FCC approves report banning ‘junk fees’ on cable, satellite bills

The FCC has approved a report and order that will require cable and satellite pay TV providers to include so-called “junk fees” on advertising and billing documents.

The order will require cable operators and DBS providers to list the “aggregate cost,” which it defines as the traditionally-list based price plus “any and all amounts that the provider charges the consumer for video programming, including for broadcast retransmission consent, regional sports programming, and other programming-related fees.”

The final “all-in” pricing must be displayed as a “clear, easy to understand and accurate line item in promotional” materials, seemingly allowing companies to still showcase the cost they have traditionally advertised as long as the total estimated cost is also included.

The report notes that “We do not at this time impose a ‘service nutrition-style label,’ specific font size, or disclosure proximity requirement to comply with the ‘all-in’ rule,” so the definition of “clear, easy to understand” is likely up to some interpretation. 

Pay TV providers covered by the rule will also be required to clearly list the total cost on any bills or statements consumers received for their service. 

“Consumers deserve to know exactly what they are paying for when they sign up for a cable or direct broadcast satellite subscription,” noted FCC chair Jessica Rosenworcel, a Democrat, in a statement issued in June 2023. “No one likes surprises on their bill. The advertised price for a service should be the price you pay when your bill arrives, rather than hide a bunch of junk fees that are separate from the top-line service price.

The cable and satellite industry clapped back quickly against the rule.

In a statement, the NCTA: The Internet & Television Association called the move “misguided.”

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“Cable providers offer clear and accurate pricing information to attract and retain subscribers, including ‘all-in’ pricing information before signing up for service. The FCC’s micromanagement of advertising in today’s hyper-competitive marketplace will force operators to either clutter their ads with confusing disclosures or leave pricing information out entirely. For consumers, it’s a lose-lose proposition,” the NCTA noted in the statement.

ACA Connects, a group representing mostly smaller operators, issued a statement saying the new rule does not address what it calls the root cause of escalating fees — retransmission fee hikes. 

For years, pay TV providers have added fees ranging from “HD technology fees” to fees for renting required hardware to a myriad of service fees, some of which it uses to pass along mandated costs to consumers.

The new rule will not, at least as it stands now, affect streaming TV providers that operate as virtual multichannel video programming distributors (sometimes still referred to as “cable” providers) such as YouTube TV, Sling TV or Hulu + Live TV, because these services are not legally considered cable or satellite providers.

There are separate efforts, however, to begin considering these types of providers as such, a move that is largely backed by broadcast TV stations through its Coalition for Local News and Congressional Democrats. 

The new FCC rule on fees could accelerate a push for such a move from the side of the cable, satellite and local TV industry because streaming TV providers already lower prices could seem even lower in comparison to traditional TV services with added fees included in advertising. 

Many streaming providers do not charge fees on top of their advertised price, with the exception of sales tax in some cases (some providers include any required taxes or fees in their monthly price).

It is not immediately clear when the FCC rule would go into effect.

The FCC has jurisdiction over traditional over-the-air broadcasters because they utilize public airwaves. The commission has some authority over cable and TV companies because, at least in the case of cable providers, they often are granted legal monopolies or quasi-monopolies to install their infrastructure in a particular region.