long term contracts – Techdirt (original) (raw)

Stories filed under: "long term contracts"

Cable Companies Tell The Government That Bullshit Fees Are Good, Actually

from the this-is-why-we-can't-have-nice-things dept

Last December, the Biden FCC proposed a basic plan to ban some of the shitty fees cable and broadband companies use to falsely advertise a lower price and jack up the cost of service. Despite the fact your cable TV and broadband bills are packed with bullshit fees, the FCC was only taking specific aim at banning early termination fees (ETFs) and restrictive long-term contracts.

Despite this being a belated, bare minimum effort, telecom industry loyal Republicans had an immediate hissy fit, insisting that the FCC was engaged in “rate regulation” (it wasn’t) of an incredibly healthy and competitive market (it isn’t).

And now policy groups representing Comcast and Charter have filed complaints with the FCC, insisting that punitive surcharges are actually a good thing, resulting in more loyal customers and lower prices:

The NCTA claimed that banning early termination fees would hurt consumers. “Discounted plans with ETFs are an advantageous choice for some consumers,” the lobby group said. The NCTA said the video industry is “hyper-competitive,” and that it is easy for customers to switch providers.

“In response to these marketplace realities, some cable operators offer discounts for consumers who choose to agree to remain customers for a longer term,” the NCTA said. “Longer subscriber commitments decrease a cable operator’s subscriber acquisition costs and provide a more predictable revenue stream, which in turn enables a cable operator to offer discounted monthly rates.”

While streaming has brought some added and welcome competition to the TV space, most users are still generally locked into cable TV via triple play cable bundles. The broadband market component of that bundle remains very uncompetitive in most U.S. markets.

When you drop the cable part of the bundle, a company like Comcast will just charge you significantly more for broadband service. They also lock users into long-term contracts with ETFs to keep users from switching to competitors (assuming there are any). There’s also a long list of dumb additional fees the FCC isn’t touching that basically let these companies routinely engage in false advertising on pricing.

The idea that any of this is actually good for users is bullshit.

U.S. broadband and TV consumer protection usually goes something like this: Democrats will do some feckless, bare minimum, years overdue effort to protect consumers from getting ripped off so they can show that they’re doing something. See: this FCC effort on ETFs, the FTC attempt to finally make service cancellations easier, and the FCC’s recent 30-year late acknowledgment that discrimination has historically occurred in broadband deployment (they didn’t fix the problem, they just acknowledged it).

Republicans will work in lockstep with giant telecom monopolies like AT&T and Comcast to pretend that whatever bare bones bullshit Democrats are attempting is akin to extremist socialist puppy torture, ensuring the effort is either blocked or weakened to the point of uselessness. Press outlets will then “both sides” the issue, giving corrupt telecom industry earlobe nibblers policy credibility they don’t deserve.

It’s why it’s 2024 and U.S. regulators still haven’t protected consumers from even the most basic of anti-competitive behaviors by the likes of AT&T and Comcast. It’s corrupt fecklessness dressed up as reason and “free markets.” It’s why U.S. broadband is expensive and uncompetitive; it’s why cable TV and broadband customer service sucks; it’s why U.S. broadband is so profoundly spotty and mediocre; and it’s why your 80cablebillsomehowturnsintoa80 cable bill somehow turns into a 80cablebillsomehowturnsintoa130 cable bill when the check finally comes due.

But the corruption at the heart of this dysfunction goes well beyond telecom and dumb cable fees. And once the Supreme Court axes Chevron (which will limit regulatory independence to make informed policy choices based on the law), pretty much any regulatory reform effort will get bogged down in the courts, quite by design. It’s a 40+ year plan for near-zero federal accountability by corporate America.

I’m not sure people have generally woken up to how badly looming Supreme Court rulings are going to break U.S. consumer protection, environmental reforms, labor protections, and U.S. public safety, but I don’t expect it will take too long before the impact becomes abundantly clear. At which point, annoying cable TV fees will be the least of your families’ worries.

Filed Under: broadband, consumer protection, early termination fees, etf, fees, ftc, long term contracts, prices, rate regulation