Navigating the broadband market can be a frustrating and confusing headache for all of us.
It’s a confusion that works in the favor of big companies, as customers struggle to make sense of bundled services, data caps, promotional pricing, and unexpected or hidden fees. The FCC receives thousands of complaints each year from consumers who aren’t certain what exactly they’re paying for, and often walk away feeling overcharged and underserved. 
Some of these charges are par for the course; however, some of them are marketing tactics used to boost profits. In other words, these fees allow ISPs to advertise a lower price, then charge you a higher price by tacking on miscellaneous charges.
In this article, we’re uncovering the most common charges and fees associated with broadband services and bills. We’ll also be discussing what you can do, as an educated consumer, to prevent them and save some money this month.
Like it or not, unexpected charges are fairly normal occurrences in billing.
Sometimes the extra charges can be as simple as a misplaced modem rental fee, or the unavoidable installation fee, or local taxes.
Other times, you might notice various “add-on” fees in your cable bill, such as a “Broadcast Network” or “Regional Sports” fee that adds up to $12 a month on top of the promotional offer.
Many of these fees come with the addition of cable and phone services. These sort of extra fees are avoidable by doing away with the cable TV packages… but if you enjoy sports and premium programming, living without those packages can be a challenge.
Recovery fees essentially work the same way, and most function to recover costs Internet providers have to pay, including corporate expansions and required Federal fees. 
Other line items are designed to sound more official and are often presented as “taxes” or “governmental” fees so that the consumer subconsciously places blame on the government rather than the company.
“Internet Cost Recovery Fees” are a good example of this, and cost affected customers around $3.99/month. The fine print will explain how this fee goes toward maintaining their broadband network and expanding its capacity, which sounds fantastic. Only problem is, that’s what your bill already pays for. 
What to do about hidden fees:
Keep in mind that not all fees are underhanded. Some are valid depending on your service and location, while others are considered the cost of doing business.
Also, itemized bills are becoming extremely rare, particularly for Internet-only plans, and often you’re just given a “Total Due” with a vague breakdown of charges.
Regardless of how you’re billed, if the amount is more than the amount you signed up for, call and request detailed information on each line item, whether disclosed in paper or not. It’s not uncommon for accidental additions like equipment leasing fees to be added to find their way onto your bill, and you’ll never know if you don’t call and do the math.
When you do call, remember to be polite and remain calm. Call centers are always more receptive to helping someone who is respectful, and they’re trained to diffuse hostile complaints.
2. Data Caps and Overage Fees
Data caps are one of the more recent developments in the Internet service market, and certainly one of the most controversial.
Essentially, data caps are limitations placed on the consumer’s internet use with the understanding that the more you use, the more you pay.
While this sounds straightforward and fair, the issue is a bit murkier.
Many ISPs have claimed data caps serve to regulate congestion on the internet. Meanwhile, critics maintain that they simply provide companies with a way to offset the increasing shift from TV/Cable to broadband streaming by penalizing customers for data used to stream third-party content. 
What’s at stake here is an ISP can charge extra in data usage to discourage the use of certain streaming services, while hindering access to others. Meanwhile, many of them are busy building their own data-cap-exempt IPTV services on the side.
That’s not all.
What’s worse is that there are little-to-no regulations or federal oversight keeping track of these practices, letting ISPs run free and set their own rules on pricing.
What to do about data caps
While this might seem hopeless, you do have a few options.
First off, maintain an awareness of how much data you use to avoid the extra charges. This is also a good idea in the unexpected circumstance you’re faced with defending inaccurate charges.There are horror stories of inaccurate data cap meters and customers being charged when they didn’t have electricity or weren’t home, and keeping tabs on use helps make sure you aren’t one of them. 
Better yet — if you have the choice — simply don’t use providers with data caps. In fact, let these ISPs know you’re not going with them because of their data cap policies. Again, you’ll get better results if you’re polite on the phone.
Here’s an exhaustive (and exhaustingly long) list of Internet providers with data caps:
If you don’t have the luxury of choosing providers, contact the Better Business Bureau and write your federal representatives. (Info at bottom of this article.) While this won’t yield an immediate result, it will encourage action and signal a consumer resistance to these practices.
3. Promotional Pricing and Contracts
Promotional pricing is great. We all like to feel like we’re getting the best deal we possibly can. However, promotional deals can be misleading and aren’t always what they seem.
In fact, ISPs often use these promotional packages as a way to gain long term profits, offering lower rates for the first year and then making their money back later on. The ISPs’ goal is to lure potential customers in with a good deal and then charge extra the second year to recoup this discount.
For an example of how this impacts your pocketbook, let’s say you sign a 2 year contract. Year one is $50/month, and the year two is priced at the “final price” of $150/month. Based on the law of averages, you’re actually paying $100/month for service over 2 years (before accounting for the usual 20–40% increase due to miscellaneous fees). In this sort of situation, the ISP comes out ahead, charging you the same on average.
They even make the distinction between “new customer” rates and “existing customer” rates, where the latter is charged up to twice as much for the same service. In some circumstances, “existing customers” are unable to access the promotional offers online, preventing them from seeing the different rates.
What to do about promotional contracts:
First off, have the foresight and plan ahead before accepting a promotional contract. Do the math on how the average fee will impact your wallet later on and avoid signing one if possible.
If your choices of ISPs are limited, plan to call after the first year to negotiate a lower monthly bill around the time the promotional period expires.
Oftentimes, these companies are willing to lower your bill, and it’s actually cheaper for them in the long run to keep you on as a customer than to lose your business altogether. With this option, keep in mind it helps to have a strategic plan to negotiate.
4. Selling User Data to Advertisers
Right now, ISPs selling user data to advertisers is a heated issue. Depending on your personality and privacy preference, selling user data might sound worse than it is, or it could sound downright scary.
The issue primarily involves the fear that Internet providers might join Google and Facebook in the practice of selling your browsing history (among other things that might determine your likes, dislikes, shopping patterns, health concerns, favorite pizza, etc.) to advertising companies looking for streamlined datasets that help determine the best ways to sell more goods.
While not all ISPs are interested in selling your data (yes, some do care about your privacy), data-collecting companies typically argue that it enhances your internet experience by providing more personalized ads while browsing.
Until now, only one ISP has actually done this, selling data to advertisers unless customers opted out and paid extra each month. They stopped due to the backlash from customers and to ensure the success of its merger with another ISP. 
More recently, however, this same ISP is reconsidering charging consumers more to protect their privacy. Analysts expect that increased deregulation of industry under the Republican congress will allow companies to access and sell data much more easily in the near future.
What to do about data privacy:
There are a few things you can do to protect your data privacy.
First, several search engines (like Chrome and Mozilla Firefox) have a “Do Not Track” feature that informs websites and apps not to track your activity.
Of course, several companies have started ignoring this feature, so start using a Virtual Private Network (VPN) and cultivate some healthy paranoia. It’s not like there’s exactly been much regulation or protection from the government, and current trends suggest these issues will only get more Orwellian.
5. Bundled Services — Great, But Only if You Use Them
Bundled services are packages offered by ISPs that include Internet service along with TV Cable and sometimes phone.
While bundled services are great if you need these specific services, many people do not use them and end up paying much more for services they rarely use.
Ultimately, it boils down to personal preference and needs.
For instance, internet-only service could cost $20/month for 10Mbps of speed. You could upgrade to $30/month and get 25 Mbps along with a small Cable package. While this does seem like a phenomenal deal, some people won’t use the extra speed.
Also keep in mind that internet-only deals aren’t subject to any miscellaneous taxes or fees (like the Broadcast Network Fee or Regional Sports Fee mentioned above), thanks to the Internet Tax Freedom Act, which prohibits federal, state, and local taxation on Internet access, and became permanent law in 2016. 
Adding TV often ends up being more than the promotional price which is why more people are cutting the cord with cable packages in favor of streaming services like Netflix or Hulu, who offer comparable subscription prices without the hassle.
What to do about bundles:
In short, know exactly what you’ll need when choosing a plan and don’t buy services you won’t use. Do the math and assess your unique position and wants, and don’t get sucked in by the glittering promotional deals.
How to File a Complaint with the FCC
As consumers, it’s up to us to express any dissatisfaction with services that might seem dishonest or exploitative. Fortunately, there are a few ways to do so.
This topic is a bit complex, so we’ve written a guide to writing effective complaints that actually get results in a separate post.
Conclusion: You Have to Take Action if You Want to Get Good Service at a Great Price
Unfortunately, because of the lack of healthy competition in the broadband market, Internet companies are free to charge what they want with little consequences. As consumers, it’s up to us to educate ourselves on what services we need and what price is fair for those services.
Each time we sign a contract, we agree to the terms and offer our consent to the prices and fees determined by the company selling the services.
Don’t hesitate to speak up and file a complaint with the FCC, or write a letter to your representative. The more we speak up, the more we’re letting companies know we’re not complacent with their practices.
It might not happen overnight, but educating ourselves on these issues and consistently speaking out will eventually have an impact — or at least, be better than doing nothing.
References and Footnotes
- https://www.fcc.gov/consumers/guides/understanding-your-telephone-bill ↩
- https://apps.fcc.gov/edocs_public/attachmatch/DOC-341088A1.pdf ↩
- http://www.centurylink.com/home/help/billing/overview-of-taxes-and-fees/internet-cost-recovery-fee.html ↩
- http://www.businessinsider.com/leaked-comcast-documents-data-cap-network-congestion-2015-11 ↩
- https://arstechnica.com/information-technology/2016/09/tales-from-comcasts-data-cap-nation-can-the-meter-be-trusted/ ↩
- https://www.dslreports.com/shownews/ATT-Says-It-May-Soon-Charge-You-Extra-For-Privacy–139840 ↩
- https://fas.org/sgp/crs/misc/R43772.pdf ↩
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Jessica Sims is a technology blogger and broadband industry veteran. Her background as an administrator and customer support employee for a major ISP informs her passion for helping consumers understand their service options.
James Webb is a tech and gadgets expert with a focus on educational content development. He draws on his background in the startup world to make complicated technologies and topics easy to understand for normal folks.