FCC Revises Cable Operator Notice Requirements for Service and Rate Changes

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On October 1, 2020, the Federal Communications Commission (FCC) voted to change its rules governing the required notices that cable operators must give to customers and local or state franchise authorities when changing either video services or rates.

The changes are set forth in the Report and Order issued that same day:

  • Cable operators must give customers notice of the loss of a broadcast station or other video service due to failed negotiations "as soon as possible," rather than 30 days in advance as formerly required. There is no change in the requirement for operators to provide 30 days' advance written notice of changes in rates and services that are within the cable operator's control;
  • The FCC eliminated the requirement for 30 days' advance notice to local or state franchising authorities (LFAs) of changes in rates and services, except for the few systems that remain subject to rate regulation;
  • The FCC eliminated the requirement for 30 days' advance notice to customers of any significant change in the information required in the cable system annual notice.

Notice of Programming Changes Due to Failed Contract Negotiations

The Commission previously required that cable operators give customers at least 30 days' advance notice of any change in video programming or rates, including specifically the potential loss of programming through failed negotiations such as for retransmission consent or other rights. Reversing its earlier position, the Commission has now acknowledged that the success or failure of negotiations for programming rights is outside the control of the cable operator and that in most cases negotiations conclude successfully in the days just before an existing agreement expires. The Commission therefore eliminated the requirement for operators to give customers 30 days' advance notice of such negotiations that may lead to the loss of programming.

Under the revised rule, operators must give customers notice "as soon as possible" that a program channel will be removed after failed negotiations. The Commission interprets "as soon as possible" to require notice "without delay" after negotiations have failed and the cable operator "is reasonably certain it will no longer be carrying the programming at issue, and, if possible, before the programming goes dark."

The Commission emphasized that the new rule only applies where programming renewal negotiations "fail within the final 30 days of an existing contract and result in a service change." In other words, if an operator has determined before that time that it will be dropping a programming service, it still should provide the traditional 30 days' prior notice.

The Commission established a unique method for giving notice that the operator has removed a station or network after failed negotiations. In such cases, cable operators are not required to follow the existing procedures for electronic customer notification. Instead, the revised rules permit operators to give notice through "other direct and reliable written means that can reach subscribers more quickly," including on-channel notification.

The Commission specifically approved the use of a "channel slate" to announce the lost programming on the same channel formerly occupied by that service or station, concluding that such notice is the most direct way to inform interested subscribers immediately of a channel deletion. The Commission defines a "channel slate" as "any on-screen written message that replaces the cable operator's video feed in the event of a programming blackout and provides subscribers with information about the blackout." The Commission also stated its expectation that operators should use multiple forms of written notices to inform customers of changes in their service.

In revising the rule to account for failed program negotiations, the Commission clarified that operators must continue to give customers 30 days' advance written notice of rate changes and other program changes that are within the operator's control. As under the previous rule, such notices must include "the precise amount of the rate change and explain the reason for the change in readily understandable terms." Notice of changes involving the addition or deletion of channels shall individually identify each channel affected.

Recognizing that many customers no longer receive or read a local newspaper, the Commission concluded that posting notice of changes in a newspaper no longer satisfies the requirement for "reasonable written means of notice."

Elimination of Notice of Service or Rate Changes to LFAs

Since the advent of cable rate regulation, the Commission's rules have required cable operators to provide 30 days' advance notice to their LFAs of any changes in rates, programming services, or channel positions in addition to the notice provided to customers.

Given that virtually all cable systems are now free from any rate regulation, the Commission eliminated as unnecessarily burdensome the required notice to LFAs for all systems that are not subject to rate regulation. The Order suggests, however, that that the Commission is not preempting specific notice requirements expressly included in local franchise agreements.

Notice of Significant Changes to Information in Annual Notices

The FCC also eliminated the former regulatory requirement that cable operators provide notice of any significant change to the information required in their annual customer notices.

The annual notice requirements include such things as installation and maintenance policies, information on how to use the service, and billing complaint procedures. As noted above, operators must still provide customers with 30 days' advance notice or notice "as soon as possible" for any changes to rates and services.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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