NCTA CEO: FTC’s Click-To-Cancel Plan Too Broad, Potentially Dangerous

Jan 16, 2024

By Ted Hearn, Editor of Policyband

Washington, D.C., Jan. 16, 2024 – The Federal Trade Commission wants to make it easier for consumers to cancel service with the cable company.

But the leader of the cable’s industry largest trade association said the FTC’s plan is too broad, too costly and potentially dangerous.

At a hearing here Tuesday, NCTA - The Internet & Television Association President and CEO Michael Powell said that the FTC’s legal authority covers unfair and deceptive practices, adding that the agency would go too far if it outlawed billing practices that are beneficial to consumers.

“… In many industries like ours, automatic renewals are the only model that makes any sense. Consumers expect their Internet service to flow reliably and without interruption. It would be quite aggravating to renew monthly, and it could prove catastrophic to suddenly find your service cut off for failure to re-enroll at a time you most need it.”

NCTA represents Comcast, Charter and Cox Communications in addition to numerous programmers like Disney and Paramount Global that offer both traditional cable TV channels and new online streaming services.

Powell also warned that a blanket approach was bad policy unlikely to survive the courts.

“Given the genuine consumer benefits in many recurring plans, the [FTC] has a legal obligation to separate the good from the bad,” he said. “Regulating so indiscriminately is inviting certain judicial rejection.”

Powell spoke during an online informal hearing presided over by Securities and Exchange Commission Administrative Law Judge Carol Fox Foelak.

In his 10-minute statement, Powell said the FTC’s plans failed to take into account the true cost of its proposed rules.

“Our companies will have to make major changes to their online systems,” he said. “Costs could easily exceed $100 million for initial implementation by our industry alone. This is hardly de minimis and likely would lead to higher prices for consumers.”

Last May, the FCC under Chair Lina Khan announced a plan to adopt rules related to subscriptions and recurring payments. The agency highlighted a “click-to-cancel” provision that would require sellers “to make it as easy for consumers to cancel their enrollment as it was to sign up.”

The FTC added, “The new click-to-cancel provision, along with other proposals, are aimed at rescuing consumers from seemingly never-ending struggles to cancel unwanted subscription payment plans for everything from cosmetics to newspapers to gym memberships.”

The FTC’s said its key proposal was a “simple cancellation mechanism.” As an example, the agency said, “If you can sign up online, you must be able to cancel on the same website, in the same number of steps.”

In comments last month, NCTA said the FTC should exempt the cable industry from the new billing rules.

Powell today said his members should not be “needlessly swept up in this overbroad proceeding.”

The FCC is concerned that a complex cancellation process can deter consumers that want to cancel, which can result in unwanted ongoing charges.

“If consumers are unable to easily leave any program when they want to, the negative option feature becomes nothing more than a way to continue charging them for products they no longer want,” the FTC said.

Powell said cable operators interact with millions of subscribers who do not find changing or dropping services to be arduous.

“The data confirms that are services are popular and that customers are satisfied,” he said. “They know how to cancel, rarely complaining about the process.”