Federal Communications Commission Chairwoman Jessica Rosenworcel announced a proposal to eliminate early termination fees by cable operators and direct broadcast satellite service providers and study their impact on consumer choices.
The proposal will be voted on during a Dec. 13 meeting.
“No one wants to pay junk fees for something they don’t want or can’t use. When companiesmcharge customers early termination fees, it limits their freedom to choose the service they want,” said Chairwoman Rosenworcel. “In an increasingly competitive media market, we should make it easier for Americans to use their purchasing power to promote innovation and expand competition within the industry.”
TV video service subscribers may terminate service for any number of reasons, including moving financial hardship, or poor service. Early termination fees require subscribers to pay a fee for terminating a video services contract prior to its expiration date, making it costly for consumers to switch services during the contract term. Additionally, billing cycle fees require TV video service subscribers to pay for a complete billing cycle even if the subscriber terminates service prior to the end of that billing cycle.
Recently, the Executive Order on Promoting Competition in the American Economy signed by President Joe Biden encouraged the Commission to consider “prohibiting unjust or unreasonable early termination fees for enduser communication contracts; enabling consumers to more easily switch providers” in order to promote competition and lower prices.
In addition to today’s proposal, the FCC is also implementing Broadband Consumer Labels and has proposed ‘all-in-pricing’ for cable and satellite services.
If adopted by a vote of the full Commission, this action, called a Notice of Proposed Rulemaking, would:
• Propose to adopt customer service protections that prohibit cable operators and DBS service providers from imposing a fee for the early termination of a cable or DBS video service contract.
• Propose to adopt customer service protections to require cable and DBS service providers to grant subscribers a prorated credit or rebate for the remaining whole days in a monthly or periodic billing cycle after the cancellation of service.
