In a recent meeting the FCC voted to change regulations around cable “junk fees” and high-speed internet standards, moves that have attracted criticisms from a major trade association.
Action on “Junk Fees”
The U.S. government has taken action on cable “junk fees,” forcing providers to advertise comprehensive payment plans and prices, so consumers know exactly what they are getting before they sign up.
Big Changes for Cable Companies
Based on decisions made by the Federal Communications Commission, all cable and satellite TV companies operating in the U.S. will be required to disclose “all-in” prices to their customers.
All-Inclusive Fees
These price plans must include the base fee as well as miscellaneous fees that are sometimes undisclosed in billing and marketing materials.
Hidden Extras
These miscellaneous fees can often include sports programming, regional broadcasts, equipment rental fees, licensing surcharges, and more.
No More Surprises
“No one likes surprises on their bill,” said FCC chairman Jessica Rosenworcel in a statement announcing the mandate.
Advertised Price Should Be the Final Price
“The advertised price for a service should be the price you pay when your bill arrives,” she continued. “It shouldn’t include a bunch of unexpected junk fees that are separate from the top-line price you were told when you signed up.”
More Than Inconvenience
She argued that these hidden fees were more than just an inconvenience for the average consumer, but they made it difficult to “compare services in a market that is evolving and has so many new ways to watch.”
A Large Portion of Your Bill
During discussions the FCC claimed that between 24 to 33% of all bills for cable and satellite TV came from these particular “junk fees.”
Bills That Are “Transparent and Fair”
“We can have bills that are transparent and fair. This is a step in that direction and that is good news for consumers,” Rosenworcel concluded.
A Misguided Mandate
But not everyone agrees that these new changes will help customers, or promote more fairness and transparency than already exists. Some, like the cable provider trade association NCTA, have called the mandate “misguided.”
NCTA Pushback
In a filing to the FCC in response to the move, the NCTA claimed that the change was unnecessary as the industry-wide practice of breaking down fees into line-by-line items makes payment plans clear enough.
Pre-Existing Customer Protections
“Our members clearly disclose the specific amounts of the fees that will apply and the total amount customers will pay for service, thereby ensuring that customers are not ‘surprised by unexpected fees,’” the filing stated.
“A Lose-Lose Proposition”
They went even further in a public statement, calling it a “lose-lose proposition” for consumers, as it would make advertising more cluttered and confusing, and force providers to leave certain pricing information out.
Claims It Will “Confuse” Customers
“Today’s misguided action will not help consumers and will only add confusion from government-imposed ad requirements,” they claimed.
The Digital Divide
In the same meeting, the FCC also discussed the issue of internet availability in the US, and released a report on what they call the “digital divide.”
Millions Without High-Speed Internet
According to the report, tens of millions of citizens don’t have access to high-speed internet in their homes.
A Modern Necessity
While this may not have been a major issue 5 to 10 years ago, as the world becomes increasingly reliant on home internet for work, communication, home maintenance, and more, it is far more relevant.
Poor Internet In Rural Areas
Using government data from 2022, the report showed that 28% of Americans living in rural areas are affected by poor internet access, and 7% of all Americans do not have access to high-speed internet.
Changes to Internet Definitions
During the meeting, the FCC voted to change the definition of high-speed internet. The threshold has been shifted from a minimum download speed of 25 Mbps to 100 Mbps, and an upload speed of 3 Mbps to 20 Mbps.
Still Not Happy
The NCTA also criticized the changes to high-seed internet definitions, calling it a “missed opportunity” to acknowledge significant improvements in broadband accessibility for Americans in recent years.
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The post FCC Forces Cable Providers to Disclose ‘Junk Fees’ and Internet Standards first appeared on From Frugal to Free.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
