Consumer Advocates Applaud All-In MVPD Pricing NPRM
Consumer advocates and allies are largely bullish on the prospects for the MVDP "all-in" pricing disclosure NPRM on circulation (see 2303220042), though some think it's an idea that would have had more value before the era of cord cutting. Many expect MVPD pushback or opposition depending on the details of implementation. The NPRM, which hasn't been released, proposes bills and promotional materials prominently show the bottom-line price of video service including line-item fees.
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“While we have yet to see the details, our members operate in a highly competitive video marketplace and are committed to communicating clearly and transparently with relevant information about the video options available to them," NCTA said.
The proposal seems at least on its face like it should be adopted by the commissioners, Public Knowledge Legal Director John Bergmayer said. He said it parallels the FTC's "junk fees" efforts (see 2302090059).
“If you did not have an industry that loves nickel-and-diming consumers with all kinds of fees … you wouldn't have a need for this," Consumer Reports Senior Policy Counsel Jonathan Schwantes said. Even with cord cutting, tens of millions of MVPD subscribers would benefit from more pricing transparency, he said. A 2019 CR study of subscriber bills in 13 states found on average $450 a year in tacked-on fees (see 1910030052). Those fees allow for backdoor price hikes, where the cost of video service itself doesn't go up, but associated fees do, he said. He said that practice is starting to spread to mid-sized ISPs for connectivity services.
All-in advertised pricing to avoid consumer deception "is good practice for providers of all services, not just cable or satellite," emailed Daniel Hattis of Hattis & Lukacs, which represented subscribers in lawsuits against Charter Communications, Cox Communications and Cable One on using fees to charge more than advertised basic rates. "One of the reasons for the increase in 'junk fees' may well be that service providers have thought they could avoid accountability by being able to hide behind fine-print arbitration clauses," he said.
"This proposal was a great idea twenty years ago," emailed DePauw University communications professor Jeff McCall. "By now, it is pretty much just a public relations move by the FCC." Due to cord cutting, the all-in pricing proposal "has less broad impact on consumers," he said. McCall said most cable and satellite providers "already have pretty transparent information on their websites and make a point to explain price increases when they are implemented." MVPDs aren't likely to get significantly worked up about the proposal, he said. "It would pretty much just require some bureaucratic wording on bills and promotional materials, and it's a safe bet consumers wouldn't read this stuff thoroughly anyway," he said. 'Given the current image of cable and satellite providers these days, they can't be viewed as opposing transparency."
As long as implementation isn't too onerous, the cable industry should support the idea, said Ron Rizzuto, University of Denver finance professor, who has cable expertise. All-in pricing means better clarity and customer service and subscribers less blindsided, meaning better customer relationships, he said. Such disclosure is more important in the cord-cutting era, where consumers have multiple choices for video service, he said.
Despite cable's less-pervasive penetration, "I think we are a long way from no one having it," emailed media consultant and former University of Michigan communications studies professor Amanda Lotz, who now is at the Digital Media Research Centre at Australia's Queensland University of Technology. Since video revenue is declining and less central to cable, the all-in proposal might not be a major concern, she said. But the proposal, by adding broadcast retransmission fees into the all-in price, could cause the advertised base price to jump, she said. That could result in more pressure on the deals for carriage of broadcasters, she said.
Not everyone sees all-in pricing rules happening without a fight. CR's Schwantes said industry pushback is likely since such rules could result in higher churn. Cable will say it already discloses all its fees, he said, but they often are in the fine print.