As Ajit Pai quits FCC, Charter admits defeat over petition to impose data caps

Charter Communications has withdrawn a petition asking for government permission to impose data caps on broadband users this year.

Unlike other ISPs, Charter is subject to the ban on data caps and overage charges until May 2023 due to seven-year terms applied to its 2016 purchase of Time Warner Cable. In June 2020, Charter asked the Federal Communications Commission to let the condition expire two years earlier, on May 18, 2021.

FCC Chairman Ajit Pai sought public comment on the petition, but never made a final decision, even though he objected to the merger terms when they were imposed by the FCC from the Obama era. With Pai leaving the FCC upon the inauguration of President-elect Joe Biden tomorrow, Charter submitted a brief brief stating that he “respectfully withdraws his petition.”

“VICTORY”

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

The COVID-19 pandemic has made it clear that unlimited home broadband connections are a necessary utility service. Evidence from April through June, when most ISPs suspended their caps, shows that ISP data caps and overage charges are utterly unnecessary abuses of market power. All networks performed well as their operators continued to achieve high profit margins as usage soared.

Charter is the second largest home internet provider in the United States after Comcast and sells broadband services under the Spectrum brand.

Transition from the FCC to democratic control

Charter’s latest FCC filing did not explain why he had withdrawn the petition, but his request would have faced longer odds in the Biden administration with Democrats controlling the FCC.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 appointed 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 presidency at least on an interim basis.

Along with the ban on data caps, the merger terms imposed by the FCC also prohibited Charter from charging large online video streaming services for network interconnection. The conditions were imposed under FCC Chairman Tom Wheeler to prevent Charter from using its increased market power against online video providers who provide services on Charter’s broadband network.

But the free interconnection requirement was overturned by the United States 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 the decision. The ruling did not affect the data cap ban.

Despite imposing the conditions for seven years, the 2016 Wheeler FCC Merger Order stated that Charter could request that the conditions be lifted after five years.

Charter claimed that users like plans with data limits

After filing its petition with the FCC last year, Charter said it had no intention of imposing data caps. “Once the terms have expired, Charter will assess the options as we would any business decision, but is not currently even considering implementing data caps or charging for interconnection and has no intention of do it, ”the company told Ars at the time. “What Charter is looking for 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 process progressed, Charter claimed in an FCC filing that broadband users appreciate having internet plans with data limits. “[T]The market is currently showing that broadband service plans incorporating data caps or other usage-based pricing mechanisms are often popular when the limits are high enough to satisfy the vast majority of users, ”Charter told the FCC months before withdrawing the petition.

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

In light of the continuing severity of the global pandemic and its effects on our customers, we want to offer them the assurance that they will continue to enjoy unlimited broadband access and the financial certainty that comes with it for these difficult times, and therefore withdrew our petition.

Charter did not take advantage of the court ruling to impose an interconnection fee. “We do not currently plan to charge an interconnection fee,” 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, any conditions that remain in effect will expire on May 18, 2023, seven years after the closing date of the transaction,” said the FCC.

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.