As part of the 2019 year-end congressional appropriations wrap-up free-for-all, Congress adopted a new Section 642 of the Communications Act that significantly changes how a cable operator advertises and bills video subscribers. The law applies to both stand-alone video programming packages and the video portion of bundled plans that combine video programming with broadband Internet service.
Under the law, cable operators must change their billing practices as follows by June 20, 2020.
- Cable operators must inform customers
at the point of sale of the “total monthly charge” for
video service, including:
- The total monthly charge for the video service or the video service portion of a service bundle;
- The amount of any promotional discounts reflected in the monthly charge for video services, and a statement of when that discount will expire;
- Any video-specific administrative fees, equipment fees, or any other monthly surcharges (e.g., retransmission consent and/or regional sports network surcharges);
- A good faith estimate of any tax, fee, or charge imposed on the consumer or provider by any federal, state, or local government; and
- A good faith estimate of any fee or charge used to recover any other assessment imposed on the provider by any federal, state, or local government.
- Within 24 hours of a cable operator entering into a service contract with a customer, the cable operator must send the consumer, by email, online link, or other comparable means, a copy of the above information.
- A cable operator must permit a new customer to cancel any contract for service within 24 hours of the required notice, with no cancellation or early termination fees.
- Electronic bills also must now
- An itemized statement breaking down the charges for video service and any charges for related administrative fees, taxes, equipment fees, or other charges;
- The termination date for any video service contract; and
- The date any video service promotional discount ends.
- Cable operators are now prohibited from assessing charges to customers for either video or broadband Internet service when those customers do not actually use the equipment supplied by the cable operator. This includes both customers who use their own set-top box or Wi-Fi router/modem, and those who have returned their equipment.
The rules are statutory and likely do not require further elaboration or rule-making by the FCC.
The statute does provide that the FCC may issue 6-month compliance extensions upon a showing of good cause.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.