FCC bans cable TV industry’s favorite trick for hiding full cost of service

A person's hand aiming a cable TV remote control at a TV screen

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Cable and satellite TV companies must start advertising “all-in” prices instead of using hidden fees to conceal the full cost of video service, the Federal Communications Commission said in new rules adopted last week.

The FCC voted to adopt the rules on March 14, and the final text of the order was released yesterday. The rules are aimed in particular at the Broadcast TV and Regional Sports Network fees charged by Comcast and other companies.

For years, TV providers have advertised artificially low prices that don’t include such fees. The actual bills received by subscribers thus have prices much higher than the advertised rates.

The record indicates that approximately 24 to 33 percent of a consumer’s bill is attributable to company-imposed fees such as ‘Broadcast TV Fees,’ ‘Regional Sports Surcharges,’ ‘HD Technology Fees,’ and others, and that the ‘dollar amount of company-imposed fees has skyrocketed,'” the FCC order said.

Cable and satellite companies say the Broadcast TV and Regional Sports fees reflect the ever-rising price of acquiring content from programmers. But acquiring programming is the cost of doing business as a TV provider—with no channels to offer, there would be no reason for consumers to buy the service.

Cable lobby mad about “micromanagement”

One of the new rules states that cable and satellite TV “providers that communicate a price for video programming in promotional materials shall state the aggregate price for the video programming in a clear, easy-to-understand, and accurate manner.”

A similar rule will apply to customer bills, requiring an aggregate price in a single line item. In both advertisements and customer bills, the operator must state whether the price is a promotional rate and what the full price will be after the promotion expires.

Cable lobby group NCTA-The Internet & Television Association claimed that the commission’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.” The NCTA previously disputed the FCC’s legal authority to issue the rules, which indicates that the industry may sue the commission in an attempt to block the order.

The TV all-in pricing rules won’t take effect immediately. Because they include information-collection requirements, they are subject to a Paperwork Reduction Act review by the US Office of Management and Budget. The rules will take effect after that review or after nine months, whichever is later.

The FCC previously adopted rules requiring broadband providers to list all of their monthly fees and other information in a format modeled after nutrition labels. The broadband label rules take effect next month.

“Beginning April 10, 2024, consumers should look for broadband labels at any point of sale, including online and in stores,” the FCC says. “The labels must disclose important information about broadband prices, introductory rates, data allowances, and broadband speeds. They also include links to information about network management practices and privacy policies.”

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