Cable TV companies tell FCC: Early termination fees are good, actually

Getty Images | Jeffrey Coolidge

Cable and satellite television companies are defending their early termination fees (ETFs) in hopes of avoiding a proposed ban by the Federal Communications Commission.

The FCC voted in favor of the ban in December, opening a public comment period that drew reactions from those for and against the rules. The FCC plan would ban early termination fees charged by cable and satellite TV providers and require TV companies to provide prorated credits or discounts to customers who cancel before the end of a billing period .

NCTA—The Internet & Television Association, the main lobbying group representing cable companies like Comcast and Charter, opposed the rules in a deposit submitted Monday and posted on the FCC website yesterday. DirecTV and Dish also opposed the proposal.

The NCTA claimed that banning early termination fees would harm consumers. “Discounted plans with ETFs are a beneficial choice for some consumers,” the lobby group said. The NCTA said the video industry is “hyper-competitive” and it is easy for customers to switch providers.

“In response to these market realities, some cable operators are offering discounts to consumers who choose to remain longer-term customers,” NCTA said. “Longer subscription commitments lower a cable operator's subscriber acquisition costs and provide a more predictable revenue stream, which allows a cable operator to offer discounted monthly rates.”

Cable companies also recently urged the United States to remove “click to cancel” regulations that aim to make it easier for consumers to cancel their services.

NCTA also opposes partial monthly credits

TV providers will be less likely to offer discounts to long-term customers if they are unable to impose early termination fees on those who want to cancel before a contract expires, the company said. NCTA. Customers who do not want to benefit from an ETF can simply choose a monthly plan, NCTA argued.

NCTA also defended full-month billing in cases where customers cancel during a month. Full-month billing “is the norm for many other common services, including gym memberships, gaming and online publications,” NCTA said.

Overall, “banning ETFs and full-month billing would increase prices and harm competition, to the detriment of consumers,” the NCTA said. NCTA also asserts that the proposal amounts to rate regulation and is not authorized under the FCC's legal authority to “establish standards by which cable operators can meet their performance requirements.” customer service “.

The proposed ban on ETFs and a proration requirement do not constitute “customer service requirements” in the ordinary sense of the term,” NCTA said.

THE FCC Proposal stated that “customer service” is not defined in the Cable Act of 1984, but that legislative history suggests that the term includes discounts, credits and other aspects of the relationship between suppliers and customers.

“Although Section 632 specifies certain topics that must be addressed in the Commission's cable customer service rules, such as “communications between the cable operator and the subscriber (including standards governing bills and reimbursements), “the list is not exhaustive,” the FCC said. . “Because Section 632(b) states that standards must address these topics “at a minimum,” the Commission has broad authority to adopt customer service requirements beyond those listed in the law.”

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