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.

Filed Under: broadband, fcc, gao