The FCC’s proposal seeks to clear up consumer confusion and stimulate competition, complementing forthcoming broadband transparency requirements
Consumers should be made aware of the total cost of their services: In late March 2023, the FCC proposed new consumer protection measures, which would require cable and direct broadcast satellite (DBS) providers to specify the ‘all-in’ (i.e. overall) price of video programming services “clearly and prominently” in their promotional materials and on subscribers’ bills. Specifically, operators would be required to state the total cost of their services as a distinct, standalone line item. This should contain broadcast retransmission consent (the compensation paid by cable companies and other multichannel video programming distributors to TV stations for retransmitting the broadcasting signal), regional sports programming and any other programming-related charges. The FCC’s proposal, if adopted, would eliminate the “misleading practice” of describing these costs as a tax, fee or surcharge; however, it would not remove the prospect of price rises themselves, with some TV providers facing rising programming costs, including with respect to sports fees.
Obligations aim to tackle hidden fees in cable and satellite TV billing: According to FCC Chairwoman Rosenworcel, consumers deserve to know what they are paying for when they sign up to a cable or broadcast satellite subscription, adding that instances of ‘bill shock’ are never welcome, especially for families on tight budgets. The regulator is therefore working to ensure that the advertised price for a service is the price a consumer pays when their bill arrives, which does not include anything that resembles ‘junk fees’. In the regulator’s view, the impact of the proposed ‘all-in’ pricing format will be two-fold:
It would allow consumers to shop around and make more informed choices, increasing competition among cable and DBS providers through improved price transparency; and
It would reduce confusion and make it easier for consumers to compare programming costs against alternative providers, including streaming services.
The cost of living remains high on the regulatory agenda: The FCC’s proposal represents its latest initiative to improve price transparency and increased competition, and is an example of how US policymakers are looking to help alleviate pressure on consumer finances. In 2021, President Biden created the Competition Council, a whole-of-government initiative tasked with tackling junk fees (i.e. unfair and often hidden charges, which can prevent consumers switching between providers to get a better deal). According to the President, these fees cost American households billions of dollars each year. The proposed measures also follow the regulator’s adoption of rules in November 2022 that will require operators to display easy-to-understand labels to empower consumers to compare fixed and mobile telecoms services effectively. These ‘Broadband Nutrition Labels’, which will soon begin rolling out, should contain information typically important to end users, including prices, speeds, data allowances and other terms of service.
