FCC Prohibits Secret Charges: Understanding New Regulations on Hidden Wireless Costs

The FCC just secured its first victory in the campaign against “junk fees.” Going forward, cable and satellite television providers must disclose full subscription pricing on bills, advertisements, and promotional materials.

It’s easy to retain an old customer, but it’s hard to gain a new one. Cable and satellite companies need to be as competitive as possible, so they often utilize hidden fees or “junk fees” to artificially reduce the top-line price of their subscriptions. A customer may sign up for an attractive $70 plan, but when they look at their monthly bill, they find that they’re being charged an extra $20 in equipment rental fees, operating fees, licensing surcharges, regional sports assessments, and other nonsense.

According to the FCC, approximately 24 to 33 percent of all customer bills (not just TV bills) are inundated with hidden fees. These fees make it harder for customers to compare services, and they “can quickly turn what seemed like a good deal into a not-so- good one.” Providers that utilize hidden fees may also have an unfair advantage over those that do not.

Now, in its landmark ruling, the FCC is forcing cable and satellite providers to adopt transparent pricing. This affects both bills and advertisements, meaning that it should be easier for customers to compare costs and select a television service. A proposal to eliminate early termination fees for TV subscriptions is also in the works.

The ruling passed 3-2, meaning that it wasn’t unanimous. And the Internet & Television Association (NCTA), which represents the cable and broadband industry, calls the FCC’s action “misguided .” It claims that transparent pricing will “force operators to either clutter their ads with confusing disclosures or leave pricing information out entirely.” Note that the NCTA also criticizes the FCC’s new broadband guidelines . These guidelines state that internet service slower than 100 Mbps can no longer qualify as “broadband.” Some internet providers will find a new term for their low-speed plans, but others have already increased their speeds to retain “broadband” labeling.

Both the FCC and the White House have proposed several measures to end “junk fees.” The ruling against television providers is a landmark, but it’s also a first step. Similar laws may come down on the cellular and internet industries in the future. Also, the FCC has reiterated its interest in banning early termination fees and suggests that customers should receive a refund for prorated service when canceling early.

Source: FCC

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