Federal Communications Commission chair Jessica Rosenworcel is proposing prohibiting cable and satellite TV operators from imposing early termination fees on their video subscribers, calling them junk fees that discourage competition.
The notice of proposed rulemaking (NPRM), which Rosenworcel has teed up for a vote at the commission's December public meeting, would also require multichannel video programming distributors (MVPDs) to provide rebates to customers who cancel service before the end of a month for which they have already paid.
In making the proposal, Rosenworcel cited President Joe Biden’s executive order on Promoting Competition in the American Economy, which “encouraged” the FCC to prohibit “unjust or unreasonable early termination fees for end-user communication contracts,” signaling that Rosenworcel also considers them to be either unjust or unreasonable.
“No one wants to pay junk fees for something they don’t want or can’t use,” Rosenworcel said. “When companies charge customers early termination fees, it limits their freedom to choose the service they want.”
Because the item has been scheduled for a vote, Rosenworcel is almost certain to have the Democratic majority she needs for its approval.
The notice begins a cycle of comments and reply comments from interested stakeholders before a vote on a final order.
“Because these fees may have the effect of limiting consumer choice after a contract is enacted, it may negatively impact competition for services in the marketplace,” Rosenworcel's office said in announcing the upcoming vote. “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. These fees penalize consumers for terminating service by requiring them to pay for services they choose not to receive.”
NCTA–The Internet & Television Association had no comment on Rosenworcel’s proposal.
