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

Charter Spectrum Celebrates Megamerger One-Year Anniversary With Blanket Price Hikes For 'Mispriced' Customers

from the synergies! dept

You may recall that when Charter proposed spending $79 billion to acquire Time Warner Cable and Bright House Networks last year, the usual promises of job creation, lower prices, better broadband, and improved customer service came along for the ride. The problem: none of those things have materialized under the new company (Spectrum). In fact, like so many telecom mergers, many customers of the nation's now second-largest cable provider say Charter's prices have gotten higher and the company's customer service (already ranked among the worst in any industry) has somehow managed to get worse.

With this week being the one-year anniversary of this mega-deal, customers in acquired territories say the company is engaged in yet another round of blanket rate hikes. In Lexington, Kentucky, for example, Spectrum customers say they're being forced to pay $20-$40 more (plus assorted fees to swap out their cable boxes) for effectively the same service. And when they call in to complain, they're discovering that part of the new Spectrum experience involves a company that's no longer willing to haggle on promotions (because it doesn't have to):

"Fitzgerald tried to haggle — Time Warner usually cut you some slack on price increases in order to keep your business, he said — but the representative stopped him. This is Spectrum’s deal. Take it or leave it.

“It was bull crap,” Fitzgerald said. “They don’t give us any notice, they just spring it on us in the middle of the month. And then they tell us we’re getting an 'upgrade.' This isn’t an upgrade, it’s the same channels we already had!"

Spectrum's latest rate hikes are part of a sweep of customer accounts to identify customers that company executives claim are "mispriced" (read: aren't paying enough). Like Comcast, Charter benefits from a dwindling amount of broadband competition with the telcos, who have simply refused to upgrade their aging DSL networks at any real scale. As a result, customers looking for ISPs that can actually provide the base FCC definition of 25 Mbps usually have only one option to go to: cable. And when they arrive, they're usually forced to bundle TV service they may or may not even want in order to get the best price.

As a result, Charter added 350,000 broadband subscribers last quarter. But even then, Charter managed to lose 47,000 pay TV subscribers last quarter, the majority of them former Time Warner Cable customers that have used the price hikes as an opportunity to cut the cable cord. Customers clearly aren't happy with the way the merger is going, but Charter CEO Tom Rutledge is positively giddy at the "value proposition" he's presenting these customers:

"It’s a difficult thing to model,” said Rutledge, whose 2016 pay package was $98.5 million. “But we’re coming at it both ways, both from creating a value proposition in the pricing and packaging we have, and doing those smart things that you can do with an existing customer base that’s been mispriced to move them in the right direction."

While the former Obama administration approved what is clearly an awful deal, they did affix a few conditions to the merger. Namely that Charter has to adhere to the FCC's net neutrality rules (even if thrown out by the FCC), needs to expand broadband to 2 million additional locations, and can't impose usage caps and overage fees for a period of seven years from the date of the deal's signing. But the current FCC has been busy trying to roll back many of those conditions, making an already awful merger even worse.

Good news though: if you really adore higher rates, bogus promises, and historically-abysmal customer service, there appears to be many more telecom mergers like this one headed your direction.

Filed Under: broadband, competition, mergers, price hike
Companies: charter

Happy New Year From Comcast: Price Hikes And Misleading Fees For Everybody

from the more-of-the-same dept

"Comcast also will hike a "broadcast TV fee" by 66 percent to $5 a month from $3. This relatively new fee covers the cost of retransmission fees that over-the-air broadcast TV networks - CBS, NBC, ABC, and Fox - charge cable companies for distributing their networks on pay-TV systems. Retransmission fees and sports are the two biggest inflationary-costs pressures in TV bills, according to industry observers and Comcast executives."

"Comcast spokesman Jeff Alexander said the company continues to invest in its network and technology "and to give customers more for their money - like faster Internet service and more WiFi hot spots, more video across viewing screens, better technology like X1, and a better customer experience."

Filed Under: broadband, fees, price hike
Companies: comcast