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The Federal Communications Commission (FCC) has proposed a rule to ban early termination fees for cable and satellite TV contracts. The proposal, which is on the agenda for the FCC’s December Open Commission Meeting, aims to give customers more freedom and choices when switching their TV service providers. The Biden Administration also wants vendors to stop charging subscribers for a complete billing cycle if they terminate the service early.
“My Administration just announced a proposed rule that would ban early termination fees for cable and satellite TV,” President Joe Biden said on X, formerly Twitter. “Companies shouldn’t lock you into services you don’t want with large fees. It’s unfair, raises costs, and stifles competition. We’re doing something about it.” The FCC’s December Open Meeting is scheduled for Wednesday, December 13, 2023.
The FCC seeks to remove early termination fees from TV contracts
Cable TV operators and direct broadcast satellite (DBS) providers usually lock customers in with long-term contracts running for months or years. Even if the customer doesn’t like the service and wants to switch, they can’t switch freely. They must pay a hefty early termination fee or keep using the service until the contract runs. The FCC is looking to end this practice with its proposed new rule for the cable and satellite TV industry.
With this rule, customers can end their TV contracts whenever they want without bearing additional costs. This gives them more freedom when switching operators. The Commission is aiming to further add to their choices with new regulations for billing cycle fees. Service providers won’t be able to charge customers for the full month if they decide to switch to another service mid-way through it.
According to the FCC’s proposal, cable and satellite TV vendors have to grant subscribers a prorated credit or rebate for the remaining days of service in a canceled billing cycle. “No one wants to pay junk fees for something they don’t want or can’t use,” FCC Chairwoman Jessica Rosenworcel said in a statement (via CNBC). She suggested that this move would “promote innovation and expand competition within the industry.”
The FCC will implement Broadband Consumer Labels next year
The new proposal from the FCC comes just months before it starts implementing Broadband Consumer Labels, which are “clear, easy-to-understand, and accurate information about the cost and performance of broadband services.” They work similarly to a food nutrition label and provide customers with detailed information about a service. Companies must display the labels on their online and offline stores by April 10, 2024. The deadline is October 10, 2024, for providers with 100,000 or fewer subscriber lines.
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