Taking Charge: FCC Launches Consumer-First Initiatives

At the Federal Communications Commission (FCC), a whirlwind of activity characterized the last two years. The debate on Network Neutrality loomed especially large throughout most of 2014 and into the early part of 2015.

While the FCC did reach a historic decision last spring to implement new “Title II” guidelines enforcing “Net Neutrality” through the Open Internet Order, Internet Service Providers (ISPs) such as Comcast, Verizon, and AT&T quickly sued – and now the fight continues in D.C. Appeals Courts.

Soon after, in an all-too-obvious attempt to undermine the new rules – at the expense of consumers, of course – many of these same companies developed a way to exploit loop holes in the form of what are often referred to as “Zero Rating” plans (more on this topic in a blog entry scheduled for later this month).

This year, the FCC took up two new issues that CUB believes are essential for consumers to understand.

For months, rumors floated in and out of the news cycle about FCC plans to heavily modernize the Reagan-era telephone subsidy program known as Lifeline. CUB reported last June about the need to address ballooning digital inequities by updating Lifeline for the 21st century.

The core principal behind the Lifeline program is that folks living at or below 135% of the federal poverty line, or those participating in certain state or federal programs (including but not limited to: Medicaid, Supplemental Nutrition or Public Housing Assistance, Head Start, or support from the Bureau of Indian Affairs), are eligible for a $9.25/month discount on their landline or mobile phone bills.

The program met an essential need when it was first introduced, but does not meet the growing needs of customers in an increasingly digitally connected world. With this in mind, the FCC made a big leap in March by approving new rules to help consumers interested in purchasing broadband service – as opposed to standalone home or mobile telephone service.

Under the new rules, customers must still choose one service to apply their discount. But starting later this year, they can also apply the subsidy toward broadband options: 1) stand-alone broadband; 2) fixed or mobile bundled voice-broadband packages; or 3) stand-alone voice service over the Internet. It’s important to note that different rules apply on Tribal lands in the form of additional subsidies.

A revamped Lifeline program reflects the conditions today by aiming to tackle a growing digital divide. Not everyone is happy with the result - service providers are understandably wary of new minimum standards for download/upload speeds and usage allowance, whereas advocacy and internet transparency groups argue that a monthly discount of $9.25 is far too low, and that when forced to choose between purchasing telephone or broadband service, low-income consumers will ultimately be left out to dry.

We at CUB acknowledge both sides of the argument, but in the end maintain that a step in the right direction is far better than no step at all. Stay tuned for updates about the program rollout as it unfolds.

The other recent FCC initiative concerns nutrition-like labeling for broadband services. Some years ago, because most shoppers won’t eat something without first having at least some idea of the ingredient(s), the Food and Drug Administration developed nutrition labels. The FCC argued, and CUB agrees, that the same should apply for broadband.

Until now, consumers have faced challenges in making apples-to-apples comparisons between different broadband service providers, and the confusing array of service packages they provide. But to make smart decisions when purchasing broadband service (for either home or mobile consumption), consumers must first have access to straightforward information about pricing, performance, and network practices.

Luckily, new Internet transparency rules are a central feature of last year’s Open Internet Order. The rules require ISPs to clearly label their products in order for consumers to make decisions based in reality and not on guesswork alone.

The FCC created two recommended templates for providers to use for labeling broadband services – one for landline and the other for mobile service. While the burden still falls on consumers to get up to speed (pun intended) about the broadband products they want to buy, the hope is that service providers will use the templates to the point that they are as familiar to consumers as nutrition labels.

The FCC and current Administration have made broadband adoption and improving digital equity outcomes a top priority, and so sweeping policy changes have been set into motion. CUB will continue to keep a watchful eye and report on how these changes affect customers in Oregon.

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