Technology

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The US broadband industry is united in opposition to a requirement that Internet service providers list all of their monthly fees. Five lobby groups representing cable companies, fiber and DSL providers, and mobile operators have repeatedly urged the Federal Communications Commission to eliminate the requirement before new broadband labeling rules take effect.

The trade associations petitioned the FCC in January to change the rules and renewed their call last week in a filing and in a meeting with FCC officials. The requirement that ISPs list all their monthly fees "would add unnecessary complexity and burdens to the label for consumers and providers and could result in some providers having to create many labels for any given plan," the groups said in the filing on Friday.

The trade groups said the FCC should instead "require providers to include an explanatory statement that such fees may apply and that they vary by jurisdiction, similar to the Commission's treatment of government-imposed taxes," or require "the display of the maximum level of government-imposed fees that might be passed through, so that consumers would not experience bill shock with respect to such fees."

The filing was submitted by NCTA-The Internet & Television Association, which represents Comcast, Charter, Cox, and other cable companies. The NCTA's ex parte filing described a meeting with FCC officials that also included wireless industry trade group CTIA and USTelecom, which represents telcos including AT&T, Verizon, Lumen (formerly CenturyLink), Frontier, and Windstream.

The meeting was attended by two other groups representing smaller ISPs: NTCA-The Rural Broadband Association and ACA Connects-America's Communications Association. The trade groups met on Wednesday with the legal advisors to FCC Chairwoman Jessica Rosenworcel and Commissioner Brendan Carr, according to the filing.

Comcast accused of “trying to create loopholes”

Comcast submitted its own filing urging the FCC to scrap the rules in June. The calls to weaken the FCC's truth-in-billing rules angered consumer advocates, as we wrote at the time. "The label hasn't even reached consumers yet, but Comcast is already trying to create loopholes. This request would allow the big ISPs to continue hiding the true cost of service and frustrating customers with poor service," Joshua Stager, policy director at media advocacy group Free Press, told Ars.

Congress required the FCC to implement broadband labels with exact prices for Internet service plans in a 2021 law, but gave the FCC some leeway in how to structure the rules. The FCC adopted specific label rules in November 2022.

The labels must be displayed to consumers at the point of sale and include monthly price, additional charges, speeds, data caps, additional charges for data, and other information. The FCC rules aren't in force yet because they are subject to a federal Office of Management and Budget (OMB) review under the US Paperwork Reduction Act.

ISPs object to a portion of the FCC order that says, "providers must list all recurring monthly fees" including "all charges that providers impose at their discretion, i.e., charges not mandated by a government." The five trade groups complain that this would require ISPs "to display the pass-through of fees imposed by federal, state, or local government agencies on the consumer broadband label."

But just because an ISP says a fee is related to a government charge doesn't mean that ISPs have to break them out separately. ISPs could instead include all costs in their advertised rates to give potential customers a clearer idea of how much they would have to pay each month.

"A provider that opts to combine all of its monthly discretionary fees with its base monthly price may do so and list that total price. In that case, the provider need not separately itemize those fees in the label," the FCC order said.

Non-mandatory fees

Discretionary charges "include those the provider collects to recoup from consumers its costs associated with government programs but where the government has not mandated such collection, e.g., USF [Universal Service Fund] contributions," according to the FCC. Comcast said the non-mandatory fees also include pass-through of state and local government fees.

The FCC order said the requirement to list "all charges that providers impose at their discretion" is meant to help broadband users "understand which charges are part of the provider's rate structure, and which derive from government assessments or programs." These fees must have "simple, accurate, [and] easy-to-understand name[s]," the FCC order said.

"Further, the requirement will allow consumers to more meaningfully compare providers' rates and service packages, and to make more informed decisions when purchasing broadband services. Providers must list fees such as monthly charges associated with regulatory programs and fees for the rental or leasing of modem and other network connection equipment," the FCC said.

Harold Feld, senior VP of consumer advocacy group Public Knowledge, told Ars in June that the FCC "should reject the request to create loopholes which would obscure what fees providers decide to pass on versus those that are mandated by state law. It is an effort to pass blame to the state which properly belongs to the ISP."

Debate over record-keeping rule

ISPs also object to a record-keeping requirement designed to ensure that ISPs follow the rules when they provide labels through "alternate sales channels" such as retail stores or customer service phone calls. ISPs can meet the label requirement in alternate sales channels either by providing a hard copy of the label or by "directing the consumer to the specific web page on which the label appears."

ISPs that don't provide hard copies of the label to prospective customers in those sales channels must document each instance in which they direct a consumer to a label.

"Requiring that providers collect identifying information and document every customer interaction would be highly disruptive to consumers seeking information through alternative sales channels and would impose significant burdens on providers of all sizes," the trade groups told the FCC. The trade groups want the FCC to "clarify that a provider satisfies these rules by developing appropriate business practices to promote distribution of the label through alternative sales channels and retaining documentation of these practices for two years."

Latino advocacy group ALLvanza also objected to the data-collection rule on privacy grounds, saying, "Many Latinos are already hesitant and/or unwilling to provide identifying information to companies or the government due to privacy concerns, fear of discrimination, potential immigration status issues, mistrust of institutions, and cultural preferences for privacy."

ISPs could avoid the requirement to collect identifying information from consumers in retail stores by providing hard copies of the label. The FCC defended the compliance plan in a submission to the OMB last month as part of the Paperwork Reduction Act review, saying it needs detailed information to ensure ISPs follow the rules.

When ISPs choose not to provide hard copies of the labels in alternate sales channels, the FCC said it needs details on each customer interaction to "allow the Commission to investigate and enforce providers' obligation to make the label available to consumers at each point of sale."

The FCC also defended itself against industry accusations that the rule is too vague. "The Commission stated in the Broadband Label Order that '[p]roviders must document each instance when it directs a consumer to a label at an alternate sales channel and retain such documentation for two years.' We believe it is unambiguous that this would include the identity of each consumer," the FCC said.