Charter Spectrum 'Competes' With New $20 Streaming TV Service Featuring $6 In Entirely Bogus Fees

from the the-illusion-of-competition dept

Fri, Jul 14th 2017 6:26am — Karl Bode

You may have noticed that things aren't going particularly well for the traditional cable TV industry. Ratings for many channels are in free fall, the rate at which customers are cutting the traditional TV cord is accelerating, and the number and quality of competing streaming services is only growing. Cumulatively, this has forced many previously myopic cable and broadcast executives to stop denying the obvious and to candidly admit there's an actual market (r)evolution afoot, even if most of them still aren't quite exactly sure how to adapt to it.

And while the headlines are often filled with dire warnings about traditional cable TV being "doomed," that's not really true. Cable operators still lay claim to somewhere around 98 million paying customers. And keeping these users from fleeing to competing streaming services really isn't that complicated. These companies just don't want to do what's necessary. Namely, listen to their customers, offer more flexible and convenient services, shore up their atrocious customer service, and finally begin seriously competing on price.

Many traditional cable providers have responded by offering a new suite of so-called "skinny bundles" that profess to offer lower costs and to offer greater channel flexibility. But more often than not old habits die hard, and the industry often saddles these offerings with numerous murky restrictions, or layers of misleading fees. The end result is that these offers either aren't really competitive, or wind up costing nearly as much as traditional cable.

Case in point: Charter (Spectrum) is currently hyping a new $20 bundle of a few dozen channels they're testing in a handful of markets. Usually these trials exist to give the impression the cable company is being innovative, but are never launched nationwide for fear of mass-cannibalization of traditional customers downgrading from more expensive plans. But most news outlets were quick to lavish praise on Charter's new offering, many posting the ad for the $20 price point alongside their reports on the new service:

Except that "$20" isn't really $20, since the cable industry just can't let go of some bad habits.

Trial participants who actually have tried the service say it not only doesn't work all that well, but Charter has chosen to hide a number of obnoxious fees that dramatically jack up the price of the service. Of particular note is the fact that Charter saddles the offering with a $6 per month "broadcast TV fee." As we've noted previously, this increasingly-utilized fee simply takes some of the cost of programming and buries it below the line. Why? It lets the cable provider falsely advertise a lower price. And despite being false advertising, regulators from both parties traditionally haven't given much of a damn.

Some companies, like Comcast, have gone so far as to try and claim the broadcast TV fee is just their way of being transparent with consumers, since nothing quite says transparency like customers having no idea what a service they're buying will actually cost. But as the market floods with alternatives from the likes of Hulu, YouTube, Sling TV and more increases, cable and broadcast executives are eventually going to have to realize that the threshold for tolerating this kind of bullshit -- in the face of real competition -- isn't going to be quite at high as they're accustomed to.

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Filed Under: cable tv, competition, cord cutting, fees, hidden fees, over the top, streaming, tv
Companies: charter, charter spectrum

31 Comments

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That One Guy (profile), 14 Jul 2017 @ 5:03am

Lies, Damn Lies, and Cable TV pricing
If the government was willing to crack down on false advertising like this it would be trivial to do so, and require a whopping one question:

Is the service/product available in the state listed, and at the price listed, with no additional mandatory fees that are not listed and are required to be able to get the service/product?

If 'Yes', then it's not false advertising, carry on.

If 'No' then it is false advertising. Hit the company with a fine large enough that they lose any profits from it and any incentive to do it again.

If a company advertises a product/service at a certain price, unless you're talking about taxes which are a given any additional mandatory costs involved should be required to be listed in the main price as well. If you can't buy it at the listed price then the listed price isn't accurate and needs to be changed such that it does reflect the actual price.
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Ninja (profile), 14 Jul 2017 @ 6:24am

And I keep remembering that the cable tvs had all the leverage to be riding the wave well before Netflix would be able to become a thing if they were focused in providing better services instead of gouging consumers pockets and protecting their cash cows. Sadly they probably won't all go Kodak.
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Anonymous Coward, 14 Jul 2017 @ 6:45am

I applaud their transparency efforts. The problem is, when they advertise a $20 / month fee, that's the opposite. Be transparent and advertise $26 / month and give a breakdown of how that breaks down.

This kind of deception should be punished by the FTC.
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That Anonymous Coward (profile), 14 Jul 2017 @ 6:48am

I wonder how many people wouldn't be pissed if the hidden $6 fee was to get competent customer service that was competent.
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Anonymous Coward, 14 Jul 2017 @ 6:49am

Re:
"This kind of deception should be punished by the FTC."

ha ha ha haaaa haaaa!!!

Here is the sad thing! IT ALREADY CAN! But it won't. Why? Because you will ask for more regulation, which in turn gives them MORE power. They want more power, why should they help you? It's not like you are going to hold your congress critters responsible for the FTC NOT DOING ITS JOB are you?

Next election, you like just about everyone else here will go back to the polls, and then you will vote in the same or another corrupt politician candidate taking their marching orders from a party that has a vested and critical interest in keep big business ALIVE!

toodles!
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David, 14 Jul 2017 @ 8:37am

Re: Re:
I don't understand what this has to do with the cable industry at all. When there is a difference between advertised and charged prices, this is a violation of basic consumer protections. The FTC not feeling responsible for this because they don't have regulations in place for cable industry advertising makes as much sense as the fire brigade not feeling responsible for a burning house with mobile antennas on top.

They are obviously unsuited for their job then because they are missing the matching job ethics.

Sure, if we put similar requirements on our country's leaders we would not make it past the primaries. But one would hope that someone wants to be doing his job as it was supposed to be done.
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Anonymous Coward, 14 Jul 2017 @ 9:01am

Re: Re:
You act as though all regulation originates within the voting public - I would guess that most regulations originate from corporate requests.
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Anonymous Coward, 14 Jul 2017 @ 9:04am

Re: Lies, Damn Lies, and Cable TV pricing
And practically every retailer in the US does this. Do you expect to purchase an item at Walmart for the advertised price? I've never been able to. They always tack on "taxes" at the time of purchase. In many other countries "taxes" and "handling fees" and such are included in the advertised price. And while I do occasionally come across "taxes included" pricing in the US, it is very rare (except for vending machines). But it can obviously be done.
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Anonymous Coward, 14 Jul 2017 @ 9:14am

Re: Re:
Disband the FTC! Disband the FCC! Disband the EPA! Disband the FDA! Ban regulation! Let me do what I want!

toot-a-loo!
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JoeCool (profile), 14 Jul 2017 @ 9:20am

Re:
If it was, they wouldn't hide it because EVERYONE would GLADLY PAY to get the service... hell, I'd pay TWICE THAT. Every time I've called, I get an idiot reading from a manual, and there's no skipping a single step regardless of what the issue is or how many times you've already called.
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Anonymous Coward, 14 Jul 2017 @ 9:48am

Re: Lies, Damn Lies, and Cable TV pricing

If the government was willing to crack down on false advertising like this...

I suspect "no contracts" is a lie too. Every service I've subscribed to wanted me to agree to some kind of (one-sided) contract.
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Anonymous Coward, 14 Jul 2017 @ 9:52am

Re: Re: Lies, Damn Lies, and Cable TV pricing

Do you expect to purchase an item at Walmart for the advertised price? I've never been able to.

Wouldn't food be tax-free?

And while I do occasionally come across "taxes included" pricing in the US, it is very rare (except for vending machines).

Also other places where they don't want to make change: food trucks, onboard purchases on trains/planes, the few payphones that still exist.... And yes, it should be included in the advertised prices everywhere.
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Anonymous Coward, 14 Jul 2017 @ 10:32am

FWIW/FYI
I used to have Comcast where I lived (well, MediaOne who got bought by Roadrunner who got bought by... You know, Comcrap.) It took them a year (yes, a year) to figure out why my service kept going out. It was a shoddy 'fix' they had made years ago, along with an installer pulling wires through the link for the condos that stripped insulation off the cable. There was actually water dripping out of the cable at the junction box on the side of the building!

Anyway, where I lived in Massachusetts finally got Verizon FiOS about 6 or 7 years ago so I went with them Nice & fast etc, until the 'discounts' disappear, and then they started adding all those phoney fees (broadcast fees, that they all use? No collusion there). It was getting expensive.

But I decided it was a good time to retire (since I got laid off) and moved to Florida, where my only option (other than AT&T DSL) is Sputum or is it Scrotum, wait, no, Spectrum!

Wow,I thought Comcrap what shitty!
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Anonymous Coward, 14 Jul 2017 @ 11:21am

Re: Re:
More paint for the paint god! More lead for the lead throne!
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Anonymous Coward, 14 Jul 2017 @ 11:49am

Re: Re: Re: Lies, Damn Lies, and Cable TV pricing

Wouldn't food be tax-free?

Some food is tax-free, some isn't. And not all Walmarts sell groceries.
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R.H. (profile), 14 Jul 2017 @ 11:51am

Re: Re: Re: Lies, Damn Lies, and Cable TV pricing
Only in some states is food not taxed. I know that I've paid sales tax for food in Illinois and Indiana but not my home state of Michigan for example.
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R.H. (profile), 14 Jul 2017 @ 11:56am

Re: Lies, Damn Lies, and Cable TV pricing
I wish that the states that required the collection of a sales tax would also require it to be included in the "sticker" price of items.
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Anonymous Coward, 14 Jul 2017 @ 11:56am

Re: Re:

Every time I've called, I get an idiot reading from a manual, and there's no skipping a single step regardless of what the issue is or how many times you've already called.

That's entirely due to management. The people answering the phones can be immediately fired if they do otherwise, no matter how idiotic it may be.
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Anonymous Coward, 14 Jul 2017 @ 12:03pm

Re: Re: Lies, Damn Lies, and Cable TV pricing

I wish that the states that required the collection of a sales tax would also require it to be included in the "sticker" price of items.

That would be good, but it would require government that was a little less "bought and paid for" by business interests.
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MyNameHere (profile), 14 Jul 2017 @ 1:45pm

Below the Line For a Reason
One of the main reasons companies in many industries move to below the line costs is to assign blame where it belongs. The $6 fee in this case is because local broadcast TV channels are greedy and insist on getting paid extra for the use of their (already broadcast) signal. So when you have to pay $26 instead of $20, they can point to the item and blame the responsible party.

Advertising a lower price is also key, naturally. They want to be able to put the lowest possible price in their ads. It is however probably not the best thing to do, as consumers who do take on the product remember not how much was in the ad, but how much they actually had to pay.

It's really a problem of consumer protection laws. Advertised prices should be the full amount the consumer must pay each month, and not just a highlight number from the middle of the discussion. But if the states involved have weak consumer laws, you get this.

Rather than blame the cable companies, why not push the states to improve their consumer protection laws?
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That One Guy (profile), 14 Jul 2017 @ 2:19pm

Re: Below the Line For a Reason
Rather than blame the cable companies, why not push the states to improve their consumer protection laws?

Because the cable companies are to blame, regardless of the laws or lack thereof. They are the ones choosing to list a price that doesn't reflect what the customer actually ends up paying, something they could choose not to do, so they deserve all the blame for it.
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That One Guy (profile), 14 Jul 2017 @ 2:35pm

Re: Re: Lies, Damn Lies, and Cable TV pricing
Which is why I included this bit:

... unless you're talking about taxes which are a given

Taxes are different in that there's no surprise there unless someone is very confused. No one gets to the counter of a store and is surprised that the price is slightly higher due to taxes, and in fact if you know the state's tax rate you can even calculate a rough estimate on the fly.

If physical stores worked like Charter is acting here you'd get to the counter with an item listed at $10 only to find out that there was also a 'Shelf Stocking Fee' of $4, a 'Keeping The Lights On Fee' of $2, a 'Because Fee' of $4...
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Anonymous Coward, 14 Jul 2017 @ 4:36pm

Re: Re: Re: Lies, Damn Lies, and Cable TV pricing

Taxes are different in that there's no surprise there unless someone is very confused.

Not true. It's surprising to people who don't live in that area, among others. And the rules can get pretty tricky: in Ontario Canada, prepared food is tax-free only if $4 or less, baked goods are tax-free only in quantities of 6 or more (some stores, but not all, will allow you to count 6 individual items if they're similar enough), and building contractors don't have to charge tax if they make less than $30000/yr in revenue. I've occasionally put grocery items back on the shelf because I was unsure of their tax status.
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That One Guy (profile), 14 Jul 2017 @ 4:56pm

Re: Re: Re: Re: Lies, Damn Lies, and Cable TV pricing
Perhaps 'no surprise in areas where the tax code is not insane' would be more accurate in that case, because yeesh does that sound confusing.
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Anonymous Coward, 14 Jul 2017 @ 6:47pm

Re: Re: Below the Line For a Reason
If the advertising is legal then it's the law that is broken.
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Anonymous Coward, 14 Jul 2017 @ 7:36pm

Re: Re: Re: Lies, Damn Lies, and Cable TV pricing
>>I wish that the states that required the collection of a sales tax would also require it to be included in the "sticker" price of items.<<

>That would be good, but it would require government that was a little less "bought and paid for" by business interests.<

I disagree. Rolling the taxes into the sticker price sounds great at first glance. But think about how this would work in practice. Over time it would be way to easy for politicians to hide tax raises.

Think about an example where taxes are included in the advertised price -- gasoline -- at least everywhere that I've travelled. Without searching for the answer, how many of you know what percentage of the price per gallon is from taxes? In Michigan, the total tax rate is way more than just the 6% sales tax rate on most goods.
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MyNameHere (profile), 15 Jul 2017 @ 1:53am

Re: Re: Below the Line For a Reason
Think of it the same way as you might think of airline tickets. They are often price quoted without local sales tax, and airport fees and such. Is that illegal? Nope.

The cable companies are doing what everyone else does, and it's entirely legal. That why I said if you want to fix it, then change state laws.

If you think the cable companies have a moral obligation to be more up front, I will remind you that moral discussions are not part of Techdirt. We only deal with the black and white of legal and illegal here. Morals are for your momma :)
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Anonymous Coward, 15 Jul 2017 @ 6:52am

Re: Re: Re: Lies, Damn Lies, and Cable TV pricing

... unless you're talking about taxes which are a given.

Umm, no, it is not a "given" that taxes will be added on. As was pointed out, in many places they are not.
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Anonymous Coward, 15 Jul 2017 @ 6:55am

Re: Re: Re: Below the Line For a Reason

Morals are for your momma

I wish yours had had some.
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Anonymous Coward, 17 Jul 2017 @ 5:50am

but...
I'ma stop buyin crack from you--but I still need that pipe. How much is that pipe?
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Cornell, 16 Jun 2018 @ 6:17pm

Spectrum TV - $20 deal
I tried this and was aware that I would be charged a TV broadcasting fee and others fees. I had a $69.99 internet bill that went up to $101, when that $20 deal was added along with other fees. I cancelled
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