US President Joe Biden speaks during a meeting on progress to counter the flow of fentanyl in the US, in the Roosevelt Room of the White House in Washington, DC, on November 21, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
WASHINGTON — The Federal Communications Commission on Tuesday announced a proposed rule to ban early termination fees for cable and satellite service contracts.
The proposed rule would require cable operators and direct broadcast satellite, or DBS, providers to eliminate early cancellation fees. It would also require cable companies and DBS to give customers a prorated credit or rebate for the remaining days within a billing period after cancellation, according to an FCC release.
“Nobody wants to pay a junk fee for something they don’t want or can’t use,” FCC Chairwoman Jessica Rosenworcel said in a statement. “When companies charge customers early termination fees, it limits their freedom to choose the service they want.”
The proposed rule is part of a larger White House focus on eliminating excessive fees under President Joe Biden’s July 2021 orders from superiors to promote competitiveness in the US economy.
According to that order, cable television is a sector where fees can stifle competition, because of the costs associated with canceling services or switching service providers.
“Companies shouldn’t lock you into services you don’t want with huge fees,” President Joe Biden X said on Tuesday. “It’s unfair, raises costs, and stifles competition. We’re doing something about it.”
The FCC had previously announced that it would implement it Broadband Consumer Labels — easily accessible information for consumers about the functions and costs of a broadband service, similar to a food nutrition label. The agency also proposed “all-in” pricing for cable and satellite services, so customers would see the total cost of the service, including fees, up front.
“In an increasingly competitive media market, we must make it easier for Americans to use their purchasing power to drive innovation and expand competition within the industry,” Rosenworcel said.
Disclosure: Comcast is the parent company of CNBC.
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