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FCC Votes To Ban Cable And Satellite Early Termination Fees

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The Federal Communications Commission today voted on and adopted a notice of proposed rulemaking in relation to banning ‘junk fees.’ The move would prohibit cable and satellite companies from charging customers early termination fees. In some cases, consumers may even be able to get a refund for switching services during the month.

Anyone that has signed up to a cable or satellite TV package in the past will likely be well aware of how limiting the terms of the agreement can be. Most notably, the fact that they cannot cancel their live TV package without incurring additional fees.

In a press release, the FCC explained these fees make it “costly for consumers to switch services” and potentially “reduce competition for video service.” As a result, it is now moving forward with its proposal “to adopt customer service protections that prohibit cable operators and DBS providers from imposing a fee for the early termination of a cable or DBS video service.”

If the proposed FCC changes were implemented, it remains to be seen what they might mean in terms of pricing. After all, if companies are unable to guarantee subscriptions for a longer period, they might be less inclined to offer signup incentives to begin with.

In addition to a ban on early termination fees, the FCC has also proposed making changes to billing cycle fees. Basically, the ability for companies to charge for a full billing cycle when a customer opts to cancel their service before the current billing period has come to an end.

While early termination fees don’t tend to impact live TV streaming subscribers, billing cycle fees certainly do. Generally speaking, there are no live TV streaming services currently opening in the United States that offer a refund when canceling before the end of a billing cycle. Instead, they accept the cancellation request and advise the subscriber can continue to access the service for the remainder of the billing period.

Under the FCC’s proposals, it is possible that subscribers could get a refund equal to the time between their cancellation request and the end of the billing cycle.

John Finn

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