When Charter Communications (Spectrum) proposed merging with Time Warner Cable and Bright House Networks in 2016, the company repeatedly promised that the amazing “synergies” would lower rates, increase competition, boost employment, and improve the company’s services. Of course like countless telecom megamergers before it, little if any of those promises actually materialized.
Instead, the company quickly set about raising prices to manage the huge debt load. And its service has been so aggressively terrible that the company recently almost got kicked out of New York State, something I’ve never seen in 20 years of covering telecom. All the while, the company continues to not only jack up its standard pricing, but the sneaky fees it uses to advertise one rate, then charge users something else when the bill actually comes due.
We’ve noted for some time how cable providers over the last few years have added a “broadcast TV” fee to customer bills. Such a fee, which simply takes a part of the cost of programming and buries it below the line, lets cable providers advertise one rate, then hit customers with a higher bill. It’s false advertising, but you’d be hard pressed to find a regulator anywhere in North America that gives much of a damn about the practice, be it in telecom, cable TV, the airline sector, or anywhere else. Culturally, American “leadership” appears to view such fees as the pinnacle of capitalistic creativity.
So it just keeps on going. The Los Angeles Times notes that Spectrum is informing its already angry customers that they’ll soon be facing yet another $ 2 monthly hike in the company’s broadcast TV fee, on the heels of another hike just last fall. The fall hike bumped the fee 12% to an additional $ 8.85 per month. This latest hike bumps it another $ 2 (20%) to $ 12 per month. And again, this is just for the cost of programming, something you’re supposed to have already paid for in your base, above the line bill.
All told, the company nets quite a significant profit from this tap dance, notes the Times David Lazarus:
“That 20% fee increase means big bucks for Charter. The company reported Thursday that it had just over 16 million residential pay-TV subscribers as of the fourth quarter of last year.
Hitting up each of them for an extra $ 2.04 a month means Charter, the country’s second-largest cable company, will be raking in an additional $ 391 million in annual revenue, on top of the tens of billions of dollars it already earns.”
Keep in mind, this is a company facing unprecedented competition by cheaper, more flexible streaming alternatives. In a functioning, healthy market, you’d either have competition or moderate regulatory oversight applying some pressure to protect consumers. But telecom, cable, and broadband is far from healthy. It’s a coagulation of natural broadband monopolies that also sell video, but have such entrenched power over state and federal lawmakers (aka regulatory capture), efforts to actually protect consumers from this nonsense wind up being few and far between in most states.
Until we see somebody in a position of regulatory authority actually crack down on this obvious practice of false advertising, it’s pretty clear American leadership’s breathless dedication to things like transparency and consumer protection are just empty lip service. Whether we’re talking about hotel resort fees or the laundry list of annoying airline fees, we’ve culturally embraced the idea that false advertising and nickel-and-diming captive customers is not only ignored but actively encouraged. Somebody wake me up when that changes.
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