Why Consumers Fight Some Fees, Forgive Others

NEW YORK (MainStreet) -- Fees are the unpleasant little bumps that shake loose extra revenue in our increasingly high-speed consumer economy, but can we please get some national consensus on which fees are pebbles and which are potholes?

Consumers spent half a year spewing vitriol and lobbing insults at Netflix (NFLX), which separated its DVD mail service from its streaming video offerings in July and effectively doubled the $7.99 fee it once charged for both. Meanwhile, Comcast (CMCSA) has raised the average monthly cable bill in Boston from $58 in 2009 to $69 this year while increasing costs in Florida and Minnesota by an average of 5.8% -- and the impact scarcely registered.

Bank of America felt consumer wrath for its fee hikes last year, just like Netflix and Verizon, but some bigger increases stir less outrage.

Think it was any better for customers of telecom service providers? AT&T (T) U-Verse has increased the price of its base cable package by $3 a month and its base broadband offering by more than $5 a month. A 4% rate hike by DirecTV (DTV) this year spread the pain to satellite producers as well. Netflix, however, has two traits that several of those providers lack: a nationwide presence and a high profile that puts it in league with companies such as Bank of America (BAC) and Verizon (VZ).

"At the basic level, any fees that these companies put in place are going to hurt a lot more people and generate more interest and more controversy, so it's natural that people were upset about that," says John Breyault, vice president of public policy for consumer advocacy group the National Consumers League. "The cable bills, ATM fees and things like that tend to affect smaller chunks of consumers because not as many people are subscribers of Time Warner Cable (TWC) as they are of Verizon, for example."

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Though New York City and Knicks fans suffer when Time Warner blacks out the MSG (MSG) Network in the middle of Jeremy Lin's star turn as point guard, Verizon heard boos much louder than those generated by the Madison Square Garden faithful when it tried to slap a $2 fee on its bill payers in December. Its "convenience fee" for one-time payments over the phone or online proved so unpopular in social media circles and among online petitioners that the fee was eliminated a day after it went public.

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