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A data limit, often mistakenly referred to as a bandwidth limit, is an artificial restriction placed on transferring data over a network. In particular, it relates to the policies imposed by an Internet service provider to limit the use that customers make of its services; Typically, exceeding a data limit would require the subscriber to pay additional fees based on whether they have exceeded this limit. US ISPs have stated that bandwidth limits are required to provide “fair” service to their respective subscribers.

Data limits allow a maximum amount of data in a month for an agreed charge. As a common rule of thumb, when the user exceeds that limit, they charge a higher fee for additional data usage. However, the provider may not charge for the surplus but rather accelerate users’ transfer rate per second beyond the limit. For example, a mobile user pays for a 4G plan downgrades to 3G for mobile data beyond their data limit.

In general, each user on a network expects to use high-speed transmission for a short time, such as downloading a megabyte web page in less than a second. Continued use, such as when sharing files or streaming videos, can seriously affect others’ service. In DSL, it shares only the core network but not the access network; this concept is less relevant. However, it becomes more relevant in wired Internet, where both the core and access networks are shared. In wireless networks, the total bandwidth of the network is also relatively limited.

An ISP can impose a data limit when a customer shares access with many users, uses file-sharing software, or otherwise breaks the terms of use. Service providers sometimes also impose data caps when they have a monopoly in a specific area.

T-Mobile recently reported that users with limited or accelerated data were using 20 to 30 times fewer data, and 37 percent of subscribers avoided streaming media because they feared exceeding their limits.

Data caps are not popular with customers. Therefore, service providers often refer to data caps by other names, such as fair use or fair access policies, usage-based billing, or loosely as band caps.

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