The Dangers of Data Caps

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More Internet service providers (ISP) are imposing monthly limits on the amount of data customers can use, and with these restrictions comes a new threat to people who enjoy streaming video from their smartphones or personal computers.  

Citing the need to unclog congested networks, AT&T, Verizon, and Comcast have all imposed data caps. If a customer goes over the pre-set data limit he or she must may hefty penalty fees. These caps naturally cut down on the number of videos customers stream, which is good for ISPs but bad for video streaming providers like Netflix and the customers they serve.

How? Data caps may be behind Netflix’s recent decision to raise its prices. If so, the caps mean customers may have to pay more for Internet access and services offering video streaming. Plus, they may be paying more for less. In Canada, Netflix has downgraded the quality of its streaming videos to keep customers from going over bandwidth limits.

For now, most families have no problem staying within their data cap as the majority of web traffic comes from home computers. Therefore, overage fees are minimal. However, this could all change as more and more people begin streaming videos on their phone. And there’s little people can do to avoid data cap plans.

“The problem is that they don’t have an alternative with monopoly and duopoly Internet service providers who oftentimes are trying to sell their own video products,” Parul Desai, policy counsel at Consumers Union, told The Washington Post.

For its part, America’s Internet service providers insist data caps are necessary to keep traffic under control and ensure everyone can get online when they need to. ISPs also argue that overage fees will help them expand their existing networks and provide better service

What do you think about data caps? Are they necessary or are they a scam?


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