For decades, broadband providers have abused the lack of meaningful competition in the telecom market by not only refusing to shore up historically awful customer service, but by raising rates hand over fist. This usually involves leaving the advertised price largely the same, but pummeling customers with all manner of misleading fees and surcharges that drive up the actual price you’ll be paying each month. And by and large regulators from both major political parties have been perfectly okay with this practice, despite it effectively being false advertising.
CenturyLink (combined by the merger of Qwest, CenturyTel and Embarq) has been exceptionally talented when it comes to such fees. A few years ago the company began charging its broadband customers an “Internet Cost Recovery Fee,” which the company’s website explains as such:
“This fee helps defray costs associated with building and maintaining CenturyLink’s High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers’ average broadband consumption.”
But the cost of maintaining broadband networks is what your entire bill is supposed to be for. Again, breaking out such additional bullshit surcharges and burying them below the line is designed to do one thing: help providers falsely advertise a lower rate. And while the “internet cost recovery fee” was only a few bucks per month, it’s a fairly lucrative scam when spread across millions of CenturyLink’s US broadband subscribers over the last five years.
With the federal government now largely comatose on such issues, states have been forced to step up to the plate and try to fill the void. As a result, Centurylink was forced to settle a lawsuit by Oregon’s AG requiring it cease the practice and shell out $4 million to impacted consumers. That settlement comes several weeks after a similar settlement with Washington State’s AG to the tune of $6.1 million:
“CenturyLink deceived consumers by telling them they would pay one price, and then charging them more,” Ferguson said. “Companies must clearly disclose all added fees and charges to Washingtonians. If you believe that a company has charged dishonest fees, please contact my office.”
In states where telecom regulatory capture is more prevalent (read: most of them), absolutely nothing is being done to thwart this practice, which extends to other feels like the misleadingly named “regulatory recovery surcharge” or the widespread “local sports surcharge” and $10 per month “broadcast TV” fees.
Keep in mind, these are precisely the kind of consumer enforcement actions the Trump FCC attempted to ban with its net neutrality repeal, which didn’t just repeal net neutrality but attempted to neuter nearly all state and federal oversight of one of the least-liked and uncompetitive industries in America. The courts argued the FCC overreached, noting it can’t eradicate its telecom protection authority, then try to ban states from stepping in to fill the void. The fact they even attempted the gambit should tell you all you need to know about the Ajit Pai FCC.
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