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.

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

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61 Comments
Anonymous Coward says:

They're just....

…following in the footsteps of the power companies since the “deregulation”.

Take a close look at the below the line fees on your power bill – there’s some real artistry in the wording of the fee descriptions. Especially the one where they can charge you more if you don’t use as much electricity as your neighbors…

Anonymous Coward says:

Re: fees

and look at the government taxes/fees on your electric/water/gas/phone utility bills — they are usually much higher than normal retail sales tax percentage. I pay a 15% “sales” tax for the privilege of having drinking water in my house, provided by my local government. (don’t look at your cellfone government taxes/fees — scary)

Anonymous Anonymous Coward (profile) says:

Re: They're just....

"…"creative" pricing…"

I love it. Now we need to have some kind of competition, annually, for the most ‘creative’, "creative" pricing. Bonus points for effective implementation and more bonus points for the percentage of annual increase. This competition should be along the lines of the Oscars, or Emmy’s or whatever. Any reality TV producer would have sufficient competence to put on such a show. I wonder what their TV viewership ratings would be? Is there a chance that they could get fans rooting for one or another? And the envelope please…

I.T. Guy says:

Re: They're just....

Better yet go with an “alternative” then watch your bill jump 300% with no explanation. Other than the bullshit they tried to give me about “market rates.” I said what market force caused a 300% increase? They couldn’t answer that because it was bullshit. PECO was wonderful about handling these charlatans as they were still responsible for billing and shut-offs. I had to open a complaint and it was not until then the charlatans wanted to pay nice, give me my money back and let me go back to PECO as a provider.

“Especially the one where they can charge you more if you don’t use as much electricity as your neighbors”
I’d like to see that one.

Anonymous Coward says:

Re: They're just....

I’m pretty sure that that provision is pretty much only used on commercial accounts where they have you submit a load sheet, and only if you’re drastically off what you told them. Now, drastically more than your neighbors I could understand(unless they have some portion of the maintenance rolled into the KWH rates, where they have a minimum amount they get from each customer, as it’s roughly what it costs to support one customer. But that arrangement is stupid, and whatever PUC approved it is stupid).

Remember, every fee, every cent on your bill is approved by a public committee in a rate hearing, where there is opposition to each increase. Heck, sometimes the utility does actually oppose rate increases(usually when the money goes to a third party, because they’ll be blamed for the increase, and not get any money out of it. They’re opposing a huge premium over market for solar where I am, because they don’t want to deal with the hatred that adding a third to most people’s bills will cause.”

I’m not saying they’re even good, just that they aren’t allowed to just make stuff up, and they tend to have to get it through an adversarial process to add it to your bill. Oh, and the reason behind the underuse fee may be related to phase balance, where if they aren’t close, they damage equipment and cause power quality issues. Which might be a legitimate reason, or it could be BS. I have no idea what your utility does, only what mine does.

Bamboo Harvester (profile) says:

Re: Re: They're just....

No, National Grid applies that use fee under something like “ESDR”.

Basically, if they sell LESS power to a neighborhood than they expected to, they can charge a sliding amount per customer to bring that customer’s bill up to their “projected average usage cost”.

PUC passed it because it works the other way as well – if they sell MORE power than they expected, they reduce the bill to bring it to the “projected average”.

Of course, the bill is almost always something like $20-50 more for it, on very rare occasions it’ll be -$3.28 or the like.

Bamboo Harvester (profile) says:

Re: Re: Re: They're just....

Don’t forget Meter Rental – $17-25 per month for the privilege of having a meter costing less than a hundred bucks hanging on your house.

Had a service line break once. Line from the pole to the house. It belongs to the power company. But if it needs to be replaced, they charge you several hundred dollars.

Found out recently the Village I live in has a similar setup with the sewer system. Any damage to your house connect you have to pay them (at higher than Union Scale) to repair, even if the problem is in the connection under the road.

Anonymous Coward says:

no honest Americans

rrr “”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””

guess there are no honest people left in U.S.

too bad, seems like honest businessmen who charged fair prices for good services/products would have a strong competitive advantage over the sleazy crooks in a specific business category

must be something blocking normal market competition.. what could that be

Anonymous Coward says:

Re: no honest Americans

seems like honest businessmen who charged fair prices for good services/products would have a strong competitive advantage over the sleazy crooks in a specific business category

Not really. The dishonest businessperson would use underhanded and/or anti-competitive tactics to interfere with the honest businessperson’s enterprise (for example, frivolous lawsuits to deplete funds, getting politicians to pass laws favoring the dishonest business and/or making it more difficult for the honest business to compete effectively). The honest businessperson would never use such tactics since they’re honest, and would therefore be at a disadvantage.

Hmm this sounds familiar…

Anonymous Coward says:

Assigned seating fees a bad example

The seat reservation fee sounds like an optional thing. It’s bad for families, but isn’t false advertising if you can pay the advertised per-seat fee without the surcharge (and if any failure to get your reserved seat gets you a refund). Compare that to telling Comcast you want the advertised price with no sports fee added.

Melvin Chudwaters says:

Contract?

What contract?

Does the customer sign and return a legal document? Does this document in any way protect the customer (or give them what I think the lawyers call “consideration”)?

I know with certainty that if you get a business account with cable providers, they do the contract properly (if digitally). But most people have residential accounts.

It’s not even as if these are anything like so-called cell phone plans; the carrier is usually fronting the cost of a $500-1000 phone. It’s not as if you get to keep your cable box once the two years is up. It’s not as if there is some hookup charge to recoup; the coax has in most cases been there for years.

Falsely asserting contract rights should be a felony.

Anonymous Coward says:

Re: Re: Re: Contract?

If there’s no alternative to renting the boxes, they should be included in the advertised prices. The article says the modem fee is optional, which would make it fair to exclude from the advertised prices and from term contracts. If term contracts don’t cover the rental, there’s no reason the price shouldn’t be able to go up during the term, and there’s also no reason the subscriber couldn’t return it halfway through.

James Burkhardt (profile) says:

Re: Re: Re:2 Contract?

Actually, for comcast they are. The DVR is what comes with the rental fee, technically. However it should be a flat contracted rate, but it technically can. And you can get an outside cable box or DVR, but years of lies (you must use our hardware) and cheap, convenient rental fees killed most competitors, and raised prices on competing hardware making it hard for most consumers to take advantage.

Melvin Chudwaters says:

Re: Re: Contract?

It is a problem. Consideration needs to be something more than what is available on a transaction basis.

If you called Comcast up and said “I need cable hooked up for 2 months but then I’ll be moving out”… they’ll set it up for you. But they won’t have a specially written 2 month contract written up. And they won’t say “but we only do minimum 12 (6, whatever) contracts”.

There is no contract here. There’s no contract when you buy a cheeseburger at McDonald’s, and McDonald’s would be laughed out of court if they claimed that that was consideration that made their “no one has to sign it” contract valid.

We live in a world where the definition of the word “agreement” has been twisted until it means nothing anymore. You’ve agreed to agree that I’m correct when you read my comment.

Anonymous Coward says:

Re: Re: Re: Contract?

There’s no contract when you buy a cheeseburger at McDonald’s

The US Supreme Court calls that an implied-in-fact contract. Restaurants are a canonical example. If you order the cheeseburger, they hand it to you, and you walk out without paying, you’ve broken the contract and can be held to account (it can’t necessarily be called "theft" when they’ve made it just for you and handed it to you). Neither side gets to make up the terms; they have to match the ordinary expectations.

James Burkhardt (profile) says:

Re: Contract?

So, the form contract you are supposed to read before you sign up for service is a valid contract. The customer pays a monthly fee, and gets in return the service laid out in the contract. (the ‘consideration’)

The galling issue, what i believe to be a contract failure, is the initial contract generally spells out a price, guaranteed for a portion of the contract, with an unknown price after the end of that period while the customer is still bound to pay. Comcast has generally moved away from that particular for of gouging (waiting until your minimum contract is up to start rasing rates), but the contract only guarantees service price. It binds you to a variety of non-advertised fees raising the cost, fees which can change.

The cable modem and cable box rental fees are the worst, given the up front costs of a modem and the cost and poor selection of a third party cable box. But any fee below the line is not a government tax. Its a because we can fee.

Anonymous Coward says:

Re: Re: Contract?

But any fee below the line is not a government tax. Its a because we can fee.

Taxes shouldn’t be special either; in most countries, they have to be included in advertised prices. (They’d still be a little special in that the fees could change during the contract period as tax rates change.)

James Burkhardt (profile) says:

Re: Re: Re: Contract?

I agree, however we can’t blame Comcast for the legal and regulatory environment that has existed since at least the beginning of self service retail that states that advertising the price before government taxes is legal.

In your quote I was actually noting that if it is labeled a ‘fee’ then it is the provider charging you that below the line, which seems even worse as at least when its a government mandated tax you can, in theory, know the applicable taxes before shopping, and factor that in.

Anonymous Coward says:

Re: Re: Re:2 Contract?

we can’t blame Comcast for the legal and regulatory environment that has existed since at least the beginning of self service retail that states that advertising the price before government taxes is legal.

I can and do blame Comcast for their actions, i.e., for doing this because they can get away with it. They can share the blame with everyone who does the same, which is pretty much everyone.

No regulation requires them to advertise pre-tax prices, and it’s not even clear that it’s technically legal. They’re taking advantage of lax regulation.

Anonymous Coward says:

Re: Re: Re:2 Contract?

when its a government mandated tax you can, in theory, know the applicable taxes before shopping, and factor that in.

I could say it’s the opposite. The government has the power to change taxes and apply the new rates to ongoing contracts, regardless of what those contracts say; you can’t know what the rates will be in a year. Comcast can only adjust fees as specified in the contract. In either case, a tenacious person will be able to determine the relevant rates before signing up.

Anonymous Coward says:

Re: Re:

The latter is unlikely, as it would drive away sales. The reason that fees work on things like internet and other utilities is because they get tacked on after you’ve signed up and used it for a while and because you really don’t have a choice about it.

For a store to add on additional fees at the register is likely to cause someone to just not buy and walk away, which is both possible and easier to do. Even without BS fees, people leave items at the checkout on a fairly regular basis just because it turned out to be more expensive than they expected for whatever reason.

With stores, the customer dissatisfaction caused by the practice is self-correcting. With ISPs, regional monopolies mean that customer dissatisfaction doesn’t have the clout it should.

Anonymous Coward says:

Re: Re: Re:

While there is technically no “profit motive” that doesn’t mean that city governments spend the money wisely. For instance, city-owned buildings are often far more fancy and expensive than they need to be. Perfectly functional buildings are torn down and replaced just because someone thinks they’ve grown out of style, and far too many construction contracts end up being awarded to friends, family, and supporters of city officials. Money-losing building projects and land givaways get pushed through under the guise of “attracting” business” or helping promote tourism or whatever else. Generally speaking, nothing ever gets done in the government unless some insider profits from it.

Anonymous Coward says:

Cox cables are a bunch of cocks too. Last summer they added a 1 TB data cap to my $80/mo 100 meg service. They also added it to even their 1 GB service. They then add a new “unlimited” data plan for $50 more a month. $130/mo for internet that 3 levels down from their fastest because they have a monopoly and successfully sued Google from putting fiber into our state. Ridiculous. So they are going to milk the consumer for as much money as can through fees and other backhanded ways of raising rates.

stderric (profile) says:

They hide all sorts of stuff below the line. My old roommate Ted was in charge of the cable/internet service, and two days after signing up with Comcast the installation tech showed up. I remember it like it was yesterday… [distorted dissolve to flashback:]

TECH: Uhh, can I have your liver?

TED: My what?

TECH: Your liver. It’s a large, ehh, glandular organ in your abdomen.

TED: Yeah, I know what it is, but… I’m using it.

TECH: What’s this, then? Mm?

TED: A Comcast contract.

TECH: Need I say more?

TED: Listen, I can’t give it to you now. It says, ‘in the event of death’.

TECH: No one who has ever signed up with Comcast has survived.

[TED bleeds to death while arguing with Customer Support on phone]

ECA (profile) says:

DID WE HAVE rules/regulatoins/???

about transparency??

Why do we have to SUE a corp to get its books to read, and then try to figure out the method to the madness of their book keeping..

I still stand by my concept that the Gov. should make a Business format that ALL corps must live by…
Dont regulate it STAMP IT IN STONE..

I really wonder how the corps do in other countries..I dont hear as much Bitching as I do here in the USA…
REMEMBER these are not small corps..they are around the world, in 1 way or another.

lucidrenegade (profile) says:

I just booked a flight for my mother on Allegiant. Initial price for round trip was $200 – not bad. As I started clicking the screens to book the trip:

*Picking you seat fee: $11 – $21 per flight, back -> front
*Each carry on bag – $20 – $50, depending on buying at booking or at the airport
*Each checked bag – $30 – $50, depending on buying at booking or at the airport

Taking a single carry on and choosing an isle seat in the middle of the plane added another $69…

Anonymous Coward says:

Re: Re:

I’ve flown on Allegiant before, and was there when someone was complaining to the flight attendants about how they were being “nickel and dimed” from the various fees you mention. The flight attendant’s response was that if they included all the fees, a ticket with them would cost about the same as a ticket on a major airline, but by breaking it all out, they could charge people a smaller fare who didn’t care where they sat or didn’t have baggage to check. I found that to be a reasonable explanation.

bhangad (profile) says:

If there’s no alternative to renting the boxes, they should be included in the advertised prices. The article says the modem fee is optional, which would make it fair to exclude from the advertised prices and from term contracts. If term contracts don’t cover the rental, there’s no reason the price shouldn’t be able to go up during the term, and there’s also no reason the subscriber couldn’t return it halfway through.

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