The Cable Industry's Latest Lame Argument: We're Burying Sneaky Fees In Your Bill As Part Of An Effort To Be More Transparent
from the when-price-gouging-is-altruism dept
While banks pioneered the use of sneaky fees back in the 80s, the broadband industry has been taking the practice to an entirely new level. Whether it's "regulatory recovery fees," "Internet cost recovery fees," or "non-telecom services surcharges," gouging customers with nonsensical below-the-line fees has become an art form for the TV and broadband industries as they work to raise rates while leaving the advertised rates the same. In addition to generating major revenue (Comcast makes $300 million per quarter from modem rental fees alone), it allows a cable or ISPs' lobbyists and policy wonks to downplay soaring TV and broadband rates since the real prices (including fees and surcharges) usually aren't even actually being analyzed.In addition to soaring cable modem fees, the last year has seen a spike in two new sneaky fees: a "broadcast TV surcharge" and the addition of new sports programming fees. In both instances, companies are taking the cost of doing business (programming costs) and burying it below the line so they can misleadingly advertise a lower price. It's false advertising, and it's sleazy, yet the industry's latest defense of this practice is -- amazingly enough -- that they're just interested in being transparent for the benefit of the consumer:
"In a statement, Comcast spokesman Steve Kipp said the charge is due to broadcast “retransmission costs,” which have more than doubled in recent years. "Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes," he said. “In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee.”You see, we're not raising prices because we're raising prices in a more sneaky fashion! Now if you would be so kind, could you please applaud us for being transparent? Comcast's defense appears to have now become the industry's standard talking point. Defending its increase in all the same fees, Time Warner Cable tells a similar story to the Los Angeles Times:
"Dennis Johnson, a Time Warner Cable spokesman, defended the higher modem-rental cost by pointing out that the fee for Internet access hasn't gone up — yet. The company's last increases for various Internet service levels was in March. "There is no change in the price of Time Warner Cable Internet plans, although speeds have increased," Johnson said..."Our fees paid to local broadcast channels have soared 60% the past two years alone, and the cost of cable sports networks has increased 91% since 2008," Johnson said. "We think it's important to show customers the impact of these rising costs through a specific item on their bill," he said of the charge for sports channels."In other words, the use of sneaky fees is a community service. Cable operators offered up a similar justification to Bloomberg in regards to the use of new regional sports fees:
"The rising cost of sports programming isn’t new, but it’s escalating dramatically, and we think that it’s important to show customers the impact of these rising costs through a specific item on their bills,” Amirshahi said in an e-mail. Cablevision, in a statement, said that their rate increases are “only a fraction of the rising costs of sports and other programming."In addition to the pretense that these companies are helping consumers by bullshitting about their advertised price, they'd also have you ignore the fact that, in many instances, they are the sports broadcaster that's busy raising rates. Most cable operators now own regional sports broadcasters, and they're frequently among the most egregious when it comes to pushing higher and higher rates for the same content. As it stands, the lack of regulatory attention to these practices means we're only going to see the industry get more creative moving forward. So what's next? Passing on installer gasoline costs? An extra surcharge for talking to an actual human being? A "technician calorie expenditure surcharge?" The future of bullshit fees is wide, wide open.
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Filed Under: false advertising, fees, retransmission, transparency
Companies: comcast, time warner cable
Reader Comments
The First Word
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Transparency
Your slip is showing.
Consumers
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YOUR MOVE CABLE INDUSTRY!
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Hollywood style accounting at its finest, report a loss in one company because fees have moved all the profits to a different company, that you also own.
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So how's that explain the model rental fee going up?
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the best way to not pay the increases is to not have these sports channels! if the people would stick together and say 'shove your sports or whatever channel services, there would be immediate panic and all sorts of offers would be on the table at much better prices too! the problem is getting people to act together, even threatening leaving if enough did it, would make them think. but as is usual, the biggest issue are the piss poor members of Congress who just do whatever they are told, for the price of a cup of coffee!!
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Re:
I have no problem with paying for the channels I want. I may think they're charging too much for them, but that's a different argument. But don't pretend that passing along rising costs for channels I don't want but am still forced to have bundled is "transparent" or in any way a service to me.
You want to be of service? Let me decline the sports package if I don't care to have it.
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If they were realliy interested in transparancy they'ld include the fees in the advertised price.
In a fair and just marketplace, the advertised price would be the price you are expected to pay.
Instead of advertising:
Package X $49/mo.
Then socking you with below the line fees (regulatory fee, cable box fee, because we feel like it fee, etc.) and presenting you with a $257.89/mo actual bill.
Advertise $260/mo.
Then explain that the cost includes a $10/mo set top box fee, a $22.95 sports transmission fee, a $2.62/mo because we feel like it fee, etc.
That would be _increasing_transparency_. Anything less is self serving B.S..
It would be like someone amputating both of your legs, presenting you with the bill and then claiming they were only interested in reducing your footwear costs.
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That wouldn't eliminate the fee, just change the name of it.
Instead of a $29.95/mo sports channel fee, they would _remove_ the sports channels from your package and charge you a $31.09/mo sports channel removal and maintenance fee (or some other like sounding silliness).
Those in charge have already decided how much they want to charge you, all that's left is what to call it.
Whether it's a 'cost per bullet used' fee, or a 'bullet recovery fee', you are still getting shot, and they are still going to charge you for the privilege.
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Re: Re:
Somewhere in the Wonderland an unicorn laughed at my dream.
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Broadcast retransmission fees
As more people cut the cord, they'll get left behind. The cable companies will interfere with your internet connection. The tv broadcasters have no such luxury; so they will have to lobby to get it.
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Part of it makes sense, but the rest :(
But there are two HUGE problems with this:
1. Don't pretend that keeping the base rate the same and adding a new fee isn't a rate increase.
2. Don't advertise a base rate the excludes the unavoidable fees.
I believe the best solution is still to list these fees individually on your bill, but under a common heading of "Standard Fees", with totals that show both individually and for the group, and then **advertise a rate that includes both the base rate and the standard fees!**
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My "Favorite" Ripoff fee
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Re: Part of it makes sense, but the rest :(
The best solution on our side is to cancel your cable subscription.
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Boldly screwing customers
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And while I'm getting all angry about rip offs in bills
Verizon says that my Flex Double Play costs $89.99/month (for FiOS TV Prime HD and FiOS Quantum Internet (50/50 Mbps))
On the My Bill page of www.myverizon.com, it says that FiOS TV Prime is 54.99 and FiOS Internet 50/50 is 50.00 for a Double Play Bundle Price of 94.99. So the price goes up by $5 between the two pages of their website.
What is up with THAT? That says fraud to me, but IANAL.
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Re: My "Favorite" Ripoff fee
Instead I use a $5 cablecard rental and a video repeater. At least on Comcast they used to CREDIT me $3 for using a cable card.
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Interesting
So how does that modem become twice as expensive to rent? One should expect that it becomes cheaper as it is paid off. Does it require counseling because of the customer satisfaction ratings of Comcast?
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Substantive evidence that an independent third party hiked costs or it didn't happen. Simples!
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Let's apply this to other products...
The cost of chicken has not changed, there is just an extra line item to account for the increase in cost to feed the chickens
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Re: Let's apply this to other products...
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Re: (anonymous coward @0826)
Especially if they refuse to refund for non-use of whatever the surcharge was for?
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Re: shove your sports
When I canceled cable, I was asked the reason why...I told them so. I have no power to change the world...what little power I have is how I spend my hard earned dollars...I say NO to big sports tv fees. I bought a rooftop OTA TV antenna. Love my weekend sports for free and the rest can go to hell.
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Re: Re: Let's apply this to other products...
That's called doing business honestly. The cable industry doesn't do business that way.
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Re: Re: shove your sports
NBA does allow streaming I think, but NHL only allows out of market games in it's streaming subscription. In DC, the Capitals are on a cable sports network so no OTA access is available that I'm aware of.
MLB is slightly better I think.
But OTA access to 'local' sports isn't great in my experience.
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Blatant Manipulation is what it is.
That is completely absurd. If the fees are for services that cannot be unbundled, then they do no deserve separate line items. That is the cost of providing the service, and playing some shell game with numbers is, frankly, despicable. It is a blatant attempt to obfuscate the rates, and a manipulation technique to make it difficult and undesirable for the consumer to compare rates and services: By providing too many choices, the consumer literally gets tired out trying to compare all the possibilities.
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Re:
On what basis? What they're doing is perfectly legal in the US. Perhaps what we need is a change in US law whereby advertised prices must include taxes and fees, like they do in other places, like Europe.
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Re: If they were realliy interested in transparancy they'ld include the fees in the advertised price.
Well, that's just not what the law requires in the US. Even Walmart advertises prices before taxes, for example. If you want to change that, change the law.
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Re: Re: Re: Let's apply this to other products...
Really? Just exactly what tire store is this? I'd like to check their ads and see if the advertised prices include taxes. OK?
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Re: My "Favorite" Ripoff fee
Have you thought about complaining to the TV manufacturer about the TV not supporting cable HD?
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Re: Let's apply this to other products...
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Re: So how's that explain the model rental fee going up?
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Re: Re: Re: Re: Let's apply this to other products...
It's when you ask for a quote that they include all the fees (disposal, mounting, balancing, warranty, etc).
I've avoided the disposal fee in the past by keeping the old tires, but many places won't do that now.
Go buy a quart of oil and look at the receipt for the disposal fee charged on that too.
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Re:
The company that controls channel X says we won't let you carry X unless you also carry Y and Z. And you have to include Y in the same package as X (Z can be in a higher package).
There's also the price breaks due to the number of people that CAN see the channel. It might cost $1 per channel ala-cart. But if all 2 million customers can see it in the basic tier, well we'll only charge $0.10 per subscriber. And if you also put this other channel in the same tier, you can get both for $0.15.
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