A New Jersey lawmaker wants to force cable companies such as Comcast and Verizon to include so-called hidden fees in their advertised prices, taking aim at additional charges that can jack up customers’ bills by hundreds of dollars a year.
Pay TV providers often exclude fees for equipment, broadcast networks, and regional sports channels from advertised base rates, even though consumers must pay those charges to receive service. Consumer advocates have accused cable companies of disguising price hikes by increasing those fees without changing promotional rates.
Assemblyman Paul Moriarty (D., Gloucester) plans to introduce legislation Thursday that would require cable companies to advertise the total amount they will bill for TV service, including costs for set-top boxes, remote rentals, and broadcast programming, according to a draft of the proposal. The proposed law would not apply to government-imposed fees or taxes.
New Jersey could be the first state to try to tackle the “hidden fees” that critics say help cable companies collect billions of dollars more from customers every year. Still, the bill is unlikely to become a law anytime soon.
“Like many people that have cable or satellite TV service, I’ve seen this development where there are new charges appearing on my bill and other people’s bills that are adding up to more than what I thought I was paying a month,” said Moriarty, chairman of the Assembly’s Consumer Affairs committee. "I figured we can probably do something about it in our state and put a stop to this.”
A recent review of nearly 800 cable bills by Consumer Reports, a consumer advocacy group, found that company-imposed fees cost customers $37 a month, on average, or nearly $450 a year — effectively adding a 24% surcharge on top of the advertised base price. The report, released last month, estimates that cable companies could collect $28 billion a year from such charges.
In many cases, the fees cover features and services that had previously been included in the base advertised price, the report said.
The fees have skyrocketed in recent years, according to the report. For example, Philadelphia-based Comcast charged consumers $2.50 a month for both the Broadcast TV Fee and Regional Sports Fee in 2015. Those fees combined now cost $18.25 a month — a 630% jump over four years — the report said.
Cable companies have cited rising programming costs to carry content from local network affiliates and other broadcasters in explaining the increasing fees. They contend that the fees are hardly hidden because they are disclosed to consumers on rate cards and during the ordering process. And they’ve noted that the Federal Communications Commission permits them to separately itemize programming costs on consumer bills, according to the report.
“The fees that broadcast stations and regional sports networks charge us to carry their content are the two fastest growing components of our overall programming costs," Comcast said in a statement. “We clearly disclose these fees to be transparent with customers about what’s included in their bills, and we get their consent when they sign up or add services to their account.”
A Verizon spokesperson did not return requests for comment.
Broadcasters typically ask cable companies to pay more to carry their TV channels, while cable companies try to keep costs low. The fee disputes have become more contentious in recent years, and according to Consumer Reports, cable companies often have little choice but to pay up or else risk having content blacked out by broadcasters.
Comcast has said its programming costs have more than doubled since 2006, and some of those costs are passed on to consumers. The cable giant recently took heat for moving Turner Classic Movies to a sports entertainment package that costs $9.95 more a month. Comcast said the move would help slow the rapid rise of programming costs, though critics called it a price hike.
Moriarty’s draft legislation applies only to cable companies, but he said he plans to broaden the bill’s language to cover satellite TV and other media distributors, such as streaming services Netflix and Hulu. The draft does not say whether companies would face penalties for failing to include fees in advertised prices. Moriarty said he hasn’t yet decided how the requirement should be enforced.
Consumer Reports, which has campaigned against hidden fees, said it is unaware of other states pursuing such legislation, though there is a similar bill in Congress.
“It’s an easy way to inject transparency into the opaque billing practices of the cable companies,” Jonathan Schwantes, senior policy counsel for Consumer Reports, said of the New Jersey proposal. He added that lawmakers should make sure any law covers fees for broadband internet service, too.