Here’s how data caps really affect your Internet use, according to data

A new paper published by the National Bureau of Economic Research takes actual, real-world data on data usage from a North American Internet provider and shows that even for people on fixed, wired home broadband, data caps have a dramatic effect on consumer behavior. It turns out that data caps are incredibly effective at getting people to use less data, and not merely on cellphone plans. The study looks at tens of thousands of subscribers belonging to an unnamed provider of high-speed broadband in four markets. And one key takeaway is that the closer people get to hitting their data caps, they more they make a conscious decision to use less Internet.

Meanwhile, consumers who are near the end of their monthly billing cycle but still have a chunk of unused data will use more of it, in an attempt to make the most of their plans. This might sound obvious in the context of your cellular bill; you probably know how much data you pay for by heart. But Williams was studying the effect of data caps on residential Internet. Such limits on home broadband are relatively rare in the industry, but some providers have considered rolling them out more widely. The really interesting difference has to do with folks on data-capped or usage-based plans versus those on "unlimited" plans with no data caps. At the time the data was collected, in 2012, this particular provider offered higher speeds to those on capped plans, perhaps as incentive to get unlimited data users to switch. People valued the extra speed they got from the metered plans far more than they valued the extra data they got on unlimited data plans.