The Cable Industry's Latest Lame Argument: We're Burying Sneaky Fees In Your Bill As Part Of An Effort To Be More Transparent
from the when-price-gouging-is-altruism dept
While banks pioneered the use of sneaky fees back in the 80s, the broadband industry has been taking the practice to an entirely new level. Whether it’s “regulatory recovery fees,” “Internet cost recovery fees,” or “non-telecom services surcharges,” gouging customers with nonsensical below-the-line fees has become an art form for the TV and broadband industries as they work to raise rates while leaving the advertised rates the same. In addition to generating major revenue (Comcast makes $300 million per quarter from modem rental fees alone), it allows a cable or ISPs’ lobbyists and policy wonks to downplay soaring TV and broadband rates since the real prices (including fees and surcharges) usually aren’t even actually being analyzed.
In addition to soaring cable modem fees, the last year has seen a spike in two new sneaky fees: a “broadcast TV surcharge” and the addition of new sports programming fees. In both instances, companies are taking the cost of doing business (programming costs) and burying it below the line so they can misleadingly advertise a lower price. It’s false advertising, and it’s sleazy, yet the industry’s latest defense of this practice is — amazingly enough — that they’re just interested in being transparent for the benefit of the consumer:
“In a statement, Comcast spokesman Steve Kipp said the charge is due to broadcast ?retransmission costs,? which have more than doubled in recent years. “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.?
You see, we’re not raising prices because we’re raising prices in a more sneaky fashion! Now if you would be so kind, could you please applaud us for being transparent? Comcast’s defense appears to have now become the industry’s standard talking point. Defending its increase in all the same fees, Time Warner Cable tells a similar story to the Los Angeles Times:
“Dennis Johnson, a Time Warner Cable spokesman, defended the higher modem-rental cost by pointing out that the fee for Internet access hasn’t gone up ? yet. The company’s last increases for various Internet service levels was in March. “There is no change in the price of Time Warner Cable Internet plans, although speeds have increased,” Johnson said…”Our fees paid to local broadcast channels have soared 60% the past two years alone, and the cost of cable sports networks has increased 91% since 2008,” Johnson said. “We think it’s important to show customers the impact of these rising costs through a specific item on their bill,” he said of the charge for sports channels.”
In other words, the use of sneaky fees is a community service. Cable operators offered up a similar justification to Bloomberg in regards to the use of new regional sports fees:
“The rising cost of sports programming isn?t new, but it?s escalating dramatically, and we think that it?s important to show customers the impact of these rising costs through a specific item on their bills,? Amirshahi said in an e-mail. Cablevision, in a statement, said that their rate increases are ?only a fraction of the rising costs of sports and other programming.”
In addition to the pretense that these companies are helping consumers by bullshitting about their advertised price, they’d also have you ignore the fact that, in many instances, they are the sports broadcaster that’s busy raising rates. Most cable operators now own regional sports broadcasters, and they’re frequently among the most egregious when it comes to pushing higher and higher rates for the same content. As it stands, the lack of regulatory attention to these practices means we’re only going to see the industry get more creative moving forward. So what’s next? Passing on installer gasoline costs? An extra surcharge for talking to an actual human being? A “technician calorie expenditure surcharge?” The future of bullshit fees is wide, wide open.