FCC to Crack Down on Cable Junk Fees: Here's What It Means for You

Although many consumers have, at this point, cut the cord with cable TV, there are those who continue to pay for it due to the convenience and variety of programming available. But the cost of cable can also constitute a personal finance hit for some people. And what makes matters worse is the way cable companies tend to tack on additional fees on top of their base prices, forcing consumers to pay even more.

Well, not anymore. The FCC is cracking down on cable TV junk fees. And soon, consumers might have a much better sense of the fee they'll be paying for cable each month.

No more surprises

The concept of junk fees isn't new. If you've ever purchased an event ticket from a service like Ticketmaster, you probably noticed that you were hit with various fees between the time you selected your seat and the time you entered your credit card number at checkout.

New rules have come down the pike to address those junk fees, and now, they're reaching the cable industry. As part of the aforementioned change, cable companies will now have to publish all-in prices when they advertise their services.

So going forward, cable providers can't advertise a monthly plan costing $69.99 with an asterisk and small print at the bottom. If the total cost of that service, fees included, is $84.72, that's the price that needs to be advertised.

It's estimated that 24% to 33% of the typical consumer's cable bill can be attributed to junk fees. So this change might help consumers make a more informed decision about signing up for cable or keeping cable.

Is it time to cut the cord with cable?

If you're a current cable TV customer, you may be wondering if it pays to hop on the cord-cutting bandwagon. And the answer isn't so simple.

A big reason it can be difficult to cut the cord with cable is that many providers offer internet bundles that make paying for cable more attractive. Or, to put it another way, dumping cable often means then having to pay more for internet service. So it's important to understand exactly what you're paying, and what your costs might be if you were to break up a cable/internet or cable/phone/internet bundle.

But let's assume you're only paying for cable. At that point, you'll need to ask yourself whether you really get good use out of all of those channels, and whether there's a cheaper alternative. If you're not picky about the content you watch and just need something for evening entertainment, then chances are, the cost of one or two streaming services will be cheaper than a cable package with hundreds of channels.

If you're pickier about your content, though, then replacing cable with streaming alternatives may not work for you. It can be particularly difficult for sports fans to get access to local games in the absence of cable. So even if you're paying, say, $89.99 a month for cable and only watch one or two sports channels, if there's no feasible way to access your games via streaming alternatives, and you can afford the $89.99, then you may want to keep paying it if that's your go-to entertainment during the week.

All told, it's good to see that cable companies will now need to be more transparent in their pricing. But it also pays to take a look at your most recent bill and figure out exactly how much you're spending on cable, and whether there could be a more cost-effective alternative that works for you. But in some cases, there may not be. And so if you can afford cable TV, and you enjoy it, by all means, keep paying for it.