FCC says “too bad” to ISPs complaining that listing every fee is too hard

The Federal Communications Commission yesterday rejected requests to eliminate an upcoming requirement that Internet service providers list all of their monthly fees.

Five major trade groups representing US broadband providers petitioned the FCC in January to scrap the requirement before it takes effect. In June, Comcast told the FCC that the listing-every-fee rule "impose(s) significant administrative burdens and unnecessary complexity in complying with the broadband label requirements."

The five trade groups kept up the pressure earlier this month in a meeting with FCC officials and in a filing that complained that listing every fee is too hard. The FCC refused to bend, announcing yesterday that the rules will take effect without any major changes.

"Every consumer needs transparent information when making decisions about what Internet service offering makes the most sense for their family or household. No one wants to be hit with charges they didn't ask for or they did not expect," FCC Chairwoman Jessica Rosenworcel said.

Yesterday's order "largely affirms the rules... while making some revisions and clarifications such as modifying provider record-keeping requirements when directing consumers to a label on an alternative sales channel and confirming that providers may state 'taxes included' when their price already incorporates taxes," the FCC said.

ISPs don’t want to list all fees

Comcast and other ISPs objected to a requirement that ISPs "list all recurring monthly fees" including "all charges that providers impose at their discretion, i.e., charges not mandated by a government." They complained that the rule will force them "to display the pass-through of fees imposed by federal, state, or local government agencies on the consumer broadband label."

As we've previously written, ISPs could simplify billing and comply with the new broadband-labeling rules by including all costs in their advertised rates. That would give potential customers a clearer idea of how much they have to pay each month and save ISPs the trouble of listing every charge that they currently choose to break out separately.

Rejecting the broadband industry's request, the FCC order yesterday said:

[W]e affirm our requirement that providers display all monthly fees with respect to broadband service on the label to provide consumers with clear and accurate information about the cost of their broadband service. We thus decline providers' request that they not disclose those fees or that they instead display an "up to" price for certain fees they choose to pass through to consumers.

Specifically, "providers must itemize the fees they add to base monthly prices, including fees related to government programs they choose to 'pass through' to consumers, such as fees related to universal service or regulatory fees," the FCC said.

The FCC was ordered by Congress to implement broadband-label rules. The FCC is requiring ISPs to display the labels to consumers at the point of sale and include information such as the monthly price, additional fees, introductory rates, data caps, charges for data overages, and performance metrics. 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.

FCC pointedly says ISPs can simplify pricing

In its dismissal of the broadband industry's claims that itemizing fees would be too confusing for customers and too burdensome for providers, the FCC pointedly noted that ISPs are allowed to use a simpler pricing model:

We also disagree that clear disclosure of these fees "has the potential to cause significant confusion for consumers and add unnecessary complexity for providers" due to the "huge variety and quantity of fees on broadband providers." Providers must itemize the fees on consumer bills, and we see no reason why consumers cannot assess the fees at the point-of-sale any less than they can when they receive a bill. Providers are free, of course, to not pass these fees through to consumers to differentiate their pricing and simplify their Label display if they believe it will make their service more attractive to consumers and ensure that consumers are not surprised by unexpected charges.

Further, we are not persuaded that it will be burdensome for ISPs to itemize on the label those fees they opt to pass along to consumers above the monthly price, particularly since providers acknowledge being able to describe such fees to a consumer over the phone and on a consumer's bill once the consumer subscribes to service. We also find that any such burdens are far outweighed by the benefits to consumers when they are shopping for service... ISPs could alternatively roll such discretionary fees into the base monthly price, thereby eliminating the need to itemize them on the label.

Separately, the order said the FCC rejected a wireless-industry "request to include potentially complex and lengthy details about data allowances on the label, and instead affirm that providers can make those details available to consumers on a linked website." To maintain simplicity, the labels must "identify the amount of data included with the monthly price," and "disclose any charges or reductions in service for any data used in excess of the amount included in the plan," the FCC said.

The FCC granted a wireless-industry "request to clarify that wireless providers have the flexibility to state 'taxes included' or add similar language to the label template when the provider has chosen to include taxes as part of its base price."

FCC grants request to simplify record-keeping

The FCC also bent to ISPs on their objection to a record-keeping requirement for labels provided 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."

Under the FCC's original decision, ISPs that don't provide hard copies of the label to prospective customers in alternate sales channels would have had to document each instance in which they direct a consumer to a label. That's what broadband industry groups objected to, saying that documenting "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."

ISPs also objected on privacy grounds because the rule would require them to collect identifying information from customers or potential customers who were directed to the label.

Granting the ISPs' request, the FCC said it is "persuaded by petitioners that providers deal with millions of customers and prospective customers by phone, in retail locations, and at 'pop-up' sales outlets such as fairs or exhibitions, and that it may be challenging for providers to capture and retain such documentation when consumers are provided with access to the labels at each and every point of sale."

The FCC thus amended its rules to "clarify that the requirement to document interactions with consumers at alternate sales channels will be deemed satisfied if, instead, the provider: 1) establishes the business practices and processes it will follow in distributing the label through alternative sales channels; 2) retains training materials and related business practice documentation for two years; and 3) provides such information to the Commission upon request, within 30 days."