The FCC’s New ‘Broadband Nutrition Label’ Doesn’t Solve The Actual Problem: Unchecked Telecom Monopoly Power

Broadband

from the we-are-clearly-ripping-you-off dept

For the better part of the last decade, the FCC had been pondering the idea of requiring a sort of “nutrition label” for broadband access. The idea is to make ISPs — which routinely mislead consumers about pricing, speeds, restrictions, usage caps, and everything else — be more transparent with the end user at the point of sale.

After a lot of whining by telecom giants, the FCC finally announced this week that starting today, ISPs must include such a label in marketing materials and their websites clearly disclosing the type of connection consumers are buying. The FCC’s demo label looks like this:

Smaller ISPs, which may find the costs of compliance more annoying than bigger ISPs, have until October to implement them. According to the FCC, these new labels will mandate transparency, something FCC boss Jessica Rosenworcel seems to think will aid competition:

“These ‘nutrition label’ disclosures are designed to make it simpler for consumers to know what they are getting, hold providers to their promises, and benefit from greater competition—which means better service and prices for everyone.”

This is certainly an improvement, and transparency is good.

The problem: most U.S. consumers don’t have a choice of broadband providers because giant telecom monopolies have spent the last forty-five years lobbying government into a state of abject fecklessness and crushing competitors underfoot. The result: limited competition, high prices, spotty access (despite billions in subsidies), slow speeds, and comically terrible customer service.

So the nutrition label can make it clearer to these users that they’re being abused and ripped off, but it doesn’t come anywhere close to stopping them from being abused and ripped off. Especially if the FCC enforcement is inconsistent and its fines are pathetic (which has been a multi-decade problem for this agency).

The Trump FCC was a direct proxy for the interests of telecom giants like Comcast and AT&T. The Biden FCC is notably better, but it’s still relatively feckless when it comes to directly challenging big monopolies directly tethered to our domestic surveillance systems. You’d be hard pressed to find a public statement by the Rosenworcel FCC even acknowledging monopoly and consolidation is a problem.

So what you get is these sort of long overdue half measures and a sort of regulatory theater by political careerists waiting for their next political opportunity or industry think tank gig. A performance that’s sometimes well intentioned, but generally nibbles around the symptoms and the edges, never tackling the real problem.

ISPs wouldn’t be implementing bullshit usage caps, or violating net neutrality, or implementing misleading fees, or consistently abusing consumer privacy, or over-charging for service if we had both competent regulatory oversight and meaningful market competition. In most U.S. markets, we have neither. Very few have both. And I would think, after decades of this, the end result is fairly obvious.

There are numerous things the FCC could do to actually tackle the problem. Chief among them being to admit that concentrated monopoly power is a problem. And to loudly support the massive, bipartisan grass roots movement comprised of city-owned utilities, cooperatives, and municipalities — so pissed by decades of obvious and abject market failure — they’re building their own networks in record numbers.

So yes a transparency label is good in that it requires unchecked telecom monopolies to be clearer about how they’re ripping you off, but it shouldn’t be mistaken for any sort of fix for the actual problem. An actual fix would require political courage, and that’s simply not something this agency is known for.

Filed Under: broadband, broadband nutrition label, caps, fcc, high speed internet, jessica rosenworcel, nutrition labels, telecom