White House Report Slams Sneaky Fees in Telecom, Cable TV A new white house report heavily criticizes the practice of hidden fees, and specifically singles out the telecom industry for its expanded and often creative behavior on this front. The report by the National Economic Council laments the fees in the hotel, airline, concert and telecom industries, correctly noting that such fees allow companies to advertise one price, but charge something entirely different. Despite being a common practice in most of these industries for the last decade, regulators have consistently failed to crack down on the behavior.

"When pricing is unclear, it threatens the competitive process by which consumers make decisions," the report said. In telecom, we've seen the steady rise of fees like the "regulatory recovery" fees, which are designed to sound like they're government mandated -- but are really just pure profit. Cable TV providers have similarly begun charging a "Broadcast TV fee." While really just the cost of doing business, in that case companies are simply taking the cost of doing business, burying it below the line, then falsely advertising a lower rate. "Hence, the subscriber to a $39.99 monthly plan might pay a real price of $46.99 thanks to the addition of an industry-imposed $4 'regulatory cost recovery fee' and a $3 'administrative fee,' which are all paid to the telephone company, and therefore represent the real price of the service.," the report said. Sneaky or not, fees are immeasurably profitable, of course. Comcast makes an estimated $300 million every quarter off of cable box rental fees alone. Senators Rob Portman (R-OH) and Claire McCaskill (D-MO) have been trying to Senators Rob Portman (R-OH) and Claire McCaskill (D-MO) have been trying to apply some pressure on telecom companies in the hopes of improving things on the misleading fee front, but actual traction on this subject has been minimal to nonexistent. Regulators for both parties have been consistently terrified of wandering into rate regulation, which is why you'll often see fees -- or the steadily skyrocketing cost of service -- largely left unmentioned by agencies like the FCC.







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Most recommended from 43 comments



maartena

Elmo

Premium Member

join:2002-05-10

Orange, CA 18 recommendations maartena Premium Member The beer example..... Say you walk down the street on a hot day, and a sign outside a pub says: COLD BEER, $3!



Thirsty as you are, your mouth starts watering and you decide to enter the pub for a nice cold one. You sit down at the bar, and you order a beer. As you gulp it down, the bartender gives you the little plastic tray with the bill....



It reads:



Beer: $3.

- Refrigeration fee: $1.

- Glass washing fee: $0.50.

- Liquor license recovery fee: $1.

- Airconditioning fee: $0.50.

- Logistics/Transport surcharge: $1.



Total: $7.



Would you feel ripped off? I mean, the sign on the street clearly says that beer could be gotten for $3. And that it was to be cold. One would EXPECT that the pub selling the beer would have the license to sell it, and that it would be served in some form of vessel, such as a glass.



This is what cable television does, and we blindly accept it.



The advertisement says cable for $29.99, but it is impossible to walk out of the cable store and get cable television exactly at that price.



Not only are there broadcast surcharges for broadcast channels you could actually get for free over the air, you also have to pay sports surcharge. But that's not all, if you actually want to be able to SEE the channels you pay $29.99 for, you need to lease their tuner box at a price of $10. And if you want that device to have the ability to record things, add another $10. Then there are regulatory recovery fees so that the cable company can specifically say: "Not OUR fault, the government makes us pay that!", and a list of other fees. Some cable companies even started charging a "technology investment fee" or something along those line.... And before you know it, your $29.99 television subscription will cost you $65-ish, and that is when you have only 2 TVs or so.



Now, most people would throw a fit when they are presented with a $7 bill for a cold beer that was advertised for $3. Luckily, most pub owners don't bill their customers like that. They just put a sign outside that says: COLD BEER: $7. If asked why the price of beer is $7, the pub owner will just say: "My cost of doing business have gone up, so that's the price I have to charge to make any profit on the beer". He may grumble about the high lease prices in town or the latest state law that is designed to hinder alcohol selling places of business, but it will stay with a grumble. He ain't going to change his pricing structure so he can blame everyone and everything else.



Cable TV isn't the ONLY company that does this, but they are the most visible one.... And it should stop. If you have to charge $29.99 for TV + $5 for a broadcast surcharge +$5 for a sports surcharge +$5 in combined other fees, then just advertise for $45.99 instead and don't lead us to believe that it is going to be thirty bucks.

NoOneCares

join:2000-09-16

Portland, OR 7 recommendations NoOneCares Member Final Price The advertised price should be the final price! Doesn't matter what kind of product.

JimThePCGuy

Formerly known as schja01.

MVM

join:2000-04-27

Morton Grove, IL 6 recommendations JimThePCGuy MVM Tickmaster/Live Nation Compared to what Ticketmaster and Live Nation charge in fees the telcoms are saints. microphone

Premium Member

join:2009-04-29

Parkville, MD 5 recommendations microphone Premium Member Make Telecom, Cable TV companies prominently post the regular price. Besides the annoying fees, it's also nice to compare the regular price of service after the promos end. Not everyone likes changing their service provider every two years or negotiating on the phone like they are at a used car lot.



This is not the easiest information to explore when you are shopping around.

cb14

join:2013-02-04

Miami Beach, FL ·Localphone

·Zadarma

·Verizon Wireless

·callwithus

·T-Mobile

·AT&T U-Verse

·Callcentric

4 recommendations cb14 Member It's everywhere. It's everywhere. What about the " shop supply fee" at the garage? When I asked what it was they said for the cleaning rags and soap for hands and similar. Next time a toilet paper surcharge will show up. And " battery recycling fee" When I offered to take the old battery with me and liberate them from the recycling burden ( and sell it for scrap) they said no, I could not do that, they would have to charge me more. I still have not figured out how much I am exactly paying for electricity and the amount of taxes and junk fees for my cell phone increases my bill by 24-25 %. My dental bill is usually about 50% higher than the price according the booklet for the procedure.And so forth.