Are Made-Up, Hidden, Broadcast-Sports Fees You Pay Quintuple-Taxed with Other Made-Up Fees?
Take the Communications Taxes, Fees, & Surcharges Quiz: You Probably Won’t Get One Answer Correct.
PART 1: Made-up, Broadcast-Sports Fees Up 820%; Overcharging $250+ a Year.
Sleazy, Deceptive and Possibly Fraudulent Billing Practices Need to be Stopped.
This is an excerpt of the author’s Spectrum NY bill for November 2020. It is a basic Triple Play that was added in 2012; the cable TV portion was installed in 1982. The advertised discounted price of the Triple Play — digital phone, cableTV and internet — was $89.99 and then it went to $170.00 after 1 year. The charges on the original bill were never $89.99 and no one can ever get that price, ever.
America’s average price for the Triple Play in 2019 was $217.42, according to Consumer Reports. According in the European Union Commission, the average price overseas is about $20.00-$43.00 in 2021. That’s a very big difference.
In the ‘You got to be kidding me’ category, America claims that it wants to solve the Digital Divide with a plan that doubles down and gives much of the $65 billion in government subsidies to the same companies that are overcharging us. History predicts that the plan will fail because it fails to address critical issues.
There is no way of putting this nicely. If you, your friends, the politicians or regulators can’t answer basic questions about the charges on the current bills…then they should be joining our call for immediate investigations and audits.
Subplot to the Egregious Acts
Over the last three decades a system of sleazy, deceptive business practices have taken over the communications billing process where fake, made-up charges are put on the bills that should never have been separate line items because they are part of cost of doing business.
If this was all it was, that would be bad enough.
Now we find that these made-up fees, some call them ‘hidden fees’, have ballooned — such as the Broadcast-Sports fee — to over $20.69 a month in NY, (which is a combined fee of multiple made-up fees), where it is not only based on made-up charges, but these made-up charges are then assessed other made-up charges, which can include the “Cost Recovery Fees”, and then all of these are assessed taxes and fees. The outcome of these actions hides a labyrinth of new revenues and profits that look like expenses — but are expenses to the customer.
- “Made-Up Fee”, sometimes called “hidden fee”, is defined as —A deceptive charge added to the bill to increase the revenues but make it appear that it is an expense. The charge was never mandated by the government, not audited for accuracy, and the alleged expenses are part of ‘doing business as usual’ that should never have been a separate line item that has continual, excessive increases on residential and business communications bills, whether it be wireline or wireless, cable, broadband, internet or even satellite services.
Example: The Corrupted Dinner Bill.
Imagine you go to a restaurant and order the ‘dinner special’, which comes with the main course, 2 sides and a selection of simple deserts. It is advertised at $29.99 but when the waiter brings over the final bill for the food, it comes to $54.99. But, wait; there is an additional “WiFi Use” for $12.95 — but you didn’t use any service. The bill has a litany of different line items which have nothing to do with what you ordered, with names like “cost recovery” or “admin” fee, or “others”, such as “Entertainment Fee”. not to mention the “Condiment Fulfillment Fee”, “The Linen Tablecloth Fee” and, of course, the dreaded “Laundry Fee for Waiter Outfits”, besides the standard, state & local taxes.
You request to have these charges removed and to pay the price listed on the actual menu, (plus normal state and local taxes).
You are told — “Don’t you see the asterisk?” They then, oh, so politely, explain that they will put the bill into collections to get back the money (and harm your credit).
And, they add: “The ‘Cost Recovery’ is to cover the costs of running the business. There is a ‘Health Inspection’ fee for making sure the restaurant passes health standards, another for the linen service for clean tablecloths, and another for the garbage disposal. The ‘Entertainment’ fee is for live music (which is only scheduled once a month), and there is an ‘Admin fee’ for having to oversee all of these government licenses and fees.” They continue with “You could have used the WiFi service. We have to have it, just in case. And we order only name brand condiments, such as mustard or soy sauce. And all of our wait-staff wants to have clean outfits at work, right? Then, all of these fees are also being applied to each other and then combined for the application of the taxes. We’re just doing what the large telecommunications companies, like AT&T and Comcast, are doing — and they add a lot of other stuff.”
In a competitive world, you can select to never go back to this place and find another restaurant that doesn’t charge these fees, but there are no other choices in your area, or serving that kind of food. And to lure you into the restaurant, they charge for items separately so that the price of the ‘dinner’ remains low but the total becomes nothing more than a scam — and that’s deceptive.
For America’s high speed broadband, most locations, at best, have a duopoly or a monopoly for delivering the services — but it is clear that there is a cartel at work as all of the companies are using identical sleazy billing practices — and we are the captured audience paying for it.
As we pointed out in Part 1, the Triple Play pricing is a bait-and-switch, anyway you cut it, that the government has refused to seriously address. It is not about the proper ‘labels’ as the Biden plan establishes; it’s about removing the entire practice, which was not fixed.
Why Is This Issue of Critical Importance Now?
We’re already being scammed from the pandemic “Digital Divide” additions.
The “EBB”, “Emergency Broadband Benefit” for low income families pays for the families that qualify to have subsidized broadband — at $50.00 or under the Biden plan, $30 a month. But we, via our government entities, are paying the retail prices that include the made-up fees and all of the taxes without any investigation or audits.
Worse, what do you think is going to happen in 2022 with the $65 billion being distributed? Much of it is now going to the same companies that helped to create the Digital Divide.
And this is the Digital Divide, which is about the affordability of services.
According to Pew Research , in 2021, a third of lower-income families were hard pressed to pay their broadband bills.
“34% of lower-income home broadband users have had trouble paying for their service amid COVID-19.”
And The Hechinger Report highlighted new research documenting that affordability is the leading cause of the Digital Divide:
“In 43 states, that affordability gap accounts for the largest share of the digital divide, according to the EducationSuperHighway report. Issues around broadband affordability disproportionately affect low-income, Black, and Latinx communities.”
America’s Digital Divide Is about Artificially High Prices and Profits.
In short, these added charges and the corporate controls over the communications networks have taken a toll on affordability, especially when compared to other countries. As we pointed out, the European Union Commission study found that the triple play prices averaged $20-$43 dollars; America’s average was $217.00 according to Consumer Reports; that’s over $150 dollars extra a month, and a big slice of this is generated by these added fees and the ability to control the agenda.
Take the Communications Taxes, Fees, & Surcharges Quiz: You Probably Won’t Get One Answer Correct.
Part 1 discussed the fact that there is a made-up charge on triple play and cable bills, the “Broadcast TV and Sports Programming Fee”, that adds $20.00 or more a month to the Spectrum NY total bill, yet it is not part of the advertised price; it is not audited or investigated and the Spectrum NY Triple Play bills shows it has gone up a whopping 820% over the last 6 years, costing customers about $250.00 a year extra. But it is worse, as this fee also appears to have been quintuple taxed, fee’d and surcharged.
The graphic in the opening is from the Spectrum NY basic Triple Play bill for November 2020, and it shows the taxes, fees, etc. applied to the bill. We added the numbers for each section of the bill, as well as the red lines between the Broadcast and Sports Fee, and, as we will discuss, other charges that we believe are also taxing this Broadcast-Sports Fee.
We will only focus on a few of the items marked on the bill and will give the short answers at the end of this post. SPOILER ALERT: The full answers will be presented next month in the upcoming new: “The Book of Violations & Egregious Acts”, which will provide a more detailed analysis for those who believe that ‘pain can be used for gain’.
NOTE: These are identical issues to all communications companies, from AT&T and Verizon to Comcast and Spectrum.
IMPORTANT WARNING: DO NOT WORRY OR PANIC IF YOU CAN’T ANSWER ANY OF THESE QUESTIONS: VIRTUALLY NO ONE ELSE CAN, EITHER.
HERE WE GO:
SECTION 1: Shows the charges for “All the Best Triple Play” at $156.74 and it lists “Extreme Internet”, “Home Phone”, and “Starter, Standard and Variety Pass TV”.
- Question 1) How much does each service — phone, broadband and cable TV, actually cost?
- Question 2) What taxes, fees and surcharges are applied to each service?
- Question 3) How can the total bill be $214.74, (number 9), which is 37% added to the actual service costs?
- Question 4) How many of these taxes, fees and surcharges are ‘made-up’ vs are mandated by the government?
SECTION 6: Regulatory Cost Recovery Fee
- Question 5) Why are there 3 identical “Regulatory Cost Recovery Fees”?
- Question 6) Are these fees ‘mandated’ or made-up?
- Question 7) What is each one being assessed against?
SECTION 3: Federal Universal Service Fund
NOTE: The Federal Universal Service Fund is applied only to ‘interstate services’, and the FCC set the contribution factor at 27.1% for 4th Quarter 2020 and it changes every quarter.
- Question 8) The charge on the bill is for $2.41. What is it assessed against?
- NOTE TO HELP: There is $8.89 in interstate revenues that is supposed to be charged this Universal Service Fund. — i.e.; the $2.41 represented 27.1% of a total amount — which comes to $8.89.
SECTION 7: The Broadcast and Sports Fee
EXAMINE all of the red lines to the other sections.
- Question 9) Which of the items listed in the boxes are also being charged to the Broadcast and Sports Fees? A) Franchise Fee, B) Universal Service, C) Cost Recovery Fees 1, 2 or 3, D) State and Local Taxes, E) Telecom Excise Taxes, F) Misc. Taxes and Fees, including McTD186e, Peg Access, State USF, or E911?
SHORT ANSWER: How the Hell Would We Know the Answers?
Let us give you the short answer:
§ There is no break out of the costs of these triple play services, and each service has a different classification and this impacts which taxes, fees and surcharges will be applied. There is “phone” service, which can be “intrastate-telecommunications” or “interstate”, and there is “cable” service, as well as the internet, which can be defined as an “interstate-information service”. Each has a different set of federal and state laws that are supposed to control the different charges to each service. And none of this is explained by AT&T, Spectrum et al. or even by most of the regulators.
§ There is no information about how these taxes, fees and surcharges were applied, except for cursory descriptions like they ‘defray costs’.
§ There is no information about how the made-up “Regulatory Cost Recovery Fees” are derived and what they are applied to on the bill or on the web site — or why there are 3 separate charges with identical names but differing amounts.
§ “These are NOT mandated taxes” is the caveat given in most of the definitions.
Here are the links to the Spectrum information and there is nothing that would be able to help answer the questions posed for anyone without serious training in forensic accounting or legal and regulatory training.
But There Are Fragments of Information Around the Web.
RCN’s chart for the taxes, fees and surcharges states that the Broadcast Fee and Sports Fees are NOT government mandated and the revenues are ‘retained’ by RCN — i.e., these line items are treated as “revenues”, especially since they are reimbursed any charges by the end-user customer.
And the fees for Spectrum, NY appear to be mid-range. Mediacom’s web page shows that their promo-priced Triple Play at $99.99 has a separate Broadcast fee that can range from $17.10 to $24.62, while the Sports surcharge can be $1.99 to $12.23 — that’s $19.09 to $36.85 extra a month. This is the very expanded ‘fine print’.
There Is a Stench from All of This — The Regulators Have Allowed This to Happen.
SMOKING GUN: The NY Public Service Commission’s information on ‘telecommunications’ taxes states that even though the charges are NOT mandated, they can therefore be considered revenue and can have surcharges and taxes applied — by other fake made-up fees.
“OTHER COMMON CHARGES: The charges shown below are specific line items for services rendered but are not defined as a tax or surcharge. Therefore, they are taxable and may have surcharges applied to them. These charges ARE NOT MANDATED by state or federal authorities and are therefore not charged separately by all telephone companies. It should also be noted that some charges are specifically not allowed as a separate line item for the intrastate portion of bills, such as Regulatory Recovery Fees, but may be allowed as an interstate charge. Such items that we consider to be “uncommon” are not listed here.”
Yes, this confirms that these made-up services have been jacked up with other made-up fees, which are then taxed and surcharged — and raising every cable, triple play, etc. bill in America — but since these are bundled services, it also impacts broadband and phone — and even wireless — all of which have been plagued by these made-up parasites.
Conclusion: Boy, Is America Getting Hosed.
We Conclude: If the goal of America is to make prices affordable to solve the Digital Divide, then we MUST remove the Christmas tree-like presents spread over these bills in the form of made-up fees as well as all taxes, fees and other made-up fees being applied.
This Is Taxation with Atrocious Representation. This needs immediate investigation with actual audits by the state and federal agencies.
- We Conclude: These made-up fees are revenues to the companies as are the Cost Recovery Fees, and they are expenses to the customer. The companies are using these bizarre and convoluted layers of deceptive charges as a way of hiding the basic flows of revenue — deceptive layers that nickel, dime and quarter all of America’s communications.
- We Conclude: The Broadcast fee and Sports fee should never have been allowed to be charged and whatever is actually valid should be part of the advertised cost of service.
- We can’t tell if the Broadcast fee and Sport fee are treated as two separate entities that both charge or get charged for each of these fees.
- Two Regulatory Cost Recovery Fees: There are 3 cost recovery made-up fees being applied; most likely 2 of them are attached to the made-up Broadcast and Sports fees — bogus tax on bogus surcharges should be illegal.
- Two Franchise fee additions. These Broadcast and Sport fees may be part of the increasing of the franchise fee and are considered ‘revenues’; and this needs to be stopped immediately.
- We can’t tell if a portion of the Universal Service Fund is being charged to these two fees.
- Two fees for state and local taxes? We believe that these fees are paying state and local taxes and excise taxes, but can’t tell if they are combined or one or more taxes are applied as one of the separate taxes.
- Component parts of the Broadcast TV fee or Sports fee or both. In the end, we have no way of knowing what exactly is being taxed of either fee, or are they just using the total amount?
Counting this up we find the Broadcast and Sport fees may be assessed multiple — 5–10 other taxes and made-up fees that are added, not to mention adding to the franchise fee you pay, and there may be the Universal Service Fund, and these are then all additionally taxed state, local and other various taxes, some of which are bundled into massive financial heap of deception.
The IRREGULATORS will be continuing the call for immediate investigations and the removal of all of these made-up, hidden charges — as a start to really solving the Digital Divide. But this is a fraction of the overall accounting-scandal issues that surround all of these charges, which we will be connecting the dots for you, dear reader, over the next few months.