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Broadband's Impact

John Meyer: Slam the Phone on Telemarketers, Chairman Ajit Pai

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The top regulator of U.S. phone calls has issued an ultimatum to telecom companies: Either stop robocallers from faking phone numbers or risk new regulations from the Federal Communications Commission.

FCC Chairman Ajit Pai’s warning is well-justified. By several different measures, the number of telemarketing and scam calls to cell phones has exploded over the last few years. Besides making good on Pai’s warning to telecom companies, the FCC should create new rules for telemarketers to protect consumers from intrusive calls and wasted time.

Americans are letting more than half their cell phone calls go to voicemail, according to a recent report. Consumers may have personal reasons for ignoring their phones, but the dramatic increase in cellular telemarketing, robocalls, and spam is undoubtedly the main culprit.

While the FCC has been active in doling out fines and adjusting regulations, Pai’s threat of “regulatory intervention” represents an escalation in the FCC’s war on spam. Victory won’t be easy, though.

Telemarketers employ a bag of tricks for subverting Caller ID. These include calling from different numbers, calling from foreign countries, and “spoofing,” which means falsifying the information showing up on call preview. “Neighborhood Spoofing,” or mimicking the call receiver’s area code, is a common practice.

When people refer to “telemarketers,” they probably mean one of three similar but distinct practices. There are sales calls from companies upselling to consumers with whom they already have a business relationship. There are also companies who have legally purchased consumer data and are using it to cold-call potential customers.

Then, last and worst, there are the scammers. First Orion, a Caller ID company, estimates scam calls constituted less than 4 percent of cellular calls in 2017. This year, they are projected to make up just under half.

According to the Washington Post, Americans received more than 26 billion robocalls last year. Robocalls are used by telemarketers from all three categories, more and less abusively. The rampant use of spoofing among robocall dialers was the primary source of Pai’s ire in his statement last week.

In 2003, Congress tried to strike a balance between consumer rights and business privilege by creating the National Do Not Call Registry. Technological advancement has made those protections obsolete, however, and disrupted the status quo in favor of telemarketers.

Americans are increasingly reliant on cell phones for both their work and social lives. At the same time, not everyone has the luxury of turning their phones on silent or ignoring unknown callers. While Caller ID companies like First Orion and others are offering consumers solutions to telemarketing abuse from the private sector, the FCC could make a few reasonable regulatory changes, as well.

The FCC should regulate from the position that consumers don’t want to be bothered. Dealing with companies that have preexisting business relationships with a consumer should be the easiest to tackle. With a few exemptions for consumer health or financial emergencies, the FCC should require customer opt-in for extracurricular calls

Reining in cold callers is trickier. Stopping telemarketers from buying phone data through companies like Google, Facebook, and Amazon would take an act of Congress, but The FCC can set strict rules on data buyers that are more consumer friendly.

All telemarketing calls, whether live or automated, should include clear “opt-out” mechanisms. These opt-outs would last for some set period of time and re-upping them after they expire should be simple.

The FCC should also require telemarketers to be more transparent about the companies they represent. That information, as well as opt-out numbers, should be communicated within the first seconds of a call.

Finally, a certain number of call rejections should count as an affirmative opt-out for future calls from a particular company. The onus should be on telemarketing companies to take the hint that their services are not required.

These regulations would benefit not only consumers but also the legitimate telemarketing industry as a whole. Scammers, incessant robocalls, and obnoxiously-relentless telemarketers are effectively poisoning the well for responsible actors. Stronger regulations might make consumers less likely to hang up on all commercial callers immediately, creating more room for good-faith salespeople.

To facilitate enforcement, all categories of telemarketing companies would need to keep extensive records on their calls and opt-out lists. Robust rules would hit the noncompliant with stiff penalties. In a perfectly just world, these “stiff penalties” might include nonstop, anonymous calls to executives and middle managers of offending companies, though such penalties would undoubtedly be cost prohibitive.

Pai’s exhortation to telecommunication companies shouldn’t be considered an idle threat. As the Net Neutrality saga proved, he’s not afraid to embrace controversy. Happily, he’s unlikely to face protests outside his home or receive death threats over new protections from telemarketing. To the contrary, successfully slamming the phone on spam callers could be the most popular thing the FCC has ever done.

John C. Meyer is Senior Researcher for Consumers’ Research, the nation’s oldest consumer organization.

BroadbandBreakfast.com accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@broadbandcensus.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of BroadbandBreakfast.com and Breakfast Media LLC.

Broadband's Impact

House Bill to Make Broadband Grants Non-Taxable Introduced

Sen. Mark Warner said last month he is working to pass a companion bill by year’s end.

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Photo of Rep. Mike Kelly, R-Penn.

WASHINGTON, December 7, 2022 – Reps. Mike Kelly, R-Penn., and Jimmy Panetta, D-Ca., on Wednesday introduced the Broadband Grant Tax Treatment Act, the companion of a Senate bill of the same name, which would make non-taxable broadband funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act.

The bill’s supporters say it will increase the impact of Washington’s broadband-funding initiatives, the largest of which is the IIJA’s $42.45 billion Broadband Equity, Access, and Deployment program. The IIJA allocated a total of $65 billion toward broadband-related projects.

Kelly said the proposal “ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment.”

“This legislation allows for existing grant funding to be spent as effectively as possible,” Kelly added.

Sen. Mark Warner, D-Va., sponsored Senate’s version of the bill in September and said last month he is working to push it through by year’s end.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” said Jonathan Spalter, president and CEO of trade group US Telecom. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose.”

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Digital Inclusion

Broadband is Affordable for Middle Class, NCTA Claims

According to analysis, the middle class spends on average $69 per month on internet service.

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Photo of Rick Cimerman, vice president of external and state affairs at NCTA

WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association. 

Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”

During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.

According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.

Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.

Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.

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Broadband's Impact

Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels

The FCC also mandated that internet service provider labels be machine-readable.

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Federal Communications Commission Chairwoman Jessica Rosenworcel

WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.

The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.

The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.

In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.

“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,”  FCC Chairwoman Jessica Rosenworcel said in a statement. 

“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products.  We’re now requiring internet service providers to display broadband labels for both wireless and wired services.  Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”

Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.

“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.

The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.

“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”

Image of the FCC’s sample broadband nutrition label

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