We Had To Pass A Law To Stop Telecom Monopolies From Charging You 'Rental Fees' For Things You Already Own
from the broken-industries dept
For much of the last few years, broadband customers have been complaining that Frontier Communications, the nation's third-biggest telco, had been charging its customers a rental fee for modems they already owned. Normally, you're supposed to be able to buy your own modem instead of paying your ISP a rental fee upwards of $10 per month. To nab some extra dough from captive customers, Frontier basically decided to charge its customers a rental fee anyway, giving them a polite, though giant, middle finger when they complained.
This façade persisted until customers had a problem with their hardware, at which point the ISP would just shrug and claim there was nothing they could do. When consumers complained to the Trump FCC about this, the agency did... absolutely nothing. As with most complaints to the Trump FCC, the agency just forwards your complaint to the ISP in question then does... nothing whatsoever.
This kind of behavior is the norm for the broadband industry, given it faces minimal pressure to try harder due to limited competition and captured regulators. So consumer advocates last year successfully pushed for the passage of the Television Viewer Protection Act (TVPA). The law, which likely would have never made it past a broken and corrupt Congress in standalone form, had to be shoveled into a budget bill in order to be passed by Congress and signed by President Trump in December 2019. It's not likely that many, including Trump, even noticed that the provision existed in the broader bill.
The bill prohibits charging consumers a rental fee for hardware they already own. It also requires that ISPs be a bit more transparent about all the bullshit fees broadband providers use to pad their advertised rates. And it gives you a 24 hours to cancel cable TV for any reason. It's not perfect; the bill doesn't prohibit ISPs from using bogus fees to raise your rate while under contract. It's also loosely worded enough that ISPs could likely find some new ways to tap dance around it. But it's still a step in the right direction:
"For years, consumers have been misled by pay-TV providers advertising service for one price and then charging another," Public Knowledge Senior VP Harold Feld said in a press release today. "Until now, consumers have had zero recourse for dealing with these surprise fees other than ending service and paying an unfair termination fee for the privilege. Not anymore."
Granted, even after the bill was passed, the FCC delayed implementing it for six months, arguing that not ripping consumers off was too onerous of a requirement to place on a regional telecom monopoly during a pandemic. Keep in mind Frontier is a bankrupt mess with a long history of dodgy behavior and fraud. And, more often than not, the FCC's reaction (basically: ¯\_(ツ)_/¯) is pretty much the norm. Especially during the Trump FCC, which is so disinterested in consumer protection, it effectively lobotomized its authority just because Comcast and AT&T asked it to.
The cable industry alone makes a whopping $28 billion annually in bullshit fees. They've been doing this sort of thing for decades and, aside from the occasional noise, the U.S. government simply couldn't give any less of a shit. And of course it's not just telecom. Countless heavily monopolized sectors (banking, airlines) engage in the same behavior, and those in a position to do something about it simply couldn't care less. There's almost an understated American belief that tricking users into paying more via bogus fees is just creative pricing and it's the consumer's fault for being ripped off.
So here we are. Having to sneakily pass a new law to stop monopolies from charging you even more money for things you already own. Now we have to wait to see if anybody can be bothered to actually enforce it.
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, fcc, fees, ownership, rental fees, sneaky fees, tvpa
Companies: frontier communications
Reader Comments
Subscribe: RSS
View by: Time | Thread
I am not a lawyer but I thought charging for services/product not delivered was fraudulent.
[ link to this | view in thread ]
I have a feeling that this unintentionally may be why we have copyright changes snuck in budget bills.
[ link to this | view in thread ]
Re:
It certainly should be, but if the regulators aren't going to do anything and you don't have a competing service to switch to, so what?
[ link to this | view in thread ]
When the goal is to pry more money out of your wallet without providing anything more, this is what you get. They will do things like taking their standard old cable service and renaming it something like...Xfinity! Now it's soo great, everyone needs to pay more! I feel great paying extra for something like that, don't you?
[ link to this | view in thread ]
Re:
Well, that would explain while all the courts return your filing fee for your complaint after it's been dismissed: You went to the courts for a judgment. You didn't get your judgment delivered. No fee.
[ link to this | view in thread ]
Re:
Not being allowed to charge people for using something already in their possession would take all the fun out of digital rights management.
[ link to this | view in thread ]
Re: Re:
Will regulators do anything as a result of this new law?
[ link to this | view in thread ]
Re: Re: Re:
{Leadership bio from the Federal Communications Commission (FCC) website.}
Nathan Simington,
Commissioner
[ link to this | view in thread ]
Router connection fee?
I am not sure about the details before and after but what is to stop them from just using more precisenlanguage about how they are ripping you off. Worse is "Router Connection Fee" would have no obligation on their part to give you a working device if you lack one.
[ link to this | view in thread ]
Who appointed Ajit Pai?
Why is the article mentioning Trump over and over and over?
Obama appointed Ajit Pai to the FCC commission. This bill limiting the powers of telecoms to steal from you was signed into law by Donald Trump.
[ link to this | view in thread ]
Re:
What like this is new?
[ link to this | view in thread ]
Re: Who appointed Ajit Pai?
Because it is the FCC as operating during the Trump Administration. We know Obama appointed him. Wheeler, surprisingly, kept the fucking evil moron in check.
[ link to this | view in thread ]
Re: Who appointed Ajit Pai?
Also, the FCC is required to have three members from the same party as the sitting President and two members from the other party. Chairman Pai was simply one of the Republicans Obama had to place. The reason that he was still around for Trump's presidency is that FCC Commissioners have terms longer than that of the President.
[ link to this | view in thread ]
Re: Who appointed Ajit Pai?
Because he had to.
But there was no such requirement behind Trump making him the FCC's head.
[ link to this | view in thread ]