Consumer Reports is telling the Federal Communications Commission that, according to many of its members, some cable and telecom broadband operators are continuing to charge for modems or routers even when consumers are using their own equipment and the agency should investigate.

The FCC has been seeking comment on compliance with the Television Viewer Protection Act of 2019, which included prohibiting charging subs a modem or router rental fee if they are using their own equipment, a prohibition the consumer advocacy group has pushed for.

Also: FCC Extends Truth-in-Billing Deadline

CR said it polled its members about that issue and received more than 350 responses. Some members said their provider was complying, but “many more” stories suggested ISPs were violating the law either by charging for equipment consumers weren‘t using, or by trying to pressure subs to rent from the provider by refusing to troubleshoot “service disruptions” for those who opted out of renting, CR said. 

“Such practices result in de facto situations where consumers feel pressured or forced to rent equipment that they would prefer to own instead,” CR told the commission.

CR conceded it had not verified the accuracy of the accounts, but said that because of the number of allegations of illegal conduct, they “merit further investigation by the commission.”

The FCC arguably has a financial interest in such an investigation. Billions in broadband subsidies overseen by the agency include reimbursements for ISP modem and router rental fees, so if there are phantom charges, the government could be footing some of that bill. ■

ACA Connects is telling the FCC that the Television Viewer Protection Act of 2019 (TVPA) appears to have paid off in terms of program pricing for smaller operators banding together to do retrans deals with larger broadcast groups.

That is according to an ex parte filing summarizing a meeting between Ross Lieberman of ACA Connects (accompanied by ACAC outside counsel Michael Nilsson) and Tyler Bridegan of new Republican FCC Commissioner Nathan Simington’s office.

The topic was growing broadcast media consolidation and the resulting increases in retransmission consent fees.

But the good news, according to ACAC, was that in the wake of the TVPA, which requires large station groups to negotiate with buying groups, notably the National Cable Television Cooperative, in good faith, the first retrans negotiations under that regime resulted in lower fees than if the smaller MVPDS had negotiated individually rather than in a buying group.

NCTC's equal bargaining status took effect July 20.

ACAC pushed for years to get the government to recognize NCTA, so the TVPA mandate was a victory for the association. But ACAC signaled that while an improvement, the problem was not solved. "Make no mistake, the broadcasters still have an incredible amount of leverage and the terms and conditions of these deals were not great for the small cable operators opting into them," the summary said.

ACAC said more good news was that the FCC had proposed nearly $10 million in fines against Sinclair-associated stations for failing to negotiate in good faith, and $48 million in fines of Sinclair, also for, among other things, failing to negotiate in good faith.

Smaller cable operators banded together under the National Cable Television Cooperative to negotiate better deals for TV station carriage than they could on their own when going up against large TV station groups.  

NCTC collectively represents "hundreds" of smaller operators in programming negotiations, including broadcast stations, but before TVPA was not covered by the FCC's requirement that those negotiations be conducted in good faith, as they must be with individual MVPDs.

The FCC, on its own dime, is asking if it should grant MVPDs a six-month extension on their obligations under the Television Viewer Protection Act of 2019 (TVPA), which passed last December, to “give consumers a breakdown of all charges related to the MVPD’s video service” before those consumers sign a contract, and which gives consumers 24 hours to cancel service without penalty." 

Related: STELAR Successor Bills Pass House 

The TVPA also requires more transparency in electronic billing and prohibits MVPDs from charging equipment they don't provide. 

The deadline for MVPD compliance with those new obligations is June 20, but the bureau points out that the FCC could extend that deadline for "good cause" and wants to know if there are any good causes out there for a blanket extension. 

It even offered a suggestion on what one of those might be. "For example," it said, "parties seeking an extension could describe the steps they need to undertake to update their billing systems in order to provide the required information to consumers, the time needed to implement such updates, and any associated employee training needed to fulfill the new requirements." 

The House has scheduled a vote on suspension Tuesday (Dec. 10) on compromise STELAR-related legislation, H.R. 5035, the Television Viewer Protection Act (TVPA), that would make permanent the FCC's mandate that broadcasters and MVPDs negotiate in good faith. 

Suspension is a procedure for fast-tracking noncontroversial bills, so the bill is expected to pass.

Currently, the mandate sunsets every five years unless Congress renews it. But the TVPA does not renew the compulsory satellite license at the heart of STELAR, which was delegated to the House Judiciary but which also sunsets Dec. 31. 

The license allows satellite operators to import distant network-affiliated TV station signals to markets that lack them. 

Related: ACA Has Issues with TVPA 

The bill is expected to pass, but what happens next is unclear.  

House Energy & Commerce Communications Subcommittee chairman Mike Doyle (D-Pa.) and ranking member Greg Walden (R-Ore.) reached the agreement on the TVPA. 

If it makes it to the President's desk--and Judiciary does indeed add the license renewal part--the bill would allow MVPD buying groups the same good faith guarantee in negotiations as individual companies, as ACA Connects had lobbied for, and still requires fee disclosures by MVPDs and prohibits MVPDs from charging consumers for some equipment.  

But where it goes next is unclear. The House Judiciary has been busy with impeachment hearings and an industry source said there did not seem to be any movement on its re-upping of the license, which broadcasters would be happy to see go. 

The Congress could punt on the issue for a couple of months in a couple of ways, passing a bill extending the license and good faith provisions until early in the New Year, as happened a decade ago. Or it could be slipped in as an extension into the continuing resolution--CR--Congress will need to pass soon to keep the government open past Dec. 20. 

No word on how the Senate is proceeding with STELAR bills on that side of the aisle, though the chairman of the Senate Judiciary Committee, Lindsey Graham (R-S.C.) has signaled he wants the compulsory license to sunset, while Commerce Committee Chairman Roger Wicker (R-Miss.) has said he thinks it is important to renew it, and has introduced a straight renewal bill and pitched it on the Senate floor.  

ACA Connects was celebrating, generally, the inclusion of a buying groups provision in the STELAR reauthorization bill that passed out of the House Energy & Commerce Committee, a provision it has pushed for for years, but it took issue with some restrictions added in the process of reaching bipartisan agreement. 

House E&C Approves STELAR Reauthorization Bill 

The bill allows buying groups, notably the National Cable Television Cooperative, to have the same good faith benefits and responsibilities under the law as individual cable operators. But there are limits on the scope of those groups, limits ACA Connects said will "restrain trade and harm consumers." 

“We thank the Committee for recognizing the benefits of extending the Federal Communications Commission’s good faith rules to retransmission consent negotiations between large broadcast stations groups and buying groups that represent small and medium sized pay-TV providers," said ACA Connects president Matt Polka, adding: “We’re pleased that the buying group provision in the bill adopted today includes a framework for providing good faith protections to buying groups." 

But there was a "but." "[W]e we are disappointed in the metrics that limit the number of subscribers who can benefit and reduce the large station groups that are covered," he added.  

Polka outlined the problematic provisions, saying that the bill: 

• "Caps the number of subscribers of an MVPD eligible to participate in the buying group to 500,000 subscribers, excluding MVPDs that regularly participate in buying group deals; 

• "Limits the buying group from representing more than 25 percent of households in a single market of a large station group, excluding smaller MVPDs especially in smaller markets from participating in buying group deals; 

• "Arbitrarily restricts the number of large station groups that must negotiate with a buying group to only those with a national audience reach of more than 20 percent, which includes only 12 station groups. It means a broadcast station group like Disney, with 8 stations, is included, but other broadcast station groups like Hearst, which owns 32 full power stations, are excluded; 

• "Delays buying groups from taking advantage of the rules until next year; and 

• "Imposes other restrictions on buying groups with regard to their negotiations with broadcasters that are not obligations on buying groups with respect to their talks with cable programmers." 

The bill must still be reconciled with a House Judiciary Committee bill reauthorizing the satellite distant-signal compulsory license, passed by the full House and reconciled with a Senate bill or bills, all by the end of the year, when the STELAR law expires.