A new proposal from Federal Communications Commission Chair Jessica Rosenworcel would toss the early-termination fees of some pay-TV providers into the same trash can of telecom history as surcharges for touch-tone dialing.
Rosenworcel put the plan on the agenda for the FCC’s Dec. 13 meeting. A summary (PDF) says it would have the FCC prohibit cable and satellite TV providers from imposing fees for terminating a video-service contract before the contract’s expiration date. It would further require them to give subscribers “a prorated credit or rebate for the remaining whole days” left in a billing cycle after they canceled service.
“When companies charge customers early termination fees, it limits their freedom to choose the service they want,” Rosenworcel says. “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.”
“ETFs” used to be a bane of the telecom industry but now only survive among a subset of pay-TV and broadband services. For example, Comcast’s site didn’t advertise any TV plans with minimum-term contracts when I checked for service Tuesday at an address in Washington, while DirecTV’s site lists an ETF of “up to $20 for each month left in your commitment.”
The rise of streaming-TV services that offer simple, month-to-month pricing has already led millions of customers–more than 6.25 million in 2022 alone–to dump traditional pay TV.
Rosenworcel’s bid to erase ETFs follows other moves by the commission to make shopping for telecom services less dicey. Last November, the FCC voted to require broadband providers to break out their rates, download and upload speeds, any data caps and other important details in a nutrition-label-style display; that rule goes into effect for larger ISPs in April.
And in March, the FCC kicked off a rulemaking process that could lead to requiring cable and satellite TV providers to post total service costs.
The FCC announcement name-checks President Biden’s July 2021 executive order on promoting competition, which encouraged the FCC to write rules “prohibiting unjust or unreasonable early termination fees for end-user communications contracts, enabling consumers to more easily switch providers.”
That document has since sparked a variety of other regulatory moves, such as the Federal Trade Commission proposing to ban non-compete clauses (which bar workers from quitting one job to work at a competing firm or start their own competent business) and moving to prohibit “junk fees” in broadband service plans. And in June, the White House announced a deal with Ticketmaster parent firm Live Nation in which that firm agreed to advertise all-in prices at tickets for events at its own venues.
