Cable TV companies on Tuesday slammed the Federal Trade Commission’s proposed rule that would make canceling a service easier.
During a hearing earlier this week, Michael Powell, president and CEO of NCTA – – The Internet & Television Association, argued that the FTC’s plan is “unjustifiably broad” and encompasses beneficial practices in its quest to stop deceptive ones.
“It risks upending popular and familiar services that consumers expect and enjoy,” Powell said during his 10-minute statement before Securities and Exchange Commission Administrative Law Judge Carol Fox Foelak.
NCTA represents major players in the cable industry like Comcast, Charter, and Cox Communications, as well as media companies operating in both cable and streaming, like Disney and Paramount Global.
For years, customers have navigated service cancellation processes — cable TV or otherwise — that were far more complicated in comparison to the sign-up process. The move is part of President Joe Biden’s broader push to get rid of junk fees and other nuisances when it comes to dealing with different services.
“The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties,” FTC Chair Lina M. Khan when the rule was first announced in March.
The FTC’s provision would require companies to offer an online cancellation option that would be the same number of steps as initial enrollment. In addition, businesses will have to ask customers looking to cancel if they want to learn about additional offers. Customers must also be warned if an automatic renewal for an annual program is coming up.
Powell argued that in the cable industry 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,” he said.
In addition, Powell said the changes companies would have to make to comply with the rule would be extensive.
“Major cable operators estimate that it could take two to three years to rebuild their systems and could cause $12 to $25 million dollars per company. Costs could easily exceed $100 million dollars for our industry alone,” Powell said.
The costs that the companies would face would in turn lead to price hikes for customers, according to Powell.
It’s likely another hearing could take place for further discussion and arguments.