The FCC has issued a Notice of Proposed Rulemaking (NPRM) to consider prohibiting certain billing practices of cable operators and direct broadcast satellite (DBS) providers. Specifically, the FCC is proposing to ban cable operators and DBS providers from imposing early termination fees (ETFs) and billing cycle fees (BCFs) on their subscribers, and seeks comment on issues related to the proposals. The NPRM is a continuation of FCC proceedings to review cable and DBS provider practices that may be misleading or limit consumer choice.
ETFs require subscribers to pay a fee to terminate a video services contract before its expiration date, making it costly for consumers to switch services during a contract term. BCFs require subscribers to pay for a complete billing cycle even if a subscriber terminates service before the end of the cycle, forcing customers to pay for a service they no longer want.
The FCC is proposing to:
(1) prohibit cable and DBS service providers from imposing a fee for the early termination of a video services contract; and
(2) require cable and DBS service providers to grant subscribers a prorated credit or rebate for the remaining whole days in a monthly or periodic billing cycle after a cancellation of service.
Related issues include:
The FCC also seeks comment on the current state of the video marketplace and how cable operators and DBS service providers currently handle ETFs and BCFs; the costs and benefits of banning the practices and how a ban would affect competition; and how the proposals would promote or inhibit advances in diversity, equity, inclusion, and accessibility.
Comments are due 30 days after publication of the NPRM in the Federal Register, and reply comments are due 60 days after publication in the Federal Register.
If you would like to submit a comment in the proceeding, or have questions about the FCC’s proposals, please contact an attorney in our Media practice group.
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