Cutting Your Internet Bill, Part I

The truth is that by any measure, you pay too much for these services. Not because we don’t have good services (we do, in comparison to just about any country on the planet) or because of the government. Okay, maybe because of the government, but that is a topic for another day.

In some cases, companies make it very difficult to make good choices. They refuse to tell you how much Internet you use each month. They bundle services to force you to take crappy services to get the good ones. They offer some of the services you want, but not all, thereby forcing you to use more than one service. Or they offer all of the services you want – if you live in one of 25 or so cities. If you live somewhere else in the 3.8 million square miles of the United States, choices are more limited.

At the bottom line, each and every one of those companies – cellular, video, telecommunications and Internet – are striving to have you pay more than $200 per month to their service. Doubt that? If you add up your cellular bill, with your cable/satellite/fiber tv network, and add to that your Internet and telephone service, you will find they generally top $350 per month. More for a small business.

That is insane. It is also what you have chosen.

And the sad truth is, unless you are willing to live without some features, you will not be able to reduce that bill by much. After all, the average five-minute Facebook session will run 25 Mb of data. The average porn site visit (and we had volunteers take on the unpleasant task of visiting these sites just to calculate!), 250 Mb for about 10 minutes (the average length of a visit to a porn site. Honest.) The average of just browsing the web, answering email and watching a few YouTube videos each day, 250 Mb. The average download of a song, 1 Gb. A movie runs 4 Gb. An HD movie, 8 Gb.

The point is that it adds up. If you are looking to just browse the web and get email on your smartphone, and you should be fine with the 2 Gb to 4 Gb limitations on data that cellular companies impose. But try to tether that phone to your home or work TV, and there is virtually no way not to exceed the limits of your data plan in any month. And cellular data plans are very, very expensive.

We’ll get to the information you need to make better consumer choices next week, in part 2 of this series. For today, there are five basic rules that you need to keep in mind:

1. The days of having a “home phone” landline system are gone, as obsolete as the Mighty Morphin Power Rangers or music by Air Supply. First, the copper telephony infrastructure was never designed to handle the needs of today’s telecommunications systems. And the more rural your location, the worse your infrastructure generally gets. Get rid of your “home phone” – but not necessarily your hard-wired DSL line. More on that later.
2. “Movies on Demand” are a sucker’s bet designed to generate obscene profits for cable and satellite companies. Sadly, so are most of the “online” television and movie services, from NetFlix to Hulu. If you fit into the narrow demographics they serve, fine. For the rest of us, skip these over-priced services, and instead learn the location on the nearest Blockbuster or Red Box kiosks. As a certified movie freak, I keep tabs on both.
3. Measure your actual Internet usage, which we will tell you how to do in Part 2. Then buy a plan that is designed to meet your needs, not the marketing hype of the providers. Believe it or not, factors built into the Internet architecture mean that you will do almost as well on the cheap 1.5 Mb plan as the pricey 10 Mb plan.
4. Don’t waste your time doing price comparisons. The prices are rigged so that wired Internet services is roughly $35 per month, cellular data plans are about $40 per month, cell phone service costs about $80 per month, and video services through either cable or satellite are about $80 per month. No matter what vender you use.
5. Make intelligent decisions about which service you will use for each of the categories of Internet, video, cellular service, and telecommunications services. Then, and only then, consider the “bundles” offered by the marketing hype of the providers.

Finally, here is the simplest trick you will ever learn about how to manage communications services: ask to speak to the Customer Retention Department. Companies spend nearly all of their marketing budgets trying to steal customers from one another. The amount of money they spend trying to keep you as a customer is almost nothing. The best deals? Not for current customers. The free offers? Not if we already own your soul.

But this is exactly backward. It costs more to gain a new customer than to keep a good customer, and once you lose a good customer the odds are that they will never, ever come back.

So when you are faced with being treated badly as a current customer, wait until your contract is up. Then call customer service. NOTE: customer service representatives do not have the authority to help you. They just don’t. Demand to speak to the customer retention department. Tell them that if they don’t give you as good a deal as a new customer, you will drop your service and see what their competitor has to offer.

Customer Retention Department. Your best friend in a confusing world of communications.

Next week: Decision Points. Part Two of this series.