President Joe Biden this week criticized cable-TV companies for imposing "junk fees," as the Federal Communications Commission proposed new rules cracking down on the hidden fees charged by cable and satellite video providers.
"My administration's top priority is lowering the cost of living for the middle class, and that includes cracking down on companies' use of junk fees to hide true costs from families, who end up paying more as a result," Biden said in a statement on Tuesday.
As Biden noted, the FCC "proposed a new rule that would require cable and satellite TV providers to give consumers the all-in price for the service they're offering up front." The proposed rule would force companies like Comcast, Charter Spectrum, and DirecTV to publish more accurate prices.
Biden continued:
Too often, these companies hide additional junk fees on customer bills disguised as "broadcast TV" or "regional sports" fees that in reality pay for no additional services. These fees really add up: according to one report, they increase customer bills by nearly 25 percent of the price of base service.
FCC Chairwoman Jessica Rosenworcel first floated pricing transparency rules for the TV services offered by cable and satellite companies in March. That effort took a step forward on Tuesday when the commission approved a Notice of Proposed Rulemaking (NPRM) that seeks public comment on rules that would force video providers to offer accurate prices in advertising.
Misleading “Broadcast TV” and “Regional Sports” fees
"Consumers who choose a video service based on an advertised monthly price may be surprised by unexpected fees related to the cost of video programming that raise the amount of the bill significantly," the NPRM said. The cable and satellite TV companies' practice of listing "Broadcast TV" and "Regional Sports Network" fees separately from the advertised price "can be potentially misleading and interpreted as a government-imposed tax or fee, instead of a company-imposed service fee increase," and make it hard for customers to compare prices across providers, the FCC said.
The docket is available here, and comments will be accepted for 60 days after the NPRM is published in the Federal Register. The FCC said its proposal "would require cable operators and DBS [direct broadcast satellite] providers to clearly and prominently display the total cost of video programming service."
The FCC is also seeking comment on whether it has the authority to impose similar requirements on other types of video providers. But Rosenworcel reportedly said in a congressional hearing that the FCC's authority under US law doesn't extend to streaming services.
The FCC already voted to require broadband providers to display labels with exact prices and other information about Internet service plans. As we reported last week, Comcast complained to the FCC that listing all of its monthly broadband fees is too hard and that it wants the commission to change the broadband label rules before they go into effect.
A TV-pricing transparency rule would force Comcast to be more honest in its advertised prices for video service as well. Comcast's Broadcast TV and Regional Sports Network fees combined can add about $40 to a customer's monthly TV bill.
Advertised price should be the price you pay
The FCC is still operating with a 2-2 partisan deadlock due to the Senate refusing to confirm Biden nominee Gigi Sohn. Biden is trying again with the nomination of Democrat Anna Gomez.
The FCC was required to implement broadband label rules in a 2021 law passed by Congress but isn't facing a similar requirement to crack down on misleading TV prices. Though the NPRM on TV-pricing transparency was approved by the FCC, Rosenworcel may ultimately need a Democratic majority to impose strict pricing rules for TV service after the comment period is over.
"Consumers deserve to know exactly what they are paying for when they sign up for a cable or direct broadcast satellite subscription," Rosenworcel said Tuesday. "No one likes surprises on their bill. The advertised price for a service should be the price you pay when your bill arrives."
Currently, TV providers "hide a bunch of junk fees that are separate from the top-line service price," Rosenworcel also said. Although the FCC probably won't try to regulate streaming services' advertised prices, Rosenworcel said her proposed rules would make it easier to compare traditional pay-TV prices to online options.
"Increases in programming costs shouldn't be described as a tax, fee, or surcharge," she said. "The 'all-in' pricing format we propose today would allow consumers to make informed choices by letting them more easily comparison shop among competing providers and evaluate programming costs against alternative programming providers, including streaming services."
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