Food for thought: The FCC has introduced new broadband labels

For anyone who has ever tried to figure out the nitty-gritty details of an ISP, or perhaps worse: tried to compare it with a competing service provider, the effort may have been met with a migraine. It’s often difficult to get solid information and specifics on things like pricing plans, internet speed, latency, hardware costs, fees associated with early cancellation, and even clear customer service contact information.

As the details are rarely – if ever – posted in a clear and concise manner, consumers often have to find out the hard way, or by trying to speak with a customer service representative.  If the FCC has anything to do with it, everything is about to change:

Taking inspiration from the FDA’s Nutritional Facts labels, the newly proposed Broadband Facts labels seek to simplify the situation. While the government wants to make this a new standard, ISP’s are not yet required to use the labels. The information contained in them is in part thanks to new transparency rules that were present in the FCC’s net neutrality legislation.

According to the FCC’s description, the “Labels Will Help Consumers Make Informed Broadband Purchasing Decisions and Serve as a Safe Harbor Format for Meeting Transparency Rule Requirements.”

Within the organization itself is the Consumer Advisory Committee which The Verge has thoughtfully mentioned contains “representatives from CenturyLink, Google, Verizon, and T-Mobile” thus offering more than a glimpse of hope that these new informative labels will be put in place.

According to Mr. Tom Wheeler, FCC Chairman:

These labels provide consumers clarity about the broadband service they are purchasing, not only helping them to make more informed choices but also preventing surprises when the first bill arrives. Customers deserve to know the price they will actually pay for a service and to be fully aware of other components such as data limits and performance factors before they sign up for service.

Offering some additional insight, Mr. Richard Cordray, Director of the Consumer Financial Protection Bureau, said that:

Consumers deserve to know before they owe, with clear, upfront information about the prices, risks, and terms of the deal. Broadband is quickly becoming a necessary part of everyday life for millions of consumers. I commend Chairman Wheeler and the FCC for bringing new transparency to the broadband market, which will help people understand what they are getting before they sign up.

What do you think? Are these new labels a good way to simplify a sordid situation, or will ISPs still try to keep things on the DL? Leave your thoughts in the comments section below!

Full press release follows.

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FCC Unveils Consumer Broadband Labels to Provide

Greater Transparency to Consumers

Labels Will Help Consumers Make Informed Broadband Purchasing Decisions and Serve as a

Safe Harbor Format for Meeting Transparency Rule Requirements

—

WASHINGTON, April 4, 2016 – The Federal Communications Commission today announced

new broadband labels to provide consumers of mobile and fixed broadband Internet service with

easy-to- understand information about price and performance. These labels should help consumers

make informed decisions about the purchase of broadband service.

FCC Chairman Tom Wheeler, joined by Consumer Financial Protection Bureau Director Richard

Cordray, unveiled the new broadband labels today at an event attended by members of the FCC’s

Consumer Advisory Committee. This committee, composed of consumer group and industry

representatives, made a unanimous recommendation of the labels’ framework.

“These labels provide consumers clarity about the broadband service they are purchasing, not

only helping them to make more informed choices but also preventing surprises when the first

bill arrives,” said Chairman Wheeler. “Customers deserve to know the price they will actually

pay for a service and to be fully aware of other components such as data limits and performance

factors before they sign up for service.”

“Consumers deserve to know before they owe, with clear, upfront information about the prices,

risks, and terms of the deal,” said Director Cordray. “Broadband is quickly becoming a necessary

part of everyday life for millions of consumers.  I commend Chairman Wheeler and the FCC for

bringing new transparency to the broadband market, which will help people understand what they

are getting before they sign up.”

The consumer broadband labels will provide consumers with more information on service speed

and reliability and greater clarity regarding the costs of broadband service, including fees and

other add-on charges that may appear on their bills. 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

The Consumer Broadband Labels will include:

 Price: Price points, including various charges that seem confusing to consumers like

overage, equipment, early termination and administrative fees.

 Data Allowances: This is the carrier-defined plan limit after which consumers will face

some consequence, such as additional charges or slowed data speeds.

 Performance: Broadband speed and other performance metrics.

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.

In the 2015 Open Internet rules, the FCC asked its Consumer Advisory Committee “to

recommend a disclosure format that should be clear and easy to read – similar to a nutrition label

found on food items – to allow consumers to easily compare the services of different providers.”

Today’s mobile and fixed broadband labels reflect the committee’s expert guidance on the

content of these labels and in a consumer-friendly format.

Chairman Wheeler thanked the Consumer Advisory Committee for its hard work and

collaborative efforts that resulted in today’s announcement. He also thanked Director Cordray

and his staff at CFPB for their support.

The Consumer Financial Protection Bureau is the first federal agency dedicated to protecting

consumers in the financial marketplace. The Bureau has considerable experience designing

disclosures for financial products that use clear language to inform consumers, including its

“Know Before You Owe” campaign, which now includes mortgages, student loans, prepaid

cards, and more. Upon the Commission’s request, the CFPB provided the FCC with suggestions

on the design and content of the consumer broadband labels. The CFPB and FCC have also

partnered on enforcement actions to protect consumers.

With the release of today’s Public Notice, the FCC is officially endorsing the use of the consumer

broadband labels as a safe harbor for the format of the required disclosure to consumers

prescribed in the transparency rule. The labels will officially operate as a safe harbor after the

Office of Management and Budget gives final approval of the enhancements to the transparency

rule adopted in the 2015 Open Internet Order—though providers may choose to use the labels for

disclosure to consumers at any time.

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