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Router and modem rental fees still a major annoyance despite new US law

Network cables plugged into a modem.

Getty Images | Jill Ferry Photography

Consumer Reports wants the Federal Communications Commission to take a closer look at whether Internet service providers are complying with a US law that prohibits them from charging hardware rental fees when customers use their own equipment. In a filing submitted to the FCC this week, Consumer Reports said it asked members about their Internet bills and got over 350 responses, with some suggesting violations of either the letter or spirit of the law.

“Some contain allegations that the law is being violated, whereas others state the new statute is being respected. Many more stories suggest that ISPs dissuade consumers from using their own equipment, typically by refusing to troubleshoot any service disruptions if consumers opt not to rent the ISP’s devices. Such practices result in de facto situations where consumers feel pressured or forced to rent equipment that they would prefer to own instead,” Consumer Reports told the FCC.

Consumer Reports’ filing came in response to the FCC asking for public comment on the implementation of the Television Viewer Protection Act (TVPA), which took effect in December 2020. In addition to price-transparency rules for TV service, the law prohibited TV and broadband providers from charging rental or lease fees when “the provider has not provided the equipment to the consumer; or the consumer has returned the equipment to the provider.”

All the comments collected by Consumer Reports are available here. The FCC filing includes examples of complaints about AT&T, Comcast, Verizon, Charter Spectrum, Frontier, Windstream, and Cox, though the complaints weren’t all about rental fees.

Frontier’s bogus rental fee was outlawed

Consumer Reports has been researching cable bills for years. The group’s new FCC filing noted that its earlier research “confirmed a disturbing new business practice first reported by Ars Technica in 2019. Frontier Communications reportedly was charging a monthly rental fee for broadband modems provided to consumers even when consumers were not using that equipment because they were already using their own purchased modem and/or routers. Absurd as it may sound, consumers were being made to pay for something they neither purchased nor needed to receive Internet service.”

Congress subsequently passed the law banning such bogus charges. Complaints included in the Consumer Reports filing indicate that Frontier has complied with the law but is still annoying customers with other fees.

“Frontier FiOS used to charge me a router fee, although I have my own router. Now they don’t have that explicit fee, but they do charge an ‘Internet Infrastructure Surcharge’ ($6.99) and a ‘Frontier Secure Personal Security Bundle’ ($5.99 after ‘discount’),” a customer in Torrance, California, wrote.

“After the router fee was made illegal by the act of Congress, I quickly called up Frontier to have the fee removed, which they did going forward,” wrote a customer in Flower Mound, Texas. “However, a few months later, Frontier increased their infrastructure charge (another bogus fee) about $3 or $4 if I recall correctly. So in my mind, Frontier did a bait and switch and is just trying to play the bogus fee game but not calling it a router fee any longer.”

We’ve written multiple stories about Frontier’s sneaky “Internet Infrastructure Surcharge,” which was raised from $4 to $7 per month last year. Frontier claims the charge is “necessary to ensure 24×7 support of Internet access.”

Potential violations

In its call for public input, the FCC asked for comment on “the extent to which (if at all) subject entities continue to assess charges for equipment that are expressly prohibited by the statute.” The FCC’s specific questions were as follows:

For example, are any providers of covered services or fixed broadband Internet access services continuing to impose fees on consumers for the use of covered equipment that has been provided by the consumer? Are such providers assessing charges for the rental, lease, or provision of covered equipment that they have not provided to the consumer? Are any such providers imposing fees for the rental, lease, or provision of covered equipment that the consumer has returned to the provider, and which fees otherwise are not permissible under the statute?”

Consumer Reports said its questions for members were “designed to measure whether or not ISPs were in compliance… and also to solicit consumer opinion on whether or not it was difficult to use consumer-owned equipment versus renting those devices from the provider. Notably, neither of the two cable industry trade associations mentioned this issue in any detail in their comments filed last month at the Commission.”

Consumer Reports said that some of the responses “suggest the statute is not being complied with as vigorously as Congress intended… These allegations merit further investigation by the Commission.” Consumer Reports offered to share contact information for the customers with the FCC so it can investigate further.

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