Internet providers must now include the labels when describing their plans on websites and in other materials, a requirement by the Federal Communications Commission (FCC) designed to compel complete disclosure of broadband speeds, the true and full cost of the service — and standardizing their publication.
The FCC’s regulatory move is part of the Infrastructure Investment and Jobs Act, the major federal infrastructure initiative helping advance broadband infrastructure nationwide. The “nutrition labels” as they have become known because they are modeled after those found on food packaging, are meant to offer clarity in the often opaque world of broadband pricing, which can leave subscribers frustrated with unexplained costs built into their monthly bills.
“It’s hard to see how you can have a market truly function if people don’t really have awareness of how much things cost until after they have committed to buying it,” said John Bergmayer, legal director of Public Knowledge, a nonprofit advocating for Internet accessibility.
“I think it’s great the administration and the FCC have been taking action against these fees, in a lot of respects,” Bergmayer said during an online panel Wednesday, organized by Broadband Breakfast, a broadband policy news site. “Not just in the broadband and cable issues that we all know — ticketing, and hotels, and restaurants, and delivery services. I would say it’s certainly not a broadband-specific problem.”
The broadband consumer labels include clearly marked information like the monthly subscription rate, whether rates are introductory, length of contract, and download and upload speeds. They’re to be displayed at the point of sale, whether in store or online.
Bergmayer took aim at what are largely considered “junk fees,” — costs tacked onto services with little disclosure, or the ability to decline them. States like California have taken action with laws like the Honest Pricing Law, which took effect July 1 and makes it illegal for businesses to advertise the price of a product or service without including the full cost. The regulation, which originated in state Senate Bill 478, does not set or control prices, but requires transparency on the full cost to consumers.
Challengers to the new FCC regulation questioned the need for the labels.
Brian Hurley, chief regulatory council at ACA Connects, an industry group, said during the panel that a number of its members already break down the different fees in customers’ bills “so the customers understand what the source is for the increase in prices that they’re seeing on their bills.”
Mark Jamison, nonresident senior fellow at the American Enterprise Institute, and the director of the Public Utility Research Center at the University of Florida, said disclosing more information about costs could make broadband service decisions overly reductive, focusing only on cost above other factors like customer relations.
“I appreciate the complexity and the difficulty of trying to make sure the consumers have the information that they need,” Jamison said during the panel. “But, sometimes it just doesn’t work … to tell people, ‘here’s what you should be paying attention to when you make that decision.’ For one reason, we’re probably going to be wrong on what they want to consider. We’re probably not going to be able to provide something that is exactly their situation, their scenario.”
Still, advocates for the policy like Bergmayer stressed more information is better than less.
“We hear people complaining about rising bills and feeling like they are deceived because the pricing is just not included in the service cost,” he said.
