It's 2021 And Bullshit Broadband And Cable TV Fees Are Somehow Still A Thing

from the you'd-think-we-would-have-fixed-this-by-now dept

For years 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.

One 2019 Consumer Reports study found that about 24% of consumer bills are comprised of bullshit fees, generating cable giants $28 billion in additional revenue annually. The problem is just as bad over in broadband (see Centurylink's utterly nonsensical "Internet Cost Recovery" fee). Often cable and broadband companies will try to give such fees official-sounding names like "regulatory recovery" so that consumers falsely blame government for being nickel-and-dimed. But between TV fees, hardware fees, usage fees, and other surcharges, bundled customers dole out a small fortune every year for absolutely nothing.

It's fraud, but fraud that has somehow been normalized over decades.

I've been writing about this problem for the better part of twenty years, so it's disheartening to see the Washington Post still covering this bullshit in 2021 without much having changed:

"Most of the price hike that I didn’t expect was Comcast sneaking in additional “fees” — not taxes, just expenses related to Comcast’s cost of doing business. I’m paying $27.05 on top of my bundle price for Comcast’s cable service to carry local broadcast networks and pro sports games. Yes, my Comcast bill, [Consumer Reports senior counsel Jonathan] Schwantes said, isn’t as bad as many others he has seen, which can include 12 or more line-item fees. Some companies, he added, try to make people think their fees are government taxes, but they’re not.

Amusingly, Comcast tries to pass off falsely advertising low prices then socking users with bullshit fees as some kind of consumer benefit:

"Comcast tells me this is exactly what its customers want. It said it disclosed its copious additional fees to me in various fine-print communications — though only after I entered my credit card number. “We conduct extensive consumer research and host focus groups and incorporate our findings into the way we present information to our customers, all in an effort to help ensure they have a positive experience and can easily understand the details of their service,” said Jennifer Khoury, Comcast’s chief communications officer."

By and large, federal regulators couldn't give any less of a shit about this problem. That leaves a patchwork collection of State AGs who'll occasionally dole out some light fines and flimsy wrist slaps. But that leaves most consumers utterly unprotected from being ripped off by their local cable TV or telecom company. As you can tell from similar behavior in the banking and airline industries, the federal government, at some point, just declared it perfectly okay to rip people off with utterly nonsensical fees, provided you're just marginally clever about it.

Filed Under: bogus fees, broadband, cable, fees, hidden fees, price hikes, truth in advertising
Companies: comcast

Broadband ISP Frontier Just Keeps Happily Ripping People Off With Bogus Fees, And Zero Real Repurcussions

from the do-not-pass-go,-do-not-collect-$200 dept

When you're a natural monopoly in America you get away with a lot. Take for example Frontier Communications, which has spent the last few years stumbling in and out of bankruptcy while dodging no shortage of scandals, including allegations of subsidy fraud. Last year, Frontier got a light wrist slap for fraudulently charging its customers a "rental" fee for modems they already owned. The company also paid a tiny $900,000 fine last year to Washington State AG Bob Ferguson for using bogus fees to rip off the company's captive subscriber base.

Of particular annoyance in consumer complaints has been the company's $4 per month "Internet Infrastructure Surcharge," which is a completely nonsensical, bullshit charge the company levies below the line. The surcharge doesn't really go to "infrastructure" (that's what your entire bill is for). What it does do is give Frontier a way to continually increase consumer prices while falsely advertising a lower rate. Other ISPs engage in similar behavior with little real penalty (see CenturyLink's "Internet Cost Recovery" fee).

While the $900,000 Washington State AG fine is semi-helpful, like most US regulatory "penalties" it's a tiny fraction of the money made via the dubious business practice. And while the company stopped charging the fee in Washington, it still charges it across the rest of its 22 state footprint. Note that Frontier has 3,735,000 broadband subscribers, each paying $4 a month in completely erroneous surcharges. That's nearly $15 million in bullshit charges in just one month, or $180 million in dodgy revenue every year.

Facing only a light wrist slap for the practice, Frontier seems intent on doubling down on this behavior. The company this week announced it will be bumping the fee to $7 per month. Frontier attempted to explain away the bogus surcharge this way:

"The increase applies to Frontier customers based on individual service packages and reflects increasing maintenance and other network costs, including the rapidly rising costs of supporting our customers' increased Internet traffic and usage, and consumer demand for greater bandwidth, services, and other requirements that affect our Internet network. Customers on price-lock and promotional pricing will not see this increase until their terms expire."

But again, "maintenance and other network costs" is what the entirety of your bill is for, and the fee's real purpose is to help the iSP engage in false advertising on pricing.

Despite decades of this, federal regulators at the FCC have largely been utterly pathetic on this issue. While there was some basic rules requiring at least some transparency in pricing baked into the FCC's net neutrality rules, those were gutted by industry lobbyists during the Trump administration repeal. This kind of misleading pricing could also be mitigated via policies that push more competition to market, but since most US markets lack competitive options, and building more competitive options tends to upset politically powerful telecom monopolies, we usually only pay lip service to that concept as well.

Filed Under: bogus fees, broadband, competition, fees
Companies: frontier, frontier communications

Charter Spectrum's Bullshit 'Broadcast TV' Fee Soars To $16.45 Per Month

from the nonsensical-surcharges-may-apply dept

Like countless other American business sectors, U.S. cable and broadband providers have been using hidden fees to covertly jack up their advertised rates for much of the last decade. These fees, which utilize a rotating crop of bullshit names, help these companies falsely advertise one rate, then sock the consumer with a significantly higher rate post sale (often when locked into a long-term contract). They also let them falsely try and claim that prices haven't increased, when they pretty clearly have.

Back in 2014, Comcast introduced a new $1.50 per month surcharge on cable bills it called its "Broadcast TV Fee." Said fee was really just a portion of the cost of doing business for Comcast (programming costs), busted out of the full bill and hidden below the line -- again to help the company falsely advertise a lower price. Fast forward to 2020 and the fee is now $15 per month, per user, and growing -- despite a number of lawsuits (correctly) alleging that the fees are misleading and predatory.

And it's not just Comcast. Charter (Spectrum) has also heavily embraced such a fee, its own "broadcast TV surcharge" getting jacked from $13.50 to $16.45 a month starting in August:

Charter has raised the fee repeatedly—it stood at $9.95 in early 2019 before a series of price increases. At $16.45 a month, the fee will cost customers an additional $197.40 per year. Charter sells TV, broadband, and phone service under its Spectrum brand name and is the second largest cable company in the US after Comcast.

One other "handy" benefit to the fee (for Charter and Comcast) anyway, is that it lets the companies tap dance out of consumer "price lock" guarantees or promotional rates, by letting them pretend that arbitrary fee increases are not actual price hikes. Charter also imposes a slightly smaller Broadcast TV fee on its streaming TV plans, with that fee getting jacked from $6 to $8.95 a month. That's, of course, in addition to all the other arbitrary fees and surcharges tacked onto your monthly bill, including broadband usage caps and overage penalties.

It's the sort of running scam that would be prohibited by functioning, objective consumer protection regulators or lawmakers, were we to actually have such a thing.

Filed Under: bogus fees, broadcast tv fee, cable tv, fcc, ftc, price increase, truth in advertising
Companies: charter, comcast

Washington State AG Fines Frontier Communications A Pittance For Its Bullshit Fees

from the 'completely-fraudulent-surcharge' dept

In telecom policy circles, there's an army of "experts" who twist themselves into pretzels trying to pretend U.S. telecom is a healthy, normal, vibrant market. Blinded by partisan loyalties, sector financial links, or ideologies embedded decades ago in grad school, they're incapable of even acknowledging that Americans pay too much money for spotty, substandard service with historically terrible customer support. They're even less likely to acknowledge the corruption, regulatory capture, and lack of competition that made this dysfunction possible. If it is acknowledged, it's downplayed to a comical degree.

As in the Ma Bell days, at the heart of U.S. broadband dysfunction sits phone companies. Providers that have long refused to upgrade their aging DSL networks despite millions in taxpayer subsidies, yet lobby for state laws that ensure nobody else can deliver broadband in these neglected footprints either. These are companies that have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising, then, that many telco DSL customers are fleeing to cable, assuming they even have a second broadband option.

The poster child for U.S. telecom dysfunction is Frontier Communications. Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. Frontier-related graft and corruption in many states (like West Virginia) is so severe, state leaders have buried reports detailing the depth of the problem, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest.

In many states, regulatory capture ensures that Frontier's behavior never sees so much as a wrist slap. That was particularly noticeable when Frontier was recently busted charging users a $10 monthly "rental" fee for modems that the users owned. Frontier, like many big ISPs, has also been given free reign to impose all manner of additional sleazy and misleading fees, usually used to help broadband and TV providers falsely advertise a lower rate.

Even in states where consumer protection is a little tougher, the penalties aren't routinely damaging enough to deter bad behavior. The latest case in point: Washington State Attorney General Bob Ferguson reached a settlement with Frontier last week (pdf) in which Frontier will pay a $900,000 fine for years of imposing bullshit fees on the company's customers. One such fee, dubbed the "Internet Infrastructure Surcharge," imposed an additional $4 monthly on user bills:

"Ferguson began investigating Frontier in 2018 after receiving more than 600 complaints and "focused on Frontier Northwest's failure to adequately disclose fees during sales of cable, Internet and phone services since 2016," Ferguson's announcement said. "For example, the company charged as much as $3.99—nearly $50 per year—for an 'Internet Infrastructure Surcharge,' without adequately disclosing the surcharge in its advertising."

Note that Frontier has 3,735,000 broadband subscribers, each paying $4 a month in completely erroneous surcharges. That's nearly $15 million in bullshit charges in just one month, or $180 million in fraudulent revenue every year. While the $900,000 fine is semi-helpful, it's far from a deterrent -- especially considering that the ISP's settlement with the state doesn't require they stop charging the bullshit fee, just that they make it clear to consumers on their bill. $900,000 is chump change to these regional monopolies.

Keep in mind that Washington is one of the most "aggressive" states in the country at consumer protection, which admittedly isn't saying much. Also keep in mind that this is just one ISP. Numerous ISPs routinely engage in this same or worse behavior, usually with absolutely no penalty whatsoever from state or federal regulators like the FCC. It's the exact sort of behavior that's only made possible by two things: a lack of competition in the broadband market, and feckless, captured regulators who are more worried about campaign contributions than outright fraud.

All ignored, in turn, but a laundry list of telecom policy experts who've made entire careers out of pretending that the US telecom sector is healthy and immensely innovative. In reality, the closest many of these companies get to innovation is in coming up with ethically dubious surcharges.

Filed Under: bogus fees, fake fees, fine, washington state, wrist slap
Companies: frontier communications

Washington And Oregon Fine CenturyLink For Completely Bogus Broadband Fees

from the gullibility-surcharge dept

For decades, broadband providers have abused the lack of meaningful competition in the telecom market by not only refusing to shore up historically awful customer service, but by raising rates hand over fist. This usually involves leaving the advertised price largely the same, but pummeling customers with all manner of misleading fees and surcharges that drive up the actual price you'll be paying each month. And by and large regulators from both major political parties have been perfectly okay with this practice, despite it effectively being false advertising.

CenturyLink (combined by the merger of Qwest, CenturyTel and Embarq) has been exceptionally talented when it comes to such fees. A few years ago the company began charging its broadband customers an "Internet Cost Recovery Fee," which the company's website explains as such:

"This fee helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption."

But the cost of maintaining broadband networks is what your entire bill is supposed to be for. Again, breaking out such additional bullshit surcharges and burying them below the line is designed to do one thing: help providers falsely advertise a lower rate. And while the "internet cost recovery fee" was only a few bucks per month, it's a fairly lucrative scam when spread across millions of CenturyLink's US broadband subscribers over the last five years.

With the federal government now largely comatose on such issues, states have been forced to step up to the plate and try to fill the void. As a result, Centurylink was forced to settle a lawsuit by Oregon's AG requiring it cease the practice and shell out $4 million to impacted consumers. That settlement comes several weeks after a similar settlement with Washington State's AG to the tune of $6.1 million:

"CenturyLink deceived consumers by telling them they would pay one price, and then charging them more,” Ferguson said. “Companies must clearly disclose all added fees and charges to Washingtonians. If you believe that a company has charged dishonest fees, please contact my office.”

In states where telecom regulatory capture is more prevalent (read: most of them), absolutely nothing is being done to thwart this practice, which extends to other fees like the misleadingly named "regulatory recovery surcharge" or the widespread "local sports surcharge" and $10 per month "broadcast TV" fees.

Keep in mind, these are precisely the kind of consumer enforcement actions the Trump FCC attempted to ban with its net neutrality repeal, which didn't just repeal net neutrality but attempted to neuter nearly all state and federal oversight of one of the least-liked and uncompetitive industries in America. The courts argued the FCC overreached, noting it can't eradicate its telecom protection authority, then try to ban states from stepping in to fill the void. The fact they even attempted the gambit should tell you all you need to know about the Ajit Pai FCC.

Filed Under: bogus fees, broadband, competition, consumer protection, extra fees, ftc, hidden fees, oregon, truth in advertising, washington
Companies: centurylink

Comcast's 'Free' Streaming Box Is Actually $13 After Stupid Fees

from the ill-communication dept

Back in March, Comcast heavily hyped the looming launch of a new streaming TV box that a press release proclaimed would provide "real value" to Comcast broadband customers for free. It was Comcast's attempt at trying to fend off the growing array of $7-$14 per month streaming services that have been popping up and causing Comcast customers to cut the cable TV cord. Comcast noted at the time the offering would only be made available to the company's existing broadband subscribers, and would only feature streaming services sanctioned by Comcast:

"For just five dollars a month, we can offer these customers an affordable, flexible, and differentiated platform that includes thousands of free movies and shows for online streaming, an integrated guide for accessing their favorite apps and connected home devices, and the ease of navigating and managing all of it with our voice remote."

Of course this being Comcast, the word "free" turns out to have been...generous. Unmentioned by the original announcement was the fact that to actually partake in this new streaming service, you must rent Comcast's "XFi Gateway," which will run you an additional $13 per month on top of your broadband bill. Comcast has long tried to convince its customers they must pay a rental fee for a router or modem, despite the fact that users can buy their own router and avoid that fee. Of course that's not possible if you want to experience the "real value" Comcast's new Flex streaming service purportedly provides:

"The $13-per-month rental fee for the xFi Gateway is a complete rip-off that Comcast (like other internet providers) pushes on its subscribers because people generally don’t know there’s an alternative. Instead of paying Comcast an additional $13 per month in perpetuity, you can instead buy a modem and router outright. By doing so, you’ll likely make up the upfront costs after a year, maybe two if you go for higher-end options. Once it’s paid off, you’ll be saving the $156 per year that you’re paying just to have a box sit in your house."

As such, Comcast's claim that this new service was available "at no additional cost as part of an Xfinity Internet-only subscription" would constitute false advertising. And Comcast's free streaming box is actually a $13 rented box that's not only loaded with a major hidden fee -- it doesn't include streaming services Comcast isn't keen on competing with. Most consumers would just be smart enough to buy a Roku or some other streaming device and enjoy a wide range of services, but Comcast hopes that enough of its customers don't know any better and will sign up anyway.

This would all be slightly less obnoxious if Comcast hadn't spent much of 2016 using outright propaganda to thwart an FCC quest to crack open the cable industry's monopoly over cable boxes and other hardware. Under the plan, cable providers would have needed to provide their programming to third party hardware vendors without the need for a CableCARD, making it easier to pay for Comcast services using your Roku, Apple TV, or third party cable box. But because the cable industry makes around $21 billion annually in rental fees, it engaged in some incredibly misleading tactics and claims to scuttle the effort.

Given the company just convinced the FCC to effectively neuter itself at lobbyist behest, there's no longer any meaningful rules in place governing misleading fees, something Comcast has lots of experience with. As such consumers' only real recourse is to avoid services and behaviors like this wherever possible, a major reason the company lost another 238,000 TV subscribers last quarter alone. But there's another problem: Comcast's broadband monopoly and its use of usage caps to hamstring and punish those that flee Comcast's fee-laden walled garden.

Filed Under: bogus fees, fees, flex, routers, streaming, truth in advertising, xfi gateway
Companies: comcast

AT&T Jacks Up Broadband Rates With Misleading 'Property Tax' Fee

from the america's-greediest-network-is-also-the-sneakiest dept

For years 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. Despite this being false advertising, regulators have chosen to look the other way for decades.

Last week, a new study highlighted how nearly 25 percent of your cable bill is comprised of bullshit fees, netting $28 billion annually from such surcharges. This week, AT&T is under fire for a new wrinkle on an old game. The company has started raising its customers' broadband prices by as much as seven percent to help offset the company's property taxes. In this case, customers who thought they were signing up for fiber broadband at a fixed, locked rate were suddenly informed they needed to pay 7% more to help pay off AT&T's tax burden:

Effective October 1, 2019, there will be an increase in the AT&T Cost Assessment Charge used to recover AT&T property taxes. The monthly rate will change from 2.92% to 7.00% of your total AT&T Business Internet, Phone and/or U-verse TV monthly charges. This charge is not a tax or fee that the government requires AT&T to collect from its customers.

Again there are several problems here. One, advertising one rate then charging something else is false advertising. Two, AT&T's property taxes are the cost of doing business, and should be included above the line. Three, these users were locked in at a "fixed, guaranteed rate," then AT&T simply ignored the promise.

AT&T's practice of adding its property taxes appears to have begun sometime in 2017. But there's no indication that the rates being paid actually, realistically reflect AT&T's property tax burden:

AT&T has been charging the property-tax fee to business customers since at least mid-2017. An AT&T business DSL customer in Oklahoma complained about it on Reddit at the time, saying the then-new fee was 1.08% of the monthly bill.

In January 2019, an AT&T customer complained in a DSLReports forum that the property-tax fee was raised from 2% to 6.69%. "So I gotta ask—did their 'property taxes' increase by 335%?" the customer wrote, noting the greater-than-three-fold increase.

In a functional market either competition would kick in to punish companies for this kind of behavior in the form of subscriber exodus, or a regulator would step in to, at the very least, warn the company away from such misleading predatory behavior. But this being the United States, where the FCC just effectively neutered itself at lobbyists' behest, based on entirely manufactured justifications, and vibrant competition remains a pipe dream, we get neither option. Enjoy.

Filed Under: bogus fees, false advertising, misleading fees, price hike, property tax fee
Companies: at&t

The Cable Industry Makes $28 Billion Annually In Bullshit Fees

from the false-adverting-by-another-name dept

Last week we highlighted a study showing that your cable bill can be as much as 45 percent higher than the advertised price thanks to bullshit fees. Now a new study by Consumer Reports shows that up to 24 percent of your monthly cable bill is comprised of said bullshit fees. The fees are designed specifically for one purpose: to let companies falsely advertise one rate, then charge you significantly more money. It's effectively false advertising, but efforts to rein in the practice are fleeting to nonexistent, because creatively fleecing American consumers is just so hot right now.

Consumer Reports examined 787 consumer cable bills from 13 top cable providers and found that while the average user paid around $156.71 per month for cable TV, users in reality paid $217.42 a month once fees were included. As such about 24 percent of your cable TV bill each month ($37.11) is made up of fees and hidden surcharges, generating about $450 per year per consumer for the industry, or about $28 billion in total.

The report is quick to highlight how some of the bullshit fees (like the "regulatory recovery fee") are named in such a way to trick the consumer into blaming government. The group reached out to 74 consumer reps posing as a customer and found that support reps are pretty clearly trained to create that impression:

"Often these fees are misleadingly portrayed by cable providers as government-mandated surcharges so that consumers blame the government instead of cable providers. One such fee is the “regulatory recovery fee,” specifically named for just this purpose.

Consumer Reports researchers say they posed as consumers and called 74 customer service representatives (CSR), who routinely tried to blame government for excessive surcharges.

"At least one CSR of every major provider that our secret shoppers contacted misstated that fees were mandated by the government, without a clear distinction made between company-imposed fees and regulatory pass-through fees," the report said.

One of the industry's favorite, more recent fees is the "Broadcast TV fee," which we've hammered on previously. This fee simply involves taking a portion of the cost of programming and burying it below the line as an itemized fee, again with an eye on falsely advertising a lower rate. Thanks in part to a government that can't be bothered to protect consumers from said false advertising, Comcast has quietly been jacking up this fee for the better part of the last decade with zero repercussions whatsoever:

"The study found that in 2015, Comcast started charging consumers a $1-a-month Regional Sports Fee and $1.50-a-month broadcast TV fee ($2.50 per month). By 2019 those fees had ballooned to $18.50 a month, or a 600 percent increase in just four years."

Cool. While some bills have been proposed to rein in the practice, they routinely go nowhere thanks to our campaign contribution slathered Congress. And the FCC just neutered much of its authority over broadband and cable TV providers at lobbyist behest. Good times, yeah?

Keep in mind this is how the cable TV industry behaves when competition from streaming alternatives is steadily driving customers to cut the traditional cable TV cord, illustrating how organic competition isn't always enough to prevent entrenched predatory monopolies from behaving badly. Cable giants figure that sure, they may lose some TV subscribers by being predatory bastards, but they'll just recoup those costs by raising the costs of broadband (where they hold a more solid natural monopoly, another problem we apparently don't want to do anything about).

Filed Under: bogus fees, broadcast tv fee, cable industry, false advertising, fcc, fees, ftc, price hikes, regulatory recovery fee
Companies: comcast