All-In Pricing for Cable and Satellite Television Service, 42277-42284 [2023-13971]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 88, Number 125 (Friday, June 30, 2023)]
[Proposed Rules]
[Pages 42277-42284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13971]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 23-203; FCC 23-52; FRS ID 151775]


All-In Pricing for Cable and Satellite Television Service

AGENCY: Federal Communications Commission

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, The Federal Communications Commission 
(Commission) propose to require cable operators and direct broadcast 
satellite providers to clearly and prominently display the total cost 
of video programming service in promotional materials and on 
subscribers' bills. Requiring ``all-in'' pricing is intended to clearly 
and accurately reflect consumers' subscription payment obligations, 
eliminate unexpected fees, and allow consumers to comparison shop among 
competing cable operators and direct broadcast satellite providers as 
well as alternative programming providers like streaming services. We 
also seek comment on the effect of imposing such requirements on other 
types of multichannel video programming distributors and on our 
authority to do so.

DATES: Submit comments on or before July 31, 2023. Submit reply 
comments on or before August 29, 2023.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Brendan Murray, [email protected], of the 
Policy Division, Media Bureau, (202) 418-1573.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking, (NPRM) FCC 23-52, adopted on June 14, 2023, and 
released on June 20, 2023. These documents will also be available via 
ECFS (https://www.fcc.gov/cgb/ecfs/). (Documents will be available 
electronically in ASCII, Word, and/or Adobe Acrobat.) To request these 
documents in accessible formats for people with disabilities, send an 
email to [email protected] or call the Commission's Consumer and 
Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 
(TTY).
    Synopsis. Access to clear, easy-to-understand, and accurate 
information about the pricing of video services helps consumers make 
informed choices and encourages competition in the market. It does so 
by empowering consumers with information to comparison shop and to find 
the video programming services that best meets their needs and matches 
their budget. Consumers who choose a video service based on an 
advertised monthly price may be surprised by unexpected fees related to 
the cost of video programming that raise the amount of the bill 
significantly. These fees, with names like broadcast TV fee, or 
regional sports programming surcharge, are listed in the fine print as 
``fees'' or ``taxes and surcharges,'' separate from the top line listed 
service price and can result in a bill that is substantially more than 
the advertised price. This categorization can be potentially misleading 
and interpreted as a government-imposed tax or fee, instead of a 
company-imposed service fee increase. This practice can also make it 
difficult for consumers to compare the service prices of competing 
video service providers.
    In this Notice of Proposed Rulemaking (NPRM), we propose to enhance 
pricing transparency by requiring cable operators and direct broadcast 
satellite (DBS) providers to specify the ``all-in'' price for service 
in their promotional materials and on subscribers' bills. This proposal 
would require cable operators and DBS providers to clearly and 
prominently display the total cost of video programming service. This 
all-in pricing proposal is intended to give consumers a transparent and 
accurate reflection of their subscription payment obligations and 
eliminate unexpected fees. It also seeks to provide consumers with the 
ability to comparison shop among competing cable operators and DBS 
providers, and to compare programming costs against alternative 
programming providers, including streaming services. We also seek 
comment on whether we should consider expanding the requirements of 
this proceeding to other types of multichannel video programming 
providers (MVPDs) and on our authority to do so.
    Background. Sections 335 and 632 of the Communications Act of 1934, 
as amended (the Act), authorize the Commission to adopt public interest 
regulations for DBS and direct the Commission to adopt cable customer 
service requirements, respectively. In 2019, Congress adopted the 
Television Viewer Protection Act of 2019 (TVPA), which bolstered the 
consumer protection provisions of the Act by adding specific consumer 
protections. The TVPA revised the Act to add section 642, which, among 
other things, requires greater transparency in subscribers' bills. As 
it considered this legislation, Congress expressed specific concern 
that consumers face ``unexpected and confusing fees when purchasing 
video programming,'' including ``fees for broadcast TV,'' and noted 
that the practice of charging these fees began in the late 2000s. In 
2021, the Media Bureau sought comment on the steps MVPDs have taken to 
implement the TVPA requirements and on whether consumers found those 
steps effective in furthering Congress's goal of protecting consumers 
when purchasing MVPD or broadband service. In response to that PN, 
Consumer Reports commented that below-the-line fees, ``which are solely 
the creation of the provider (versus regulatory fees that are passed on 
to the consumer)[,] made up the bulk'' of costs that are added to 
advertised rates and MVPD subscribers' bills. It appears that since 
adoption of the TVPA, the practice of charging subscribers unexpected 
``fees'' (for example, for broadcast television programming and 
regional sports programming listed separately from the monthly 
subscription rate for video programming service) that are actually 
charges for the video programming service for which the subscriber 
pays, has continued. Moreover, websites, advertisements, and other 
promotional materials may advertise a top-line price that does not note 
prominently the mandatory programming costs that make up the

[[Page 42278]]

service until the customer signs up for the service. For example, those 
materials use a different font size (often in fine print) and separate 
from the proclaimed monthly subscription fee amounts extra ``fees'' 
designated by the provider that consumers will also need to pay for the 
video programming that they will receive.
    Discussion. We believe that the public interest requires that cable 
operators and DBS providers represent their subscription charges 
transparently, accurately, and clearly. Accordingly, we propose to 
require cable operators and DBS providers to provide the ``all-in'' 
price for video programming service in their promotional materials and 
on subscribers' bills. Below, we seek comment on (i) the specifics of 
this proposal, (ii) existing Federal, state, and local requirements 
related to truth-in-billing, (iii) the marketplace practices regarding 
advertising and billing, and (iv) our legal authority to adopt this 
proposal. We also seek comment on the costs and benefits of our 
proposal and the effects that our proposal could have on equity and 
inclusion.
    Proposal Details. We propose to require that cable operators and 
DBS providers aggregate the cost of the video programming service (that 
is, any and all amounts that the cable operator or DBS provider charges 
the consumer for video programming, including for broadcast 
retransmission consent, regional sports programming, and other 
programming-related fees) as a prominent single line item on 
subscribers' bills and in promotional materials, if they choose to 
advertise a price in those promotional materials. Section 602 of the 
Act defines video programming as ``programming provided by, or 
generally considered comparable to programming provided by, a 
television broadcast station.'' We intend for this aggregate amount to 
include the full amount the cable operator or satellite provider 
charges (or intends to charge) the customer in exchange for video 
programming service (such as broadcast television, sports programming, 
and entertainment programming), but nothing more (that is, no taxes or 
charges unrelated to video programming). We do not propose to require 
that cable operators and DBS providers include equipment costs in the 
``all-in'' price listed on promotional materials and bills, as these 
costs are variable for each subscriber, and some subscribers use their 
own equipment and therefore do not incur such charges from the 
provider. We seek comment on this analysis. The goal of this proposal 
is to provide consumers with the video programming service portion of 
their subscription payment for which they are or will be responsible in 
clear terms. This will allow consumers to make informed choices, 
including the ability to comparison shop among competing cable 
operators and DBS providers; compare programming costs against 
alternative programming providers, including streaming services; and 
budget for the actual amount that they will need to pay for cable or 
DBS video service every month, similar to the truth-in-billing rules 
that the Commission has in place to aid common carrier customers in 
understanding their bills and making informed choices in the market.
    We seek comment on our proposal. Is this proposal sufficient to 
ensure that subscribers and potential subscribers have accurate 
information about the cost for video service? To what extent are 
providers to already advertising an ``all-in'' price that is inclusive 
of all video programming-related costs, government-imposed taxes, and 
fees? Would such materials satisfy our proposal, given that it relates 
only to charges for video programming? If a provider attempts to 
attract new subscribers with a total price (which would necessarily be 
higher than just the price for video programming), does that benefit 
outweigh the benefits of requiring uniformity for comparison shopping 
purposes? Are there more consumer-friendly ways that cable operators 
and DBS providers should be required to provide this information? Is 
the term ``prominent'' specific enough to ensure that cable operators 
and DBS providers present consumers with an easy-to-understand ``all-
in'' subscription price, or do we need to provide more detail about how 
cable operators and DBS providers must communicate the price for 
service? For example, should we require cable operators and DBS 
providers to convey the information in a consistent font size or via 
some other measurable metric? In cases where the cable operator or DBS 
provider bundles video programming with other services like broadband 
internet service, can the cable operator or DBS provider readily 
identify the amount of the bill that is attributable to video 
programming, and if not, how should our rulemaking account for those 
situations? We invite comment, particularly from consumers and local 
franchising authorities (LFAs), about whether consumers encounter 
misleading promotions or receive misleading bills, and request that 
commenters include documents (such as advertisements and bills with 
redacted personal information) to support their claims.
    Subscribers are entitled to clear, concise, and understandable 
information about the elements that comprise their subscription fees. 
We also understand that cable operators and DBS providers may wish to 
(or in some cases are required to under 47 U.S.C. 562) provide their 
subscribers and potential subscribers with information about how much 
of their subscription payments are attributable to specific costs of 
the video programming service, equipment rental, or other items that 
contribute to the bill. Section 622(c) permits cable operators to 
identify franchisee fees, public, educational, and governmental access 
(PEG) fees, and other fees, taxes, assessments, or other charges 
imposed by the government ``as a separate line item on each regular 
bill of each subscriber.'' Section 642(b) states that when an MVPD 
provides a consumer a bill in an electronic format, that bill shall 
include an ``itemized statement that breaks down the total amount 
charged for or relating to the provision of the covered service by the 
amount charged for the provision of the service itself and the amount 
of all related taxes, administrative fees, equipment fees, or other 
charges.'' The language in our rulemaking is intended to make clear 
that MVPDs may itemize their bills with even more granularity than the 
statute requires. We are concerned, however, that some cable operators 
and DBS providers may currently portray retransmission consent and 
sports programming costs as separate lines on the bill in such a way as 
to lead a reasonable consumer to believe that the charge has been 
mandated by the government, which is a concern that is similar to the 
concerns that the Commission had with regard to common carriers when it 
adopted truth-in-billing rules that apply to them. Therefore, 
consistent with sections 622(c) and 642 of the Act, we propose to 
explicitly state in our rule that cable operators and DBS providers may 
complement the prominent aggregate cost line item with an itemized 
explanation of the elements that compose that aggregate cost, so long 
as the cable operator or DBS provider portrays the video programming-
related costs as part of the all-in price for service. We seek comment 
on this proposal. Are there consumer benefits to receiving the cost 
line-item information, which would justify their inclusion on consumer 
bills? Would a prohibition on separate line items, other than those 
mandated by section 642 of the Act or permitted under section 622(c) of 
the Act, better serve the public interest, and if so, could the 
Commission adopt such

[[Page 42279]]

a prohibition consistent with the Act and the First Amendment? Should 
we require cable operators and DBS providers that choose to itemize 
portions of their bills to provide a full accounting of how a 
subscriber's bill is apportioned? For example, should we require cable 
operators and DBS providers to explain what portion of a bill is 
attributable to programming costs, or other relevant costs? If so, we 
seek comment on which categories would best inform consumers about how 
their payments are apportioned. We invite comment about rules we should 
consider in order to promote billing and marketing transparency.
    Marketplace Practices. We seek comment on industry practices 
regarding service pricing categorization. Is there a business purpose 
for characterizing these service rate increases as taxes, fees, or 
surcharges, and if so, what is this purpose? Are certain sectors in the 
MVPD marketplace more prone to charging such fees? Aside from line-item 
fees for broadcast television, sports programming (including regional 
sports programming), and entertainment programming, are there other 
video programming-related fees that are being categorized as taxes, 
fees, and surcharges, instead of included in the price for video 
service? Have any MVPDs changed the way they bill or promote such fees 
since the TVPA took effect, and if so, how? Aside from the examples 
discussed above, are there any other industry practices that are 
relevant to the analysis of our proposal?
    Existing Consumer Protections. We seek comment on whether any 
existing laws and protections prevent these advertising and billing 
practices related to charges for video programming that are listed 
separately on bills as taxes, fees, or surcharges. The Act provides 
shared authority over cable customer service issues: the Commission 
sets baseline customer service requirements at the Federal level, and 
state and local governments tailor more specific customer service 
regulations based on their communities' needs. Given the bifurcated 
authority we share with state and local governments, we seek comment on 
whether any franchising authorities have regulations or franchise 
agreement terms about these types of billing and advertising practices, 
and if so, whether they would conflict with our proposal. We seek 
specific input from franchising authorities about whether any 
regulations or franchise agreement terms have succeeded in eliminating 
surprise, below-the-line fees and potentially deceptive advertising, 
and whether those regulations or terms would make for appropriate 
Federal standards for purposes of the practices we are considering 
here. What other insights can franchising authorities share regarding 
their experiences in assisting constituents with understanding these 
billing and/or advertising practices? And have other regulatory bodies 
addressed this practice? For example, has the Federal Trade Commission 
investigated any of these advertising and billing practices, and if so, 
what was the result of that investigation? Have any state attorneys 
general investigated these practices and found them to violate any 
state laws? If so, how do such efforts contribute to our efforts in 
this proceeding?
    Legal Authority. We tentatively conclude that sections 335, 632, 
and 642 of the Act provide ample authority for this proposal. We also 
tentatively conclude that our proposed rule is consistent with the 
First Amendment. We seek comment on our analysis below and invite 
comment on other sources of authority upon which we may rely to support 
our proposed rule.
    We tentatively conclude that section 335 of the Act provides us 
with authority to adopt our proposed rule as it will apply to direct 
broadcast satellite (DBS) providers. Section 335(a) provides us with 
authority to impose on DBS providers ``public interest or other 
requirements for providing video programming.'' The Commission has not 
relied on this authority to impose customer service obligations on DBS 
before, but has recognized that section 335(a) authorizes the adoption 
of public interest regulations. We tentatively find that the rules we 
propose here are public interest requirements that fall squarely within 
our authority under section 335(a). As the Commission recently 
explained, ``Consumer access to clear, easy-to-understand, and accurate 
information is central to a well-functioning marketplace that 
encourages competition, innovation, low prices, and high-quality 
services. The same information empowers consumers to choose services 
that best meet their needs and match their budgets and ensure that they 
are not surprised by unexpected charges or service quality that falls 
short of their expectations.'' These are some of the same goals that 
our proposed rule here is intended to accomplish. Although section 
335(a) covers requirements for ``providing video programming,'' we do 
not read that phrase to limit our authority to cover only 
communications that take place after a DBS provider and consumer enter 
into a contract. Advertising and promotional materials are often the 
catalyst for locking consumers into long-term contracts for the 
provision of video service. Our proposed rule, as it applies to 
advertising and other promotional materials, will ensure consumers have 
accurate and understandable information from the start of their 
subscriber relationship with the DBS provider, prevent consumer 
surprise down the road from unexpected charges assessed for ``providing 
video programming,'' and allow each consumer to have accurate 
information about the monthly cost in order to choose an MVPD service 
that best suits his or her needs. Accordingly, we tentatively conclude 
that we have authority under section 335(a) to apply our proposed rule 
to DBS providers. We seek comment on this tentative conclusion.
    In addition, we seek comment on whether we have authority under 
section 4(i) of the Act to extend our proposed rule to DBS providers. 
By doing so, we will ensure uniformity of regulation between and among 
cable operators (regulated under Title VI and by various state consumer 
protection laws and local franchising provisions) and DBS providers 
(under Title III), thereby preventing DBS providers from gaining a 
competitive advantage over their competitors with potentially 
misleading marketing materials. We seek comment on this analysis.
    Further, we tentatively conclude that section 632 of the Act 
provides us with authority to adopt our proposed rule as it will apply 
to cable operators. Section 632(b) provides us authority to establish 
customer service standards regarding billing practices and other 
communications with consumers, and we have relied on that authority for 
decades to regulate in this area. Our mandate under section 632(b) is 
to adopt customer service requirements regarding, among other 
enumerated topics, ``communications between the cable operator and the 
subscriber (including standards governing bills and refunds).'' 
Although the statute identifies specific areas that the Commission's 
customer service standards must cover, section 632 describes these only 
as the ``minimum'' standards. Thus, by its terms, section 632(b) gives 
us broad authority to adopt customer service standards that go beyond 
those enumerated, including outside the billing context. The 
legislative history of section 632 provides that ``[p]roblems with 
customer service have been at the heart of complaints about cable 
television,'' and Congress believed that ``strong mandatory 
requirements are necessary.'' Congress expected ``the FCC, in

[[Page 42280]]

establishing customer service standards to provide standards addressing 
. . . billing and collection practices; disclosure of all available 
service tiers, [and] prices (for those tiers and changes in service) . 
. . .'' This language from the legislative history--particularly the 
expectation that the Commission would adopt standards regarding 
``disclosure of all available service tiers, [and] prices''--suggests 
that Congress granted the Commission authority over how cable operators 
disclose their prices to consumers, including prices for services to 
which consumers may have not yet subscribed. We do not read the 
reference to ``customer service'' requirements in section 632(b) to 
limit the Commission to regulate only post-contract communications; 
rather, we tentatively find that price information in advertising and 
other promotional materials is a natural extension of the power 
Congress expressly delegated to the Commission concerning billing 
communications between cable operators and subscribers. That is, our 
proposal seeks to prohibit a cable operator from promoting a 
potentially misleading price to entice customers to sign up for service 
and then billing subscribers more than the advertised price. Thus, we 
tentatively conclude that requiring an ``all-in'' price for service is 
the type of ``strong mandatory requirement'' that Congress contemplated 
in section 632 and accordingly we have authority under section 632(b) 
to adopt our proposed rule as applied to cable operators. We seek 
comment on these tentative conclusions, and whether we should consider 
expanding the requirements of this proceeding to other types of MVPDs, 
and on what statutory basis. We also seek comment on the potential 
competitive effects of applying these requirements to only a subset of 
video programming providers.
    As discussed above, section 642, as added by the TVPA, requires 
MVPDs to bill subscribers transparently when the MVPD sends an 
electronic bill, and specifically requires MVPDs to include in their 
bills ``an itemized statement that breaks down the total amount charged 
for or relating to the provision of the covered service by the amount 
charged for the provision of the service itself and the amount of all 
related taxes, administrative fees, equipment fees, or other charges.'' 
We tentatively conclude that our proposal requiring cable operators and 
DBS providers to provide consumers with the ``all-in'' price for video 
programming service meets this statutory directive, at least as it 
applies to any electronic bill the MVPD sends. Specifically, our 
proposal to require cable operators and DBS providers to provide 
consumers with the total charge for all video programming would ensure 
that consumers are provided complete and accurate information about the 
``amount charged for the provision of the service itself,'' as Congress 
intended. We tentatively find that such costs make up the charges for 
the ``provision of the service itself'' because broadcast channels, 
regional sports programming, and other programming track the statutory 
definition of ``video programming'' (that is, all are programming 
provided by, or generally considered comparable to programming provided 
by, a television broadcast station), and video programming is, by 
definition, the service that an MVPD makes available for purchase. We 
tentatively conclude that listing such costs as below-the-line fees 
potentially results in confusion for consumers about the ``amount 
charged for the provision of the service itself,'' because the word 
``itself'' suggests a single charge for the total service rather than 
one charge for one portion of the service and then a separate charge 
for other programming provided. This contravenes Congress's core 
purpose for enacting the legislation: as noted above, the legislative 
history of this section indicates that Congress intended to curb MVPDs' 
practice of charging ``unexpected and confusing fees,'' but recent 
press reports suggest that this practice continues. We observe that the 
statute further provides for the disclosure of a second group of costs 
on electronic bills--i.e., ``the amount of all related taxes, 
administrative fees, equipment fees, or other charges.'' However, we do 
not believe that costs related to video programming fall within this 
category. Such costs are not ``taxes,'' ``administrative fees,'' 
``equipment fees,'' or ``other charges'' because the Act defines video 
programming as the specific service that customers buy from MVPDs--in 
other words, the ``service itself.'' Thus, the terms ``taxes,'' 
``administrative fees,'' ``equipment fees,'' or ``other charges'' 
cannot reasonably include separate charges for various types of video 
programming (e.g., amounts paid for retransmission consent rights or 
rights to transmit regional sports programming or any other 
programming). We note that section 622(c) permits cable operators to 
identify, ``as a separate line item on each regular bill of each 
subscriber, . . . [t]he amount of the total bill assessed to satisfy 
any requirements imposed on the cable operator by the franchise 
agreement to support public, educational, or governmental channels or 
the use of such channels.'' 47 U.S.C. 542(c). As noted above, we 
drafted our proposed rule to be consistent with this rule section by 
making explicit that cable operators and DBS providers may list 
discrete costs that make up the ``all-in'' cost for video programming. 
Based on this analysis, we tentatively conclude that our proposed rule 
regarding pricing disclosures is a reasonable construction of these 
statutory directives and is authorized under the TVPA. Section 642's 
silence with respect to the Commission's rulemaking role does not 
remove such authority. The courts have previously affirmed the 
Commission's authority to promulgate rules implementing a section of 
the Communications Act even where Congress never explicitly or 
implicitly delegated power to the Commission to interpret that 
particular statutory section. We seek comment on these tentative 
conclusions.
    We also tentatively conclude that our proposed rule is consistent 
with the First Amendment. As the Commission has explained in other 
contexts where it adopted truth-in-billing, advertising, and labeling 
rules, ``[c]ommercial speech that is misleading is not protected speech 
and may be prohibited,'' and ``commercial speech that is only 
potentially misleading may be restricted if the restrictions directly 
advance a substantial governmental interest and are no more extensive 
than necessary to serve that interest.'' To what extent is the speech 
at issue here--portrayal that the cost of video service is a certain 
amount when the actual amount for the video service is potentially much 
higher--misleading? Is it categorically misleading such that is not 
considered protected speech? Or is it only potentially misleading? Is 
there a credible argument that this practice is not misleading at all?
    If a reviewing court were to find that the speech is misleading, 
the constitutional analysis would end there because the proposed rule 
simply prevents misleading commercial speech, which is afforded no 
protection under the First Amendment. However, even if our proposed 
rule seeks to regulate only potentially misleading speech, regulations 
involving commercial speech that require a disclosure of factual 
information (such as the disclosure of the total cost for video 
programming service that our proposed rule would require) are entitled 
to more lenient review from courts than regulations that limit speech. 
That is, under Supreme Court precedent, a speaker's commercial speech 
rights are adequately protected as long as

[[Page 42281]]

disclosure requirements are reasonably related to the government's 
interest in preventing deception of consumers. That standard is met 
here as our proposed rule would simply require cable operators and DBS 
providers to disclose to consumers in bills and promotional materials 
an accurate statement of the total cost for video programming service, 
and the disclosure requirement is reasonably related to the 
government's interest in preventing deception of consumers. As was the 
case in Zauderer, here, a cable operator's or DBS provider's 
constitutionally protected interest in not providing the required 
information is ``minimal.'' In addition, the rule does not prevent 
cable operators and DBS providers from conveying any additional 
information. We seek comment on this analysis.
    Assuming, for the sake of argument, that our proposed rule would be 
subject to the more stringent test of commercial speech regulation 
(i.e., intermediate scrutiny), we still believe that the rule passes 
that three-prong test that the Supreme Court established in Central 
Hudson: first, the government must assert a substantial interest in 
support of its regulation; second, the government must demonstrate that 
the restriction on commercial speech directly and materially advances 
that interest; and third, the regulation must be ``narrowly drawn.'' 
Our proposed rule passes this test. First, we have a substantial 
interest in making sure that consumers can identify the full cost of 
video programming to which they subscribe so that they can understand 
the price they are being charged for the service as well as make 
informed purchasing decisions as they consider competing cable and DBS 
service options. Second, our proposed rule would advance that interest 
by requiring cable operators and DBS providers to identify the cost for 
video programming as a single, prominent line-item on consumer bills 
and promotional materials, which would allow consumers to identify the 
full cost of video programming. Finally, our proposal is narrowly drawn 
and proportionate to the substantial interest we aim to promote: the 
proposed rule would permit cable operators and DBS providers to 
identify elements that comprise the total charge for video programming 
and require only that they present information about the total cost for 
video programming uniformly. We seek comment on this analysis.
    Cost/Benefit Analysis. We seek comment on the benefits and costs 
associated with adopting the proposed rules. In addition to the 
consumer benefits discussed above, including promotion of competition, 
are there also benefits to industry, such as leveling the playing field 
for cable operators and DBS providers that do offer transparent 
pricing? We also seek comment on any potential costs that would be 
imposed on consumers or cable operators and DBS providers if we adopt 
the proposals contained in this NPRM. Would a truth-in-billing 
requirement impose undue burdens on small cable operators, as that term 
is defined by the Small Business Administration? Are there ways to 
limit any potential compliance burdens on providers, including small 
cable operators, while still achieving the benefits to consumers 
discussed above? Comments should be accompanied by specific data and 
analysis supporting claimed costs and benefits. We seek comment on 
these issues and any other issues related to the regulation of below-
the-line fees and truth-in-billing requirements.
    Digital Equity and Inclusion. Finally, the Commission, as part of 
its continuing effort to advance digital equity for all, including 
people of color, persons with disabilities, persons who live in rural 
or Tribal areas, and others who are or have been historically 
underserved, marginalized, or adversely affected by persistent poverty 
or inequality, invites comment on any equity-related considerations and 
benefits (if any) that may be associated with the proposals and issues 
discussed herein. Specifically, we seek comment on how our proposals 
may promote or inhibit advances in diversity, equity, inclusion, and 
accessibility, as well the scope of the Commission's relevant legal 
authority.
    Initial Regulatory Flexibility Act Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission 
has prepared an Initial Regulatory Flexibility Analysis (IRFA) relating 
to this NPRM. The IRFA is set forth below.
    Paperwork Reduction Act. This NPRM may result in new or revised 
information collection requirements subject to the Paperwork Reduction 
Act of 1995, Public Law 104-13 (44 U.S.C. 3501 through 3520). If the 
Commission adopts any new or revised information collection 
requirement, the Commission will publish a notice in the Federal 
Register inviting the public to comment on the requirement, as required 
by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 
3501-3520). In addition, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission seeks specific comment on how it might ``further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.''
    Ex Parte Rules--Permit-But-Disclose. This proceeding shall be 
treated as a ``permit-but-disclose'' proceeding in accordance with the 
Commission's ex parte rules. Ex parte presentations are permissible if 
disclosed in accordance with Commission rules, except during the 
Sunshine Agenda period when presentations, ex parte or otherwise, are 
generally prohibited. Persons making ex parte presentations must file a 
copy of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. Memoranda must contain a 
summary of the substance of the ex parte presentation and not merely a 
listing of the subjects discussed. More than a one or two sentence 
description of the views and arguments presented is generally required. 
If the presentation consisted in whole or in part of the presentation 
of data or arguments already reflected in the presenter's written 
comments, memoranda or other filings in the proceeding, the presenter 
may provide citations to such data or arguments in his or her prior 
comments, memoranda, or other filings (specifying the relevant page 
and/or paragraph numbers where such data or arguments can be found) in 
lieu of summarizing them in the memorandum. Documents shown or given to 
Commission staff during ex parte meetings are deemed to be written ex 
parte presentations and must be filed consistent with section 1.1206(b) 
of the rules. In proceedings governed by section 1.49(f) of the rules 
or for which the Commission has made available a method of electronic 
filing, written ex parte presentations and memoranda summarizing oral 
ex parte presentations, and all attachments thereto, must be filed 
through the electronic comment filing system available for that 
proceeding, and must be filed in their native format (e.g., .doc, .xml, 
.ppt, searchable .pdf). Participants in this proceeding should 
familiarize themselves with the Commission's ex parte rules.
    Filing Requirements--Comments and Replies. Pursuant to sections 
1.415 and 1.419 of the Commission's rules, 47 CFR

[[Page 42282]]

1.415, 1.419, interested parties may file comments and reply comments 
on or before the dates indicated on the first page of this document. 
Comments may be filed using the Commission's Electronic Comment Filing 
System (ECFS). See Electronic Filing of Documents in Rulemaking 
Proceedings, 63 FR 24121 (1998).
    Electronic Filers: Comments may be filed electronically using the 
internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
    Paper Filers: Parties who choose to file by paper must file an 
original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
Commercial overnight mail (other than U.S. Postal Service Express Mail 
and Priority Mail) must be sent to 9050 Junction Drive, Annapolis 
Junction, MD 20701. U.S. Postal Service first-class, Express, and 
Priority mail must be addressed to 45 L Street NE, Washington, DC 
20554.
    People with Disabilities. To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the FCC's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).
    Availability of Documents. Comments and reply comments will be 
publicly available online via ECFS.
    Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission 
has prepared this present Initial Regulatory Flexibility Analysis 
(IRFA) concerning the possible significant economic impact on small 
entities by the policies and rules proposed in the Notice of Proposed 
Rulemaking (NPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments provided on the first page of the NPRM. 
The Commission will send a copy of the NPRM, including this IRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA). In addition, the NPRM and IRFA (or summaries thereof) will be 
published in the Federal Register.
    Need for, and Objectives of, the Proposed Rules. Sections 335 and 
632 of the Communications Act of 1934, as amended (the Act), authorize 
the Commission to adopt public interest regulations for direct 
broadcast satellite (DBS) and direct the Commission to adopt cable 
customer service requirements, respectively. In 2019, Congress adopted 
the Television Viewer Protection Act of 2019 (TVPA), which bolstered 
the consumer protection provisions of the Act by adding specific 
consumer protections. The TVPA revised the Act to add section 642, 
which, among other things, requires greater transparency in 
subscribers' bills. As it considered this legislation, Congress 
expressed specific concern that consumers face ``unexpected and 
confusing fees when purchasing video programming,'' including ``fees 
for broadcast TV,'' and noted that the practice of charging these fees 
began in the late 2000s. In 2021, the Media Bureau sought comment on 
the steps multichannel video programming distributors (MVPDs) have 
taken to implement the TVPA requirements and on whether consumers found 
those steps effective in furthering Congress's goal of protecting 
consumers when purchasing MVPD or broadband service. In response to 
that PN, Consumer Reports commented that below-the-line fees, ``which 
are solely the creation of the provider (versus regulatory fees that 
are passed on to the consumer)[,] made up the bulk'' of costs that are 
added to advertised rates and MVPD subscribers' bills. It appears that 
since adoption of the TVPA, the practice of charging subscribers 
unexpected ``fees'' (for example, for broadcast television programming 
and regional sports programming listed separately from the monthly 
subscription rate for video programming service) that are actually 
charges for the video programming service for which the subscriber 
pays, has continued. Moreover, websites, advertisements, and other 
promotional materials may advertise a top-line price that does not note 
prominently the mandatory programming costs that make up the service 
until the customer signs up for service. For example, those materials 
use a different font size (often in fine print) and separate from the 
proclaimed monthly subscription fee amounts extra ``fees'' designated 
by the provider that consumers will also need to pay for video 
programming that they will receive.
    Some MVPDs charge subscribers an assortment of unexpected fees that 
are not identified as a cost attributable to the video programming 
service that they sell, even though those fees are for parts of that 
video programming service. This categorization can potentially be 
misleading and interpreted as a government-imposed tax or fee, instead 
of a company-imposed service fee increase. This practice can also make 
it difficult for consumers to compare the service prices of competing 
video service providers. To make sure that consumers have the 
information they need to budget for video programming service and 
compare competitive services,
    Legal Basis. The proposed action is authorized pursuant to sections 
1, 4(i), 303(v), 335(a), 632(b), and 642 of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 154(i), 303(v), 335(a), 552(b), and 
562.
    Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply--Cable and Other Subscription 
Programming. The U.S. Census Bureau defines this industry as 
establishments primarily engaged in operating studios and facilities 
for the broadcasting of programs on a subscription or fee basis. The 
broadcast programming is typically narrowcast in nature (e.g., limited 
format, such as news, sports, education, or youth-oriented). These 
establishments produce programming in their own facilities or acquire 
programming from external sources. The programming material is usually 
delivered to a third party, such as cable systems or direct-to-home 
satellite systems, for transmission to viewers. The SBA small business 
size standard for this industry classifies firms with annual receipts 
less than $41.5 million as small. Based on U.S. Census Bureau data for 
2017, 378 firms operated in this industry during that year. Of that 
number, 149 firms operated with revenue of less than $25 million a year 
and 44 firms operated with revenue of $25 million or more. Based on 
this data, the Commission estimates that a majority of firms in this 
industry are small.
    Cable Companies and Systems (Rate Regulation Standard). The 
Commission has developed its own small business size standards, for the 
purpose of cable rate regulation. Under the Commission's rules, a 
``small cable company'' is one serving 400,000 or fewer subscribers, 
nationwide. Industry data indicate that, of 4,200 cable operators 
nationwide, all but 9 are small under this size standard. In addition, 
under the Commission's rules, a ``small system'' is a cable system 
serving 15,000 or fewer subscribers. Industry data indicate that, of 
4,200 systems nationwide, 3,900 have fewer than 15,000 subscribers, 
based on the

[[Page 42283]]

same records. Thus, under this second size standard, the Commission 
believes that most cable systems are small.
    Cable System Operators (Telecom Act Standard). The Communications 
Act of 1934, as amended, contains a size standard for a ``small cable 
operator,'' which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than one percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' For purposes of the Telecom Act Standard, the 
Commission determined that a cable system operator that serves fewer 
than 677,000 subscribers, either directly or through affiliates, will 
meet the definition of a small cable operator based on the cable 
subscriber count established in a 2001 Public Notice. Based on industry 
data, only six cable system operators have more than 677,000 
subscribers. Accordingly, the Commission estimates that the majority of 
cable system operators are small under this size standard. We note 
however, that the Commission neither requests nor collects information 
on whether cable system operators are affiliated with entities whose 
gross annual revenues exceed $250 million. Therefore, we are unable at 
this time to estimate with greater precision the number of cable system 
operators that would qualify as small cable operators under the 
definition in the Communications Act.
    Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS is included in the Wired 
Telecommunications Carriers industry which comprises establishments 
primarily engaged in operating and/or providing access to transmission 
facilities and infrastructure that they own and/or lease for the 
transmission of voice, data, text, sound, and video using wired 
telecommunications networks. Transmission facilities may be based on a 
single technology or combination of technologies. Establishments in 
this industry use the wired telecommunications network facilities that 
they operate to provide a variety of services, such as wired telephony 
services, including VoIP services, wired (cable) audio and video 
programming distribution; and wired broadband internet services. By 
exception, establishments providing satellite television distribution 
services using facilities and infrastructure that they operate are 
included in this industry. The SBA small business size standard for 
Wired Telecommunications Carriers classifies firms having 1,500 or 
fewer employees as small. U.S. Census Bureau data for 2017 show that 
3,054 firms operated in this industry for the entire year. Of this 
number, 2,964 firms operated with fewer than 250 employees. Based on 
this data, the majority of firms in this industry can be considered 
small under the SBA small business size standard. According to 
Commission data however, only two entities provide DBS service--DIRECTV 
(owned by AT&T) and DISH Network, which require a great deal of capital 
for operation. DIRECTV and DISH Network both exceed the SBA size 
standard for classification as a small business. Therefore, we must 
conclude based on internally developed Commission data, in general DBS 
service is provided only by large firms.
    Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. The NPRM proposes to require cable operators 
and DBS providers to state the makeup of consumers' bills 
transparently, accurately, and clearly. The NPRM does not propose any 
new or modified recordkeeping or other compliance requirements.
    In assessing the cost of compliance for small entities, at this 
time the Commission is not in a position to determine whether, if 
adopted, amending the cable operator customer service obligations will 
require small entities to hire professionals to comply, and cannot 
quantify the cost of compliance with any of the potential rule changes 
that may be adopted. To help the Commission more fully evaluate the 
cost of compliance, in the NPRM we seek comment on whether a truth-in-
billing requirement would impose undue burdens on small entities. We 
also seek comment on ways to limit any potential compliance burdens on 
small entities, while still achieving the benefits to consumers of 
clearer, non-misleading bills and advertisements. Comments should be 
accompanied by specific data and analysis supporting claimed costs and 
benefits. In addition, we seek comment on these issues and any other 
issues related to the regulation of below-the-line fees and truth-in-
billing requirements. We expect the comments that we receive from the 
parties in the proceeding, including cost and benefit analyses, to help 
the Commission identify and evaluate compliance costs and burdens for 
small entities that may result from the matters discussed in the NPRM.
    Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered. The RFA requires an 
agency to describe any significant alternatives that it has considered 
in reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance, rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.''
    The NPRM seeks comment on whether cable operators and DBS providers 
have changed the way they bill or promote such fees since the TVPA took 
effect, and if so, how. We ask whether there is a business purpose for 
characterizing these service rate increases as taxes, fees, or 
surcharges, and whether certain sectors in the MVPD marketplace more 
prone to charging such fees. We also ask whether any franchising 
authorities have regulations or franchise agreement terms about these 
types of billing and advertising practices, and if so, whether they 
would conflict with our proposal. Consistent with section 642 of the 
Act, the NPRM proposes to explicitly state in our rule that cable 
operators and DBS providers may complement the prominent aggregate cost 
line item with an itemized explanation of the elements that compose 
that aggregate cost, so long as the cable operator or DBS provider 
portrays the video programming-related costs as part of the all-in 
price for service. There may be consumer benefits to allowing cable 
operators and DBS providers to provide their subscribers and potential 
subscribers with information about how much of their subscription 
payments are attributable to specific elements of the video programming 
service, equipment rental, or other elements that contribute to the 
bill.
    We considered alternatives to whether our proposal to provide the 
``all-in'' price for service in their promotional materials and on 
subscribers' bills is sufficient to ensure that subscribers and 
potential subscribers have accurate information about the cost for 
video service. We considered whether there are more consumer-friendly 
ways that cable operators and DBS providers should be required to 
provide this information and whether the term ``prominent'' is specific 
enough to

[[Page 42284]]

ensure that cable operators and DBS providers present consumers with an 
easy-to-understand ``all-in'' subscription price, or whether we need to 
provide more detail about how cable operators and DBS providers must 
communicate the price for service and seek comment on these matters. We 
also considered whether, aside from line-item fees for broadcast 
television, sports programming (including regional sports programming), 
and entertainment programming, there are other video programming-
related fees that are being categorized as taxes, fees, and surcharges, 
instead of included in the price for video service. We also considered 
whether are there also benefits to industry, such as leveling the 
playing field for MVPDs that do offer transparent pricing.
    We expect to more fully consider the economic impact and 
alternatives for small entities following the review of comments and 
costs and benefits analyses filed in response to the NPRM. Our 
evaluation of this information will shape the final alternatives we 
consider, the final conclusion we reach, and any final actions we 
ultimately take in this proceeding to minimize any significant economic 
impact that may occur on small entities.
    Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rule. None.
    It is ordered that, pursuant to the authority found in sections 1, 
4(i), 303(v), 335(a), 632(b), and 642 of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 154(i), 303(v), 335(a), 552(b), and 
562, this Notice of Proposed Rulemaking is adopted. It is further 
ordered that the Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Notice of 
Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 76

    Cable television, Reporting and recordkeeping requirements.

Federal Communications Commission.
Marlene Dortch,
Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
1. The authority citation for part 76 is revised to read as follows:

    Authority:  47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 341, 503, 
521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 
549, 552, 554, 556, 558, 560, 561, 571, 572, 573.

0
2. Add Sec.  76.310 to read as follows:


Sec.  76.310  Truth in billing and advertising.

    Cable operators and direct broadcast satellite (DBS) providers 
shall aggregate the cost of video programming that they provide as a 
prominent single line item on subscribers' bills and in any promotional 
materials. Cable operators and DBS providers may complement the 
aggregate line item with an itemized explanation of the elements that 
compose that single line item.

[FR Doc. 2023-13971 Filed 6-29-23; 8:45 am]
BILLING CODE 6712-01-P