The impact of data caps on mobile broadband Internet access: a welfare analysis

•We study plans with a tight data cap and a flat price.•Offering a small plan with cap along with an unlimited one is always profitable for the provider.•With respect to the benchmark of unlimited access, a sufficiently low cap would make every user weakly better off.•If the cap is set optimally by the provider, some user is strictly worse off.•The total effect on welfare is ambigous, but is negative if low valuation users are sufficiently homogeneous.