It’s 2022 And Bullshit Cable TV Fees Are Somehow Still A Thing
from the fees-fees-and-more-fees 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 falsely claim they haven’t raised rates.
A 2019 Consumer Reports study found that about 24% of consumer bills are comprised of bullshit fees, generating cable giants $28 billion in additional revenue annually. The problem is just as bad over in broadband (see Centurylink’s utterly nonsensical “Internet Cost Recovery” fee).
Often cable and broadband companies will try to give such fees official sounding names like “regulatory recovery” so that consumers falsely blame government for being nickel-and-dimed. But between TV fees, hardware fees, usage fees, and other surcharges, bundled customers dole out a small fortune every year for absolutely nothing.
It’s fraud and false advertising, but fraud and false advertising that has somehow been normalized over decades in the United States.
One particularly annoying fee is the “broadcast TV fee” cable providers tack onto your bill. It’s basically just a portion of the cost of programming, again broken out and hidden below the line so they can falsely advertise a lower rate. Charter (Spectrum) this week informed customers that the broadcast TV fee on their bills will soon be jumping to $21 a month:
Effective March 18, Spectrum’s “Broadcast TV Fee” will increase by $3. Customers will have to pay $21 per month just to be able to watch their favorite local, over-the-air television stations.
The Broadcast TV Fee has been raised each of the last two summers; most recently, it was increased to $17.99 per month in June 2021. This means that Spectrum’s average surcharge for local, OTA stations is rising an average of $36 per year.
Competition really hasn’t hampered this behavior, in part, because many users still feel like they must subscribe to traditional cable to watch the full array of live sports options that aren’t consistently available on streaming. And again, regulators have generally chosen to turn a blind eye to this practice, much as they have in the airline, hotel, banking, and countless other industries.
The closest we’ve got to meaningful action has been the Biden FCC’s decision to revisit “nutrition labels” for broadband. But that doesn’t apply to television bundles, and while it’s helpful to bring more transparency to precisely how you’re being ripped off, it doesn’t actually stop it from occurring.
Filed Under: broadcast tv fee, false advertising, fcc, fees, hidden fees
Companies: charter, charter spectrum
Comments on “It’s 2022 And Bullshit Cable TV Fees Are Somehow Still A Thing”
Calling it "fraud" is BS
Few very MVPDs turn a profit on pay TV services – many of them made a net loss on each subscriber as of 2018. The point of the broadcast TV surcharges is to point out to subscribers, “This is not revenue. This is how much the broadcast stations force us – by law – to pay them so we can retransmit something you could get for free if you were smart enough to use an antenna.” It’s not “BS” anymore than collecting the required local/state sales tax is “BS.” Look what happened to Locast when they tried offering OTA streaming without paying OTA stations.
The actual BS fees that pad bills would include “network enhancement fees,” like the $3.50 that Optimum and Suddenlink subscribers pay each month for the ‘privilege’ of being connected to those providers’ networks.
So, traditionally, the advertised price of a good or service includes the costs of goods or services sold. When I buy a power rangers toy, I don’t get told that I also have to pay an unknown fee to recover the cost of acquiring the toy.
Leaving aside questions if the fee does indeed represent a 1:1 reflection of local broadcast retransmission costs without profit, a fact not in evidence, What is described as BS is that the “fee” is simply a cost of providing the service and should simply be a part of the price. However, like carpet mills trying to hide the fact that they are raising prices for the 3rd time in the last year, rather than raise prices, they added a below the line fee, a fee which then steadily grows while the advertised cost of service remains stagnant, which makes it seem like they haven’t raised prices in advertising, even as the cost goes up every year.
The existence of retransmission fees isn’t bullshit, what is bullshit is hiding that cost to the consumer and advertising prices over 20% lower rather than include those costs as part of the base price, for the same reasons you find the network enhancement fees bullshit.
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While these despicable practices may not meet the legal requirements for criminal or civil fraud, they certainly do meet the dictionary definition of fraud. They are intentionally deceptive and dishonest. If it were not for the thorough regulatory capture of our corrupt government by these (often nearly monopolistic) companies, we could have some very simple and effective “Truth in Advertising,” “Truth in Pricing,” and “Truth in Packaging” laws that would be in the interests of the consumers. Instead, we have the current situation, which is completely in the interests of the businesses.
As Karl correctly points out, these problems are by no means limited to the telecom industry. They are pervasive. And we need to always remind ourselves and others that these dishonest practices are not problems with capitalism, they are problems with dishonest capitalists.
Correction: “modern life” pointed out that these problems are pervasive.
I would argue the fact that capitalism expressly rewards dishonesty at every level is a flaw in capitalism. Capitalism only escapes Crony capitalism and dishonest capitalists with extensive use of the heavy hand of regulation, which capitalism naturally opposes as a restraint on the power of capitalist trade.
1) That should be “any more”, not “anymore”.
2) Advertising pre-tax prices would be considered fraud in most of the world (apart from the USA and some parts of Canada).
If a company offers to sell me something for $10, they should accept $10 and expect no further payment; anything else is just fraud that’s been normalized over the decades.
I don’t understand the “it’s 2022” in the title. Yeah, it’s 2022, but anyone still paying for cable has evidently not realized that or has accepted the bullshit. The government should still prosecute fraud, of course, but let’s not pretend we’re surprised (in 2022) that they’re on the side of large companies.
Re: Re: On the US' crazy quilt of taxes
It’s impossible for any merchant – be it a communications service provider or grocery store – to advertise post-tax prices in any ad medium other than direct mail. The reason is that sales taxes vary not just by ZIP code, but by the full 9-digit ZIP code. There are special tax districts all over the US – you might live near one and not know it. And the only way to automate post-tax price quotation is by paying thousands of dollars for a solution like Wolters Kluwer’s SureQuote, which would create a huge barrier to entry for small merchants.
If you’ve dealt with enterprise software pricing, you know that there’s a huge difference in single-tenant licenses and company-wide licenses. So no one should be surprised that a pre-sales agent can’t access the same tax details as a billing agent. That said, most CSPs have responded to new legislation by tallying all taxes and fees in the buyflow before a visitor orders services.
The alternative would be 5-minute-long TV ads where the narrator says, “Just $50 plus 8.9% sales tax in ZIP codes A, B, C, or 9.2% sales tax in ZIP codes D, E, F, or 9.6% […]”
Re: Re: Re: Grocery store?
I don’t know of any jurisdiction in which a bricks-and-mortar grocery store would be required to collect taxes based on the address of a customer, unless it was delivering to that customer. Advertising the post-tax price that you’d pay if you walked into the store and bought something should be perfectly fine. It’s hard even to see how a retailer could do business if they had to verify what special tax district an in-person customer lived in!
Technically, the in-person customer likely owes a “use tax” to the home jurisdiction, but that’s not imposed on the merchant to collect. In fact, it’s hard to see how it could be, when the customer’s home town doesn’t have personal jurisdiction over the merchant.
In any case, except for general sales taxes, it smells like fraud to add a ton of below-the-line “taxes”. Most of these are taxes assessed on the business, not on the sale – they’re part of the cost of doing business.
Re: Re: Re:2
And I’ve definitely received printed grocery store flyers with text along the lines of “only valid at LOCATION(S)” printed prominently. If those locations sell at those prices, fine.
Re: Re: Re:
Everywhere else in the world deals with this. Last time I bought a product (internationally) from Germany, it was advertised at €69 plus €10 shipping. When I went to check out, it turned out I was not subject to VAT, and so the total with shipping ended up being something like €67.
So, that’s one way to do it. Another would be to simply say “$20/month in city X”, including the tax for that city. An advertisement does not need to document the prices everywhere, just as they don’t need to read the full contract for service on the air—it’s enough that they don’t make any false statement. “Prices vary by city” or “under $25/month” or “$20/month plus local tax”—referring only to true taxes, and only those varying by service area—would be fine, and much less burdensome than the fast-talking symptom readout on American drug ads.
And of course, as soon as the signup process gets your full address, there’s no excuse for not giving the final price; e.g., “your bill will be $57.12/month”, with a breakdown of all taxes and fees legally required to be listed separately. Nobody should ever be surprised on receiving their first bill. Credit card companies could actually enforce this today, if they wanted to.
yeah, the broadband and cable industry are very creative in sneaky consumer deception — but are hardly alone in that game. It’ everywhere.
Deceptive physical packaging is routine in the retail industry, especially supermarkets. The actual contents of a cereal box or soup can, for example, decrease quietly– as a stealth price increase.
And take a close look at the many creative government TAXES & FEES on your cable broadband bill — they are outrageous gouging.
Same with your cellfone bill, water/electric bills, etc.
Why should people even have to pay Sales Tax on a basic necessity like water ?
The American tax system has so many varied and hidden taxes that no consumer can understand his actual tax burden.
Consumer ripoffs are everywhere. Just look around.
I remember trying to find out from a company exactly how much my bill would be every month. The answer was, “I can’t tell you that, the fees change, so the bill will be different.”
The advertising thing I love is the lower price for the first six months. They show you the lower price. Try finding the price it’s going to be after six months. Good luck, you’ll have to dig.
modem rental fees for those using their own device....
Just for starters
Cut the cord and problem is solved.
Re: RE: Zero fees.
It’s not solved for many, since they have agreements that make their service to only one available. You end up just get gouged on your internet bill instead of TV.
It certainly is blatant fraud and should be outlawed...
When a fee is advertised it should not have any fine print disclaimers below. These deceptive practices by cable companies are part of the many reasons I cut the cable cord over 15 years ago. If I cannot watch it for free with my outdoor antenna or streaming, they’ve lost me as a customer.
Long ago, the water, power, gas were controlled by the states and Not over priced.
Then Allot of promises After, Gas and power went to privatization.
Cable TV was a great idea, with lots of promises of LESS Commercials, but the TV movie industry said NOPE cant do that. Cable jumped on board. Promises Gone, TONS of commercials more. All at the price of $10 per month. Then $20 and now?
Which is really funny, as with Broadcast, it was free with commercials, where cable wanted the advertisers to end up paying.
ViVa Le Capitalism. NOW they get paid for adverts and then by the Customer.
For all the Equipment they use, for all the encryption and OTHER stuff. that they Could get rid of and make it all FREE, except maybe installations. They could save more money giving it free, without the equipment, that they keep updating and changing every 5-10 years.
OH! did you know that you can Buy your own decoder, LEGALLY? last I looked anyway. But for a bit of hardware, its Expensive, for no reason. There is/was even a digital card for computers.
Witht eh Power and Gas Privatized we FINALLY created public utility counsels, To money prices.
Power companies were selling Power back and forth so much and raising prices, it was worse the Who OWNS the phone corps.
Then the phone corps bought into the Internet, as they had the Last mile, why not buy up the Middle ground and be Tier 1. After gotten into Cable, why not buy up some of the TV industry. And recently the movie industry.
How much money do they need, if they are charging us for every part of this and that, that USED to be free, with adverts. We still have more adverts. They even tried adverts in theaters. We have radio channels with more Advert then music.
How Much are you willing to pay is the Big thing. Sit in your house and watch rented/bought movies, play card games, board game or what? HOW much can they get out of your pocket before you get pissed off enough to Turn it all off.
But even a basic Wired phone ISNT cheap anymore.
A person on Quora, asked a question about How Much it cost for Central Africs to have all these 2nd hand clothing.
I suggested the corps but from china cheap, then what they dont sell here in time, they send to Other nations, and Why we see all these sports shirts over the world, and they get the tax write off and it comes up as $0 tax and cost. so much fun.
Fee hikes are comming.
With official inflation at 7.5% (feels like 37.5%), we can all expect to see the amazing and dazzling spectacle of hidden cost. Between shrinkflation, fee increases, and actual price increases. We can all expect to be paying 50% more for everything.
i realize it is from a source article, but
Spectrum’s average surcharge for local, OTA stations is rising an average of $36 per year.
is not making any sense.
Questions on content
I’ll play devil’s advocate here for a moment.
This is a legitimate question!
Why are cable TV stations still being forced to prop up broadcast?
And why should they not be allowed to point out that they are required to do so at expense?
I’m going to step outside the ‘cable costs too much’ argument here:
I’m sorry but if you’re not recovering cost of production by running 28 minutes or advertising in a 60 minute block your doing something wrong.
Cable companies are required to supply broadcast on their services.
Pay for that broadcast.
So pointing out (accuracy aside) ‘it costs this much to send you these stations the government decided we need to give you costs this much more than if we dropped the the stations’ doesn’t come off that bad in that explanation.
Much like a gas pump tells you this much tax is added to the cost.m by mandate.
I fully support upfront labelling on cost. And think the advertised price should be the total post fees price!
But let’s not pretend the government is actually at fault for this being a thing in the first place.
Of course, the price on the sign includes those taxes, and comcast does not.
There is an ocean of difference between “this price includes $X fee for licensing of local broadcast content” and “On top of your advertised monthly rate we are charging you a $x fee for licensing of local broadcast content. This fee can increase without notice without limits on the amount or frequency of increase.”
Re pump fees
I totally agree Burkhardt
I was just pointing out while the methods are clearly in their hands, the cause is not.
If you expect me (joe informed) to believe that stations like NBC, Fox, CBS et al are in dire need for federal protection requirements to stay on air… I call bullshite.
Advertising makes up nearly half of broadcast time.
With that much finding? If you can’t run in the green you deserve to fail.
Misleading pricing is definitely a problem.
But this specific case is governmental failure.
Spectrums new internet upgrade
I think it is amazing how suddenly my internet became super slow shortly after Spectrum starts advertising a new faster upgrade, which I refuse to purchase. All of a sudden my phone and tv continue to freeze and is very slow. I wish to god that there was some competition in my area for them, sadly there isn’t, and they know we have no choice. If I do upgrade I will be paying over $100. for internet only, I am disabled and on a fixed income, if it was for tv and cable only I would just cancel, however I need it for my security panic system in the event I suffer from another stroke. All I can say is …… SHAME ON THEM!!!!
There’s almost always some choice. Use Speedtest dot net to see local providers. Business line companies can often be less expensive if you don’t mind buying some equipment upfront.
Beyond that, you can get your own router/gateway
They tend to be more reliable and the provider is unable to modify speed via software without you knowing.