Consumer Reports urges Congress to crack down on hidden fees in Pay-TV bills in testimony before Senate Commerce Committee

Reauthorization of STELAR gives Congress opportunity to require fair and transparent pricing

WASHINGTON, D.C. – Jon Schwantes, senior policy counsel for Consumer Reports, will call on Congress today to require fair and transparent pricing for pay-TV bills and support policies that foster competition in the video marketplace in testimony before the Senate Commerce Committee.  The Committee is holding a hearing on the reauthorization of the Satellite Television Extension and Localism Act (STELAR), which expires at the end of 2019.

“In the past decade, cable companies have imposed new fees for features and services previously included in the base advertised rate,” said Schwantes.  “Consumer Reports’ analysis of hundreds of pay-TV bills found that these company-imposed charges add almost 25 percent to the base price of the typical monthly cable bill.  These sneaky fees enable cable companies to camouflage price increases, confounding consumer efforts to comparison shop and stay within household budgets.”

Consumer Reports analyzed nearly 800 cable bills collected from consumers across the country to calculate the cost of monthly fees.  The exact assortment of fees varies by cable provider, but they are company-imposed and go by terms like Broadcast TV Fee, Regional Sports Surcharge, HD Technology Fee, and Network Access and Maintenance Fee.

CR found that company-imposed fees cost consumers, on average, $450 per year and that cable providers could be making an estimated $28 billion annually from these charges.  This amount is separate from taxes, regulatory pass-through fees imposed by the government, and optional charges for premium services.  The average cable bill has more than 13 line-item charges, including the base package price, company-imposed fees, regulatory fees, and taxes, creating a jumbled laundry list ripe for consumer confusion.

“The good news is that Congress, beginning with the Commerce Committee, can act to solve this problem in the video marketplace and elsewhere,” said Schwantes.  “A bill introduced by Senator Markey earlier this year, the TRUE Fees Act, would require company-imposed fees to be included in the advertised price.

Schwantes also noted during his testimony that some of the provisions of STELAR should be made permanent, namely Section 119 “distant signal” license – a compulsory copyright license that permits satellite companies to import an out-of-market broadcast channel into a market where the local channel is unavailable.  In addition, Schwantes urged lawmakers to retain the “good faith” requirements attached to retransmission consent negotiations, which permit the Federal Communications Commission to adjudicate programming carriage disputes between broadcasters and multichannel video programming distributors.

Jonathan Schwantes’ full testimony is available here.  The hearing “The Reauthorization of STELAR,” is scheduled for 10am on Wednesday, October 23.  For more information, including how to view the hearing online, please visit www.commerce.senate.gov

Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 7606

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