WASHINGTON, D.C.—While the NAB has not taken a position regarding the FCC’s proposal to end early termination and some other pay TV fees, the NAB has filed comments with the FCC arguing that early termination fees “ “insulate MVPDs from the financial consequences of negotiating disputes” and that they are part of a larger effort by the pay TV operators to avoid paying retransmission consent fees and to manipulate retransmission negotiations in their favor.
In a Feb. 5 filing with the FCC regarding its proposals to prohibit some so-called “junk” pay TV fees, the NAB said that it “does not take a position on whether the Commission has the authority to (or should) regulate use of such fees by pay TV providers” but it said that early termination fees feed “other MVPD practices [that] harm consumers; insulate MVPDs from the consequences of their own actions; and aid MVPDs in manufacturing `evidence’ of a supposedly `broken’ system through retransmission consent disputes, and all at the expense of consumers.”
After describing the pay TV industry’s longstanding attacks on paying for broadcasters content and engaging in reasonable retransmission consent negotiations, the NAB said that “[d]uring a dispute, consumers face immediate harm because they cannot access broadcast signals via their MVPD services. Consumers may decide they have had enough of disrupted access to their favorite programming, outages of their entire MVPD service, rising costs of service and/or other issues. But those that wish to terminate MVPD service often find themselves `locked in’ by the prospect of paying hundreds of dollars in ETFs. For example, both Dish and DirecTV charge subscribers an early termination fee of $20 per month remaining on their contract,” forcing consumers to pay “up to $480 in fees for a service they no longer wish to receive.”
“During retransmission consent impasses, broadcast stations also face immediate financial repercussions from reductions in ratings and ad revenues while their signals are not carried and the lack of retransmission consent compensation from that MVPD,” the NAB said. “Yet pay TV providers involved in disputes are in the short-term largely insulated from any economic harm and, instead, may reap benefits. They continue to sell programming packages to new consumers that advertise the availability of broadcast signals; continue to tack on “broadcast TV fees” to packages that are marketed as already including broadcast signals; continue to charge subscribers for programming they do not receive; and count on their subscribers not canceling service or switching providers because of iron-clad ETFs [early termination fees].”
“NAB observes that ETFs and other MVPD practices harm consumers, insulate MVPDs from the consequences of their actions, and help fuel the ability of MVPDs to manufacture `evidence' of a supposedly broken system through retransmission consent disputes,” the NAB concluded. “NAB believes that consumers should be allowed to freely choose from among their available video programming options.”
