Bert Goff considers himself to be a highly informed consumer, and he’s persistent about finding good deals. But Goff said even he, a retired software engineer, has struggled to find complete information when shopping for home internet service.
Goff, who lives in New Milford, said it’s difficult to determine the fees that internet companies tack onto monthly bills and to learn about available discounts.
“Sometimes it’s hard to get straight answers talking to customer support about what all that’s going to be,” Goff said.
The process could soon become easier for Goff and millions of Americans as a result of new rules surrounding internet price transparency and a growing acknowledgment that affordable, high-speed internet service is a public necessity in the modern world. Federal regulators and state consumer advocates are seeking to ensure that every resident has consistent access to affordable high-speed internet service, as billions of dollars in American Rescue Plan and Infrastructure Investment and Jobs Act funding are being funneled to broadband expansion projects.
The federal government is also spending billions of dollars more to help subsidize internet service for low-income Americans — a boon for internet service providers who have seen their customer numbers rising. More than 147,000 Connecticut residents have already signed up for those subsidies, known as the Affordable Connectivity Program.
But companies providing internet services, many of whom are benefitting from multibillion-dollar federal investments, have been pushing back on efforts to make pricing and service speeds more transparent for consumers.
Earlier this year, the Connecticut Office of Consumer Counsel set out to gather basic cost and speed information posted on the websites of several internet service companies, including Comcast, Cox Communications and Frontier. The state agency planned to make the information available for consumers in a simple format that would allow them to compare rates and services. But when state employees tried to confirm the listed prices directly with the companies, they were told that some data were incomplete or no longer accurate.
Consumer Counsel Claire Coleman then launched an investigation in mid-February, asking each company, in writing, to explain how they inform customers of internet pricing and plan options. The companies’ responses didn’t provide much clarity, Coleman said.
That’s largely because they didn’t have to. As Sharon Codeanne, director of government affairs for Comcast, pointed out in a letter to OCC: “Comcast’s Internet service is not regulated at the federal or state level, and therefore, this response is a courtesy.”
Should the internet be regulated like a utility?
While high-speed internet has become as necessary as any utility in everyday life, it isn’t like gas, water and electric utilities in Connecticut, which are heavily regulated and required to outline their pricing structures.
Coleman would like to see that change.
“This is an industry that’s providing an essential service but isn’t rate-regulated,” she said. “It’s a very frustrating space to be in.”
Coleman said she doesn’t think free-market competition among internet providers has fully worked to eliminate steep annual price increases and improve service quality.
The New England Connectivity and Telecommunications Association, a trade group representing the major internet providers in the region, says their speed tiers and pricing are “uniform” across the state.
“As for additional, seemingly unrelated fees, they reflect decisions by policymakers to add consumer taxes to cable/broadband bills, and our companies fully comply with the collection of these funds to support individual state programs like 9-1-1 services,” NECTA President Tim Wilkerson said in an emailed statement.
“Overall, Connecticut’s broadband marketplace has strong competition, providing consumers with ever more choices and competitive pricing,” Wilkerson wrote. “While nearly every sector of the economy has seen dramatic price increases due to inflation, the price of broadband internet has remained stable and affordable.”
In theory, any internet customer can shop around between various providers, comparing plans based on prices and speeds. And Goff said he’s figured out how to save money by renegotiating his internet service contract when introductory rates run out after a year or so.
But many consumers don’t have the time to scour websites or sit on hold with customer service representatives and haggle over the terms.
“It can be obnoxious to switch,” Goff said. “It’s always easier to stay where you are, but it may be more costly than you realize.”
“A lot of it is an issue of time,” he said. “I’m retired. I can be on the phone for an hour.”
Internet service “nutrition labels” are coming
Coleman’s office is also playing a waiting game. As federal regulators work to finalize rules governing internet service companies, the OCC has paused its investigation.
The Federal Communications Commission will soon require companies to provide standardized “broadband nutrition labels,” publicly listing their prices, promotional rates, data limits, broadband speeds and other information on the services they offer.
The agency is also working on rules to prevent discriminatory practices in the provision of internet service. (Both the ARPA and IIJA broadband programs call for “equitable” deployment of internet service.)
“The FCC requirements imposed upon providers should alleviate the need for OCC’s efforts,” Lindsay DeRoche, regulatory affairs director for Cox, wrote in the company’s response to Coleman’s investigation.
Internet service companies filed public comments on the FCC’s proposed rules, through industry groups like the U.S. Telecom Association and the Internet and Television Association. Their input largely focused on limiting the scope of the new disclosure rules to make it easier for the companies to comply.
“The Commission should seek to further preserve the simplicity of the broadband labels by only including that information that will give consumers meaningful insight into the broadband plans they are considering without including hypertechnical information that is meaningless to consumers and would overburden providers,” officials with the U.S. Telecom Association wrote.
The industry associations also suggested that the new rules could infringe in their First Amendment rights if they went too far. And they warned the FCC against intruding into “the provider-customer relationship.”
When the FCC announced the proposed broadband labels last year, Chairwoman Jessica Rosenworcel said internet price transparency had been a concern for years. And she noted that federal lawmakers had called specifically for transparency rules as part of the infrastructure bill when they passed it in late 2021.
“With these broadband nutrition labels, we can compare service providers and plans, hold broadband providers to their promises, and foster more competition — which means better service and better prices,” said Rosenworcel, who is a native of West Hartford.
In response to emailed questions, an FCC spokesperson said the rules still need to be approved by another agency, the Office of Management and Budget, and will only go into effect following that approval.
“These rules are long overdue,” said Sen. Richard Blumenthal, D-Conn., who has advocated for more price transparency from internet providers for several years. “There was a need for them a long time ago, but I’m glad that we are finally seeing them.”
Nora Duncan, the state director for AARP Connecticut, said a primary reason federal lawmakers pushed for the FCC to enact the rules on internet labels is because people are often confused about charges on their internet bills.
“It’s putting the language of these giant service providers, which we have all come to rely so heavily on, into a language that we can understand and compare,” Duncan said.
AARP, which was closely involved in the FCC’s rulemaking process, encourages its members to be savvy consumers and to gather information on the services they’re seeking before signing up. But that’s harder when it comes to internet plans, Duncan said, because of the lack of regulation. “A lot of times the reason people don’t shop around is because there is no transparency,” Duncan said.
“This is going to put the control back into the hands of consumers,” she said.
Enforcement in Connecticut
Connecticut’s Office of State Broadband, housed in Coleman’s agency, has submitted public comments on both FCC rulemaking proceedings.
The office called for additions to the “nutrition labels,” such as discounts and surcharges, equipment rental prices, cancellation and other fees, bundle prices and variable pricing, among other data points. And Coleman described the challenges her office encountered trying to gather such information from the internet companies’ websites. That lack of transparency “could lead to potential digital discrimination in both pricing and service tiers,” the comments stated.
The Connecticut broadband office was especially concerned that local consumers aren’t able to see an internet provider’s service options without first keying in a street address on the companies’ websites. They said that raises the potential for inequitable access.
“It is not inconceivable that, upon entry of an address in the ISP web portal, algorithms could immediately determine socio-economic and competitive information, as well as credit history, that leads to a display of broadband pricing and options that are not uniform, but rather customized to favor (or disfavor) certain geographical areas or other demographic groups,” they wrote.
Research from the National Digital Inclusion Alliance suggests that internet providers may be more inclined to upgrade internet service in wealthier areas, leaving lower-income communities reliant on outdated networks. The practice has come to be known as “digital redlining.”
In a report last year, Connecticut’s Department of Energy and Environmental Protection found that poverty is closely correlated with low rates of internet adoption. In census tracts where more than 16.4% of households are below the poverty line, one quarter of locations aren’t subscribed to broadband service.
Dave Weidlich, president of the Communications Workers of America Local 1298 in New England, said many Connecticut CWA members are working on broadband expansion projects in the same geographic areas, while other parts of the state remain underserved.
Kathi Schapp, who lives in Torrington, said residents in the rural area where she lives have only had one choice for high-speed internet service, and she said the price for that internet connection with Optimum, a subsidiary of Altice, is expensive.
In an emailed statement, a representative for Altice said the company seeks to provide transparent plan information and doesn’t require long-term contracts.
“While state and local taxes and fees may vary by location, Optimum’s rate information is available on our website, and the Company’s practice is to notify customers of upcoming rate changes consistent with state regulations,” Erin Smyth, of Altice, wrote.
Frontier is currently upgrading its fiber network in the Torrington area, said Schapp, who works from home for an insurance agency. Once that happens, she said it would help to have broadband labels available to compare the prices and speeds offered by the two companies.
“If you are shopping, or need to shop, you can compare apples to apples,” Schapp said. “That would absolutely be helpful.”
Wilkerson of NECTA said, “So-called ‘broadband nutrition labels’ are important for consumers education, and our companies fully comply with them at the federal level as our members treat transparency and robust consumer information as top priorities.” But, he added, “any state effort to create a duplicative reporting system is unnecessary and could be confusing for consumers.”
Still, as the FCC rules get finalized and promulgated, Connecticut’s broadband office is looking to ensure they have teeth. In its public comments, the state office has requested authority to enforce the “nutrition label” and digital discrimination rules in Connecticut.
Coleman’s office anticipates, once the rules are in effect, that consumer complaints in Connecticut and around the country could “quickly overwhelm the Commission’s resources.”
Blumenthal said he thinks it won’t be long before high-speed internet sees similar levels of regulation to other utilities.
“It’s no longer a luxury. It’s now really a matter of survival,” Blumenthal said. “I think we will look back on these, say, last 10 years, and we’ll say to ourselves, ‘How could they have not moved more quickly?’”