Hidden Fees Mean US Cable & Broadband Bills Can Be 45% Higher Than Advertised

from the ill-communication 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. These companies will then brag repeatedly about how they haven’t raised rates yet this year, when that’s almost never actually the case.

Despite this gamesmanship occurring for the better part of two decades, nobody ever seems particularly interested in doing much about it. The government tends to see this as little more than creative marketing, and when efforts to rein in this bad behavior (which is really false advertising) do pop up, they tend to go nowhere, given this industry’s immense lobbying power. And given the US broadband sector remains painfully uncompetitive in most markets, actually voting with your wallet is often impossible.

How bad is the problem, really? A new study by GlobalData found that what you’ll actually pay to your cable TV or broadband provider can often be upwards of 45 percent higher than the advertised price:

“In some cases, the final cost is as much as 45% over the advertised rate. For example, Xfinity?s $40 ?Starter Internet plus Basic? TV bundle jumps to $58 per month once the additional $18 in equipment costs are added. Prices can also vary based on location.?

According to GlobalData?s research, Verizon had the highest additional costs in August at $24 per month, followed closely by Frontier and Optimum with around $17-$18 in additional equipment fees. AT&T and Google Fiber offered the most cost transparency in bundle price with zero additional equipment or technology fees.

AT&T is let off the hook here and they shouldn’t be. This is a company that recently tried to charge its broadband customers upwards of $500 more a year if they simply wanted to opt out of snoopvertising and online data tracking. The broadcast and cable fee problem isn’t a subtle one. Companies like CenturyLink have gotten so cocky they’ve charged their broadband users a “internet cost recovery fee,” which it claims helps the ISP “defray costs associated with building and maintaining CenturyLink’s High-Speed Internet broadband network.” Except that is, in case you didn’t know, what the rest of your damn bill is for.

Of course it’s a problem that’s everywhere, and not just in the telecom sector. Hotels routinely still charge users obnoxious “resort fees” (legislation to hamper those efforts exists but faces an uphill climb against lobbyists), and airlines and banks have of course perfected the nuisance as well. But both parties appear to have embraced the practice as a form of capitalistic creativity, despite the fact that when you strip away the bullshit justifications, it’s little more than false advertising. And, apparently, most US regulators and lawmakers are cool with that.

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Companies: at&t, centurylink, comcast, frontier, verizon

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Comments on “Hidden Fees Mean US Cable & Broadband Bills Can Be 45% Higher Than Advertised”

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37 Comments
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BobButtons says:

It shuts them up on the phone.

If/when I ever need to call Spectrum about my account, they naturally try their best to upsell me since I’m an Internet-only customer. They love the term "plan guarantee" as if locking me into a plan rate means anything at all when a third of the bill is below the line. Despite no interest in adding services, I’ll ask if their ‘plan guarantee’ prevents the bill from skyrocketing at the company’s will every time they jack up their self-applied fees as they’ve done numerous times in the last couple years alone. "Does your plan guarantee come with a bill guarantee?" Of course they have no answer to that because it doesn’t so ‘plan guarantee’ means absolutely zero since they still have the freedom to increase your bill whenever they want.

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Noe Subject Allowed says:

AGAIN you rail against NON-GOOGLE CORPORATIONS. You PIRATES keep DEMANDING lower prices for other people’s WORK, while REFUSING to punish TROLLS for insulting me.

You won’t CHASE me away, ankle-biters! HOOT HOOT HOOT!

(TWENTY-EIGHTH attempt just to get in because Maz is SCARED of my TITLES. HOOOOOOOT!)

Anonymous Coward says:

Re: Re: Re:2 Sales taxes

Your spending is someone else’s income so yes it is taxed again.

Maybe. It’s semantics whether a tax rate of 0% counts as "taxed again", and a lot of people—particularly part-time workers—pay zero or negative income tax. It’s not reasonable to expect sellers to collect the tax data of everyone they pay to tell you the amount. A sales tax, by contrast, is easily quantifiable and is collected directly by the seller. Worldwide, it’s often/usually included in the advertised price, with few problems.

A Guy says:

Re: Re: Re:3 Sales taxes

I grew up in one of the traditional high tax states that cannot seem to stop growing its state debt no matter how much tax they raise. I think it’s above 1 trillion just at the state level now, unless they did some budget cuts and restructuring since I stopped paying attention which I doubt.

Anyway, there is no such thing as 0% income tax there. Last I checked, everyone had the same rate on all income no matter how much or little you make. Make 1000 dollars at a part time job as a teenager, you pay the same rate as everyone else. (if it’s reported and you’re sent a tax form anyway)

Anonymous Coward says:

Re: Re: Re: Sales taxes

Source of income are taxed, not the things you spend on

It’s almost the same, only much worse. When the balance sheet is complete you’ve still been taxed n% for that widget you bought. But you’ve also been taxed n% on the money you put away in savings, n% on the money you lent to a friend and n% on every other dollar you earned before you’ve had a chance to spend any of it. Why anybody is in favor of income tax versus sales tax is a mystery.

urza9814 (profile) says:

Re: Re: Re:3 Sales taxes

In every case that I’ve seen, sales tax is only applied to "luxury" items, the same way income tax generally only applies to above poverty level income. So someone who spends their entire paycheck on rent and groceries likely isn’t paying a dime in sales tax.

But sales tax benefits the rich in a different way. The poor spend more than they save and end up in debt; the rich save more than they spend and end up with a nice bank balance. So ignoring the typical exceptions, the poor would pay sales tax on their complete income or more, while the rich would almost never pay sales tax on anything close to their complete income. Considering investments as a "sale" would correct some of that imbalance, but you’ll never get rid of all of it.

Gary (profile) says:

Re: Sales taxes

The USA is one of the few places in the world where companies can advertise pre-tax prices.

By law they can’t advertise the price to include sales tax – for good reasons. Not everyone pays sales tax, and the tax varies from county to county. And it isn’t part of the "Price." It’s a separate item levied by the state and county.
But it’s not something that is going to catch anyone by surprise. At least anyone who has been paying sales taxes for their entire life!

Unlike the mystery line items charged by hotels and cable companies. They try to imply this is some sort of regulatory fee, not just a price hike that goes straight into their pockets.

Anonymous Coward says:

Re: Re: Sales taxes

But it’s not something that is going to catch anyone by surprise. At least anyone who has been paying sales taxes for their entire life!

It catches Europeans by surprise—they’ve paid sales tax all their lives, in much higher amounts than Americans, but always included in the price. On international purchases, those prices may need adjustment—you might pay 20% less than advertised if an EU company ships to America.

But really, even locals are caught by surprise all the time. Very few people know the exact rules about what’s taxable at what rates, especially when traveling out of state. Food taxability is often complex. Just last week there was a CBC story about Wal-Mart charging tax incorrectly in Canada (few provinces enforce tax-inclusive pricing), for quite some time before anyone noticed they were paying more than was listed on the price tag.

A Guy says:

Cable Ripoff

Mediacom has been ripping off my mom for over a decade and she didn’t realize it because she doesn’t use the internet connection in a high bandwidth way since her retirement.

She was paying for 100Mbs down and 5Mbs up but it was magically downgraded to 60Mbs without explanation. I have now checked it for her and it in fact gives 1.5Mbs down on a good day and .25Mbs up. I don’t even know who to complain to in the government due to the fcc’s current attitude on the situation but mediacom gets hundreds of dollars a month for services we don’t think they ever delivered since my mom retired from John Deere.

Anonymous Coward says:

If we saw this elsewhere...

If we were to see this sort of shenanigan elsewhere, say for example, at the supermarket, there would be plenty of yelling and screaming…

Just imagine being able to buy Tomatoes for 79 cents a piece (according to the price tag), but then when you get to the register, there’s an additional 59 cents billed for ‘upgrading and maintaining farming equipment’ and additional 19 cent ‘Required by act 39.1 B fee’ … not to mention that there would also be whatever sales tax and possibly a fee to bag it and for the bag itself…

Yeah, I don’t think that sounds reasonable at all, do you?

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