The cable and broadband lobby is blasting the Federal Trade Commission's proposal to outlaw junk fees -- arguing that the potential rules are not only unconstitutional, but would also disrupt ad practices throughout the country.
“We believe that the FTC’s proposed rule is impermissible, unconstitutional, unnecessary, and unsupported by substantial evidence, especially with respect to NCTA members’ services,” NCTA--The Internet & Television Association writes in comments filed Wednesday with the agency.
“The proposed rule would upend industry practices with respect to pricing, disclosures, and advertising across virtually the entire U.S. economy,” the group adds.
The filing is in response to proposed regulations that would effectively prohibit businesses from advertising one price, then tacking on extra fees.
If adopted, the regulations would require companies that advertise a price to disclose the “total” price -- including fees -- in the ad. The total price also would have to appear more prominently than other pricing information.
The lobbying group contends the FTC lacks authority to issue regulations that would affect advertising throughout the U.S. Among other arguments, the organization says the constitution only allows Congress to pass the kinds of restrictions the FTC has proposed.
The organization also says that if the FTC goes ahead with the proposed regulations, it should exempt broadband carriers, cable companies and other NCTA members, given that they are already subject to Federal Communications Commission regulations.
For instance, the FCC recently enacted rules requiring broadband providers to disclose key information about pricing and services in a nutrition-label style. Those rules are set to take effect later this year.
The trade group adds that the FTC's proposed regulations are “particularly ill-suited” to ads in the cable industry, given the various federal, state and local taxes as well as franchise fees, regulatory charges and other costs associated with broadcasting.
“These costs vary across different regions and localities,” the group writes. “The 'all-in' price for any given household may be different from the 'all-in' price for a household that may be just across the street or next door, but technically in a different city or county, due to differences in such regulatory fees.”
Cable companies have long been criticized over their pricing practices. Consumer Reports says in its comments to the FTC that the cable television industry is “perhaps the worst offender for charging hidden junk fees.”
That organization reported in 2019 that the cable industry generates an estimated $28 billion a year from fees.
In December, the FCC separately proposed rules that would prevent cable companies from imposing early termination fees. The cable lobby opposes that proposal also, arguing such rules would amount to an unlawful attempt to regulate prices.