Monday, January 9, 2012

Phone Costs - and the one-year promotion

Keeping telecommunications costs down is an ongoing battle.

One annoying thing about telephone deregulation is that it is hard to get a straight answer on phone costs.  Everything is offered on a promotional basis - the price is good for one year, after which the pricing goes back to "regular" levels, which are often astronomic.

For example, a year ago, I signed up for a "bundle" service that included unlimited long distance, as well as a number of calling "features" as well as mid-level DSL service and a VoiceMail box.  The monthly cost was about $65.  Last month, the deal expired, and the phone bill bumped up to its "normal" level of $90 a month.

This may sound like a trivial amount of money to some folks, or a staggering number to others.  It is $1000 a year, and this is a lot of money to any middle-class person.  After all, even if you are making $100,000 a year, chances are, your disposable income is only 10% of that, and thus $1000 is 10% of your disposable income and well worth investigating for cost cuts.

Many folks have both a landline and a cell phone, and thus the overall costs of having both (and DSL service) can top $2000 a year.  Or, if they have cable TV and cable modem, as well as a cell phone, the costs could be close to $3000 a year, particularly if they have a land-line as well.  For a family with multiple cell phones, texting and data plans, a sport package Cable TV connection (with HBO and other premium channels) and a land-line and DSL, the bill for communications could easily reach $300 to $400 a month.  And people wonder why they are broke all the time.

For most individuals, all of this is not really necessary.  Many young folks were raised on cell phones, and the idea of the land-line seems quaint and antiquated to them.  Why bother having a land-line when you can have just a cell phone and then have (a) one phone number, (b) one voice-mail (usually free) and (c) one low monthly bill?

And for many folks, this is a solution that makes sense.  If you are in college, a cell phone may be the only phone you need, as you are moving a lot and a land line is just a hassle.  And chances are, you are getting Internet service in the dorm, or you are sharing it with roomates, so the cost of the additional land-line (DSL) or Cable service (Cable Modem) is shared as well.  Or you can just use free Internet access at a WiFi hotspot on campus or at a local coffee shop.

Internet access, of course, is a necessity for many of us who do business over the internet.  For many folks, it is an expensive luxury.  I know some folks who have high-level DSL or Cable Modem access, and spend $50-$100 a month or more on just that service, all so they can check their bank balances and e-mail photos to their grandchildren.  If this describes your internet access usage, then perhaps you could save quite a few bucks by going to the local library or internet cafe once a week or so.  Even a cheap dial-up service might suffice.

But of course, more and more, people are using the Internet for Entertainment - such as downloading movies from Netflix, which, despite all the negative press, is still fun.  For that, you need at least a medium speed Internet connection.

For me, my requirements are fairly simple, although perhaps more than that of the average person - but different from that of say, a college student:

1.  I need a DSL connection to upload and download documents online and do business online.

2.  I need a clear, static-free phone connection that will not drop calls in the middle of a five-way conference call.

3.  I need a voice-mail that will answer the phone when I am on the line (busy) or not available (no one answers).  Busy signals are not an option.

4.  I need a cell phone for very occasional use to mostly check voice mail and return calls.

What I do not need are:

1.  Cable TV

2.  Texting or data plans for my cell phone.

3.  Lots of airtime for my cell phone.

4.  A smart phone.

So far, what has worked well for me is a DSL service hooked to a land-line.   Landlines may be archaic, but DSL with a land-line provides me with a clean, reliable connection for telephone conference calls.  My cell connection, until recently, was "iffy" here on the island, even with a cell phone antenna and amplifier.  Recently, however, they have installed several new antennas on the water towers and cell service has improved.

I have been using the AT&T GoPhone plan for a year now - which costs $100 a year (no taxes or fees added!) for each phone for 1000 minutes.  About a month from now, the plan is up for renewal, and we have about $15-25 left on each phone.  It has worked well and is easy to control and predict costs.

The local cable company is offering land-line service, cable TV and Cable Modem Internet, "starting at $69.99 a month!" which sounds attractive, until you realize that is the come-on promotional price that is good for "new customers only" for 12 months (after which it goes to $89.99 a month), and doesn't include a voice line.  From what I can read from their site, you can get a voice line, or Internet, but not both.  Of course, you could piggyback phone service off the cable modem, using Vonage or Magic Jack, but the latter often sounds like hollering down a well, and both require additional fees as well.

Nevertheless, that is an option, a "Plan B" if you will, but isn't it interesting how, in this age of deregulated communications, both options come out to about $100 a month when all is said and done (quote prices do not include local excise taxes, island access taxes, 911 charge, federal whozitswhatzis tax, and of course the tax-tax, that all add $10-20 to the price of any communications package).

Of course, one could argue that you could switch from an AT&T bundle (which are available with satellite TeeVee) to a Comcast Bundle and then go back and forth and take advantage of these "new customer" pricing deals.  But the catch is, they usually require to you keep service for 24 months to get the lower price, and also there may be connect and disconnect fees due when you switch (at least from the cable company), not to mention equipment fees.  So it might be an exercise in futility.

The point of these "bundle" deals is not to give you a package of great services at a low price.  No, that is the bait that they are using to snare you, the idiot consumer, into signing up for a very expensive telecommunications package, for the long term.  People say, "Well, I'll take the bundle and then when the price goes up, switch to a cheaper service!" but if you read the fine print (and it is very fine print) on the Comcast site, you'll note that you can't just do that, for at least a year after the price goes up.

Nice try - sort of like trying to beat the banks at the credit card game.

There are some other options I could use, of course.  I pay $7 a month for an AT&T voice-mail box, and that is sort of redundant when I have an answering machine with my cordless phone as well as a free voice-mail with the AT&T GoPhone plan (which can be accessed without using minutes).  So I dumped the AT&T Voicemail plan and programmed the land-line phone to "go to" the cell phone if no one answers the land-line or if the land-line is busy.

It may not sound like much, but $7 a month is $84 a year, or about one month's service, and by taking five minutes to make such a change, I save $84 a year, or an effective hourly rate for my labor of about $1008 an hour....

Another option, which I used when I was snowbirding, was to use basic "poverty line" service for my land line, which runs about $25 a month.  This meant I had no long distance service, but an AT&T calling card, which charges by the minute, ended up being a better deal overall (I still use this for overseas calls, as paying for an overseas plan is pretty futile, unless you call Slovenia on a daily basis).  Yes, the bundled "unlimited long distance" ends up being pretty much a wash, unless you make a lot of phone calls.  For a family, it might be a good deal.  For someone who rarely makes phone calls, not so much.  I have this service, which I will examine down the road, to see if it is really worthwhile or not.

The problem with the poverty land-line is that it has no calling features - no forwarding when busy, no caller ID, no nothing.  So if you want to use these * features, the poverty land-line is not an option.  But if you just need a phone to call locally, it could be a good deal.

With the poverty land-line, I used my cell phone as my primary number and then had it call-forward to the land-line, which insured good signal at the home, as well as a single number for both homes.  It worked well, and since I hardly used any of my minutes anyway, it didn't cost much, in terms of cell phone charges.  But now that I am in one place, it made more sense to dump the cell phone minutes and apply that money to the land line instead. 

Overall, my goal is to keep the overall telecommunications bill (Cable, Internet, Phone, Cell Phone) to under $100 a month.  So far, I think we have been successful at this, but it still galls me that I have to spend as much as we do, just for communications.

We'll see how this works out.  If I didn't need Internet service, I would dump the land line completely.

But I would be interested to hear how others deal with this.  What are your communications needs?  And what options do you use to achieve these goals?  And how much does it cost (the actual bill, not the promotional numbers bandied about that never include all those taxes and fees)?

Because to me, $100 a month is far too much, but I am not sure there are any realistically cheaper options.