Hidden Fees Mean US Cable & Broadband Bills Can Be 45% Higher Than Advertised

from the ill-communication 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 brag repeatedly about how they haven't raised rates yet this year, when that's almost never actually the case.

Despite this gamesmanship occurring for the better part of two decades, nobody ever seems particularly interested in doing much about it. The government tends to see this as little more than creative marketing, and when efforts to rein in this bad behavior (which is really false advertising) do pop up, they tend to go nowhere, given this industry's immense lobbying power. And given the US broadband sector remains painfully uncompetitive in most markets, actually voting with your wallet is often impossible.

How bad is the problem, really? A new study by GlobalData found that what you'll actually pay to your cable TV or broadband provider can often be upwards of 45 percent higher than the advertised price:

"In some cases, the final cost is as much as 45% over the advertised rate. For example, Xfinity’s $40 ‘Starter Internet plus Basic’ TV bundle jumps to $58 per month once the additional $18 in equipment costs are added. Prices can also vary based on location.”

According to GlobalData’s research, Verizon had the highest additional costs in August at $24 per month, followed closely by Frontier and Optimum with around $17-$18 in additional equipment fees. AT&T and Google Fiber offered the most cost transparency in bundle price with zero additional equipment or technology fees.

AT&T is let off the hook here and they shouldn't be. This is a company that recently tried to charge its broadband customers upwards of $500 more a year if they simply wanted to opt out of snoopvertising and online data tracking. The broadcast and cable fee problem isn't a subtle one. Companies like CenturyLink have gotten so cocky they've charged their broadband users a "internet cost recovery fee," which it claims helps the ISP "defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network." Except that is, in case you didn't know, what the rest of your damn bill is for.

Of course it's a problem that's everywhere, and not just in the telecom sector. Hotels routinely still charge users obnoxious "resort fees" (legislation to hamper those efforts exists but faces an uphill climb against lobbyists), and airlines and banks have of course perfected the nuisance as well. But both parties appear to have embraced the practice as a form of capitalistic creativity, despite the fact that when you strip away the bullshit justifications, it's little more than false advertising. And, apparently, most US regulators and lawmakers are cool with that.

Filed Under: broadband, cable, fees, hidden fees, truth in advertising
Companies: at&t, centurylink, comcast, frontier, verizon


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  • identicon
    BobButtons, 1 Oct 2019 @ 6:29am

    It shuts them up on the phone.

    If/when I ever need to call Spectrum about my account, they naturally try their best to upsell me since I'm an Internet-only customer. They love the term "plan guarantee" as if locking me into a plan rate means anything at all when a third of the bill is below the line. Despite no interest in adding services, I'll ask if their 'plan guarantee' prevents the bill from skyrocketing at the company's will every time they jack up their self-applied fees as they've done numerous times in the last couple years alone. "Does your plan guarantee come with a bill guarantee?" Of course they have no answer to that because it doesn't so 'plan guarantee' means absolutely zero since they still have the freedom to increase your bill whenever they want.

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

    • identicon
      Anonymous Coward, 1 Oct 2019 @ 12:09pm

      Re: It shuts them up on the phone.

      They have an answer. They've given it to me.
      Listen to this crock
      "You were saving $X, your bill has increased but you are still saving $X"

      This response covers 99.9% of the people. Some believe it, the rest are too flabbergasted to say anything

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

  • identicon
    Anonymous Coward, 1 Oct 2019 @ 6:41am

    I have a bullshit fee that I charge them, it is typically equal to the bill they would send me if I did business with the liars.

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

  • This comment has been flagged by the community. Click here to show it
    identicon
    Noe Subject Allowed, 1 Oct 2019 @ 6:52am

    AGAIN you rail against NON-GOOGLE CORPORATIONS. You PIRATES keep DEMANDING lower prices for other people's WORK, while REFUSING to punish TROLLS for insulting me.

    You won't CHASE me away, ankle-biters! HOOT HOOT HOOT!

    (TWENTY-EIGHTH attempt just to get in because Maz is SCARED of my TITLES. HOOOOOOOT!)

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

  • identicon
    Anonymous Coward, 1 Oct 2019 @ 7:00am

    gamesmanship

    well, this kind of deception is very common in the private and public sectors.

    Hotels and airlines are infamous for hidden fees -- and its a very rare politician or legislator who is honest about how much his programs will actually cost taxpayers'.

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

  • identicon
    Anonymous Coward, 1 Oct 2019 @ 7:55am

    so how much goes to the lobbyists, members of Congress, regulators and, in particular Pai? remove these 'hidden costs' and the reduction would be considerable!

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

  • identicon
    Pixelation, 1 Oct 2019 @ 8:13am

    I think they hired the accountants from the entertainment industry.

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

  • identicon
    Anonymous Coward, 1 Oct 2019 @ 8:54am

    Sales taxes

    Hotels routinely still charge users obnoxious "resort fees" ..., and airlines and banks have of course perfected the nuisance as well.

    Don't forget sales taxes. The USA is one of the few places in the world where companies can advertise pre-tax prices.

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

    • identicon
      Anonymous Coward, 1 Oct 2019 @ 9:14am

      Re: taxes

      yeah, taxes take the cake for being THE most hidden fees -- not one citizen in hundred understands how much he really pays in taxes

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

      • identicon
        Anonymous Coward, 1 Oct 2019 @ 9:28am

        Re: Re: taxes

        If you live in the US then don't bitch about taxes. Have a look at the rest of the world's taxes first. Not one US citizen in 1000 understands how good we have it here wrt taxes.

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

        • identicon
          Anonymous Coward, 1 Oct 2019 @ 10:17am

          Re: Re: Re: taxes

          Oh not this tired old story.
          If you are going to compare things, one needs to compare things that are alike. When they are not even similar, one needs to do something similar to normalization of the data.

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

    • identicon
      Anonymous Coward, 1 Oct 2019 @ 9:26am

      Re: Sales taxes

      I don't see how that's a bad thing. If you live in an income tax state everything your money goes to is taxed -- purchases, savings, everything. That tax isn't rolled into advertised hotel rates.

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

      • identicon
        Anonymous Coward, 1 Oct 2019 @ 9:54am

        Re: Re: Sales taxes

        If you live in an income tax state everything your money goes to is taxed

        Source of income are taxed, not the things you spend on. The companies selling stuff to you can't know how much income tax you pay, or their employees and suppliers pay.

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

        • identicon
          A Guy, 1 Oct 2019 @ 10:50am

          Re: Re: Re: Sales taxes

          Your spending is someone else's income so yes it is taxed again.

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

          • identicon
            Anonymous Coward, 1 Oct 2019 @ 12:05pm

            Re: Re: Re: Re: Sales taxes

            Double taxation is not supposed to happen, but is is SOP.

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

          • identicon
            Anonymous Coward, 1 Oct 2019 @ 1:05pm

            Re: Re: Re: Re: Sales taxes

            Your spending is someone else's income so yes it is taxed again.

            Maybe. It's semantics whether a tax rate of 0% counts as "taxed again", and a lot of people—particularly part-time workers—pay zero or negative income tax. It's not reasonable to expect sellers to collect the tax data of everyone they pay to tell you the amount. A sales tax, by contrast, is easily quantifiable and is collected directly by the seller. Worldwide, it's often/usually included in the advertised price, with few problems.

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

            • identicon
              A Guy, 2 Oct 2019 @ 12:26am

              Re: Re: Re: Re: Re: Sales taxes

              I grew up in one of the traditional high tax states that cannot seem to stop growing its state debt no matter how much tax they raise. I think it's above 1 trillion just at the state level now, unless they did some budget cuts and restructuring since I stopped paying attention which I doubt.

              Anyway, there is no such thing as 0% income tax there. Last I checked, everyone had the same rate on all income no matter how much or little you make. Make 1000 dollars at a part time job as a teenager, you pay the same rate as everyone else. (if it's reported and you're sent a tax form anyway)

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

        • identicon
          Anonymous Coward, 1 Oct 2019 @ 5:46pm

          Re: Re: Re: Sales taxes

          Source of income are taxed, not the things you spend on

          It's almost the same, only much worse. When the balance sheet is complete you've still been taxed n% for that widget you bought. But you've also been taxed n% on the money you put away in savings, n% on the money you lent to a friend and n% on every other dollar you earned before you've had a chance to spend any of it. Why anybody is in favor of income tax versus sales tax is a mystery.

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

          • identicon
            Anonymous Coward, 2 Oct 2019 @ 1:34am

            Re: Re: Re: Re: Sales taxes

            Because income tax is better for those worse off, if you don't earn much, you don't pay much tax if any. Sales tax however, is worse for the poor as you still have to pay it, no matter how low or high your earnings.

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

            • identicon
              urza9814, 2 Oct 2019 @ 7:42am

              Re: Re: Re: Re: Re: Sales taxes

              In every case that I've seen, sales tax is only applied to "luxury" items, the same way income tax generally only applies to above poverty level income. So someone who spends their entire paycheck on rent and groceries likely isn't paying a dime in sales tax.

              But sales tax benefits the rich in a different way. The poor spend more than they save and end up in debt; the rich save more than they spend and end up with a nice bank balance. So ignoring the typical exceptions, the poor would pay sales tax on their complete income or more, while the rich would almost never pay sales tax on anything close to their complete income. Considering investments as a "sale" would correct some of that imbalance, but you'll never get rid of all of it.

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

    • icon
      Gary (profile), 1 Oct 2019 @ 9:30am

      Re: Sales taxes

      The USA is one of the few places in the world where companies can advertise pre-tax prices.

      By law they can't advertise the price to include sales tax - for good reasons. Not everyone pays sales tax, and the tax varies from county to county. And it isn't part of the "Price." It's a separate item levied by the state and county.
      But it's not something that is going to catch anyone by surprise. At least anyone who has been paying sales taxes for their entire life!

      Unlike the mystery line items charged by hotels and cable companies. They try to imply this is some sort of regulatory fee, not just a price hike that goes straight into their pockets.

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

      • identicon
        Anonymous Coward, 1 Oct 2019 @ 9:51am

        Re: Re: Sales taxes

        But it's not something that is going to catch anyone by surprise. At least anyone who has been paying sales taxes for their entire life!

        It catches Europeans by surprise—they've paid sales tax all their lives, in much higher amounts than Americans, but always included in the price. On international purchases, those prices may need adjustment—you might pay 20% less than advertised if an EU company ships to America.

        But really, even locals are caught by surprise all the time. Very few people know the exact rules about what's taxable at what rates, especially when traveling out of state. Food taxability is often complex. Just last week there was a CBC story about Wal-Mart charging tax incorrectly in Canada (few provinces enforce tax-inclusive pricing), for quite some time before anyone noticed they were paying more than was listed on the price tag.

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

        • identicon
          Anonymous Coward, 1 Oct 2019 @ 5:48pm

          Re: Re: Re: Sales taxes

          That only works because the tax rates are stable across large swaths of Europe. Unlike in the US where tax rates can vary by state, county and city. Trying to advertise prices that include sales tax would be an exercise in futility in the US.

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

  • identicon
    A Guy, 1 Oct 2019 @ 9:21am

    Cable Ripoff

    Mediacom has been ripping off my mom for over a decade and she didn't realize it because she doesn't use the internet connection in a high bandwidth way since her retirement.

    She was paying for 100Mbs down and 5Mbs up but it was magically downgraded to 60Mbs without explanation. I have now checked it for her and it in fact gives 1.5Mbs down on a good day and .25Mbs up. I don't even know who to complain to in the government due to the fcc's current attitude on the situation but mediacom gets hundreds of dollars a month for services we don't think they ever delivered since my mom retired from John Deere.

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

    • identicon
      A Guy, 2 Oct 2019 @ 7:58pm

      Re: Cable Ripoff

      They fixed it to a level where I would not have complained about it but it's obvious that the speed they advertised when we bought it is the maximum possible speed, not average speed.

      Anyway, it's now working well enough that we no longer care.

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

  • identicon
    Anonymous Coward, 1 Oct 2019 @ 3:30pm

    If we saw this elsewhere...

    If we were to see this sort of shenanigan elsewhere, say for example, at the supermarket, there would be plenty of yelling and screaming...

    Just imagine being able to buy Tomatoes for 79 cents a piece (according to the price tag), but then when you get to the register, there's an additional 59 cents billed for 'upgrading and maintaining farming equipment' and additional 19 cent 'Required by act 39.1 B fee' ... not to mention that there would also be whatever sales tax and possibly a fee to bag it and for the bag itself...

    Yeah, I don't think that sounds reasonable at all, do you?

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

    • identicon
      Anonymous Coward, 1 Oct 2019 @ 5:49pm

      Re: If we saw this elsewhere...

      Nope, not reasonable at all.

      So tell me: Do you have cable and dutifully pay your monthly bill?

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

  • identicon
    Smartassicus the Roman, 1 Oct 2019 @ 5:22pm

    Fuck Comcrap

    We should all start billing these con artists for our fees to put up with their terrible customer service, shitty connections, TV dropouts (at $200 per second), etc.

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

  • icon
    Toom1275 (profile), 2 Oct 2019 @ 9:52pm

    A reminder that municipal broadband doesn't come with this fuckery.

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

  • identicon
    Anonymous Coward, 3 Oct 2019 @ 6:48am

    often be upwards of 45 percent higher than the advertised price:

    "In some cases, the final cost is as much as 45% over the advertised rate."

    "as much as" means "up to", Karl. Up to 45%. Not "upwards of". That means "more than". "up to" is not the same as "more than".

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


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