Cable and satellite TV providers can still sock viewers with add-on fees for everything from local broadcasts to tuner boxes, but they can no longer surprise their customers with those surcharges.
It requires multichannel video providers to disclose their total monthly cost to subscribers before sign-up and itemize “any related administrative fees, equipment fees, or other charges,” including both taxes and surcharges levied to recover government fees. This estimate also must clarify promotional discounts and when they expire.
Pay-TV providers must further send new customers a copy of this estimate within 24 hours of their agreeing to a service contract—and let them cancel the contract without penalty within that 24-hour window.
The catch is, cable and satellite firms need not itemize these add-on fees in their ads, and they can still make potential customers click their way down the purchase funnel before displaying them.
“Initial versions of the legislation actually had the provision as truth in advertising, so you had to advertise the entire fees,” said Jenna Leventoff, senior policy counsel at Public Knowledge, a Washington-based public-interest group. “But it’s still an improvement over what currently exists, because you have a right to cancel after signing up.”
Other provisions in the bill remove the five-year sunset provision of the compulsory license that lets satellite provides transmit distant network signals for certain viewers and make permanent a mandate for MVPDs and broadcasters to negotiate retransmission deals in good faith.
The bill also bans TV and internet providers from charging customers monthly fees to use equipment they purchased separately—a bill-padding tactic such ISPs as Frontier have employed.
But the bill also gives providers six months after enactment to meet these transparency requirements. And it lets the Federal Communications Commission grant a six-month extension.
“We seriously hope the cable industry doesn't try to game its way out of complying with a very straightforward disclosure requirement: let consumers know what they will actually pay each month once all the fees are tacked on to the advertised price,” emailed Jonathan Schwantes, senior policy counsel with Consumer Reports, which lobbied for this bill. “And we hope cable operators can do so well before the six month enactment date, and not ask the FCC for an extension for doing something so simple.”