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Expert Opinion: ‘Making Sense of Data Caps and Tiered Pricing in Broadband and Mobile Networks’

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By Nick Feamster, Associate Professor of Computer Science, Georgia Tech  (The original version of this article is posted in Dr. Feamster’s Blog ‘Connection Management’)

WASHINGTON, February 27th, 2013 — Last week, I had the pleasure of sitting on a panel of the Broadband Breakfast Club at Clyde’s of Gallery Place in downtown Washington, DC.  The Broadband Breakfast Club is an event series, hosting events once a month, focusing on policy issues related to broadband service in the United States. It is organized by BroadbandBreakfast.com, a broadband policy news and events organization based in Washington.

I was previously asked to sit on a panel on measuring broadband performance, due to our ongoing work on BISmark, but I was unable to make the date last fall, so I found myself on a panel on data caps in wired and wireless networks.

I participated on the panel with the following other panelists: Serena Viswanathan, Staff Attorney at the Federal Trade Commission; Patrick Lucey, Policy Program Associate at the New America Foundation; and Roger Entner, Founder of Recon Analytics.  A keynote speech with presentation was provided by Ruth Milkman, Chief of the Wireless Telecommunications Bureau at the FCC. The panel discussed a variety of topics surrounding data caps in broadband networks, but the high level question that the panel circled around was: Do data caps (and tiered pricing) yield positive outcomes for the consumer?

We had an interesting discussion.  Roger Entner espoused the opinion that data caps really only affect the worst offenders, and that applications on mobile devices now make it much easier for users to manage their data caps. Therefore, data caps shouldn’t be regarded as oppressive, but rather are simply a way for Internet service providers and mobile carriers to recoup costs for the most aggressive users.  Patrick Lucey, who recently posted on a study he co-authored for the New America Foundation on data caps, stated a counterpoint that echoed his recent article, suggesting that data caps were essentially a profit generator for ISPs, and consumers are effectively captured because they have no real choice for providers.

I spent some time explaining the tool that Marshini Chetty and my students have built on top of BISmark called uCap (longer paper here).  Briefly, uCap is a tool that allows home network users to determine the devices in their home that consume the most data.  It also allows users to see what domains they are visiting that consume the most bandwidth.  It does not, however, tell the user which applications or people are using the most bandwidth (more on that below).  Below is a screenshot of uCap that shows device usage over time. My students have also built a similar tool for mobile devices called MySpeedTest, which tells users which applications are consuming the most data on their phones.  A screenshot of the MySpeedTest panel that shows how different applications consume usage is shown below (Click to enlarge):

uCap Screenshot Showing Device Usage Over Time and MySpeedTest Showing Mobile Application Usage

I used these two example applications to argue that usage caps per se are not necessarily a bad thing if the user has ways to manage these usage caps.  In fact, we have repeatedly seen evidence that tiered pricing (or usage caps) can actually improve both ISP profit and make consumers better off, if the consumer understands how different applications consume their usage cap and has ways to manage the usage of those applications.  Indeed, our past research has shown how tiered pricing can improve market efficiency, because the price of connectivity more closely reflects the cost to the provider of carrying specific data.  Further, we’ve seen examples where consumers have actually been worse off when regulators have stepped in to prevent tiered pricing, such as the events in summer 2011 when KPN customers all experienced a price increase for connectivity because KPN was prevented from introducing two tiers of service.

The problem isn’t so much that tiered pricing is bad—it is that users don’t understand it, and they currently don’t have good tools to help them understand it.  In the panel, I informally polled the room—ostensibly filled with broadband experts—about whether they could tell me off the top of their heads how much data a 2-hour high-definition Netflix movie would consume against their usage cap.  Only two or three hands went up in a room of 50 people.

I also confessed that before installing uCap and watching my usage in conjunction with specific applications, I had no idea how much data different applications consumed, or whether I was a so-called “heavy user” (it turns out I am not).  My own experience—and Marshini Chetty’s ongoing work—has shown that people are really bad at estimating how much of their data cap applications consume.  One interesting observation in Marshini’s work is that people conflate the time that they spend on a site with the amount of data it must consume  (“I spend most of my time on Facebook, therefore, it must consume most of my data cap”).

If we are going to move towards pervasive data caps or tiered pricing models, then users need better tools to understand how applications consume data caps and to manage how different applications consume those caps.  I see two possibilities for better applications going forward:

Better visibility.  We need applications like uCap and MySpeedTest to help users understand how different applications consume their data cap.  Helping users get a better handle on how different applications consume data is the first step towards making tiered pricing something that users can cope with.  In addition to the applications that show usage directly, we might also consider other forms of visibility, such as information that helps users estimate a total cost of ownership for running a mobile application (e.g., the free application might actually cost the user more in the long run, if downloading the advertisements to support the free application eats into the user’s data cap).  We also need better ways of fingerprinting devices; applications like uCap still force users to identify devices (note the obscure MAC addresses in the dashboard above for devices on my network that I didn’t bother to manually identify).  Solving these problems requires both deep domain knowledge about networking and intuition and expertise in human factors and interface design.

Better control.  This area deserves much more attention.  uCap offers some nice first steps towards giving users control because it helps users control how much data a particular device can send.  But, shouldn’t we be solving this problem in other ways, as well?  For example, we might imagine exposing an SDK to application developers that helps them write applications that are more cognizant of data constraints—for example, by deferring updates when a user is near his or her cap, or deferring downloads until “off peak” times or when a user is on a WiFi network.  There are interesting potential developments in both applications and operating systems that could make tiered pricing and demand-side management more palatable, much like appliances in our homes are now being engineered to adapt to variable electricity pricing.

Finally, Patrick made a point that even if users could understand and control usage caps, they often don’t have any reasonable alternatives if they decide they don’t like their current ISP’s policies.  So, while some of the technological developments we discussed may make a user’s life easier, these improvements are, in some sense, a red herring if a user cannot have some amount of choice over their Internet service provider.  This issue of consumer choice (or lack thereof) does appear to be the elephant in the room for many of the policy discussions surrounding data caps, tiered pricing, and network neutrality.  Yet, until the issues of choice are solved, improving both visibility and control in the technologies that we develop can allow both users and ISPs to be better off in a realm where tiered pricing and data caps exist—a realm which, I would argue, is not only inevitable but also potentially beneficial for both ISPs and consumers.

Sylvia manages the Broadband Breakfast Club, on-the-record monthly discussion groups that meet on the THIRD Tuesday of each month. She has had a long career in non-profit development and administration, and has raised funds for technology and science education, and managed a project on health information exchange adopted by the State of New York. She understands community education and infrastructure needs for effective broadband access.

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Broadband Breakfast on December 15, 2021 — Public-Private Partnerships and Broadband Deployment

One of the most important recent developments in the deployment of broadband infrastructure.

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Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the December 15, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, December 15, 2021, 12 Noon ET — How Public Private Partnerships Represent an Opportunity for Broadband Deployment

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Broadband Breakfast on December 8, 2021 — Implementation of the Infrastructure, Investment and Jobs Act

In this event, we’ll explore the perspective of the NTIA and state agencies charged with implementing IIJA.

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Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the December 8, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, December 8, 2021, 12 Noon ET — Implementation of the Infrastructure, Investment and Jobs Act

The passage of the Infrastructure, Investment and Jobs Act on November 5, 2021, represents a significant opportunity for the broadband industry. This includes the providers of high-speed internet service as well as those that seek to enhance the deployment of better broadband. But many questions remain about the details of implementing the IIJA on both the federal and the state levels. In this special “Broadband Breakfast for Lunch” IN PERSON and LIVE ONLINE event, we’ll explore the perspective of the lead federal government agency charged with implementing IIJA’s broadband provision, the Commerce Department’s National Telecommunications and Information Administration. We’ll also consider the important role of state broadband officials in the next phase of IIJA implementation.

Join us IN PERSON on Wednesday, December 8, at Broadband Breakfast Club for Lunch!

There are two ways to participate in this event: IN PERSON or LIVE ONLINE. To attend in person, sign up to attend to attend in person through EventbritePlease arrive for lunch at Clyde’s of Gallery Place, 707 7th Street NW, Washington, D.C., by 11:30 a.m. to be seated for lunch. The program will begin promptly at 12 Noon ET.

Panelists for this Broadband Breakfast Live Online session:

  • Scott Woods, Senior Broadband Program Specialist, NTIA
  • Jase Wilson, CEO, Ready / Broadband Money
  • Other guests have been invited
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

As a Senior Broadband Program Specialist with the National Telecommunications and Information Administration’s (NTIA), Scott Woods serves as the Team Lead for the Connecting Minority Communities (CMC) Pilot Program, a new grant program to provide $268 million in direct funding to expand broadband access, connectivity and digital inclusion to eligible Historically Black Colleges or Universities (HBCUs), Tribal Colleges or Universities (TCUs), Minority-serving Institutions (MSIs) and the anchor communities upon which these institutions serve. Mr. Woods also serves as the principal liaison between the BroadbandUSA program office and key strategic partners and external stakeholder groups, including representatives from state and local governments; broadband service providers; for-profit and non-profit corporations; telecom trade associations; community representatives and organizations, and colleges/universities.

Jase Wilson is co-founder and CEO of Ready / Broadband Money, a software, data and financial services firm devoted to helping local ISPs connect more people to better broadband. He lives in the SF bay area with his wife and their son Wafer, aka WWW.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Broadband Breakfast on December 1, 2021 — How the Telecom and Tech Industries Should Approach Privacy

Privacy is rising in the landscape of telecom and technology policy issues issues.

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Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the December 1, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, December 1, 2021, 12 Noon ET — How the Telecom and Tech Industries Should Approach Privacy

Slowly but surely, privacy is rising in the landscape of telecom and technology policy issues. From the perspective of the technology marketplace, massive data breaches, incessant cybersecurity threats including ransomware, and the market power of the big tech companies (Alphabet’s Google, Apple, Meta’s Facebook, Amazon and Microsoft) force everyone else to adapt defensively. But from the policy perspective, the reality of congressional or Federal Trade Commission action is forcing a new respect on the notion that privacy rules may soon be enshrined into law. This Broadband Breakfast Live Online session will consider how tech and telecom industry players should approach the issue.

Panelists for this Broadband Breakfast Live Online session:

  • Jessica Dheere, Director, Ranking Digital Rights
  • Kirk Nahra, Partner, WilmerHale
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Jessica Dheere is director of Ranking Digital Rights, a program at the think tank New America that evaluates the world’s most powerful tech and telecom companies on their public commitments to protect users’ free expression, privacy, and other rights. She co-authored RDR’s spring 2020 report “Getting to the Source of Infodemics: It’s the Business Model.” Jessica has a master’s degree in media studies from the New School in New York City and was a 2018-19 fellow at the Berkman Klein Center for Internet & Society at Harvard University.

Kirk J. Nahra is a partner with WilmerHale in Washington, D.C., where he is Co-Chair of the firm’s Cybersecurity and Privacy Practice as well as Co-Chair of the Big Data Practice.  He assists companies in a wide range of industries in analyzing and implementing the requirements of privacy and security laws across the country and internationally.  He is an adjunct professor on various privacy issues at the Washington College of Law at American University and serves as a fellow with the Cordell Institute for Policy in Medicine & Law at Washington University in St. Louis.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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