The Cable Industry Makes $28 Billion Annually In Bullshit Fees

from the false-adverting-by-another-name dept

Last week we highlighted a study showing that your cable bill can be as much as 45 percent higher than the advertised price thanks to bullshit fees. Now a new study by Consumer Reports shows that up to 24 percent of your monthly cable bill is comprised of said bullshit fees. The fees are designed specifically for one purpose: to let companies falsely advertise one rate, then charge you significantly more money. It's effectively false advertising, but efforts to rein in the practice are fleeting to nonexistent, because creatively fleecing American consumers is just so hot right now.

Consumer Reports examined 787 consumer cable bills from 13 top cable providers and found that while the average user paid around $156.71 per month for cable TV, users in reality paid $217.42 a month once fees were included. As such about 24 percent of your cable TV bill each month ($37.11) is made up of fees and hidden surcharges, generating about $450 per year per consumer for the industry, or about $28 billion in total.

The report is quick to highlight how some of the bullshit fees (like the "regulatory recovery fee") are named in such a way to trick the consumer into blaming government. The group reached out to 74 consumer reps posing as a customer and found that support reps are pretty clearly trained to create that impression:

"Often these fees are misleadingly portrayed by cable providers as government-mandated surcharges so that consumers blame the government instead of cable providers. One such fee is the “regulatory recovery fee,” specifically named for just this purpose. Consumer Reports researchers say they posed as consumers and called 74 customer service representatives (CSR), who routinely tried to blame government for excessive surcharges. "At least one CSR of every major provider that our secret shoppers contacted misstated that fees were mandated by the government, without a clear distinction made between company-imposed fees and regulatory pass-through fees," the report said.

One of the industry's favorite, more recent fees is the "Broadcast TV fee," which we've hammered on previously. This fee simply involves taking a portion of the cost of programming and burying it below the line as an itemized fee, again with an eye on falsely advertising a lower rate. Thanks in part to a government that can't be bothered to protect consumers from said false advertising, Comcast has quietly been jacking up this fee for the better part of the last decade with zero repercussions whatsoever:

"The study found that in 2015, Comcast started charging consumers a $1-a-month Regional Sports Fee and $1.50-a-month broadcast TV fee ($2.50 per month). By 2019 those fees had ballooned to $18.50 a month, or a 600 percent increase in just four years."

Cool. While some bills have been proposed to rein in the practice, they routinely go nowhere thanks to our campaign contribution slathered Congress. And the FCC just neutered much of its authority over broadband and cable TV providers at lobbyist behest. Good times, yeah?

Keep in mind this is how the cable TV industry behaves when competition from streaming alternatives is steadily driving customers to cut the traditional cable TV cord, illustrating how organic competition isn't always enough to prevent entrenched predatory monopolies from behaving badly. Cable giants figure that sure, they may lose some TV subscribers by being predatory bastards, but they'll just recoup those costs by raising the costs of broadband (where they hold a more solid natural monopoly, another problem we apparently don't want to do anything about).

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Filed Under: bogus fees, broadcast tv fee, cable industry, false advertising, fcc, fees, ftc, price hikes, regulatory recovery fee

Companies: comcast