As Ajit Pai exits FCC, Charter admits defeat on petition to impose data caps

Charter Communications has withdrawn a petition seeking government permission to impose data caps on broadband users this year.

Unlike other ISPs, Charter is subject to the prohibition on data caps and overage fees until May 2023 because of seven-year conditions applied to its 2016 purchase of Time Warner Cable. In June 2020, Charter petitioned the Federal Communications Commission to let the condition expire two years early, on May 18, 2021.

FCC Chairman Ajit Pai sought public comment on the petition but never took final action, even though he had opposed the merger conditions when they were imposed by the Obama-era FCC. With Pai leaving the FCC upon President-elect Joe Biden’s inauguration tomorrow, Charter submitted a brief filing stating that it “respectfully withdraws its petition.”

“VICTORY”

“Hey hey! Charter just withdrew its despicable petition to start implementing data caps in the middle of a pandemic! That right there is what we call a VICTORY,” tweeted Dana Floberg, policy manager for consumer-advocacy group Free Press. The group previously urged the FCC to reject the petition, writing:

The COVID-19 pandemic has made it abundantly clear that unlimited home broadband connections are a necessary utility service. The evidence from April through June, when most ISPs suspended their caps, demonstrates that ISP data caps and overage fees are completely unnecessary abuses of market power. All networks performed well while their operators continued to earn high profit margins, as usage skyrocketed.

Charter is the second-biggest home-Internet provider in the US after Comcast and sells broadband service under the Spectrum brand name.

FCC switching to Democratic control

Charter’s latest FCC filing didn’t say why it withdrew the petition, but its request would have faced longer odds in the Biden administration with Democrats controlling the FCC. Pai’s departure will leave the FCC with a 2-2 split between Republicans and Democrats until a new commissioner is nominated by Biden and approved by the Senate. In the meantime, Biden is expected to promote one of the two current Democrats—Jessica Rosenworcel or Geoffrey Starks—to the chair position on at least an interim basis.

Besides banning data caps, the FCC-imposed merger conditions also prohibited Charter from charging large online video streaming services for network interconnection. The conditions were imposed under then-FCC Chairman Tom Wheeler to prevent Charter from using its enhanced market power against online video providers that offer service over Charter’s broadband network.

But the free-interconnection requirement was nullified by the US Court of Appeals for the District of Columbia Circuit in August. The Pai-led FCC did not defend the merits of the merger condition in court, paving the way for that ruling. The ruling did not affect the data-cap ban.

Despite imposing the conditions for seven years, the Wheeler FCC’s 2016 merger order said Charter could petition for the conditions to be lifted after five years.

Charter claimed users like plans with data caps

After filing its petition to the FCC last year, Charter said it had no intention of imposing data caps. “Once the conditions expire, Charter will weigh the options as we would any business decision but is currently not even considering implementing data caps or charging for interconnection and has no plan to do so,” the company told Ars at the time. “What Charter seeks is a level playing field so that we can continue to grow and provide superior service to our customers across the country.”

But as the proceeding moved on, Charter claimed in an FCC filing that broadband users enjoy having Internet plans with data caps. “[T]he marketplace currently shows that broadband service plans incorporating data caps or other usage-based pricing mechanisms are often popular when the limits are sufficiently high to satisfy the vast majority of users,” Charter told the FCC, months before withdrawing the petition.

When asked why it withdrew the petition today, a Charter spokesperson noted that the merger conditions have already been partially overturned in court. Charter also told Ars it wants to assure customers that their unlimited data is not going away:

In light of the ongoing severity of the global pandemic and its effects on our customers, we want to offer them the assurance that they will continue to benefit from unlimited access to broadband and the accompanying financial certainty it provides during these trying times, and therefore have withdrawn our petition.

Charter has not taken advantage of the court ruling to impose interconnection fees. “We have no plans at this time to charge interconnection fees,” the Charter spokesperson told Ars.

The FCC today issued a public notice acknowledging Charter’s withdrawal of the petition. “Pursuant to the terms of the Order approving the merger, all conditions that remain in effect will expire on May 18, 2023, seven years from the Closing Date of the transaction,” the FCC said.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1736113