A Charter customer has sued the cable company, alleging that it falsely advertises a lower price than it actually charges and falsely tells customers that extra fees tacked onto their bills are mandated by the government. The complaint, filed in California State Superior court in San Diego, takes aim at the “Broadcast TV” and “Sports Programming” surcharges that are added to customers’ bills despite not being included in the advertised rate.
“Charter is committing massive billing fraud by disguising price increases above the advertised and promised service package price in the form of the bogus ‘Broadcast TV and Sports Programming Surcharges’ line item on customer bills,” said the lawsuit filed last week by Michael Song.
The plaintiff is a subscriber in California, where Charter, the second largest cable company in the US after Comcast, operates via its newly acquired Time Warner Cable (TWC) subsidiary. Song is paying an extra $8.75 a month from those two fees combined.
In addition to subtracting the fees from the advertised price, Charter falsely tells customers that it collects the fees to comply with government mandates, the lawsuit says. A Charter/TWC bill from last month is included in the complaint, and it says, “TWC imposes surcharges to recover costs of complying with its governmental obligations.”
“This is a clear and unambiguous statement that any line item on the bill that is labeled as a ‘surcharge’ is charged to recover costs imposed on Charter by the government,” the lawsuit says. “Charter clearly and unambiguously calls the Broadcast TV and Sports Programming fees ‘surcharges’—in fact, the very name of the line item is: ‘Broadcast TV and Sports Programming Surcharges.’ Meanwhile, Charter provides no further explanation or definition of the Broadcast TV and Sports Programming Surcharges line item on its customer bills.”
Song’s complaint also has a transcript of a chat with a Charter customer service agent, who claimed that Charter pays the broadcast fee back to the government. The customer service agent apparently has only a limited grasp of English, but the chat transcript helps illustrate one of the ways in which customers are being misinformed about their bills.
The sports programming fee exists simply to reimburse Charter for the amount it pays networks to broadcast sporting events. The “Broadcast TV” fee reimburses Charter for the amount it pays broadcast networks to retransmit their content. The fee is not mandated by the government, but US rules allow broadcast stations to demand carriage fees from cable companies. Cable companies don’t have to pay the broadcasters, but generally they do it so they can offer the channels to customers.
“[P]aying television networks for video content and transmission rights is a basic cost of doing business for a cable company,” Song’s complaint said. “The reality is that Charter invented these Surcharges in order to deceive its customers by advertising and promising a lower price while actually charging a higher price.”
Song’s lawsuit repeatedly refers to the Broadcast TV and Sports Programming surcharges as “bogus” and “hidden,” since they subtract a portion of the standard monthly charges from the “services” section of the bill.
When contacted by Ars about the lawsuit, Charter issued a statement that defends its billing practices in general but does not refute the lawsuit’s major claims. “Charter is committed to offering its customers superior products at a better value, including the fastest base broadband speed and the most HD video,” the company said. “Our customer friendly approach includes simplified pricing and packaging with no data caps, no modem fee, no early termination fee and no separate USF [Universal Service Fund] fee. We provide simple to understand bills and want our customers to understand what they are paying for, including the skyrocketing cost of broadcast channels.”
The Charter statement seems to address only the company’s pre-merger territory with regard to fees, ignoring the TWC areas it owns. TWC does charge a federal Universal Service fee, as seen in the bill included in Song’s lawsuit. The TWC website confirms that the company charges early termination fees. Charter is still in the process of rolling out its own pricing and service packages to former TWC markets.
Message for other customers: Opt out of arbitration
While cable company contracts typically force customers into arbitration rather than court, Song is trying to avoid arbitration by not seeking any monetary damages. The TWC arbitration clause says that “Only claims for money damages may be submitted to arbitration; claims for injunctive relief must be brought in a court.” Song is seeking injunctive relief, specifically an order preventing Charter from continuing with the same conduct. He is asking for reimbursement of attorneys’ fees but not for a refund of what he has paid to Charter.
Song’s attorney is Daniel Hattis, who also represents Comcast customers in a nearly identical case. In the Comcast case, the customers opted out of the company’s arbitration clause and are seeking class-action status and financial damages.
While Song may be bound by an arbitration clause, customers are given 30 days to opt out of it. According to Hattis, “the point of filing for injunctive relief is to raise awareness of these surcharges and to encourage new TWC customers to take advantage of that 30-day window to opt out of forced arbitration,” the Consumerist reported Friday.
Here is the link for opting out of TWC arbitration.
“I think the cable industry has pushed it too far with its latest scheme of inventing, and repeatedly raising, these bogus below-the-line broadcast TV and sports fees,” Hattis told the Consumerist. “Hopefully, a successful attack on these fees will help clean up cable billing practices.”
Disclosure: The Advance/Newhouse Partnership, which owns about 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.