Big ISPs Avoided 2020 Law Banning Predatory Modem ‘Rental’ Fees By Simply Calling Them… Something Else

from the total-gibberish-surcharge dept

When you’re a natural telecom monopoly in America you get away with a lot.

Take for example broadband ISP Frontier Communications, which has spent the last few years stumbling in and out of bankruptcy while dodging no shortage of scandals, including allegations of subsidy fraud. A few years back, Frontier got a light wrist slap for fraudulently charging its customers a “rental” fee for modems they already owned (something ISPs like Comcast also have a long history with).

The company also paid a tiny $900,000 fine in 2020 to Washington State AG Bob Ferguson for using other completely bogus fees to rip off the company’s captive subscriber base. The problem was bad enough that Congress even passed a law (the Television Viewer Protection Act (TVPA)) specifically banning companies from charging you rental fees for things you already own.

Two years later, and Consumer Reports has found that most ISPs are just tap dancing around the law’s restrictions. In some cases by simply renaming the surcharge… something else:

“Frontier FiOS used to charge me a router fee, although I have my own router. Now they don’t have that explicit fee, but they do charge an ‘Internet Infrastructure Surcharge’ ($6.99) and a ‘Frontier Secure Personal Security Bundle’ ($5.99 after ‘discount’),” a customer in Torrance, California, wrote.

So while Frontier did remove one predatory fee, they simply replaced it with another, bullshit, predatory fee they’d already been fined for by State AGs:

“After the router fee was made illegal by the act of Congress, I quickly called up Frontier to have the fee removed, which they did going forward,” wrote a customer in Flower Mound, Texas. “However, a few months later, Frontier increased their infrastructure charge (another bogus fee) about $3 or $4 if I recall correctly. So in my mind, Frontier did a bait and switch and is just trying to play the bogus fee game but not calling it a router fee any longer.”

The 2020 bill banning the practice had to be hidden in a broader legislative package to make it past a corrupt Congress and be signed by Trump (who I’d guarantee had no idea it existed). And now that it’s formally a law, the FCC under Democratic control is dithering and engaging in a drawn out public comment period before acting on what’s very obvious billing fraud and false advertising.

When the agency does act, it will culminate in a fee that’s a tiny, tiny fraction of the money Frontier made off of predatory fees. A fee that, if history serves, may be reduced or eliminated entirely with some clever lawyering. And this is just one subset of fees. Studies have shown up to 45% of cable and broadband bills are comprised of bullshit, sneaky fees with completely made up names.

This has been a problem in the industry for decades, with ISPs like Centurylink (now Lumen) and at one point charging users a completely made-up “Internet Cost Recovery Surcharge” just to fatten their wallet. Other ISPs charge “regulatory recovery fees” that are just nonsensical ways to fatten revenue dressed up with a name to trick users into falsely blaming government.

The fees serve several functions: one, they allow ISPs and cable companies to advertise one price, then charge consumers a much higher rate. They also allow ISPs to pretend that broadband prices aren’t increasing, because they can point to their static advertised rate. They’re used to help feed Wall Street an insatiable need for quarter over quarter improvements, while doing nothing to better service.

The underlying problem is that, with the occasional exception, U.S. regulators and politicians generally approve of using bullshit fees to rip off consumers. They’re rampant in everything from telecom and banking to the airline and hotel industries. When the occasional policymaker with a backbone does act, it’s always years late and several billion dollars short of having any meaningful impact.

This is, of course, a feature and not a bug.

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Companies: centurylink, frontier communications, lumen

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Comments on “Big ISPs Avoided 2020 Law Banning Predatory Modem ‘Rental’ Fees By Simply Calling Them… Something Else”

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Koby (profile) says:

All Included

From the “There Outta Be A Law” Department:

There ought to be a law that any fees beyond the advertised price must be optional. The base service must work without optional services. Although the provider can advertise and charge any price they want, mandatory fees constitute false advertising.

Anonymous Coward says:


Completely agree. The ISPs have their “infrastructure” fees, hotels have “resort” fees, restaurants near me have had a “livable wage” fee for a few years now, and it just keeps going and expanding as more businesses come up with creative ways to charge you more than the advertised price. We really need a law that forbids below the line charges. I’d go a step further and state you have to include the government imposed fees in advertising (either the actual cost or a range if it may vary within the advertising market).

Whoever says:

Re: Re: Other businesses

Can you imagine if other industries tried to get away with this?

They do. Car rentals (why should I pay a special fee for the tax they pay on the car, when they still have to pay that tax if I don’t rent the car and it stays in the garage). Why not a special fee for the property taxes on their HQ?

Buying cars. All the bullshit that dealers add.


Ticketing fees,

Etc, etc..

Anonymous Coward says:


Bravely bold Sir Koby
Rode forth from the Internet.
He was not afraid to die,
Oh brave Sir Koby.
He was not at all afraid
To be killed in nasty ways.
Brave, brave, brave, brave Sir Koby.
He was not in the least bit scared
To be mashed into a pulp.
Or to have his eyes gouged out,
And his elbows broken.
To have his kneecaps split
And his body burned away,
And his limbs all hacked and mangled
Brave Sir Koby.
His head smashed in
And his heart cut out
And his liver removed
And his bowls unplugged

David says:

I like "regulatory recovery fee"

Other ISPs charge “regulatory recovery fees” that are just nonsensical ways to fatten revenue dressed up with a name to trick users into falsely blaming government.

That’s not nonsensical but cynical. It’s essentially a paraphrase of “bullshit fee because we are no longer allowed bullshit fees”. The equivalent of a pickpocket writing you a bill for wearing a pocketless dress.

Talk about entitlement.

That One Guy (profile) says:

They are not scams, they are surprise mechanics

If those in charge of regulations weren’t corrupt as hell behavior like this would sure serve as a great example of an industry that is in dire need of heavy regulations and even heavier fines for violating them.

As it stands though so long as the ‘donations’ clear the regulators seem quite content with how things are going, it’s not like they tend to be ripped off after all.

Lostinlodos (profile) says:

His the real fee anger with fake fees

This all boils down to—you gave them one so they made more.

It’s hard to be angry about mandatory rebroadcast carriage when you have 12 “regulation” fees and “taxes”.

Congress gave them a mandate and opened the door to all of this.
It’s time to close that door [mandatory rebroadcast] and cut the other fees as well.

All in one single bill.

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