Plaintiffs From Seven States Sue Comcast For Misleading, Hidden Fees (dslreports.com)

An anonymous reader quotes a report from DSLReports: Back in 2013 Comcast began charging customers what it called the "Broadcast TV Fee." The fee, which began at $1.25 per month, has jumped to $6.50 (depending on your market) in just three years. As consumers began to complain about yet another glorified rate hike, the company in 2014 issued a statement proclaiming it was simply being "transparent," and passing on the cost of soaring programmer retransmission fees on to consumers. There's several problems with Comcast's explanation. One, however pricey broadcaster retransmission fees have become (and keep in mind Comcast is a broadcaster), programming costs are simply the cost of doing business for a cable company, and should be included in the overall price. Comcast doesn't include this fee in the overall price because sticking it below the line let's the company falsely advertise a lower rate. Inspired by the banking sector, this misleading practice has now become commonplace in the broadband and cable industry. Whether it's CenturyLink's $2 per month "Internet Cost Recovery Fee" or Fairpoint's $3 per month "Broadband Cost Recovery Fee," these fees are utterly nonsensical, and inarguably false advertising. And while the FCC can't be bothered to take aim at such misleading business practices, Federal class action lawsuit filed this week in California is trying to hold Comcast accountable for the practice. Plaintiffs from seven states -- including New Jersey, Illinois, California, Washington, Colorado, Florida and Ohio -- have sued Comcast alleging consumer fraud, unfair competition, unjust enrichment and breach of contract. What's more, the fee has consistently skyrocketed, notes the lawsuit. Comcast initially charged $1.50 when the fee first appeared back in 2013, but now charges upwards of $6.50 more per month in many markets -- a 333% increase in just three years.

Comments

Fees == false advertising

[whoever57]

Let's be clear, all these fees exist as a way to hide the true cost of the service.

One that irritated me a lot was paying a property tax fee for a rental car at DFW airport. Why is this so bad? Because, had I not rented the car, the company would have still been required to pay that property tax. In other words, the tax wasn't directly tied to my rental of the vehicle. Why not charge a fee for the property taxes on their HQ? Or charge a fee for the salaries of the employee who checked me in and gave me the car keys?

Taken further, every service is going to cost 1 cent and the rest will be "fees and taxes". Perhaps at that point the FTC might step in?

Re:Fees == false advertising

[Bookworm09]

"Let's be clear, all these fees exist as a way to hide the true cost of the service."

Not really. They exist to inflate pricing while allowing an advertised rate that doesn't actually include what should be part of the service fees.

You are basically saying the same thing the OP said. The cable companies are artificially/fraudulently lowering the advertised cost in order to entice people to sign up. He just chose to phrase it differently.

"hide the true cost of the service" == "allowing an advertised rate that doesn't actually include what should be part of the service fees"

Re:Fees == false advertising

[_merlin]

Yeah, US badly needs an "advertised price is actual total cost" law. We take these kinds of laws for granted in the rest of the world, but I for one only really learned to appreciate it after visiting the US (for IEEE 802.11 working group). Hotels want a "resort fee" on top of the advertised room rates, lots of things have sales tax added on top of the listed price, there's the dreaded tipping game, i.e. underpay workers so we can list artificially low prices, and count on customers paying extra. It really needs to stop, as it creates anything but an open and transparent market.

Re:It's a way of pointing a finger

[Nahor]

They can still itemize the full price if they want to point fingers.

To use the car analogy, when you get an estimate for a repair, they don't give you a base fixed price and then tack on extra in the end for parts and labors for the final cost. The estimate is supposed to be as close to the final cost as they can make it.

So here Comcast could do the same:
      Service is $50 (includes a $6.50 retransmission fee and 10% CEO wallet padding fee).

Re:It's a way of pointing a finger

[Zak3056]

Based on what I've seen in other cases, it seems to me like those fees are broken out so that a finger can be pointed at someone else and used for leverage. In other words, "Don't like that cost? It's all the FCC's fault", or something like that.

FWIW, the finger needs pointing. There was an issue with Viacom vs Dish a couple of years ago where Dish stopped carrying CBS. Huge screams in the media and from customers, finger pointing by both sides, but in the end it comes down to this:

In the past, the FCC mandated that cable and satellite companies carry broadcast stations in the local markets (not too big a problem on the cable side, but a big PITA on the satellite side). The deal was mandated carriage vs no license fees, and it was (in general) a fair one. Fast forward and the networks decided that since they were now entrenched, it was time to get paid by the evil cable/satellite companies "free riding" on their content.

The fact that it's a hidden fee is bullshit (the total should match the advertised rate + tax) but the fee definitely needs to be broken out separately, because charging to rebroadcast an advertising supported network in the very area they're giving the signal away for free is also complete bullshit.