On Tuesday the FCC released a Notice of Proposed Rulemaking proposing to require cable operators and direct broadcast satellite (DBS) providers to specify an “all-in” total price for their video service, both in their promotional materials and on subscribers’ bills.
The proposal is intended to help consumers understand the complete cost of video service, to provide consumers with the ability to comparison shop among competing service providers and to compare programming costs against those of alternative programming providers, such as streaming services.
The proposal builds upon the recently implemented Broadband Nutrition Label requirement, which demands that broadband Internet providers display easy-to-understand service performance labels akin to food labels. The proposal is also consistent with the broader federal effort driven by the White House to eliminate so-called junk fees across a variety of industries. Such fees are service provider mandatory fees that are not fully disclosed in provider marketing/advertisements and that later surprise consumers when they are billed.
The agency’s new proposal stems from the Television Viewer Protection Act of 2019 (TVPA). The TVPA added Section 642 to the Communications Act and requires greater transparency in subscribers’ bills, including unexpected and confusing below-the-line video programming fees, such as separate fees for local broadcast stations and regional sports networks.
Of particular concern to Congress when it adopted the TVPA was that provider websites, advertisements, and other promotional materials often advertise a top-line price that does not include these additional mandatory fees that consumers are not aware of until the fees show up on their monthly billing statements.
The proposal would require a cable operator or DBS provider to aggregate the total cost of their video programming service into a single fee that includes all amounts the provider charges the consumer for video programming. The cost would comprise any fees for carrying local broadcast stations and regional sports programming channels, and must include that amount as a prominent single line item on subscribers’ bills and in promotional materials. This amount would not include taxes, franchise fees, or charges unrelated to video programming.
While the notice strongly suggests that the FCC will indeed adopt such rules in the near future, it also seeks public input on the following issues:
- Should providers that itemize portions of their bills provide a full accounting of how a subscriber’s bill is apportioned and explain what portion of a bill is specifically attributable to video programming costs?
- Should there be different requirements or exemptions for promotional materials based on the size of the advertisement (e.g., a website or direct mail solicitation, as opposed to a web pop-up ad that may be character limited)?
- How to account for national, regional, or local advertisements where the actual price may not be the same for all consumers receiving the promotional materials because of market-specific price variations?
- Should the rules differentiate between residential, small business, and enterprise subscribers?
- How do the rules apply to existing customers with legacy plans that are no longer available?
- What is a reasonable implementation period within which providers should be required to update their systems for the new rules? Should smaller providers have more time to comply?
Initial comments will be due 30 days after date of publication in the Federal Register.