Recently, the Federal Trade Commission heard an earful from a range of industry leaders at a hearing on the agency’s proposed “Click-to-Cancel” regulations, which aim to impose wide-ranging regulations to govern how subscription-based businesses must interact with their customers. The most compelling objection came from the cable industry, which pointed out — quite accurately — that its sign-up and cancellation practices are already closely regulated by a separate federal agency.
Congress first granted the Federal Communications Commission a mandate to regulate the cable industry nearly four decades ago. In the years since, Congress has repeatedly reinforced that authority — including via 1992’s Cable and Television Consumer Act and 2019’s Television Viewer Protection Act (TVPA) — to ensure the FCC has the power to regulate precisely the kind of business practices on which the FTC has now set its sights.
For example, under FCC rules, cable operators must maintain a customer service line 24 hours a day, seven days a week, and answer calls within 30 seconds. Cable operators must disclose the total monthly charge for service to consumers before entering a contract — and explicitly note the amount of any promotional pricing and when it expires. Within 24 hours of entering the contract, the provider must send this same information by email or online link and give consumers a 24-hour window to then cancel with no penalties. The TVPA also requires electronic bills to include information about charges and fees, the termination date of any promotional discount and the termination date of the contract.
I’ve seen firsthand, as former chief of the FCC’s Cable Services Bureau, how the commission’s broad regulatory oversight in these areas effectively empowers it to protect consumers and investigate and punish any bad actors. Decades of close oversight has built within the FCC an in-depth, nuanced comprehension of the sector and the specific protections its customers need.
By contrast, the FTC’s envisioned rule paints all industries with the same broad brush. A sweeping, “one-size-fits-all” proposal that sees no difference between cable TV service and scammy subscription businesses will cause confusion and may result in unintended negative consequences for consumers.
Undoubtedly, there is need in other industries for the FTC’s proposed rule. Cast in the most favorable light, perhaps the FTC’s efforts could be viewed as that agency’s effort to do for the rest of the digital economy what Congress and the FCC have already done and continue to do for cable customers; that is, ensuring consumers have full disclosure of all the key facts — prices, terms and conditions — they need to make informed choices, and then making sure they can easily reach their providers if they want to modify service. Assuming that’s the FTC’s goal, it should take the logical step to exempt the cable industry from its proposed rules, rather than just overlapping the FCC’s efforts in ways that could lead to innumerable headaches and costs for both providers and their customers.
The FTC’s proposal, for example, would likely lead to cable customers receiving less-relevant information and fewer options compared to the FCC’s current regime. In fact, the proposed rule strictly forbids any business from even offering a departing customer a better price or special offer without first asking and receiving their explicit permission to extend such an offer. Intentionally restricting a company’s ability to offer customers discounts or other benefits is hardly an intuitive approach to consumer protection. A key component of making informed decisions is not only access to information before signing up, but also access to information before canceling.
The FTC’s simplistic, one-size-fits-all approach is particularly ill-suited for complex offerings like cable service, for which consumers can generally personalize their choices from a menu of bundled services, channel packages and speed tiers. Subscribers often opt for discounted packages with specific terms, and if a customer cancels early or cancels only one service in the package, the discount may be revoked. Restricting a provider’s ability to clearly explain those consequences could lead to subscribers unintentionally canceling desired services.
The FCC’s long-established approach to protecting cable consumers is informed through decades of oversight and expertise and rooted in core principles of transparency, disclosure and consumer choice. The FTC should direct its efforts to those industries not already subject to comprehensive, industry-specific consumer protections.
