Industry, Consumer Advocates Clash on the Prevalence of Broadband Junk Fees

Consumer advocates and industry officials disagreed Wednesday about the need for addressing junk fees in the broadband and communications marketplace. After noting that increased competition results in consumers getting faster speeds and better service, ACA Connects Chief Regulatory Counsel Brian Hurley said, "In this competitive marketplace, our members and providers have every incentive to avoid bill shock and other negative experiences that could compel their customers to take their business elsewhere." Addressing a Broadband Breakfast webinar, Hurley added there's "no finding that junk fees are prevalent" in the marketplace.

Broadband is "an evolving industry" and "we welcome the [FCC] proceedings" on junk fees, said Mike Lynch, National Association of Telecommunications Officers and Advisors director-legislative and regulatory affairs. "Personally, I'd like to see more things thrown in there," such as broadcast and regional sports fees. Banning junk fees, Lynch added, is "an attempt at transparency, honesty, and clarity for the consumer, and we welcome that."

Public Knowledge Legal Director John Bergmayer agreed. Taking "decisive action against these fees" is a matter of "consumer fairness," he said. "It's hard to see how you can have a market truly function if people don't really have awareness of how much things cost until after they have committed to buy" them, he said. "It is totally legitimate and wonderful for providers to itemize out and explain to consumers" what they are paying for, Bergmayer added.

Highlighting service prices would assist customers in determining their ultimate costs, said Mark Jamison, American Enterprise Institute nonresident senior fellow, but that potentially makes other things that a customer may worry about more expensive. It would "distort the industry's incentives because the industry knows that everyone is going to look at the price."

It can be hard to determine exactly what information a consumer needs to know because price will vary from customer to customer based on their location and actual broadband needs, Hurley said. It's "impossible to generalize across service providers and how they do these things," he said, adding that ISPs are already required to provide broadband nutrition labels to customers at the point of sale.

"People want transparency" in pricing so they can shop for a service that fits their needs, Bergmayer said, adding he didn't see "tension" about the concept of all-in pricing. Industry benefits from "fairer and simpler pricing that people can easily understand because it just leads to less confusion" and fewer consumer complaints.

Some government involvement in pricing is "inevitable," Hurley said. ISPs have a general obligation to be "fair and nondeceptive," but the broadband market remains competitive and dynamic, so "we should be cautious about going beyond the sort of basic level of regulation that's already in place."