Altice is facing a consumer lawsuit from officials in Connecticut over its decision to raise a little-known fee on its Internet service there.
On Monday, Connecticut Attorney General William Tong said the lawsuit against Altice alleged violations of the state’s Unfair Trade Practice Act as it relates to Altice’s decision to charge subscribers of its Optimum Internet service a Network Enhancement Fee.
Earlier this year, Altice said the Network Enhancement Fee would rise from $4.50 per month to $6 per month. The increase came as Altice affirmed it was lowering the standard rate for its Optimum Internet service across different tiers.
Altice justified the Network Enhancement Fee increase as necessary to continue making investments in its fiber-based services. The adjustment was more-noticeable to customers who were paying promotional prices for Optimum Internet, as the price adjustment tacked on an extra $1.50 per month to whatever rate they were paying.
Customers who were on non-promotional prices were less affected by the adjustment, because the increase was offset by lower standard service rates.
Still, Tong says Altice misrepresented the intention of the Network Enhancement Fee by grouping it on subscriber bills under the heading of “Equipment and Extras.” That gave the impression that the surcharge was optional when, in fact, it applied equally to all customers.
“The NEF is nothing more than a hidden junk fee,” Tong complained. “Altice advertised a price for Internet Service that did not include the NEF, but actually charged many of its Connecticut customers a higher price that does include the NEF. In this way, Altice was able to advertise an artificially lower price for Internet service.”
The situation was even more problematic for Optimium customers who speak Spanish as their primary language, according to Tong: While Altice does provide marketing material for its Optimum Internet service in Spanish, information about the Network Enhancement Fee is listed in English, as were other terms and conditions related to its service offerings, Tong says.
Tong also takes issue with Altice advertising a certain upload speed that the company isn’t always able to provide, even though the company charges customers as if they are always available. He also takes issue with advertisements that make certain claims about Altice’s WiFi speeds and other fees, which Tong says are “not clear and conspicuous,” to include advertisements that ran on television in which the fine print was “provided in gray text on gray background, making them nearly impossible to read and appear[ing] on the screen only for fleeting moments.”
A spokesperson for Altice said the lawsuit was “without merit,” and claims the company “provides customers with various offers at different speeds and price points, delivering reliable speeds and service with transparent pricing to customers throughout the state.”
The spokesperson affirmed Altice’s position that it offers “symmetrical speeds of up to 8 gig, the fastest residential internet service in our Connecticut service area.” Through its Optimum brand, Altice provides residential and small business cable TV and Internet service to more than two dozen Connecticut communities across three counties.
The lawsuit comes at a time when federal regulators are increasingly looking at new rules that would govern the types of fees telecom providers like Altice charge to consumers, and whether certain so-called “junk fees” should be curbed or eliminated.
Earlier this year, the Federal Communications Commission (FCC) approved a rule that requires cable TV providers like Altice to advertise a flat price for different service tiers, with all fees made apparent in those advertised rates. The aim of the measure is to eliminate consumer shock when they received their bills after signing up for what they believed to be a cheaper service. The rule doesn’t extend to non-cable TV services like broadband Internet or wireless phone, even if they are offered by a cable company.
“No one likes surprises on their bill — the advertised price for a service should be the price you pay when your bill arrives,” FCC Chairperson Jessica Rosenworcel said in March. “It shouldn’t include a bunch of unexpected junk fees.”
