12 Apr Looking for a Better Deal on Internet Service? New Labels May Help.
Have you been surprised by a large mobile service bill or do you wonder why you pay so much for slow Internet at home? New labels designed to give you straight-forward information about your mobile and fixed broadband services and associated charges may solve the mystery. On April 4th, the Federal Communications Commission (FCC) announced the approval of the new broadband labels to “allow consumers to easily compare the services of different providers.” The new, easier-to-digest labels should look familiar as they mimic the nutrition labels you find on food packages.
“The term broadband commonly refers to high-speed Internet access that is always on and faster than the traditional dial-up access. Broadband includes several high-speed transmission technologies such as DSL, cable modem, fiber, wireless, satellite, broadband over powerlines.” (FCC)
On June 12, 2015, the FCC’s 2015 Open Internet Order, sometimes described as “net neutrality”, went into effect. (See blog posts: Net Neutrality: The Big Event on June 12th and Internet Speed and Access: Chipping Away at FCC’s Net Neutrality). The new rules include enhanced transparency requirements for broadband providers. As part of this effort to inform consumers, the FCC charged its Consumer Advocacy Commission (CAC) with developing a clear and easy-to-read format to disclose and compare broadband service plans. The CAC, which is comprised of consumer groups and industry representatives, proposed labels — one for fixed broadband and one for mobile broadband — that give consumers basic information in a nutrition-label format.
Will It Help?
If all Internet and mobile service providers present the details of their plans in a familiar, clear, uniform format, it should make it easier for consumers to see what they are paying for and to compare plans. The new labels will include information such as price (including “surprise fees”), data allowance, performance (speed), and network management. That said, consumer education also seems an important part of the puzzle. If you don’t know what the terms “packet loss”, “latency”, or “Mbps” mean, the information becomes less useful. The FCC has indicated that the labels will allow consumers to access (via a link) a glossary of terms to aid this education process.
Some in the broadband industry question the necessity of he labels, claiming the information is already made available. The Wireless Association (CTIA) points out that their members already provide disclosure and transparency in line with their Consumer Code for Wireless Service.
Even if the information is already made available by companies, a uniform format for the presentation of plan features should benefit consumers who wish to compare different providers’ plans.
Adoption of the labeling format is voluntary, but broadband service providers have a strong incentive to do so. If they use the label, they are offered a safe harbor under the FCC’s Open Internet transparency requirements. The details of those requirements are not yet finalized and await review by the Administration’s Office of Management and Budget. The FCC is encouraging industry to adopt the new format, even without the new rules yet in place.
It’s important to note that the FCC’s 2015 Open Internet Order faces legal challenges. While transparency requirements are not at the heart of the case, plantiffs have asked for the whole order to be thrown out. A decision in the court case is expected very soon.