'All-In' Video Pricing Proposal Has Disagreements Over Consumer Confusion

Many video providers said cord cutting is obviating the need for such rules. With the practice on the rise, it's "an inopportune time to impose obligations that would apply only to the segment of the competitive and dynamic video programming market that is in decline," said USTelecom. It said cable and DBS providers would need to include regional sports network fees in their all-in pricing but streamers wouldn't, possibly leading "to comparisons between 'half an apple and three orange peels' rather than the 'apples-to-apples' comparisons the Commission desires." Any all-in pricing rule needs to explicitly say cable and DBS can itemize the various expenses that make up the aggregate all-in cost, it said.

"Existing law and marketplace forces already ensure that consumers receive accurate and transparent pricing information for MVPD services and are not surprised by unexpected fees," NCTA said. Customers already get pricing information through the sign up and sales process, said Charter, Comcast, Mediacom, Midcontinent Communications and TDS Teleco in a joint filing, calling the proposed rules unnecessary. Citing cord cutting, they said the commission "should be finding ways to reduce unnecessary regulations that apply only to MVPDs rather than proposing new pricing regulations that apply only to a shrinking segment of the market." NTCA said the FCC could foster better price comparisons by letting video providers identify the cost of programming as separate line items on promotional materials and consumer bills. Verizon said the comments show problems in marketing rather than in billing. Saying competitive market conditions sometimes justify cable and satellite TV providers itemizing separate fees on subscriber bills, it argued the FCC should continue to allow that itemization flexibility.

Charter and the rest said the use of such words as "customer" and "subscriber" in the Cable Act's Section 632 means the agency doesn't have authority to regulate communication with the public or potential subscribers. NCTA said Section 632's title, “Consumer protection and customer service,” clearly shows these are different areas of regulation." It said Section 632 directs the FCC to establish minimum customer service standards, but there's no similar grant of authority for consumer protection covering nonsubscribers or potential subs.

Ignore those video programming provider arguments that fees and surcharges don't cause confusion because the record "tells a different story," said local franchise authorities including Minneapolis and Oklahoma City. They pressed the FCC to make clear that franchise fees and public, educational and government fees are imposed on cable operators, not on cable subscribers. "They are cable operators’ cost of doing business and, though permissibly itemized, should not be mistaken for a government charge imposed on subscribers or confused with the 'junk fees' providers are choosing to impose," the LFAs said. Section 632 gives the FCC authority, the LFAs said, arguing authority under 632 isn't limited just to operators' interactions with existing subscribers.

"It is clear that company-imposed fees like the Broadcast TV Fee are often misrepresented and cause consumer harm, echoed Consumer Reports and Public Knowledge. They said 632 authority gives the FCC authority and lacks any sunset on its provisions, unlike the program access rules, so Congress intended 532 to protect consumers no matter the level of competition. CR and PK said the FCC also has authority under its general authority to set service rules for wireless licensees.

"The confusion and damage to consumers is clear," said local government interests including NATOA, Boston and Fairfax County, Virginia. The TV Viewer Protection Act won't work well if consumers are already confused by marketing and advertising by the time they reach the 48-hour disclosure and cancellation period under the TVPA, they said, saying all-in pricing rules would address that. They urged the FCC to require advertising of the total amount consumers will pay, including all programming, equipment, franchise fees and taxes but excluding local sales taxes. When the video is bundled with a nonprogramming product, the bundle should be advertised as an all-in price for the bundle or the provider breaks out the all-in price for the video programming only, they urged. The Colorado Communications and Utility Alliance also backed the NPRM.

Broadcasters were critical of MVPDs and their practices. "MVPDs continue to mislead their customers in an effort to shift the blame for the steadily increasing rates they charge their subscribers onto the government and broadcasters," said the ABC, CBS, Fox and NBC TV affiliates association, saying the all-in pricing proposal "would provide a corrective." They said MVPDs put up "a hodgepodge of unconvincing arguments" against the proposals but don't give "the slightest justification for depriving consumers of honest messaging from video providers about what such consumers will pay when they sign up for service and what they are paying for when they receive their monthly bills.