By David Shepardson
WASHINGTON (Reuters) – The Obama administration on Monday unveiled new labels for broadband and mobile Internet service, aimed at helping the nation’s web users make price and service comparisons.
The labels from the U.S. Federal Communications Commission are similar to federally required nutrition labels on nearly all U.S. foods or information on credit card billing statements and will include disclosures of all fees and add-on charges and service speed and reliability. The new labels are recommended but not legally required, though firms that use them will not face government investigations into transparency rules.
The FCC said there are 97.8 million American households and business subscribers to fixed broadband service and 223 million U.S. mobile phones with internet access, according to the most recent data.
More than 85 percent of all Americans use the Internet and typically spend $60 or $70 a month on service, the FCC said, and the new labels could be a big factor in which service consumers choose to buy.
FCC Chairman Tom Wheeler and Consumer Financial Protection Bureau Director Richard Cordray unveiled the new labels at a press conference in Washington – and were supported by a committee of industry and consumer groups. Wheeler said the key to robust competition was better information for consumers.
“This is industry and advocates coming together unanimously,” Wheeler said. “Customers deserve to know the price they will actually pay for a service and to be fully aware of other components such as data limits and performance factors before they sign up for service.”
Cordray said “consumers deserve to know before they owe, with clear, upfront information about the prices, risks and terms of the deal.”
Scott Bergmann, vice president of regulatory affairs at wireless trade association CTIA, said carriers “already provide disclosure and transparency as part of the consumer code for wireless service. The competitive nature of the wireless broadband market does more for consumers than regulation can hope to achieve.”
The label is part of the 2015 FCC net neutrality order that requires new disclosures by Internet providers. A federal appeals court heard a separate challenge to the net neutrality order in December, but hasn’t yet ruled.
(Reporting by David Shepardson; Editing by Andrea Ricci and Alan Crosby)