FCC says Labels for Internet Services will help customers compare prices, speed and data caps
Consumers will be better able to determine if they’re getting a good deal on high-speed Internet access and avoid bill shock when they open their bills by using labels for internet broadband service. This is a new FCC initiative.
The model that was used are the Nutrition Facts labels on food products, the new labels for internet replace information on calories, sugar and cholesterol with details on price, speed and data caps.
“If you’re going to get competition, competition, competition, you need information, information, information,” said Tom Wheeler, chairman of the Federal Communications Commission.
The FCC rolled out the voluntary labels for internet for wired and mobile broadband to help consumers make more informed choices and avoid surprises on their monthly statements, Wheeler said.
Internet service providers that put accurate labels for internet facts on their offerings would be immune to regulatory action based on new transparency requirements the FCC adopted last year with its net neutrality rules for online traffic. The so-called safe harbor protection would go into effect after the White House Office of Management and Budget gives final approval to the transparency requirements of the net neutrality rules. But Internet service providers could start using labels for internet before then.
The FCC said it gets more than 2,000 complaints a year from consumers about unexpected fees on their Internet service bills. In some cases, the prices paid for broadband can be as much as 40% more than advertised after taxes and fees are added on, the FCC said.
The labels will include monthly and one-time fees, though they note that there might be additional government taxes and costs based on the consumers’ location. Consumers will see the specific monthly charge and data allowance for tiers of broadband service as well as the ramifications, either in price or slower service, if they exceed the data limits.
The labels also include information on filing complaints with the service provider and the FCC. The National Cable & Telecommunications Assn., which includes major players such as Comcast Corp. and Time Warner Cable Inc., said it supported the labels even though it is among trade groups and companies that have sued to stop the net neutrality regulations.
Richard Cordray, director of the Consumer Financial Protection Bureau, helped design the labels for the internet. Created by the 2010 financial reform law, the protection bureau has focused on improved disclosures for mortgages, student loans and other financial products. Cordray said broadband “is quickly becoming a necessary part of everyday life for millions of consumers.” “Consumers deserve to know before they owe, with clear, upfront information about the prices, risks and terms of the deal,” he said.