The Federal Communications Commission has unveiled consumer broadband labels, inspired by the nutrition labels that are found in the packages of food products.
The labels look to provide consumers with easy-to-understand information regarding fixed and mobile broadband Internet services, which will help in making informed decisions when purchasing such services.
"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," said FCC Chairman Tom Wheeler.
Richard Cordray, the director of the Consumer Financial Protection Bureau, joined Wheeler in the unveiling of the initiative, commending the FCC and its chairman for providing new transparency to the broadband market.
The information that will be included in the consumer broadband labels include the following:
- The price of the broadband Internet service, including the various charges that consumers can incur such as fees covering early termination, equipment and overage.
- The data allowance of the service, as defined by the Internet service provider. Consumers face additional charges or experience slower Internet speeds once they reach their data allowance limit.
- The performance of the service, including expected broadband speed and other metrics of the service's performance.
The labels, as formatted by the FCC, are not required to be used by ISPs. However, as part of the net neutrality order of the FCC, the companies would need to improve their transparency and make more specific disclosures. The FCC recommends that the ISPs use the labels in the demonstrated format, but the companies are allowed to come up with customized labels as long as they still include the easy-to-understand information as seen in the example labels.
According to the FCC, it receives over 2,000 complaints per year on surprise fees that are associated with the bills that consumers receive for broadband Internet services. The amount that consumers pay for such services could be higher by as much as 40 percent compared to what is advertised after taxes and additional fees are factored in, and these labels are looking to reduce the surprise factor by clearly stating what consumers can expect to pay for choosing a certain service.
Just recently, the FCC made another consumer-friendly move by approving the proposal to include broadband services in the monthly $9.25 telephone subsidy of low-income Americans.
