Senators Propose Broadband Speed Disclosure Rules

Published April 7, 2010

According to the Federal Communications Commission, the broadband speed consumers experience lags behind what’s promised by their Internet service providers by as much 80 percent. Three Democratic senators want to put an end to what they characterize as false advertising.

Sens. Amy Klobuchar (D-MN), Kirsten Gillibrand (D-NY), and Mark Begich (D-AK) introduced the Broadband Service Consumer Protection Act on March 15.

The bill requires the FCC to develop uniform performance standards so consumers can compare the speeds advertised with the speeds they actually receive.

Senators Want the Info
Internet service providers (ISPs) such as AT&T, Comcast, and Verizon consider such information proprietary, but the bill’s sponsors disagree.

“As more and more consumers gain access to high-speed Internet service, they should know exactly what kind of service they are paying for,” Klobuchar said in a statement.  “A key factor in a consumer’s decision to purchase broadband Internet is how fast the service will be.

“If providers are advertising a certain type of broadband speed, then that is the speed consumers should receive,” she said.

No Need for Law?
Craig Settles, president of Berkeley, California-based Internet marketing firm, says it shouldn’t be necessary for the government to intervene between consumers and ISPs.

“Where possible, the private sector should be able and willing to address these issues without government regulation,” Settles said.

Settles says he thinks having the government mandate carriers provide accurate speed and availability data is not necessarily unreasonable. But he added those two elements are part of the product these companies are selling, and “there are already laws on the books to protect consumers from deceptive advertising and selling techniques.”

“Penetration, meaning market share, is a gray area, since anyone can do research to find this out,” Settles said. “Yet a private-sector company may prefer that you work to find this out rather than make your job easy by telling you.”

Proposal Is ‘Dumb’
Josh King, vice president of business development and general counsel for Seattle-based online legal service Avvo, Inc., says regulating broadband speed disclosure is not only unnecessary but also useless.

“I think it’s dumb,” King said. “The impulse is to regulate, but I don’t think it will provide useful information to consumers.”

King says there are so many variables involved in actual broadband speed that it’s virtually impossible to inform consumers of the exact speed they will receive at any given time.

Besides, he noted, the user can affect speed in numerous ways such as the number of programs they are using, the level of sophistication of the programs, and the number of applications running at the same time.

Market Pressures Force Honesty
King says fierce market competition keeps providers honest.

“I think the market does a fine job on this,” King said. “With wireless carriers, as you have additional choices, there are more places consumers can go. It doesn’t strike me as an industry that really needs this kind of regulation.”

Klobuchar’s bill reminds King of worries about deceptive advertising in television and computer monitor screen sizes, in which manufacturer claims of “32-inch class screen” were used to advertise screens that were actually 31 inches.

The proposed regulation, he says, fails to recognize that people inherently know what they are buying and evaluate the whole product based on experience rather than specific numbers.

“I think regulators really need to think about the user experience,” King said.

Market Provides Information
Adam Elliot, president of Minnesota-based Insight ID, a fraud prevention company, said the market can take care if itself on this kind of disclosure.

Elliot noted his company in December launched a national database of broadband usage data, “BroadBand Scout,” which delivers accurate details about speed, usage, and market penetration. In addition, he says, free participation by consumers in the broadband market unleashes a wealth of information.

“When consumers go to the public Internet every day, they create millions of transactions where they leave Internet Protocol address and carrier-related data such as type of service and location data without revealing private information,” Elliot said.

“Ultimately, it is consumer preference that will force the industry to change its practices. Now more than ever, consumers make information-based decisions,” he added.

Celeste Altus ([email protected]) writes from Martinez, California.