The “Bait & Switch” Continues: Overcharging Americans for Broadband Is Part of Biden’s Infrastructure Plan

By B.N. Frank

Over the years, numerous lawsuits have been filed against the Federal Communications Commission (FCC) including one by a group of telecom experts, “The Irregulators”. According to the group’s lawsuit, Americans have already paid for telecom-related services that many have still not received — including high-speed broadband via safer, more secure, and more reliable fiber optics to the premises (FTTP) and copper landline connections. In fact, Americans have been overcharged for telecom-related services for decades and continue to be overcharged (see 1, 2, 3). Thanks to Irregulator Bruce Kushnick for another update on how the Biden Administration aims to continue the overcharging via its increasingly controversial Infrastructure Plan.

From Medium:

FCC Broadband ‘Nutrition’ Labels Cover Up America’s Overcharging.

This is a mark up of the FCC’s proposed Broadband “Nutrition Labels”, that were first promulgated by the FCC in 2016, but are now part of the law under Biden’s infrastructure plan.

NextTV writes about the Biden plan and the FCC’s role in this.

“Among the provisions in the Biden Infrastructure Act, which allocated billions of dollars for broadband, including subsidies for service, was a mandate that the FCC create a broadband ‘nutrition label’ of sorts, so consumers can know what speed and quality of service they are getting at which price and with what fees attached.”

And quoting FCC Chairman, Jessica Rosenworcel:

“Rosenworcel said that label must include ‘accurate information about prices, introductory rates, data allowances, and broadband speeds’.”

Thus, when a customer is shopping for a service, they will supposedly get accurate data in the form of this label. The FCC writes:

“FCC Acts to Empower Broadband Consumers Through Transparency

Description:

“Proposes to require that ISPs display, at the point of sale, labels to disclose to consumers certain information about prices, introductory rates, data allowances, broadband speeds, and management practices, among other things.”

We seen this hyped-up-rhetoric before.

Over the last three decades my colleagues and I have been filing at the FCC and state commissions about the failure to stop deceptive advertising for basic communications services, like the triple play, where the price of service doubles after the promotion ends — and you can never get the services at the advertised price. In short, it is a bait and switch, which has become an industry-wide problem.

Where’s the investigation into this bait-and-switch or the addition of made up fees?

These price hikes can be 100% over a year. Even during the promotion period the companies tack on made-up surcharges, such as the ‘Cost Recovery Charge’, or the ‘Admin Fees’, unadvertised charges that are really just more revenue for the phone and cable companies. The piling on of such fees has become standard industry practice.

Besides virtually unreadable bills that make rational examination extremely difficult, even for an auditing team, a typical customer can never figure out the basics of the bills and what made-up fees, taxes, governmental and non-governmental charges are being assessed.

Where’s the investigation into why America is paying 5–20 times more for our telecom and cable services vs overseas?

America’s price for the triple play — cable TV, internet and phone was about $215.00, on average, according to Consumer Reports, but reports from the European Union Commission shows that in 2021, the average triple play overseas averages about $35; meanwhile, basic broadband can be $10–20 US dollars in Europe — in America the average monthly cost to the consumer is over $70, counting taxes, fees, etc.

Where’s the investigation of ‘Ramming’, ‘Cramming’ and where’s the place for this on the Nutrition Label?

Adding insult to injury is the fact that bills, including broadband bills, are littered with charges the customer DID NOT ORDER, and since the bills are unreadable — how would they know? As we previously wrote, this Verizon NYC customer’s basic broadband service had an added “inside wire” charge, adding an additional $15 a month. Click to see the bill

Where’s the fiber optic infrastructure we’ve been paying for through rate increases?

And in NY, as in every state and every phone company, the utility has been able to manipulate the basic flows of money to make the entire US infrastructure appear unprofitable.

I.e., at a time when the politicians and regulators, not to mention the public, have woken up to the fact that prices in America are no longer ‘just and reasonable’, one would think that they would be screaming that the charges on the bill for broadband should be investigated for their excessive costs as they are no longer even “affordable”.

There is a litany of other issues that need investigation and are related to the charges on the bill. The services that were paid for via rate increases may not even be available in the person’s state or community, and we find that regulators have not seriously examined whether the companies have delivered the speed of service they promised over the last 3 decades.

The Consumer Advisory Board Serves Industry More Than the Public.

The current state of labeling shows that AT&T, et al. are in control of the agenda — and the advisory committee that created the label — shirked its responsibility to deal with the core issues that created the Digital Divide.

For decades, the Consumer Advisory Committee has had the major telecom companies and their associations on board, including Verizon, AT&T, the CTIA, the Wireless Association, the NCTA, the Internet and Television Association, and USTelecom, now the ‘wired broadband association’. But also has a host of compromised non-profits who take money from the companies and then claim that they are ‘independent’ have been members.

There is No Truth in Truth-in-Billing. The Experts Were Ignored.

Let me backtrack as we’ve had a front row seat to thirty years of failed fiber optic deployment and overcharging due to failed regulatory oversight. New Networks Institute, NNI, filed its first complaint against the FCC’s data way back in 1994, after undertaking a massive study of how the companies, now AT&T, Verizon and CenturyLink could use their monopoly power and not upgrade their networks to fiber optics. Moreover, they also could charge local phone customers to actually replace the existing copper to fiber optics. But, every FCC datapoint had serious flaws. In 1994, at the request of then VP Al Gore’s office, we met with senior FCC agency staff.

The FCC’s published data in various reports was NOT based on actual costs of service and was manipulated to make the prices — and thus increases, appear to be just and reasonable. In 1993 and 1995, we had done surveys of bills and found no one could read their bills, and that prices were continuously going up and the actual phone bills were hiding mistakes, overcharging and other issues. Of course, the FCC did nothing to fix any datapoint and those same failed analyses continue in every FCC report on communications services.

In 1998, the FCC had the first Truth-in-Billing proceeding and we filed, asking the FCC to fix the bills, make them legible and halt the practice of multiple fees that nickel and dime customers with obscure and largely hidden charges.

From 2001–2002 we worked with Congressman Nadler’s office on the “Broadband Bill of Rights”, which laid out basic issues about speed of service, reliability, etc. Because the FCC had decided to throw the competitors under the bus, the small ISPs that were the backbone of delivering the internet and WWW to America were harmed. The large companies ignored their own wired customers and came to realize the potential of the internet late in the game. Once they did, they pushed for and were granted regulatory changes that put most of the small ISPs out of business- This was the creation of Net Neutrality — rules to keep the large companies in check so that they would not act badly.

In 2003–2004 we, as TeleTruth, were on the FCC Consumer Advisory Committee and our team included a telecommunications auditing firm. We did a report based on thousands of NY bills that showed over 150 different violations, mistakes, overcharges and concealments. When we asked to present this, we were blocked by some of the members, including Verizon and a group of astroturfers who got money from the telcos. We filed a complaint against the Committee, and small changes were made because the Washington Post did a story. — Fast Forward; it is still corrupt and captured.

In 2004 and 2008 we did surveys of bills in California under the California Consumer Protection Fund and using findings from this and our other survey work, in 2005 we presented the findings to the FCC and asked Congress and requested that they initiate, The Truth-in-Billing Act of 2005 , which laid out all of the issues we just mentioned, as well as much more serious labeling, not only of the current bills, but in the advertising and web site information.

Today, there is nothing on the Verizon, AT&T or Comcast sites that gives the actual price of the service, and the taxes, fees and surcharges; the fine print has turned into a license to overcharge, and the bills are designed to confuse.

In short, the pandemic has exposed these issues to the public — and how, those who should have been examining these issues ignored what we detailed or worked for these companies and they act behind the scenes to make sure that the investigations don’t happen and changes don’t occur.

In short, these are monopolies that have taken control of the regulators, known as ‘regulatory capture’.

Examples of the Labels as Harmful Cover Ups

Example 1: Bait-and-Switch Price Cover-Up.

On the top left, under “choose your data plan” there are 2 boxes; 1) monthly charge for month-to-month plan and the 2) monthly charge for ‘2 year contract plan’.

The advertised price for a triple or even double play goes up about 50–100% after the promotion ends — in 1 year, on average. All of the related taxes, fees and surcharges can go up, and even the different component parts follow suit.

Thus, the advertised Triple Play for $89.99 a month, ends up at $215.00 on average, according to Consumer Reports.

The FCC wants us to accept this bait-and-switch and that we are being overcharged instead of investigating the actual charges that populate this ‘label’.

Telling someone that their service will be going up over 100% or more after the first year without an explanation of how they got away with this massive rate increase and bogus charges, (how can that happen) — is ludicrous.

Worse, regardless of what they say, they can change the conditions and fees with impunity — no one is watching.

Example 2: Space on this Label for Made up Fees.

The FCC has allowed continuous 20+ years of bogus promotional pricing on services that are using the state franchised utility telecom and cable networks — where the price can increase 100% over the period of 1–2 years.

Allows made-up fees and then label them “Other Monthly Fees”

On this labeling, there are “Other Monthly Fees”, and then there are “Government Taxes and Other Related Government Fees”.

There is no mention that these “Other Monthly Fees” are NOT mandated, have never been investigated by regulators and there is no reason why they should not be a part of the basic price for the service. To the extent they recover legitimate costs of the company, which is highly suspect, they are ordinary costs of doing business and like labor costs and other operating costs, should be included in a single advertised price. It is not as though they are for features or services that customers request. These made-up charges imposed on all customers.

For example, the cost recovery and administrative fees are being charged almost universally. Ironically, these fees are now even being paid by the federal government in some cases. The latest Emergency Broadband Benefit is paying/reimbursing qualified low-income families for the retail rates — which include a host of made-up fees.

Notice that there are ‘Government Taxes and Other Government Charges” — which are different than ‘Other Monthly Fees’ — i.e., the FCC knows that these other charges are NOT mandated, should not be on the bill, and are also NOT optional and must be paid.

Does putting all of this telco fat on these ‘nutrition’ labels really show that instead of making America healthy, the plan is just to feed us excess trans-fat, and other harmful additives, when the telcos need to go on a diet?

Conclusion. Labels are a waste of time when you aren’t willing to do anything except protect the status quo of overcharging.

With $65 billion dollars floating around, what the FCC has presented is not only decades late for basic enforcement of already existing laws on deceptive advertising and fraud, much less state and federal disclosure laws, we are presented with a hyped up, glossy, show card that fails on every front to do what is most needed.

Stop the massive bait-and-switch, remove all of the made-up taxes fees and surcharges, investigate all “ramming”, where the companies have charged customers for services they didn’t order, and start investigations into why America’s prices are 5–20 times more expensive than overseas, thus creating the expansion of the Digital Divide through excessive overpricing and under delivery of service.

At the same time, question every cent that has been already given to AT&T, Verizon and Centurylink for fiber optic services, all of the rate increases over the last 30 years for network upgrading and critical infrastructure, much of which was never built, before any further government subsidy is given to these companies or the cablecos.

The Infrastructure Bill (see 1, 2, 3), the Emergency Broadband Benefit (EBB) (see 1, 2), and other state and federal internet connectivity funds (see 1, 2) have already provided hundreds of millions of dollars to “Big Telecom” companies that are primarily deploying more unsafe, unreliable, and inferior Wi-Fi and 5G broadband connections.

The FCC is supposed to protect Americans by regulating telecommunications industries (broadband, cable, and wireless). Instead, it has catered to them for decades (see 1, 2). Most – if not all – former and current appointees have been employed by telecom companies when they weren’t working for the agency! As previously mentioned, other lawsuits and petitions have been filed against the FCC as well (see 1, 2, 3, 4, 5, 6, 7, 8).

Activist Post reports regularly about “Big Telecom”, the FCC, and unsafe technology. For more information visit our archives and the following websites.