U.S. house bill says bigger ISPs have lower transparency standards

by Steve Blum • , , ,

Face it, $100 million is chump change here.

Mid-sized Internet service providers as well as small ones would be exempt from Federal Communications Commission rules that require, among other things, full disclosure of monthly price, fees, data caps and other such terms of service, under a bill approved unanimously (411 to zip) by the U.S. house of representatives. HR 4596 says that transparency rules adopted last year by the FCC, as part of its decision to regulate broadband as a common carrier service, “shall not apply to any small business”, which is defined as “any provider of broadband Internet access service that has not more than 250,000 subscribers”.

The exemption also would apply to network performance reporting requirements and disclosure of network management practices, or at least the additional requirements imposed by the FCC last year. An FCC decision from 2010 that established a lower standard of transparency and reporting will remain in effect for mid and small sized ISPs.

ISPs with fewer than 100,000 subscribers were given a temporary exemption by the FCC last year. This bill would make it permanent and raise the bar to 250,000 subscribers. It’s a typical Washington mischaracterisation to call an ISP with that many subs a “small businesses”, since it could easily have annual revenue of more than $100 million a year. Even 100,000 is a very high bar – the largest independent ISPs in California are well south of that number, as are rural telephone companies.

The bill essentially says that it’s only the major incumbents that have to meet the higher standard of consumer disclosures and network management reporting imposed last year. Sorta. Those requirements are being challenged in court, along with the big issue of common carrier status for broadband service, and the bill won’t change that.

Before it takes effect, it has to be approved by the U.S. senate – a similar bill already has bipartisan support there – and signed by the president.