The FCC chairman is proposing a ban on early termination fees for cable and satellite connections

Fees that cable and satellite companies charge subscribers for canceling their service before their contract ends would be banned under a new FCC proposal.

Chairman Jessica Rosenworcel today unveiled a proposal aimed at the “junk costs” of video services, in line with President Joe Biden’s move to limit such consumer taxes across industries.

Some subscribers who sign contracts with cable and satellite providers must pay early termination fees if they want to cancel the contract before the expiration date. Companies have introduced such fees to reduce customer churn.

The FCC proposal would also focus on requiring subscribers to pay for the entire billing cycle if they cancel their service before that date. The proposal would require video providers to provide a prorated credit for the remaining days of a billing cycle. The proposal applies only to cable and satellite providers, not streaming services.

In a statement, Rosenworcel said: “No one wants to pay junk fees for something they don’t want or can’t use. When companies charge their customers an early cancellation fee, it limits their freedom to choose the service they want. In an increasingly competitive media marketplace, we must make it easier for Americans to use their purchasing power to drive innovation and increase competition in the industry.”

The FCC will vote at its December 13 meeting on whether to issue a notice of proposed rulemaking for public comment.

Biden posted about the proposal on X/Twitter.

He wrote: “My administration has just announced a proposed rule that would ban early termination fees for cable and satellite television. Companies shouldn’t lock you in with high costs for services you don’t want. It is unfair, increases costs and stifles competition. We are doing something about it.”