By a 3-2 party-line vote, the Federal Communications Commission on Thursday approved a report and order that would require cable and satellite pay TV operators to publish in their advertising and on customer bills the actual total price of their video service, so-called junk fees included.
The FCC's new “all-in pricing” order will “require cable operators and DBS providers to state the aggregate cost of video programming (that is, any and all amounts that the provider charges the consumer for video programming, including for broadcast retransmission consent, regional sports programming, and other programming-related fees) as a clear, easy-to-understand and accurate single line item in promotional materials, if a price is included in those promotional materials, and on subscribers’ bills,” the FCC says in a fact sheet published in February.
“Consumers deserve to know exactly what they are paying for when they sign up for a cable or direct broadcast satellite subscription,” FCC chair Jessica Rosenworcel, a Democrat, said in a statement released back in June. “No one likes surprises on their bill. The advertised price for a service should be the price you pay when your bill arrives, rather than hide a bunch of junk fees that are separate from the top-line service price.
Rosenworcel has also recently proposed ending early termination fees by cable and satellite providers.
As to when cable and satellite operators will have to start abiding by the new reporting rules is unclear. A rep for NCTA: The Internet & Television Association told Next TV that the cable lobbying organization still hasn't seen the final order.
Not surprisingly, the cable industry pushed back on the FCC's order.
“Today’s misguided action will not help consumers and will only add confusion from government-imposed ad requirements,“ NCTA said in a statement. “Cable providers offer clear and accurate pricing information to attract and retain subscribers, including ‘all-in’ pricing information before signing up for service. The FCC’s micromanagement of advertising in today's hyper-competitive marketplace will force operators to either clutter their ads with confusing disclosures or leave pricing information out entirely. For consumers, it’s a lose-lose proposition.”
ACA Connects, meanwhile, said the order doesn't account for what the group representing smaller, independent cable providers says is the root cause of escalating fees, broadcast retransmission consent fees.
“ACA Connects members support providing easy-to-understand and transparent pricing for customers,” it said in a statement. “However, this order fails to meet that goal because it does nothing to address a driving cause of sticker shock —broadcasters’ retransmission consent fees forced on cable providers and, ultimately, on their customers. Further, the heavy-handed requirements are more likely to confuse people than increase transparency and will create implementation challenges for providers.”
Consumer groups, of course, felt differently.
Consumer advocates told the FCC that between 24% to 33% of the typical monthly pay TV bill can be attributed to so-called junk fees, which include line items such as “broadcast TV fees,” “regional sports surcharges” and “HD technology fees."
Meanwhile, a 2019 analysis conducted by Consumer Reports of 800 cable bills, revealed the cable industry generates $450 per customer, per year, from company-imposed fees.
"Public Knowledge applauds the agency for helping consumers learn the true price of what they’re paying for before they sign up for video programming, preventing surprise costs while also improving consumer choice," Public Knowledge said in its statement.
