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FCC Debuts New Consumer Broadband Labels

NEWSFACTOR NETWORK
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Arguing that broadband Internet services are increasingly necessary for everyday life, the Federal Communications Commission (FCC) said those services should be clearly labeled so customers know exactly what they're paying for.

Service providers can make their prices and offerings more transparent by using a system similar to the nutrition labels provided on food products, according to the FCC. Yesterday, the agency unveiled recommendations for broadband labels that were developed by its Consumer Advisory Committee.

While they won't be mandatory for mobile and fixed broadband providers, the labels would help ensure that those companies meet the requirements set by the FCC's 2015 Open Internet Order. The labeling recommendations cover data allowances, broadband speeds and pricing, including fees for administrative services and early termination of services.

Consumer Group: Make Labels Mandatory

The new labels are "going to make it much easier for consumers," John Simpson, director of the Privacy Project at the advocacy organization Consumer Watchdog, told us today. While he welcomed the FCC's recommendations, Simpson added that the labeling format should be mandatory for broadband providers. Internet service labeling won't be effective, "if you put it out there and no one uses it," he said.

On the other hand, the CTIA-The Wireless Association industry group said it already has a code that governs the information its members should provide to consumers.

"While we appreciate that these labels will serve as a 'safe harbor' under the Open Internet transparency rules, CTIA members already provide disclosure and transparency as part of the Consumer Code for Wireless Service," CTIA vice president of regulatory affairs Scott Bergmann said in a statement. "The competitive nature of the wireless broadband market does more for consumers than regulation can hope to achieve."

Numerous Complaints about 'Surprise Fees'

The FCC's labeling recommendations will help consumers make more informed choices about the broadband services they buy, and are also aimed at "preventing surprises when the first bill arrives," FCC chairman Tom Wheeler said in a statement.

For example, the labeling format allows for a side-by-side comparison of monthly costs under a month-to-month plan versus the monthly charge under a two-year contract plan. It also includes specifications for charges assessed for exceeding monthly data allowances, modem or gateway lease fees, typical upstream and downstream data speeds, and typical latency and packet loss rates.

Currently, more than 2,000 people every year submit complaints to the FCC about surprise fees on their Internet service bills. The agency reports that consumers' actual costs for broadband services can be "as much as 40 percent greater than what is advertised after taxes and fees are added to a bill."