- The FCC wants telecom and broadband providers to make it easy for subscribers to cancel subscriptions
- It's launched a Notice of Inquiry to gather information about service providers' customer support
- The industry is likely to fight back against the click-to-cancel initiative
Any consumer who’s ever tried to unsubscribe from a recurring subscription knows how frustrating it can be. And they also know that the company behind that subscription deliberately makes it hard by using such tactics as not allowing unsubscribes via an online portal, forcing consumers to call their offices (between the hours of 9 am and 5 pm), keeping them on hold for an eternity and forwarding their call to a sales team to try and change their mind about unsubscribing.
Now, the Federal Communications Commission (FCC) is launching a Notice of Inquiry related to the quality of customer support provided by broadband and wireless providers. And one thing the inquiry will seek information about is the ability for consumers to easily cancel subscriptions. The FCC's move follows a similar action by the Federal Trade Commission earlier this month,
“We can and should expect consistent, transparent and helpful customer service from the communications companies that provide so many services that are so vital in our day-to-day lives,” said FCC Chairwoman Jessica Rosenworcel, in a statement.
“No one should get stuck in a doom loop trying to cancel a subscription,” she added.
The FCC’s Notice of Inquiry also seeks information on other customer service concerns, such as the ability to talk to a live customer service representative and for consumers to be explicitly asked for permission before providers automatically renew a service and/or increase prices after a trial or promotional period expires.
Perhaps, as part of its Notice of Inquiry, the FCC will also examine the trend for wireless providers to make it impossible for consumers to call their local store. This is the case with Verizon where consumers trying to reach their neighborhood store instead get routed to a far-way call center.
But the telecom industry is likely to fight back against any FCC initiative to improve its customer service practices because it’s obviously more expensive to pay real people to handle customer problems, as opposed to phone trees and bots. And presumably, companies do thwart some level of subscription cancellation with their heavy-handed tactics.
Fighting back
Recently, the Federal Trade Commission (FTC) implemented a new rule, which requires sellers to provide consumers with simple cancellation mechanisms to immediately halt all recurring charges. The FTC said it implemented the rule because some sellers “make cancellation difficult or impossible.” It estimates that its new click-to-cancel rule will affect over a billion paid subscriptions in the United States and will benefit consumers.
But yesterday, the NCTA – The Internet & Television Association, along with other plaintiffs, sued the FTC over its new click-to-cancel rule. NCTA's filing in the U.S. Court of Appeals for the Fifth Circuit said the rule “is an attempt to regulate consumer contracts for all companies in all industries” and that the rule would be an “onerous new regulatory obligation.”
Regulation of broadband
The FCC would like to have more clear oversight of broadband providers, as evidenced by its efforts to reinstate net neutrality. Earlier this year, the FCC reclassified broadband service providers as Title II carriers under the Communications Act, subjecting them to the same rules as telcos.
The FCC wants to oversee broadband providers for a variety of reasons, but one of those reasons is that it can regulate them more closely to protect consumers.
In fact, the agency, under Rosenworcel, has already advanced additional consumer-protection rules for telecom, including broadband nutrition labels, which went into effect on October 10. And it’s investigating whether the FCC can encourage greater choice for tenants in multi-dwelling units by banning bulk-billing arrangements.
Recently, Fierce Network spoke with Fletcher Kittredge, chief strategy officer at the service provider GWI. He said, “If you went back five years or 10 years, broadband was not regulated. As of today, there’s quite a bit of regulation.”
He cited the broadband nutrition labels, as well as security-incident reporting and requirements to provide coverage data for the FCC’s national broadband map. In addition, he said, “My guess is most providers have taken federal grants in one form or another, and that comes with a ton of additional regulation.”
Grant Spellmeyer, president and CEO with the trade group ACA Connects, told Fierce, “The continuous onslaught of FCC regulatory oversight on all aspects of broadband operations is creating unnecessary and intrusive hurdles thwarting providers’ efforts to connect every American to the internet. Providers – who are already subject to extensive consumer protection and disclosure obligations – are best positioned to set their own internal policies, obligations, and practices that meet the needs of the customers and communities they serve.”