How the net neutrality repeal helps ISPs keep their hidden fees hidden

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Hidden fees that show up on broadband bills after customers sign up for service have long been a source of frustration for Internet users.

Because advertised prices often don’t reflect the full cost of service, the Federal Communications Commission in 2015 forced ISPs to be more transparent with customers about hidden fees and the consequences of exceeding data caps. The new requirements were part of the net neutrality rules—and are therefore going to be eliminated when the FCC votes to repeal the rules next week.

While FCC Chairman Ajit Pai is proposing to keep some of the commission’s existing disclosure rules and to impose some new disclosure requirements, ISPs won’t have to tell consumers exactly what everything will cost when they sign up for service.

Rules were expanded in 2015

There have been two major versions of the FCC’s transparency requirements: one created in 2010 with the first net neutrality rules, and an expanded version created in 2015. Both sets of transparency rules survived court challenges from the broadband industry.

The 2010 requirement had ISPs disclose pricing, including “monthly prices, usage-based fees, and fees for early termination or additional network services.”

That somewhat-vague requirement will survive Pai’s net neutrality repeal. But Pai is proposing to eliminate the enhanced disclosure requirements that have been in place since 2015.

Here are the disclosures that ISPs currently have to make—but won’t have to after the repeal:

  • 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).

Pai’s proposed net neutrality repeal says those requirements and others adopted in 2015 are too onerous for ISPs.

“[W]e retain the transparency rule as established in the [2010] Open Internet Order, with some modifications, and eliminate the additional reporting obligations of the [2015] Title II Order,” Pai’s proposal says. “We find many of those additional reporting obligations significantly increased the burdens imposed on ISPs without providing countervailing benefits to consumers or the Commission.”

The FCC is also making it harder for consumers to find ISPs’ disclosures. Under the 2010 and 2015 rules, disclosures had to be made on provider websites and at the point of sale so that consumers would know what they’re getting into before they buy service.

But Pai’s proposal says ISPs should be able to make disclosures in “the least burdensome” way. Going forward, this is how the FCC will require disclosures to be made:

We give ISPs two options for disclosure. First, they may include the disclosures on a publicly available, easily accessible website… Alternatively, ISPs may transmit their disclosures to the Commission, and we will make them available on a publicly available, easily accessible website.

This less-strict disclosure process will clearly apply to new transparency requirements that we’ll talk about later in this article. But it’s not clear to us whether any of the disclosures being retained from the 2010 rules will have to be made at the point of sale. We asked the FCC this question last week and today and are still waiting for an answer.

Network management disclosures

In addition to price and data cap disclosures, the 2010 and 2015 transparency rules also required ISPs to tell customers about network performance and how they manage their networks.

Speed and latency had to be disclosed under the 2010 rules, along with steps ISPs take to manage congestion, limitations imposed on applications, and device attachment rules and restrictions.

The 2015 rules enhanced these requirements by, for example, adding packet loss as a required disclosure. The enhanced disclosures had to be “reasonably related” to the network performance in any given consumer’s geographical area.

Limitations imposed on certain types of users or data plans also had to be disclosed. In some cases, consumers had to be notified directly.

“We enhance the rule to require a mechanism for directly notifying end users if their individual use of a network will trigger a network practice, based on their demand prior to a period of congestion, that is likely to have a significant impact on the end user’s use of the service,” the 2015 rules said.

The FCC also created optional “nutrition labels” that ISPs could use as one method for complying with the enhanced transparency rules:

Pai’s repeal will eliminate the direct notification requirement, calling it “unduly burdensome to ISPs and unnecessary in light of the other forms of public disclosure required.”

The optional broadband nutrition labels are also being dropped in Pai’s plan. The enhanced disclosures including the packet loss and geographic requirements are being dropped as well, with Pai arguing that consumers generally don’t understand the network performance statistics:

[C]onsumers have little understanding of what packet loss means; what they do want to know is whether their Internet access service will support real-time applications, which is the consumer-facing impact of these performance metrics.

We asked Pai’s office whether he thinks consumers are also confused by the soon-to-be-eliminated disclosures about hidden fees and the consequences of going over data caps. We haven’t received an answer.

The best disinfectant

The new version of the transparency rules are influenced by Pai’s proposed repeal of bans on blocking, throttling, and paid prioritization. Pai argues that consumers will be protected as long as ISPs disclose such behavior.

After the repeal, ISPs will be able to block, throttle, and prioritize content in exchange for payment. They’ll have to disclose those activities on their websites or by providing the information to the FCC, though they will not have to make those disclosures to consumers at the point of sale.

In addition to blocking, throttling, and paid prioritization, ISPs will have to disclose prioritization of their own content, congestion management practices, and limitations imposed on specific types of applications or devices.

Those disclosures, even without actual bans on those practices, will be enough to protect Internet users, Pai argues.

“‘Sunlight,'” Justice Brandeis famously noted, ‘is… the best of disinfectants,'” Pai’s proposal said.

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