The cable industry made $28 billion last year in company-imposed hidden fees

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CNBC Television / YouTube

For over a decade, the telecom and cable industry has used hidden fees to get around its misleading advertising. When Comcast tells you your cable will only cost you $50 a month, it is lying. Historically, fees that the telecom industry is forced to charge its customers—taxes on federal, state, and local use—are technically out of its control, and therefore companies do not have to inform them of those costs in their advertising. These fees are below-the-line costs; they aren’t included in the sticker price.

However, with no regulations restraining them, cable companies have jacked up their prices, pocketing those profits while still pretending the increases are due to the fees that are out of their control. Consumer Reports recently released a new study in which it analyzes the cable industry’s abuse of such hidden fees and charges. According to the report, the cable industry brings in “$28 billion a year from charging company-imposed fees.” That’s not a typo.

One of the long-standing and most infuriating fees charged by companies like Comcast is the broadcast TV Fee. In four years, starting in 2015, Comcast increased its $1.50-a-month broadcast TV fee and its $1-a-month regional sports fee, resulting in a bundled price of $18.50 a month in 2019. That’s an increase of 630%. Charter introduced a broadcast TV surcharge of $1 a month in 2010. The monthly fee for consumers is now $13.50.

Other fees that cable companies have used to hike up profits while hiding them below the line include modem and cable box rental fees. Unless you’ve purchased your own, you don’t own that modem or cable box; you are renting it from your cable operator. And while it would make sense to have that cost upfront in the advertising, as well as the fact that those rental costs might continue to rise, regardless of your contract with the cable company, cable companies continue to see no repercussions from regulators.

The report uses the example of an average cable package of $217.42 a month. It notes that “once all fees, taxes, and charges for premium services were subtracted from the total price,” that base monthly cost was $156.71. This leaves $60.71 a month in add-on fees and charges.

Where was this other monthly amount going? Around $9 went for premium services (e.g., HBO, Showtime). Just over $13 dollars was for government fees or taxes, while a little over $1 is accounted for with the opaque “miscellaneous” identifier. That still leaves more than $37 unaccounted for every month.

The findings are as bad as you imagined they might be, but the numbers are still breathtaking. With 64% of Americans saying they are paying more now in surprise charges than they were just five years ago, the breakdown of telecom companies’ bogus fees just innumerates what most of us already know—that there are absolutely no consumer protections from the telecom giants.

What can be done? More state attorneys general can use their office to enforce existing consumer protection laws against the telecom industry. If you are able to, you can cut the cord. However, as Consumer Reports notes, some of the same hidden fees are beginning to make their way into internet-only services—usually provided by many of the same companies providing you cable access.

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2 Comments on "The cable industry made $28 billion last year in company-imposed hidden fees"

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David Bishop
David Bishop

American capitalism (regional monopolies)at its finest.

chris whitley
chris whitley

I figured that out long time ago. They have a license to steal.