How often did you ask yourself if you are paying too much for your mobile internet subscription? The Government Accountability Office wanted to find an answer to this question. A report released on Tuesday by the government agency says that customers are not well informed about how much data they use monthly. A Sandvine survey indicates an average of 465 MB of data are consumed each month by American customers, Ro/code says. Are internet data caps useful for consumers or not?
GAO organized eight focus groups with customers of both wireless and wireline internet services. Other information were obtained through interviews with the top 13 wireline and four wireless ISPs.
In the meantime, AT&T announced plans to introduce gigabyte internet to Nashville.
Internet data caps are a double-edged sword for customers
GAO is concerned that U.S. wireless consumers do not benefit from lower-cost data packages from mobile carriers. Data caps (user-based pricing), are a part of the mobile Internet consumers’ lives and it might lead to over-payments. Telecommunication companies argued in the beginnings that data caps are introduced to avoid congestion. Later on they admitted that the practice helps them recover the initial infrastructure costs. But the benefits coming from user-based pricing helps companies extend the network capacity.
Just seven of the 13 wireline ISP interviewed use data caps. “Most wireline ISPs we interviewed that have data allowance tiers said that less than 10 percent, and usually 1 to 2 percent, of users exceed their data allowances in any given month,” the report concludes.
Even if some ISPs offer online tools for data usage assessments, they are not widely used by customers who presume wrongly that online shopping or social media websites running in the background consume a lot of data.
Both customers and companies are affected by this confusion. While customers pay more for something they do not use entirely, ISPs cannot adequately charge data-hungry consumers, because of many unlimited data contracts signed years ago. There are a couple of categories who the respondents think that widespread adoption of user-based pricing will disproportionately affect. Students, telecommuters and those with low socio-economic status are perceived to potentially suffer more in this case. By connecting to the home Wi-Fi, the focus-group participants get a chance to relax about data usage. So Internet data caps might be more useful for the better-offs.