Data caps described as ‘cash cows’ that ISPs use to bilk customers

Bandwidth caps are one of the less popular innovations that ISPs have unveiled over the past few years, and a new paper from the liberal New America Foundation think tank contends that such policies are brazen attempts to pad service providers’ margins by bilking their customers. The paper notes that “data caps, especially on wireline networks, are hardly a necessity,” especially since “the costs to provide broadband service are also declining, including the cost of Internet connectivity or IP transit as well as equipment and other operational costs.” The paper uses publicly available data to show that ISPs have been implementing these bandwidth caps despite the fact that their wireline capital expenditures have been shrinking as a percentage of their

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