If I weren't a broadband consumer, I'd feel sorry for the people touting broadband services. They just can't win. The week after Verizon and SBC offer a staggeringly cut-rate deal on DSL service, the word on the street is very dismissive indeed. The two harshest words in a free market economy, bait and switch, are being thrown around with reckless abandon. I don't happen to agree with the word on the street, but it highlights a big problem in the broadband market: a failure to define your terms.
At first sight, it's hard not to like the look of these DSL deals. Verizon and SBC are touting an introductory DSL service for $14.95 a month. Heck, that's a price tag for dial-up service, not broadband, and it's six bucks cheaper than some dial-up services we could name. What's not to like about that?
What's the deal?
Well, some people have found plenty not to like about these new broadband deals. In some cases, it's based on the consumer's definition of broadband, and in others it has to do with Verizon's definition of $14.95. For one thing, the figure doesn't include taxes and USF fees, which jack up the price by three or four bucks per month. There's an activation fee involved too: $19.95. You have to commit to a year of the service, and you must pay an early termination fee of $79 if you cancel before the 12 months are out. At the end of the year, the service reverts to its normal price of $37. And, of course, Verizon's most loyal customers, the ones who already use its DSL service, aren't eligible for the deal.
When people hear the terms broadband and DSL, apparently they think of a uniform speed in the megabits per second range.
There's clearly some resentment here, especially among existing Verizon customers. Of course, every consumer is wise to the five-cent trick: knocking a nickel off the price tag so that you can put the number 14 next to the dollar sign instead of the actual price, $15. But those miscellaneous fees and activation costs drive prices up in ways that people don't always understand. When you factor in taxes and fees and divide the activation cost out over the year you've committed to, you're paying more than $20 a month.
Feel the need?
Strangely enough, though, the ire that's raised has little to do with price. It has to do with the access speeds. When people hear the terms broadband and DSL, apparently they think of a uniform speed in the megabits per second range. This budget service tops out at download rates of 768Kbps and upstream rates of a sluggish 128Kbps--and the operative phrase here is tops out. DSL rates are dependent upon the distance from the nearest switch, and if you're on the outer rim of the catchment area, you won't see the top speeds. (Cable also suffers from bandwidth deficiencies, but the normal cable rate is four times faster than this entry-level DSL.)
DSL rates are dependent upon the distance from the nearest switch, and if you're on the outer rim of the catchment area, you won't see the top speeds.
When some people look at these figures (some of the posters over at Muniwireless.com, for example), they see red. But how much speed do you really need? Even a sluggish 768Kbps is 10 times faster than 56Kbps dial-up and 5 times faster than accelerated dial-up.
Let's label better
The problem here is one of labels. People in the United States and Canada are used to seeing price tags that are substantially lower than the prices they will pay: the prices of consumer goods never include state and local sales taxes. We're not likely to see this continent change to a European system where all price tags include the taxes and surcharges.
But we can do something about the labeling of Internet access services. By all means, let's put a monthly price on these things. Leave off the USF and other taxes and surcharges if you must, but let's factor the access rates into the pricing.
When you go to a supermarket to buy coffee, you see a price underneath every can or package. You know that you're going to pay $8.99 for those Starbucks-brand beans and $1.99 for that Chock Full O' Nuts can. But right next to the unit cost is a different price. In the case of coffee, it's usually a price per pound. With cookies or vitamins, it's a cost per hundred.
If you could see at a glance that you're paying $19.47 per month per megabit for Verizon's budget DSL and $38.49 for SBC's, and $300 for some overpriced dial-up's 56Kbps, it would give a much better basis for comparison. You may want to pay a premium to swig on the Starbucks of services, but if you're a Chock Full O' Nuts type, you'll be able to tell at a glance where to get the cheapest can of grounds on the market.
Is there a better way to comparison shop for broadband? Are Mbps a red herring? Let Matt Lake have your DSL-vs.-dial-up diatribes in the TalkBack section below.