Triple Play for $45; Deals for Only $15 a Month? Why is America Paying 2–5 Times More for Our Broadband, Internet, and Cable Services?

Backdrop: IRREGULATORS v FCC

On July 22nd, 2019, the IRREGULATORS v FCC moved forward with the filing of our initial brief. The FCC has until September 5th, 2019 to respond. This legal challenge exposes one of the largest accounting scandals in American history. AT&T, Verizon and CenturyLink have been able to manipulate the FCC accounting rules, which directly impacts the price of every communications service you, your friends, family, and business pays for.

  • We estimate that the US unlimited wireless customers are being overcharged $50-$75.00 a month, not counting the additional 500–1000 GB of a truly unlimited service that you did not receive. This comes to an average of $873 a year extra.
  • There is severe customer gouging in the low-end wireless market. A 1GB “data booster” from Verizon costs $15.00, not counting taxes. We estimate that while the average basic wireless plan can be $30-$60 a month, when there are plans around the world that have 100 GB for $8.27, and services at $7.50 that offer the same amount of GB, we estimate that the overcharging is $20–50 a month.
  • This comes to an average of $654 a year extra.
  • Overcharging by Capping GB Usage. It is clear something is very wrong when other countries have unlimited usage of 500–1000GB as standard, and the US has been capped at 25–75 GB, and then the service is slowed to being almost unusable.
  • New Networks Institute estimates that the overcharging on America’s basic Triple Play is between $70-$155 a month, not counting add-ons.
  • OCED-EU: Triple Play ‘basic’ averaged $44.77 a month in 2017, but the ‘cheapest’ was only $15 a month.
  • US Triple Play prices are 258%-479% above the OCED-EU average; 766–1410% above the ‘cheapest’ basic Triple Play service offered by some OCED-EU countries’ carriers.
  • US Bait and Switch: AT&T, Verizon, Comcast and Spectrum et al. have an advertised averaged price of $88.95. However, the actual price (using a Spectrum NYC basic plan, which has common added fees that appear to be in the same price range, nationwide) comes to about $115.00 a month.
  • Missing: The US Triple Play is plagued by 20–35% of taxes, made up fees, and surcharges including the infamous “Broadcast TV and Sports Programming” — now at $14.69 on the August Spectrum, NYC bill. It is not a mandated fee but is direct revenues to the companies — and there is no oversight.
  • Post-Promotional Price: 130% above advertised price, bringing total to over $200.00 a month (based on Charter-Spectrum and Comcast Triple Play bills, though it varies by state, city and carrier.)
  • In parts of Europe, customers can get a Triple Play with 30–100Mbps speed for as little as about $14.86 (US dollars), (absolute lowest price) while 1GBPS speeds, can be as low as $29.32.
  • NOTE: These include VAT taxes, usually at 15%.
  • In South Korea, a 1Gbps Triple Play can be $34.84 dollars, and the EU 28 ‘least expensive’ is $45.22 while Japan is $54.26.
  • And America? The Report states: “Fixed internet offers are more expensive in the USA and Canada compared to the EU, particularly in the case of ultra-fast broadband (>100 Mbps)”.
  • In contrast, according to the report, the US Triple Play costs about $81.02 US dollars. Anyone in America knows that this is the ‘promotional’ price, and these statistics do not include the taxes, made up fees and surcharges, which adds 20–35%. This is then joined by increases that could double the price after the promotion is over.
  • (NOTE: The author’s Spectrum NY Triple Play, with no add-ons, is $209.11 in August, 2019 yet was advertised at $89.99. The taxes, which were not fully disclosed, added 27% to the actual price of the first bill (without other added activation charges). This means that the actual total bill went up continually, over 130%, from the advertised price after the 1 year promotion expired.
  • Based on actual bills, including taxes, fees and surcharges, the US Triple Play is 200–450% more than Europe or Japan or South Korea.
  • “A decrease in retail prices was recorded for all bundles including television services (-9.5%, 12–30 Mbps basket; -7.3%, 30–100 Mbps basket; -13.4%, 100 Mbps basket).
  • “The largest decrease in retail prices was recorded for Triple Play offers in the 100+ Mbps basket (-24.3%), with 12–30 Mbps (-13.2%) and 30–100 Mbps (-14.5%) reaching double digits as well.”
  • Missing: The US Triple Play is plagued by 20–35% of taxes, made up fees, and surcharges including the infamous “Broadcast TV and Sports Programming” — now at $14.69 on the August Spectrum, NYC bill. It is not mandated but is direct revenues to the companies and there is no oversight.
  • NOTE: The “European Report” covers (left to right) — “US” is the price which is quoted in the report; then we have the “cheapest”, “EU28”, “Korea” and “Japan” –all taken from the report.
  • The average basic price is derived from averaging the EU28, Korea and Japan, and does not include the “cheapest”.
  • The first column has the US “Advertised Price”, then the Triple Play first bill with taxes — “Advertised with Taxes”, followed by the total bill once the promotion is removed, “Promotion Removed”. We used $200.00 for the basic Triple Play without discounts, with the taxes and fees included.
  • Overcharging on the Triple Play: We estimate that the range is $71-$155 a month, not counting add-ons. This is based on “Advertised with Taxes”, the starting price with taxes, slowing going up after the benefits of the promotion are “removed”.
  • OCED-EU’s Triple Play basic average is $44.77 a month; the cheapest is at $15 a month.
  • Bait and Switch: AT&T, Verizon, Comcast and Spectrum et al. Triple Play is advertised with an average price of $88.95, yet the actual price in NY City was about $115 a month.
  • Post-Promotional Price: 135% above advertised price, bringing total to over $200.00 a month.
  • In the end, US Triple Play prices are 258%-479% above average; 766–1410% above the ‘cheapest’ basic Triple Play service offered by ISPs in the OCED-EU member countries.
  • Stare at these numbers and you realize that the companies’ inflated prices caused the Digital Divide and are responsible for the “Homework Gap”, pricing families out of being able to purchase these services, or worse, they may not even be available.
  • Read through these statistics and we find that Net Neutrality, Privacy, and our very democracy has been slowly eroded by a few companies working together to give their own companies advantages over the public.
  • Prices could not continually increase over decades if there was actual competition.
  • AT&T and Verizon failed to properly upgrade and maintain their state-based utility infrastructure and most of America country does not have a second high-speed competitor.
  • AT&T only has 3.1 million “fiber optic to the premises” residential and business customers, even though AT&T covers 76 million ‘locations’ and now controls 21 state’s wired utilities. I.e.; 3% of their territory is using a fiber optic to the premises wired service.
  • It is clear that AT&T, Verizon and the cable companies have all decided to use the same deceptive bait-and-switch promotional mechanism to fool customers and to add multiple added made up fees — as an industry-wide practice.
  • Verizon has cross-subsidized their entire FiOS, fiber to the home deployment and was able to not only charge all basic wireline phone customers extra for the fiber optic upgrades, claiming that they are just upgrading the state utility infrastructure — but this was done claiming these networks are “Title II”, common carrier networks.

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bruce kushnick

bruce kushnick

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.