Earlier the month,
Netflix submitted
comments to the FCC with regards to the Commission’s Twelfth Broadband
Progress Notice of Inquiry. In the comments, Netflix asked the FCC to “take
into account the impact of data caps—and low data caps in particular—on a
consumer’s ability to watch Internet television using a mobile network.”
This is a clear example of rent-seeking. Netflix would benefit from an FCC rulemaking that would limit the use of data caps by fixed and/or mobile providers, because it would enable consumers to spend more time streaming Netflix. However, consumers who do not use Netflix or infrequently use mobile data – often low-income consumers – are better off buying a fixed amount of mobile data each month as opposed to paying extra for unlimited data. Additionally, the FCC is currently investigating zero-rated services, which are a complement to data caps. It would be costly and contradictory for the Commission to investigate and possibly regulate two services which work in conjunction with each other.
This is a clear example of rent-seeking. Netflix would benefit from an FCC rulemaking that would limit the use of data caps by fixed and/or mobile providers, because it would enable consumers to spend more time streaming Netflix. However, consumers who do not use Netflix or infrequently use mobile data – often low-income consumers – are better off buying a fixed amount of mobile data each month as opposed to paying extra for unlimited data. Additionally, the FCC is currently investigating zero-rated services, which are a complement to data caps. It would be costly and contradictory for the Commission to investigate and possibly regulate two services which work in conjunction with each other.
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