elaine, many institutions charge a cancellation fee..
Expedia does it all the time..Once I cancelled a hotel reservation that I made only few hours earlier, and was charged 25 dollars..

I've been traveling for a while now, and this is my first experience with a hotel charging a cancellation fee, not to mention charging for the first night's stay to begin with,especially 4+ months out.

I've been traveling quite a while, also, and have never had either happen. The first time I've seen this in Parisian hotels (I've never had it happen anywhere to me in any country in the world) was within the last couple of years, and then rarely -- Relais Bosquet was about the first one I saw charging a cancellation fee but I did think it was their booking software company.

Expedia isn't a hotel and what Expedia charges isn't comparable to a Parisian hotel's own policy when you are booking directly with them. Expedia itself does that, and they talk about it because they claim to have special rates and also exactly because you are not booking directly with the hotel but through an agent. A 2* Parisian hotel doing this when you book directly is quite unusual, I think.