Biden to seek cut in early termination fees for cable, satellite users – The Streamable

One of the first ways streaming video differentiated itself from pay TV services was its month-to-month contract structure. Cable and satellite providers typically require customers to sign contracts of a year or more, while the cord cutter can cancel their service at any time without cumbersome contract terms or huge fees to worry about.

This cancellation facility may also be coming to Pay TV users. The Biden administration is set to propose new legislation that would limit early termination fees for cable, Internet and cellphone companies. There’s no word on exactly what those limits might be, but the proposal could save pay-TV customers hundreds of dollars when they decide to end their service.

Companies charge a different amount when it comes to early termination fees, but they can be overwhelming quickly. Some, like DIRECTV, charge a set amount. $20 per month canceled. Others charge a fixed amount, regardless of how much time is left on the contract. Xfinity charges users $110 to terminate a 12-month contract and $230 for a 24-month contract.

As good as the news is for consumers, it likely won’t bring smiles to the faces of pay-TV executives. Lowering early termination fees may lead to more competition in the market as cable and satellite companies may introduce subscription contracts closer to what streaming services provide.

It may also lead to an acceleration of the already rapid decline of the cable and satellite industry, allowing people to opt out of their deals and move to some form of streaming for their entertainment. Pay-TV household penetration is at its lowest point since 1993, and the rate of decline is increasing every quarter. If customers find themselves uninhibited by high early termination fees, a new wave of cord-cutting could occur across the United States.

However, President Biden may not have as much luck enacting new legislation as he would like. The Senate is controlled by his party, but the House of Representatives is not. Congressional Republicans are unlikely to rubber-stamp anything sent to them from the White House, but especially not legislation of this type, which will likely face pushback from tech and entertainment companies like Comcast, Charter, Verizon and others.

However, there is no doubt that the proposed rules would greatly help consumers. In addition, the legislation would also curb exorbitant fees on ticketing sites like Ticketmaster and force airline and booking sites to display the full cost of a ticket in advance. However, cable and satellite users may see the biggest gains, especially those looking to get out of their long-term contracts a little earlier.

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