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Biden Executive Order on Internet Service
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In case you missed it, earlier this month President Biden signed an executive order that aims to promote competition in the U.S. economy. The order includes 72 initiatives, directing a dozen different federal agencies to promote competition in key sectors.
The White House published a fact sheet to explain what the EO aims to do. [Read the full factsheet is here]. It begins by pointing out how a "lack of competition drives up prices for consumers," which is why "families are paying higher prices for necessities—things like prescription drugs, hearing aids, and Internet service."
It goes on to say that the order will, among other things, "save Americans money on their Internet bills by banning excessive early termination fees, requiring clear disclosure of plan costs to facilitate comparison shopping, and ending landlord exclusivity arrangements that stick tenants with only a single Internet option."
As you might imagine, we are particularly interested in the section on “Internet Service,” which you can read below:
Internet Service
The Order tackles four issues that limit competition, raise prices, and reduce choices for Internet service.
In the Order, the President encourages the FCC to:
• Prevent ISPs from making deals with landlords that limit tenants’ choices.
Lack of competition among broadband providers: More than 200 million U.S. residents live in an area with only one or two reliable high-speed Internet providers, leading to prices as much as five times higher in these markets than in markets with more options. A related problem is landlords and internet service providers entering exclusivity deals or collusive arrangements that leave tenants with only one option. This impacts low-income and marginalized neighborhoods, because landlord-ISP arrangements can effectively block out broadband infrastructure expansion by new providers.
• Revive the “Broadband Nutrition Label” and require providers to report prices and subscription rates to the FCC.
Lack of price transparency: Even where consumers have options, comparison shopping is hard. According to the Federal Communications Commission (FCC), actual prices paid for broadband services can be 40% higher than advertised. During the Obama-Biden Administration, the FCC began developing a “Broadband Nutrition Label”—a simple label that provides basic information about the internet service offered so people can compare options. The Trump Administration FCC abandoned those plans.
• Limit excessive early termination fees.
High termination fees: If a consumer does find a better internet service deal, they may be unable to actually switch because of high early termination fees—on average nearly $200—charged by Internet providers.
• Restore Net Neutrality rules undone by the prior administration.
Companies discriminatorily slowing down internet access: Big providers can use their power to discriminatorily block or slow down online services. The Obama-Biden Administration’s FCC adopted “Net Neutrality” rules that required these companies to treat all Internet services equally, but this was undone in 2017.
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