November 10, 2004 4:00 AM PST

DSL wars come down to a battle of the bundles

Broadband packages that bundle high-speed Internet access with subscription TV and telephone services are becoming de riguer, but consumers need to double-check the math to make sure a discount on one product translates into a deal overall.

SBC Communications last week sliced its basic DSL package to $19.95 a month--about half the price of most comparable cable broadband offers, and even slightly less than some slower dial-up services, such as America Online.

Careful. Even though that deal leads with one of the lowest DSL prices in the land, the total comes in at more than $70 a month and could wind up costing you more than you otherwise might pay for broadband and phone service. That's because subscribers must also purchase SBC's complete local and long distance phone plan, which costs $48.95 for unlimited local and long distance calling, voicemail, call waiting and other perks.

News.context

What's new:
Telephone and cable companies are bundling broadband with voice, video and wireless services to lure customers.

Bottom line:
Both industries are spending billions to outmatch one another with bigger service bundles. Want a discount? Buy more--a lot more.

More stories on DSL

"You're not getting a big discount until you start piling all the (services) in," said Mark Cooper, director of research for the Consumer Federation of America.

In a telecommunications-heavy world, pricing trends highlight a new fact of life, consumer watchdogs warn: To save some money, you may have to spend a great deal more.

Families can now easily shell out more than $100 a month for local and long distance phone plans, subscription TV, pay-per-view, Internet and cellular phone service. New demands in the form of Internet media--music downloads, interactive games, satellite radio and video-on-demand services--promise to push costs, and bundling opportunities, to even greater heights.

The packaging of TV, telephone and broadband services in a single bill highlights growing competition between the Baby Bell phone companies and cable conglomerates. Bundling makes sense for both sides because customers who buy more services are more likely to stick with them in the long haul. And by offering other services such as local and long distance phone calling, cellular plans and cable or satellite TV, consumers can pick the services they need at varying discounts.

But with all of these pricing plans and packages, are consumers getting real savings off their monthly phone or cable bill? It often depends on how much people buy.

Spending money to save money
Indeed, savings increase with more services, but so does the monthly bill.

Take Verizon Communications. The nation's largest phone company currently offers DSL with a download speed of up to 1.5mbps for as low as $29.95 a month for a one-year commitment and an extra voice line. People who buy a $54.95 unlimited local and long distance voice plan get up to 3mbps DSL for the same price and a discount on satellite service from DirecTV for about $37.

Verizon said it will soon introduce "naked DSL," which lets people buy only broadband without forcing them to buy a voice line.

SBC, the nation's second-largest phone company, has aggressively priced its 1.5mbps DSL as low as $26.95, with a basic local phone line costing $10.69 a month. The company is pushing to sell bigger packages, called "Total Connections," that include local and long distance voice calls, a Cingular Wireless plan and DSL, for between $78 and $90 depending on the state of residence. Add satellite TV from the Dish Network, and the bill costs between $108 and $120.

"It's important for us to move quickly so we can bring DSL to market to leapfrog cable and to do so at a reasonable cost," said SBC spokesman Wes Warnock.

Basic, barebones cable TV costs around $15 for Comcast, and up to $40 for more channels such as CNN and Lifetime with Cox. Digital cable, which offers more channels and, in some networks, video-on-demand, runs up to $60 a month in some systems, and even higher when adding premium channels such as HBO, Cinemax and Starz.

Remarkably, few cable systems are budging on their broadband Internet rates despite price competition from DSL. Most cable systems offer up to 3mbps download speeds for $40 to $45 a month, and about $55 for broadband without video. That amounts to more than $60 a month for barebones cable and broadband and more than $100 for digital.

Some cable systems offer phone service as well, for between $30 and $50 a month. That means up to $150 a month for the bundle.

From these estimates, it appears consumers can get more bang for

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Clarifications
A couple of clarifications. Vonage is mentioned in the article as $24.95 for voice, but fails to mention that that too must be tied to another offer; e.g., broadband from another carrier adding another approximate $45 to the mix, bringing the total to the same as SBC offer of $70. In addition Verizon is offering in NY a $29.95 standalone offer for DSL where customer gets choice of DSL speed from 1.5-3.0; over 30% savings over cable bundle in NY - no promo, this is standard list.
Posted by (1 comment )
Reply Link Flag
Alternative
Go for Cox all in one package: you can get basic cable, phone n internet service for cheaper pricee.
Posted by (23 comments )
Reply Link Flag
Bell South
What's also interesting is that Bell South and select other
companies won't let you subscribe to their DSL services unless
you have a phone line with them. In other words, you can't get
DSL without a Bell SOuth phone line. Their DSL service is truly
remarkable but who needs all that other stuff? Our household is
discussing jumping ship and going with Cable Broadband just to
cut expenses, something we'd like to avoid since we like our
current DSL service.
Posted by roberts2424 (9 comments )
Reply Link Flag
Qwest does not want to sell DSL
I just went thru a very frustrating evaluation of the High Speed access options for our home. We live in an upper middle class area of Phoenix AZ and wanted something better than dialup. Right now we have Qwest for home phone, ATT long distance & dialup internet, and Direct TV. We wanted to stick with one of these companies. Direct TV internet priced itself out of the evaluation. ATT doesn't offer DSL in our area so I went to Qwest. Over a two week period in October - after alot of phone calls and pushing for answers I found that Qwest does not want the business. It seems they wired the area years ago with fiber optic cable and have decided that if you want more than phone you WILL use the fiber optic cable - on their terms. You HAVE to rent a modem from them (it's a special fiber optic modem)you have to take MSN, and they do NOT support home networks - and if you have the guts to install it on your own they will not give you any tech support. And to top it off the technician would not give me any indication of the download/upload speed! They would hook up the first computer in the home for $9.99 (promotional rate) but the second and additional computers are $99 each! They gratiously will allow you up to 4 computers in a household to use the connection for the same monthly rate but they are each separately connected to the internet and can not be networked together. They really want you to buy your cable tv from them too. I told them that I now understand why so few people in the local school directory have a Qwest or MSN email address and Cox has the majority. I am planning to call Cox and set up phone and internet from them and eliminate both Qwest and ATT. We are not willing to give up Direct TV so Cox is not going to get that business.
Posted by (1 comment )
Reply Link Flag
Cable + VoIP
Phone company being obstinate? Simple solution: get cable internet access and VoIP. If you're not a cable TV subscriber, your bill will be only $5 or so more than if you were. However, you won't be tied to an expensive landline service, and your internet access will be considerably faster than with DSL. Go cable!!!
Posted by LANjackal (39 comments )
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