Cable TV corporations are pushing again in opposition to the Federal Communications Commission’s proposal to ban early termination charges, which cable corporations often cost customers for canceling companies. In a brand new submitting to the fee, a lobbying group that represents massive cable corporations declare that if the FCC’s proposed ban goes into impact, then customers can be charged greater month-to-month charges for cable service to make up for the loss in cash.
In December final 12 months, the FCC voted to approve a Notice of Proposed Rulemaking that introduces the ban. The fee claims within the proposal that early termination charges “penalize consumers for terminating service by requiring them to pay for services they choose not to receive.”
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Proposal seeks partial month refunds
If the ban will get the ultimate approval from the FCC within the subsequent few months, it can additionally require cable TV corporations to offer their clients “a prorated credit or rebate” for the remaining days “in a monthly or periodic billing cycle” after they cancel their service.
The NCTA-The Internet & Television Association, which represents cable operators similar to Comcast and Charter Communications, will not be pleased with the proposal. In a Feb. 5 submitting to the FCC that was submitted by the affiliation, the group refers to early termination charges as “ETFs” for brief and claims that the proposed ban will find yourself harming customers.
“Banning ETFs would ultimately harm consumers by reducing the variety and depth of discounts available to them,” mentioned the NCTA.
The NCTA additionally claims that mandating “partial month refunds” to customers who cancel their service, which is highlighted within the FCC’s proposal, would “alter the terms under which the customers accepted service” and can lead to greater month-to-month costs for all.
New rule may encourage subscriber churn
“In addition, effectively allowing subscribers to void their monthly service contracts before the end of the month could encourage subscriber ‘churn,’ raising provider costs,” mentioned the NCTA. “The Commission’s refund proposal would therefore put upward pressure on cable rates for all subscribers, as the operator would have to set the rate high enough to offset losses from subscribers who cancel partway through the month.”
The group additionally claimed that the proposed ban would make the video market extra “competitive” in relation to pricing amid a difficult atmosphere the place customers are cord-cutting cable TV in favor of subscribing to on-line streaming companies.
The NCTA declined to reply to TheRoad’s request for touch upon its latest submitting to the FCC.
The transfer from the NCTA comes after it testified final month in opposition to proposed laws from the Federal Trade Commission that might make it simpler for customers to cancel their subscriptions. The group argues that the proposed coverage may make customers “easily misunderstand the consequences of canceling.”
Cord-cutting is a pattern that has been ramping up lately. According to knowledge from Leichtman Research Group, conventional cable suppliers have misplaced virtually 6 million clients annually between 2019 to 2022 as customers go for streaming companies similar to Sling TV, Disney+ and Hulu.
In one other report by Leichtman Research Group, which was launched on Nov. 14, high cable suppliers had a internet lack of about 1,015,000 video subscribers throughout the third quarter of 2023, which is a rise in comparison with the 985,000 subscribers they misplaced throughout the identical time interval in 2022.
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