Charter Says Its Sneaky, Unnecessary Fees Are A Consumer Benefit

from the this-is-for-your-own-good dept

Wed, Nov 16th 2016 6:27am — Karl Bode

We've noted for some time how cable providers over the last few years have added a "broadcast TV" fee to customer bills. Such a fee, which simply takes a part of the cost of programming and buries it below the line, lets cable providers advertise one rate, then hit customers with a higher bill. It's false advertising, but you'd be hard pressed to find a regulator anywhere in North America willing to tackle the problem. When Comcast was criticized for the practice two years ago, the company claimed that burying a sneaky new fee below the line was just the cable company's way of being "transparent" with its customers:

"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."

While it's true broadcasters impose often unreasonable rate hikes on cable companies, the cost of programming is just one of several costs of doing business, and hiding these costs when listing your prices is the complete opposite of being transparent with your user base. Since the fee began popping up in 2014, some cable companies have as much as tripled the fee, which can now be as much as $6 to $8 per customer, per month.

Fast forward to this month when Charter (and now Charter-owned Time Warner Cable) was sued for the practice. The plaintiff in question wasn't asking for monetary damages; they simply wanted to highlight how an estimated 20% of Charter's revenues are now thanks to a practice that lets the cable company "deceive its customers by advertising and promising a lower price while actually charging a higher price." Charter has finally responded to the suit and, like Comcast, is actually claiming that it's misleading its customers for their own benefit:

"Our customer friendly approach includes simplified pricing and packaging with no data caps, no modem fee, no early termination fee and no separate USF [Universal Service Fund] fee. We provide simple to understand bills and want our customers to understand what they are paying for, including the skyrocketing cost of broadcast channels."

Right, but the lack of data caps is because the FCC banned them for seven years as a merger condition. And while Charter is one of the only cable ISPs that rolls the cost of renting a modem into the overall cost of service, breaking out the broadcast TV fee is the exact opposite of that. Hiding a part of your costs outside of the advertised price, then bumping that fee 300% in just a few years, remains false advertising and misleading jackassery by any measure. Leave it the cable industry to try and argue that intentionally misleading you into thinking you're not getting a rate hike this year is some kind of favor.

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Filed Under: fees, hidden fees, sneaky fees, transparency
Companies: charter

36 Comments

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aerinai (profile), 16 Nov 2016 @ 6:26am

No Fees, No Arbitration
So I was reading this on Ars Technica and the user is suing for 'no damages' other than lawyer fees because of the arbitration agreement that Charter/TWC has. Essentially, if he asked for his money back, he'd be sent to arbitration. But if he sues for 'non-monetary damages', arbitration doesn't apply.

Kinda sneaky but I hope it works. Might be an end-run around these damned arbitration agreements every company tries to put their customers into.
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Anonymous Coward, 16 Nov 2016 @ 6:37am

Only $9.99* per month guaranteed!

*A reoccurring $159.99 service fee will be applied to your bill each month.
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Anon E. Mous (profile), 16 Nov 2016 @ 6:44am

Additional fess are just another way for the Cable & Telco's to pick the subscribers pocket. This has been going for years because the Cable * Telco's know they can get away with it to bring in more revenue.

As a customer you can see why people cancel or dump channels they dont use to save money on their bill and these Fee's are the way for the Telco's to be sneaky about generating more revenue and a lot of these charges are made to look like these are mandatory charges that the Cable & Telco's has to recoup and most people are oblivious to the fact that this is the Cable & Telco's doing this and not any Federal or state agency mandated charge.

The Cable & Telco's wonder why people are cord cutting, and it is because everyone has a limit of what they believe is reasonable to pay, but people have limits and gouging the customer with made up fees and contract pricing for service that can change at the Cable & Telco's whim are just examples of an industry that is cannibalizing itself with high stupidity and pricing itself out of exsistance
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Anonymous Coward, 16 Nov 2016 @ 6:51am

Even Walmart
They put a price on the shelf, but then add on taxes at the checkout. The price on the shelf should be the price you pay.
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Jason, 16 Nov 2016 @ 6:57am

We provide simple to understand bills and want our customers to understand what they are paying for, including the skyrocketing cost of broadcast channels.

So their argument is that they want their customers to understand what they're paying for, but only after they sign up for service for the advertised amount and get a bill for that number plus all the unadvertised fees?

Idea: If the "skyrocketing cost of broadcast channels" just can't be included in the price of the service (otherwise known as how much it costs) then I should be able to get a cable bundle that omits the broadcast channels. If they're advertising a service at a particular cost but I can't actually buy that service at that cost, isn't that the very definition of false advertising?
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Jason, 16 Nov 2016 @ 7:00am

Re: Even Walmart
A more apt analogy would be Walmart adding a $5 "store lighting fee" and a $9.99 "shelf stacking service charge" to the bottom of every receipt.

Don't get me wrong, I wouldn't mind at all if the including-tax price was the one listed. But the store doesn't get that money, whereas all of these addon fees and charges go right to the cable company.
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That One Guy (profile), 16 Nov 2016 @ 7:07am

Re: No Fees, No Arbitration
I hope it works too, because they certainly deserve to get hammered on this, and because I can't help but think that the second TWC's lawyers figure out the 'loophole' he used to avoid the rigged arbitration system they'll be issuing an 'updated customer agreement' post-haste to close it and prevent anyone else from going through a court not completely stacked in their favor.
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Anonymous Coward, 16 Nov 2016 @ 7:21am

I've got a new idea for a restaurant chain, all of the food will have a base price between $5 and $10, but once they get their itemization I'll just tack on a food preparation fee, dishwashing fee, waiter service fee, food delivery fee, universal hunger fee, state, city, & county taxes...
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That One Guy (profile), 16 Nov 2016 @ 7:37am

Re:
Don't forget the 'Fee calculation fee', can't leave off something as vital and necessary as that.
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kallethen, 16 Nov 2016 @ 7:49am

Re: Re:
And a payment processing fee.
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TasMot (profile), 16 Nov 2016 @ 7:52am

Transparency
Well then, if transparency is actually the game, then why not specify up front what is included in the advertised monthly fee?

Let's see how that will look in cable-company-speak:

"Everything is included except for what is currently listed below the line as additional fees and any other fees that we decide to hide below the line later"

Yeah, I think that covers it.
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PaulT (profile), 16 Nov 2016 @ 7:55am

Re: Even Walmart
I've never understood why Americans accept that practice so easily. It's the only country I've ever been to where if I want to buy a $1 item and I have a $1 bill, I don't have enough to pay for it. Confuses the hell out of me when I visit, that combined with mandatory tipping always gets me spending more than I think I am (which, I suppose, is the point).
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Jason, 16 Nov 2016 @ 8:18am

Re: Re: Even Walmart
I suspect it may have something to do with the fact that the sales tax varies from one state to another. Just look at the angst from all the online retailers about how hard it would be to apply sales tax to orders. I can see corporations freaking out that they'd need different promotional materials for different states just to account for non-uniform sales tax.

Not saying I think it's a good reason, of course... but it seems like the kind of excuse that we'd get if anyone asked about it.
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Peter Voveris (profile), 16 Nov 2016 @ 8:26am

Don't Understand
I don't even understand why the cable companies need to pay any fee to the local broadcasters, it isn't as if they are providing something that can't be received for nothing with an antenna. It is just free money to the local broadcasters as well, who also make their money with their crappy ads as well.
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Blaine (profile), 16 Nov 2016 @ 8:32am

Re:
We already have a "Waiter Service Fee." It's called a tip. It's not optional and it's basically pre-calculated by social standards.

This is a separate related discussion, but restaurants should simply raise their rates by %15 and pay their staff better.
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My T3 is better than your 100Mb fibre, 16 Nov 2016 @ 8:40am

Nationalize the wires
This applies not just in the US but the whole western world, TAXES paid for almost all the build out AT@T got out of living up to the fibre to the last mile it made in the early 90's buy being broken up into baby bells effectively stealing the 100 BILLION dollars they had already been given for that purpose I don't know what the total is now but a lot more mergers and re consolidation are ways of getting out of these commitments, ARMs length national wire management everybody leases on rates that drop with volume a yearly interconnect fee and bandwidth cost what it actually does near zero.

want to start an ISP rent an connection get some servers and customers, what to deliver cable TV service get the content contracts rent a connection and get some customers

NOT ROCKET SURGERY!

Trump will not burn things down but you can, organize, act, disobey
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Anonymous Coward, 16 Nov 2016 @ 9:02am

Re: Don't Understand

I don't even understand why the cable companies need to pay any fee to the local broadcasters,

It the copyright as property madness, its the broadcasters property and therefore they should get the value that is added to the cable service.
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Anonymous Coward, 16 Nov 2016 @ 9:04am

Time to turn the tables, if they can add non-existant 'costs' why can't we?
How to pay your cable bill 101:

Cable bill Initial cost: $150.00
Bill Reading Fee: - 50.00
Jaw dropping pickup fee: - 25.00
Eye Popping push in fee: - 25.00
Sanity check fee: - 25.00
Payment Issuing fee - 24.99
Net Due Cable Company .01

Tape a penny to the itemized bill payment invoice, and submit.

If they can claim that all their fees are just a "cost of doing business" then we can claim all our fees are just a "cost of staying sane"
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Anonymous Coward, 16 Nov 2016 @ 9:44am

Re: Don't Understand
I've said the same in the past. It's a huge scam to expect to get a Re-transmitting fee, asking for TONS of money!!! Something anyone can get for FREE with a antenna!!! In fact that's how I get most of my TV.

If anything, the Cable and Satellite company's are doing them a favor. They're getting more people tuned into their channel without having to use a antenna. More people watching means more money can be made on the ad's. Ad's the pay for that channel.

Take it to the next level. Why do all these cable channels like Discovery, TLC, Syfy, etc require a cable or Satellite subscription to watch them using their App? After all you're still watching their Commercials. In fact unlike cable/Satellite where you can DVR everything and skip the commercials, You can't do that through their app.

The CW channels doesn't require a Cable or Satellite subscription to watch any of their programs with their App!!! That's a Antenna Channel, and yet, ABC, CBS, NBC, Fox still all require a Cable or Satellite subscription even though it's FREE to watch using a Antenna. Which I do along with a TIVO and I'm skipping on their commercials. Something I wouldn't be able to do using their App!!! So it really makes no sense to me. CBS goes so far as forcing people to pay $6 a month for their content using their App. No way in HELL am I going to do that. So instead I record them and skip their commercials.
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Anonymous Coward, 16 Nov 2016 @ 9:47am

Re: Re: Even Walmart

Don't get me wrong, I wouldn't mind at all if the including-tax price was the one listed. But the store doesn't get that money, whereas all of these addon fees and charges go right to the cable company.

Wal-Mart doesn't "get" the money they use to pay employees either. Sales tax is an expense like any other (the main difficulty is that it varies by jurisdiction, but I'm sure it costs more to ship products to certain Wal-Marts too).

Those addon fees don't exactly go "right to the cable company" either. The channels really have been raising their costs, as has been reported here. But Charter could deal with that in various non-fradulent ways.
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Anonymous Coward, 16 Nov 2016 @ 9:50am

Re: Re: No Fees, No Arbitration
This isn't a loophole. The plaintiff is following the explicit instructions from their contract:

the arbitration clause in the TWC residential user agreement also states that “Only claims for money damages may be submitted to arbitration; claims for injunctive orders or similar relief must be brought in a court.”

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Anonymous Coward, 16 Nov 2016 @ 10:14am

"...no modem fee, no early termination fee and no separate USF [Universal Service Fund] fee."

Except that Charter-owned Time Warner Cable has ALL of those things. So, another whopper of a lie from Big Cable.
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Anonymous Coward, 16 Nov 2016 @ 10:26am

I've seen gas stations that post the amount of taxes paid per gallon. But you know what? On the big sign, they don't post the price as $1.996 and then make you actually pay 2.489. They post the price you're actually going to pay.

If this was really about "transparency", cable companies could do the same thing. Put the breakdown ABOVE the line. It's fine to show your consumers how much each channel costs. Just don't charge them extra for doing the thing they're paying you to do.
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Anonymous Coward, 16 Nov 2016 @ 10:55am

Re: Re: Re: Even Walmart

I suspect it may have something to do with the fact that the sales tax varies from one state to another.

State to state? It can vary by product or container size, location (county/city/metro area/location within a city), etc. The state I am in almost certainly has hundreds of different sales/excise tax rates (the state sales tax instructions say you can download tax charts for 30 different rates). However, for any given product, location, and means of delivery, the rate could be calculated and the final price posted by the retailer. Petrol stations and cigarettes sell at the posted price.

I gotta admit, it does make VAT sound good. Except that we'd then apply other random taxes on top of that posted price.
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Alphonse Tomato (profile), 16 Nov 2016 @ 10:57am

Re: Re: Re: Even Walmart

I suspect it may have something to do with the fact that the sales tax varies from one state to another.

State to state? It can vary by product, location (county/city/metro area/location within a city), etc. The state I am in almost certainly has hundreds of different sales/excise tax rates. However, for any given product, location, and means of delivery, the rate could be calculated and the final price posted by the retailer. Petrol stations sell at the posted price.

I gotta admit, it does make VAT sound good. Except that we'd then apply other random taxes on top of that posted price.
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Anonymous Coward, 16 Nov 2016 @ 11:05am

Re: Re:
" restaurants should simply raise their rates by %15 and pay their staff better."

Many restaurant owners would gladly raise their prices while not giving employees anything extra, hell - some of them do not even pay minimum wage.
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Anonymous Coward, 16 Nov 2016 @ 11:07am

Re: Transparency
and there are a dozen pages of "listed" exceptions.
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Anonymous Coward, 16 Nov 2016 @ 11:10am

Re: Nationalize the wires
Have you seen how he "drained the swamp" ?

lol, he is simply replacing the existing idiots with other, different idiots.
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Anonymous Coward, 16 Nov 2016 @ 11:13am

Re:
Gas stations are local.
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Anonymous Coward, 16 Nov 2016 @ 11:24am

Re:
Or, we could combine all those extra fees, and simply expect the customer put forward about an extra quarter of their final cost after paying...
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Anonymous Coward, 16 Nov 2016 @ 12:36pm

Re: Re: Even Walmart
> all of these addon fees and charges go right to the cable company.

Um, no. The Broadcast TV Fee money winds up going to the broadcast TV stations.
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Anonymous Coward, 16 Nov 2016 @ 12:39pm

Re: Re: Even Walmart
"A more apt analogy would be Walmart adding a $5 "store lighting fee" and a $9.99 "shelf stacking service charge" to the bottom of every receipt."

You mean like the "handling fee" many sellers charge?
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Anonymous Coward, 16 Nov 2016 @ 12:46pm

Re: Even Walmart
Can you really blame an American cable company for engaging in common American business practices?
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Chuck, 16 Nov 2016 @ 1:08pm

Roll it back out, please.
"And while Charter is one of the only cable ISPs that rolls the cost of renting a modem into the overall cost of service"

They didn't used to. I haven't been a charter customer for the last 12+ years (and thank goodness - my 15MBit DSL may be slow, but at least I'm not sharing 100MBit with my friends and neighbors, including that guy who torrents every single new movie in 4K HD so he can watch it on his 27" 2009 plasma TV. Not even kidding. Look up "trunk speed" and remember to close your mouth. It's amazing.)

Even so, back when I was a Charter customer, they charged a separate $10/month as modem rent. The catch was, you could go to the local Office Depot (or Best Buy, whatever) and buy a brand new modem you'll OWN for $59. In 6 months it pays for itself, and from that point onward, every single month it saves you $10.

So Charter rolls the cost in? I wish they'd roll it back out. Cable modems are very cheap and not worth paying rent for, ever.

But hey, I'm not a customer any more.
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HegemonicDistortion (profile), 16 Nov 2016 @ 2:43pm

Just wait until Comcast gets my Customer Home Connection Access Fee, a real bargain I know they'll appreciate at only $99.95 a month.
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Anonymous, 20 Dec 2016 @ 8:17am

Re: No Fees, No Arbitration
Why don't customers start cancelling cable and Internet and not agreeing to the Arbitration agreement. Let Comcast start bleeding millions. I cut cable and everytime they call I tell them I will only sign a mutually created contract that includes no arbitration agreements and a flat rate fee with penalties on their side for over charging. I also ask for select channels and no data caps for Internet. They always tell me they can't do it. But if enough people (read millions)started asking for the same thing and started cutting the cable they would either do it or become irrelevant and replaced by something we could all live with.
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