Consumer Protection in the World of Broadband Data Services

September 2, 2014

Global Internet 2Recent news reports suggest that subscribers to broadband data service from some of the largest service providers may not be getting their money’s worth. Allegations have been raised claiming that digital subscriber line (DSL) customers may not be receiving consistently the data speeds they thought they purchased and that subscribers of “unlimited” data service plans are being pushed to shift to plans that are more profitable for the service providers.  These allegations raise important questions for regulatory authorities.

Industry observers reviewing the federal government’s “Measuring Broadband America” report on the status of broadband data use in the United States claim that the report indicates many customers are not receiving the level of service they were sold.  These critics claim that the U.S. government information seems to indicate that ten percent of Verizon DSL customers received less than fifty percent of the data speeds they thought they purchased.  The critics also contend the government information indicates that five percent of AT&T’s broadband data customers actually received less than sixty-two percent of the data speed they thought they purchased.

Communications industry analysts have also reported that major wireless service providers, including Verizon, may be deliberately slowing wireless data services, referred to as “throttling” those services, in order to push high data volume customers to service plans more profitable for the service providers.  These reports claim that customers in the top five percent of volume users in Verizon’s old unlimited data plans are having their data speed rates throttled in an effort by Verizon to force those users to change to service plans more profitable for Verizon.

These reports suggest that it is time for greater action by government authorities to protect customer interests with regard to the quality of data services.  Federal authorities such as the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) should be more active in their oversight of data service rates, terms, and quality.  State consumer protection authorities also have a constructive role to play in this oversight.

The United States has acknowledged the need for substantial improvement in the scope and quality of its broadband networks and services.  Much of the attention associated with that effort has been directed toward construction of new broadband facilities.

It is time to recognize that another critical aspect of successful broadband service development is aggressive and comprehensive enforcement of rules to protect the consumer interests of broadband data service users.  To meet the critical national policy objective universal access to broadband services, the national broadband network in the United States must be expanded, and the prices and terms of use associated with access to broadband services must be just and reasonable.

If broadband service providers are permitted to use degraded service quality and unfair service terms to push consumers into service plans that are most profitable for the service providers, our nation will likely suffer substantial economic harm.  Governments should recognize that effective enforcement of rules requiring fair and reasonable treatment of broadband data service users are at least as important as policies designed to expand our nation’s broadband network infrastructure.