By Jacob Passy
The era of hidden cable fees could soon be a thing of the past.
On Tuesday, the U.S. House of Representatives passed H.R. 5035, known as the Television Viewer Protection Act, in a voice vote after less than three minutes of discussion. The legislation’s primary purpose was to permanently require television broadcasters and pay-TV providers, including cable and satellite companies, to engage in good-faith negotiations over retransmission rights for broadcast channels such as NBC and CBS.
But a separate amendment to the legislation would also increase transparency over how cable and satellite companies bill their customers. In particular, the bill requires cable and satellite television operators to present the total prices of their services up-front.
“Cable companies lure customers in with a low advertised price but then bury hundreds of dollars in extra fees each year in the fine print,” said Jonathan Schwantes, senior policy counsel for Consumer Reports. “This legislation will help bring fairness and clarity to pay-TV pricing by helping consumers spot and avoid hidden fees.”
Consumer Reports has targeted the pay-TV industry for more than a year in hopes of forcing cable and satellite companies like Comcast /zigman2/quotes/209472081/composite CMCSA -2.77% , Charter Communications /zigman2/quotes/201656355/composite CHTR -1.84% and The Dish Network /zigman2/quotes/207505872/composite DISH -7.82% to be more transparent about their pricing. The consumer watchdog group released a report in October that found the cable industry on average makes $450 per customer per year from company-imposed fees, which equates to a 24% surcharge on the advertised price.
(The Dish Network supported the bill because it “maintains that broadcasters and pay-TV companies continue to negotiate retransmission consent fees in good faith,” a company spokeswoman said.)
Common fees that cable companies charge include regional sports fees, cable modem and/or router fees, administrative and convenience fees and installation fees, according to Consumer Reports. Currently, these fees are legal. The FCC allowed companies to charge these fees starting in 1992.
The Television Viewer Protection Act was sponsored by Rep. Michael Doyle, a Democrat representing Pennsylvania’s 18th congressional district, which includes Pittsburgh. The bill would require companies to disclose the total monthly charge for television service to the customer by phone, in person or online, including any fees and estimated taxes. This would apply both to television services sold individually and those sold as part of a bundle.
The bill further stipulates that consumers would then have a 24-hour window to cancel their service free of charge after signing up and receiving the full breakdown of costs.
“Today it’s difficult for the customer to make an intelligent decision since every competitor charges different fees that sometimes are or are not advertised,” said Jeff Kagan, a telecommunications consultant. “While I don’t think all competitors are going to like this idea, I think others will and the consumer will.”
Additionally, the legislation would require pay-TV providers to include information related to the termination date of the contract and the termination date of any promotional discounts that the customer received in their electronic bill. The bill also stipulates that cable and satellite TV operators could no longer charge customers for using their own equipment, such as their own modem or router for internet service.
While the bill has passed the House, it still needs Senate approval to make its way to President Trump’s desk. “The latest rumors we’re hearing from the Hill is that H.R. 5035, the Television Viewer Protection Act, will likely be attached to a spending measure to keep the government funded past Dec. 20 of this year,” Schwantes told MarketWatch. “This would present the easiest path forward for this legislation to be quickly passed by both the House and Senate, and ultimately signed into law by the President.”
This is not the first time legislation has been drafted to put an end to hidden cable bills. Earlier this year, Rep. Anna Eshoo, a Democrat from California, and Senator Ed Markey, a Democrat from Massachusetts, introduced legislation that similarly would have required all charges to be disclosed to cable, phone and internet customers. That bill also would have required companies to notify consumers of any increase in fees no later than 21 days before going into effect.
That bill has received 54 co-sponsors in the House and 12 in the Senate, but has yet to make it out of committee in either chamber for a floor vote.
MarketWatch contacted Charter Communications, Comcast, Frontier Communications /zigman2/quotes/200222352/composite FTR -4.51% , AT&T /zigman2/quotes/203165245/composite T -3.77% , Verizon /zigman2/quotes/204980236/composite VZ -3.68% and Altice USA /zigman2/quotes/207426329/composite ATUS -4.34% requesting comment, but did not receive immediate responses.
This story was updated on Dec. 12, 2019.