FCC, CFPB Unveil New Broadband Internet Labels to Provide Greater Transparency for Consumers
The Federal Communications Commission (FCC) has announced new broadband labels to provide consumers of mobile and fixed broadband Internet service with easy-to-understand information about price and performance.
The FCC says that these labels should help consumers make informed decisions about the purchase of broadband Internet service.
FCC Chairman Tom Wheeler, joined by Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, unveiled the new broadband labels 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 new 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 FCC, are recommended by the agency and will serve as a "safe harbor" to meet those requirements.
The FCC says that it 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." The agency says that the new mobile and fixed broadband labels reflect the committee's expert guidance on the content of these labels and in a consumer-friendly format.