The FCC Is Pushing A 'Nutrition Label' For Broadband Connections

from the 70%-fat dept

A report last year by the GAO (pdf) found that most consumers have no real idea what kind of a broadband connection they’re buying. The report argued that caps, interconnection squabbles, throttling, and other line limitations make it virtually impossible for many consumers (especially the more Luddite-inclined among us) to understand what they’re buying, or compare it with competing services. As a result, the FCC this week proposed a new “nutrition label” (pdf) for broadband that would include not only connection speed — but any network management, latency, usage caps, overage fees, or other conditions impacting the line.

They should, according to some samples provided by the FCC, look a little something like this:

Interestingly, the FCC”s push for improved labeling includes some renewed attention on the disclosure of sneaky, below-the-line fees, which many ISPs use to jack up the advertised rate post sale. We’ve noted how many of these fees are simply pulled out of thin air and are pure profit, a practice the FCC (after fifteen years of apathy) is now showing some interest in:

“The FCC receives more than 2,000 complaints annually about surprise fees associated with consumers? Internet service bills. The actual prices paid for broadband-related services can be as much as 40 percent greater than what is advertised after taxes and fees are added to a bill, according to consumer complaints to the Commission. With the average monthly cost of broadband service ranging between $60 and $70, consumers deserve to know what they are going to get for their money.”

While well intentioned, it’s not exactly clear if ISPs will actually use the new labels. According to the FCC announcement, the labels are only “recommended” by the agency for ISPs concerned that they’re not meeting the FCC’s transparency requirements, which were part of last year’s still-contested net neutrality rules:

“The FCC?s Open Internet transparency rules require broadband Internet access service providers to disclose this information to consumers in an accurate, understandable and easy-to-find manner. These formats, while not mandated by the agency, are recommended by the Commission and will serve as a ?safe harbor? to meet those requirements.”

Knowing ISPs as most of you do, you’ll probably know their definition of “accurate, understandable and easy to find” may not exactly match your own. The labels have the approval of the FCC’s Consumer Advisory Committee, which includes companies like Verizon and CenturyLink. That these two companies find the labels acceptable could very well mean they have no intention of actually using them (possibly pointing to their existing website structure as good enough). Both companies also are busy trying to scrap the FCC’s net neutrality rules entirely, which if successful would mean a quick death to the rules — and these labels.

Another problem is that the use of hidden, manufactured fees to jack up the advertised price is considered false advertising and fraud by many. Many ISPs are so un-frightened of regulatory enforcement on this front they’re barely trying any more. CenturyLink, for example, charges millions of its DSL customers a $2 “Internet Cost Recovery Fee” that its website explains as such:

“This fee helps defray costs associated with building and maintaining CenturyLink’s High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers’ average broadband consumption.”

And here you were thinking that’s what your advertised existing monthly broadband bill was for. As such, given the obvious fraud on the hidden fee front, it may take a little more than a few labels to meaningfully improve ISP behavior and transparency.

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Comments on “The FCC Is Pushing A 'Nutrition Label' For Broadband Connections”

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Anonymous Coward says:

Re: Re:

and if something has an undesirable ingredient that must be labeled all the company has to do to avoid putting it on the label is to lower the serving size. If the amount of the undesired ingredient then falls below a certain threshold the nutrition label doesn’t have to disclose that it’s there.

Mason Wheeler (profile) says:

Fees pulled out of thin air for pure profit

Charge ’em for the lice, extra for the mice
Two percent for looking in the mirror twice
Here a little slice, there a little cut
Three percent for sleeping with the window shut
When it comes to fixing prices
There are a lot of tricks he knows
How it all increases, all them bits and pieces
Jesus! It’s amazing how it grows!
— Thenardier, Master of the House
Les Misérables theatrical production

The more things change…

jilocasin (profile) says:

the new normal.

I believe ISPs would like this to be the new normal.

You wrote:

“And here you were thinking that’s what your advertised existing monthly broadband bill was for.”

Your advertised existing monthly broadband bill has now been relabelled profit.

The actual costs needed to build and sustain the service you are paying for are supported by all the fees they now charge.

WDS (profile) says:

Easy Fix for FCC

While the usage caps need to be spelled out, the thing that riles most people is the below the line charges. It would be easy to fix that by just making a rule that only taxes and fees actually charged by government agencies could go below the line.

That rule should not be just for broadband service, but also for TV and Telephone, where (at least in my area) the practice is even more abused.

Machin Shin (profile) says:

“This fee helps defray costs associated with building and maintaining CenturyLink’s High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers’ average broadband consumption.”

What I would then love to see is an independent audit of their books showing that every cent of that fee was used to pay for that and nothing else.

Coyne Tibbets (profile) says:

Re: Re:

Let’s say you do your independent audit, and they know you’re going to.

All they will do is spin off the expansion of network capacity into a subsidiary. The provider’s books will then show that they spent 100% of that on network expansion (paid that subsidiary)…and since the subsidiary is entitled to profit, half the money the subsidiary takes in will still go to the stockholders.

In the end, after the accounting magic, your audit will accomplish nothing.

Coyne Tibbets (profile) says:

Re: Re: Re: Re:

It doesn’t matter.

It’s the same thing the insurance companies do now. They take premiums, take 15% off the top for profit, pay another 35% to an administrative services company, then pay the rest to an underwriter for services. The underwriter takes 50% off the top (underwriters aren’t regulated by the insurance board) and then pays the rest to a secondary underwriter. The secondary underwriter takes 50% off the top…

50%50%50%*50% leaves 6% or so for claims…is it any surprise the insurance company files bankruptcy at the drop of a hurricane rumor? All perfectly legal; you can audit the daylights out of them and no one is “taking more than they’re legally entitled to take.”

The state of Florida offered to underwrite the insurance companies for free, and the insurance companies snubbed it because it would mean less profit for the stockholders.

Anonymous Coward says:

FCC tries to nail jello to a wall. Again.

Almost everything a consumer thinks he buys from a telecom is a made up concept. Even the term “broadband” is a marketing concept. It is called “broadband”, instead of “Internet”, because it is more abstract and you don’t have to deal with silly things like standards documents when discussing it in front of a judge. ( Yes, there is an FCC written definition of “broadband”. Yes I’ve read it. Yes I still stand by what I just said. )

The question here is: “Why isn’t the network built in a way that conforms more clearly with the UCC”. And the answer is obvious. When people create transaction systems that aren’t in conformance with the UCC the intent is usually to defraud.

The network can be (and is being) re-engineered to circumvent regulation faster than regulation can be written. Everybody in the business has seen it at least once. At the executive level there is no hesitation about burning brilliantly engineered networks to the ground and sending their entire engineering staff to therapy, if that is what it takes to make their quarterly bonus.

So there is nothing that you can put on a sticker, that won’t be circumvented in a week. The reason for that is that everything you put on the sticker is a marketing concept, and changing the name of something is cheap.

The only thing you can do is break them up. Being both carrier and content provider is what is causing the malpractice. So the simple solution is: Content or Carrier, pick one. This is what Glass Steagal did when banks were committing insurance malpractice. And it worked until it was repealed.

Overturn Citizens United. Reinstate Glass Steagall. Bust the Trusts.

Anonymous Coward says:

What if the receiving and sending parties terms of service are different?

Ok, so I’ve got a sticker. I know my ISP diddles my traffic. The guy I’m sending to doesn’t know that. How do I know how much HIS ISP diddles my traffic?

Say I run a relay service like a VPN provider, email pop server, search engine, chat server etc. Parties completely unrelated to my ISP are communicating, through my ISP. How do THEY discover the terms of service I have with my ISP?

Who granted the carrier the authority to regulate domestic trade between parties they’ve never met?

John85851 (profile) says:

And so what?

While this kind of labeling is a good idea in theory, what does it accomplish other than make people mad?
Like we’ve said over and over and over again, most ISP’s have a monopoly in their area. If a customer doesn’t agree with the information on these labels, what’s the choice? They might be able to complaint to the FCC, but then what? Large companies like Verizon and Comcast will pay a penalty fee to the FCC, call it a “cost of doing business”, and nothing will really change.

Kludge (profile) says:

The US isn't ready to talk about price on ISPs.

Instead of price and “averages,” what we really need is precise packet loss and service information based on individual residencies. I’m so tired of moving somewhere to find out the line’s not up to meeting demand or’s otherwise faulty, or in my last house, Frontier claimed to service the area after I called to confirm, and then it turns out they DON’T actually service the house (I wouldn’t have bid on the house if they told me that originally).

At current residence, when I moved in a year ago, I found I ran into debilitating packet loss if I tried to actually use the full bandwidth of my line, so I had service bumped to 50/5 to 15/1, which is close enough to broadband to do what I need it to, and I didn’t experience packet loss… until around three months ago, when I started running into the same problem during peak time, and now it’s a constant PitA.

I’ll probably have to go sit alone in the office this weekend because the deskphone keeps cutting out at home. I’ve gone through three different modems, but TWC won’t give me anything better than to tell me to power-cycle the modem, or send a tech out who says he’s fixed the line… but the issue persists. -So I’ve given up. A friend’s moving in a block away and I’m going to shut off my service and run a P2P from her apt. If that doesn’t work, I’m moving… again… just to find an Internet connection which can support basic VOIP. I’m in Cincinnati for God’s sake – how has my ISP service never managed to match what I got from Comcast in 2001 in rural nowheresville?

Anonymous Coward says:

“The FCC receives more than 2,000 complaints annually about surprise fees associated with consumers’ Internet service bill”

These are the 2,000 people complaining to FCC. This doesn’t include the complaints to Consumerist, blogs, friends, etc.

FCC is doing better…we should do better and give the FCC more ammo! Who cares if it is a label…maybe public shaming will adjust the prices more in our favor!

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