Charter Spectrum Keeps Mindlessly Jacking Up Its Bullshit Fees

from the false-and-deceptive dept

When Charter Communications (Spectrum) proposed merging with Time Warner Cable and Bright House Networks in 2016, the company repeatedly promised that the amazing "synergies" would lower rates, increase competition, boost employment, and improve the company's services. Of course like countless telecom megamergers before it, little if any of those promises actually materialized.

Instead, the company quickly set about raising prices to manage the huge debt load. And its service has been so aggressively terrible that the company recently almost got kicked out of New York State, something I've never seen in 20 years of covering telecom. All the while, the company continues to not only jack up its standard pricing, but the sneaky fees it uses to advertise one rate, then charge users something else when the bill actually comes due.

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 that gives much of a damn about the practice, be it in telecom, cable TV, the airline sector, or anywhere else. Culturally, American "leadership" appears to view such fees as the pinnacle of capitalistic creativity.

So it just keeps on going. The Los Angeles Times notes that Spectrum is informing its already angry customers that they'll soon be facing yet another $2 monthly hike in the company's broadcast TV fee, on the heels of another hike just last fall. The fall hike bumped the fee 12% to an additional $8.85 per month. This latest hike bumps it another $2 (20%) to $12 per month. And again, this is just for the cost of programming, something you're supposed to have already paid for in your base, above the line bill.

All told, the company nets quite a significant profit from this tap dance, notes the Times David Lazarus:

"That 20% fee increase means big bucks for Charter. The company reported Thursday that it had just over 16 million residential pay-TV subscribers as of the fourth quarter of last year.

Hitting up each of them for an extra $2.04 a month means Charter, the country’s second-largest cable company, will be raking in an additional $391 million in annual revenue, on top of the tens of billions of dollars it already earns."

Keep in mind, this is a company facing unprecedented competition by cheaper, more flexible streaming alternatives. In a functioning, healthy market, you'd either have competition or moderate regulatory oversight applying some pressure to protect consumers. But telecom, cable, and broadband is far from healthy. It's a coagulation of natural broadband monopolies that also sell video, but have such entrenched power over state and federal lawmakers (aka regulatory capture), efforts to actually protect consumers from this nonsense wind up being few and far between in most states.

Until we see somebody in a position of regulatory authority actually crack down on this obvious practice of false advertising, it's pretty clear American leadership's breathless dedication to things like transparency and consumer protection are just empty lip service. Whether we're talking about hotel resort fees or the laundry list of annoying airline fees, we've culturally embraced the idea that false advertising and nickel-and-diming captive customers is not only ignored but actively encouraged. Somebody wake me up when that changes.

Filed Under: broadband, broadcast tv fees, competition, fees, price hikes, tv fee
Companies: charter communications, spectrum

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