Legal Issues

by Karl Bode


Filed Under:
billing, competition, fees, isps, lawsuits

Companies:
centurylink



Lawsuits Pile Up For CenturyLink After Years Of Bogus Fees, Fraudulent Billing

from the because-we-can dept

For decades now, broadband ISPs have abused the lack of meaningful competition in the telecom market by not only refusing to shore up historically awful customer service, but by raising rates hand over fist. This usually involves leaving the advertised price largely the same, but pummeling customers with all manner of misleading fees and surcharges that drive up the actual price paid post sale. And by and large regulators from both major political parties have been perfectly ok with this practice, despite it effectively being false advertising.

CenturyLink (combined by the merger of Qwest, CenturyTel and Embarq) has been exceptionally talented when it comes to misleading fees. A few years ago the company began charging its broadband customers an "Internet Cost Recovery Fee," which the company's website explains as such:

"This fee helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption."

Of course that's what the rest of your bill is supposed to be for, but by breaking out a cost of doing business below the line, CenturyLink can advertise a lower (completely false) rate. That not only helps the company mislead consumers, but makes it harder to compare existing plans -- should you actually have something vaguely resembling broadband competition in your town. In addition to misleading fees like this, CenturyLink has also taken advantage of a lack of competition by imposing arbitrary and unnecessary usage caps and overage fees as well.

But the company has been forced to retreat from both misleading fees and overage fees as it faces a steady stream of lawsuits for its pricing practices. The company was sued back in June after a whistleblower revealed the company was ripping off its customers in yet another way: signing them up for pricey services they never wanted, and never ordered. CenturyLink's problems have only ballooned since, with a growing list of states filing their own suits for what they say is a documented pattern of fraudulent billing:

"I want [CenturyLink] to knock it off,” Swanson said. β€œIt is not OK for a company to quote one price and then charge another for something as basic as cable television and internet service. We want an injunction so the company stops doing this to other people, and hopefully fixes the problem for these people as well.” The lawsuit, filed in Anoka County District Court, accuses Louisiana-based CenturyLink of committing consumer fraud and engaging in deceptive trade practices. It cites 37 specific cases in which people were overbilled by the company and denied the opportunity to reduce those charges β€” even when they had the original offer in writing."

Again, this has been going on for decades as a direct result of an overall lack of competition in the market. Usually said lawmakers defend their apathy to this problem by insisting the "free market" will somehow magically bring competition to bear on ISPs, culling any bad behavior. The problem, however, is these same lawmakers often simultaneously support ISP-written state level protectionist laws designed specifically to ensure this competition never actually arrives. It's a cycle of dysfunction that we won't be rushing to fix anytime soon, as the current Trump FCC is making fairly clear.


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  • icon
    Ninja (profile), 24 Jul 2017 @ 1:30pm

    Ajit Pai to the rescue! Of CenturyLink of curse.

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

    • identicon
      Anonymous Coward, 24 Jul 2017 @ 3:58pm

      curse

      your slip is showing, sig.

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

    • icon
      ShadowNinja (profile), 25 Jul 2017 @ 6:06am

      Re:

      Well of course. Those poor businesses worth tens of billions of dollars need all the help they can get. :(

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

      • identicon
        Anonymous Coward, 25 Jul 2017 @ 10:07am

        Re: Re:

        they will get a slap on the wrist, pay a few millions in fines and laugh all the way to the bank with the hundreds of millions they received from their fraud on their customers. give them 6 months to a year to start the fraud cycle all over again.

        rinse and repeat......

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

  • identicon
    Anonymous Coward, 24 Jul 2017 @ 1:54pm

    "For decades now, broadband ISPs have abused the lack of meaningful competition in the telecom market"

    This is what happens when you give up liberty in free-market for safety through regulation... you get neither liberty or safety.

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

    • icon
      Ninja (profile), 24 Jul 2017 @ 2:09pm

      Re:

      You do know that this is the fruition of the repeal of Title II near 2000 and years of under-regulation? Of course you don't. But you dod know that the lack of regulations (ie: true free market) produces monopolies naturally? No? Go educate yourself, play Monopoly then come back providing meaningful contributions.

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

      • identicon
        Anonymous Coward, 24 Jul 2017 @ 3:52pm

        Re: Re:

        Wait? let me get this right...
        Out of fear that the free market "might" create a monopoly, you choose to ensure that one is created through regulation? Not only that, but a monopoly "blessed" by government?

        I am guessing that you and logic are not on speaking terms. Perhaps it is best if you not discuss this particular subject.

        No wonder politicians fool you people so easily.

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

        • identicon
          Anonymous Coward, 24 Jul 2017 @ 3:56pm

          Re: Re: Re:

          Without regulation: MaBell. Natural monopoly.

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

          • identicon
            Anonymous Coward, 24 Jul 2017 @ 4:38pm

            Re: Re: Re: Re:

            yes, but I was just pointing out that using the idea that free market might create a monopoly as justification for regulation that creates a monopoly anyway is bankrupt.

            MaBell was broken up under antitrust laws right? Which is a good thing in my opinion. No one should be allowed to have a monopoly, not even a natural one. Natural Monopoly is code for we don't know how to properly break up a business so lets just regulate it instead of solving the problem. There are plenty of ways to keep a free market from creating any monopolies through antitrust alone.

            There is no reason for the government to allow or to attempt to regulate a natural monopoly, well unless there is something more sinister at work, and based on all of those "campaign contributions" charts running around I am pretty much right.

            From my perspective everyone is giving ISP's a lot of money, and the ISP's just turn around and use that very money to buy favors and regulations from politicians to secure their business interests with. It appears to me that everyone is working vigorously against themselves here. If you think a politician is going to save you, then I don't know how to describe how bad that is except to say... look at it right now. A lot of people are upset and the FCC has helped make this problem blossom. I wouldn't trust the FCC with anything, they are obviously easy to buy off right along with Congress.

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

        • icon
          orbitalinsertion (profile), 24 Jul 2017 @ 9:04pm

          Re: Re: Re:

          A free market _might_ create a monopoly. What a free market will always do is have a lifetime measured in picoseconds, if that. The market forces are not the consumers. They are the businesses. There ain't no such thing as a free market.

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

          • identicon
            Anonymous Coward, 25 Jul 2017 @ 12:39am

            Re: Re: Re: Re:

            You managed to pack a lot of ignorance into a small space. Should I say well done?

            For something that does not exist, as you say, you seem to speak to it as an authority. Which is is it? A farce or something you know something about? Or are you just here as usual, to offer up a fairy tail?

            "The market forces are not the consumers."

            Several decades of commercials and trillions of dollars spent on them along with the people that produced them, aired them, and watched them would like a word.

            You indeed made quite the orbital insertion of stupidity that exceeds expectations. Okay, I will say it!

            Well done!

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

        • identicon
          Anonymous Coward, 25 Jul 2017 @ 1:50am

          Re: Re: Re:

          Anything that relies on a network infrastructure is a natural monopoly in any area. This means roads, rail, water, sewage, electricity, phones, cable, Internet. The means of dealing with this is either state ownership or a regulated monopoly for the infrastructure.

          Most of the world has a highly regulated monopoly delivering the infrastructure, and use that regulation to open that infrastructure up to competing ISPs. This also eliminate the problem that killed Googles efforts to become a wired ISP, access to the poles and ducts and the need to build out a parallel infrastructure. Having every ISP build out a network to every building is the most expensive way of providing the Infrastructure.

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

        • icon
          Ninja (profile), 25 Jul 2017 @ 6:11am

          Re: Re: Re:

          Man, are you that stupid or is it just pretending?

          Might no, it WILL create. Remember how Bell was divided in the 80's? Let's take a look on what's happening:

          http://subjunctive.net/klog/2008/12/graphical_history_of/

          And that natural monopoly tendency is why we need to set clear frameworks to provide both ease of access to the market to new entrants and prevent abuses from the bigger players.

          I'll wait while you try to twist facts.

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

  • icon
    NeghVar (profile), 24 Jul 2017 @ 2:56pm

    Arbitration clause

    Don't ISP contract usually contain arbitration clauses?

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

  • identicon
    Anonymous Coward, 24 Jul 2017 @ 3:03pm

    The "free market" hates

    "Free software"

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

  • identicon
    Thad, 24 Jul 2017 @ 3:52pm

    I'd sure like to quit Cox.

    But there's no other broadband ISP available at my house.

    And if the only other broadband provider in my city were to expand to my neighborhood...then my choices would be Cox and CenturyLink.

    So yeah, stuck with Cox.

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

  • identicon
    Anonymous Coward, 24 Jul 2017 @ 5:35pm

    >No one should be allowed to have a monopoly, not even a natural one.

    Isn't that like demanding equal distribution rights for right-handed neutrinos?

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

    • identicon
      Anonymous Coward, 24 Jul 2017 @ 5:56pm

      Re:

      not even close.

      Telling a group of neutrinos that they can't "all" lepton to a single particle is not the same as telling each neutrino what to lepton.

      equal distribution is the concept that outcome is forced to be the same, which means that rules must be applied unequally to achieve. the laws of physics do not work that way. Under the laws of physics, each particle has a rule according to its makeup and nothing gets an exception. As humans, each human should face the same rules as other humans, no exception. It is also stupid to apply human rules to animals and vice versa, or you might get your face mauled by a monkey or bit by a dog.

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

      • identicon
        Anonymous Coward, 24 Jul 2017 @ 6:25pm

        Re: Re:

        Under the laws of physics, each particle has a rule according to its makeup and nothing gets an exception. As humans, each human should face the same rules as other humans, no exception.

        Except each human has a unique "makeup", and so by that logic each gets unique "rules".

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

        • identicon
          Anonymous Coward, 24 Jul 2017 @ 7:10pm

          Re: Re: Re:

          "Except each human has a unique "makeup", and so by that logic each gets unique "rules"."

          No two of anything are exactly alike, there is always something different about them... spin, position, vector, bonds, configuration.

          Not sure if you are making a joke or being serious, but those are all superficial and meaningless within the context I have established.

          Now, in reality, you are correct that we humans do create arbitrary, and usually selfish excuses to treat other humans differently.

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

          • identicon
            Anonymous Coward, 25 Jul 2017 @ 4:56am

            Re: Re: Re: Re:

            No two of anything are exactly alike, there is always something different about them... spin, position, vector, bonds, configuration.

            Those are differences in their situation, not their makeup. I'm not sure if you are being facetious or ignorant.

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

          • identicon
            Anonymous Coward, 25 Jul 2017 @ 5:02am

            Re: Re: Re: Re:

            I knew it! I've been saying that the power company has been delivering me substandard, weak electrons for years and thus overcharging me! I want a refund!

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

  • identicon
    Anonymous Coward, 24 Jul 2017 @ 6:12pm

    "all manner of misleading fees and surcharges"

    Sounds like they've studied bankers and car dealers.

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

  • icon
    MyNameHere (profile), 24 Jul 2017 @ 9:25pm

    Economy of scale and the free market

    The free market tends to generate monopolies, especially when the monopoly player can offer the service or product for significantly less than a new player could.

    Google proved it. their fiber product is essentially dead because without economy of scale, without infrastructure that is already paid for, without a long built up customer list, they are unable to crack the markets and make enough money to make it worth doing.

    Google has a bag full of cash and they aren't willing to waste any more of it trying to get into a marginal business.

    So when you complain about monopolies, just remember that the cost of creating new competition is likely beyond what the marketplace is willing to pay in the long run. Google only got marketshare by pretty much giving away their product at what appears to be below cost, considering the reports of how much money their "special projects" have been losing. If their tried to charge the public what it cost to sets up and run a full fiber network with a reasonable return on investment, it's unlikely anyone would sign up.

    All the arm waving, bitching, and lawsuits in the world won't change anything until your change the entire paradigm of the last mile.

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

    • icon
      Ninja (profile), 25 Jul 2017 @ 7:40am

      Re: Economy of scale and the free market

      No such a thing as free market, it's more of a regulatory capture. That's why Google is having troubles despite their money.

      "All the arm waving, bitching, and lawsuits in the world won't change anything until your change the entire paradigm of the last mile."

      That's pretty much what is being fought for. It's a multi-pronged approach with maintaining healthy NN rules being just one of the needed actions.

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

  • icon
    McGyver (profile), 25 Jul 2017 @ 8:51am

    Regulations are the devils playground...

    So no regulations means a perfect world and everyone gets a magical unicorn... Right?
    Do monopolies sometimes stay monopolies because it is often too expensive to bother to compete?
    Well, duh... Yeah...
    Because they got to be monopolies in the first place...
    And that's a flat a out disingenuous argument against proper regulations.
    Stop making it look like people hate democracy or are communists because they support reasonable rules of conduct.
    Arguing against reasonable rules of conduct is what destroys democracies.
    Nobody is denying any industry a right to be successful.
    It's what unregulated industries do with their $$$ influence that that is the problem.
    They use that power and influence to install and support corrupt human refuse the likes of which we see floating around in Washington, passing themselves off as the representatives of the people of this nation...
    All to allow these monopolies to grow more profitable and influential and recklessly manipulate government to their advantage.
    Where is the "We the People" in that?
    Anyone who can't see this is either stupid or deliberately blind to history.
    You can make up any stupid "free market" nonsensical arguments you want to exemplify "why regulations are evil" and they will still be bullshit...
    For the simple reason that you are trying to get everyone to ignore human nature...
    When has creating a system devoid of consequences to select individuals or entities ever benefited the general wellbeing of a society?
    But then again I suppose that those who try to debunk the need for reasonable regulations, don't care about anything but their own comfort and wellbeing, because they are in one way or another associated with a regulated industry and wish to grab way more then their fair share of the pie, should they get the chance.
    Please stop making stupid arguments up and just be honest and say "regulations are bad because they are inconvenient to my chosen line of work and prevent me from getting everything I deserve in life at the cost to others life, liberty and pursuit of happiness"...
    That's a far more honest argument.
    At least you'll have that one speck of honesty to point to.

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


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