The US Federal Communications Commission (FCC) has proposed a new set of rules that could significantly alter how internet service providers (ISPs) present pricing to consumers. These changes, if approved, would roll back many of the transparency measures adopted under the previous administration, making it more difficult for customers to understand exactly what they are paying for each month.

What the proposed rules change

The core of the proposal involves how ISPs display additional fees known as passthrough charges. Under current rules, enacted under the Biden administration, providers must itemize these fees separately on what are called broadband labels. These labels are essentially nutrition fact-style disclosures that show the total monthly price, including every fee and surcharge. The goal was to help consumers compare plans from different providers quickly and clearly.

If the new rules pass, ISPs would be allowed to bundle all passthrough fees into a single “up to” amount. Instead of showing a line for something like “Local Infrastructure Fee” or “Government Compliance Fee,” you might see just a single line that says something like “Additional Charges — up to $10.” This aggregate figure would be much harder to parse, especially for customers trying to figure out exactly which fees apply to their specific plan or location.

Moreover, providers would no longer be required to display the broadband label directly on their ordering pages. Instead, they could simply place a small icon or link next to the advertised plan, and only if you click that link would you see the detailed pricing. The FCC’s draft order argues that this is still convenient because “the consumer is a mere single click away from the label.” However, critics point out that burying information behind a click reduces its likelihood of being seen, especially during a rushed signup process.

The proposal also eliminates the requirement for providers to maintain machine-readable versions of their labels. This machine-readable format had allowed third-party comparison websites and consumer advocates to automatically aggregate and analyze pricing data across multiple ISPs. Without that requirement, it becomes much more difficult to conduct independent research or build tools that help consumers make informed choices.

What are passthrough fees?

A passthrough fee is any charge that an ISP adds to a customer’s bill to recover costs that the provider says are imposed by third parties or local governments. Common examples include fees for network access, regulatory recovery, universal service fund contributions, and local franchise fees. While some of these costs are genuinely incurred by the ISP, others have been criticized as being a way to advertise a lower base price while adding on additional charges later.

For instance, an ISP might advertise a plan for $49.99 per month, but after adding a $5 regulatory fee, a $3.50 infrastructure surcharge, and a $2.99 technology fee, the actual monthly bill could be $61.48. Under current rules, each of these fees must be shown separately on the broadband label, allowing consumers to see the full picture. Under the proposed rules, the ISP could simply state “$49.99 plus up to $11.49 in additional charges,” and the consumer would have to click a link to see the breakdown — or call the provider to request it.

Impact on phone ordering and customer service

The proposal also addresses how pricing information is conveyed over the phone. Under the existing rules, phone agents are required to provide a detailed breakdown of all charges if a customer asks for it. The new rules would allow agents to simply quote the aggregate “up to” price. If a customer wants more detail, the agent can direct them to the company’s website. The draft order explicitly states that the FCC declines to require phone agents to provide the full label upon request, though it encourages providers to do so.

This shift could particularly harm older adults or those without easy internet access, who are more likely to sign up for service over the phone. During a call, they may not be able to easily navigate to a website to find the detailed label, and they might not even know the label exists. The result could be that these consumers agree to a price that later turns out to be significantly higher once all the surcharges are added.

Background and history of broadband transparency

Broadband labels were first mandated by the FCC in 2016 as part of the Open Internet Order, but they were not fully implemented until the Biden administration pushed for their enforcement in 2022. The idea was modeled after the Food and Drug Administration’s nutrition labels, providing a standardized, easy-to-read format that lists price, speeds, data caps, and fees in a single place.

Consumer advocacy groups have long argued that ISPs use confusing billing practices to obscure the true cost of service. A 2020 report by the National Consumer Law Center found that ISP bills often contain a dizzying array of fees with vague names like “Network Enhancement Fee” or “Government Process Fee,” making it nearly impossible for consumers to comparison-shop. The broadband label was seen as a step toward solving that problem.

Now, the FCC is proposing to reverse many of those gains. The draft rules were first circulated last year, and the commission is set to vote on them on July 22. If approved, the changes would take effect 30 days after publication in the Federal Register.

Arguments for and against the proposal

Supporters of the new rules, which include major ISPs like AT&T, T-Mobile, and Verizon, argue that the itemized fee requirements are overly burdensome and that they add complexity to billing that confuses customers. They claim that many fees are too variable to be accurately listed upfront, and that the “up to” approach provides a more honest picture of the potential range of charges.

Consumer advocates counter that the “up to” method is actually less honest because it allows providers to hide the exact fee amount until after a customer has committed. They also note that the machine-readable requirement was critical for independent oversight. Without it, only the ISPs themselves will have the data to know what the average or typical fee actually is, making it impossible for third parties to verify claims.

Another concern is the elimination of the requirement to maintain archived records of plans that are no longer available. This would make it more difficult for researchers and journalists to track how pricing has changed over time, or to hold providers accountable for past promises. For example, if an ISP raised a fee significantly, it would be much harder to prove the change without archived labels.

The FCC has also proposed similar rule changes for robocall protections, which were criticized as a privacy threat. That proposal, along with the broadband label changes, suggests the current FCC is moving toward a less consumer-protective regulatory stance. The vote in July will be a key indicator of the commission’s direction.

As the July 22 vote approaches, consumers and advocacy groups are watching closely. If you want your voice heard, the FCC is accepting public comments on the proposal. The outcome will affect how much — or how little — you know about your internet bill every month.

Source: Android Authority News