Customer Sues Charter, Time Warner Cable Over “Broadcast TV” Fees; Doesn’t Seek Monetary Damages

Last month, Comcast customers accused the cable company of illegally using its “Broadcast TV” and “Regional Sports” fees to raise customers’ bills by as much as $10/month. Now a customer of the recently merged Time Warner Cable and Charter Communications is accusing the providers of breaking the law by using similar fees to hide rate hikes while implying to subscribers that these surcharges are required by the government.

The lawsuit [PDF], filed this week in a California state court in San Diego, accuses Charter and TWC of “engaging in a massive illegal scheme of falsely advertising and promising its cable television service plans for much lower prices than it actually charges.”

What Is The Broadcast TV Fee?

As we mentioned earlier this year in our line-by-line breakdowns of bills from Time Warner Cable and Charter customers, both of these companies have charged some sort of “Broadcast TV” fee.

This surcharge is a way for the cable companies to recoup the money they pay to the broadcast networks — NBC, ABC, CBS, FOX — to carry their channels. Charter has been adding this surcharge for six years, while Time Warner Cable has been using this add-on charge since 2014. TWC expanded this surcharge in 2015 by adding “Sports Programming”.

The amount of this surcharge — $8.75/month for some customers, according to the complaint — is not included in the monthly rate that the now-combined companies advertise to the public.

The lawsuit contends that this surcharge should be included in the advertised rate, as carrying TV stations is the very thing that customers pay cable companies for.

The money that Charter pays to the networks “is a basic cost of doing business,” argues the plaintiff, who says that if Charter is going to pass this cost on to customers, it should be including that amount in the rates it markets.

“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,” reads the lawsuit, which alleges that the failure to disclose these fees in the advertised rate is a violation of California’s law against false advertising.

No Fee Required

In addition to the claim of deceptive marketing, the plaintiff alleges that Charter/TWC is breaking state law by implying to customers that this surcharge is required.

As we noted in our coverage of the TWC bill, the company lists the Broadcast TV fee in the same section as other very official-sounding “recovery” fees, like the “Regulatory Recovery Fee,” “PEG Capital Fee,” “PUC Recovery Fee,” “Universal Service Fund” fees for both state and federal,
and a “State Cost Recovery Fee.”

“TWC imposes surcharges to recover costs of complying with its governmental obligations,” reads an explanation at the end of that section.

The Communications Act does require cable companies to set aside a certain number of channels for carrying local broadcast stations, but a cable provider is not required to pay whatever price a station demands for retransmission.

So if Cable Company X can’t come to a retransmission agreement with TV Station A, the station could be blacked out for Company X subscribers. As the FCC explains on its site, it doesn’t really have the authority to get involved in these negotiations.

Just look at what happened three years ago, when a standoff between CBS and TWC ended up in a month-long CBS blackout for millions of TWC subscribers. In the end, TWC reached a deal with CBS not because it was required to, but because it was bleeding customers who have long expected that the major networks will be available from their cable company.

To the plaintiff, the language on the TWC bill is falsely implying that the Broadcast TV Surcharge is somehow related to a mandatory governmental expense.

“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,” argues the complaint. “But in truth, rather than collecting this money to pay for its governmental obligations, Charter is pocketing the money and enriching itself as a result of its fraud.”

Even though TWC is now under Charter’s “Spectrum” brand and has redesigned its invoices to lump the surcharge under the header of “Other Fees,” a copy of the new bill included in the complaint still contains the old language about recovering “costs of complying with its governmental obligations.” —

Misinformation Or Mistake?

While one could argue that this cost-recovery explanation printed on the bill is not meant to be read as applying to all the surcharges that came before it, the plaintiff alleges that some Charter employees are explicitly telling customers that these surcharges are required by law.

In a customer service chat transcript included in the complaint, a TWC rep said “correct!” when the customer asked if “Time Warner [Cable] pays this broadcast fee to the local government?”

It’s apparent from the transcript that the rep’s primary language is not English, and they may simply have misunderstood either the question being asked or the nature of the surcharge, but ultimately isn’t Charter/TWC responsible for training their reps and making sure they don’t provide bad information?

No Monetary Damages

The first question we ask whenever we see a customer’s lawsuit against a telecom giant, is “how does it plan to survive arbitration?”

As we’ve pointed out before, all major telecom, cable, and broadband companies (and just about anything else you can buy) now have forced arbitration clauses that can be used to remove customers’ lawsuits from a court of law by compelling them into private arbitration. These clauses — including the Charter and TWC ones — often include a ban on class actions, even through arbitration, meaning each allegedly wronged customer must go it alone.

The TWC arbitration clause does include a 30-day window for new customers to opt out, but the plaintiff in this dispute is still hoping to avoid being shunted off to the arbitrator. How? By not seeking any financial damages.

Instead, the plaintiff is only seeking injunctive relief — for the court to stop Charter/TWC from the allegedly illegal practices — and for a declaration that these practices do indeed run afoul of the law.

Why might that work? Because the arbitration clause in the TWC residential user agreement also states that “Only claims for money damages may be submitted to arbitration; claims for injunctive orders or similar relief must be brought in a court.”

Therefore, argues the complaint, “it is beyond dispute that this action must be heard and decided in Court, and is not subject to arbitration.”

Dan Hattis, the attorney who is representing the plaintiff in this case (and who is also the plaintiffs’ lawyer in the recent Comcast lawsuit) tells Consumerist that while this lawsuit isn’t seeking monetary damages, 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.

“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,” says Hattis. “Hopefully, a successful attack on these fees will help clean up cable billing practices.”

We have reached out to Charter for comment on this lawsuit and will update if we hear back from the company.

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