Failures

by Karl Bode


Filed Under:
fees, regional sports fees, sports fees, zip code

Companies:
directv



DirecTV's 'Regional Sports Fees' Make No Coherent Sense, Company Won't Explain Why

from the because-we-can dept

For several years now, the cable and broadband industry has, like so many industries, turned to obnoxious, misleading fees to help pad their already healthy revenues. The fees, usually tacked on below the line post-sale, aren't just a great way to covertly raise rates -- but they allow companies to advertise one rate -- then charge something decidedly different. Despite effectively being false advertising, this practice has long been ignored by regulators. Companies like Comcast and Charter have, however, been repeatedly sued for the practice.

Two major fees in the last few years have received the brunt of the attention. One being the "broadcast TV fee." The broadcast TV fee is simply your cable operator taking a part of the cost of programming and burying it below the line to help them falsely advertise a lower rate. Comcast and Charter have both insisted this is simply them being transparent with their customers.

Another contentious fee is the "regional sports fee," which functions in just the same way, and as the name implies is just the cost companies pay to broadcast sports content. On its face, this fee was already contentious (given that many cable providers own the local sports broadcaster). But one DirecTV customer actually discovered that you could use a tool on the DirecTV website to determine how much each zip code pays in regards to this fee.

What she found is that there appears to be no rhyme or reason for how this fee is assessed. Users just a few feet apart could pay $0, $2.47, $5.83, or $7.29 in regional sports fees -- despite all having access to the same content. The user even broke down this in practice in Arizona via a handy map:

The Consumerist then went city by city and found the same thing in Chicago, New York, and multiple cities in California. And in places like Philadelphia, the website found that people paying absolutely nothing in fees are often saddled right next to people paying up to $7.29 more per month:

There's no coherent reason for this. It's not because of regional franchise agreements, most of which were demolished when companies like AT&T and Verizon convinced state legislatures to pass state-level agreements when they got into the business a decade ago. Similarly, DirecTV doesn't even offer a regional sports offering in many of the markets with varying rates. What is for certain is that both the broadcast TV fee and these regional sports fees have skyrocketed in very short order. The regional sports fee has jumped from $1 to nearly $10 for some carriers in just the last few years.

Hoping to find out why different people pay such dramatically different rates, the website asked DirecTV and got a complete and total non (and frankly false) answer:

"We sent all these maps to DirecTV, hoping to get a better explanation than the non-answer given to Connie. After more than two days of waiting, the best the company has been willing to provide is “[Regional sports network] content and thus the costs charged by providers vary significantly by ZIP code.”

Yet that’s simply not true. The examples we provided to DirecTV all involve relatively small areas where any regional channels would be the same. For instance, we could find no evidence of any special regional sports channel being beamed only to residents of Chicago’s Logan Square neighborhood."

If the cost fluctuation had a legitimate, above-board reason, you'd have to think DirecTV wouldn't shy away from explaining it. Given that this is the least liked industry in America, the other possible explanation is that there's nothing to explain because the entire fee is bullshit -- and therefore so is its implementation. In that case, why not charge everybody the same, uniform rate? Are some neighborhoods not being charged the fee to improve overall subscription rates? Follow up questions to DirecTV were subsequently ignored, suggesting there certainly is a reason -- just not one DirecTV wants to share with you.


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  • icon
    Ninja (profile), 14 Mar 2017 @ 5:18am

    Sure, the fee is bullshit. But why not charge it when the Government couldn't care less about the ways we screw the customer and when they pretend they do it just ends in a gentle wrist slap? Oh and also, near monopoly. - Honest DirecTV

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Mar 2017 @ 6:51am

      Re:

      "Oh and also, near monopoly."

      Ahem...

      Government REGULATORY blessed near monopoly! These monopolies are blessed at the Federal, State, and Municipal levels.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 14 Mar 2017 @ 7:11am

        State Actors

        The government allows them monopoly status in return for unlimited access to user data.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 14 Mar 2017 @ 7:35am

          Re: State Actors

          A total win-win for Business and Government.

          The 3rd party doctrine has managed to gain a significant foothold in politics and courts, and now even the public eye.

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Mar 2017 @ 8:40am

      Re:

      But why not charge it when the Government couldn't care less about the ways we screw the customer

      And when the customers are paying it despite complaining. DirecTV isn't an essential service like phone or internet, and unlike the cable companies they can't even coerce people to subscribe by offering internet+TV for cheaper than internet-only (except, I suppose, for the truly desperate people who have no option but satellite/wireless internet).

      reply to this | link to this | view in chronology ]

  • icon
    Stephen T. Stone (profile), 14 Mar 2017 @ 6:35am

    Now imagine the fees AT&T will be able to charge once Net Neutrality is done away with.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Mar 2017 @ 7:43am

      Re:

      If you read the Net Neutrality rules you would find that it would have prevented very little of this. The loopholes were still big enough to allow for all sorts of this chicanery (think zero-rating). I am not even sure the new rules would have even been able to apply to something like this either, since this is on the cable side and not the internet.

      reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 14 Mar 2017 @ 7:57am

      Re:

      AT&T bill
      - "Because we can" fee: $5.

      Consumer: Wtf?
      AT&T: You can't get internetz from anyone else so we charge this because we can.
      Consumer: But I have Comcast to go to.

      Comcast bill
      - "We have the power" fee: $10

      Consumer: ...
      Comcast: We love our cash cows! We mean, customers!

      reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 14 Mar 2017 @ 6:36am

    One does wonder what would happen if you overlaid the fees with income levels...
    But then that would be profiting off of those who least can afford it...

    reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 14 Mar 2017 @ 6:39am

      Re:

      “Just like George Washington intended!” — DirecTV, probably

      reply to this | link to this | view in chronology ]

    • identicon
      Zengief, 14 Mar 2017 @ 6:53am

      Re:

      Or race
      Or political leaning
      Or socioeconomic background
      Etc.

      It is going to match with something, because they wouldn't bother rolling dice that many times. It is just a matter of finding the connection.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Mar 2017 @ 6:53am

    How do those maps compare to average income, or other sociological data maps?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Mar 2017 @ 7:18am

    AT&T thanks you for pointing out all this lost revenue. Those not paying will be advised of the fee increase.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Mar 2017 @ 7:46am

    If they just wanted to be transparent, it wouldn't be a fee tacked onto the main price of their bill like:
    Cable Package: $70
    Broadcast fee: $5
    ------------------
    Total: $75

    It would be an itemized total as a part of their main bill cost like:
    Licensing: $35
    Infrastructure maintenance: $30
    Broadcast fee: $5
    ----------------------------
    Total for Cable Package: $70

    reply to this | link to this | view in chronology ]

  • identicon
    Joel Coehoorn, 14 Mar 2017 @ 8:32am

    Has anyone been able to map the fees against the average income of each zip code? In other words, could we show that they are charging wealthier, more affluent neighborhoods more than poorer neighborhoods, just because they can?

    reply to this | link to this | view in chronology ]

  • icon
    timmaguire42 (profile), 14 Mar 2017 @ 9:04am

    The key, as you point out early on, is truth in advertising laws. All of these fees are fraudulent unless they are optional. If the consumer cannot purchase the product for the advertised price, then the advertised price is consumer fraud. It's not even a close quesiotn.

    And yet...

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Mar 2017 @ 10:47am

      Re:

      They always have some qualifying statement or asterisk that leads you to a paragraph of tiny tiny text that mentions "some additional fees may apply".

      But of course, that stuff is only explicitly there so that they can continue to get away with false advertising and have something to point at in court to claim that they totally aren't.

      reply to this | link to this | view in chronology ]

  • icon
    McFortner (profile), 14 Mar 2017 @ 9:22am

    It makes perfect sense if you remember who owns DirectTV, AT&T.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Mar 2017 @ 9:43am

    and let everyone actually see, in writing, that they are being ripped off? of course not!

    reply to this | link to this | view in chronology ]

  • icon
    aerinai (profile), 14 Mar 2017 @ 11:50am

    New Zip Codes + Old DB = Free Fee

    Read an interesting comment elsewhere on the internet hypothesizing some of the more egregious examples cites ($4.83 vs $0.00) is more than likely a mis-configurations by DirectTV / AT&T. If this system was created 10-15 years ago, but zip codes were created due to rezoning etc. 5 years ago, they probably have just never been added to the fee database. I work as a developer, so these types of things happen.

    It's not like their PR people can say 'hey... that was a mistake on our end. let me fix that for you. Also, thanks for the millions you found we weren't skimming off of people in these zip codes!'

    However... I'd bet that is occurring behind the scenes as we speak (I mean, it's 'free' money after all)

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 14 Mar 2017 @ 11:57am

    i NEED MORE INFO..

    It is mentioned that in many parts of Asia and middle east, that the Country sends up 1-2 Satellites..Send out 1 BIG signal for all the channels that WANT to be Broadcast..
    They just buy a Cheap box to convert the signal..
    AND COVER the WHOLE AREA..

    Yes, many of these countries are limited because its Gov. TV..
    But the Amount of infrastructure needed is CHEAP.
    Charge a few bucks to send a signal to the Sat. and Broadcast away..
    ---------------------------------

    I LOVE "*" symbol...every time I see it, and THRU MAIL AWAY..I dont even CARE who its from.
    The posted VALUE on the FRONT should be ALL of it..not that little line at the bottom that adds Surcharges, fees, fines, and interest rates..

    Anyone KNOW what the word "FREE" means?? I dont. I would LOVE a TRUE, 1 meaning, no augmentation of the word..

    ----------------------------------------

    THEY DONT WANT CHEAP..
    They want to be able to Show and demonstrate, and Excuse ANY REASON for adding EXTRA COST to a product, including THERE OWN business doing business WITH ITSELF..
    Anything sound like the music/movie industry?? Event he GAME industry.
    After you dump all the handling/shipping, Packaging, Artwork, Storage and Display, and 50-100% markup at the STORE...Why in HELL is online DATA costing so much??

    reply to this | link to this | view in chronology ]

  • identicon
    Bashfull, 14 Mar 2017 @ 8:00pm

    The cable-cartographer says "Yet that’s simply not true. The examples we provided to DirecTV all involve relatively small areas where any regional channels would be the same," but she seems to be assuming the content is the sole determinant of the fee charged rather than the location of the consumer. The statement of the cable company suggests they may incur different license fees to carry content to different neighborhoods.

    Whether that's true or not, and whether that explains this peculiar behavior is another matter, of course- anyone know about this?

    It would certainly make sense for the demographics in a particular locality to affect the ad revenue. Doesn't seem far fetched to me for the same content going to two different zip codes to have varying costs to the cable operator. If the neighborhood is wealthy and loves watching a particular team, I could imagine the content owner to have more incentive to lower costs to maximize the audience and hence ad revenues. If the neighborhood is a bunch of old farts who don't buy anything, on the otherhand, perhaps there's less incentive to keep license costs down, as the advertisers likely see little return.

    I do hesitate to ascribe rational motives to the behavior of cable companies/ISP's, though. Given my observations over the years, the above possibility strikes me as altogether too reasonable to be a likely explanation.

    reply to this | link to this | view in chronology ]

  • identicon
    Sean, 15 Mar 2017 @ 7:55am

    Tool no longer available

    Looks like Directv may have taken the tool down. The address now auto-forwards to their main page.

    reply to this | link to this | view in chronology ]

  • icon
    AnaChronic (profile), 16 Mar 2017 @ 8:05pm

    Shot themselves in the foot with this one, now they're slapping a bandaid on it.

    reply to this | link to this | view in chronology ]


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