Over twenty percent of cable TV bills are bogus fees, study says
vice.com
vice.com
Comparison is the mechanism by which competition drives a healthy economy. There's less value in competition the harder comparing them is. It's really hard to compare when you have to dig all the way to checkout to find what you'd pay.
Imagine you're at the supermarket and different brands of milk were listed at one price, but each had different fees when you get to the cash register. No one but the cashier can tell you what each option actually costs. How many people are going to get out of the line and go back and try another brand of mystery milk when they find out they chose one with a $1 "cattle fee?" It makes competition weak and needs to be illegal.
I agree, and regulation of this type would most likely be quite beneficial.
But for many if not most of us, it won't actually make a difference to cable/internet "hidden fees," because there is no competition.
While, it might not change the final price, the proposed regulation should reduce hidden fees, in the sense could not lawfully be hidden anymore.
How is that achievable without regulatory action?
* You have to login and tell you who you are before they'll even deign to tell you which services are available to you and at what cost.
* They WILL NOT tell you what the actual cost of a package is. They'll only tell you the 'sticker' price during the promo period. It's virtually impossible to find out the price after the promo expires.
* They WILL NOT show you the price on their website until you tell them where you live, and the price (and services available!!) change depending on whether you're a current customer, previous customer, etc.
Basically, there is not a 'menu' or price schedule. There's absolutely no way to know. Even if you call in, it's basically a negotiation. It's like the worst of used car dealerships "what do you want your monthly payment to be" dealing.
I paid for Comcast television service for years, when I wasn't even using it -- I just used my over-the-air antenna. Why? Because they charge you less money for the same internet service if you also agree to 'accept' a TV package to artificially inflate their subscriber numbers. I think that discount goes away when your promo expires, which is part of what they're banking on -- even if you're paying them "only" $20 a month more for TV on top of your internet, at least it's something. And then, of course, they get to charge you all these bogus TV fees. The more services you agree to, the more they can hit you for fees.
Thankfully, AT&T and Sonic are moving in with gigabit offerings. I finally got symmetric FTTH in April from ATT, resold by Sonic, and Sonic is hoping to roll fiber by the end of the year so I can pay them directly, $50/mo instead of $90 for ATT.
It's still an incredibly complicated, and I'm not sure how much of it will go away when I'm getting Sonic-provided service instead of resold ATT (maybe ATT itemizes more fees?), but at least all of the fees/taxes are, I believe, legitimate. I do have to pay modem+ATA rental fees regardless of which provider I use, but I'm happy to do so because it's still better and cheaper than any service I've ever gotten (1 gig down is $150 from comcast, with like 25mbit up, all capped at 1TB xfer, where my FTTH is unmetered symmetric gigabit)
Description Unit Price Total
Voice Federal Universal Service Fund Fee - 0.73 0.73
STI-0324805-1/PAIR41431
Voice California Lifeline Telephone Service 0.39 0.39
Surcharge - STI-0324805-1/PAIR41431
Voice California Deaf and Disabled Telecom 0.04 0.04
Program Surcharge -
STI-0324805-1/PAIR41431
Voice California High Cost Fund-A Surcharge 0.03 0.03
- STI-0324805-1/PAIR41431
Voice California Teleconnect Fund Surcharge 0.06 0.06
- STI-0324805-1/PAIR41431
Voice California Advanced Services Fund 0.05 0.05
Surcharge - STI-0324805-1/PAIR41431
Voice California 911 Emergency Surcharge - 0.06 0.06
STI-0324805-1/PAIR41431
Voice Redwood City Utility Users Tax - 0.49 0.49
STI-0324805-1/PAIR41431
Voice California Public Utility Commission 0.03 0.03
User Fee - STI-0324805-1/PAIR41431
Voice FCC Interstate Telecom Service 0.01 0.01
Provider Fee - STI-0324805-1/PAIR41431
Property Tax Allotment Surcharge - 0.36 0.36
STI-0324805-1/PAIR41431
Voice Regulatory Recovery Surcharge - 0.77 0.77
STI-0324805-1/PAIR41431
Fusion IP Broadband Phone Service - 0.00 0.00
6507164737 - STI-0324805-1/PAIR41431
Fusion IP Broadband Residential FX3, 90.00 90.00
STI-0324805-1 - SIID 1398754-1
$10 Fusion FTTN Discount for 12 months - 10.00cr 10.00cr
1398754-1 (expires: 2020-04-25)
Fusion IP Broadband Information - 0.00 0.00
STI-0324805-1 - Data $80.00 Voice $10.00
Fusion IP Broadband Modem Rental - SIID 9.50 9.50
1398754-1, Device ID 276586
ATA Rental - STI-0324805-1, Order ID 275814 6.50 6.50
Fusion Fiber Pre-Order 0.00 0.00https://www.accc.gov.au/publications/advertising-selling/adv...
My experience getting rid of the TV portion of the package was so painful, I cancelled everything instead and switched to AT&T. Luckily, they had recently laid fiber to my house. I was wary as they weren't the best company to deal with back when I had a landline. I figured they couldn't be worse than Comcast though. To my pleasant surprise, they've been perfect. 10/10. Their pricing was transparent and stable. The service top notch. No idea what customer service is like because I've never had to call.
I suspect it is only this good because there's competition here though. So YMMV. I'd love to see a heavy regulatory hand smack the whole industry.
We just dropped AT&T (directv) because of the bogus charges. We now only use streaming services. We are using Comcast for the internet and nothing else.
That allows them to increase fees 600%. I would dump Comcast in a heartbeat if I had an alternative. Their service is unstable and inconsistent in my area and we are forced to pay very high rates.
$65 for internet, $60 for tv $35 for phone. $20 for rented devices (such as a DVR)
Phone services and the rented devices are increasingly unnecessary, but when I’ve looked into cutting the cord and maintaining the same level of media accessibility (live sports and certain kids programs mostly) my savings come almost entirely from dropping phone and devices, not TV.
$150-220 for triple play (tv, internet, phone) is still preposterous. It is 2-4 times more expensive than the most expensive package I could find for my current location (Northwest Europe), including all extra pay-tv channels (live sports, etc).
$20 per month for a DVR is $240 per year, which is insane. $35 for landline is insane. Internet price you quote ($60) would get you almost commercial-grade internet here.
Don't get me started on the price of USA mobile phone networks!
The article cites the example of CenturyLink's "Internet Cost Recovery Fee", which is a $4/mo fee not listed in your price that is supposed to cover CenturyLink's costs of network expansion. I don't know how you can argue this is not part of the rate which CenturyLink themselves are charging for the service. Some of the other examples, like Comcast's passing on of government fees outside of the headline price I could understand as political differences, the same way you do not include sales tax in advertised prices (which annoys me every time I'm in the US), but I don't see how the "Internet Cost Recovery Fee" is not actionable fraudulent advertising.
In comparison, my ISP's advertised price is €80/mo. I pay €80/mo. In exchange, I get 400mbit/s broadband with no extra fees. This is technically a business plan, but the only extra price weirdness for consumer plans is the 6 month introductory rate.
EDIT: I’d really like to know why folks are downvoting this.
In industries with little relevant competition it’s either because the government gave one company a monopoly, the Comcast effect, or because they’re just crushingly better than the competition, Alcoa or Google. The dangers of monopoly are in oversold to a completely ludicrous degree compared to the historical record. Look at Standard Oil, the poster child for the trusts. It drove competitors out of business through expertise and economies of scale while increasing quality and decreasing prices. Then the government broke it up after it had started to lose market share anyway. Monopoly gets an insane amount of coverage in economics compared to how often it arises in the real world outside of government mandates[1].
[1]http://png.cdn.mises.org.468elmp01.blackmesh.com/sites/defau...
The Myth of Natural Monopoly
It is a myth that natural monopoly theory was developed first by economists, and then used by legislators to "justify" franchise monopolies. The truth is that the monopolies were created decades before the theory was formalized by intervention-minded economists, who then used the theory as an ex post rationale for government intervention. At the time when the first government franchise monopolies were being granted, the large majority of economists understood that large-scale, capital intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process.
Here's where things get complicated. The city I used to live in charged AT&T a municipal telecom tax of $1.25 when I moved the fee went away and I've since changed to Comcast. If I look at my cellphone bill I see a $0.11 tax for the state, and $0.06 for the county.
Remember you can tax at the federal/state/county/city level in the US. I used to work at a restaurant in the city limits that had a small percentage tax on alcohol, if you walk across the street its no longer in the city limits thus no excise tax.
I don't envy the programmer who has to make all this happen.
I live in Canada and we do the same thing here. I think it’s a good thing to remind everyone of sales taxes at checkout time. Sales taxes are regressive taxes. We should get rid of them in favour of a more progressive tax, such as land value tax.
Laws that mandate hiding sales tax by including it in the advertised price only serve to entrench a tax that should be repealed.
Edit: I just wanted to note that the vast majority of people I see defending sales taxes (i.e. VAT) are Europeans and the people opposed are North Americans. Putting aside the argument over whether it’s a good idea or not, I think this is good (albeit anecdotal) evidence that hiding/showing the tax in the purchase price at checkout affects people’s opinion of the tax.
Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps. Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?
Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income.
Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap?
There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion.
VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax.
If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion.
I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
My point, however, is merely that VAT is a regressive tax.
However, I fail to see why regressive taxes are bad in general and why VAT is bad in particular.
I was originally interested in the question by someone else before me:
> I'd be interested to hear your reasoning for why you think sales tax is so bad.
What value has the government added to consumer products I purchase in the store, particularly in the USA where tax rates vary from state to state, county to county, or even city to city? There is no national sales tax here, but consumer regulation is still a thing, and factors into the base price of goods.
I’m still genuinely interested in what value you see the government adding, but I think this might be why Americans and Europeans are disagreeing here.
So perhaps a more effective and fair means of paying for it is to recognize that those with higher incomes are the most financially able to support the cost, and develop a progressive income tax that ensures that the highest burdens are put on those with the greatest ability to bear them.
European countries have this.
I understand why it’s appropriate to tax [fill in blank] in order to fund emergency services.
People with high income are more able to pay such a tax, if it’s structured progressively. People with real estate holdings benefit most from emergency services.
We disagree, I guess.
So why not levy taxes against the land value of those who own the property adjacent to those structures? They are the ones who see the most benefit when the value of their land increases, causing their wealth to increase dramatically. For example, the shop owner derives vastly more benefit from the sidewalk in front of his shop than do the pedestrians who occasionally walk by.
Sales tax is a toll that gets charged to everyone, equally, when the benefits of the spending are distributed unequally.
It's called that because the effect of the way the tax is implemented is to tax the _addition_ of value to the product by those being taxed on its way to a consumer.
Suppose I buy a vacuum cleaner from a big store nearby for $100 plus $25 VAT. I don't need to care about this, but presumably the big store bought it from a vacuum cleaner manufacturing company. Maybe they want $50. Two things could happen, the manufacturer could charge $62.50 (adding VAT) which the big store then needs to claim back because they only bought it to then sell it to me - or more likely - the two firms exchange details and both create paperwork showing that the vacuum cleaner cost $50 and no VAT was charged. We can see that either way only $12.50 of the VAT is attributable to the big store, the rest is in some sense someone else's fault, either the manufacturer or their suppliers in turn.
Poor people who spend all of their money every month pay more in sales taxes, as a percentage of their income, than rich people who invest and save most of their income.
That has to be satire, right?
On the chance it isn't: Because they are poor. You know, spending all their income on housing, food, clothing and getting to and from work. A simple car repair, or broken cooker could tip a poor family into crisis. There's nothing left in the pot for investing.
And to be clear, when I say "access to," I don't mean that we should have the ability to just spend someone else's money. I mean that while they hold that money, and do not spend it, as far as the entire rest of the country/society/system is concerned, it does not exist. The effective pool of dollars is smaller.
a) I'm wrong
b) Something else is artificially holding the value of the dollar up
c) Those theories are wrong, or
d) It just hasn't been long enough yet.
I'm not arguing that there's anything wrong with incentivizing investment this way, or that there are not risks to such investments, but I do think it's worth pointing out that effectively this is a case of "being paid for being rich", and the richer one is the more one gets paid.
I guess I just don't see the problem with rich people having more left over after paying the sales tax than poor people do.
The problem is that they can spend it on capital which then lets them earn more and more wealth. Maybe you also disagree with the claim that inequality is itself a problem? That would put you in the minority in most places.
If not, then consider this: sales taxes, due to their regressive nature, increase inequality and funnel more wealth to the top. Taxes on unearned economic rents (such as land value taxes) are progressive, decreasing inequality and spreading wealth more evenly throughout society.
Example: I recently needed to switch both jobs and housing urgently. When I learned this, I had about £13,000 in liquid savings and $7,000 in almost-as-liquid savings. I didn’t end up needing to really touch more than £3,000 of those savings pots. So was my £10,000 of extra savings giving me any utility?
Absolutely yes. I was much less worried.
Contrast this with someone who has no savings and whose tire blows. How do they acquire $250 in order to be able to keep their job?
It's fine to have haves and have-nots, but the burden of supporting society should be equally borne, financially by those with financial means and laboriously by those putting in the labor. Regressive taxes force those without capital to pay twice.
Sales tax is bad because it is not on the sticker. Guess my and every europeans surprise when we realize that what we have to pay not the sum of the prices on the goods we buy, but that sum plus some more.
VAT is a whole lot more reasonable as the price on the sticker is the price you pay is the sum of the prices on the stickers ;-)
That said:
VAT seems kind of reasonable to me but I will be happy to hear why ut isn't.
In my experience, it's generally been the case that rich people are anti-consumption, at least on a personal level. Poor people often splurge on luxuries to relieve some of the pressure of grinding poverty. They buy things to signal status in order to attract a partner. A sales tax on luxuries like this is effectively a wealth transfer from the poor to the rich, not altogether dissimilar to government-run lotteries which fund scholarships.
And the Gov sees the rich land owner as the source, not the renter. And it makes the land-owmer seem like their taxes are high - when the burden is not theirs
This argument, followed to its logical conclusion, would tell us to abandon all taxes, all monetary penalties short of total seizure, and any form of finance-based incentive on companies and landlords.
So, what would you propose instead?
Edit: ....Also, this ignores the fact that not all land owned by the wealthy is being rented. Indeed, there are landlords that deliberately keep units empty, in part to reduce supply and keep the price of the units they rent higher. Taxing them even when they're inactive would prevent this kind of perverse incentive and help (at least in some small way) to alleviate the housing shortages in some areas.
This means that a wealthy person owning an empty lot in an expensive part of the city pays just as much tax as the condominium owner next door. This encourages the empty lot owner to build and collect some rents in order to offset the tax. This ultimately increases the supply of real estate and puts downward pressure on rent.
In practice, sales tax is probably progressive, but not to the same extend as, eg. income tax.
Furthermore, we should probably consider increasing the sales tax as it limits the consumption. This is highly necessary given our current ecological situation (In Denmark, where i live, the sales tax is 25%).
Land value tax taxes landowners on the unimproved value of the land (that is, your land disregarding whatever’s built on it).
Source: I used to be a tax lawyer.
I would think it would be easier to use transfer payments (like SNAP) to ensure that the exemption is not used for the benefit of non-low-income individuals.
Alternatively, you can have a prepaid or postpaid refundable VAT, where individuals can get their VAT refunded (up to a limit) based on income.
In reality, it doesn’t even work. Poor people spend money on luxuries in order to gain status which they need to attract a partner. Rich people don’t need to do to spend their money to gain status since they already have it by virtue of being rich.
You imply that you think government spending has lower consumption than personal spending.
Alternatively, if tax is spent on nothing, wouldn't everything stay the same (just prices or wages shift, but actual consumption remain static?)
People I know are well aware of the taxes here, both VAT, income taxes and mandatory health/benefits payments.
I think I would be quite annoyed if the taxes were omitted from the price until the cashier calculates it (or if I'm supposed to do mental gymnastics). Do you mentally calculate total price if the taxes are different? Or just apply a constant factor?
For the record I hate it because I only care about the out-of-pocket costs. Same goes for tips.
If you would be annoyed, then VAT is hidden in the most important sense. It's like a mosquito that can bite without making you itchy so that you don't notice it. Yes, everyone may be aware that mosquitos exist but without the annoying reminder they can do a much better job spreading malaria to unwitting people.
VAT, being a sales tax, is a wealth transfer from the poor to the rich. The fact that you don't have to calculate it at checkout is a point against it, not in favour of it.
1. https://en.wikipedia.org/wiki/Harmonized_sales_tax#Individua...
I've taken dozens of flights in the US and I've never been charged a surprise fee.
However, I’ve always seen all the fees listed in email confirmations along with a final total price.
You can’t dispute partial fees either and no bank lets you dispute a charge that is on your bill as far as I’m aware.
No bank in my experience (as a merchant or customer) would stand behind undisclosed or unspecified charges.
Switching to a different fast food chain is as easy as walking next door in most cases.
Switching cable providers is impossible for many (Comcast is my only choice), or may require hours lost from work while dealing with customer service, returning equipment, waiting for installers, etc.
Remember people only choose McDonalds because of the consistent quality, for whatever definition of “quality” you want to ascribe to them, and low cost.
Indeed, this is the only reason I eat McDonald's when I do - it doesn't matter where in the world I am, I know exactly what I'm getting, and I can pay in USD cash (although change is returned in local currency)
The biggest share in operating costs for a restaurant is rent. Now if we could see a "the-rent-is-too-high" surcharge, that might spark a movement against excessive prices for apartment rents in the Bay. Fat change this will happen.
The $0.99 burger is a loss leader to get you to buy the $1.00 soft drink. Soft drinks are have incredibly high margins.
My current battle, though, is with Travelodge. I discovered the hard way their 'Flexible rate + Breakfast + Wifi' packagee refunds only the room and breakfast parts if you cancel. Despite the wording 'Cancel up until noon on arrival date', they withold the wifi charge if you cancel.
This isn't mentioned on the confirmation email, nor at the T&Cs link. The agents who answer the booking phone number can't do anything. There is no email contact. And their customer service phone number costs 13p per minute.
So anyone in the UK thinking of staying at Travelodge, don't! They are predatory scum...
Unfortunately, hotels are also generally tightening up cancelation policies to require 48 to 72 hours notice--which of course does you zero good if the cancelation is due to travel disruption of some sort.
(You also see a lot more pre-pay/no cancel rates which I admittedly have less trouble getting upset with although it's very annoying that there's often no refund window at all if you fat finger something when you make the reservation even if you notice immediately.)
My most recent bitch with Travelodge--which I basically never stay at but it was the only last minute room I could get--was that they really didn't want me to check in without a government-issue photo ID which I lost at the airport. This was even though I had a wallet full of other cards and I had an online reservation.
Most EU rules are not "regulations" but "directives" - done by the EU saying what the rough idea is, and then each government has to pass their own laws to implement that idea in an appropriate way. This is especially useful if two EU members already had roughly the rule everybody now agrees is a good idea, but slightly different - nobody has to lose "their" favourite law, so long as any members that had no law about this get one pronto. For example EU members all need rules so that if a bank fails normal people get (up to a defined sum of) their money back. The EU says this rule needs to protect all account holders of banks in the EU, so a Brit can use a Spanish bank, or a German can use a French bank or whatever. But local laws might be slightly better and that's fine, e.g. the UK law gives you slightly more money back and is indexed to the Pound rather than the Euro.
So, these British laws don't vanish in a puff of smoke, but without the EU to insist upon them they could be "reformed" in unhelpful ways, or just abolished altogether, should a government choose to do so.
In the last 4 years, they have consistently raised these 2 fees each time effectively raising the final amount I pay which is higher than what is on my contract.
When I call to complain, they point me to a section of my contract (in small letters) which say broadcast and regulatory fees may change within the contract duration.
I wish the government would crack down on this (they are just being plain deceptive) or that they get some competition
Nobody goes broke here when you get sick.
And still, ISP for me is 43€/month, fixed, unlimited and stable.
We have much better benefits here :p
I would never want to work in the bv US actually ( personal opinion)
Some years abroad and then come back.
It is true for salaried professionals. Salaries are about 30-40% higher in the states. Taxes (which cover education up to uni), health insurance, and 401K account for roughly 30% of our gross salaries, leaving us with more left over than our European counterparts gross (we also work more hours, but not enough to make up the difference). Of course, if you look at non-professional employees, it’s probably better to be European.
Ya, portions are a bit different, but meal prices still come under on average.
It’s like Tokyo, expensive place to live, but good food is cheap.
Take a look at the indices linked below—notice that food is pretty close, and notice also that the meal prices aren’t adjusted by serving size. Notice also the salaries. Notice also the rent prices (which appear astronomical in the US vs France until you realize that they don’t adjust for sq ft), then look at the adjusted sq ft prices.
https://www.numbeo.com/cost-of-living/compare_countries_resu...
The monopolies were probably exacerbated, rather than exasperated, though /you/ might have been exasperated.
To exacerbate a thing is to make something that was bad, worse. You will usually exacerbate the _aspect_ that is bad, but you might also exacerbate a whole thing (such as a monopoly or a house fire) if the whole thing is in fact bad.
Whereas to exasperate is to irritate very intensely when action to sooth the irritation is frustrated. So if a young child is screaming and won't stop but you know hitting them is wrong, you may be exasperated.
I've not had much sleep the last few weeks thanks to my newborn son so am making these kinds of silly mistakes.
I wish there were better alternatives in the area, as I pay a lot more than I'd like to each month just for mostly reliable internet. I can't use satellite because I need it to be up even during storms, as I work from home.
FWIW, keeping just Comcast internet leads to no fees. Not sure how that's managed to stay that way.
The underlying problem is that the US does not have a true democracy. The government here works for big businesses, not "of the people, by the people, and for the people". EU is much closer to being a true democracy.
Myself since I'm in a ATT family plan I pay $60 for unlimited data and it comes with ATT TV formerly called Direct TV now. I do use it but wouldn't pay for it or use it if it wasn't bundle in cheaply as it is now.
They use this as a guise to provide internet, while only being responsible for the tv portion.
Additionally, the FCC has specific rules which exempt cable modems from regulation at the municipal level, which is why you see fiber convert back to DOCSIS to attach a cable model at the end.
Now it is a legislative construct, used to bypass consumer protections.
The fact it costs Nike ~a few bucks to make a pair of shoes has absolutely nothing to do with the selling price.
They can charge what they want because: no competition.
There is no competition because the regulators have decreed that the lack of competition constitutes competition in their view.
Capitalism is about growth and competition. When there's only one cable to your home, privately owned AND they act as a middleman for content, you do not have meaningful choice.
The way to combat this is to only use that cable for internet. Ideally, there would still be competition (I'm very lucky to have cable and fiber to my home...) and go elsewhere for content.
That being said, fees that are not included in the advertised price, are not actually government mandated taxes/fees but are added on to your bill and misrepresented?
They should be fined for this behavior.
But you're correct, there's nothing stopping companies from trying to make a profit at the expense of tricking consumers with hidden fees.