The fees that cable and satellite companies charge to subscribers for eliminating their service before the end of their contracts would be prohibited under a new proposal from the FCC.
Chairwoman Jessica Rosenworcel today outlined a proposal that takes aim at video service “junk fees,” in line with President Joe Biden’s actions to curb such consumer levies across industries.
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Some subscribers who sign contracts with cable and satellite operators face paying early termination fees if they want out of the agreement before the expiration date. The companies put such fees in place to reduce churn.
The FCC proposal also would target requirements that subscribers pay for the entire billing cycle when they end their service before that date. The proposal would require that the video providers grant a pro-rated credit for the remaining days in a billing cycle. The proposal applies only to cable and satellite providers, not streaming services.
In a statement, Rosenworcel said, “No one wants to pay junk fees for something they don’t want or can’t use. When companies charge customers early termination fees, it limits their freedom to choose the service they want. In an increasingly competitive media market, we should make it easier for Americans to use their purchasing power to promote innovation and expand competition within the industry.”
The FCC will vote at its Dec. 13 meeting whether to issue a notice of proposed rulemaking for public comment.
Biden posted about the proposal on X/Twitter.
He wrote, “My Administration just announced a proposed rule that would ban early termination fees for cable and satellite TV. 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.”
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