Broadband Mapping & Data
Emma Gautier: Broadband Labels Help Transparent Providers Show Off Their Service
‘It should be easy to understand what you are paying and what you are getting for that price.’
The Federal Communication Commission recently published rules for its broadband nutrition label provides a partial victory for Internet subscribers and a potential marketing advantage for fiber providers – but may pose a challenge for wireless Internet service providers.
Though the new rules were finalized in October, Internet Service Providers have until April 10, 2024 to publish their broadband labels, though providers with 100,000 or fewer subscriber lines have until October 10, 2024.
Just like the label on the back of packaged food in grocery stores helps shoppers understand the nutritional value of the food they are buying, the broadband label requires ISPs to disclose their broadband pricing and service information (at the point of sale) to help potential subscribers make informed decisions about the service they are signing up to get.
Transparency on Display
Though the label is just another red-tape requirement for some providers, others see it as an opportunity to show off the quality of their services.
Google Fiber, for example, published via social media and its blog a preliminary version of its own broadband consumer label, just days after the final rule was published, and six months before its deadline.
In a post titled “Is your internet high fiber?,” Ariane Schaffer, the company’s Government Affairs & Public Policy Manager, wrote about how the broadband nutrition labels are “a great idea,” adding “we didn’t think that Google Fiber customers should have to wait for that clarity. As of today, GFiber is launching nutrition labels for our residential 1 Gig, 2 Gig, 5 Gig, and 8 Gig products — some of the first to roll out anywhere.”
Schaffer told ILSR, “we think that transparency is the right thing for the customer. It should be easy to understand what you are paying and what you are getting for that price.”
The label helps Google show off its consistent speeds and straightforward pricing structure, especially when compared with large monopoly providers known for making it difficult, if not impossible, for subscribers to figure out exactly how much they can expect to pay month-to-month.
Planet Networks, an ISP serving just over 6,000 subscribers in New Jersey, Pennsylvania, and New York, didn’t wait until the final requirements were published to get their label over a year ago. The ISP posted the label on social media in addition to publishing it at the point of sale, the minimum requirement.
Planet Networks CEO Robert Boyle told ILSR that putting the label together was simple:
“We don’t play games with pricing and we overprovision everything to ensure customers always get what they are paying for.”
He believes Planet Network’s straightforward and honest pricing, exhibited on the label, gives the provider a market advantage, which is why the company shared it on its social media platforms. “I think greater transparency is going to help us compete against the cable company when they advertise one price, but actually bill significantly more after all their made up fees that they disguise as government taxes and surcharges,” Boyle said. “There is no sales tax nor other government taxes in any jurisdiction where we do business.”
Boyle also mentioned that Planet Networks would eventually publish the label on monthly bills – something advocates fought hard for but that didn’t make it into the final ruling.
A Challenge for WISPs
While the label is a great opportunity for fiber providers to show off their speeds, some wireless Internet service providers (WISPs) are concerned that meeting the requirements will be more difficult for them. WISPs with straightforward and transparent pricing structures shouldn’t have an issue when it comes to reporting cost of service. The challenge is reporting performance metrics.
Matt Larson, CEO of Vistabeam, a wireless provider serving over 8,500 subscribers across Colorado, Kansas, Nebraska, & Wyoming, told ILSR that “it’s almost impossible to put out performance metrics that will be consistent across the board because network conditions change constantly.” Speed and latency, he said, vary greatly depending on what time of day it is and how much traffic there is.
Larson worries that the label will create unrealistic expectations by incentivizing providers to overstate their services. He also emphasized that it leaves out other important information that could help potential subscribers make decisions, such as the level of competition in a given area, what kind of company is offering the service, and the provider’s responsiveness to service outages and billing concerns.
Bringing Transparency to Market
Ideally, no ISP would try to lure subscribers into purchasing broadband service through complex pricing structures or other deceptive sales tactics. And while the new labels may be a headache for some providers, the idea behind requiring them is rooted in enabling the transparency true free markets require, and to establish mechanisms that are in the best interest of subscribers.
Although, it should also be noted that a number of public interest groups agree the label requirements don’t go far enough, as noted by Free Press policy director Josh Stager who points out how the FCC opted not to require the label be put on the monthly bill (only at the point of sale), adding that the new rules still allow providers to hide the label from subscribers who are not aware that the label even exists.
Still, we hope to see the new labels nudge providers away from opaque pricing and sneaky deals that are actually a huge part of the reason why big cable and telecom companies are among the most hated companies in the nation.
Emma Gautier is a Researcher with ILSR’s Community Broadband Networks Initiative. She supports data collection and analysis within the broadband initiative. Emma recently received a BA in Women’s and Gender Studies from Carleton College, and since graduation has been working in research, advocacy, and political organizing for social and environmental justice. She is interested in the synthesis of research and on-the-ground action in communities. This piece was originally published on communitynets.org on December 19, 2023, and is reprinted with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Broadband Mapping & Data
Bruce Kushnick: Look Overseas, America’s Prices for Broadband are Out of Control
America’s prices are 5–10 times higher than comparable data from other countries.
This chart, taken from the European Union Report on Broadband, shows that a triple play — phone, cable TV, broadband-Internet, can cost about 36 Euros for a service with 30–100 Mbps speeds, and 21 Euros for a stand alone service.
The average U.S. triple play is about $220.00 a month, and with an exchange rate of 1 Euro=$1.09 Dollars, the overcharging, which we documented, is $150+ a month — or more.
The Digital Divide was created, in large part, because prices are unaffordable, and America is now paying for over 20 million low-income families to have broadband — up to $30. a month allowance.
America’s prices are out of control, yet where are the investigations and audits to explain how overseas prices are a fraction of what we are paying in the U.S.? And why are we giving billions to the companies that helped to create the Digital Divide in the first place?
We assembled our previous research with new findings in this new series, using both 3rd party expert analysis as well as actual examples from December 2023, comparing and detailing the out of control US prices vs the services of free Telecom in France and Spectrum-Charter in New York City.
America’s broken promises and the state 5-year broken broadband plans
America’s prices for broadband have made high speed internet unaffordable for many households, Moreover, the pandemic revealed a major Digital Divide where whole areas of the U.S. were never upgraded to fiber optic networks, much less high speed services even over the copper wires. Thus, no competition to lower rates.
And every state now has plans to ‘bridge the Digital Divide’, but in all of the state broadband plans, none have addressed how the Divide started in their state or about the massive financial price divide between America and the EU or Asian countries that charge a fraction of the prices charged in the US.
Over $150 billion is being given out in state and federal government subsidies over the next few years, and much of It going to the companies that helped to create the Digital Divide.
The states must investigate the core issues as they impact almost every FCC, NTIA, FTC, Congressional and state current and future actions.
The opening chart tells the tale of how the European countries did not allow for massive multiple additional made up fees, such as the Broadcast-Sports fee ($27.90 on a Spectrum Triple Play). Moreover, the services do not charge ridiculous prices for equipment, such as set top box, that is required to use the service. Also, because there is competition, customers have choices and prices have not skyrocketed, but are actually going down.
America’s prices are 5–10 times higher than comparable data from other countries
How can America’s prices for the stand-alone, double and triple play — (phone, cable TV and ISP-broadband) be 5–10 times more when comparing data from other countries, as highlighted in the European Union Commission’s report, published July 2022 for the year 2021. And, as the report details, even basic stand-alone high speed broadband prices overseas are a fraction of what we’re paying in the U.S.
- America’s “Double play” — high speed broadband and phone service — is being overcharged, on average, almost $75 a month — a whopping $900 a year.
- The “Triple play” is being overcharged by $180 a month on average; this comes to overcharged, over $2,200 for the triple play.
The current triple play in America, after the promotional prices end, is now around $220.00 a month, yet overseas, the average was around $40 a month, but the prices overseas are in decline. However, in some countries, it can be as low as $23.00 for 200 Mbps or more; only $15 for the double play.
According to the EU report, we’ve even been beaten out by Bulgaria, Romania and let’s not forget Slovakia:
- “Overall, Lithuania and Romania have the most attractive prices for broadband internet in the EU. All the offers in these countries belong to the cluster of the least expensive countries in their respective baskets. Bulgaria, Latvia and Slovakia follow. Poland, Hungary, France and Spain have low prices especially for Triple Play.”
But when the EU report says prices are “attractive”, we are talking $10–12 bucks a month for stand-alone broadband and $20–23 for the triple play, with speed of 200 Mbps or more.
By the way, Bulgaria does get Netflix and their Top 10 shows are close to America’s viewing.
How is it possible that America’s Triple Play is $150-$200 a month over what is being charged overseas? That’s over $2,200.00 a year ‘extra’ being charged to families — including low-income families and fixed income seniors. This is on top of the fact that there could be only one or no providers of high-speed services in the rural regions or in low-income neighborhoods of cities.
It would be one thing if it was a small differential between the overseas EU group and others price of service, but this is a difference that is too large to be ignored.
What are the underlying issues?
No Serious Competition to keep market forces and rate increases at bay. First, AT&T et al. failed to show up with high-speed competition to keep the cable companies, the other group of providers that use a wired connection, in check. For example, in CA, AT&T-Pac Bell had obligations to bring fiber optic broadband throughout the state and our maps showed that much of AT&T’s entire Los Angeles county region had been left to deteriorate and not upgraded as promised with fiber optic infrastructure.
Made-up Fees and surcharges are out of control. One of the sleaziest practices in the US has become the addition of made-up taxes, fees and surcharges that are not mandated or government sanctioned. This is being done so that the companies can quote a price that is missing 20–40% of the total costs,
Made-Up Taxes include:
- Broadcast and Sports surcharge: $15–24.00 a month
- Cost Recovery Fee: $1.99–2.99
- Admin Fees: $1.49-$2.99 per month
- Pass-through taxes, Gross receipts tax, telecom taxes
The largest and most egregious added fee is now the Sports and Broadcast surcharge, which is really 2 separate charges that have been merged in many cases:
“Made-up, Broadcast-Sports Fees Up 820%; Overcharging $250+ a Year — then Quintuple-Taxed, Fee’d and Surcharged.” This article was written in December 2021, and along the way there have been increases bringing the total charge on the Spectrum NY June 2022 bill to $23.70 a month. This one fee on the Spectrum NY Triple play bill is more than the entire charges for a triple play in many overseas EU countries.
This charge went up to $27.90 a month extra in 2023. That is an overall increase of 1,140%.
- Quadruple Taxed, Fee’d and Surcharged. — If the increases to this one fee is not enough, there are made-up taxes, fees and surcharges being applied to this fee as it is considered ‘revenue’ to the company and is taxed as such. And some of these surcharges are actually tax pass-throughs where the company gets to have the customer pay the company’s taxes.
- It is impossible to calculate the exact tax assessment as there is no ‘Rosetta Stone’ to be able to unravel how each tax, fee and surcharge is applied.
But, considering that basic telecom taxes can be 12–20% depending on the city and state, if a 15% tax is applied, that would add an additional $3.55 more per month.
- Not included in the advertised price: To add irony to obfuscation, this fee is never included in the advertised rates, nor is it added completely in the promotional price, making the increases after the promotion even more egregious.
- Not included in the EU statistics for the U.S. Triple Play: Ironically, the EU informed us that they do not include the extra charges and fees in the US because — well, the other countries only have a VAT (Value Added Tax), and not the made-up fees.
- No Oversight, No Audits; Regulators Failed U.S.: The idea that a state-franchised cable service or the Holding Companies that control the state telecommunications public utility can just make up fees and add them to bills with no one asking for a cost analysis or some other justification to raise this make-believe charge, should have the peanut gallery screaming.
- Public has Amnesia: No one knows who these local telecom companies are or what they’ve been able to get away with. And virtually no one could answer basic questions about who the companies are or the services they offer.
- Let’s give government subsidies to keep America in a perpetual state of “Please Sir May I have another?” Currently there are subsidies being given to low-income families to go online, which are then handed over to the same companies that have caused this Divide in the first place; i.e.; a new flavor of Corporate Welfare. We will address these issues in an upcoming story.
The telecom holding companies that control the critical infrastructure wires, towers and antennas created the Digital Divide. They also control the pricing of all services, wireline, wireless, broadband, internet and even cable, and as we will discuss, they also were able to manipulate the accounting formulas to have the state telecom utility act as a cash machine to fund, illegally, the other lines of business.
America must go after these cooked books and must clean up the mess. There is plenty of money to get America upgraded, and it must be seen as the first step in LA County to clean up the mess and decades of public policy and regulatory issues.
Government subsidies, both state and federal, to companies who have created the Digital Divide and can control the prices and profits over the public utility wires needs immediate investigations — not more gifts of largesse.
Bruce Kushnick is Executive Director of New Networks Institute and a founding member of the Irregulators. He has been a telecom analyst for 40 years, and playing the piano for 65 years. A version of this piece originally appeared on Medium on January 9, 2024, and is reprinted with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Broadband Mapping & Data
Broadband Measurement Summit Announced for March 7
With state broadband challenges underway, Broadband Measurement Summit brings BEAD into dialogue with FCC nutrition labels.
WASHINGTON, January 9, 2024 – Broadband Breakfast is pleased to announce the Broadband Measurement Summit on Thursday, March 7, in Washington, D.C.
This new one-day event will run from 8:30 a.m. to 3:30 p.m. and brings together the top stakeholders in understanding broadband speeds, prices, availability, reliability and competition. The Summit is in-person, but with a webcast component.
The Early Bird price of $195 available until Friday, February 9, 2024. Existing Breakfast Club Members take an additional $100 off the in-person event.
Sign up for the Broadband Measurement Summit, and visit the event page for updated information about panelists, keynotes and sponsors.
Broadband Mapping & Data
NTIA Endorses FCC’s Proposed Increase of Broadband Speed Benchmark
The FCC sought comment on upping the definition to 100 * 20 Mbps.
WASHINGTON, January 3, 2024 – The National Telecommunications and Information Administration is backing the Federal Communications Commission’s proposal to alter the definition of broadband to increase the speed benchmark.
The current definition, set in 2015, requires a speed of 25 Megabits per second download and 3 Mbps upload for internet service to be considered broadband, or high-speed internet. The commission sought comment in November on a proposal to increase that threshold to 100 * 20 Mbps, in addition to using more data sources in its assessment of broadband availability in the U.S.
NTIA officials met with commission staff on December 21 to express support for the move, according to an ex parte letter the agency filed last week.
“We support the Commission’s proposal to raise the speed threshold for fixed broadband to 100 Mbps downstream and 20 Mbps upstream,” the agency wrote, saying a higher benchmark would better reflect user needs and bring the standard in line with the Infrastructure Act’s Broadband Equity, Access and Deployment program, which the NTIA is tasked with managing.
That $42.5-billion broadband expansion effort already has a 100 * 20 Mbps benchmark, meaning infrastructure funded by the program will be required to provide at least that speed, and areas currently receiving slower internet will be eligible to be served with BEAD funded infrastructure. Homes and businesses receiving less than the current FCC benchmark of 25 * 3 Mbps are given special priority.
The commission is required by section 706 of the Telecommunications Act of 1996 to conduct annual assessments of the “availability of advanced telecommunications capability to all Americans.” In the same November notice of inquiry, the FCC proposed adding a number of new data points to that assessment, including latency, affordability, adoption, and equitable access among minority groups. That will partly be facilitated by the commission’s new Broadband Data Collection database, which has more precise information from internet providers.
The NTIA endorsed all of that as well, writing: “The Section 706 inquiry has the potential to serve as an important indicator of our nation’s progress toward achieving digital equity, and it will be best equipped to do so if it examines the available data on a wide range of challenges in this field.”
The agency added that it is working on a project with the Census Bureau to estimate broadband adoption in small geographic areas.
Industry response
In comments to the commission, broadband industry groups expressed broad support for the 100 * 20 Mbps benchmark, but some disagreed on the commission’s proposed long-term goal of 1 Gbps * 500 Mbps – something the NTIA did not touch on.
CTIA, a trade group representing wireless providers, wrote that while the commission noted some situations in which users require more than 100 * 20 Mbps, “none of these justifies a fixed broadband benchmark above 100 * 20 Mbps, even as a long-term goal.” That’s a view shared by WISPA, an association of wireless broadband providers.
NTCA, which represents small and rural broadband providers, advocated for an even higher long-term goal, but did not specify an exact number. Trade group INCOMPAS pushed for setting the download benchmark to 1 Gbps now, rather than in the future.
USTelecom, another broadband industry group, said the long-term 1 Gbps * 500 Mbps goal would be impractical, as the only technology capable of providing those speeds is fiber-optic cable.
“There are locations where deployment of fiber is not practical now and may never be,” the group wrote in comments to the Commission.
CTIA also opposed adding non-deployment metrics like adoption and affordability to the 706 inquiry, arguing that reporting requirements for existing Universal Service Fund programs are a better venue for assessing them.
This story was updated to reflect the current definition of broadband, 25 * 3 Mbps.
-
Open Access3 weeks ago
Former Utah House Speaker Spearheads Campaign Against UTOPIA Fiber
-
Funding4 weeks ago
Virginia and NTIA at Odds on BEAD Low-Cost Option
-
#broadbandlive4 weeks ago
Broadband Breakfast on January 3, 2024 – The Broadband Forecast for 2024 with Tech Journalists
-
12 Days of Broadband3 weeks ago
Broadband Breakfast Presents the 12 Days of Broadband
-
12 Days of Broadband3 weeks ago
12 Days: How Soon Will the Affordable Connectivity Program Expire?
-
Congress4 weeks ago
Republican Lawmakers Criticize ACP as ‘Wasteful’ in Letter to FCC Chairwoman
-
Satellite3 weeks ago
Starlink Plans to Join Affordable Connectivity Fund Subsidy Program
-
Spectrum3 weeks ago
President Biden Signs Law Giving FCC Limited Authority Over Spectrum Licenses