AT&T Raises Prices 7% By Making Its Customers Pay AT&T's Property Taxes (arstechnica.com) 69
"AT&T has been charging business Internet customers a 'property tax' fee, claiming it needs to charge this to recover AT&T's own property taxes," reports Ars Technica. "AT&T has been charging the fee for at least a couple of years and just hit customers in California with an increase that more doubled the fee." From the report: Scott Phillips, owner of a small business called Valley View Media in Santa Clarita, California, signed up for AT&T fiber Internet service and a block of static IP addresses, agreeing to an all-in price of $95 a month. His order summary, which he shared with us, specifically says that the $95 ongoing monthly price includes taxes and fees. The document makes no mention of property taxes. But when Phillips got his first bill on July 1, which he also shared with Ars, it contained this notice: "Effective October 1, 2019, there will be an increase in the AT&T Cost Assessment Charge used to recover AT&T property taxes. The monthly rate will change from 2.92% to 7.00% of your total AT&T Business Internet, Phone and/or U-verse TV monthly charges. This charge is not a tax or fee that the government requires AT&T to collect from its customers."
That first bill included exactly $95 in recurring charges, consisting of $60 for 100Mbps download Internet and $35 for the static IP addresses, just as AT&T promised. (There was also a one-time installation fee of $99.) While the property-tax fee notice on that first bill suggested he was already paying a 2.92% charge on top of the $95, the first few bills didn't actually include a separate property-tax fee. But when Phillips' October bill came, AT&T imposed the 7% property-tax fee, adding $6.65 to the $95 base price. The actual billing increase was thus for the full 7%, not just for the difference between 2.92% and 7%. The report notes that AT&T has been charging the property-tax fee to business customers since at least mid-2017. At the time, the then-new fee was 1.08% of the monthly bill, but an AT&T customer reported earlier this year that the fee was raised from 2% to 6.69%.
In a (vague) statement, AT&T said: "Like others in the industry, we regularly evaluate and adjust our prices based on the costs to deliver our services, as well as costs associated with government and regulatory mandates. We communicated these changes to our customers and will continue to work with them to best meet their needs."
That first bill included exactly $95 in recurring charges, consisting of $60 for 100Mbps download Internet and $35 for the static IP addresses, just as AT&T promised. (There was also a one-time installation fee of $99.) While the property-tax fee notice on that first bill suggested he was already paying a 2.92% charge on top of the $95, the first few bills didn't actually include a separate property-tax fee. But when Phillips' October bill came, AT&T imposed the 7% property-tax fee, adding $6.65 to the $95 base price. The actual billing increase was thus for the full 7%, not just for the difference between 2.92% and 7%. The report notes that AT&T has been charging the property-tax fee to business customers since at least mid-2017. At the time, the then-new fee was 1.08% of the monthly bill, but an AT&T customer reported earlier this year that the fee was raised from 2% to 6.69%.
In a (vague) statement, AT&T said: "Like others in the industry, we regularly evaluate and adjust our prices based on the costs to deliver our services, as well as costs associated with government and regulatory mandates. We communicated these changes to our customers and will continue to work with them to best meet their needs."
One-way contract (Score:5, Insightful)
This is why "contract" has become a bad word to consumers in the telecom world. They bind YOU, but the provider acts as if its not binding to them. Only things you can do are sue (which will cost more than paying the fee), or not pay and let them sue you (and then they'll cut off service and make your life hell)
Adios AT&T (Score:2)
I signed up for VOIP over cable and dropped A
Comment removed (Score:5, Interesting)
Re:Urgh (Score:5, Interesting)
That is exactly the problem. It's expected to pass expenses on to customers, but quoting a price that is lower than anyone will be charged and making it up in 'fees' and bogus 'taxes' is nothing short of fraud.
Re:Urgh (Score:5, Insightful)
It was always a mistake to allow US companies to quote prices that did not include taxes and fees. Ask your representatives to change that.
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It's... not always that simple.
In some cases, the final retailer isn't the one that pays the taxes - gas stations don't pay directly, they collect on behalf of their owning distributor.
In some cases, the prices are dynamic. Electricity can have different prices, fees, and taxes based on time and amount of consumption.
And in some cases, lawmakers have made it illegal to post all the taxes and fees, because that would reveal how much they are gouging the consumer. Gasoline prices often work this way, with g
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In some cases, the final retailer isn't the one that pays the taxes - gas stations don't pay directly, they collect on behalf of their owning distributor.... Gasoline prices often work this way, with governments actively preventing receipts from correctly listing all the taxes and fees.
In every case I have ever seen gas stations post the price you are going to pay for the gas. How that is divided into payments to distributors, the oil producer, the refinery, the trucker shipping in the gas, the property and other business taxes the gas station must pay, and the state and local taxes makes no difference. They quote the price you will be charged. Despite near daily price fluctuations they manage to keep their posted prices up to date.
Even easier for AT&T, since they decide on the billin
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And yet, when you get gas, you will pay exactly the amount displayed on the pump which is exactly the posted price on the sign multiplied by the amount of gas you purchased. If the pump says $10.00, that's what you pay, not $10.00 plus 6% sales tax, $0.75/gallon fuel tax and some more or less random percent for the property tax on the gas station.
So yes, it is that simple. Even the stereotypical pump jockey manages to get it right.
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It was always a mistake to allow US companies to quote prices that did not include taxes and fees. Ask your representatives to change that.
But they consider this charge to not be a tax or a fee. For that reason. What the law needs to say is what you are quoted is all inclusive with no contractual exceptions, otherwise it just makes for endless semantic games.
Re:Urgh (Score:4, Interesting)
I have no objection to an infrastructure provider passing on property taxes to customers - that makes sense. What is objectionable is...
What's objectionable is that it's a percentage of the bill. Somehow AT&T property taxes go up because I buy more services?
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Just when you thought US telecoms couldn't get any shittier. You have to admit, they're pretty creative at finding way to be even more shitty to people.
I'm inclined to suggest that virtually all "extra fees" should be outlawed.
In the EU, they are. It's illegal to charge anything but the price advertised at the time of sale, even if it was in error. If there are 2 or more prices, the consumer has the right to pay the lowest. You don't have to sue, just report them to the gubbermint & they'll do the rest for you :)
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In the EU, they are. It's illegal to charge anything but the price advertised at the time of sale, even if it was in error. If there are 2 or more prices, the consumer has the right to pay the lowest. You don't have to sue, just report them to the gubbermint & they'll do the rest for you :)
That can be complicated in the USA because sales tax can vary by the borough, not just city, county, and state.
You can literally have over a dozen different prices within the range of a single radio or TV station.
That said, I appreciated being able to see something advertised for $0.99 and being able to pay with a dollar bill and not having to pull out more change. And such.
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I don't see wh. You couldn't just go to our HR department and say "I decided to buy a more expensive house, so my mortgage is more expensive so pay me more."
I'm not a telecom operator. I don't know or want to know their costs. I just want them to quote me a price that I can accept or reject..And if I sign a multiyear contract, I expect the price to be fixed.
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Sure, you can ask for a raise whenever and for whatever (or no) reason. But they aren't going to give you a raise because your mortgage got more expensive. They are totally unrelated.
This guy is in a 2-year contract. Long term commitments of price/service (from AT&T) and purchase intent (from him). It's not like they broke the contract, they're still trying to hold him to his commitment to purchase.
And, frankly, the "costs go up therefore price goes up" doesn't really hold in a monopoly. Or duopol
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Doublespeak award of the day (Score:5, Insightful)
"will continue to work with them to best meet their needs" Yes yes, how will you possibly surpass your service of passing along fees they don't expect and haven't agreed to.
Every corporate "mea culpa" statement is stuffed with lies like this. Every one! Blizzard/Activision's hilariously dishonest non-apology wins tomorrow's award since they released it dated Oct 12 (i.e. for a Chinese timezone). Sick and tired of this.
The goal here is to make them go to their reps (Score:5, Insightful)
It's clever and it works. Instead of folks realizing it costs pennies [broadbandnow.com] to provide internet access and demanding it be a public utility universally available for the public good folks get wound up about taxes and start demanding tax cuts. Then they get a 1% cut and AT&T gets a 7% one.
I'm reminded of an old Married with Children bit, where Al tried to save money in a shoe box buried in his backyard for a car. 20 years he saved, but turns out his wife had found the box and been taking money from it for years. Al somehow never noticed.
So he asks her, what you do with the money and she says: "Remember when you wanted me to buy orange juice? Well I took some money for orange juice for daddy... and a fur coat for mommy...", and this went on until the $15k he'd saved was whittled down to $25 bucks.
Comment removed (Score:4, Interesting)
Re:What’s changed? (Score:4, Insightful)
Eventually, the monthly cost of the service will be $1 plus taxes and fees.
Re: What’s changed? (Score:2)
There is a parking lot here which added a "living wage fee" in the fine print.
So now they literally add a fee for paying their employees. Must be nice. I need to start trying that with my business.
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Every customer pays the business' property taxes (Score:2)
I realize at uber-liberal Ars, they may not understand economics, but every customer pays the business' taxes. Businesses don't pay taxes. People pay taxes. This isn't complicated.
Re:Every customer pays the business' property taxe (Score:4, Informative)
It looks like the situation is too complicated for you to understand.
Every customer pays every damned cost a business has.
What makes taxes special? Why do tax costs in particular get to be fraudulently omitted from price quotes?
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What makes taxes special? Why do tax costs in particular get to be fraudulently omitted from price quotes?
I think that this, in particular, is the clearest way of thinking of this. Sorry I don't have mod points for you.
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It looks like the situation is too complicated for you to understand.
Every customer pays every damned cost a business has.
Well no shit dude, But the article is about a specific item. That's why I named that specific item.
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And I asked why that specific item gets to be fraudulently omitted from price quotes. You seem to have implied that it's because of "Uber Liberals" or something.
Tax rates vary more (Score:2)
What makes taxes special?
For a company that offers a service across several jurisdictions, some low-services and others high-services, tax rates presumably vary from market to market more than other costs of doing business.
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i don't follow your point. Businesses pay taxes on the money they earn. It comes out of their profits. If the taxes didn't exist they would make more money.
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Profits are after taxes. If taxes didn't exist, the price would be lower. Competition doesn't cease to exist without taxes.
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In a perfectly competitive market where customers have perfect information, a business is selling their product/service virtually at cost and thus passes on fees to customers.
It's beyond absurd to suggest that broadband in the USA is that kind of market. It's not. It's often a market where AT&T can take as much profit as doesn't make people move to a more competitive city or endure satellite internet. Or it's a duopoly where AT&T and the cable company can unofficially decline to compete much and kee
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AT&T sucks here. We have a slew of fixed wireless ISPs.
What spectrum are they using? Are they reselling Verizon or T-Mobile?
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The problem is they're pulling their business expenses out of their pricing structure, resulting in their "price" being out of line with the customer cost. It muddies comparison shopping. You can't know the cost you'll pay ahead of time.
Worse is when they charge a percentage of the bill. How does consuming more telecom services increase AT&T's property taxes? It doesn't consume more property.
It's become a trend for local restaurants to charge a percentage fee on the check "to help offset the health
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Businesses pay taxes. Customers pay what they agreed to in their contract. Contracts have been a thing for thousands of years.
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Customers pay what they agreed to in their contract.
The question then becomes whether this cost recovery fee exceeds what was agreed in the contract.
This is ridiculous (Score:4, Insightful)
Re:This is ridiculous (Score:4, Insightful)
I'm getting really tired of companies that engage in this practice (*cough* Comcast *cough*). We need a law requiring that all taxes and "fees", whether government mandated or not, be included in the advertised price for postpaid services...
We don't need a new law, we just need a court willing to rule that it's false advertising.
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One word (Score:2)
Sue.
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Sue.
Two words: forced arbitration
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If ten thousand customers all individually bring arbitration cases within a month, how many will AT&T's lawyers bother to show up for?
airline where forced to quote an all in min price (Score:3)
airline where forced to quote an all in min price it's about time more do this.
MGM can F** off with there $37 a night Resort Fee
The should have an "Employee Wage Fee", next. (Score:3)
And maybe a "CEO Bonus Fee", and a "Shareholder Dividend Fee". Maybe a monthly "Cancellation Processing Fee Fee", too.
Billing fee (Score:2)
And a billing fee fee and a billing fee fee fee and a billing fee billing fee.
Presumably they've reduced line costs - NOT (Score:1)
So they pass on an increase in property tax; quid pro quo says they should pass on the lower operating costs they've had 'cos of technology improvements. (I'm fed up with an inexorable price rise for broadband, where we all know technology lets them poke more bits down the same wire and with ever cheaper electronics,)
well... (Score:3)
Re: Static IP addresses? (Score:1, Flamebait)
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itâ(TM)s time to do away with static IPs for anyone other than service providers.
The operator of a personal website [indieweb.org] provides a service to viewers of the website.
No... you donâ€(TM)t need to run a server at home. And if you do, use protocols that support NAT traversal and centralized directories. Itâ€(TM)s time for broad adoption of CG-NAT.
What NAT traversal method is defined for the HTTPS protocol in order to operate the personal website of an Internet user? Or what alternative to the HTTPS protocol would you recommend for a personal resource analogous to a website?
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You'd have to have a really high volume website to justify not using a cloud hosting service.
That or content that the major cloud hosting services currently deem politically incorrect.
[Amazon Web Services] don't even need the full /24, it would be just to advertise a single public IP into the BGP tables.
AWS is more than just EC2 and S3. Giving AWS one public IP address and letting TLS SNI tell the virtual endpoints apart would require every AWS public endpoint to be capable of routing every AWS service in every region.
Alternate way to fund property taxes. (Score:1)
High time to split it up again (Score:3)
Problem isn't the fee (Score:1)
The problem is that they are allowed to advertise a price that does not include the fee.
Taxes that are are not "direct to consumer" should be treated as a cost of doing business and rolled into the advertised price.
What AT&T and so many other companies do is misleading, unethical, and should be stopped.
Cost of doing business varies by jurisdiction (Score:2)
Taxes that are are not "direct to consumer" should be treated as a cost of doing business and rolled into the advertised price.
Tax rates vary substantially from one jurisdiction to another. High-services states, high-services counties, and high-services cities charge a higher rate than low-services states, low-services counties, and low-services cities. For an advertisement campaign that spans more than one jurisdiction, "50 USD per month plus the local tax recovery fee for your neighborhood as published on our website" be acceptable?
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"50 USD per month plus the local tax recovery fee for your neighborhood as published on our website" be acceptable?
No, at least not for "cost of doing business" taxes.
When Sears has a sale on shirts it's valid at all Sears locations in the marketing area.
It's "Sale price, plus sales tax" but not "plus property tax-/franchise tax-/other cost-of-doing-business-tax- recovery fee."
Internet service shouldn't be any different.
Actually, now that I think about it, in jurisdictions where SOME forms of internet ARE subject to a traditional sales tax and some are not, the sales tax SHOULD be rolled into the advertised price. Why?
How big are marketing areas? (Score:2)
No, at least not for "cost of doing business" taxes.
When Sears has a sale on shirts it's valid at all Sears locations in the marketing area.
How large is each marketing area? Is it bigger than a taxing jurisdiction?
Internet service shouldn't be any different.
Other than that the marketing areas for Internet service tend to be much larger because an ad on a national broadcast or cable television network goes to every taxing jurisdiction in the country.