The FCC sent out a stern reminder to broadband Internet service providers (ISPs) that they must accurately disclose their service offerings to consumers under the Open Internet Transparency Rule, first put into place in 2011.
It's not an order without teeth: The commission can censure or fine companies that don't comply with the rule.
Under the transparency rule, ISPs must provide information about network management practices, terms of service and its network's performance. They must detail their broadband network's expected speed versus its actual speed and note any latency. And they must disclose their pricing, including any fees a consumer might be charged such as usage-based pricing (e.g., data caps), overage fees.
What does that have to do with online video? Plenty: For example, streaming video on a network that has data caps can result in hefty overage fees for consumers. While companies like Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) tested usage-based billing in years past, it's not too prevalent in the U.S., and is mostly seen in agreements with lower-speed DSL customers. (The fees can be onerous: Canadian consumers suffer under data caps that kept Netflix (NASDAQ: NFLX) from making headway in that country for years).
Network management, including how they deal with network congestion, is another issue that ISPs have to disclose. It's a prescient detail considering the trouble Netflix is having in streaming its video to subscribers on certain broadband networks, such as Verizon (NYSE: VZ).
An FCC spokesperson told GigaOM that the commission received "hundreds of complaints" last year from consumers who weren't sure what services they were receiving and felt their provider wasn't telling them.
"Consumers deserve to get the broadband service they pay for. After today, no broadband provider can claim they didn't know we were watching to see that they disclose accurate information about the services they provide," said Chairman Tom Wheeler in a prepared statement. "The FCC's transparency rule requires that consumers get the information they need to make informed choices about the broadband services they purchase. We expect providers to be fully transparent about the details of their services, and we will hold them accountable if they fall down on this obligation to consumers."
The FCC notice included a link to more information on the transparency rule. Consumers were urged in the document to run a speed test of their broadband connection and to report any discrepancies to the FCC.
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