Broadband

by Karl Bode


Filed Under:
fees, rates

Companies:
comcast



Comcast Under Fire For Using Bullshit Fees To Covertly Raise Rates

from the surreptitious-slimy-surcharges 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.

For example, for several years now, CenturyLink has been charging its broadband customers an "internet cost recovery fee," which the company's website insists "helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network" (that's what the full bill is supposed to be for). Comcast and other cable companies have similarly begun charging users a "broadcast TV fee," which simply takes a portion of the costs of programming, and hides it below the line. The names differ but the goal's the same: falsely advertise one rate, then charge consumers with a higher price.

Comcast was sued for the practice last year. Amusingly, the company responded to the suit by trying to claim that covertly jacking up their advertised rate was just their way of being "transparent" (nothing quite says "transparency" like not knowing what your bill is going to be until after you've signed up for service). Despite this being false advertising, you'd be hard pressed to find any U.S. regulator, federal or state-level, that gives much of a damn. The sense one gets is that the government, slathered with campaign contributions, has been conditioned to see this kind of behavior as simply creative expression.

In Oregon, regional TV regulators have bucked the apathetic trend and are urging Oregon's Department of Justice to begin investigating Comcast's (and other providers') abuse of this kind of pricing. In a letter to the Oregon Department of Justice (pdf), the smaller regulators for Multnomah and Washington counties point out that under current law they're forbidden from regulating cable prices. But, they note, they're being inundated with complaints from Comcast subscribers tired of having their rates covertly jacked up while under contract:

For example, a complaint received in January from Ms. Sisson, a Comcast cable customer, mirrors those of Comcast and other cable company customers across the state. She signed a term contract for a specific cable package at a specific advertised rate, only to learn later the extent of the additional fees and that these fees are often increased again during the agreed upon contract period with no apparent limit to the increases...

We began receiving complaints about add-on fees in December 2013. This practice was first implemented by Comcast and other cable companies have followed their lead and adopted similar fees. Currently the add-on fees can result in monthly programming package rates of at least $10 more than the contracted or advertised rates. The fees in question are not government imposed fees/taxes, fees for leasing equipment, or one-time fees for a service.

It's interesting, because even folks that generally despise regulation tend to agree that this is a behavior that needs cracking down on, and doing so wouldn't be particularly difficult (just mandate that only taxes and government-mandated charges can be used below the line). Yet it never happens. The former FCC had proposed a voluntary "nutrition label" for broadband that would have required that providers clearly disclose all fees -- but it fell well short of banning such behavior. And the current FCC is far too busy gutting existing consumer protections to be bothered.

Comcast, for its part, also continues to pretend it's just an innocent little daisy in the dance between broadcasters and cable companies:

"The cost of retransmission imposed by broadcasters continues to increase significantly as do the costs charged by regional sports programmers, and while these fees are increasing they only defray a portion of what we are being charged to be able to carry these channels," the company said in a written statement.

So one, the fact that broadcasters raise rates doesn't somehow justify taking a part of those increases and hiding them below the line. The increased cost of content is the cost of doing business, and should be included in the overall price. Two, Comcast ignores that fact that it itself is a broadcaster (owning NBC and a number or regional sports networks), so blaming this all on broadcasters doesn't negate Comcast's role in the billing shenanigans. This practice remains false advertising and someday, maybe, we'll live in a world where companies like Comcast are actually held accountable for it.


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  • identicon
    Anonymous Coward, 1 May 2017 @ 6:45am

    Sounds like a company I want policing itself, like Ajit 'Enemy of the Internet' Pai is proposing.

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

  • icon
    TheResidentSkeptic (profile), 1 May 2017 @ 7:01am

    The most likely outcome

    2 new fees:

    1) Legal Costs Recovery Fee
    2) Settlement Costs Recovery Fee

    And if they get sued for that, then "lather, rinse, repeat"

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

  • identicon
    Joseph Ratliff, 1 May 2017 @ 7:15am

    Then there are those data caps too...

    They've brought data caps back too.

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

  • identicon
    Chuck, 1 May 2017 @ 7:28am

    Fuzzy Math

    So...if comcast's last line there, that this only helps defray "some" of their rising costs, is actually true, then how could we confirm that?

    Well logically, that would mean they've made less profits this quarter than last quarter, and presumably, since people have seen such fees for multiple years, it'd mean their profit margin has been dropping every single quarter for at least 8-10 straight quarters.

    So, Comcast, are you saying you're turning less profit now than 2 years ago - which I'm sure your investors would LOVE to be informed about - or are you just lying through your teeth about the fees?

    I mean, we all know it's the later, but I'd love to hear you say it.

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

  • icon
    ThaumaTechnician (profile), 1 May 2017 @ 7:38am

    This does and will keep happening,..

    ..until an upper manager or a member of the board is put in jail for ignoring the rules.

    / how many people are in jail for a busted tail light, eh?

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

    • identicon
      kallethen, 1 May 2017 @ 8:05am

      Re: This does and will keep happening,..

      Rules? What rules? The fox hasn't just gotten into the hen house, he's purchased it from the farmer and is setting his own rules on how he'll take care of the hens.

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

    • identicon
      Anonymous Coward, 1 May 2017 @ 8:53am

      Re: This does and will keep happening,..

      How about we also throw some politicians in jail for pulling the same trick?

      Many politicians love to brag that they won't or didn't raise your taxes, all while constantly voting to add new fees, or increase the fees on everything (such as renewing your driver's license). Because hey, fees aren't taxes you see on your tax bill!

      The practice is so widespread that even a number of presidential candidates have been guilty of it.

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

    • icon
      Andrew (profile), 1 May 2017 @ 9:27am

      Re: This does and will keep happening,..

      Back in 2001, Spring started charging "Property Tax Recovery Fee" on all their phone bills.... so this has been going on for a while.

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

  • icon
    jupiterkansas (profile), 1 May 2017 @ 7:42am

    Google Fiber doesn't seem to have a problem advertising $70/month and charging exactly $70/month.

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

    • identicon
      David, 2 May 2017 @ 8:54am

      Re:

      Google Fiber doesn't seem to have a problem advertising $70/month and charging exactly $70/month.

      How is that legal? How are they going to reimburse law enforcement when they overbook the bandwidth and have to throw people offline?

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

  • identicon
    Anonymous Coward, 1 May 2017 @ 8:08am

    There are two ways foreward in this context:
    1. Make ISPs eat the costs and make them advertise locally so as to avoid misleading the customers. This is what Comcast is refusing to do.

    2. Making the broadcasting costs much more transparent and spelled out would make Comcasts point much more transparent and would be the logical consequence of Comcasts statement.

    For some reason, I am not sure Comcast would be appreciative of doing either. So the conspiracies and/or fraud continue with unimpeded strenght while politicians keep getting dazzled by a field that is technically becoming unbelievably complex and more and more "he who controls the infrastructure controls the narrative!"...

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

  • identicon
    Anonymous Coward, 1 May 2017 @ 9:12am

    Synonyms needed

    "The sense one gets is that the government, slathered with campaign contributions, has been conditioned to see this kind of behavior as simply creative expression."

    Fake fees to jack up the price can also be called "alternative rates".

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

  • identicon
    ThatOneOtherGuy, 1 May 2017 @ 9:18am

    Sounds like my apartment complex...

    "Billing Fee...$4.00"

    I turned the tables on them when I paid..

    "Payment Fee...$400.00"

    They weren't amused, but I made my point, and I no longer have "billing fees"...

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

    • identicon
      Jason, 1 May 2017 @ 9:50am

      Re: Sounds like my apartment complex...

      When my now-former apartment stopped accepting checks because they were "too inconvenient" they instead only allowed payment via direct bank transfer (set up automated billing!) or by credit card for a $35 fee.

      For every one of the remaining months I lived there I transferred the money manually (which, in order to avoid risk of exposure to my primary account, turned in to a two-step process).

      The only time I would almost be able to stomach a "billing fee" would be if the biller had gone paperless and I was explicitly asking for a paper statement be mailed to me. But since that isn't something I'm likely to do any more...

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

  • identicon
    techdirtReader, 1 May 2017 @ 11:48am

    I am incurring this problem with Verizon FIOS. I was suckered into a two year commitment in return for a two year prize freeze.

    Verizon has kept the base price frozen but increased other line items and added new items. They claim the new items are new government fees. These fees are labeled to look like government fees, but strangely enough, they aren't located in the government fees section of the bill.

    Not all fee increases are masked as government fee increases. They increased the subscriber line maintenance fee by $2.00. I asked to have that undone and they told me to pound sand.

    As part of a two year commitment, if I leave Verizon I would have to pay a fairly large fee. It appears to be a one sided commitment.

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

  • icon
    Stan (profile), 1 May 2017 @ 12:05pm

    Croissants from Comcast

    25 cent* Croissants from Comcast kitchens!
    25 cents* lifetime cost guaranteed! Only 25 cents!*

    *(some additionally self-imposed non-regulatory mandated fees may be applied including, but not limited to, the following: yeast activation fee, water purification charge, sugar importation offset, flour grinding expense, butter purity / bovine inspection costs, oven operation surcharge, poison control expense, profit margin protection offset, Property Tax adjustment, billing information verification fee, politician payoffs, et cetera ad infinitum)

    Final cost is copyrighted and is not available until after payment.

    [daily croissant consumption limit may be imposed/changed without prior notification]

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

  • icon
    ECA (profile), 1 May 2017 @ 12:17pm

    SOP, Standard operating procedure..

    WHAT??
    This has been going on for YEARS..
    The phone corp was charging a Tax from the 1898 from Teddy Roosevelt, to HELP the spanish american war...
    AND NO ONE DROPPED IT after it was done..

    WHO got all that money.. a $3 charge from Every phone in the USA..Easy MONEY..

    For all the regulations and controls, WHO is NOT watching, the What is WHAT..

    Even the Gov. keeps hiding WHERE THE MONEY IS GOING..

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

  • identicon
    Anonymous Coward, 1 May 2017 @ 3:05pm

    Does anyone know

    Does anyone know how cash flow works at Comcast? EG: How many subscribers would have to cancel / not renew in a 3 month period in order for it to be a major shock to their system? The quick look I took says ComCast earnings are 80 billion a year but I don't know if that's right or not.

    As far as television goes, I don't watch cable, haven't for over a decade. Mostly it's because there's not much I care to watch, partly because I don't see the return on value to pay $150+ per month.

    As for Internet, I'm currently on a cable connection (not ComCast, thank goodness), but I'm looking to move to microwave as they just bumped the price by $10 a month again, the second time in a year. I'm not sure if there's any sort of TV programming on the cable - I've not owned a RF TV receiver for many years now.

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

  • identicon
    Brainsick, 2 May 2017 @ 7:44am

    Re: This does and will keep happening,..

    The overwhelming dissatisfaction with these 'tech'companies are out of control. Since the government won't do anything it's up to us, the beleaguered consumer. I propose, as a group, if you're​ not satisfied, don't pay. What will they do? Turn off the service? Sure. There are many many different ways to get TV programming WITHOUT cable/satellite. Check it out 😎

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

    • identicon
      Tina Woods, 2 May 2017 @ 5:19pm

      Re: Re: This does and will keep happening,..

      But not many ways to get broadband service. In almost all markets people are limited to 1 or 2 providers.

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


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