Regulation - What is it Good For?

FCC Implements Broadband Labels

The FCC voted recently to implement consumer broadband labels. This was required by section 60504 of the Infrastructure Investment and Jobs Act. The new rules will become effective after the Office of Management and Budget approves the new rules and after the final notice is published in the federal register. ISPs will then generally have six months to implement the labels.

The labels look a lot like the nutrition labels that accompany food. The label will include basic information like a customer’s service plan name, the monthly price for standalone broadband, any special pricing that in place currently and when that special pricing expires, and a description of other monthly and one-time fees. The labels also must disclose the typical broadband speeds and latency.

It’s going to be interesting next summer to see how ISPs react to the label requirement. The pricing information alone must be giving shivers to the marketing folks at the biggest ISPs. This will make them list the price of standalone broadband to every customer and compare that to what the customer is currently paying. It’s been incredibly easy for consumers to subscribe to broadband in the past and never know the list price of what they are buying.

The requirement that I think will be the most controversial is the requirement to disclose the typical broadband speed and latency. I can’t wait until next year to see big ISPs implement this requirement. In the many surveys we have done, most consumers tell us that they have no idea of the speeds they are supposed to get – and that most of their monthly broadband bills don’t mention the speed.

Some ISPs will have a real dilemma with the speed disclosure.

  • It’s extremely challenging for a DSL or fixed wireless ISP to tell any customer the speed, since speeds vary from home to home and by the time of day. Even if one of these ISPs wants to disclose a reasonable estimate of speed, it’s hard to think how they can reasonably do so. I can’t imagine how these ISPs can provide a label to a prospective customer since the ISP won’t know the real speed until they try to connect to the customer.
  • What will ISPs do who have been exaggerating speeds in the FCC broadband reporting? Just to use an example I heard yesterday, there are places where Starlink reported 350 Mbps to the FCC where a customer was barely getting 50 Mbps. If ISPs report the FCC speeds to customers, they are going to hear a mountain of complaints from folks who aren’t seeing the high speeds. But if an ISP tries to be more truthful about speeds on the broadband label, it will have demonstrated that it has fudged the speeds for the FCC mapping.
  • The most interesting speed issue might be upload speeds. It’s hard to think that any cable company or WISP is going to report upload speeds under 20 Mbps because doing so would be an admission of not delivering broadband. But declaring 20 Mbps or faster upload speeds won’t sit well with customers who are getting something far slower.

We’ll have to wait and see, but my guess is that ISPs will report the same speeds to customers that are reported to the FCC. But an ISP that is exaggerating FCC speeds should be ready for an onslaught of customer complaints from customers that know the speeds on the label are not right. I think this is part of the reason why these labels were mandated – to force ISPs to come closer to telling customers the truth. But there are going to be some contentious years coming for ISPs that claim imaginary speeds on the broadband label or to the FCC.

The FCC is not quite done with the labels. The FCC issued a Future Notice of Proposed Rulemaking to solicit input on a few issues. One is how to include bundling on the labels. The surveys my firm does are still showing more than 50% of customers on bundles in urban areas, and bundling allows ISPs to hide the pricing for any component of the bundle.

The FNPRM also asks if there is a better way to disclose speeds, such as average speeds instead of typical speeds. Finally, the FCC is asking if ISPs should disclose network management policies that might harm consumers, such as blocking, throttling, or paid prioritization for some customers.

We won’t see the broadband labels in practice until at least next summer – but I’m expecting an uproar after folks see what ISPs say about prices and speeds.

One reply on “FCC Implements Broadband Labels”

The requirement for labels is the right thing to do. I would entertain a suggestion to publicly fund and require a simple low-cost single-purpose device at every service location that reports actual maximum speed available to a neutral secure location. If knowing the speed is deemed important (and it is), then it will take different (perhaps radical) solutions to get any result different than we already have. Thanks for your blog and keep writing!

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