Internet ‘nutrition labels’ will help customers compare prices, speed and data caps

Reporting from Washington —  Consumers will be better able to determine if they’re getting a sweet deal on high-speed Internet access and avoid indigestion when they open their bills by using nutrition-like labels for broadband service unveiled Monday by federal regulators.

Modeled on the rectangular Nutrition Facts labels on food products, the new broadband labels replace information on calories, sugar and cholesterol with details on price, speed and data caps.

“If you’re going to get competition, competition, competition, you need information, information, information,” said Tom Wheeler, chairman of the Federal Communications Commission.

The FCC rolled out the voluntary labels for wired and mobile broadband to help consumers make more informed choices and avoid surprises on their monthly statements, Wheeler said.

The agency adopted a format unanimously recommended by its consumer advisory committee, which received input from industry and public interest groups, said committee chairwoman Debra Berlyn.

Internet service providers that put accurate Broadband Facts labels on their offerings would be immune to regulatory action based on new transparency requirements the FCC adopted last year with its net neutrality rules for online traffic.

See more of our top stories on Facebook >>

The so-called safe harbor protection would go into effect after the White House Office of Management and Budget gives final approval to the transparency requirements of the net neutrality rules. But Internet service providers could start using the labels before then.

The FCC said it gets more than 2,000 complaints a year from consumers about unexpected fees on their Internet service bills.

In some cases, the prices paid for broadband can be as much as 40% more than advertised after taxes and fees are added on, the FCC said.

The labels will include monthly and one-time fees, though they note that there might be additional government taxes and costs based on the consumers’ location.

Interested in the stories shaping California? Sign up for the free Essential California newsletter >>

Consumers will see the specific monthly charge and data allowance for tiers of broadband service as well as the ramifications, either in price or slower service, if they exceed the data limits.

“It is very straightforward. It’s very clear-cut,” Wheeler said. “Hidden fees have no place to hide.”

The labels also include information on filing complaints with the service provider and the FCC.

The National Cable & Telecommunications Assn., which includes major players such as Comcast Corp. and Time Warner Cable Inc., said it supported the labels even though it is among trade groups and companies that have sued to stop the net neutrality regulations.

“In today’s competitive marketplace, cable Internet providers are committed to providing consumers with accessible and relevant information about broadband services,” NCTA said.

“We appreciate this contribution by the commission to offer consumers that same information in a format they are familiar with.”

Wheeler and Berlyn were joined in unveiling the labels by Richard Cordray, director of the Consumer Financial Protection Bureau, which helped design the labels.

Created by the 2010 financial reform law, the protection bureau has focused on improved disclosures for mortgages, student loans and other financial products.

Cordray said broadband “is quickly becoming a necessary part of everyday life for millions of consumers.”

“Consumers deserve to know before they owe, with clear, upfront information about the prices, risks and terms of the deal,” he said.

[email protected]

Follow @JimPuzzanghera on Twitter.

MORE BUSINESS NEWS

Why the gig economy doesn’t work for everyone

Ski trips, beef, plastic surgery among the most unusual expense report requests

Supreme Court upholds verdict against Wells Fargo on overdraft fees in California