The FCC pushed back against calls from industry to adjust the new rules, which will involve significant compliance efforts as they come into effect
Scheme receives its final approval
On 10 October 2023, the US Government’s Office of Management and Budget (OMB) formally approved compliance dates for the broadband labelling scheme adopted by the Federal Communications Commission (FCC) in November 2022. Operators with fewer than 100,000 subscribers now have 12 months (i.e. until 10 October 2024) to adhere to the new congressionally-mandated regulations. These require operators to display, at the point of sale, a label for consumers containing critical information about their broadband service offerings, including pricing, introductory rates, data allowances and performance metrics, as well as whether they participate in the FCC’s Affordable Connectivity Program (ACP). Operators with more than 100,000 customers will have until 10 April 2024 (only six months) to ensure compliance with the rules.
Experiences elsewhere show broadband labelling can have unintended consequences
The aim of the new labels is to allow consumers to easily understand and compare an operator’s fixed and mobile services, and to contrast them with those of their competitors. The FCC considered that its rules would ensure that clear and accurate information is available to consumers about the cost of different broadband packages, enabling them to identify those plans that best suit their needs and budget. To empower consumers effectively, the labels have been designed specifically to resemble the nutrition labels that have appeared on food products in the US for many years. Nevertheless, the experiences of other countries (e.g. the ‘traffic light’ system in Italy) suggest that well-intentioned efforts to improve transparency and fairness can lead to increased confusion about the technologies and speeds some consumers can access.
Industry attention now turns to ensuring compliance
Despite the adoption of the broadband labelling scheme almost a year ago, there were still a number of issues (e.g. the availability of labels in multiple languages) for the FCC to resolve. This opened the door for some stakeholders to push for the rules to be clarified or modified. However, on 29 August 2023, the FCC released an Order that largely upheld the original obligations. The regulator did make some revisions, including relaxing record-keeping requirements when operators direct consumers to a label on an alternative sales channel. With OMB approval and compliance deadlines set, attention now turns to implementation, which is expected to mean significant documentation gathering and systems development for industry. The FCC has not specified the possible penalties operators could face for not displaying broadband labels correctly, but considers its existing enforcement mechanisms will be sufficient to deter non-compliance.
