Cable and wireless phone companies consistently rank among the least popular types of businesses.
Perhaps that's because on top of the already hefty fees people fork over for pay television and wireless phone service, companies like Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), AT&T (NYSE:T), Sprint (NYSE:S) and Verizon (NYSE:VZ) find sneaky ways to pad your bill. Cable and mobile phone service seem to be the one set of businesses where it's OK to advertise one price and then charge another.
McDonald's, back when it had a Dollar Menu, could not list a cheeseburger on it for $1 then tack on a "cheese conveyance" fee or a "bun storage" surcharge. The cable and wireless phone companies seem bound by no such restraint and despite running highly visible commercials touting one price, it's hard, if not impossible for customers to actually pay the advertised number.
The $1.50 Broadcast TV Fee
In many markets Comcast tacks on $1.50 to your bill each month on top of your regular fee.
The company very clearly shows pricing for its various packages of channels on its website, all of which include the major broadcast networks. The "Digital Starter" package for example is touted as costing $49.99 per month for the first 12 months.
If, however, you click on the fine print (and it's very fine print) you will see that the company also adds $1.50 to your monthly bill on top of that $49.99. If this was a tax or some other pass-along charge that goes to the government, it might make sense, but it's not, it's extra money to pay for what you have seemingly already paid for.
Company spokesperson Steve Kipp explained the charge to GeekWire in a statement, saying that the charge is due to broadcast "retransmission costs," which have more than doubled in recent years:
Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes. In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee.
So, basically, what he's saying is that the company plans to charge more, but won't call it a price increase. It's a case of Comcast not only trying to have its cake and eat it, too, but actually making its customers pay for the cake.
When T-Mobile eliminated overage fees for customers who use more data than their plan allows, many expected the other major smart phone players would have to do the same. They didn't and Sprint, Verizon, and AT&T continue to pad customers' bills by charging for excess use, while T-Mobile simply slows down their data speeds.
To make matters worse, the three companies don't exactly trumpet these often hefty extra charges from the rooftop. Instead, it's in the fine print when you pick a data plan, but bold and clear as a line item on your bill when you incur an overage charge.
This type of fee harkens back to the days of hard-wired phones where what we were paying for long distance charges was always a mystery until the bill showed up.
The problem with this fee, which is similar to the charge most people pay to rent a cable box, is that it's possible to buy a modem for well less than you will ultimately pay to rent one. In the case of cable boxes, buying is generally not an option, but for cable modems, that is not true, according to USA TODAY.
Instead of paying the $5.99 to $7.99 most people have tacked onto their bill each month, you can simply see the list of compatible modems each company lists (but does not promote) on its website. In most cases, there will be options you can buy for under $100, so if you pay $7 to rent, you will be ahead of the game in a little over a year.
Take action (when you can)
In the case of the Broadcast TV fee the only way to not pay it is to drop cable, but the other charges on this list can be avoided. You can avoid paying overage fees if you monitor your data usage through the online tools Sprint, Verizon, and AT&T all offer. You can also check your plan to make sure it fits how much data you actually use.
Modem rental fees are even easier to avoid -- just check the list and buy a modem.
It's possible to pay less if you are an informed, active consumer. The cable and wireless companies are counting on you not to be and have made billions on the fact that many people are not.
Daniel Kline has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.