do Data Caps Affect Students and the Homework Gap?

Data caps can create insurmountable barriers for low-income consumers trying to access life-changing services online, such as educational tools. Today, teachers across the country assign online homework, but not all students have unlimited access to the Internet and they may find that they have met a data cap before their work is done. This leaves parents with an impossible choice: to forego other household essentials to pay the fees imposed by ISPs, or to limit their children’s access to essential information to complete their assignments.

Without a reliable and cost effective connection to the Internet, students may quickly find themselves cut off from opportunity. Today, over 600 colleges and universities accept the Common Application, which can only be accessed online. Filling out the application takes hours, in addition to the time needed to research each school. This may cause students to quickly meet a data cap, which can result in load times so slow or fees so exorbitant that they are unable to complete the applications.

Data caps on mobile broadband can also cause serious financial problems for students in low-income households. If a student enrolls in an online course using a mobile broadband connection with a data cap, he is highly likely to hit the cap long before his coursework is completed. Benjamin Lennett and Danielle Kehl of New America’s Open Technology Institute write,

Both Verizon and AT&T offer ‘low cost’ plans that bundle unlimited voice and texting with a gigabyte of data consumption for $40 or $50 per month. However, if you tried to stream video lectures on that connection, you'd reach the data cap after about three hours and then face fees of $15 per gigabyte. If you tried to complete a course with 15 hours of video a month, your phone bill could arrive with as much as $70 in extra fees.(12)

These extra fees can cause a “free” online course to become surprisingly expensive.

Conclusion

Data caps are harmful to individuals across the nation, particularly those in the most vulnerable situations. Low-income consumers do not have the luxury of a buffer in their budget for the fees that are associated with surpassing a cap, and, as a result, many have to discontinue or suspend their service. This can keep them from accessing health care, education and job opportunities online. A high percentage of low-income consumers are disabled, and connectivity is especially important for them. Caps can harm disabled individuals as they seek a job online, or try to communicate with their friends and family.

The evidence shows that the implementation of caps are primarily a business decision made by ISPs in an effort to increase already massive sources of revenue. Given the ill effects of data caps, and that the rationale for their implementation is weak, ISPs should be prevented from further implementing harmful limits on data.

1. AT&T’s DSL and U-verse services are subject to soft caps at 150GB and 250GB with an additional fee of $10 per 50GB over the service limit. Charter Communications has instilled hard caps between 100GB and 500GB, depending on a user’s plan. Today, Time Warner does not include caps on the national scale, but is testing various data caps and overage fee systems in market trials. (See New America, “Capping the Nation’s Broadband Future")
2. Twitter handle @jlivingood, Tweet on 14 Aug 2015 at 6:11am,
3. Marshini Chetty, Richard Banks, A.J. Bernheim Brush, Jonathan Donner, and Rebecca Grinter, “‘You’re Capped!’ Understanding the Effects of Bandwidth Caps on Broadband Use in the Home,” Microsoft Research, May 2012, http://research. microsoft.com/apps/pubs/default.aspx?id=162079
4. Mark Goldstein, “FCC Should Track the Application of Fixed Internet Usage-Based Pricing and Help Improve Consumer Education,” Government Accountability Office, December 2014, http://www.gao.gov/assets/670/667164.pdf
5. Kehl, Danielle and Patrick Lucey, "Artificial Scarcity: How Data Caps Harm Consumers and Innovation." New America. June 2015. https://static.newamerica.org/attachments/3556-artificial-scarcity/DataCaps_Layout_Final.a7ef6b9029da4dd29324757e5710b903.pdf
6. Smith, Aaron, "U.S. Smartphone Use in 2015," Pew Research Center (April 2015) http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/
7. Dailey, Dharma et al. "Broadband Adoption in Low-Income Communities," Social Science Research Council (March 2010) http://eprints.lse.ac.uk/29459/1/Powell_etal_Broadband-adoption-in-low-income-countries_2010.pdf
8. Capping the Nation’s Broadband Future at 2
9. Williams, Wes, "Comcast data caps make life for deaf difficult," American Public Media (November 30, 2015) http://www.marketplace.org/2015/11/30/tech/comcast-data-caps-make-life-deaf-difficult
10. Ibid.
11. Goodnough, Abby, "Modern Doctors’ House Calls: Skype Chat and Fast Diagnosis," New York Times, July 11, 2015 http://www.nytimes.com/2015/07/12/health/modern-doctors-house-calls-skype-chat-and-fast-diagnosis.html
12. Lennett, Benjamin and Danielle Kehl, "Data Caps Could Dim Online Learning's Bright Future," Chronicle of Higher Education, March 4, 2013 http://chronicle.com/article/Caps-on-Data-Use-Dim-Online/137653/