AT&T Jacks Up Broadband Rates With Misleading 'Property Tax' Fee

from the america's-greediest-network-is-also-the-sneakiest 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. Despite this being false advertising, regulators have chosen to look the other way for decades.

Last week, a new study highlighted how nearly 25 percent of your cable bill is comprised of bullshit fees, netting $28 billion annually from such surcharges. This week, AT&T is under fire for a new wrinkle on an old game. The company has started raising its customers' broadband prices by as much as seven percent to help offset the company's property taxes. In this case, customers who thought they were signing up for fiber broadband at a fixed, locked rate were suddenly informed they needed to pay 7% more to help pay off AT&T's tax burden:

Effective October 1, 2019, there will be an increase in the AT&T Cost Assessment Charge used to recover AT&T property taxes. The monthly rate will change from 2.92% to 7.00% of your total AT&T Business Internet, Phone and/or U-verse TV monthly charges. This charge is not a tax or fee that the government requires AT&T to collect from its customers.

Again there are several problems here. One, advertising one rate then charging something else is false advertising. Two, AT&T's property taxes are the cost of doing business, and should be included above the line. Three, these users were locked in at a "fixed, guaranteed rate," then AT&T simply ignored the promise.

AT&T's practice of adding its property taxes appears to have begun sometime in 2017. But there's no indication that the rates being paid actually, realistically reflect AT&T's property tax burden:

AT&T has been charging the property-tax fee to business customers since at least mid-2017. An AT&T business DSL customer in Oklahoma complained about it on Reddit at the time, saying the then-new fee was 1.08% of the monthly bill. In January 2019, an AT&T customer complained in a DSLReports forum that the property-tax fee was raised from 2% to 6.69%. "So I gotta ask—did their 'property taxes' increase by 335%?" the customer wrote, noting the greater-than-three-fold increase.

In a functional market either competition would kick in to punish companies for this kind of behavior in the form of subscriber exodus, or a regulator would step in to, at the very least, warn the company away from such misleading predatory behavior. But this being the United States, where the FCC just effectively neutered itself at lobbyists' behest, based on entirely manufactured justifications, and vibrant competition remains a pipe dream, we get neither option. Enjoy.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community. Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis. While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: bogus fees, false advertising, misleading fees, price hike, property tax fee

Companies: at&t