The Federal Communications Commission on Thursday voted along party lines to exempt more internet service providers (ISPs) from an enhanced transparency rule that requires them to fully inform customers on any promotional rates, extra fees, and data cap and throttling policies they may apply.
The rule was initially enacted as part of the 2015 Open Internet Order, which more famously set in place the net-neutrality rules that prevent ISPs from giving preferential treatment to certain internet services.
That order initially shielded ISPs with 100,000 or fewer subscribers from the transparency rules, but that exemption expired last December. On Thursday, the now-GOP-led commission put it back into place, but bumped it up to include any ISP with 250,000 or fewer subscribers. The exemption now applies until January 2022.
The FCC is quick to note that the transparency rules dictated by the 2010 Open Internet Order — which broadly require ISPs to “publicly disclose accurate information regarding the network management practices, performance, and commercial terms” of their broadband services in a way that’s “sufficient for consumers to make informed choices” — will still apply to every ISP going forward.
The 2015 Order’s transparency rules, however, mandate that ISPs always note the following:
- "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)."
Those requirements will no longer apply until the 250,000 subscriber threshold after Thursday’s 2-1 vote. Newly appointed FCC chairman Ajit Pai and GOP commissioner Michael O’Rielly argued that the exemption will help protect more small businesses, particularly those in rural areas, from “onerous reporting obligations” that could strain their resources. Pai said it would help those ISPs to spend more money on “building out better broadband to rural America,” while O’Rielly pointed to a recent House bill that proposed the same exemption and passed with bipartisan support.
Democratic commissioner Mignon Clyburn dissented, arguing that the move was part of “an ongoing quest to dismantle basic consumer protections for broadband services.” She said the rollback overstated how burdensome the requirements are, and that it'd allow larger companies to skirt the rules through smaller subsidiaries.
Since the exemption does not apply to service specifically from major ISPs like Comcast, Charter, or Verizon, the vast majority of customers won’t be affected by the change.
The FCC did not immediately respond to a request for comment on exactly how many people the exemption could impact. In a statement blasting the new rule, Democratic senator Ed Markey said that the total number of subscribers using now-exempted ISPs is close to 9.7 million.
In any case, the move is symbolic — Pai is a vocal critic of several Obama-era FCC regulations, the 2015 Order and its net-neutrality laws chief among them, and has vowed to take a lighter-touch, pro-industry approach to rulemaking. Though he's mostly chipped at past policies thus far, he has the support of a GOP-majority Senate with similar sentiments behind him.
Along those lines, O’Rielly suggested at an FCC meeting on Thursday that the enhanced requirements may soon be on the chopping block altogether.
“In the end, this is a balanced effort to find an acceptable and defensible landing spot,” he said. “But to be clear, [Thursday’s order] does not address a far more fundamental matter: whether these reporting requirements should exist at all. That will have to wait for another day in the near-future.”
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