FTC's click-to-cancel rule disappoints cable and broadband service providers. Now, lobbyists are demanding better solutions than the proposed regulation.
In March 2023, the Federal Trade Commission introduced a new set of rules that are expected to help consumers avoid unnecessary subscriptions from ISPs (internet service providers) and cable TV companies.
The seal of the FTC is seen on a podium at FTC headquarters in Washington, DC on September 4, 2019.
FTC Chair Lina Khan said that the new click-to-cancel regulation is needed since some companies commonly trick users into paying subscriptions they don't really need.
However, lobbyists for cable service providers and advertisers claim that the click-to-cancel rule could negatively affect numerous broadband and cable companies.
FTC's Click-To-Cancel Rule Disappoints Cable, Broadband Companies
One of the lobbyists that demand better options than the click-to-cancel rule is the National Cable & Telecommunications Association (NCTA)-now called the Internet & Television Association.
NCTA CEO Michael Powell said that FTC's proposed click-to-cancel rule may not be that simple when "such practices" are involved."
"A consumer may easily misunderstand the consequences of canceling, and it may be imperative that they learn about better options," he added via The Wired.
In his example, Powell said that the click-to-cancel regulation could lead to numerous issues and unintended consequences, especially for consumers who only want to cancel one service in their cable or internet service packages.
The NCTA chief executive officer explained that this is because canceling a part of the discounted package could lead to a higher monthly or yearly subscription price for the remaining line of businesses (LOBs).
Michael Powell said that ISPs and cable companies already have customer representatives who can assist consumers if they want to cancel their packages or certain services.
"Out of millions of cancellations, complaints received by NCTA members amount to only a tiny fraction of 1 percent," he explained.
Read Also: OpenAI Faces FTC Scrutiny Over Potential Consumer Harm
What To Know About FTC's Click-To-Cancel
A Comcast service vehicle is seen parked on July 13, 2015 in San Francisco, California. Comcast announced plans to launch a streaming video service later this summer for Xfinity internet subscibers. The service called Stream will cost $15 a month.
Via its official website, the FTC said that existing regulations and laws don't provide a consistent legal framework to consumers and the industry.
This is why the consumer protection agency decided to propose the click-to-cancel rule, which includes the following changes:
- Will require broadband firms and ISPs to offer features that will make subscription cancellations easier for consumers.
- Internet and broadband providers will be required to send annual reminders to users if they are enrolled in negative option programs.
- ISPs and broadband companies will be allowed to pitch offers, but they should respect consumers who say no to their offers or users who don't even want to hear their pitches in the first place.
Related Article: Adobe's Hard-to-Cancel Subscriptions Now Investigated by FTC-What Should the Software Giant Do?
