House Lawmakers Question Telecom Giants Over Broadband Price Gouging During A Pandemic

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

House lawmakers say that telecom giants are exploiting a national health and economic crisis to make an extra buck.

The subject of their ire are broadband usage caps, which we've long made very clear are little more than price gouging of captive customers in uncompetitive US broadband markets. Such restrictions don't manage congestion, aren't technically necessary, and serve no financial function outside of price gouging, given flat rate broadband is already hugely profitable, and "heavy" users can already be bumped to business class tiers.

Broadband caps are a monopolistic toll on captive customers. And while the Trump FCC struck a temporary pinky swear agreement with ISPs to suspend them during the first few months of the pandemic (which many ignored), ISPs like Comcast and AT&T were not only quick to return to the punitive charges, some ISPs like Comcast actively expanded them. Sure, millions of Americans are struggling to pay for essential services and rent, but monopolies are always going to monopolize unless they face one of two things: penalties via competition, or penalties via functional regulators. The US broadband sector has neither.

Regulators inclined to look away from the problem of US telecom monopolization in normal times have found it harder to do so via COVID, even if that usually doesn't result in any serious repercussions. This week, House Energy & Commerce Committee members Reps. Frank Pallone, Jr, Mike Doyle, and Jerry McNerney lambasted companies like Comcast for doubling down on their greedy bullshit during an economic crisis:

"Over the last ten months, internet service became even more essential as many Americans were forced to transition to remote work and online school. Broadband networks seem to have largely withstood these massive shifts in usage. Unfortunately, what cannot be overlooked or underestimated is the extent to which families without home internet service — particularly those with school-aged children at home — have been left out and left behind.” “This is an egregious action at a time when households and small businesses across the country need high-speed, reliable broadband more than ever but are struggling to make ends meet."

This is all a very polite way of saying monopolies are ripping customers off during a tragic crisis. The lawmakers in question fired off equally polite letters to most telecom CEOs, asking for more detail on the timing of many capping decisions.

Granted this is empty rhetoric until the incoming administration arrives and the makeup of Congress shifts away from GOP control. For four years, the Trump administration was literally incapable of even acknowledging that US broadband isn't competitive, resulting in mediocre service in nearly every global metric that matters, and some of the highest prices for broadband in the developed world. They similar turned a blind eye as telecom monopolies used a universe of bogus surcharges to jack up the cost of broadband and TV services post sale, a tactic that effectively lets them falsely advertise lower rates.

Again, lawmakers were happy to turn a blind eye to this stuff in normal times, but as the wheels of government shifts its focus to providing COVID aid to struggling Americans, broadband monopolies' relentless efforts to price gouge captive customers who can't vote with their wallets is going to find itself increasingly in the spotlight. Which is why Comcast recently expanded its broadband caps now when it knows nobody in government gives a damn.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: broadband, congress, covid, fcc, pandemic, price gouging


Reader Comments

Subscribe: RSS

View by: Thread


  • identicon
    Anonymous Coward, 14 Jan 2021 @ 6:39am

    it shouldn't matter whether there is a pandemic or not! these fuckers are and have been ripping customers off since the internet became available and it'll take more than asking this ridiculous question now to fix it! a big help would be if the law makers, Congress members and others, some of which i am sure are involved with this questioning, were named and shamed for accepting 'personal contributions' from the various ISPs and telecoms companies and actually voted to allow competition into the market place! also, for localities that wanted to, be allowed to install their own internet infrastructure and services, free from interference from the major players and everything they do to impede it from happening!

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

  • icon
    JoeCool (profile), 14 Jan 2021 @ 7:44am

    Spectrum has been busy raising prices on internet service the last several months. My bill has gone from $69.99 to $79.99 per month in less than six months. I'd love to see anything that got those prices back down.

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

  • icon
    Koby (profile), 14 Jan 2021 @ 8:12am

    Oughtta

    From the "there oughtta be a law" department:

    There oughtta be a law which says that any surcharges are optional and don't have to be paid. Companies may itemize their charges, but cannot exceed the price quoted for service.

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

    • identicon
      Anonymous Coward, 14 Jan 2021 @ 2:17pm

      Re: Oughtta

      Companies providing a public service also shouldn't be able to refuse to negotiate reasonable changes on a contract. Something I've ONLY come up against in telco land is contractual agreements that are made solely over the phone, solely with a contract written by a telco lawyer and non-negotiable by the sales rep or the customer (is it really a contract then?) and including content that essentially means the customer has no rights and the provider retains all rights -- to content, to privacy (where applicable by law), to choice of arbitration in disputes, and to change the "contract" as they see fit.

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

      • identicon
        Anonymous Coward, 14 Jan 2021 @ 2:23pm

        Re: Re: Oughtta

        I still remember once getting a telco sales guy promising me all sorts of wonderful things. I told him to provide me with a printed version of the contract. He must have really wanted the contract, because he showed up at my business with the hard copy in hand. Then he got frustrated as I read through it in full, initialing the paragraphs as I agreed with them. Then eventually I came to a clause that was illegal, so I crossed it out, wrote a statement that accomplished what they stated they wanted to do but in a legal way, and initialed, and passed it to the sales rep to initial. He freaked out and said "You can't do that!" I said "Is this a contract?" he said "yes..." and I said then I can do that. If you don't have the authority to sign it, then send someone with that authority instead. If you don't want the contract, I'll go find one of your competitors who is willing to accept legal terms.

        The guy actually left with the contract un-signed, and I never heard from him again. I ended up going with a small reseller who was willing to agree to an actual contract.

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

  • identicon
    Benign Bodger, 14 Jan 2021 @ 8:21am

    "The lawmakers in question fired off equally polite letters to most telecom CEOs, asking for more detail on the timing of many capping decisions."

    And they'll keep sending the polite letters until the "contribution" checks clear the bank...

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

  • icon
    hij (profile), 14 Jan 2021 @ 8:22am

    Hiding the carriers

    Many of the people who have actively worked to coddle the carriers have also spread disinformation about section 230 protections. They have explicitly called out platforms for not allowing all speech while simultaneously providing cover for the corporations that restrict access to the platforms they claim are required to host all speech.

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

  • icon
    jilocasin (profile), 14 Jan 2021 @ 8:53am

    About fraking time

    It's about time, now if we could just (pretty please) get a little more than rhetoric, it might actually help.

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

  • identicon
    Anonymous Coward, 14 Jan 2021 @ 9:37am

    fake news

    House lawmaker are paid by telcom giant's lobbyist, so this is drama to make House lawmakers look like they care. In fact, House & Senate lawmakers are paid by corporate lobbyists, and House & Senate lawmakers aspire to become lobbyist themselves after their political careers expire.
    1.work for corporation
    2.run for office
    3.get elected/selected
    4.pass laws favorable to corporation
    5.leave office and return to corporation
    It's a great gig...until CONGRESSIONAL TERM LIMITS.

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

  • identicon
    Anonymous Coward, 14 Jan 2021 @ 9:56am

    It is quite interesting that Comcast has increased their cap by 30% to millions of people without any fanfare. If it was done in any type of business, customers would be really happy and think it was really nice of them to give 30% more service for free. But I think they increased it because so many people were hitting that 1 Tb cap and they needed to increase it to 1.3 Tb so they can say that only 5% of the customers hit the cap. I want actually numbers from Comcast to say that their meters are accurate and I would like a graph about how many customers use over 1 TB. I did not go over 1.3 Tb the last few months but that is only because of shutting down my router and forbidding my kids from using any internet for the last week of the month.

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

    • icon
      jilocasin (profile), 14 Jan 2021 @ 1:14pm

      Re:

      The whole cap thing is a pointless exercise, an excuse to get more money from a captive audience just because they can.

      In the dial up days, you were charged by the minute because you were tying up a circuit. Your speed was mostly a product of the modem you had purchased and the quality of your phone lines.

      In the broad band era you are charged by the speed of your connection. The faster your connection, the more you pay.

      Caps are useless and counterproductive. If it takes you two weeks to hit your cap at your current speed, paying to double your speed just means that you'll hit it in half the time. Which of course is what they want. Pay $ x.xx per month per speed tier and $ y.yy per byte. It's classic double dipping. The fact that their meters aren't entirely accurate isn't a bug, it's a feature.

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

      • identicon
        Anonymous Coward, 14 Jan 2021 @ 1:57pm

        Re: Re:

        Well yeah that's the whole thing. It's like you're increasing the wear on their fiber or something. Too many photons!

        Meanwhile, no corporation wants to pay taxes for roads and stuff.

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


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads
.

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.