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