What A Hidden Fee Really Is

By April 12, 2019The Latest
What A Hidden Fee Really Is

When you sign up with a big telco carrier like AT&T, Sprint, or Verizon, you may notice that on top of any device payments and the basic monthly cost there’s a list of surcharges and other fees.  These numbers cover things like taxes, regulations, and administrative costs, so it makes some sense to have them sit after the main cost of service.  After all, most store purchases you make include a sales tax on top of the listed price, and when you buy something like a car you often have to pay delivery fees.

However, your phone bill doesn’t have to be that complicated.  Since you’re making a single payment per month and these extra fees come with every bill, your phone provider could roll the numbers up into a single sum.  After all, when you buy a shirt the cost covers the factory, the workers, the regulation costs, the taxes, and everything else the manufacturer has to pay for to make the shirt and make a profit.  So what stops a telco company from doing the same thing?

The honest answer is that nothing stops them.  However, adding these fees to the basic monthly cost would cause that number to go up, and that would make it less appealing to people wondering which carrier to choose.  That’s why people call them “hidden” fees:  they’re always added into your monthly bill but the carrier doesn’t include them in its advertisements.  Carriers can even use these fees as a way to quietly increase their rates, like the time in 2018 when AT&T increased its administrative fee from $0.76 to $1.99.

On the other hand, cable and fiber internet providers usually give you a single up-front cost for each subscription option.  This means the number you sign up for and the number you get on your bill each month will be exactly the same every time.  The number doesn’t go down if you rarely use the internet, but it also doesn’t go up if you and your family spend all day online.  And since a home internet connection can even let you use your smartphone to make app-based calls, a good home internet connection lets you scale back your phone subscription.

Smartphones are an important part of modern connectivity, but it’s easy to see your monthly bill go higher than you expect thanks to hidden fees and overage fees.  If the internet providers in your area offer a good deal on a fast fiber-optic connection, you should consider relying more on it than on your phone provider.  After all, while 5G speeds are just starting to spread to cell networks, internet providers are already giving people gigabit speeds at home.