When consumers pay a monthly fee for Internet service, why would they also have to pay a 99-cent "Internet Cost Recovery Fee?"
It's not like getting Net access is an optional feature when paying for ... Net access. The fee is not unlike a coffee shop charging a "coffee bean acquisition fee" or a grocery store charging a "fresh fruit delivery fee." But that's what Penny Williams found when she opened her bill last month.
The Washington resident watches her bills very closely, so she noticed right away when her CenturyLink high-speed Internet bill rose mysteriously by $1.88. A glance at the paperwork revealed two new fees accounted for the difference, but the listed explanation didn't make much sense.
One line of the bill included the phrase "Internet Cost Recovery Fee—0.99." Given that Williams already pays about $30 monthly for Internet service, the $1 fee, seemingly for Internet service, made little sense to her. But the next line item was even more confusing.
"Internet Cost Recovery Credit—0.89," it said. Despite that friendly sounding name, the "credit" offered by CenturyLink actually increased her bill by 89 cents. Was it possible CenturyLink had changed the definition of the word credit?
A note to customer service shed a little light on the issue, but no light on the 89-cent credit.
"As of May 10, 2013 CenturyLink, began charging a Cost Recovery fee to our High Speed Internet users. The Internet Cost Recovery Fee is a monthly charge of $.99 that helps cover the costs associated with the building and maintaining of the Internet network," said a response from the company sent to Williams and provided to CNBC. A follow-up query about the 89-cent charge produced no response.
Louisiana-based CenturyLink, which has 5 million broadband customers around the U.S., already faced a round of criticism last year when it first began to impose the 99-cent Internet Cost Recovery Fee. And the chorus of boos is getting louder.
"I was highly annoyed. I watch my bills very carefully for any changes. ... I'm not getting any additional or better service," said Williams, who lives near Seattle, where CenturyLink Field is home of the Super Bowl champion Seahawks.
When CNBC contacted CenturyLink for an explanation, we got a similar response as Williams.
"The Broadband or Internet Cost Recovery Fee has been in place in much of CenturyLink's service areas for several years," wrote spokesman Mark Molzen in an email. "This fee helps defray the costs associated with building and maintaining the CenturyLink High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in average customer broadband consumption."
In many industries, such fees might sound farcical, but they have been fair game in the telecommunications industry for years. Some other industries—the hotel business, for example—have also seized on the base-price-plus-fee structure, as summer travelers will soon be reminded.
Tack-on fees help companies make their monthly charges appear lower than they actually are. Critics say they are just a sneaky way of simply raising prices, particularly when line items are broken out that seem to be an inherent, nonoptional part of a service.
Consumers today are often confused by the real price they pay for monthly services, and why it differs from advertised prices. Such confusion—these tack-on gotchas—often serve as pure profit for companies.