Cable ISPs Want Bundled Services Exempt From Early Termination Fee Ban

WASHINGTON, June 25, 2024 - Internet service providers want Federal Communications Commission Chairwoman Jessica Rosenworcel’s proposed ban on pay-TV early termination fees to exempt bundled service offerings.

While the Rosenworcel's proposal targets ETFs charged by cable and satellite TV providers, NCTA - The Internet & Television Association has raised concern that the prohibition will extend to video-broadband bundles offered by cable companies. 

In a June 18 letter to the FCC, NCTA Vice President and Deputy General Counsel Mary Beth Murphy said the proposal would create “significant logistical challenges” for providers.

NCTA argued that applying the rules solely to the video component of bundles would be “confusing” to consumers, while extending them to all bundled services, including to broadband and voice services, would overstep the agency's authority.

NCTA recommended a more contained approach to addressing unfair ETFs.

“To the extent the FCC is considering rules for bundled services, further development of the record is necessary to ensure that the rules are effective and do not have unintended consequences,” NCTA said.

In the event an ETF ban is adopted, NCTA encouraged the FCC to primarily target “unjust or unreasonable” ETFs, rather than apply a blanket ban.

NCTA's letter recommended that ETFs include transparent disclosures and offer grace periods for customers that will allow them to cancel video services after signing up without incurring fees.

The letter also said that the FCC should ensure ETFs are not excessive relative to the value of the service and that they decrease over the contract term.

“This approach is in line with President Biden’s executive order and would preserve the benefits of reasonable ETFs while protecting consumers from harmful practices,” NCTA said.

NCTA also requested that the FCC reject arguments advocating for state and local governments to impose their own additional mandates on cable services.

“A patchwork of state and local regulations would be unduly burdensome and would make it more difficult for cable operators,” NCTA said.