Nov 22, 2023 - Business

Biden admin targets cable cord-cutting costs in latest junk fee proposal

Ivana Saric

Joe Biden during a meeting to accelerate efforts to counter the flow of fentanyl into the United States in the Roosevelt Room of the White House — President Biden at an event in the Roosevelt Room of the White House on Nov. 21. Photo: Shawn Thew/EPA/Bloomberg via Getty Images

The Federal Communications Commission announced a rule proposal this week that would forbid cable and satellite companies from charging customers for canceling their services mid-contract.

Why it matters: It's the latest front in the Biden administration's war on junk fees, the hidden charges that drive up the cost of everything from hotel and travel bookings to concert tickets to banking.

"Companies shouldn't lock you into services you don't want with large fees. It's unfair, raises costs, and stifles competition. We're doing something about it," President Biden wrote on X Tuesday.

Details: The new rule stems from Biden's July 2021 executive order, which called for ending certain early termination fees, per an FCC press release.

The rule would prevent cable operators and direct broadcast satellite (DBS) providers from imposing early cancellation fees, the FCC said.
It also targets arrangements that force customers to pay for the entire monthly or periodic billing cycle even after they've cancelled their service. Under the new rule, companies would be required to grant a prorated credit or rebate for the remaining days in the billing cycle.
"No one wants to pay junk fees for something they don't want or can't use," FCC Chairwoman Jessica Rosenworcel said in a statement.

What to watch: The FCC is scheduled to vote on the new rule on Dec. 13.

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Biden admin targets cable cord-cutting costs in latest junk fee proposal

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