Today Free State Foundation President
Randolph May and Senior Fellow Andrew Long filed comments opposing the FCC’s
proposal to prohibit cable and DBS service providers from imposing early
termination fees and to require these providers to grant a prorated credit
for the remaining days in a monthly or periodic billing cycle after the
cancellation of service.
A complete copy of the comments, with the footnotes, is attached. Here is an
excerpt from the Introduction and Summary:
* * *
The Billing Practices
NPRM proposes (1) "to prohibit cable and DBS service providers
from imposing a fee for the early termination of a cable or DBS video service
contract" – that is, to deny traditional MVPDs the benefit of their
open-eyes bargains with consumers in a manner that certainly will result in
higher prices – and (2) "to require cable and DBS service providers
to grant subscribers a prorated credit or rebate for the remaining whole days
in a monthly or periodic billing cycle after the cancellation of
service" – that is, to require that traditional MVPDs establish a daily
price for their service despite a statutory prohibition against rate
regulation. In short, the Commission's proposal would reduce consumers' options
and lead to higher prices, while contravening Congress's bar on rate regulation
of cable services. This misguided effort to implement an ill-conceived instance
of "Regulatory Bidenomics" should be abandoned.
Forty years ago, in the 1984 Cable Act, Congress articulated a clear intent to
leverage competition, rather than regulation, to generate efficiencies – lower
prices, greater options, enhanced innovation – for consumers of video content.
Today that competition undeniably exists, and the variety of billing
arrangements offered to consumers – including those vilified and proposed to be
prohibited in this proceeding – is evidence, not of consumer harm, but of
competition-fueled consumer choice. Nevertheless, employing some linguistic
legerdemain that would make George Orwell blush 75 years after publication of
his masterpiece, the coincidentally titled 1984, the Commission proposes
to not just regulate rates, but to dictate – and, for existing relationships,
disregard – the specific terms of the informed voluntary agreement between
(1) empowered purchasers of video programming, and (2) the shrinking
subset of providers over which it has some regulatory authority: traditional,
facilities-based MVPDs. If adopted, these proposals would diminish consumer
welfare directly, through higher monthly prices and fewer billing options, and
indirectly, by further hindering the ability of subscriber-shedding cable
operators and DBS providers to compete with ascendent streaming alternatives.
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