FCC Considers Regulating Triple-Play Cancellation Fees

Telecom News Editorials Reports Glossary

FCC Considers Regulating Triple-Play Cancellation Fees

7:00 am on September 14, 2007 | Category: Business, Telecom Services, Regulation, Editorials

The U.S. Federal Communications Commission may consider placing limits on the termination fees charged by cable companies when subscribers prematurely cancel a contract, according to FCC Chairman, Kevin Martin.

Regulators are already examining the early-termination fees charged by wireless carriers, and should also investigate similar cancellation penalties on telephone, broadband, and cable TV contracts, according to Martin.

“This issue may be broader than just the wireless industry, and I think the commission should look at what the implications are,” Martin said, noting that triple-play communication and entertainment packages, which combine voice, data, and video services are often subject to such charges.

Cable and telecom industry representatives, however, counter that eliminating early termination fees would raise the cost of service for everyone.

A large percentage of new subscribers choose to sign a contract in order to receive special introductory offers, such as free equipment or a discounted rate for the first few months. Without a contractual commitment from consumers, telecom and cable providers would be unable to offer these special perks and discounts.

As it stands now, subscribers are free to sign a contract and receive a better deal. Those who want the ability to cancel without hindrance can opt to pay slightly more for a month-to-month plan.

It’s a fairly clear choice, and for customers who bother to read the small print, it shouldn’t really be a problem.

1 Comment »

RSS feed for comments on this post.

What did the FCC require about early termination fees on the customer contracts the RBOCs had their customers sign just before telephone competition took hold in their territories?

Comment by Mike Ward — September 14, 2007 #