Chairwoman Jessica Rosenworcel of the Federal Communications Commission (FCC) has introduced a proposal to ban the fees imposed by cable and satellite companies on subscribers who wish to terminate their service before the end of their contracts. This initiative aligns with President Joe Biden’s efforts to curtail such fees that burden consumers across various industries.
Currently, subscribers who have signed contracts with cable and satellite providers may incur early termination fees if they opt to terminate their agreement before its expiration. These fees are implemented by companies to reduce customer turnover, also known as churn.
The FCC’s proposal not only aims to prohibit early termination fees but also targets the practice of requiring subscribers to pay for the entire billing cycle when they terminate their service prematurely. Instead, the proposal calls for video providers to provide a pro-rated credit for the remaining days in the billing cycle. It is important to note that this proposal does not extend to streaming services.
Chairwoman Rosenworcel emphasized the significance of eliminating these “junk fees” in her statement, asserting that customers should not be burdened with charges for services they do not desire or cannot utilize. She believes that early termination fees limit the freedom of consumers to choose the services that best suit their needs. Additionally, she emphasizes the importance of making it easier for Americans to use their purchasing power to support innovation and foster competition within the media industry, particularly in the face of an increasingly competitive market.
On December 13, the FCC will vote on whether to issue a notice of proposed rulemaking for public input and comment on this matter.