FCC Wants To End Bill Shock With 'Nutrition Labels'

Aiming to curb unexpected broadband fees, the Federal Communications Commission today unveiled new, approved formats that carriers can use to disclose information to broadband subscribers.

The samplelabels, similar to nutrition labels on food packaging, include lines for information about total monthly data, overages, activation fees, early termination fees, and typical speeds. The labels also include a spot for ISPs to link to sites offering insight into traffic management practices like throttling. (Currently, AT&T, Sprint and Verizon say they may throttle customers in certain circumstances.)

The new labels are not mandatory. But ISPs that use the labels will have a defense for accusations that they violated a net neutrality rule requiring transparency.

The initiative aims to eliminate the bill shock experienced by consumers. Currently, some report paying 40% more than the advertised price, after fees and taxes, according to the FCC. "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," the agency stated Monday.

The FCC added that it receives 2,000 consumer complaints annually about surprise broadband bills.

"These labels provide consumers clarity about the broadband service they are purchasing," FCC Chairman Tom Wheeler said today in a statement. "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."

The templates unveiled today call for fairly detailed information. For instance, the sample label for wireline service includes a box for the price of stand-alone broadband service, and also leaves room for links to sites where consumers can learn how much bundled service will cost.

At the same time, the FCC's initiative doesn't appear likely to completely eliminate surprise bills. Consider, the sample labels released today don't deal with the cable-video portion of the bill -- which often is incomprehensible to subscribers. Telecom analyst Bruce Kushnick made this point in October of 2014, when he publicly posted his Time Warner Cable bill for triple-play broadband/video/telephone service. “When I signed up, less than two years ago, it was advertised at $89.99 and today, less than two years later, the actual price is 110% more -- now $190.77,” he wrote in a widely circulated piece that originally appeared on Huffington Post.

He added that not only did his bill increase, but Time Warner tacked on a host of extra charges, including a “regulatory recovery fee” of 69 cents, a “public access fee” of $1.23 and a “broadcast TV fee” of $2.25. “Fact is -- you can never, ever get the advertised price because it doesn't include many of the fixed costs, like the set-top box, not to mention it is littered with pass-throughs of the company's taxes and fees, including the cable franchise fees,” he wrote. “To add insult to injury, there are a bunch of garbage, made up charges.”

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