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.

Filed Under: broadband, fcc, fees, ownership, rental fees, sneaky fees, tvpa
Companies: frontier communications

From $1.50 To $10 Per Month: How Comcast's Bogus Fees Are False Advertising

from the fees-and-surcharges-may-apply dept

For several years now cable and broadband providers have been using hidden fees to covertly jack up their advertised rates. 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). The practice also allows the company to falsely claim they're not raising rates on consumers. They omit that they're talking about the above the line rate being charged, implying that anything below the line (where real fees like taxes are levied) is outside of their control.

Back in 2014, Comcast introduced a new $1.50 per month surcharge it called its "Broadcast TV Fee." Said fee was really just a portion of the cost of doing business for Comcast (programming), busted out of the full bill and hidden below the line -- again to help the company falsely advertise a lower price. Over the last four years Comcast has quietly but quickly pushed this fee skyward, this week informing customers that -- alongside numerous other rate hikes like its "Regional Sports Network" fees -- the company's Broadcast TV fee would now be $10 per month for the company's cable TV customers:

"Comcast is raising its controversial "Broadcast TV" and "Regional Sports Network" fees again on January 1, with the typical total price going from $14.50 to $18.25 a month. The newly raised broadcast TV fee will be $10 a month, and the sports fee will be $8.25 a month, Cord Cutters News reported last week. The new fee sizes are confirmed in a Comcast price list for the Atlanta market. About a year ago, Comcast raised the broadcast TV fee from $6.50 to $8 and the sports fee from $4.50 to $6.50."

Not to be outdone, Comcast's also socking millions of its customers with a bevy of additional fees in the new year. Including a wide variety of modem and cable box rental fees, the latter of which arrive after Comcast worked overtime to kill FCC plans to improve cable box competition. Comcast users still routinely pay an arm and a leg in rental fees for hardware that actually costs very little for Comcast to buy wholesale:

"Equipment rental fees are rising, too. Comcast last year raised its modem rental fee from $10 to $11 a month. The new price list for January 1 lists an "Internet/Voice Equipment Rental" fee as $13. Comcast confirmed to Ars that the modem rental fee is rising $2 a month. Customers can avoid that fee by purchasing their own modem."

There's nothing healthy about a scenario where customers don't know how much they'll pay for service until the bill actually arrives, and face a rotating bevy of covert fees while purportedly under contract. In a country with functional regulators or healthy competition (or hey, both) Comcast wouldn't be allowed to completely make up a bogus fee specifically to help it advertise a lower price. But despite some occasional noise on this front, neither party has given much of a damn about such "creative" pricing. It sends a pretty clear message: ripping off consumers is fine if you're semi-creative about it.

As such, regulatory promises to mandate some transparency on this front come and go without meaningful change, and bills attempting to stop the practice routinely get crushed by lobbyist cash in Congress. The FCC's net neutrality rules included some meager provisions requiring that ISPs being transparent about hidden surcharges, but even those requirements were killed during the agency's net neutrality repeal (at direct Comcast lobbyist behest).

And while Comcast is occasionally singled out for the practice via lawsuits and consumer groups, it routinely tries to insist that socking customers with bullshit fees is just Comcast's way of being "transparent."

Obviously it's not just the cable industry that engages in such nonsense; telecom companies learned the tactic from the banking, airline, and other industries, who similarly get to confuse customers with surprise surcharges with zero meaningful market or regulatory repercussions. From hotel "resort fees" to family-separating airline assigned seating fees, the United States has repeatedly made it clear across industries that lying to consumers about how much they'll pay is now a great American pastime akin to baseball.

Filed Under: below the line fees, broadband fees, broadcast tv fee, false advertising, fees, sneaky fees
Companies: comcast

New York City Hotels Say Obnoxious $25 'Destination Fee' 'Improves The Customer Experience'

from the that'll-work dept

Taking a page from the telecom and banking sector playbooks, New York City hotels have decided to add a $25 "destination fee" just for the honor of being able to sleep somewhere near the audio visual cacophony that is Times Square. Major hotel chains like Hilton, Marriott and Starwood are all adding the new destination fees, which aren't part of the advertised rate -- and are only added to the final tally at checkout. Said fees mirror other "resort fees" used to jack up advertised rates in other destination locations like Hawaii, the Florida coast, or Las Vegas.

In many instances, the fee is being called an "urban destination charge," and is being applied each day of a customer's stay:

"But this week, a guest booking a room at the Hilton New York was alerted as he finalised payment that a “Daily Mandatory Charge” of $25 would be added to the room rate, covering an “Urban Destination Charge”, “premium” internet access, local and freephone calls, and a total of $25 credit for food and drink in the hotel.

The credit, it turned out, is a one-off figure – though the Urban Destination Charge is due every day of the stay."

If you've paid attention to the problems in the telecom sector, you've probably realized that this is now standard industry procedure. Cable and phone companies alike often make up entirely nonsensical fees (with names like the Internet Cost Recovery fee or Broadcast TV fee) with the express goal of advertising one price, then charging another. To add insult to injury, they'll then crow about how their advertised rate has remained the same from year to year. That's been an obvious case of false advertising for going on a decade, yet legal or regulatory accountability for the misleading charges remains elusive at best.

In telecom, the FCC had made a little noise about cracking down on the misleading surcharges in the form of a "nutrition label" for broadband that would clearly disclose any caveats, but that effort appears to have stalled. In the hotel industry where competition makes such action less pressing, the FTC gave hotels a fairly tepid warning about the practice in 2012, stating that the practice of hidden fees "may be deceptive" and "may violate the law." Hints that a new FTC crackdown on the practice was coming similarly emerged last year, only to apparently disappear back into the swamp of regulatory intent and good intentions.

Just like in the telecom industry, when hotels are asked whether jacking up the advertised rate post sale could be construed as predatory and obnoxious, they'll usually trot out some rubbish about how the practice enhances the "customer experience." Take this bit of prattle from Starwood owners Marriott International, for example:

"The Destination Fee was created as a way to lift the guest experience by providing added value to a hotel stay. Each hotel may offer a combination of hotel services (such as dry-cleaning, pressing or a food & beverage credit); local experience vouchers for free/discounted events and attractions (such as city tours), and/or access to fitness programs (such as yoga or cycling) in nearby studios..."The implementation of the Destination Fee gives us the opportunity to test how a bundle of benefits that our research shows are valuable to guests might enhance the stay."

Of course that's bullshit, since not knowing what the hell you'll actually be paying for your room kind of puts a damper on the entertainment value of the whole affair, and users are usually docked these fees regardless of whether they use amenities or not. The goal again is to falsely advertise a lower rate, full stop. That may be a problem for competitors foolish enough to clearly advertise their real rates, since they superficially could appear to be a worse value. On the flip side, hitting your visitors with obnoxious, hidden fees is a wonderful way to help drive business to the share economy competitors these companies have been whining about for the better part of a decade.

Filed Under: destination fee, fees, ftc, hotels, nyc, sneaky fees, times square

Comcast Continues To Insist Its Sneaky, Misleading Fees Are Just The Company's Way Of Being 'Transparent'

from the false-advertising-is-good-for-you dept

We've noted for years now how broadband and cable providers have created a high art out of bogus, misleading fees. Such fees, ranging in name from Comcast's "broadcast TV fee" to CenturyLink's "internet cost recovery fee" -- allow these companies to falsely advertise one price, then sock consumers with a much higher rate once the bill comes due. This allows these companies to not only jack up prices while claiming the don't, but it has the added bonus of making direct price comparisons with competitors almost impossible.

Comcast initially charged $1.50 when its broadcast TV fee first appeared back in 2013, but now charges upwards of $6.50 more per month in many markets -- a 333% increase in just three years. With the occasional exception, regulators and lawmakers tend to turn a blind eye to this practice as little more than pricing creativity. Comcast was however sued for the practice last year, plaintiffs claiming that this practice is not only false advertising, but is primarily designed to let the company raise rates on customers it convinced to sign long-term contracts.

For its part, Comcast has spent the last few years insisting that sneaky, misleading fees are just the company's way of being "transparent" with its users:

"Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes," he said. “In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee."

Yes, nothing says "transparency" quite like an advertised price that suddenly jumps due to a completely manufactured, sneaky fee. In Oregon, customers were just informed that Comcast will be hitting users there in October with a $1.50 increase in the broadcast fee, a $2 increase in the company's regional sports fee (also a focus of the recent lawsuit), and a $1 increase in the cost of modem rental. And again, Comcast is attempting to tell locals this is all part of the company's quest to be more transparent with its users:

"We continue to make investments in our network and technology to give customers more for their money - like faster Internet service and more WiFi hotspots, more video across viewing screens, better technology like X1 and a better customer experience," Comcast Oregon spokeswoman Amy Keiter said in a written statement. The sports and broadcast fees, she wrote, "allow us to be more transparent with our customers about the factors driving price changes, and represent only a portion of our costs of carrying broadcast and regional sports networks."

Apparently, Comcast would have you believe that it's necessary to tack these fees on to your bills to help emphasize the fact that programmers are demanding higher and higher rates for the same service. But even if broadcaster demands are often ludicrous -- that's simply the cost of doing business -- and should be included in the overall cost of service. Comcast also apparently believes its subscribers are stupid enough to not realize Comcast NBC Universal is itself one of the biggest broadcasters in America, and owns most of the regional sports networks it's charging an additional fee for.

Eventually, a regulator or lawmaker somewhere will realize this is a predatory and misleading practice that harms consumers. Until then, Comcast customers not only get a heaping dose of false advertising, but also get to hear that this misleading pricing is for their own good. Enjoy!

Filed Under: sneaky fees, transparency, tv fee
Companies: comcast

Happy New Year From Comcast: Usage Caps, Rate Hikes, And More Sneaky Fees In 2017

from the innovation! dept

Comcast continues to perfect the art of raising rates in a variety of creative new ways. In addition to just straight rate hikes to TV and broadband service, the company has taken to using hidden fees to covertly jack up the cost of service even higher. These fees take some of the cost of doing business and bury it below the line, letting Comcast falsely advertise a lower rate. This is all before you even get to Comcast's slow and steady expansion of usage caps and overage fees, which are just glorified rate hikes being imposed on uncompetitive broadband markets.

This week the company began informing customers that they'll be paying 3.8% more for service starting in the new year. In addition to increases in most of the company's bundles, TV and broadband packages, Comcast will be raising the company's sneaky "broadcast TV fee," as well as the company's ever-skyrocketing regional sports fees:

The Broadcast TV fee is moving from $5 a month to $7 a month, while the Regional Sports Network fee is rising from $3 a month to $5 a month, according to notices sent to customers in several cities. Combined, that's a change from $8 to $12 a month, giving Comcast an extra $48 a year from each customer that has to pay the fees.

Comcast began charging these fees a few years ago, and has increased them quickly. Just over a year ago, Comcast raised the Broadcast TV fee from $3 to $5 and the Regional Sports fee from $1 to $3. The two fees have thus gone from $4 to $12, combined, in little more than a year.

...The Broadcast TV fee was introduced in 2014, initially as $1.50 a month, and the Regional Sports fee was added in 2015 at $1 a month.

You might recall that Comcast is currently being sued over the broadcast TV fee, which simply takes a part of the cost of programming and buries it below the line, again letting Comcast mislead customers as to what the service actually costs in advertising. When the company was criticized back when the fee was introduced in 2014, Comcast tried to claim that hiding the real cost of service was just its way of being "transparent" with consumers. While Comcast's certainly being transparent, it's not quite in the way they meant.

Comcast, for what it's worth, continues to justify the rate hikes with the usual statement about how gosh, programming these days sure is expensive:

"We continue to make investments in our network and technology to give customers more for their money— like faster Internet service and more Wi-Fi hotspots, more video across viewing screens, better technology like X1 and a better customer experience. Unfortunately, the costs we are charged to carry popular networks continue to increase significantly, especially broadcast television and sports programming, which are the largest drivers of increases in price adjustments."

And while Comcast certainly does pay a significant amount for programming, it certainly helps that the company owns NBC Universal, not to mention a number of regional sports networks. But these programming-related fees also aren't the only fees seeing an increase. The company is also informing users that the company's "digital adapter outlet fees" will be increased from $3.49 to $5.49 per outlet, and a fee to reactivate TV service is being bumped from $1.99 to $3.50. And again, this is all before we get into Comcast's usage caps, which penalize users looking to use streaming video competitors.

And if you're looking for things to get better anytime soon, you may be waiting a long while. Comcast may be facing greater competition from streaming competitors on the video front, but its monopoly over broadband is only growing as phone companies like AT&T and Verizon give up on upgrading unwanted DSL users. Combine that with an incoming Trump administration that's giving every indication it intends gut the FCC as a consumer watchdog, and there's going to be less market and regulatory pressure on Comcast than ever to offer quality service and decent customer service at a reasonable price.

Filed Under: data caps, rate hikes, sneaky fees, usage caps
Companies: comcast

Charter Says Its Sneaky, Unnecessary Fees Are A Consumer Benefit

from the this-is-for-your-own-good dept

We've noted for some time how cable providers over the last few years have added a "broadcast TV" fee to customer bills. Such a fee, which simply takes a part of the cost of programming and buries it below the line, lets cable providers advertise one rate, then hit customers with a higher bill. It's false advertising, but you'd be hard pressed to find a regulator anywhere in North America willing to tackle the problem. When Comcast was criticized for the practice two years ago, the company claimed that burying a sneaky new fee below the line was just the cable company's way of being "transparent" with its customers:

"Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes," he said. “In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee."

While it's true broadcasters impose often unreasonable rate hikes on cable companies, the cost of programming is just one of several costs of doing business, and hiding these costs when listing your prices is the complete opposite of being transparent with your user base. Since the fee began popping up in 2014, some cable companies have as much as tripled the fee, which can now be as much as $6 to $8 per customer, per month.

Fast forward to this month when Charter (and now Charter-owned Time Warner Cable) was sued for the practice. The plaintiff in question wasn't asking for monetary damages; they simply wanted to highlight how an estimated 20% of Charter's revenues are now thanks to a practice that lets the cable company "deceive its customers by advertising and promising a lower price while actually charging a higher price." Charter has finally responded to the suit and, like Comcast, is actually claiming that it's misleading its customers for their own benefit:

"Our customer friendly approach includes simplified pricing and packaging with no data caps, no modem fee, no early termination fee and no separate USF [Universal Service Fund] fee. We provide simple to understand bills and want our customers to understand what they are paying for, including the skyrocketing cost of broadcast channels."

Right, but the lack of data caps is because the FCC banned them for seven years as a merger condition. And while Charter is one of the only cable ISPs that rolls the cost of renting a modem into the overall cost of service, breaking out the broadcast TV fee is the exact opposite of that. Hiding a part of your costs outside of the advertised price, then bumping that fee 300% in just a few years, remains false advertising and misleading jackassery by any measure. Leave it the cable industry to try and argue that intentionally misleading you into thinking you're not getting a rate hike this year is some kind of favor.

Filed Under: fees, hidden fees, sneaky fees, transparency
Companies: charter

Comcast Sued For Misleading Fees It Claims Are Just Its Way Of Being 'Transparent'

from the transparently-obnoxious dept

In addition to vanilla price hikes and usage caps and overage penalties, ISPs have spent the last few years borrowing a tactic from the banking industry to covertly jack up the advertised price of broadband service: the completely nonsensical hidden fee. From CenturyLink's $2 per month "Internet Cost Recovery Fee" to Fairpoint's $3 per month "Broadband Cost Recovery Fee," such fees usually just hide some of the cost of doing business below the line, letting an ISP advertise one price, then charge something quite different at the end of the month.

Encouraged by the fact that the FCC can't be bothered to police this behavior, a few years ago Comcast began charging its cable customers a "Broadcast TV fee." At the time, Comcast proudly proclaimed it was just being "transparent" by taking a portion of the retransmission fees paid to broadcasters and putting it below the line:

"Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes," he said. “In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee."

The problem with this logic is two fold. One, the money Comcast pays to broadcasters for programming is the cost of doing business as a cable company and should be included in the overall bill. Two, this is effectively little more than Comcast advertising a lower rate, only to shock users with a higher bill. It's false advertising, which is about as far from being "transparent" with consumers as you can get. Yet again, you'd be hard pressed to see the FCC so much as mention this sort of behavior, despite occasional, breathless announcements that the regulator is very concerned about transparency in the cable and broadband sector.

Fast forward to this week, when eight plaintiffs filed a class action lawsuit against the cable giant alleging consumer fraud, unfair competition, unjust enrichment and breach of contract for trying to covertly raise rates while the users were supposed to be under a locked-in rate:

"Lead plaintiff Dan Adkins, of California, says Comcast started using "a shady backdoor way to increase prices" in January 2014. He says the company added a "newly invented" Broadcast TV fee to cable bills without clearly disclosing the price hike to customers or updating its advertisements to reflect the new prices. "Comcast not only charged the fee to new customers, but also added the charge to the bills of existing customers in violation of their contracts which had promised a flat monthly rate for the term of the contract," Adkins says in the 79-page complaint."

Like all Comcast pricing, the lawsuit also points out that Comcast has relentlessly raised the fee from $1.50 when introduced, to $6.50 per month this year, a 333% increase in just three years. And while FCC data makes it clear that programming retransmission fees are skyrocketing, again -- that's the cost of doing business as a cable company (also remember that Comcast NBC Universal is also a broadcaster). The lawsuit is also quick to point out that Comcast is among several cable companies that began charging regional sports fees last year. In Comcast's case (as the owner of Comcast Sportsnet), the lawsuit notes how that fee was also bumped by 350% in just a few years, from $1.00 to $4.50 per month.

Trying to mislead customers by advertising one rate -- then socking them with a notably higher bill -- doesn't seem like the actions of a company that repeatedly insists it's dedicated to fixing some of the worst customer satisfaction ratings of any company, in any industry in America.

Filed Under: broadband, fees, hidden fees, sneaky fees
Companies: comcast

Washington Post Charges An 'Activation' Fee To Let You Pay Them To Get Around Their Paywall

from the how-nice dept

We're still pretty skeptical about paywalls for most newspapers, because they really tend to limit the audience for your offering, and limit people sharing that content as well (which is pretty important for growing your audience these days). But, some newspapers have really embraced them, including the Washington Post, which lately has ramped up its paywall efforts. And, apparently with that, come sneaky fees. First noticed by an editor at the WSJ (another paywall site, though one that has been designed to be much more porous), Tim Hanrahan, it appears that the Washington Post now has an "activation fee" to subscribe to get around the paywall: Of course, we've been reporting on how telcos and broadband providers have made an entire (large!) business out of sneaking in bogus extra fees for well over a decade. As we noted back then, many of these tack-on fees are really so that the service provider can advertise much lower fees than they're actually charging. It certainly feels like misleading advertising, though the FTC doesn't seem that interested in getting involved.

Of course, we also wondered, all the way back in 2004, when these kinds of bogus fees would start spreading to other businesses.

"Perhaps other companies should get into this game as well. Want a pizza pie? It's just $3, but there's a $3.50 "crust fee," a $9.38 "oven fee," a $4.50 "service fee," and a $2.18 "cleanup fee." Plus tax."

Not too many other businesses have gone down that road... but I guess the Washington Post has decided to leap in head first.

Filed Under: activation fee, fees, journalism, paywall, sneaky fees
Companies: washington post

As Time Warner Cable Defends Merger Plans, It Keeps Gouging Customers With Obnoxious New Sneaky Fees

from the surcharged-to-death dept

For years now, the broadband and TV industry has hammered its customers with all manner of creatively sneaky fees, buried below the line to jack up consumer prices -- while leaving the advertised price alone. It's clearly false advertising, though regulators have seen fit to ignore these practices as business as usual -- even though many of the fee names have become increasingly, aggressively ridiculous. CenturyLink, for example, charges its users a $1 "Internet Cost Recovery Fee" and a $1.55 "Non-Telcom Services Surcharge" -- both fees are little more than pure profit and entirely untethered to logic or any actual service rendered.

Other ISPs happily charge customers a non-government mandated "regulatory recovery fee," purportedly to counter ambiguous government regulation -- despite a decade of being deregulated. The latest obnoxious fee trend is a "broadcast TV fee" that has been showing up on many cable customers' bills over the last year. This too is little more than the cable company breaking out a portion of programming costs and burying it below the line -- again to give the illusion of a lower advertised price.

Despite the fact that Time Warner Cable is putting on a polite face to get its $45 billion fusion with Comcast approved, it's certainly no exception to this aggressive sneaky fee parade. The company was just sued for billing shenanigans and the vast difference between promotional and real world prices. Undaunted, the company informed customers this month that it's socking them with a new $2.75-per-month sports fee, as well as bumping its broadcast TV surcharge from $2.25 to $2.75. Like most cable operators, Time Warner Cable is quick to blame broadcasters for the increases:

"Time Warner Cable said broadcast fees have risen more than 60% in the past two years and that the cost of cable sports channels has increased 91% since 2008. The company said the charges only represent a fraction of what it pays to programmers."

Amusingly unmentioned is that Time Warner Cable itself owns Time Warner Cable Sports Net and SportsNet LA -- two sports channels directly responsible for some of the highest sports programming costs in the nation. Despite blaming programming costs, Time Warner Cable is also quick to bump its monthly modem rental fee from $6 to $8 (though, fortunately users can buy their own modem to avoid this charge). All in all, it's part of the cable and broadband industry's ingenious plan to self-immolate and mindlessly raise rates in the face of competition from disruptive new viewing options.

These costs not only are an assault on customers in uncompetitive TV and broadband markets, but they skew all policy conversations on industry pricing because they're historically not included in price analysis. In other words, all of those studies that already indicate how U.S. consumers pay significantly more for broadband and television aren't even including this layer of creative pricing fat companies pile on top. One can only guess the new heights of obnoxious fee creativity obtainable by a larger, combined Comcast and Time Warner Cable. Ready for the "Shut up, it's because we can" fee?

Filed Under: fees, sneaky fees
Companies: time warner cable

Naveen Jain's Latest Quest For A Trillion Dollar Company May Be In Trouble

from the how-about-that? dept

Naveen Jain is nothing if not confident in himself. Back in 2000, as founder and CEO of InfoSpace, he famously declared both that InfoSpace was bigger than the internet, and that it would be the world's first trillion dollar company. More specifically, he said: "There are two kinds of people in this world... those who don't believe in God, and those who believe in God and InfoSpace. That's OK -- the nonbelievers will be converted when we become a trillion-dollar company." Now, it's one thing to be confident, but it's another thing to be cooking the books to try to get there. After InfoSpace imploded and Jain was sent packing, an investigative report uncovered all sorts of evidence about how much of InfoSpace's revenue was a huge scam, involving outright lies and "lazy susan" deals, where InfoSpace would "invest" in a company, who would turn around and pretend to buy InfoSpace services as a way to boost revenue.

Jain moved on and started a new company called Intelius, which claims to help you get background information on people -- though it's not hard to find many, many, many people who claim that the information is next to useless. Still, it's managed to bring in a ton of revenue, and with that has been planning to go public. However, Mike Arrington did a fantastic bit of sleuthing to discover that much of that revenue seems to come from a very questionable method.

Basically, Intelius gets you to cough up some money for the "information" it has on someone. Afterwards, it asks you to take a short survey, promising to give you $10 for your time. The survey is quick, but down below, in tiny gray-colored hard-to-read print, it notes that in submitting the "survey," you're actually agreeing to sign up for a $20/month "service" that, according to Arrington, doesn't appear to do anything other than charge you $20/month. As for that $10? Well, it's never mentioned again (nor is the $20/month you'll be paying... other than on your credit card bill). The "service" is a separate company (though Intelius gives them your credit card info), but clearly pays Intelius a fee for each signup. Arrington does a few back of the envelope calculations and figures that nearly all of Intelius' "growth" comes from these scammed deals, which, some claim are also difficult to cancel.

The whole thing stinks, and you would think that, given the situation with InfoSpace, the backers of Intelius' IPO would have done a bit more due diligence before agreeing to take the company public.

Filed Under: ipos, naveen jain, sneaky fees
Companies: infospace, intelius