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