FCC Proposes ‘All-In’ Pricing Rule for Cable and Satellite Industry

The Federal Communications Commission, the government agency that regulates communications through cable, radio, television, satellite and wire, is looking to require cable operators (e.g., Comcast, Charter, Cox) and direct broadcast satellite (DBS) providers (e.g., DISH Network, DirecTV) to provide “all-in” pricing. Specifically, the FCC wants cable and satellite service providers to clearly and prominently display the total cost of video programming services in promotional materials and on subscribers’ bills so that consumers don’t get hit with unexpected fees and so they can comparison shop among competing providers. As part of this effort, the FCC published a notice of proposed rulemaking at the end of June and is seeking public comment on its proposal.

Unexpected fees are a serious, widespread and insidious problem – and one that TINA.org has investigated and reported on numerous times across a multitude of industries, including the cable and satellite services industry. Based in large part on these investigations, TINA.org filed a comment today on the FCC’s proposal, with support and a recommendation to expand the rulemaking to also cover bundled – and related – services. (More on that below.) Earlier this year, TINA.org filed a comment with the FTC supporting the commencement of a rulemaking proceeding to address junk and hidden fees more generally.

The cable and satellite services industry is fraught with pricing deception. A 2019 analysis of 800 cable bills collected from consumers across the country revealed that on average, the cable industry generates close to $450 per year per customer from company-imposed fees, amounting to $28 billion in fees a year. And nearly 6 in 10 Americans who encountered unexpected or hidden telecom fees in the two years prior to the survey reported that the fees caused them to exceed their budgets.

It’s no surprise that the cable and satellite services industry has for years ranked among the most hated by U.S. consumers.

In fact, numerous consumers over the years have reported to TINA.org experiencing deceptive pricing in the industry:

These statistics and consumer reports support the FCC’s position that it is in the public interest to require that cable operators and DBS providers represent their subscription charges transparently, accurately and clearly.

While TINA.org supports the FCC’s proposed rulemaking proceeding to address unexpected fees, we also believe that an addition is necessary to increase the rule’s utility and impact. As explained in our comment, TINA.org is urging the FCC to engage in a rulemaking that explicitly addresses not just cable and satellite services but bundled – and related – services as well.

Cable and satellite services are frequently advertised and provided to consumers as part of bundles that also provide other types of services, including internet and phone. And the advertised prices for such bundles often omit fees that consumers are ultimately charged. Even when additional services – like internet – are not bundled with cable/satellite services, hidden fees persist.

For example, one consumer reported to TINA.org earlier this month the following issues regarding ads like the one above for Astound’s internet services:

This ad has been everywhere over the last half year. I get mailers monthly for it, it comes up on search engines, and first thing you see when you load in their web page. What is the problem with the ads? The price is not obtainable, and the price increases in as little as 1 year. Although not mentioned in the ad the auto pay and bill discount only last 1 year. However the larger problem is only mentioned in the Terms of Service when signing up. ‘… price does not include Network Access and Maintenance Fee of up to $9.77/month, which is subject to change[.]’ So the actual price is 30% higher than advertised, and can change at any point in the 2 years you have a price lock. Your 2 year price lock at $25/month ends up actually being $34.77/month before tax for 1 year. Then after year 1 it increases to $39.77/month before tax. This assumes they do not raise the price for their NAMF during that time.

Another consumer reported to TINA.org last month that he experienced similar deceptive pricing tactics with Optimum Mobile telephone services bundled with internet services, stating:

Optimum Mobile has regularly changed its pricing plans since its inception two years ago. Now they have established monthly pricing plans that are only available if you are also on Optimum Internet customer. The problem is that the only place you find this out is at the very bottom of the page in small print… Additionally, in order to further confound customers, the $20/month non-internet customer surcharge, which is more than the $15/mo that I’m paying for my line, doesn’t appear in your bill until the 3rd month…

And numerous consumers have reported issues to TINA.org regarding deceptive pricing of cable services bundled with internet services, phone services or both, including the following examples:

These stories from consumers barely scratch the surface of the financial harm imposed by hidden and unexpected fees in the cable/satellite industry.

Clearly something needs to be done to rein it in. And a rulemaking proceeding is a good start.

Read TINA.org’s full comment here.