FCC votes to squash hidden junk fees for cable and satellite TV

The Federal Communications Commission will now require cable and satellite companies to disclose all costs up front, as a single line item in promotions and on bills. 

The FCC voted 3-2 in favor of the new transparency rules. Between 24% and 33% of a typical cable bill consists of fees added on to the monthly price, and the fee names are often obscure, the FCC said.

“Across the economy, consumers are frustrated with junk fees,” FCC Chairwoman Jessica Rosenworcel said in a statement. “They are tired of seeing one advertised price and then paying something different when the bill comes due. They are fed up with special surcharges, line items, and tacked-on costs.”

The new rule aims to help consumers make informed decisions when deciding among options and avoid getting hit with a monthly commitment they didn’t expect, the FCC said. The FCC cited a report by Consumer Reports that said many cable companies advertise “relatively low base rates” to attract customers and then hit them later with “a dizzying array of other charges.”

The FCC’s decision is part of a movement at the federal level and in some states to eliminate hidden junk fees:

• The Department of Transportation is considering requiring airlines to disclose certain fees at the first point in a consumer’s search process where a fare is provided. The fees may include any charged for first and second checked bags, carry-on bags, changes and cancellations, and adjacent seating for children age 13 and younger.
• The Consumer Financial Protection Bureau is capping credit card late fees at $8.
• The Federal Trade Commission is considering prohibiting undisclosed junk fees in a range of industries, including for hotels, event tickets, utilities and apartment rentals. 

In response, Teresa Murray, Consumer Watchdog for U.S. PIRG Education Fund, said:

“Our long national nightmares about junk fees may finally be close to an end — at least the ones we see the most. And it’s way past time.

“How any business can think it’s OK to trick customers escapes us. When the IRS asks how much you make, it’s not OK to disclose only part of your income and hope they don’t notice. When your doctor asks how old you are, you don’t answer with a fraction of your age and add to it later.

“This isn’t about limiting how much businesses charge. It’s just about requiring them to be honest and up front and stop trying to slip fees in at the last minute.”