FCC in plan to stop early TV termination fees

US Federal Communications Commission Chairwoman Jessica Rosenworcel has unveiled a plan to stop video service providers from charging early termination fees to subscribers.

FCC chair Jessica Rosenworcel (source: FCC)

The FCC has introduced a proposal to eliminate what it describes as video service junk fee billing practices by cable operators and direct broadcast satellite (DBS) service providers and study their impact on consumer choices.  The proposal will be voted on during a December 13 meeting.

The FCC said that early termination fees may limit consumer choice and negatively impact competition for services in the marketplace.  Currently, billing cycle fees also 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, a practice the FCC wants to stop.

If the Commission approves, a Notice of Proposed Rulemaking will propose prohibiting cable operators and DBS service providers from imposing a fee for the early termination of a cable or DBS video service contract, and requiring providers to grant subscribers a prorated credit or rebate for the remaining whole days in a monthly or periodic billing cycle after the cancellation of service.

The regulator cited a recent presidential Executive Order on Promoting Competition in the American Economy that encouraged it to consider “prohibiting unjust or unreasonable early termination fees for end-user communication contracts; enabling consumers to more easily switch providers” to promote competition and lower prices.

The FCC is also planning to implement Broadband Consumer Labels and has proposed ‘all-in-pricing’ for cable and satellite services.

“No one wants to pay junk fees for something they don’t want or can’t use.  When companies charge customers early termination fees, it limits their freedom to choose the service they want. In an increasingly competitive media market, we should make it easier for Americans to use their purchasing power to promote innovation and expand competition within the industry,” said Rosenworcel.