Protocol | Policy

Does your internet suck? Consumer Reports wants to help.

More than 40 groups led by Consumer Reports are trying to build the case for government to do more on broadband competition.

Woman reads bill and pays via tablet

Broadband Together hopes to review at least 30,000 bills to learn how much users are paying for internet.

Photo: JGI/Jamie Grill/Getty Images

What's in your broadband bill? Consumer Reports wants to know — and hopefully, to make it cheaper.

More than 40 consumer, privacy and digital rights groups, led by Consumer Reports, launched a drive today asking people to send in their internet bills as part of a campaign to push down prices for, and boost the quality of, internet service through increased competition.

The group effort, known as Broadband Together, hopes to review at least 30,000 bills to learn how much users are paying and figure out where competition is scarce for internet service.

Broadband Together's launch comes as the Biden administration has thrown support behind increasing broadband access as part of an infrastructure bill and taken steps to try to increase competition, including in a sweeping order last week.

"To create a better marketplace, we need to know the truth about our internet prices and fees," Jonathan Schwantes, senior policy counsel for Consumer Reports, said in a release. "Shockingly, some bills don't even list the price consumers are paying for internet service."

To participate, consumers will upload PDF copies of their bills to a website that extracts the pricing and service information, Schwantes told Protocol in an interview. The ZIP code is the only personally-identifiable information the website extracts, although the accompanying survey asks optional demographic questions, and the bills are only shared with Consumer Reports.

Consumers then take an online speed test to figure out their upload and download speeds. Not all entries will be useful, the organization admits. In particular, service bundles, in which companies provide some combination of internet, TV and phone services together, may not clearly break out the cost of each service, and Consumer Reports isn't taking paper bills for the time being. But Schwantes is optimistic that the coalition will receive enough bills that he and others can get good data on local price, service, speed and more.

"Once we do that, we can tell you what the ISPs are charging, and then really with enough data, [we can] start figuring out, why is that same plan cheaper in that ZIP code versus that ZIP code?" Schwantes said.

He said he fully expects the answer to come down to competition: Where it's robust, plans will likely be cheaper and offer better speeds. Where it's not, consumers will be paying more for less. If the results do support that conclusion, the group then plans to promote a series of potential reforms. Many focus on government support of internet service, particularly in areas where it might be too expensive for new commercial networks to launch as rivals offering lower prices than incumbent providers.

"Where there's not competition and consumers are stuck, the only person who can help them out is the government," Schwantes said. "You should have some version of a low-cost plan."

Of course, the shape and effectiveness of such low-cost plans is an open question. The $3.2 billion in federal funding for internet access that came out of the pandemic has faced a glitchy rollout, including difficulty reaching the tens of millions of people it aims to help and also issues such as Spectrum's effort to funnel users into full-price service down the road.

State-level action also faces an uphill battle. The telecom industry in June succeeded in its lawsuit to block a first-in-the-nation discount program in New York state. Nearly two dozen states also have outright bans or other significant roadblocks in place to networks that state and local governments might build or run.

The telecom industry, which says that broadband competition is robust and prices are decreasing broadly, has cast municipal broadband efforts as unnecessary expenses on the taxpayer for poor networks. Instead, industry groups push for public-private partnerships like the network that Consolidated Communications is building out for 500 customers in Eastbrook, Maine.

Still, the time might be opportune for Broadband Together's push — particularly if legislators are still debating an infrastructure package in the fall, when Schwantes said he expects results.

Biden's Friday executive order on competition likewise contains provisions addressing residential broadband. One request asks Federal Communications Commission to require reports from broadband providers about prices for internet services and to generate standard consumer labels about broadband services, based on ubiquitous nutritional information labels.

Schwantes said that while the broadband labels, which the FCC had proposed in the Obama administration before abandoning them under the Trump administration, might be a "cuter" solution than massive government support for internet service, it's also a "no-brainer."

"Just looking at all of these bills can make the case for that as well," he said.

Because the FCC is an independent agency, the administration's requests are non-binding. The commission is also evenly split between Republican and Democratic members until Biden nominates a fifth commissioner.

Still, Broadband Together may have history on its side. The inspiration for the project came in part from similar work Consumer Reports did on hidden fees in cable TV bills. Consumers on the group's list delivered more than 5,000 bills in two weeks, which is part of why Schwantes is optimistic about meeting or exceeding his goal with a long list of partners. The resulting 2019 report helped the group succeed in its push for a law bringing more transparency to fees.

The coalition's steering committee also includes Public Knowledge, Access Now, the American Library Association, Color of Change, the National Hispanic Media Coalition and more. Many of the groups are veteran Washington policy organizations, with several focusing on Black, Hispanic and rural communities where access or affordability issues may be particularly acute.

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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