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All I Want for Christmas Is Fee Transparency

December 15, 2020 , , , , , ,
Cable Bill

On December 20th, something exciting is happening for television viewers, and no, it’s not a new Hallmark Christmas movie (although, we’re sure that’s happening too, and when it does happen, we’ll be there!). What’s happening is that FINALLY, consumers are going to get some transparency into how much they will spend on pay-TV service (e.g. cable or satellite television), before they sign up.

According to Consumer Reports, the average cable bill has more than a dozen line-item charges, and company-imposed fees alone can cost consumers almost $450 a year. That same $450 could feed a family of four for the better part of a month, or get a gamer almost all the way to the purchase of a new PS5.

Last year, due in part to strong advocacy by Public Knowledge and Consumer Reports, Congress passed the Television Viewer Protection Act (TVPA), which goes into effect on Sunday. Amongst other things, the law took action to prevent consumers from signing up for a pay-TV service, only to realize, once it was too late to cancel without a penalty, that they’d be charged hundreds of dollars a year in unexpected fees. The TVPA would require pay-TV providers to tell consumers the total monthly charge for service, including fees, equipment rentals, and taxes, before they sign up. It would also require providers to reiterate that information to consumers within 24 hours of them signing up. Once the consumer gets that notice, if they realize that the price is too damn high, they can cancel the service without any fees or penalties.

The new law will also put an end to the unconscionable business practice of charging consumers a rental fee for cable modem routers even if consumers do not use them! This common sense correction will permit consumers to continue to use their own equipment, and not be forced to pay for something they neither asked for nor needed.

Importantly, this legislation will go into effect just in time to help consumers who are considering signing up for pay-TV service from Comcast. The company recently announced it would be raising its company-imposed fees like the Broadcast TV Fee and the Regional Sports Fee starting on January 1, 2021. These skyrocketing fees could cost Comcast customers an additional $78 a year. While the TVPA doesn’t do much to help existing pay-TV customers, who will now be forking over enough money for a month or two of car insurance despite not knowing they would be doing so when purchasing their service, it would help new customers avoid signing up for a service they can’t afford. It’s also worth noting that the new law won’t help consumers looking to purchase internet service—it only applies to providers of video services.

Moving forward, there are steps that both Congress and the Federal Communications Commission can take to ensure that consumers aren’t bogged down in excessive and unexpected fees. We hope that the FCC will robustly enforce this legislation, and ensure that pay-TV providers disclose their total prices clearly and conspicuously. Ideally, the total price won’t be hidden in small print, which is currently the industry norm. Congress can further expand these requirements to ensure that companies are upfront in their advertising. Congress should also expand the requirements to companies providing internet service, or any other services bogged down with hidden fees. Ensuring those things would make this a very merry holiday season indeed.

 

Image credit: Consumer Reports

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