Significant changes in final text clarify some issues

At its March 14, 2024, open meeting, the Federal Communications Commission (FCC) adopted new rules that require multichannel video programming distributors (MVPDs – cable television operators and satellite video providers) to specify the aggregated monthly "all-in" price for video programming services on customer bills and any advertising or promotional materials that include the price of video programming. MVPDs must comply by the later of December 19, 2024, or approval by the Office of Management and Budget (OMB), except MVPDs with less than $47 million in annual receipts have until the later of March 19, 2025, or OMB approval.

The All-In Pricing Rule

MVPDs will be required to state an aggregate monthly (or other regularly occurring) all-in price for video programming as a "clear, easy-to-understand, and accurate single line-item" on customer bills. The price must include all charges for retransmission consent, sports programming, and any other programming fees in the prominent line item on customer bills and any regional or national promotional materials that show the price. The order and the rules do not address whether separately sold premium channels and other video content are required to be included, but they make clear that taxes, administrative fees, equipment fees, franchise fees, and fees for Public, Educational and Governmental (PEG) programming are not required to be part of the all-in price. MVPDs will still be allowed to show additional line items with the amounts attributable to any element of the total price, including retransmission consent or broadcast fees and sports network charges. The FCC did not provide any illustrative example of a compliant bill and declined to provide greater specificity for how to present an all-in price.

If a customer receives an introductory or time-limited price, the bill must show either the length of time for the promotion (e.g., 12 months) or the specific date it will end. In addition, MVPDs' billing statements 60 days and 30 days before the end of the introductory period must include the post-promotion all-in price the customer will pay after the expiration of the promotion.

The rules will apply to all individually billed residential video services provided by MVPDs, including those who subscribe to grandfathered service plans and any offer to renew, extend, or change the plan. The rules apply to video offered to residents in multiple tenant or dwelling unit environments (MDUs), but not to bulk purchasers of residential services in MDUs. Services provided and marketed to other "enterprise customers and bulk purchasers of non-residential video services" are also exempt.

Bundled Services

For bundled services, MVPDs must separate out the all-in price for fees and charges specific to the video component of the service to be shown as a single line item. The Commission offered no further guidance on how operators can determine which of the bundled services are discounted or allocate the amount of the discount for any service, which presumably leaves MVPDs with flexibility similar to the good faith standard that applies to allocations of bundled revenues for other FCC reporting purposes.

Promotional Materials

MVPDs must also state the all-in price of video service in advertising and marketing "in a clear, easy-to-understand, and accurate manner." If part of the all-in price varies by customer location, providers may advertise a "starting at" price or a range of prices which includes the highest all-in price that could apply within the area covered by the promotion. But MVPDs must disclose in marketing where and how potential customers may obtain the actual all-in price for their service area (the order notes that, "for example," an ad could direct consumers to the operator's website to contact the MVPD to request the location-specific all-in price). Regardless of the method, when a potential customer provides location information, the provider must supply the all-in price for that customer's location. All promotional materials that offer a promotional or introductory rate must also disclose the time period of the offer or the date that the promotional rate will end and the all-in price for the package after the promotion ends, calculated at the time of the marketing campaign.

Legal Authority

The Commission adopted the rules by a vote of 3-2, with the two Republican Commissioners dissenting. The majority asserted that the FCC has authority to adopt the rules pursuant to three statutory provisions: Section 632 of the Communications Act (which gives the FCC authority to establish customer service rules including requirements for "communications between the cable operator and the subscriber, including standards governing bills and refunds)"; Section 642 of the Act (the Television Viewer Protection Act of 2019, which requires MVPDs to inform prospective customers at the point of sale of the "total monthly charge" for video service and requires disclosures in electronic bills, as we explained here); and Section 335 of the Act (which authorizes the FCC to impose rules on DBS providers regarding "public interest or other requirements for providing video programming"). The dissenting Commissioners disagreed, among other reasons noting that none of these provisions mention customer advertising. The Commission also affirmed its tentative conclusion that the new rules are consistent with the First Amendment, finding that the rules "simply prevent[] misleading commercial speech, which is afforded no protection under the First Amendment."

Effective Date

The Commission will publish the rules in the Federal Register, and they become effective 30 days thereafter, but MVPDs are required to comply with the rules either by December 19, 2024, or when OMB completes its review, whichever is later. MVPDs with less than $47 million in annual receipts are required to comply by the later of March 19, 2025, or the completion of OMB review. We will be advising numerous MVPDs regarding potential challenges to, and compliance with, the new rules, and would be pleased to assist.