What You’ll Learn

While broadband providers enthusiastically welcome government funding to build and expand networks, Vantage Point’s Jeff Smith details some of the transparency requirements that come with it.

Guest Speaker

Jeff Smith

Show Notes

Transcripts have been lightly edited for clarity and readability.

 

Intro: Rural Broadband Today is a production of Pioneer Utility Resources. Broadband. We need it for work and for school, for our health and our economy. What’s being done to bring broadband Internet access within reach of every American? Let’s talk about it now on Rural Broadband Today.

Andy Johns: Thank you for listening to Rural Broadband Today, where we take a look at the issues and the people shaping the rural broadband story across America. I’m your host, Andy Johns. And on this episode, we’re going to be talking to Jeff Smith, who is the VP of public policy and advocacy for Vantage Point. So, Jeff, thanks for joining me.

Jeff Smith: Thank you, Andy. Looking forward to our conversation today about the broadband label requirement.

Andy Johns: Now, full disclosure here, this will be take two of this podcast. Jeff and I recorded – I don’t know Jeff, it might have been the greatest podcast episode ever recorded previously, and somehow it got lost somewhere in the recording platform. So we’ll try to make this one a good one as well, but I do appreciate Jeff sticking with me for this recording. And especially since we’re recording during that kind of dead week between Christmas and New Year’s when not a lot of folks are in the office. So Jeff, I really do appreciate you taking the time twice now to be on with me.

Jeff Smith: You bet, Andy. Looking forward to our session today.

Andy Johns: Great. So what we’re going to be talking about in this episode is the broadband labels that are out. And I’ll admit the first time a few weeks ago when I saw one of these on LinkedIn and the feed somebody had posted about these broadband nutrition labels, I kind of thought somebody was just having fun with the dietary fiber and fiber optics and kind of making a joke. But you could confirm, Jeff, that these are real. These are legit, and they come with some regulatory oomph behind them.

Jeff Smith: Yes, they do, Andy. They are real. And it’s something that people that are offering a standalone broadband package have to do during 2023. And they have patterned them after the nutrition labels you see in the grocery store. And the idea is to give a prospective broadband customer an opportunity to compare at the point of sale what they’re getting for their broadband money.

Andy Johns: Got it. So where does the idea come from for something like this? Is this something that came from within the industry or something that came from consumer advocates or something legislators just dreamed up one day? Where does the emphasis for this come from?

Jeff Smith: The idea – Andy, that’s a good question. The idea started at the congressional level. This was part of the Infrastructure Investment and Jobs Act, the landmark legislation that Congress passed that allocated $65 billion for deployment of broadband infrastructure in the country. And this is one of the strings that are attached to that. They wanted customers to have a fair and transparent process at the point of sale. So Congress directed the FCC to develop these nutrition style broadband labels, and the commission went through a process of having three public meetings and doing extensive analysis research, and they came up with an order here in November. And we now have a standardized label that once the Office of Management and Budget has approved the Paperwork Reduction Act, steps that have to occur when new reporting forms are offered by the commission. We’ll have a – for the larger carriers, over 100,000 – they have six months to put the labels into place. And then for those carriers that have under 100,000 customers on a consolidated basis, they’ll have 12 months. So for the average smaller carrier, you’ll have all of 2023 to get this accomplished, but we’re encouraging people to take the challenge on sooner than later.

Andy Johns: Sure. And of course, most of the folks that we work with at Pioneer, and I believe most of the folks y’all work with at Vantage Point, are going to fall under that $100,000 threshold. And so they’ll have the full 12 months to do that.

Jeff Smith: That’s correct. We had almost 300 people on our informational webinar here at the end of November, and all the folks that participated there were in the smaller carrier group.

Andy Johns: I will – at the risk of some very boring audio here – I’m going to read a little bit of what’s on the label. I know that we do have folks that listen to this, these podcasts while they’re driving. So anybody who needs to stay up, you know, stay awake, you may want to flip forward a few seconds. But, you know, when I’m looking at it, and I would encourage anybody to just Google – I Googled – you know, broadband facts label. And it starts at the top labeled “broadband facts.” It does look almost exactly like what you’d see on the size of a breakfast cereal box. And then it says choose your service data plan. This one, this example has a 50 mbps service tier. It’s got the monthly charge for month-to-month plan, a monthly charge for a two year contract plan. Data included in the monthly charge, charges for additional data over usage, other monthly fees, optional modem or gateway leases, activation fees, deposit. So as you said, Jeff, the top part is almost exclusively talking about pricing. And then it gets into some of the performance stats down lower on the label. So like I said, I encourage folks to Google that to see an image of it if you haven’t already. But I did want to at least establish kind of what the labels look like and what information is on there does that.

Jeff Smith: That’s exactly right, Andy. Almost the top half of the label talks about the pricing and all the all the various aspects that you’ve touched on in the pricing. We like to categorize that the Commission has done a nice job of balancing a nutrition type label. If you’re in the cereal aisle and you’re trying to decide between Wheaties and Cocoa Puffs, you’re going to have two contrasts there. And on this broadband label, we’re talking about the things that make broadband taste good, and that’s the speed and the price and the attributes that an average customer looks like. And then lower in the label, we get into the items that you can say that makes it good for you. And Wheaties might win the day over Cocoa Puffs. Cocoa Puffs are going to taste better, but we get into the bottom part of the label. We talk about the network management practices that a carrier employs the privacy. And one of the things we think that will be added, there’s this comment period coming up in January and replies in February. We anticipate the Commission may choose to add a requirement to add a link for your cybersecurity practices as well, but those are more of the things that make it good for you in terms of adequate network management in place, privacy policies that comport to prudent rules, and then the cybersecurity.

Andy Johns: Got it. I do want to get into that January deadline and the timeline here just a moment. But while we’re talking about what’s on there, it seems to me, Jeff, like the, you know, any time there’s regulation that comes out like this, there are going to be some folks – and if we don’t want to say winners and losers, we’re going to say folks who it may help. Give them a little bit of advantage or not. It seems to me like if the goal here, and it seems like the labels do a decent job of that, if the goal is more transparency, the folks with the strong fiber to the home synchronous networks are going to be the one who that transparency probably helps. And the folks that are a little bit more smoke and mirrors, and maybe that’s not fair, but just folks that maybe can’t do that synchronous connection, they’re asynchronous that have some other fees in there. This kind of, they don’t win with this whereas the folks with the stronger more robust networks probably come out ahead with something like this. From where I’m sitting, that’s kind of the way it looks. Do you share that thought?

Jeff Smith: I share that perspective, Andy. And the people, the providers that have the more robust packages offered at an attractive price, maybe not the lowest price, but at a fair price for what the consumer is going to get in terms of the broadband speed and the latency. Obviously, if you’re a person that’s involved in gaming, you’re going to look at the latency and that becomes very important. Some of the satellite folks are going to have a disadvantage with the latency because their latency statistics are going to be longer. But everything else being equal, if you have the most robust package at a fair and affordable price, this label transparency is going to help you more than it’s going to hurt you, Andy. The people that have invested in their network and are offering the best packages for the customer, we believe will be the winners, not only in the short term, but over the long term as well. And from a congressional perspective and from a regulator, FCC perspective, they want the customer to have an opportunity to select the best package for them. And they’re of the belief that labels are going to help that occur.

Andy Johns: Perfect. Now, let’s talk a little bit about timeline. You it mentioned earlier. Folks under 100,000 lines will have 12 months to do it as it stands right now. And, of course, I guess the caveat to this whole episode is that this stuff is still happening, and there may be changes or tweaks to any of this as we go forward. But as it stands right now, the January 17th deadline is for filing a comment. And these labels right now, folks, have 12 months to kind of get this implemented. Is that correct on the timeline?

Jeff Smith: That is correct. And we’re actually waiting. The January 17th date is when the comments are currently due. There has been one request for an extension. It’s not clear whether the Commission will grant that. But in the January time frame, we’ll have comments. In the February time frame, we’ll have replies. One of the things that happens at the FCC when they introduce new reporting requirements for carriers, they have to refer that to the Office of Management and Budget, which then that agency handles the Paperwork Reduction Act requirements. We’re currently in the completion of that process, and we don’t have a hard target date set, but we’re anticipating here in the January, February time frame when we could pass the holidays that will get wrapped up, and there’ll be an announcement of that. And for purposes of illustration, let’s say they get done by that that’s done by January 31st, 2023. That would be the end of July for the larger carriers, six months out, the end of July, and then the following January of 20, actually 2024. But what we’re telling people is view 2023 as your time frame, and we’re encouraging people to try to get that done in the first half of the year as opposed to the last half of the year. As you mentioned to me in our first recording, it might even be an opportunity for a company that has their labels done to start using that in their marketing and get a jump on that and start acquainting people with the fact they’re going to see that at the point of sale. I thought that was a very good idea you had in the first part of our conversation.

Andy Johns: Yeah, and let’s go back there. Let’s go back there again because with a box of Wheaties, with your example before, if I’m at the grocery store, I know where to look on the box of Wheaties and the box of Cocoa Puffs to see the labels. It’s a little trickier with broadband. Where, you know, where do these labels have to be affixed? We’re not talking about putting it on a router in somebody’s house, as you said earlier. And this may change. It’s kind of defined as point of sale right now.

Jeff Smith: Point of sale, exactly. And we’ll evolve those requirements. But at this point, that point of sale is an interesting concept to actually bring into implementation. If you’re a customer and you’re going to the website to try to compare. Obviously, the labels are going to need to be on the website. And there’s aspects of the label where it actually gives you a link and takes you somewhere else to the network management practices or the privacy practices or cyber security, if they choose to have that as part of this comment process. But if you’re, let’s say I’m the customer, and I call in to use the customer service office, and I start asking questions, technically under the rules today, you would have to read the label to me. So as we talked about earlier in the podcast, that could be a little boring to listen to every single word on the label. We’re going to suggest in our comments that Vantage Point is going to file in January that one option, one reasonable option at least for the smaller carriers, would be that if a customer is calling in and you get to the point in needing to read that you can send them to a recording and let them hear the recording that way. But technically, the point of sale for a phone call is that phone call. And on an audio phone call, the option the commission is prescribing at this point is that we would have to read that label to the customer over the phone. If you’re in a face-to-face situation in an in-person contact, it is permissible then to hand them a paper copy of the label, have a hard copy of the label. But the idea is when the customer is interfacing at the point of sale and attempting to make their purchase decision, that label information will be available in some medium or some form.

Andy Johns: Okay, then when I’m thinking of other labels like this out there, some of the ones that you see in addition to the nutrition labels, but you also see the ones on like cigaret advertising or alcohol. I think some of the ads have to have the disclaimer on there about dangers of drinking while pregnant. And those are at the bar. They’ll have those as well. So how far out do you see, and I know some of this may be opinion right now or some of this may be kind of extrapolating from the order, but how far out does this go? I mean, if a company has a, you know, 12 or 13 different, you know, some folks, if they’ve got an old copper plan and then some fiber plans in they’re CLEC, and you know, if they’ve got to have a label for every one of their packages, you know, if they put up a billboard that says, you know, “Buy our Internet. It’s great.” Are they going to have to have 12 or 13 different broadband facts labels up on a billboard? Or what does this mean for marketing pieces right now?

Jeff Smith: That’s a very good question, Andy, and it’s going to depend upon how the phrase “point of sale” is ultimately interpreted. But it, if reason is not brought in, it will end up being a restriction as opposed to an enhancement. If ABC Broadband carrier can’t have a billboard without having all their labels up, that would seem to be restrictive. You raise a good point. If you have 13 to 15 various packages, the current requirement is for every package you have, you have to have a unique and distinct label. At the bottom of the label will be identifying information for the carrier and their FRN number. And then there’ll be a unique numeric identifier that describes the plan. Carriers may decide that they don’t want to have 15 plans. They may bring that back to a smaller number. If you have seven people on a one plan, you’re going to end up having to make a choice. Is the paperwork and record keeping requirement of that, justify that? And you may want to consolidate some of your plans to a smaller number. It hasn’t been determined yet whether you simply have to produce the label or whether you have to submit that to the FCC or some third party entity. One of the requirements of these labels is that they’re going to be in machine readable format. There’s no customization. It is a standard set label that the Commission has set. You’re simply filling your information into the label that they prescribe. They’re going to have it in a machine readable format so they can do some large data analysis of that. And, again, this is adding record keeping and compliance costs. And so if you can take your current offering from 15 down to five, you may choose to have five plans, and there may actually be some efficiencies there that we garner from this that we’re not currently anticipating. But you raised some key points with your questions. If you have a plan, it has to have a unique label produced and maintained.

Andy Johns: Okay. And then it just remains to be seen at this point as to whether that just has to be provided on the website and in the lobby or if that’s got to be on the example you mentioned earlier, is the booth at the county fair or. Yeah, I guess just how far it goes, it sounds like remains to be seen.

Jeff Smith: If you have enough plans, you’d have to have one label with the ad saying, “Buy our service.” And then the next billboard down the road would be your 15 labels. Hopefully some reason will take hold on this, and we’ll come up with a – we’ll have the kind of balance the Commission currently has in terms of what’s on the current label, not overwhelming the customer with information, but providing useful data for that purchase decision for the broadband customer.

Andy Johns: Got it. So, you know, if we’ve got anybody out there who’s listening and on the communication side and is the heart rates up a little bit, maybe to calm down a little bit, it sounds like generally the folks you’ve talked to – aside from kind of the gray area right now as to how often this has to be displayed – overall, it sounds like folks in the industry are having a pretty positive reaction to this. What are you hearing from folks in the broadband space from Vantage Point clients and others as how they’re reacting?

Jeff Smith: Good question, Andy. People have the normal reaction of an additional record keeping or reporting compliance requirement. There’s a little bit of initial apprehension, but when they weigh that against the fact that this is one of the requirements for that $65 billion to be infused into the industry, it’s a fair trade off. This is actually one of the easier compliance issues. We have these requirements of having to test the network performance, and you’re having to go out and interface with the customer and actually test the capacity at their residence or their point of origin for their broadband. Now, that gets a little more complicated. And this is something a carrier that is providing a standalone broadband package controls each piece of the input. You set your price. You know what you’re, and again, you’re reporting what your typical upload and download speeds are, latency. You have your policies in place. The one thing it may engender is if you don’t have your network management or your privacy policies up to date, it’s going to require you to tweak that and get that into compliance. But you control all the information that goes on the label. This is just a matter of assigning some people the task and given some timelines and some deadlines. We’re very confident at Vantage Point that the carriers that we have the privilege of working with are all going to be compliant well before the deadline in 2023. And so this will be a necessary part of getting that $65 billion invested, further invested, into broadband.

Andy Johns: Got it. Got it. Well, last thing I had for you. What, I think you touched on it there a little bit, but what are you recommending folks? So it sounds like we’ve got to wait for the form to be finalized before anybody can really do too much. What are kind of the recommendations, the next steps, that you’ve got for folks that want to make sure that they stay in compliance on something like this?

Jeff Smith: Good question, Andy. What we’re recommending is assign some folks and assign some responsibility and ownership for it within your company and set some time frames. And then if you are a company that has 12, 15, 18 different plans, you may want to take a look at what steps you have to do to get to a smaller number. The one thing that isn’t going to change, for each standalone plan you have, you have to produce a label. And currently you’d have to produce those on a quarterly basis because there are on the piece it says government taxes. Those change every quarter when the universal service surcharge changes. And we’re going to offer in our comments that we file as Vantage Point in January that that that piece only be required on an annual basis. But we don’t know what the success of that will be. So the idea is to start to size what your response has to be. Again, I anticipate, Andy, if we have people with multiple plans, I think we’ll see a shrinkage of some of the plans to a smaller number of plans offered because of this labeling requirement. But it’s a matter of just tasking out what you need to do. And the commission has been very generous with a 12 month. I’d be a little more concerned if we had 30 days to get ready, but we have a full 12 months and that clock’s going to start early next year. So this is a compliance issue that I’m anticipating that everybody can have a success on.

Andy Johns: Got it. One final – I know, I said that was my last question. So this is a point of a point of clarification here. You had mentioned all the money coming in, this is a requirement for folks, whether they’re getting any grant money or not, right? This is something everybody has to do.

Jeff Smith: Correct.

Andy Johns: It’s not just contingent on if you applied for and received any new grants or new funding, right?

Jeff Smith: Whether you get zero or whether you get, a grant or loan. The requirement applies to everyone that’s offering a standalone broadband plan.

Andy Johns: He is Jeff Smith, the VP of Public Policy and Advocacy at Vantage Point. Jeff, thanks so much for joining me.

Jeff Smith: Thank you, Andy. And Happy New Year, everyone.

Andy Johns: Thank you so much for listening to Rural Broadband Today. We’ve got more episodes coming up for you later on this month. Thanks.

Outro: Rural Broadband Today is brought to you by Pioneer Utility Resources. Rural Broadband Today is engineered by Lucas Smith of Lucky Sound Studio.