The Federal Communications Commission voted 3-0 to loosen its broadband nutrition-label rules, ending a Biden-era requirement that Internet service providers itemize each monthly “passthrough” fee on the price labels customers use to compare plans.
The change matters at checkout. Broadband providers can advertise a base monthly rate, then add location-specific charges to the bill. The 2023 FCC rule required providers to break out discretionary monthly fees they pass to customers, so a subscriber could see the add-ons before the first invoice arrived. Under the order approved by the commission, providers may show passthrough charges as an aggregate “up to” amount, with some added categorization.
FCC Chair Brendan Carr, a Republican, backed the rollback. Democrat Anna Gomez joined Carr and the Republican majority, while saying at the meeting that she would have preferred full fee itemization to remain in place.
“Though I would have preferred that the labels provide a complete itemization, consumers will have the option to click on a link below to learn more about each of the types of fees and what they are used for,” Gomez said.
What the new labels will show
The final order had not been made public at the time of the vote, but Gomez described changes from Carr’s earlier draft. Her office said the label’s aggregate passthrough-fee line will include two subcategories: fees remitted to state and local governments, and fees remitted to third parties.
Those subcategories will list types of passthrough charges and point customers to a provider-run webpage explaining what each fee means and how it is used, Gomez’s office said. Examples include E911 fees and pole attachment fees.
That is a narrower disclosure than the 2023 rule required. Carr’s draft order would have allowed providers to show a single maximum passthrough-fee number, according to the draft. Gomez’s office said the subcategories and explanatory links were added as a compromise.
The FCC has described passthrough fees as charges imposed by a government entity or third-party infrastructure owner, rather than fees set directly by the provider. The draft order cited state and local right-of-way fees and pole attachment fees imposed by third-party pole owners. The agency also said providers choose to pass those costs to subscribers rather than fold them into the advertised monthly price.
Labels will be easier for ISPs to hide behind a click
The order also relaxes where labels must appear. Gomez said the FCC will keep a requirement that broadband labels be available in customers’ account portals, but providers may use a hyperlink or icon rather than displaying the full label there.
The FCC said another change allows customer service representatives to discuss the label conversationally over the phone, rather than reading it word for word. Gomez said phone sales must still include critical terms such as the monthly price including monthly fees, any introductory rate and its duration, typical download and upload speeds, latency, data allowance, contract term, and early termination fees.
USTelecom, a broadband industry lobbying group, had argued to the FCC that itemized fee labels forced providers to create and update hundreds of labels because charges vary by geography and must be matched to a customer’s address.
Carr said broadband labels had become cluttered and less useful as a shopping tool. In a press release, the FCC said the prior rules produced sometimes confusing labels and raised compliance costs. Carr said providers will still have to offer a label for every standalone broadband plan, including pricing, introductory rates, speeds, and data allowances.
If the implementation date from the draft order remains unchanged, the revised rule will take effect 30 days after publication in the Federal Register.
This story draws on original reporting from Ars Technica.
