WASHINGTON (Reuters) - The Federal Communications Commission said Tuesday it is opening a formal inquiry into the use of data caps by telecom firms and how they impact consumers and competition.

"For most people in the United States, rationing their internet usage would be unthinkable and impractical. But, for millions, limitations on how much data they can use online is a constant concern," said FCC Chair Jessica Rosenworcel, noting caps "can cut off small businesses from their customers, slap fees on low-income families, and prevent people with disabilities from using the tools they rely on to communicate."

(Reporting by David Shepardson; Editing by Chizu Nomiyama)