Per New FCC Rule, Internet Service Providers Must Display Broadband ‘Nutrition Labels’ for Clearer Pricing
Last updated April 16, 2024
Internet service providers (ISPs) have always made it difficult for customers to know what they’re getting and for how much. Low prices pitched in ads are never what you wind up paying each month once all taxes and fees are included.
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The Federal Communications Commission (FCC) wants to bring some transparency to the broadband marketplace. A new FCC rule, which took effect last week, requires ISPs to use standardized “Broadband Facts” labels (similar to the Nutrition Facts labels on packaged foods) that display “accurate information about the cost and performance of internet services,” in a format that’s “clear, easy to understand.”
“Consumers across the country can now benefit from consistent, transparent, and accessible point-of-sale information about broadband prices and services,” said FCC Chairwoman Jessica Rosenworcel. “These ‘nutrition label’ disclosures are designed to make it simpler for consumers to know what they are getting, hold providers to their promises, and benefit from greater competition—which means better service and prices for everyone.”
The new broadband labels are required to be displayed at all points of sale, including online and in stores. They will provide important information about prices, introductory rates, data allowances, and speeds. Internet providers must display a separate label for each broadband plan they offer.
“This is the stuff that hasn’t always been disclosed upfront, but now it’s going to be required,” said Teresa Murray, director of the consumer watchdog office at U.S. PIRG, a nonprofit advocacy group. “Transparency is important because if you and I are putting out our hard-earned money, we deserve to know what we’re buying, what we’re paying for, and it’s not OK for companies to lure you in with one price and then change it on you halfway through the transaction—or worse, after the transaction.”
The new broadband labels are modeled after the familiar Nutrition Facts labels required on food packages since 1994. By requiring every company to use a standardized format, the FDA made comparison shopping at the grocery store easier. Shoppers know where to look for amounts of calories or sodium. The new broadband labels should make it easier for anyone shopping for new internet service to find specific information that’s important to them—whether it’s pricing or download speeds.
“It separates these pieces out, whereas we normally see all of these things mixed together in a very confusing format,” said Erin Witte, director of consumer protection at the Consumer Federation of America. “Broadband internet bills are extremely confusing—and this is not by accident. It’s by design. Complicated bills are much harder to contest, so consumers aren’t as likely to know if there’s a mistake. They’re not even really sure what they’re paying for.”
The label rule is now in effect for the major broadband providers, including wireless companies that offer broadband service. Internet providers with fewer than 100,000 subscribers have until Oct. 10, 2024, to comply. By then, all Broadband Facts labels must be machine-readable, making it easier for third parties to collect these data to create comparison shopping tools.
A Lot of Information Included
Here is the template for the new label:
The most important information is listed at the top, starting with the monthly price (in bold) and any additional charges and fees:
Price: The monthly price is the cost of the plan before additional monthly charges and fees, such as modem rental and taxes. The company must disclose if this is an introductory offer. If so, the label will list how long that promotional rate applies, and what the monthly price will be once the promotional period ends. The length of the contract, if there is one, must be listed, along with a link to that contract. Even on month-to-month plans, the FCC noted, there is usually a contract involved.
Additional Charges: Here, you will find ongoing monthly fees and one-time purchases, such as a “connection” or “installation” fee, or the cost of a modem or other equipment. Government regulatory fees passed along to the customer and government taxes must also be listed. If there’s an early termination fee, the cost must be listed.
Discounts & Bundles: Some internet service providers offer discounts or special pricing options for customers who use their own equipment, or bundle their broadband service with other services (such as video, phone, or wireless service). A link will be provided that connects to those offers.
Speeds Provided: The typical download speed, typical upload speed, and typical latency.
Data Allowance: You will see how many gigabits of data are included in your monthly plan, and the cost for additional data if you go over the monthly allowance.
Additional Information: The bottom of the label includes links to the company’s network management and privacy policies, a phone number and a web address for customer support.
The FCC created a Glossary of Terms that explains all the categories listed on the broadband label. It’s also available in Spanish.
A Few Drawbacks
While consumer groups commend the FCC for issuing the rule after years of pushback from the industry, they wanted the commission to require internet providers to make the new broadband labels accessible in a customer’s account or part of their monthly bill.
“The ISPs fought that, and so far, the FCC has agreed with them,” said Justin Brookman, director of technology policy at Consumer Reports. “Hopefully, at some point, maybe, they can expand the rule to require companies to do that.”
By making it possible for customers to access the label after purchase, they can check back to see what they’re getting for their money, and maybe make a change.
Or, if you receive an offer from another company that seems to be a better deal, you can easily compare.
“That’s part of the attraction of transparency,” U.S. PIRG’s Murray said. “When you’re trying to make an apples-to-apples comparison, you know that everything is the same.”
Disclosure does not solve another problem: lack of competition. Many Americans don’t have a choice of ISPs.
“The lack of competition means that prices are overall higher than they should be, and there are other things the FCC should be doing about that,” Brookman told Checkbook.
Even for those with only one available internet provider, the new disclosure rule will help them understand what they’re paying and what they’re getting—and that’s a big improvement. It might help customers discover billing mistakes, or find an easy way to lower their monthly bill.
More Info:
File a complaint with the FCC Consumer Complaint Center if you find that an ISP isn’t displaying the required broadband label or has posted inaccurate information about its fees or service plans.
If you have a question about accessibility requirements for the Consumer Broadband Disclosure Labels, contact the FCC’s Disability Rights office at 202-418-2517 for a voice phone call, at 844-432-2275 by videophone, or by email at [email protected]
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Twitter, and at ConsumerMan.com.