Bipartisan investigation demands answers on cable TV’s “misleading fees and sales practices”

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January 5, 2017 by Paul Dughi

Businessman is pressing on the virtual screen and selecting Investigation.

In a bi-partisan effort, Senators from both parties are calling on Charter Communications (which also acquired Time Warner) and Comcast to stop what they call “misleading placement of fees on customers’ bills, and inadequate advertising disclosure for service promotions.

They’ve asked before and say they’ve never got an answer to their complaints even after holding Congressional hearings.

U.S. Senators Claire McCaskill (D-Mo.) and Rob Portman (R-Ohio) are the top-ranking Democrat and Republican Chairman of the Permanent Subcommittee on Investigations behind the effort following a hearing they held.  They’ve sent letters to cable owners asking for answers they say they never got during the hearings.

“At the hearing, we expressed our concern that [Charter/Time Warner, Comcast] and their competitors obscured the cost of programming by categorizing some programming costs as fees, such as the ‘“Broadcast TV Surcharge”’ or ‘“Regional Sports Network Fees,’” McCaskill and Portman wrote in the letters.

These charges are often broken out to show a lower cable fee, giving the impression, the Senators say, that they are regulatory charges.  They’re not.

“We found that [Charter/Time Warner, Comcast] grouped those fees alongside taxes and regulatory charges. Such placement is misleading in that it suggests to the subscriber that the government requires the cable or satellite provider to impose these charges.  As you are aware, no federal, state or local government levies the Broadcast TV Surcharge or Regional Sports Network Fee, which are charged entirely at the discretion of [Charter/Time Warner or Comcast].” – .” – McCaskill and Portman

Untitled-1This spring, McCaskill and Portman held a hearing to examine the cable and satellite provider industry, focusing on practices involving billing, fees, refunds, and other customer service issues.

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Senate investigating cable and satellite TV customer service and billing practices

At the hearing, Senator McCaskill discussed how the price of service [Charter/Time Warner or Comcast] advertises reflects only the promotional price of service, even though the expiration of promotional pricing could lead to a significant increase in a customer’s bill, the letter says.

Unanswered questions

She asked each cable and satellite provider present whether it disclosed the non-promotional price of service in its advertisements as conspicuously as it did the limited promotional price. She also asked whether the companies disclosed the non-promotional price at all to potential customers.  The Subcommittee did not get an adequate response to these questions.

The companies that testified at the Senators’ hearing provide television services to more than 70 million subscribers, representing more than half of all American households and more than 70 percent of households with pay-TV service.

A recent American Customer Satisfaction Index survey found that pay television service ranked near the bottom of the 43 industries it studied. That result followed the previous year’s survey finding that the pay-TV industry tied for the lowest score out of all industries surveyed.

Full text of the letters can be found HERE and HERE.

 

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