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Analysis
The Federal Communications Commission (FCC) recently announced that it will require internet service providers (ISPs) to display a “nutrition label” with important information to allow consumers to compare their offerings to other providers.
The “nutrition label,” which is modeled after the labels seen on food items, would display broadband provider’s speeds, prices, fees, data allowances, and more. FCC Chairwoman Jessica Rosenworcel said the labels will need to be “fully displayed when a consumer is making a purchasing decision” such as the “main purchasing pages that providers have online.”
The plan to require providers to show this information in a label format has been in the works for years, and President Joe Biden urged the agency to move forward with the labels in his July 2021 executive order regarding competition.
“You shouldn’t have to be a lawyer to know just what is in your internet service plan or an engineer to understand just how your provider is treating your data. Broadband nutrition labels are designed to make it simpler for consumers to know what they are getting, hold providers to their promises, and benefit from greater competition—which means better service and prices for everyone,” Rosenworcel said in a statement.
However, while the labels are great for transparency, they don’t address a major issue: the monopoly power of telecom giants.
The goal of the labels is to allow for consumers to “comparison shop for broadband services,” according to the FCC, but it does little for the many Americans that won’t be able to use the labels to “comparison shop” because ISPs have created an environment where consumers have only one option when choosing who to get their internet from.
That lack of choice isn’t some small number. An estimated 88.3 million Americans can access broadband through just one provider, according to one estimate. That lack of competition in the marketplace *surely* has no connection to the fact that nearly half of Americans aren’t satisfied with the price they were paying for their internet service (/sarcasm).
Why it matters
While it’s great that a consumer will be able to have transparency when looking at what a broadband provider is offering them, it won’t help much if they are stuck with that provider regardless of what the labels say. Sure, the labels will tell you what you need to know about the service, but if you can’t shop around, what does that information do for you?
As I said in January when I wrote about the labels, they are a good first step but don’t address the root of the problem.
