The US government proposed a crackdown on cable companies’ billing practices Wednesday as it announced plans to ban early-termination fees and to introduce fresh rules that could lead to consumer refunds if a subscriber cancels a plan mid-month.
The proposal by the Federal Communications Commission would impose new restrictions on the cable and satellite industry in an effort to fight so-called “junk fees” and improve competition, Democratic agency chairwoman Jessica Rosenworcel said, before a 3-2 commission vote along partisan lines launching the proceeding.
The new rules could help millions of Americans who simply want to switch cable providers or those who must do so because of a move. Many subscribers face subscription terms that effectively lock them into their provider, said Rosenworcel.
“These friction-filled tactics to keep us subscribing to our current providers are aggravating and unfair,” Rosenworcel said. “So today we kick off a rulemaking to put an end to these practices.”
The push follows a White House executive order that President Joe Biden signed in 2021 encouraging the entire federal government to find ways to boost competition across the US economy. Biden has also made battling junk fees a core part of his economic agenda, targeting those charged by banks and financial advisors, live event ticketers, and more.
Republicans on the FCC voted against the move, saying that it unfairly singles out one industry and is sure to provoke legal challenges accusing the agency of exceeding its authority.
“I cannot sign onto the Biden administration’s inexorable march toward regulating rates,” said Republican FCC Commissioner Brendan Carr.
(The FCC is an independent executive agency that, by law, answers to Congress, not the President. It is composed of five members in a mix of both parties.)
Nathan Simington, the commission’s other Republican official, warned that the proposed rules could ultimately lead to higher consumer prices as cable and satellite companies try to recoup the lost revenue that early-termination fees currently provide.
The FCC will now solicit public feedback on the proposal before taking an eventual vote on any final rules.
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