FCC Says No to Cable and Satellite Providers Hiding ‘Junk’ Fees; How Much Extra Are Cable Companies Charging?
In a party-line vote, the FCC ruled that cable and satellite distributors must give browsers the total price of their services up front.
The Federal Communications Commission (FCC) is stepping in to put an end to a practice that has plagued pay-TV customers for years. This week, the commission voted 3-2 along party lines to crack down on hidden “junk” fees from cable and satellite companies, ensuring that going forward consumers who are trying to comparison shop for a pay-TV plan know exactly what they will be paying when they make a choice.
- The new FCC rule compels cable and satellite outlets to list the “all-in price” for a service when advertising it.
- Cable and satellite providers say the old way of doing business was more helpful to consumers.
- Customers can end up paying as much as $50 per month extra when hidden fees are all added up, but live TV streaming services like Sling TV usually don’t feature as many.
The ruling from the FCC means that going forward, cable and satellite providers will have to advertise the “all-in” price for their TV plans, including fees that were formerly listed as mere line items in a customer’s bill. This will give consumers who are weighing their pay-TV options the most accurate picture of their monthly TV costs as possible.
“No one likes surprises on their bill,” said FCC Chairwoman Jessica Rosenworcel. “The advertised price for service should be the price you pay when your bill arrives. 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.”
Cable and satellite companies don’t agree with the new ruling. A statement from NCTA (formerly the National Cable and Telecommunications Association), a trade association that represents pay-TV distributors says that enforcing “all-in” pricing rules is not necessary and that they already inform customers of fees ahead of time adequately.
“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 statement says.
How Much Extra Do Customers End Up Paying Every Month Thanks to Hidden Fees?
Despite NCTA’s protestations, most of the time viewers who sign up for a cable or satellite plan don’t know the full extent of the fees they’ll be paying each month until they receive their first bill. Companies often bury such fees in fine print, so only the most sharp-eyed consumers see them before making the final decision to sign up for a particular service.
These fees can add up to be quite a hefty chunk of a viewer’s bill. Consumer advocates arguing in favor of the new rules said the average consumer sees 24% to 33% of their bill comprised of just fees, such as advanced receivership fees, broadcast TV fees, equipment usage fees, and more.
For example, customers of Comcast’s Xfinity TV service must pay up to $31.25 per month just to watch local channels they could be getting for free through an over-the-air antenna. Additionally, many Comcast viewers have to pay a regional sports network fee if they have an RSN in their area, bumping their bill up another $17.25 monthly, and then there’s the cable box rental of $10 per month. Suddenly, viewers are paying more than $50 per month extra on top of the advertised price of their Xfinity plan.
Live TV streaming services usually do better by viewers, but even here there can be hidden fees. Fubo advertises its prices starting at $79.99 per month, but 98% of customers reachable by Fubo have a regional sports network in their area. Fubo charges an extra monthly fee of $11.99 for customers who have one RSN in their range, and $14.99 for those who have two or more.
Still, services like DIRECTV STREAM and Sling TV are much more flexible about what you can watch with your plan, and about walking away if you’re no longer satisfied. That’s because you can cancel a subscription to these services with no hidden early cancelation fees since contracts are month-to-month. Most live TV services don’t require extra equipment that necessitates rental fees, and many don’t carry regional sports networks. DIRECTV STREAM does, but it houses them on a higher-priced tier so viewers have the option to avoid paying for them if they won’t watch.
The new FCC rule will be a definite benefit for consumers, who will have a much better idea of what they’re paying for when subscribing to a cable or satellite plan going forward. It’s not the greatest news for cable and satellite companies who are already losing millions of customers every year, but continuing to be able to hide those fees was not likely going to be the difference between the survival of pay-TV and its downfall going forward.
DIRECTV STREAM
DIRECTV STREAM is a live TV streaming service, which is essentially the streaming version of the DIRECTV service. All packages include local channels and at least 31 of the top 35 cable channels. New subscribers can get a free Gemini streaming device from the company, in which case the service is called “DIRECTV via Internet.”