New Law Finally Bans Bullshit Cable TV Fees
from the better-late-than-never dept
For a decade we've talked about how the broadband and cable industry has perfected the use of utterly bogus fees to jack up subscriber bills -- a dash of financial creativity it adopted from the banking and airline industries. Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate -- then sock you with a higher rate once your bill actually arrives. These companies will then brag repeatedly about how they haven't raised rates yet this year, when that's almost never actually the case.
Despite this gamesmanship occurring for the better part of two decades, nobody ever seems particularly interested in doing much about it. The government tends to see this as little more than creative marketing, and when efforts to rein in this bad behavior (which is really false advertising) do pop up, they tend to go nowhere, given this industry's immense lobbying power.
But something quietly shifted just before the holidays. After a longstanding campaign by Consumer Reports, The Television Viewer Protection Act of 2019 passed the House and the Senate last week buried inside a giant appropriations bill that now awaits President Trump’s signature.
The bill bans ISPs from charging you extra to rent hardware you already own (something ISPs like Frontier have been doing without penalty for a few years). It also forces cable TV providers to send an itemized list of any fees and other surcharges to new customers within 24 hours of signing up for service, and allows users shocked by the higher price to cancel service without penalty.
The bill's not perfect. Because of the act itself it largely only applies to cable TV, not broadband service where the problem is just as bad. And cable TV providers can still falsely advertise a lower rate, thanks to what appears to be some last minute lobbying magic on the part of the cable TV sector:
"Initial versions of the legislation actually had the provision as truth in advertising, so you had to advertise the entire fees,” said Jenna Leventoff, senior policy counsel at Public Knowledge, a Washington-based public-interest group. “But it’s still an improvement over what currently exists, because you have a right to cancel after signing up."
The trick now will be enforcement by a government and FCC that has routinely shown it's entirely cool with industry repeatedly ripping consumers off with bullshit fees to the tune of around $28 billion annually:
"We seriously hope the cable industry doesn't try to game its way out of complying with a very straightforward disclosure requirement: let consumers know what they will actually pay each month once all the fees are tacked on to the advertised price,” emailed Jonathan Schwantes, senior policy counsel with Consumer Reports, which lobbied for this bill. “And we hope cable operators can do so well before the six month enactment date, and not ask the FCC for an extension for doing something so simple."
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: broadband, cable tv, hidden fees, television viewer protection act, truth in advertising
Reader Comments
Subscribe: RSS
View by: Time | Thread
"The bill bans ISPs from charging you extra to rent hardware you already own (something ISPs like Frontier have been doing without penalty for a few years)."
One might think that a mandatory fee for something not delivered would be fraud or some such crime already.
But apparently it is not fraud, must be some phenomenal pretzel logic employed here.
[ link to this | view in chronology ]
It's not fraud because the terms were laid out in the contract you signed.
That makes it all legal. The fact you didn't want various services and can't get the ones you do want without them is not relevant.
It's dirtbaggery, but I assure you their corporate attornies have all the bases covered there.
[ link to this | view in chronology ]
Re:
It's not fraud because the terms were laid out in the contract you signed.
I disagree, but if you have a good argument let's hear it.
One can not sign away certain rights before the fact. For example, if you sign something that says it is ok for others to murder you - that does not make it ok to murder you. Yeah, fraud is not murder but they are both felonies.
[ link to this | view in chronology ]
Re: Re:
Difference is that one is a human right and one isn't. You can legally agree to part with your money for nearly any reason you want to, whether it's to sign over the rights to a movie deal, take a toll road instead of a freeway, or to buy a banana, but you can't legally agree to part with your life for practically any reason.
I'm sure the way they've worded their contract, it spells out exactly what you're paying for and that they don't promise to give in return any service or product that you don't receive.
Legally speaking, that makes it no different than donating your change to the Red Cross at a supermarket register. Morally speaking is another matter entirely, of course...
[ link to this | view in chronology ]
Re: Re: Re:
Agreed.
And then there is the possibility of a court declaring said contract null and void due to its being unconscionable.
[ link to this | view in chronology ]
Re: Re: Re:
Donations under law have no requirement to go through with the donation. The place getting the donation can not say "You said you would give me your life savings" and have a court follow through with the judgement.
Cable Co's said something more akin to "You can connect to our network only with approved devices, if we do not provide said device there is a cost recovery fee of x".
In short, they are charging you a fee to bring your own device, something legally allowed, annoying as its a profit grab, but something they can do I guess.
[ link to this | view in chronology ]
Re: Re: Re: Re: [donations]
This should probably be correct, see dissent in Allegheny College v. National Chautauqua County Bank, 159 NE 173 (NY 1927).
Unfortunately, it isn't. See majority in id., and of course Estate of King v. Trustees, 647 NE2d 1196 (Mass. 1995).
[ link to this | view in chronology ]
Re: Re: Re: Re:
Donations under law have no requirement to go through with the donation.
This may be the case, I don't know. However - if one takes the charitable contribution write off in their tax return while not actually making any contribution, I would guess that is a crime. If the IRS does not audit, it does not mean you are not a crook.
[ link to this | view in chronology ]
Re: ok
“It’s not fraud because the terms in the contract”
LETS SEE WHAT A JUDGE SAYS IN COMPARISON TO OTHERS LIKE IT.
[ link to this | view in chronology ]
but...
Won't someone please think of the poor executives?
[ link to this | view in chronology ]
Re: but...
"Poor executives" is an oxymoron.
[ link to this | view in chronology ]
Re: Re: but...
I don't think oxymoron means what you think it means.
[ link to this | view in chronology ]
Re: Re: Re: but...
What does it mean?
[ link to this | view in chronology ]
Re: Re: Re: Re: but...
People on the Internet are constantly using oxymoron wrong. An oxymoron is NOT a contradiction in terms. It is a literally device where two words are put together that seem to oppose each other, but in context do not. A traditional example is "little giant."
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: but...
Simply being an executive does not imply wealth?
Ok, I guess so.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: Re: but...
It shouldn’t, but to many think it does. My wife is considered an executive, mid level management, but only makes $63k a year.
So if that’s wealthy, I guess we’re rich!
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: Re: Re: but...
"Only" 63k/yr puts her at double the average income in the US. In fact, a full 80% of the country earns less than that. Being at the lower end of the top 20% does not make you "poor".
[ link to this | view in chronology ]
This is garbage.
You still cannot compare offerings. It's a huge hassle to sign up for every single provider in your vicinity, then cancel again, just in order to be able to compare prices. And providers may threaten not to do business with you a few weeks right after you already canceled, so it's not even a feasible method for picking the cheapest provider.
[ link to this | view in chronology ]
Re: This is garbage.
You still cannot compare offerings.
Mission Accomplished.
[ link to this | view in chronology ]
But how much do they really get paid.
https://fitsmallbusiness.com/tv-advertising/
For local television stations, advertisers can expect to pay a minimum of $5 per 1,000 viewers for a 30-second commercial. Based on data provided by Adage, a 30-second spot broadcast nationally averages around $115,000 in 2019. The average cost placements for 30-second Super Bowl ads can go for upward of $5.25 million.
LOCAL
Los Angeles $34.75
New York City $27.16
Cleveland $21.11
Detroit $18.36
Kansas City $14.36
60 sec Commercial.
if you want to show your commercial in Los Angeles and your local station tells you that 500,000 people will see your ad, then your cost equation will be (500,000 / 1,000) x 34.75. This equals a total ad cost of $17,375.
the rest of this, trying to understand and get prices for National is abit complicated..
Verizon recently sent out an Advert with IGN.. It was Amazing, $80 for 800/800mbps FIOS..
So I clicked thru, which Will cost them money.
I entered my Zip code and NOPE, not here..(didnt think so)
I then talked to the online Chat about locations, and found its EAST COAST ONLY...(well thanks allot, <25% of the nation and you have an advert for 100%), So I wonder the site and the only map I see it the Cellphone one.. Then I find what I wanted, FIOS COVERAGE.. ONLY the FAR NE section..
https://broadbandnow.com/Verizon-Fios
THATS IT.??
They send a National advert through IGN(gaming site and sales) to the Whole nation. And its <1% oif the nation?
All those click thru's are going to cost money, but its a covered expenditure..Tax deductible. and they get it for a national advert. Not just a Small local advert.
And I would not put it passed theses corps to have a little Chip in their modems to do something stupid. Its always amazed me that they can Count the number of people Who watch certain TV programs. The Internet is kinda easy to monitor Who is watching what. But those Neilson (sp) reports generally didnt cover the nation, and mostly went to people Who would document everything they watched. They hated me,as I set the TV to PBS, all day long. The Net has a much better selection, even if you dont count YT.
[ link to this | view in chronology ]
Re: But how much do they really get paid.
I love the idea that Companies Pay to advert to you, then You pay the cable company to advert to you, then we get charged extra for some odd reason, then they can Never explain the charges on the bills we get, that add, This/that/the other taxes, that no one knows who or what they came from..
from City/state/fed/franchise fee's/repair fee's/insurance fee, then they get to write-off paying a 3rd party to do customer service, and another for billing, then pay another group for Maintenance.. Everything is a write-off, even if those other business are part of the main corp in any way.. really sounds like the RIAA/MPAA which controls everything down the line, how to get paid for everything, and pay nothing in the end. Love tax loopholes..
[ link to this | view in chronology ]
Re: But how much do they really get paid.
Nielson reports are manually filled out by volunteers. The participating viewers have to mark what they watched, when they watched, and how many people watched. They are not automatic.
This is how shows can obtain an absolute 0 rating even on networks that are constantly playing in bars, hotels, cafes, and the like. It's no different than a Gallup survey poll -- it's a representative sample, not a query of the entire population.
[ link to this | view in chronology ]
Re: Re: But how much do they really get paid.
Nielsen has had boxes that track volunteer consumption habits for a long time (Nielsen Families). Yes they have other methods as well.
Btw they are dividing into two daughter cells, one that does the measuring, and one that tells advertisers how much bang they get for their buck.
[ link to this | view in chronology ]
Re: Re: But how much do they really get paid.
"Nielson reports are manually filled out by volunteers."
I thought they discontinued that a long time ago, replacing it with stb devices that would record viewing habits and upload via POTS.
No idea how they rate things now days, as the internet has changed everything, but it is a good bet that it is automated.
[ link to this | view in chronology ]
Re: Re: Re: But how much do they really get paid.
I did a Neilson survey 2-3 years ago, and it was a paper log book that I filled out by hand for a couple weeks and mailed back to them.
They said to log EVERYTHING you watched on TV, regardless of if it was network, streaming, anything....so what they got from me was basically just a list of YouTube channels... :)
They couldn't automate it these days even if they wanted to. It's no longer as simple as just plugging in to the cable box and seeing which channel it's tuned to. Now you'd have to integrate with every single streaming platform and all of their apps on all the various supported platforms...probably far easier to just use the paper logs.
[ link to this | view in chronology ]
Cable TV industry has responded with, Challenge accepted. Your next bill will now include a fee for itemizing the fees we charge you."
[ link to this | view in chronology ]
...and a fee for issuing a paper bill.
[ link to this | view in chronology ]
Re:
Haha, that may be a joke in the US, but here in the UK we actually do get charged for paper bills!
[ link to this | view in chronology ]
Re: Re:
Yeah, we do in the US too, they just usually spin it as a discount for electronic billing.
[ link to this | view in chronology ]
Bullshit cable fees were banned?
What, did Richard Bennett not wear the chicken costume this time?
[ link to this | view in chronology ]
Re:
Contrary to appearances Dick Bent is still human... I think.
The human body can only operate for so long using Sriracha hot sauce as a lube replacement.
[ link to this | view in chronology ]
Organized Crime
These corporate people aren't going to change their ways, and especially not if the bean counters tell them, it would be more profitable to break the law with those illegal fees and pay the significant fines. The only way such laws have teeth and meaning is if they contain language that treats the entire corporate body as engaging in organized crime. They are thereby arrested as guilty parties to face court and possible jail time so the public can get justice for their willful sins. That's the only way to send a strong message to other corporate executives not to willfully engage in unlawful behavior.
If people are like, "you can't arrest these people!" Well, the good news is it can. Law enforcement does it all the time for organized crimes — the mafia, money laundering operations, Ponzi schemes, and so forth. When the NYPD arrest a massive racketeering ring of 50 to 100 people, they get lauded as heroes. When the FBI arrested Bernie Madoff and his organization, people praised their efforts. Yet compared to them, corporate boards knowingly commit financial crimes on a mass scale and keep getting away with it because the law somehow cannot touch them. If the government cannot make laws to treat lesser and greater evils as equal, then their laws are arbitrary and meaningless, and they're wasting the public's time and money.
[ link to this | view in chronology ]
Re: Organized Crime
Blame the fact that companies NEED to continue to show profitability for their share holders. If not, stock goes down and companies lose valuable insertion of cash to operate.
[ link to this | view in chronology ]
Re: Re: Organized Crime
What rate of return is the stall speed for a business?
Why is some business capable of operations at a 5% profit margin while others demand a 15% profit margin?
At what point do stock holders call bullshit when a company predicts high rates of return?
[ link to this | view in chronology ]
Re: Re: Re: Organized Crime
There is no single rate. The stall speed is dependent on a number of factors, including (but not limited to) current interest rates (if you profit 5% per year, but the interest rate is 10% and you need a loan then your business isn't viable anymore), risk (you might not want to invest in a 5% profit company if there's a 50% chance of bankruptcy this year), other available opportunities (why provide funding to a 10% profit margin company if you can get a 15% instead?), quantity of product produced (oil companies make a very small profit per gallon of gasoline sold, but because they sell a gazillion gallons each day they still make a lot of money), or existing debt (a company making 0% profit might last indefinitely if it never needs a loan, and its employees are being paid a sufficiently high salary) . It is my understanding that this is why there are people with a full time job attempting to sort this sort of thing out to predict whether a company might be viable in the future, or not.
[ link to this | view in chronology ]
Re: Monthly Bills
Is $86.10 too much for expanded cable on 2 TV's?
Is $105.10 too much for 2 landline telephones and broadband for 2 gaming PCs and 2 laptops?
Is $103.33 too much for 3 cell phones?
What am I paying for? Am I getting what I am paying for? Do I need all these services? I have a vague feeling it's not worth it.
[ link to this | view in chronology ]
Re: Re: Re: Re: Organized Crime
"(if you profit 5% per year, but the interest rate is 10% and you need a loan then your business isn't viable anymore)"
What about the last question:
At what point do stock holders call bullshit when a company predicts high rates of return?
People are gullible and there is a sucker born every minute, just go ask Bernie Madoff.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: Organized Crime
when they do an IPO and they bid it lower instead of higher
[ link to this | view in chronology ]
The Frontier Router Fee issue could really use your pen....
FCC sSection 76. 1201 is quite clear as to what Frontier can and cannot do as it applies to the illegal Router Fee, operative word "illegal" because it is. The FCC shouldn't be holding back enforcement, Frontier is clearly in violation and it boggles the mind as to why the FCC hasn't done something about it long ago. The good news if you can call it that is that I spoke with the Office of The President at Frontier today and apparently an email circulated yesterday indicating that Frontier will no longer charge the fee as of June. Of course not, because they know damn well what they are doing is illegal and finally in June once the TVPA in enforced there will be consequences for their actions. I'm trying to get a copy of the email through friends at Frontier and will send you a copy upon receipt. The bottom line is we should all be pressing the FCC to enforce whats on the books now and in the case of Frontier make an example of them with stiff penalties and annoyingly invasive oversight until Frontier learns that stealing from it's customers is not acceptable behavior now or anytime even for a Cable Company.
[ link to this | view in chronology ]