Business forum on the phone companies and internet services --rebuttal to other prior biz forum. phone, verizon, internet, cable
By Deborah M. Todd / Pittsburgh Post-Gazette
In a competitive marketplace where companies up the ante to woo new customers on a seemingly weekly basis, the buck for a la carte DSL or high-speed Internet stops at a very specific price point in Western Pennsylvania: around $19.99 per month. And for many customers, the value gained from dollars saved is lost through time wasted during slow downloads and less reliable service.
In a nation with an average of 5.7 Internet-connected devices per home, according to Port Washington, N.Y.-based marketing company NPD Group, customer needs are increasingly shifting in the direction of higher speeds. A Federal Communication Commission's report in February found Americans are increasingly choosing speed over savings and going with plans at least one tier higher than their Internet service provider's cheapest option.
Increased speeds support better Web browsing, which sees maximum performance at 10 megabits per second, and better video streaming, which can require 1 to 2 Mbps speeds for standard videos or 5 Mbps for full high-definition video. The report determined the new average download speed for America's Internet subscribers is 15.6 Mbps, a 20 percent increase over the past year.
Comcast and Verizon, the region's two top Internet service providers, are both currently offering stand-alone Internet service for $19.99 per month for 12 months.
Both of those plans also offer the companies' slowest possible download speeds, with Comcast Xfinity's Economy Plus plan downloading at speeds up to 3 Mbps and Verizon's High Speed DSL Internet downloading between .5 and 1 Mbps.
Prices and download speeds offered by smaller Internet service providers aren't too far off the mark set by the bigger players.
Consolidated Communications, a Mattoon, Ill.-based DSL provider that serves several Allegheny County municipalities, offers 3 Mbps service for $19.99 per month.
Pa.net, a Mechanicsburg-based Internet provider, offers DSL Lite service with download speeds between 256 kilobits per second and 128 Kbps for customers connecting through CenturyLink phone lines and between 1.0 Mbps and 384 Kbps for $24.95 per month.
Low-priced plans with slower speeds are more than acceptable for people who use the Internet only to check email or browse the occasional news site, said Niall Connors, group manager for Verizon Fios consumer marketing.
However, when multiple devices come into play, or if a user wants to download music or a Netflix documentary, the lack of speed can mean an hourslong wait for content.
Comcast estimated that users of its Economy Plus plan would need approximately 2.96 hours to download one high-definition movie while Verizon estimates it would take 3.3 hours to download a standard definition 1.5 gigabyte movie using its basic high-speed Internet.
While bundle packages obviously put more cash into ISPs pockets than a la carte Internet service, consumers also are receiving premium discounts, said Brett Bennett, director of product management for Consolidated Communications.
Mr. Bennett said DSL, cable and fiber-optic lines allow companies to use a single line to deliver Internet, phone and television services to customers, so it's easy to pass along savings.
Besides the need for speed, customers are also tempted to upgrade because of closely priced offerings and attractive bundle deals.
Comcast customers can upgrade from Economy Plus to Performance Internet, which comes with speeds up to 25 Mbps and provides access to 100,000 Wi-Fi hot spots, for $29.99 per month for six months. One bundled offering provides customers with Xfinity's 50 Mbps Blast Plus Internet service along with a Digital Economy TV package for $54.99 per month for 12 months.
Verizon offers High Speed Internet with a regional calling plan for $34.99 per month, High Speed Internet Enhanced service with download speeds between 1.1 and 15 Mbps with a regional calling plan for $44.99 per month and a High Speed Internet Enhanced plan with unlimited calling for $54.99.
Customers can also upgrade to Verizon Fios, a fiber-optic Internet service with speeds starting at 15 to 5 Mbps, for $49.99 per month. Or customers can sign a two-year agreement that gives the same Internet service, Fios TV with Prime HD and a home phone for $89.99 per month -- and maybe a promotional gift.
Customers of Consolidated Communications can upgrade to 10 Mbps speed service for $34.95 per month.
Lightning-fast service isn't necessary for everyone, but more people are jumping onto that bandwagon, said Mr. Connors.
He said basic high speed works for his mother and other customers with few Internet-connected devices but would fail in his house where there are seven Internet-connected devices.
"My mother has that service and she uses it to check email and for a little bit of Web surfing but not much else. For her, that's great. For me and my wife, it wouldn't work. It all depends on a customer's need," he said.
Deborah M. Todd: firstname.lastname@example.org or 412-263-1652.
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