Broadband ISP Frontier Just Keeps Happily Ripping People Off With Bogus Fees, And Zero Real Repurcussions

from the do-not-pass-go,-do-not-collect-$200 dept

When you're a natural monopoly in America you get away with a lot. Take for example Frontier Communications, which has spent the last few years stumbling in and out of bankruptcy while dodging no shortage of scandals, including allegations of subsidy fraud. Last year, Frontier got a light wrist slap for fraudulently charging its customers a "rental" fee for modems they already owned. The company also paid a tiny $900,000 fine last year to Washington State AG Bob Ferguson for using bogus fees to rip off the company's captive subscriber base.

Of particular annoyance in consumer complaints has been the company's $4 per month "Internet Infrastructure Surcharge," which is a completely nonsensical, bullshit charge the company levies below the line. The surcharge doesn't really go to "infrastructure" (that's what your entire bill is for). What it does do is give Frontier a way to continually increase consumer prices while falsely advertising a lower rate. Other ISPs engage in similar behavior with little real penalty (see CenturyLink's "Internet Cost Recovery" fee).

While the $900,000 Washington State AG fine is semi-helpful, like most US regulatory "penalties" it's a tiny fraction of the money made via the dubious business practice. And while the company stopped charging the fee in Washington, it still charges it across the rest of its 22 state footprint. Note that Frontier has 3,735,000 broadband subscribers, each paying $4 a month in completely erroneous surcharges. That's nearly $15 million in bullshit charges in just one month, or $180 million in dodgy revenue every year.

Facing only a light wrist slap for the practice, Frontier seems intent on doubling down on this behavior. The company this week announced it will be bumping the fee to $7 per month. Frontier attempted to explain away the bogus surcharge this way:

"The increase applies to Frontier customers based on individual service packages and reflects increasing maintenance and other network costs, including the rapidly rising costs of supporting our customers' increased Internet traffic and usage, and consumer demand for greater bandwidth, services, and other requirements that affect our Internet network. Customers on price-lock and promotional pricing will not see this increase until their terms expire."

But again, "maintenance and other network costs" is what the entirety of your bill is for, and the fee's real purpose is to help the iSP engage in false advertising on pricing.

Despite decades of this, federal regulators at the FCC have largely been utterly pathetic on this issue. While there was some basic rules requiring at least some transparency in pricing baked into the FCC's net neutrality rules, those were gutted by industry lobbyists during the Trump administration repeal. This kind of misleading pricing could also be mitigated via policies that push more competition to market, but since most US markets lack competitive options, and building more competitive options tends to upset politically powerful telecom monopolies, we usually only pay lip service to that concept as well.

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Filed Under: bogus fees, broadband, competition, fees
Companies: frontier, frontier communications


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  • identicon
    Anonymous Coward, 3 Mar 2021 @ 12:26pm

    Another further example of a company being able to get away with whatever it wants mainly because there are too many in Congress on the take, ensuring it can happen and no one who has the minerals to stand and be counted, then lose their cushy little job as a result!

    reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 4 Mar 2021 @ 12:17am

      Re:

      "Another further example of a company being able to get away with whatever it wants..."

      Funny, It's almost as if the whole of the US is driven by fraud and grifting rather than being a nation of "truth and justice" as has been hyped for so long. How'd that happen?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 12:53pm

    When you're a corporation, they let you do that.

    reply to this | link to this | view in chronology ]

  • identicon
    Glenn, 3 Mar 2021 @ 1:51pm

    What the law should say is that they can only break-out taxes, fees, and surcharges that are charged by govt. entities (aka things they have no control over)... but it doesn't. Not just for ISPs, but any company.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Mar 2021 @ 8:23pm

      Re:

      What the law should say is that they can only break-out taxes, fees, and surcharges that are charged by govt. entities (aka things they have no control over)

      Or they could, you know, just tell people the actual final price. Like they do in almost all other countries. Maybe we need some allowance for post-signup tax changes or multijurisdictional advertisements, but once they know your tax rate, the price they tell you should be the amount you pay.

      reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 4 Mar 2021 @ 12:26am

      Re:

      "What the law should say is that they can only break-out taxes, fees, and surcharges that are charged by govt. entities (aka things they have no control over)..."

      That...isn't the case anywhere. Not even in "socialist" europe. The reason the US markets can't have nice things is because the markets are all locked up in monopolies more resembling those of the old USSR than anything we see anywhere else today. I doubt even China has this crippled an internal market. In fact, I'm pretty sure it doesn't.

      The cure for this is for government to enforce a level playing field; Sensible net neutrality regulation. Mandated lease/share legislation for all utility infrastructure laid. Compelled transparency in billing and advertising. Regulated and enforced minimum standards.

      After that, when you actually have a free market, the likes of Frontier will be run out on a rail by competitors eager to gain customers by being more convenient and effective.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 1:53pm

    The only reason why a company should be allowed to charge you a separate fee is if they have to remit that fee to someone else. I have no problem paying sales tax separate (or I wouldn't if I lived in a state that had one) because the store has to remit the tax to the government. They don't have to charge me for it, they include it in the price like Europe does with VAT, but I don't mind if they'd rather not.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 3 Mar 2021 @ 2:57pm

    Its almost as if the fine isn't enough, they'll just keep doing it.

    (Charlie Brown trick-or-treating meme, looking in the treat bag)
    What did you get?
    Another 20 yrs of credit monitoring & their promise that this time they really really mean it that they take our data privacy seriously, the new admin password will be 1234567...

    I mean I guess its trendy to let them steal millions then collect a fine of a tiny fraction while allowing them to keep stealing millions... in a functioning marketplace the punishment would be a bill credit to all of the consumers & not allowing the company to just steal it all back again... but of the corps, for the corps, with profits for the 1%

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 3:18pm

    So they are going to recover the cost of the fine and the lost revenue for not being able to charge the fee in Washington state on the backs of the rest of their footprint. Also, just add a bit more to the increase to cover lawyers fees from the lawsuit an to preemptively have money in the bank to cover the next lawsuit.

    reply to this | link to this | view in chronology ]

  • icon
    Avantare (profile), 3 Mar 2021 @ 4:00pm

    Fines imposed

    Any corporation that is caught charging bogus fees need to be fined 2x the amount that they gather with those fees. No argument accepted. Laws need to be made that address this kind of activity (like that'll ever happen).

    Good example of a fine would be doled out using the Frontier example in this article.

    "Note that Frontier has 3,735,000 broadband subscribers, each paying $4 a month in completely erroneous surcharges. That's nearly $15 million in bullshit charges in just one month, or $180 million in dodgy revenue every year."

    $30 million per month x the number of months they have been doing this plus an additional $5 million per month cumulative for every month they continue the practice. This will be payable in CASH and NOT stock or the equivalent.

    No ifs, ands, or buts about it.

    reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 4 Mar 2021 @ 12:29am

      Re: Fines imposed

      "Any corporation that is caught charging bogus fees need to be fined 2x the amount that they gather with those fees. No argument accepted. Laws need to be made that address this kind of activity (like that'll ever happen)."

      There are laws about that, and in europe at least, those laws work just fine. This is just one more of those Only In America issues where both federal and state government fail to prosecute actual fraud because the intended accused is too big for the DA's next election campaign to bear.

      reply to this | link to this | view in chronology ]

      • identicon
        Talmyr, 6 Mar 2021 @ 4:45am

        Re: Re: Fines imposed

        Funny how not having elected DAs over here helps with that element as well. Almost like not having your sheriffs and DAs elected is actually better for democracy...

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 6:30pm

    The increased photon flux due to the pandemic is wearing holes in our fiber faster than usual.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 7:59pm

    Wait, this article doesn't belong. I have it on good authority from a frequent commenter that Techdirt is pro-corporation! Does not compute!?!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2021 @ 8:29pm

    So, if a restaurant...

    were to pull this kind of crap, there'd be a lot of angry folks out there.
    Can you imagine buying a $5 burger, then when you get your bill you also see: a $1 charge for grill maintenance, $2 for access to the chefs and finally a $3 charge to handle increased patronage.

    Yeah, I don't think that would work out well for any restaurant that pulled that kind of crap. But there's likely more than one burger place where ever you have a town large enough for restaurants.

    But we put up with it from the telecommunication industry... if only, there were some competition, we might actually have a choice.

    reply to this | link to this | view in chronology ]

  • icon
    BG (profile), 4 Mar 2021 @ 3:49am

    Time for turnabout perhaps?

    Perhaps there ought to be some organised means of impressing on the corrupt congress-critters in question just how frustrating this is. Of course the difficulty is in finding a common service they all use.

    This is a bit unusual, but I might just have found it ... what about hookers / escort services and the like?

    Oral sex: $25
    Additional below the line charges:

    • Unzipping fee, additional $5. No, it really doesn't unzip itself.
    • Maintenance fee, additional €5. Otherwise known as the "I damn near froze to death wearing next to nothing in December" fee.
    • Environmental fee, additional €5. Otherwise known as the "I see, you're too good to clean up after yourself you asshole" fee.
    • Union dues, additional €5.
    • Union levy, additional $5. For the pimp/madam this time.
    • etc.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Mar 2021 @ 9:54am

    this is also an actual Frontier charge (may not apply in all states)

    Frontier Roadwork Recovery Surcharge $1.30

    reply to this | link to this | view in chronology ]


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