A federal judge in California says a lawsuit claiming that Comcast Corp. engaged in a “massive illegal scheme” by not properly disclosing special fees to its TV subscribers can go forward.
The fees — which the lawsuit says amount to about $1 billion in revenue a year for Comcast, about 15 percent of its profits — have angered consumers. The Philadelphia company says it has properly informed consumers of the fees, which help cover the cost of regional sports networks such as Comcast SportsNet Philadelphia and the cable distribution of traditionally free over-the-air-TV networks.
The fees were introduced in 2014 and in the Philadelphia area amount to $12 a month.
In early August, Judge Vince Chhabria denied Comcast’s bid to dismiss the 2016 lawsuit, saying that when reviewing how Comcast subscribers ordered their cable TV service, “it was plausible that a reasonable consumer would be misled to think that the price of the service will be Comcast’s advertised price, plus taxes, government-related fees, and any onetime installation fees” — without the addition of the broadcast TV and regional sports network fees.
Comcast spokeswoman Jennifer Moyer said in a statement Wednesday that the company had “always listed the broadcast TV and regional sports fees separately on the bill and included clear disclosures about them in our advertising. It’s also worth noting that because this case is in the early stages, the court was required to accept the plaintiffs’ allegations as true, and that the complaint itself demonstrates that these fees were disclosed and were not part of promotional pricing. Also, prior to the most recent hearings, and as part of our ongoing efforts to improve the customer experience, we updated the online buying process at issue in this case.”
Plaintiffs’ lawyers Dan M. Hattis of Bellevue, Wash., and Jason Skaggs of Palo Alto, Calif., could not be reached for comment.
Verizon Communications Inc., DirecTV, Time Warner Cable, and Charter Communications also charge fees for broadcast television networks ABC, NBC, Fox, and CBS or for regional sports networks. These two categories of content have put the greatest upward pressure on cable and satellite TV bills in recent years.
The fees can be a significant part of Comcast subscribers’ monthly bills. A double-play subscriber — one with internet and television services — who pays $100 a month will pay an additional $7 for the broadcast TV fee and an additional $5 for Comcast SportsNet Philadelphia, boosting bills by 12 percent.
The California suit calls Comcast’s fees a “massive illegal scheme of falsely advertising its cable television service plans for much lower prices than it actually charges.” The initial lawsuit named plaintiffs in Ohio, California, Washington, South Jersey, Illinois, Colorado, and Florida. But it has been pared back to just California consumers. The suit claims Comcast breached its contract with consumers and was deceptive with its advertising.