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ISPs Still Fib About Advertised Prices, Regulators Don't Care
by Bill Neilson 04:48PM Friday May 30 2014
For years, broadband customers have struggled to get even the most basic transparency from their broadband providers. In 2010, the FCC finally admitted in public that consumers were not getting accurate speed and network management information about their connection. Fast forward to today and consumers are still largely left in the dark when it comes to what's often highly-priced, low quality connections.

For example, the FCC continues to ignore the continued ISP use of "unfees" or various other below the line charges that are used to add additional revenue from customers through official sounding names such as a "regulatory recovery fee" or the "Internet Cost Recovery Fee." Customers are then left with jacked-up bills and rate hikes all the while the “advertised price” remains the same (the ad price is also what's used for most international comparisons of U.S. prices).

As this site has reported previously, Attorney Generals from a number of states have started to crack down on wireless carriers for lying to customers about unlimited data, sneaky contract extensions, and ETFs (which have largely gone away thanks to T-Mobile). Yet, why are billing tricks by wireless and wireline carriers alike not given more attention by the FCC?

This week, we look at a recent story by the Los Angeles Times who wrote about an elderly woman who saw a price for AT&T U-Verse services and decided to give them a call:
quote:
"Carr had been getting her phone and Internet service from AT&T and her TV from DirecTV. She saw an ad for AT&T's broadband U-verse service that bundled everything together for a lower total price, so she gave the company a call. "They told me it would be $172 a month for phone, Internet and TV," Carr said. "I asked them three times to confirm that price, and three times they said it would be $172 a month."
Yet, when the woman received her first bill, it showed $190 in monthly recurring charges, plus another $16.33 in "one-time charges/credits." Oh, and let’s tack on standard taxes/fees which raise the price even higher to at least $215 (just my guess, btw). When the LA Times writer decided to help, he broke down the issues that face many customers:
quote:
"I won't waste space with all 41 line items on the bill estimate, some adding to the monthly cost, others subtracting from it. Anyone would be bamboozled by all the accounting legerdemain. What jumped out for me was the estimate's combined $20.93 in monthly "surcharges and other fees" for U-verse phone and TV service, plus another $44.25 in combined "government fees and taxes." What surcharges? What other fees? What government fees and taxes?
When the LA Times writer went to AT&T's online page titled "Understanding Your U-verse Bill," he found absolutely no detailed information on these so-called surcharges, fees and taxes. Much like other people who contact AT&T and ask them about their bills, the LA Times found a number of discretionary charges by AT&T such as a Universal Service Fund charge and a regulatory cost recovery charge.

Then again, when it comes to getting ISPs to pay taxes (ie their own so-called bills), we can be assured that they spend many, many hours looking into making sure that laws are introduced and passed which limit how much the providers must be forced to pay for doing business in the country. Their bills will be routinely reviewed and lowered while our bills will continue to increase and be impossible to understand, with regulators napping all the while.

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Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1

2 recommendations

Prices advertised should be what is charged.

Okay I know this is impossible to do on radio and TV since that is pretty much a regional or nation wide ad. But I think when you visit a website and enter your zip it should show the true price and not the adspeak price. And this should be required by law.

I mean if I buy food items at a supermarket which are not taxed, I pay what is on the shelf or tag. I do not get my steak to the register and see the screen show "Cutting Fee, Refrigeration Fee, Packing Fee, Health Code Compliance Fee".

No these are all the cost of the supermarket doing business and its already considered when the owners decide what to charge per unit for the food they sell.

ISPs spew bullshit about fees are needed to cover the cost of doing business, But its no different than a supermarket having costs and they do not tack on fees. If the power company raises rates the items prices go up they do not add a "Keeping the lights on fee". So the cost still goes up but at least they are not weasel about it and hide the higher cost until its time to pay the bill.
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[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

Camelot One
Premium,MVM
join:2001-11-21
Greenwood, IN
kudos:2

1 recommendation

Re: Prices advertised should be what is charged.

I would meet them half way. The advertised price should be everything but the government mandated taxes/fees. They should absolutely not be allowed to tack on these cost-of-business fees mandated by no one but themselves. Sales tax and other state/local fees vary from place to place, so I can accept that those aren't included in the nationally advertised price. But there is no reason a sales rep can't tell a person exactly how much those will add to the bill, once they have your address.
BiggA

join:2005-11-23
EARTH

Re: Prices advertised should be what is charged.

Yeah, that makes more sense. They shouldn't be able to tack on BS fees for no reason.
corinthos

join:2007-10-09
Yeah but they should be able to quote you the price after the fees on the phone. I know its possible because I used to work for AT&T 2 years ago and we were able to do it but couldn't tell people because it "might change or be off by a few cents" and they didn't want us to give them misinformation. I think it was just because they didn't want people upset about how much taxes and their shitty little fees were going to up the bills. Some of those fees were not taxes because we could remove them to "lower their bill" if they bitched.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
said by Kearnstd:

I mean if I buy food items at a supermarket which are not taxed, I pay what is on the shelf or tag. I do not get my steak to the register and see the screen show "Cutting Fee, Refrigeration Fee, Packing Fee, Health Code Compliance Fee".

But if you buy a quarter/half or whole carcass (beef, pork,lamb, venison (it's all good) from a butcher or farmer, there usually is a "cut and wrap" fee added per pound in addition to the hanging weight the farmer gets. and smoking the bacon or sausage costs a few cents more per pound.

as long as it is clearly disclosed, it's fine to charge it.
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1

Re: Prices advertised should be what is charged.

And I bet they display those exact fees on the sign, The telecom industry does not do that even on their websites which could provide localized data to the potential customers.
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[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: Prices advertised should be what is charged.

I can call Comcast and ask for MY price at MY house on any combination of products the sell, and the can calculate the prices, taxes, fees and total within a penny, and it has always been correct ( I used to get charged a extra penny each month and on the third or forth month get 2 cents credit because the way the tax was rounded) or the most part the website is correct on most fees, but due to other problems I've always ended up completing/correcting the order on the phone.
So far I've been unable to have a CSR fax or email me the number (they say email is not permitted and fax could be going to anyone, so I'm OK with those rules) within a couple days I can usually see the changes and charges on my account OR I call to confirm the expected bill.

Not effortless on my end, but a reasonable method does exist.
And I'm not afraid to call/write any Telco/credit card/vendor to dispute ANY unknown/unexpected charge, something ALL consumers should do.
Almost every large company has sales people (often contractors or commission based) who push the boundaries of honesty in order to book enough sales. Even simple tally systems catch repeat offenders fairly quickly and they move on, unfortunately credit or at least a notation in the customer they dealt with account record doesn't always happen (it should) seen as a liability rather than correcting a company error.

Camelot One
Premium,MVM
join:2001-11-21
Greenwood, IN
kudos:2

Re: Prices advertised should be what is charged.

Now that I am a Comcast customer, I can call customer service and get my monthly total, after fees. However, I tried 3 times to get that amount BEFORE signing up, and each time I was told they couldn't tell me the total after fees/taxes until the first bill was generated.
I had the same issue with Centurylink (even on their POTS), and with AT&T in Austin. Years ago Verizon was pretty close on the Fios internet estimate, but they still forgot to include one of the Florida taxes.
Skippy25

join:2000-09-13
Hazelwood, MO
That is all fine and dandy, but any and ALL fees that are not government mandated and are a cost of doing business should be on the advertised price.
Expand your moderator at work
shmerl

join:2013-10-21

Optimum manages it somehow

They charge what they advertise, no hidden fees and "surcharges".
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

Regulators work for the government

Which, like the ISPs, has a number of below-the-line charges, which they sometimes admit are taxes, and sometimes call fees or funds.

They aren't about to challenge the status-quo, which permits Uncle Sam, his friends in the statehouse and city hall to tax us with impunity, since the charge is passed-through.

If ISPs were required to honor their advertised price without fine-print, they would fight tooth-and-nail to eliminate those extra taxes and fees.
shmerl

join:2013-10-21

Re: Regulators work for the government

quote:
If ISPs were required to honor their advertised price without fine-print, they would fight tooth-and-nail to eliminate those extra taxes and fees.
Why? All they need to do is include those fees / taxes (averaged) in the advertised price if they want to pass them to their customers. That would be fair. It's not like their subscribers can't find that there are extra fees - they will find it anyway. So what's the point of hiding it to make people only more upset?
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

Re: Regulators work for the government

said by shmerl:

Why? All they need to do is include those fees / taxes (averaged) in the advertised price if they want to pass them to their customers. That would be fair. It's not like their subscribers can't find that there are extra fees - they will find it anyway. So what's the point of hiding it to make people only more upset?

By requiring the ISP to incorporate those taxes and fees into their advertised price, invariably, the stated price will be higher, thus, losing sales, while the ISP will end up eating more of the taxes, since they aren't permitted to apply them dynamically with each bill, and they will catch even more flack with each rate change.

By "hiding" the taxes, the ISP would have a vested interest in opposing them, using their allegedly all-powerful lobbying elements, where today, they simply pass them along, to the tune of 20-60%.
shmerl

join:2013-10-21

Re: Regulators work for the government

They can lose sales either way. Because once people will find they were cheated they are even more likely to ditch that ISP if they can. And if they can't (i.e. for example that's the only ISP in the area) then advertising the higher price won't make any difference either. So I don't really see any valid reason for them to hide that.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
said by shmerl:

Why? All they need to do is include those fees / taxes (averaged) in the advertised price if they want to pass them to their customers.

But they aren't average, many places internet service isn't taxed, so if you bring your on modem taxes and fees would be zero on that single play customer, while TV, phone and equipment can have plenty of taxes fees legitimately added.
Require the company to break out all their own charges and fees in ads or websites and have GOVT required charges displayed separately (you ought to know what the Gmen take too) and you should always be given the bottom line price too.
Perhaps the bill/price sheet should be sent BEFORE service starts so that you MUST acknowledge, YOUR commitment.

JakCrow

join:2001-12-06
Palo Alto, CA

But! But!

The telcos just gotta recoup these fees for "fixed costs" from their dindling customer land line base! Didn't you know?
ITGeeks

join:2014-04-20
Cleveland, OH

Re: But! But!

It's just not telcos- some Indie ISPs are doing it as well. DSLx is one that charges the USF as a "recovery" fee they claim AT&T charges everyone for who uses their network. But yet they still charge the same fee to Frontier/VZ customers as well.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

the LA Times found a number of discretionary charges by AT&T such as a...

...Universal Service Fund charge ---
Is that really discretionary on phone service from the phone company?
Is it something ANY CSR/sales rep can just waive at their own discretion? I doubt it.

While I disagree with how AT&T sales rep APARRENTLY (based on this story) jacked up the price, it also sounds like the reporter may be shading the truth about which taxes and fees are REQUIRED to be passed along, even listed as a line item.
Here it is required that they be listed separately, and a good rep SHOULD tell you the correct TOTAL, if requested.
Further, you could likely void the contract if it was dishonestly represented by a company employee.
I do know state and local laws vary.
This does show the value of the Comcast 30 day money back guarantee which allows you to test the services and the accounting.
More companies should start with that level of trust (they could lose $500, and a few months free service) when aiming for a long term customer relationship.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

Re: the LA Times found a number of discretionary charges by AT&T such as a...

USF = universal slush fund.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: the LA Times found a number of discretionary charges by AT&T such as a...

said by dvd536:

USF = universal slush fund.

BUT required by federal law/FCC rule. not something they can choose not to collect, even if unpopular.
And certainly not something someone on the sales floor has discretionary power to ignore.

fg8578

join:2009-04-26
Salem, OR

Re: the LA Times found a number of discretionary charges by AT&T such as a...

said by tshirt:

BUT required by federal law/FCC rule. not something they can choose not to collect, even if unpopular.
And certainly not something someone on the sales floor has discretionary power to ignore.

The USF is assessed on the telco, not the customer.

The "discretionary" part is whether the telco eats the charge or bills it to the customer as a "pass-through", which by law they are allowed to do.

Given a choice between eating it or passing it through, which do you think most businesses would do?

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: the LA Times found a number of discretionary charges by AT&T such as a...

said by fg8578:

Given a choice between eating it or passing it through, which do you think most businesses would do?

The customer will always end up paying it either way, breaking it out as a line item lets them know how much it is, and is required in some states.
And yes when giving a service quote this SHOULD be mentioned both as an item in the sub total and added to the Grand total.
With a renewed push to make USF pay for internet it is LIKELY to get a bigger % and apply to more of the bill.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: the LA Times found a number of discretionary charges by AT&T such as a...

The consumer will always pay all fees, but this fee as many of the others should be in the advertised price.
rfrooney

join:2006-02-26
Antioch, TN

Start filing complaints

If the FCC doesn't care then start filing false advertising and consumer fraud complaints with the FTC. Ask the FTC to force the telco and cable companies to include ALL equipment fees, cost recovery fees, broadcast fees, I need a new yacht or vacation home fee, and taxes (except local and state sales taxes) in the advertised price. There are truth in advertising laws on the books and they should be enforced. Also, complain to your congressman. The cable companies may own him but you can still fire him.
ITGeeks

join:2014-04-20
Cleveland, OH

Re: Start filing complaints

The FCC has no power over advertising. It's the FTC all the way.

Packeteers
Premium
join:2005-06-18
Forest Hills, NY
kudos:1
Reviews:
·Time Warner Cable

why to cut the cord

ISP only service does not have any BS add-on charges if you own your modem.
I'm paying TWCable the same $30 no extras for the past 3 years, and not even
a late payment fee. also when you pay Netflix/Hulu/Aereo - no added BS charge,
same with VoIP/SIP as long as you find a way around the local e911 BS.

fg8578

join:2009-04-26
Salem, OR

1 recommendation

FCC can't regulate prices

Bode, it's not a question of regulators "not caring" (but your headline certainly works as click-bait).

The FCC pre-empted the states so the state PUCs cannot set broadband prices. And since the FCC categorized broadband Internet as a Title I information service, the FCC can't set prices either. OTOH, the FTC and state attorneys general certainly can go after ISPs for false advertising.

If customers believe they've been lied to, they should file a complaint with the FTC and their state attorney general. Is that "caring" enough for you?
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·Millenicom
·Embarq Now Centu..
·Comcast
·CenturyLink

Don't think it is only ISP's that mislead customers on prices.

The problem is lawmakers are bought and paid for by corporate fascists. It is not only ISP's that mislead and defraud customers by failing to disclose all costs. The airline industry has been doing a great job screwing customers. The airlines made two billion dollars last year forcing passengers to pay more or stay. I had relatives that were charged over $100.00 in undisclosed fees including baggage fees and seat selection fees at the gate. Of course airlines and travel booking websites are crying foul. They claim it would be impossible to list those fees on their price lists. They sure can locate the price list when they demand their pound of flesh. The Federalist SCOTUS, lobbyists and corrupt lawmakers will make certain that the 99 Percenters are not treated honestly because there will be no sanctions against the perpetrators.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·Millenicom
·Embarq Now Centu..
·Comcast
·CenturyLink

One Cable Company using DTA's to scam customers.

I am moving to a Condominium that has standard basic cable service, paid for the homeowners association. Until January when a resident (tenant or owner) signed up for additional services they were unknown to the cable company. All the resident had to do was plug in their cable ready television to receive channels 2 to 95 without additional equipment. If a new resident applied for additional services they received promotional pricing. At the end of last year I received a notice that in order to continue to receive programming paid for by the HOA, I had to acquire DTA's from the cable company. The apartment has 5 Cable Outlets. The new policy limited residents to two televisions unless they paid a $2.00 fee for each additional DTA. I consider that a price increase.

1) When I went to pick up the DTA's the at the cable company office to continue to receive programming. I asked the representative if promotional pricing was available to me and was advised that I would qualify. Furthermore I asked if signing for the DTA's would affect my new customer status and was assured it would not affect my new customer status, because the DTA's are paid for under the HOA contract. At that time I was quoted a monthly cost of $139.00 per month for the services I requested as a new customer.

2) I am now getting ready to move and tried to order the additional services at the promotional rates quoted. I was not offered the promotional pricing that I was offered when I picked up the DTA's. I was offered bundled pricing that would be offered to an any existing customer. As a result of the misrepresentation the monthly cost increased from $139.00 per month to $202.00 per month a $63.00 increase. I am trying to locate the correct agency to file a complaint.

Another case of the shell game played by cable companies.
ITGeeks

join:2014-04-20
Cleveland, OH

Re: One Cable Company using DTA's to scam customers.

Pricing changes all the time. So does bundling and they do not have to offer new customer pricing. The only thing they need to do is sell you service at the rate advertised to YOU. Everyone generally pays a different rate depending on the bundle they were offered and the promo.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·Millenicom
·Embarq Now Centu..
·Comcast
·CenturyLink

Re: One Cable Company using DTA's to scam customers.

said by ITGeeks:

Pricing changes all the time.

You are correct, on the other hand when I established a dialog with a Comcast representative in 2006 I asked if I could install standard basic service immediately and then upgrade services when I finally move permanently. The representative advised me I would get the best pricing if I ordered all desired services with my initial order because no further new customer promotions would be offered after that unless I disconnected service for six months. I followed her advice and received approximately 40% discount on the regular price for a period of six months.

I did not order broadband service at that time because I had a good relationship with a manager at Circuit City and was advised to order broadband service in December because Circuit City offered their best promotion at that time. That deal included a modem at no charge, Standard Broadband service at $19.95 per month and a $100.00 gift card.

If the cable company representative warned me the offer was only available when I picked up the DTA's in January 2014, I would have ordered service at that time. I would have saved $63.00 per month or $756.00 the first year or the equivalent of 5.4 Months of service at the last quoted price.

Based on the above article I might have been charged a higher price than the promotional price anyway, when I received the first bill, because accurate pricing is not one of their virtues.

cork1958
Cork
Premium
join:2000-02-26

AT&T or Verizon

Every time I read a story and it turns out to be about AT&T or Verizon, it just makes me wish all the more that those 2 conglomerates would just blow up! Man, I hate those companies!

Although phone companies aren't the only one's with these below the line fees and stuff, those 2 companies just irk me!
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MrBungle87

join:2013-01-18
Durham, NC
Reviews:
·Time Warner Cable
·Frontier Communi..

What about equipment rental?

Why are cable companies permitted to advertise a TV package at, say, $49.99 a month and then *require* a monthly STB rental for $10-12 (in addition to electronic programming guide fees, among others)? If you *have* to have an STB to enjoy a TV package as it was intended (eg: to decrypt premium cable/HD channels), then why shouldn't hardware rental be included in your monthly rate? Because cable companies know $49.99 looks more attractive than $65.36? Right. Once we get to the bottom of the hardware fee shenanigans cable companies play, we'll have made some progress.