Majority of large ISPs now using monthly data caps, GAO says

U.S. broadband providers appear to be embracing monthly data caps, but customers are confused about the amount of data they use and broadband plan options, according to preliminary findings by the U.S. Government Accountability Office.

The four largest U.S. mobile carriers and seven of the 13 largest wireline broadband providers have data-capped subscriptions in place, the GAO said. When customers exceed the data caps, three mobile carriers and three wired providers charge customers for additional data, while a fourth mobile carrier throttles connection speeds, the GAO said.

The ISPs' move toward data caps raises concerns about what customers are getting in return, said Representative Anna Eshoo, a California Democrat who requested the GAO report. Broadband customers want to be able to stream videos, download music and use video-conferencing apps, and "they don't want it interrupted," she said.

Data cap plans could create a "huge disruption" for customers, she added. "While broadband providers are experimenting with these new business models ... consumers are left wondering if they're going to have to foot the bill, and how much more it will be."

Many customers don't understand the data caps, called usage-based pricing or UBP in the GAO's report, said Mark Goldstein, director of the GAO's physical infrastructure team. While some broadband providers offer Web-based tools or email alerts to help consumers check their data usage, many customers don't understand how much data they use, he said.

"The tools that are out there can be confusing," Goldstein said.

In some cases, customers overestimate how much data they use and could save money by subscribing to lower-tier data plans, Goldstein said. Some people in eight focus groups told the GAO they didn't want to face being cut off if they exceeded their data caps on lower-tier plans, he said.

Adding to the confusion are business models that exempt some types of data or some services from the caps, Eshoo said.

In the focus groups, the GAO found negative reactions to data caps on wireline broadband services, with some participants concerned that caps might require them to limit data-light activities such as online shopping, Goldstein said. Focus group participants told the GAO they're not used to data caps on their home broadband connections and they prefer not having to keep tabs on their data usage, he said.

The GAO didn't make immediate recommendations for education programs to help consumers understand data plans and their data usage, but that may be part of the agency's recommendations going forward, Goldstein said.

In addition, many customers have limited choices of broadband providers, with focus group participants telling the GAO they would change from providers with data caps if they had other options, Goldstein said.

Representatives of AT&T, Comcast and Verizon didn't immediately have comments on the GAO report.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.