With contributions from Laurel Lehman, Policy Analyst.
Imagine you’re shopping for a new automobile, but as you go from car to car and dealership to dealership, the window stickers each look completely different. Some include a breakdown of the component charges and taxes, while others reveal just the bottom line. Some list the expected gas mileage, while others do not. And some don’t show the price of the car at all—just the total cost if you buy the vehicle as part of a bundle that also includes, say, a motorcycle and a boat.
Or what if the next time you went into a grocery store, none of the food had the familiar nutrition facts grid on the label? Instead, some manufacturers might choose to list a few things like the calorie count or protein content, but leave others off, like the fat content, or a complete list of ingredients.
In reality, of course, all new cars and trucks, regardless of make or model, have had standardized window stickers since 1959; and most of the foods at the supermarket have standardized Nutrition Facts labels, which have been required since 1994. Both represent common-sense transparency and enable consumers to compare competing products and make thoughtful, informed purchasing decisions.
Unfortunately, consumers lack such basic tools when shopping for broadband internet service, which has become essential to daily life—a reality that the COVID-19 pandemic made even more clear as work, education, and even healthcare increasingly moved online. Instead, broadband consumers often get unreliable or slow internet service, data caps, quietly expiring promotional rates, and confusing bills filled with a laundry list of mysterious fees, which make it hard for consumers to budget and virtually impossible for them to comparison shop. Unbelievably, some bills for bundled service packages do not even list a separate line item for the cost of internet service!
These practices, and the industry’s overall lack of transparency around pricing, are hardly surprising given the state of the broadband market. The industry is largely devoid of competitive forces—in many states, a majority of consumers have only one choice of broadband providers—and is constrained by little to no government regulation.
What makes these dynamics especially problematic is that consumers are in no position to turn down whatever their local internet service provider (ISP) deems to offer. Consumers are tired of this situation and deserve better. At the very least, they should have easy access to clear, accurate, thorough information about how much they need to pay for service and exactly what they’ll get for their money.
As it happens, consumer advocates have, for more than a decade, been pushing for something that would deliver precisely that: a standardized, easy-to-read broadband “label” inspired by the Nutrition Facts label and automobile window stickers that would include pricing information, additional fees, promotional discounts and length, and performance information (i.e., expected speeds). ISPs should be required to make the label available to consumers both when they sign up for service and when they pay their monthly bills. Call it a “broadband nutrition” label, if you will.
So why hasn’t it happened yet?
A Brief History of the Broadband Price Transparency
New America’s Open Technology Institute first proposed a version of a standardized broadband label in 2009, but the industry’s actual moves toward transparency have been slow and faltering.
In 2010, the Federal Communications Commission (FCC) issued its first Open Internet Order, which included the first Transparency Rule for broadband providers in addition to its better-known net neutrality provisions. The rule enumerated the information that had to be disclosed to consumers at the point of sale, including three broad categories—network practices, performance characteristics, and commercial terms—as well as specifics such as the monthly price, actual and expected internet speed, and fees for early termination. It did not, however, mandate any specific format for delivering that information.
Before the ink was even dry on the order, Verizon sued the FCC to overturn both the net neutrality and disclosure requirements. But in 2014, the federal Court of Appeals in Washington, D.C. upheld the Transparency Rule—even as it nullified the net neutrality provisions—affirming a basic floor for ISP transparency disclosures. The FCC then issued guidelines further clarifying that the Transparency Rule forbade ISPs from making erroneous, misleading, or deceptive assertions in their disclosures, which also had to be consistent with claims made in their advertising.
In 2015, the FCC issued a second Open Internet Order, which not only aimed to set net neutrality rules that could withstand legal challenge, but also enhanced and strengthened the pricing transparency rules. Specifically, it required ISPs to disclose:
- the full monthly service charge, including promotional and standard rates, all one-time and/or recurring fees, and whether data caps would be imposed;
- performance metric data specific to geographic location; and
- if the consumer’s internet usage would trigger “a network practice” likely to affect their service, as when, for example, a data cap triggers “throttling” or significant overage fees.
The 2015 order also laid out plans for a uniform—but voluntary—disclosure format that ISPs could use to satisfy the new transparency requirements. And in 2016 the FCC released the format: a broadband consumer label modeled on the Nutrition Facts label. If ISPs had decided to use this voluntary safe harbor, it would have represented a genuine move towards price transparency, and been a clear win for consumers.
But it was not to be. In 2017, over the protests of CR and other consumer groups, the newly installed FCC chair Ajit Pai pushed the agency to issue the Restoring Internet Freedom Order, which both overturned the 2015 net neutrality rules and tossed out the stricter transparency standards, including the voluntary broadband nutrition label.
What’s Next?
In 2020, a version of the broadband nutrition label was revived and passed in the House as part of an infrastructure passage—but ultimately failed to clear the hurdle of the Senate.
In March 2021, Representative Angie Craig (MN-02) introduced the Broadband Consumer Transparency Act of 2021, which would direct the FCC to promote and incentivize widespread adoption of a standardized broadband label. (Craig has also publicly backed the idea of mandating its adoption.) The language of Representative Craig’s legislation appears in the Accessible, Affordable Internet for All Act (AAIA Act) introduced by Representative Jim Clyburn in the House and by Senator Amy Klobuchar in the Senate; both bills await consideration by Congress.
Alternatively, the FCC could reinstate the label on its own, but has yet to initiate a rulemaking to consider the issue— which the Biden administration encouraged the FCC Chair to do in its recent Executive Order on Promoting Competition in the American Economy. In the meantime, many consumers are left guessing what price they’re paying for monthly internet service, an almost absurd notion for an essential service in the 21st century.
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The lack of price transparency and confusing billing practices aren’t the only issues faced by consumers in the broadband internet market. Too many people do not have access to affordable, reliable internet service. That’s why Consumer Reports, along with a coalition of partners, is embarking on an ambitious project called Broadband Together to investigate the state of internet access in the U.S. CR will analyze thousands of consumer ISP bills from across the country to better understand what factors determine why and how ISPs charge the prices they do, and what information is and is not included in monthly bills. Go to www.broadbandtogether.org to participate, and share your bill today.
