Dear internet service providers of America: We’re onto your tricks.
For you and me, the study of big and small ISPs alike offers a clearer view of their worst behaviors — and how to fight back. The most important cost-saving lesson: Calling up and threatening to quit your internet service works. It’s super annoying, I know, but Verizon (for example) applied discounts to nearly 60 percent of the bills people submitted, with an astounding monthly median discount of $40.
The study’s spotlight on ISP tricks, including bogus fees, data caps and wildly inconsistent pricing, is also fresh evidence that in many parts of America, there just isn’t a competitive market for internet service. Who would put up with it if there was? About 200 million people live in parts of America with only one or two choices for reliable, fast internet, according to a 2021 report from the White House.
The study also suggests that prices are higher in places where we don’t have good options. In Zip codes where they received bills from only one provider, the median monthly price was $75. In Zip codes where they received bills from four or more providers, the median bill was $65.
That ought to crank up the heat on regulators including the Federal Communications Commission, which has largely allowed the broadband industry to get away with writing its own rules for prices, fees and even how transparent they need to be on our bills. “It’s helpful to know in one of the most-deregulated businesses what people are actually paying,” says Jonathan Schwantes, a senior policy counsel for Consumer Reports’ advocacy division, who led the research.
It’s important to be clear about what the study does — and doesn’t — tell us. Even though Consumer Reports got bills from every state, this isn’t a nationally representative sample. There’s not enough data to draw conclusions about some questionable industry behaviors, such as charging poorer communities more for internet service.
Some in the industry claim we can’t learn anything from studying these bills. The Consumer Reports effort is an “unscientific study which actively seeks frustrated customers to submit bills,” emailed Brian Dietz, the senior vice president of strategic communications for the Internet & Television Association, known as NCTA. He also cited a 2021 survey by Consumer Reports that found 77 percent of Americans with broadband say they’re “satisfied.”
Satisfied that your service keeps running isn’t the same as being pleased with the sales shenanigans of cable and internet companies. The study “represents the state of the broadband market at a moment in time,” says Schwantes. It gives us a point of reference from which we can spot high, low and just plain weird behaviors among actual bills.
Digging into the data, here’s what caught my eye — and what it can teach us.
Highest (non-discounted) prices: Optimum and Suddenlink
Altice’s Optimum, one of the nation’s largest cable companies, and its subsidiary Suddenlink charged study participants a median price of $89.99 per month for internet service.
Altice spokeswoman Janet Meahan said “the $89.99 price point is our rate card pricing and is in most cases not what the customer is paying for their internet service after taking into account their full package and any promotional credits.”
The Consumer Reports study did measure non-discounted prices — but Altice’s rate is still very high. The nationwide median non-discounted price was $74.99, across more than 18,000 bills where a line-item price for internet service could be determined. (Altice declined to say what Optimum’s median price is after discounting.)
Lowest (non-discounted) prices: Sonic
Sonic, a provider in California, charged participants a median of $49 per month. What’s more, that’s the price Sonic charged for gigabit-speed fiber service — making it a very good deal.
The only problem: the reach of Sonic’s gigabit service has been limited, particularly in cities that make laying new fiber-optic cable difficult. “It’s no good to have a great ISP in the neighboring city, or state, as the case may be,” said Dane Jasper, Sonic’s CEO. “Expansion of our network beyond California is in the works now, with a number of markets around the U.S. in various stages of planning, engineering and permitting.”
Where you might pay more for less: AT&T
The more you pay, the faster your speed, right? Not necessarily. Getting sub-broadband speed can cost as much or more than a super-fast connection.
On volunteer bills, AT&T’s median pricing across different speed plans was all over the map. People getting:
- 12 mbps paid $63.
- 45 mbps paid $80.
- 100 mbps paid $60.
- 1000 mbps paid $80.
Why should people who aren’t even getting minimum broadband speeds (25 mbps) be paying more than people getting zippy service? ISPs can and will charge whatever they can get away with in your neighborhood.
“The charges on those bills may reflect older plans that we no longer sell,” said AT&T spokesman Jim Kimberly. “Customers with older plans can check on our website or call in to see if a lower cost offer is available to them for faster speeds and switch service.”
That’s another lesson for all of us: It’s always worth checking to see if there’s a new deal available. Unlike the cellphone carriers, ISPs rarely proactively switch consumers into cheaper or better plans.
Biggest discounter: Consolidated Communications
Consolidated, which serves more than 20 states, applied discounts to 66 percent of participants’ bills, with a median discount of $30. Verizon, which serves the mid-Atlantic and New England, followed closely with 57 percent and a $40 median.
For you and me, this is a mixed bag: Discounts gives us some ability to go in and negotiate. (Even if there isn’t another good option, it can’t hurt to try.) But ultimately, it’s also bad because it means every year or two you’re shocked to see your bill has shot up — and you have to call up your ISP and go through a dance to get back to a market rate. The companies are just hoping you’ll forget or be conflict-averse enough to allow them to keep overcharging you.
“There are some older pricing plans which included deeper discounts on regular rates. These plans are being updated to new, straightforward and simple plans,” said Consolidated spokeswoman Nicole Elton. “We aim to be transparent with our billing, and provide details on our website, advertising and consumer bills.”
Verizon spokeswoman Adria Tomaszewski said, “Verizon offers a variety of affordable and reliable broadband options to hundreds of millions of customers nationwide.”
ISPs: If you want Americans to like you, stop acting like used-car salesmen. Sonic, for one, has a firm no-discounting rule.
Some 32 percent of participants’ bills from Comcast, America’s largest ISP, bundled internet with TV or other services in such a way that it was impossible to know how much they were paying for internet. That’s a problem because without knowing the broadband price, how do you know if your package is actually a good deal?
The FCC and ISPs have been fighting for years over the idea of requiring a standardized broadband “nutrition label” on monthly bills that would break apart and explain the components of bundled pricing.
Comcast spokesman Joel Shadle says the company is in the process of rolling out a new bill format that “clearly breaks out the cost of specific services, including internet.” New customers will get the new bill when they sign up and older ones will get it when they renegotiate or re-up their contracts.
Weirdest fee that isn’t actually a government mandate: Windstream
Respondents’ broadband bills were filled with strange mandatory fees.
The biggest head-scratcher: Windstream, which serves primarily rural areas in 18 states, charged study volunteers a “Deregulated Administration Fee” for a median price of $7.77. A glossary on the company’s website says, “This fee is not a tax or charge required by the government.”
Wait, wasn’t the argument supposed to be that deregulation leads to lower prices?
That DAF fee “was added to broadband customers’ bills years ago to help cover the ongoing cost of maintaining our network as we expanded it to support our customers’ broadband demands,” said Windstream spokesman Scott Morris. In recent years, he said, the company has begun including it as part of the regular rate, and customers should get in touch with the company to switch plans.
Highest data-cap fee: Cox Communications
Some ISPs put caps on how much data you can use at home, after which they start charging overage fees or requiring you pay even more for “unlimited” data.
Among participants’ bills, major ISP Cox charged the most, with a median $49.99 “unlimited data plan” fee on top of their regular monthly bill. And Consumer Reports received at least one bill in which Cox charged a customer without the unlimited plan $100 in overage fees.
What’s not clear is whether there’s any technical justification for these fees — in a fixed broadband system, it shouldn’t cost them more money to deliver more data.
Cox spokeswoman Stacie Schafer didn’t answer that question, but said “more than 95 percent of our customers will not be charged for overages in a given month.”
Highest equipment rental fee: Wave Broadband
Many ISPs encourage you to rent your modem and WiFi router from them for a monthly fee. The highest Consumer Reports volunteers reported was a median $16 per month from Astound’s Wave Broadband, which serves customers in Washington, Oregon and California.
Wave spokesman Mark Peterson said the fees “enable our customers to have the very latest required equipment, receive needed upgrades or service, and ensures speed compatibility.”
But he also said 99 percent of Wave’s customers have the option to skip the rental fee and own their own equipment, if they want to.
Key lesson: These rentals are almost always a bad deal in the long run. For example, you can buy your own cable modem for as little as $40.