FCC Partially Kills Rules Requiring ISPs Be Clear About Usage Caps, Hidden Fees

FCC boss Ajit Pai made it clear that overturning net neutrality would be the new FCC’s top priority (apparently right behind paying lip service to the poor), and his behavior is making it very clear that wasn’t an empty promise. Pai recently killed the FCC’s inquiry into Verizon and AT&T’s zero rating, which lets both companies use arbitrary usage caps to give their own content an unfair market advantage. The previous FCC argued both ISPs were violating net neutrality and engaged in anti-competitive behavior. The new FCC, in contrast, now says zero rating “enhances competition in the wireless marketplace.”

Now Pai’s chipping away at the transparency portion of the FCC’s net neutrality rules as well, insisting they’re little more than “excessive reporting obligations.” The transparency requirements, originally passed in 2010, required that ISPs make the following items perfectly clear when selling service to consumers:

  • Price — the full monthly service charge. Any promotional rates should be clearly noted as such, specify the duration of the promotional period, and note the full monthly service charge the consumer will incur after the expiration of the promotional period.
  • Other fees — all additional one-time and/or recurring fees and/or surcharges the consumer may incur either to initiate, maintain, or discontinue service, including the name, definition, and cost of each additional fee. These may include modem rental fees, installation fees, service charges, and early termination fees, among others.
  • Data caps and allowances — any data caps or allowances that are a part of the plan the consumer is purchasing, as well as the consequences of exceeding the cap or allowance (e.g., additional charges, loss of service for the remainder of the billing cycle).”
  • The FCC estimated that it should take ISPs about 6.8 hours per year to adhere to these requirements, which have an obvious benefit to consumers. But because some ISPs repeatedly complained that the requirements were “too onerous” (without ever really supporting that claim with data), the FCC temporarily exempted ISPs with fewer than 100,000 subscribers from the rules. But last week, the FCC not only extended the rules, but expanded them claiming this would let ISPs “allocate scarce resources toward expanding modern networks that bring economic opportunity, job creation and civic engagement to all Americans.”

    But lone dissenting FCC commissioner Mignon Clyburn was quick to point out that under the surface, this had little to do with helping small ISPs (again, given the small burden of 6.8 hours in extra work per year), and everything to do with slowly-but-surely rolling back oversight of larger companies utilizing smaller holding companies:

    “Many of the nation’s largest broadband providers are actually holding companies, comprised of many smaller operating companies,” Clyburn said. “So what today’s Order does is exempt these companies’ affiliates that have under 250,000 connections by declining to aggregate the connection count at the holding company level.”

    The original exemption for ISPs with 100,000 or fewer subscribers was applied to the aggregated total of subscribers “across all affiliates,” so that small ISPs owned by big holding companies wouldn’t be exempt. That changed today, according to Clyburn.

    Consumer group Public Knowledge quickly issued a statement questioning the wisdom of making often convoluted and misleading broadband bills more difficult to understand:

    “Yet again, Chairman Pai has acted to weaken consumer protections at the FCC. Today’s action means that more ISPs could withhold essential information about their broadband pricing and service, making it harder for many more subscribers to make informed decisions and hold their providers accountable. How can it be good for consumers if companies conceal anything about the price, speed, and data caps for their broadband service?”

    If you hadn’t noticed already, easing government and public oversight of one of the least popular and least competitive markets in America — then pretending it’s either for the poor or for “modernization’s” sake is new FCC boss Pai’s modus operandi. It doesn’t matter whether we’re talking about Pai’s decision to help prison telco monopolies overcharge inmate families, his decision to kill plans for more cable box competition, or the recent efforts to dismantle net neutrality piecemeal, this is all being set to the backdrop of bogus empathy for the little guy. And this is just his first month in office.

    As we noted previously, Pai won’t repeal net neutrality via FCC process because it would open the door to a public-comment period during which his decision would be quite-justly lambasted. Instead, the plan is to chip away at the rules bit by bit until the GOP pushes either a Communications Act rewrite or other legislation that puts net neutrality — and likely the FCC’s entire authority over broadband ISPs — to bed permanently. If you really like the end result of having large ISPs and revolving door regulators dictate internet policy (read: Comcast), you should be pretty excited about what the future has in store.

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    Author: Karl Bode

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