ICLE on Data Caps and Usage-Based Pricing

An ICLE white paper on data caps and usage-based pricing was cited in a Law360 story about the paper. You can read the full piece here.

As the Federal Communications Commission launches an inquiry into how data cap practices affect the public, a free market think tank is stepping into the fray to say it’s worried any regulation limiting data caps would be “misguided.”

The International Center for Law & Economics published a white paper Wednesday making the case for leaving companies’ abilities to place data caps relatively unrestricted, saying they’re good for competition and that taking them away could “lead to unintended consequences that harm consumers and stifle innovation in the broadband market.”

“Indeed, these practices may help internet service providers to better manage network congestion, ensure fair allocation of network resources, and provide a means for ISPs to recover the large, fixed costs associated with building, maintaining, and upgrading broadband infrastructure,” the think tank says in the paper, adding that it would also, in turn, let the company more quickly deploy increased data capacity.

The think tank also encouraged “responsible use of network resources” by keeping the price consumers pay lined up with the cost of providing those resources.Banning usage-based pricing would definitely be “heavy-handed” because it would give the consumer more options, the think tank said. People who use the internet less can pay less, while heavier users can shoulder more of the costs shelled out by the broadband companies to provide their customers with service, according to the paper.