Cable’s Worst 33 Days in Washington Since Whenever

Nov 21, 2023

By Ted Hearn, Editor of Policyband

Washington, D.C., Nov. 21, 2023 – For the cable industry, the hits just keep on coming.

Cable lobbyists certainly knew they would confront a hostile Federal Communications Commission after Anna Gomez was sworn in seven weeks ago, giving the Democrats slender voting control.

But did they really think the last 33 days would be this extreme?

On Oct. 19, it was a severe form of Net Neutrality. Last week, it was Digital Discrimination loaded with threats of broadband rate regulation, and today it was a proposed ban on cable TV Early Termination Fees (ETFs).

Is it going too far to suggest that FCC Chair Jessica Rosenworcel has opted to weaponize her one-vote Democratic majority against cable in what is looking suspiciously like a bill of attainder by the administrative state?

In a press release, Rosenworcel referred to ETFs as “junk fees” that she said President Biden in his Oct. 11 Executive Order “encouraged” the FCC to eliminate. Consumers reportedly pay these fees when they break their service contracts. The money owed usually declines month by month in equal amounts until the contract has ended.

Rosenworcel said her plan had two features. One bans providers from “imposing a fee for the early termination of a cable or DBS video service contract.” Yep, she tossed in Dish and DirecTV, too.

The second requires that consumers who have dropped service receive a “prorated credit or rebate for the remaining whole days in a monthly or periodic billing cycle after the cancellation of service.”

Looks straightforward – but it’s really not. One problem is that Rosenworcel did not bother to cite any statutory authority for her proposal, which can be classified as a form of rate regulation.

Although cable has periodically been subject to rate regulation over its long history, satellite TV has been totally exempt from that form of government oversight. So, it will be interesting to see what provisions of the law that resourceful FCC lawyers will invoke to assist Rosenworcel. They’ll likely need to come up with something more substantial than insisting a White House Executive Order can direct outcomes at an independent agency specifically designed to be insulated from Oval Office directives.

Reliance on rate regulation provisions in the Cable Act of 1992 looks like a barrier, because in 2015, with Commission Rosenworcel dissenting, the FCC under Democratic Chairman Tom Wheeler voted to eliminate the last vestiges of cable rate regulation at the local level. National rate controls came off in March, 1999.

The Wheeler FCC held that every cable TV operator in the country was subject to “effective competition,” meaning local governments could no long apply price caps to the basic tier of service – the one with local TV stations, public/educational/governmental channels, and other community-generated video programming.

In communicating with the public today, Rosenworcel was spartan with the legal details, meaning she’s turned this new and unexpected ETF contest with cable into a guessing game.

To get her way, will Rosenworcel attempt to reverse engineer the effective competition vote by the FCC under Wheeler?

We’ll find out soon because Rosenworcel has promised her “proposal will be voted on during the Dec. 13 Open Meeting.”