American consumers understand that they have to shop around in order to find the best price. We do it all the time – from gas stations to grocery stores to online shopping.
The one thing that most of our shopping experiences share is transparency – we know the actual amount we will pay when we compare the prices different merchants offer. That’s the way free markets are supposed to work. Informed consumers make markets more competitive – and more efficient. Moreover, Americans believe that this kind of transparency is what makes marketplace competition fair.
If you have rented a car or booked a hotel recently, you know that additional fees are a standard feature. But prior to completing your hotel booking or car rental, most major companies provide an estimated total cost including taxes and fees. The result is that when you arrive at the car rental company, the price quoted is what you actually pay to take the car off the lot. Sure, there may be additional optional charges offered to you upon arrival, like insurance, GPS or gas, but you are free to decline these services.
Unfortunately, not every market in this country works efficiently – or fairly. The market for telecommunications services is a good example. You sign up for a service that is advertised at a given price, only to discover that your monthly bill is much higher than advertised. If you take a look at your most recent phone, Internet, or Pay-TV bill, you’ll probably see that in addition to taxes and other government-imposed charges, your bill also includes an array of mandatory, company-imposed fees. These fees are not optional. They are a standard part of subscribing to the service. Over the course of a two-year contract, these “below the line” fees can easily cost you several hundred dollars.
This practice isn’t prohibited, but as far as we’re concerned, it’s misleading. Moreover, it’s bad for consumers – and in the long run, it’s bad for our economy.
In 2014, Congressman Doyle and three other Members of Congress sent a bipartisan letter to the Federal Communications Commission (FCC), urging the Commission to take a closer look at these billing practices. In the letter, the Members stated that an inquiry sent to some of the nation’s largest communications providers led them to conclude that below the line fees can add substantially to a consumer’s monthly bill and should be made known to consumers before they sign up for service.
Commissioner Clyburn shares this view.
We believe that consumers should know exactly what they will pay before they get their first month’s bill – and, in fact, before they sign up for the service. Full disclosure of these fees up-front, and the total cost of monthly service as well, would promote competition, innovation, investment, end-user choice, and broadband adoption.
In April, the FCC released its consumer broadband label, a new tool that will give consumers more information about the fees and terms of service associated with their fixed and mobile broadband service. Such disclosure and transparency inspires confidence, increases the public’s trust, and demonstrates good faith. The American people not only want these things, they demand them.
We believe that providing comparable information for other telecommunications services would increase the price transparency of those markets.
We are calling for the nation’s communications providers to lead the way and voluntarily improve transparency and disclosure of these “below the line” fees so that when consumers sign up for service, either online or in-store, they won’t have to wait for their first bill to learn what their total monthly costs will be.
We hope the nation’s communications providers will heed our call to action and take this simple step to improve the customer experience. Not only would this be a huge win for consumers; it would be an opportunity for the nation’s phone, Internet, and Pay-TV providers to show they are committed to putting their customers first.