Senators to FCC: Consumers need your help

Kudos to four more senators who recently weighed in with a call to federal regulators to take action to finally curb the abusive business practices of America’s pay-TV industry.

Sens. Bernie Sanders (I-Vt.), Al Franken (D-Minn.), Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.) this month asked the Federal Communications Commission (FCC) to act on behalf of millions of Americans who are tired of skyrocketing price hikes, unfair early termination fees, outrageous monthly digital video recorder fees and lousy customer service that have long served as the standard operating procedure at cable and satellite TV companies. TVfreedom.org stands with these four lawmakers, who, along with Missouri Sen. Claire McCaskill (D), have shown real courage by taking on Washington’s entrenched big pay-TV lobby.

{mosads}In response, the FCC is seeking comment and data for its next video competition report that focuses on the competitive strategies used by pay-TV companies to add video-related fees on to customers’ bills as opposed to raising monthly subscription prices. The FCC is also seeking comment on whether video-related fees cause customers to pay higher prices than the company’s advertised rate and in what ways customers are notified of the new fees before they actually show up on the monthly pay-TV bill. 

The senators initially raised these concerns because they believe there is a sense of urgency to their request, especially given the likelihood of increased concentration in the industry (i.e. the AT&T-DirecTV merger, and the proposed Charter Communications, Time Warner Cable and Bright House Networks merger) and the clear lack of consumer choices for service in the telecommunications ecosystem. With more than 60 percent of Americans having access to just one broadband provider, the senators strongly suggest that consumers are left with “de facto telecommunications monopolies” throughout the country. 

They believe it’s time to begin “empowering Americans with more information about ever-increasing rates for cable and Internet services and how providers calculate consumers’ monthly bills” so they can make better-informed decisions about what they want to pay for and the types of video services that fit their personal preferences.

And, who would argue with denying consumers this important information, unless you’re affiliated with the likes of Time Warner Cable, DISH or Mediacom?

For an industry notorious for poor customer service and low consumer satisfaction ratings, one would think that pay TV and broadband service providers would be working to constructively address industrywide market failures and bad service.

Recently, a federal judge leveled a $229,500 judgment against Time Warner Cable for its year-long harassment of a Texas woman who wasn’t supposed to be the recipient of a jaw-dropping 163 robocalls made to her by the company for a bill that wasn’t hers. The facts fully illustrate just how critical it is for federal regulators to take a more active role.

The FCC’s initial actions will begin to address these widespread problems and hopefully will lead to greater billing transparency for telecommunications subscribers and aid in the fundamental understanding of what they’re paying for and why.  Let’s hope that the FCC’s inquiry to pay-TV companies leads to a greater exploration of the pricing and billing issues raised by the senators.

After all, the senators said collecting this data would “help Americans understand the price of the product they are buying and what their neighbors are paying (monthly) for the same service.”  It’s clear that pay-TV companies have this information and routinely use it to raise customers’ monthly bills, not lower them.

For the sake of consumers, we hope when all is said and done, the FCC’s data collection will tell us, on average, just how much Americans are paying for broadband and pay-TV services. Do those prices vary greatly for rural and urban customers? Does cable “clustering” — the practice of cable companies carving up exclusive territories across the nation — lead to higher prices?

When there’s a cable “over-builder” that expands service and injects competition in local markets, do cable rates drop for customers? If yes, then on average, by how much? 

The latest SNL Kagan data shows that broadcast programming from local TV stations constitutes about 12.5 percent of all programming fees.  Perhaps the FCC’s willingness to collect more pricing data and dig deeper into billing transparency strategies used by cable and satellite TV providers is an acknowledgement by the Commission that broadcasters are not responsible for the high cost of pay television service.

In closing, TVfreedom strongly supports Congressional and federal regulatory inquiries into pay television business practices. Consumers are fed up with the behavior of pay-TV providers, and are demanding greater pricing and billing transparency. The time for action is now. 

Kenny is director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations and other independent organizations advocating for preserving the retransmission consent regime. He is a former press secretary at the FCC.