Comcast Under Fire For Using Bullshit Fees To Covertly Raise Rates

Tech Dirt – by Karl Bode

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.

One thought on “Comcast Under Fire For Using Bullshit Fees To Covertly Raise Rates

  1. Bill for cable tv goes up, people lose their shit. Bill of Rights gets dumped, people rejoice in “safety”. Holey f*#k!

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