FCC implements new labeling rules for internet - what to expect
posted Sunday Nov 20, 2022 by Scott Ertz
There are a lot of issues when trying to compare products, no matter which product category it is. Different companies will use differing terms for the same feature. Some industries enforce a unified naming convention to solve this problem. Other times, the government feels the need to step in to unify an industry. This week, the FCC announced a new marketing convention for internet service providers (ISPs) to make it easier for customers to cross-compare services.
The problem with ISPs
ISPs have been trying to get customers to switch to their services for years. But, ISPs are not something that most consumers understand, and generally fear the difficulty of making the switch. What is involved with swapping from Spectrum to Frontier? Techies know that it's a fairly easy switch, but it's not that clear to regular consumers.
More importantly, it's difficult for consumers to look at two services and understand what the difference is between them. What am I getting for my $50 per month from Wow versus what I'm getting for my $50 per month from Verizon? Wow uses one set of terms, while Verizon uses another. So, the problem then becomes one of deciphering the marketing terms and creating a unified comparison.
There's so much to consider and compare - speed, data caps, fees, and of course price. Creating a comparison chart is easy if you know how to dive into the numbers and technical details, but that's not always possible.
The FCC solution
To solve this problem, the FCC has stepped in and created a unified marketing matrix that all ISPs will be required to implement. The concept is based on another successful government labeling matrix: the nutrition labels from the FDA. Every food product sold in the US, even those produced internationally, is required to include this matrix that shows things like fat, sodium, carbohydrates, protein, and more. It even includes a required list of all of the ingredients.
The FCC's solution comes in the form of a new labeling scheme called the "Broadband Facts." These labels will be applied to ISPs and Wi-Fi providers across the country. The labels cover several different aspects of internet service, including: price, service speed, bandwidth usage, additional fees (e.g. modem rental), package features and restrictions, minimum contract period, privacy policy, and more. In fact, Broadband Facts look just like Nutrition Facts, just to make it more familiar.
Like the nutrition labels, the Broadband Facts labels will allow consumers to get a quick and easy look at exactly what is being offered by the company. Thr standardization is, therefore, intended to make it easier to understand the differences between services and to immediately and obviously disclose what are currently hidden fees. Unified disclosure will make it easier for customers across the country.
Next Steps
ISPs will be required to implement this new labeling system across all of their marketing. In fact, they will need to include it within a small distance from any marketing, seemingly suggesting that we will begin to see these labels appear in print and television ads. The labels will also be required to be archived and made available to the Commissions upon request. Likely this is in the event of a lawsuit against the company, the FCC will be able to collect the information on demand for the instance in which an agreement was made.
From a records keeping perspective, this is going to cause a lot of trouble for the companies, with agreements changing all the time and needing to hold the labels in perpetuity. However, it is a huge move in favor of consumers.
