October 21, 2016
A class action lawsuit filed this week seeks to explain those mystery fees that may appear on your cable bill.
Eight customers of Comcast from around the country sued the cable giant, alleging its regional sports fees and broadcast retransmission fees add up to false advertising.
The lawsuit, filed in U.S. District Court in the California, claims the Philadelphia-based cable company is "engaging in a massive illegal scheme of falsely advertising its cable television service plans for much lower prices that it actually charges."
“Comcast promises to charge customers a fixed monthly price for the service plans,” contends the lawsuit. “But in fact Comcast charges a much higher rate for those plans via concealed and deceptive ‘fees’ which Comcast intentionally disguises in both its advertising and in its customer bills.”
According to a wired.com report, Comcast denies that claim:
A company spokeswoman says that when Comcast introduced the retransmission fee in 2014, it did not apply to customers with a locked-in promotional rate. She also says Comcast discloses the fact that a bill may include taxes and fees in addition to advertised rates. Indeed, you can find these disclaimers on the Comcast website—after clicking a link titled “Pricing & Other Info,” which displays a lengthy block of text that details the caveats attached to the advertised. In other words, you must read the fine print.
The broadcast retransmission fee reflects the increasing fees Comcast pays television networks to license programming. The regional sports fee is tied to the cost of licensing sporting events. Neither is imposed by the government. Although critics argue that these fees are a business cost that should not be passed along to consumers, the Comcast spokeswoman defends the practice, saying the company lists each fee in an effort to be transparent. And she notes that Comcast is not alone in levying these such fees.
Specifically, the lawsuit claims Comcast advertises one price and charges another. It alleges the company makes more than $1 billion annually from its "Broadcast TV Fee" and "Regional Sports Fee," about 15 percent of its total profits.
"Comcast promises to charge customers a fixed monthly price for the service plans, but in fact Comcast charges a much higher rate for those plans via concealed and deceptive 'fees' which Comcast intentionally disguises in both its advertising and in its customer bills," the lawsuit contends.
As Wired points out, most of the fees are legal, but the confusion that arises from the bills makes it difficult for consumers to protect themselves from mistakes and overcharges. The issue has been on the radar of the Federal Communications Commission, which released Wednesday "Empowering the 21st Century Consumer," a report detailing its recent actions to protect consumers from practices that include deceptive and opaque pricing, multitudes of fine print, and surprise fees.
This week, the FCC settled a $48 million suit with T-Mobile over the way it advertised its “unlimited” data plans.
A week earlier, the agency reached a $2.3 million settlement with Comcast to resolve an investigation into whether the company wrongfully charged cable TV customers for services and equipment that those customers never authorized.
The plaintiffs are demanding a jury trial.