WASHINGTON, D.C.—During its December Open Meeting, the Federal Communications Commission (FCC) adopted a Notice of Proposed Rulemaking that would create new rules eliminating early termination and other video service fees by cable operators and direct broadcast satellite (DBS) providers. The FCC also plans to study the impact of these practices on consumer choices.
The adoption of the Notice of Proposed Rulemaking signals support for an FCC’s crackdown on what FCC chairwoman Jessica Rosenworcel has called “junk fees'' by enacting rules that prohibit early termination fees. It would also require prorated credits or rebates after cancellation of service.
The vote to approve the NPR begins a process of public comments and review on the final rules, which won’t go into place until a final order is adopted by the FCC.
The Notice of Proposed Rulemaking (FCC 23-106) was approved strictly along party lines, with chairwoman Rosenworcel, commissioners Starks and Gomez voting yes and commissioners Carr and Simington voting no.
In adopting the NPR, the FCC noted that 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 service contract prior to its expiration date, making it costly for consumers to switch services. This in turn limits consumer choice and reduces competition for video services, the FCC argued.
The FCC also stressed that its move to end those fees comes in the wake of the recent the Executive Order on Promoting Competition in the American Economy.
That Executive Order from the Biden administration encouraged the Commission to consider “prohibiting unjust or unreasonable early termination fees for end-user communication contracts; enabling consumers to more easily switch providers” in order to promote competition and lower prices.
The Notice of Proposed Rulemaking is also the latest in a series of consumer-focused proposals by the FCC including Broadband Consumer Labels and proposed “all-in-pricing” for cable and satellite services, the FCC said.
