Away from Pay TV

I need to know, is all this part of the LBYM syndrome? Although I would just as soon not have a big cable bill, I look at it as our entertainment. We don't go to movies or the like so our TV's are our source of entertainment. I like sports and have my man cave. Wife has the big screen setup in the great room. Total of five TV's in the house and two are on all the time. She also has the DVR on her setup so we don't miss much. Her smart TV has the Netflix and Amazon built in which makes all that so much easier. There are two major cable boxes plus three digital adapters.

We have Verizon FIOS with 35/35 internet and the bill also includes our home phone. All that for about $180/month or $2160/year. Overall I think this is a reasonable entertainment expense.

I think before cutting the cable or ditching the dish, we need to ask ourselves some questions: If we didn't have this entertainment option, what else would we do to replace it? And if the answer is something considerably more expensive, then maybe you leave well enough alone.
 
I despise my cable company. Ironically I've worked most of my career in the cable settop industry. So yes - in some way, I hate the hand that feeds me.

Google is taking on the cable industry. Not just with their FIBER overbuild in Kansas City. But now they're talking about bundling content that has traditionally only been available over cable or satellite.
http://www.nytimes.com/2013/07/17/business/media/google-is-said-to-mull-internet-cable-service.html?_r=1&

I'm for competition. Having worked on equipment for both sides when telco companies (verizon FIOS, ATT uverse) took on the cable companies (comcast, time warner)... the consumer ends up ahead when there is competition.

I'm a consumer first and engineer second. I want a fair market rate (vs a rip off) for the cable content I want.
 
It's my feeling that these cable/telecom companies have no respect for customers.
I think it depends on what you mean by "respect". I have found that when you're paying them the listed price for what they're offering, and not expecting services that aren't explicitly included in that price, they are quite respectful. I've read a lot complaints that claim the contrary, but I dispute the premises on which those complaints are based. I think it is easiest to understand the difference if you think of how you'd feel if your boss called you and started haggling for a $100 per week discount on your services. By ascribing a human sentiment to a company (saying that they have no respect), you're already half-way to acknowledging the parallel between their "reaction" and your own reaction if you were in the same situation.

The reality is that companies aren't human, and don't have feelings or attitudes. They have policies, forecasts, market research, and pricing models. They have cost structures, billing systems, and standard operating procedures for customer billing and customer contact. These come together to affect how a customer's interaction progresses, but to consider it "respect" or lack thereof is granting it meaning it simply doesn't have, in reality. Underlying all those things that go into how a company interacts with customers is the expectations of the company's owners, its investors, and the investor marketplace itself. In other words: Most of us.

The scientific extraction of maximum revenue while incurring the lowest possible cost is something we investors have imposed on these companies. We can choose to think of companies as if they are people, and thereby grant them the power to make us feel disrespected or otherwise aggrieved, but in reality we're doing that to ourselves. From the company's perspective, it isn't personal. It's just business.

I have fought with Comcast and AT&T for as long as they have had offerings.
My read (based on my experience working in that industry ten years ago) is that the cost-cutting tactic of threatening to switch providers has become too well-known, such that there is no longer a real cost to taking a chance that the customer will leave. The pattern that seemed to develop, within some providers in some areas, from what I could tell from postings on AVS Forum, is that after the third time you extract an introductory discount by threatening to leave, your account gets marked, and you can only get a discount from then on by upgrading your service in some way.

I think the introductory discounts are sometimes eating so much into the profitability that customers who engage in the tactic as a matter of course offer the service providers so much of a lower profit potential long-term that there isn't a business case to be made for working hard to keep that customer's business. At worst, the secondary providers are gaining as many customers from other suppliers through this means as they are losing, while the primary providers are able to focus their operations on extracting additional revenues from the least price-sensitive customers.

That's not to say that people shouldn't try to get a lower price, but rather that people should avoid perceiving the work they have to go through in this regard as punitive or negligent on the part of the service provider. They're not in business to save you money. Quite the opposite. So perceiving your own business as so much more valuable to them than it is, in the context of other business demographically categorized the same way, is going to lead your logic astray.

Unfortunately, Uverse or any other provider is not available where she lives. So we are kind of stuck there.
We have FiOS here. I've compared my FiOS pricing with Comcast pricing where FiOS doesn't operate. It's within 10%. There's really not much of an advantage to be had even with multiple providers.

I also get paper bills for all subscribed services and so does my daughter. Those include cable providers and all cell phones. I though deregulation was supposed to lower prices for everyone?:LOL:
Deregulation was just supposed to open the market to additional competitors - so those companies can make some of the profit that the legacy providers were making - so it was just about more companies splitting the profits of the market. More competitors would have significantly lowered prices if prices weren't already pretty close to the value of the services. Consumers don't pay for things that aren't worth it - they do without things that are truly not worth the price.
 
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Yeah, it looks like you have to be a cable or satellite subscriber to get the "free" stream on your computer, iPad, etc.
Correct... Watch ABC has a (non functioning) website, that shows the different cable providers that you have to have to subscribe to to get the "stream". So far, DirectTV and Dish are not part of the WatchABC stream...
DirecTV does have DirecTV Everywhere, where subscribers can download content to phones and tablets for free.
My original understanding came from TV news reports that said "FREE"... not so!

I think we're just on the early edge of this transition... As of now, ABC believes that their ratings will rise, benefitting from what they see as a new market. Lots more to shake out of the change, as in the total advertising $$$ income continues to drive the competition.

Those who have a ROKU, have received updates that have added private channels... (not shows, but separate channels, ala Hulu and Netflix). A total of more than 700 specialty channels are available. As mentioned earlier in the original post, even more channels may become available through the "Developer Mode"... which allowed the addition of UTube without Roku adding the channel.
 
I think it depends on what you mean by "respect". I have found that when you're paying them the listed price for what they're offering, and not expecting services that aren't explicitly included in that price, they are quite respectful. I've read a lot complaints that claim the contrary, but I dispute the premises on which those complaints are based. I think it is easiest to understand the difference if you think of how you'd feel if your boss called you and started haggling for a $100 per week discount on your services. By ascribing a human sentiment to a company (saying that they have no respect), you're already half-way to acknowledging the parallel between their "reaction" and your own reaction if you were in the same situation.

The reality is that companies aren't human, and don't have feelings or attitudes. They have policies, forecasts, market research, and pricing models. They have cost structures, billing systems, and standard operating procedures for customer billing and customer contact. These come together to affect how a customer's interaction progresses, but to consider it "respect" or lack thereof is granting it meaning it simply doesn't have, in reality. Underlying all those things that go into how a company interacts with customers is the expectations of the company's owners, its investors, and the investor marketplace itself. In other words: Most of us.

The scientific extraction of maximum revenue while incurring the lowest possible cost is something we investors have imposed on these companies. We can choose to think of companies as if they are people, and thereby grant them the power to make us feel disrespected or otherwise aggrieved, but in reality we're doing that to ourselves. From the company's perspective, it isn't personal. It's just business.

My read (based on my experience working in that industry ten years ago) is that the cost-cutting tactic of threatening to switch providers has become too well-known, such that there is no longer a real cost to taking a chance that the customer will leave. The pattern that seemed to develop, within some providers in some areas, from what I could tell from postings on AVS Forum, is that after the third time you extract an introductory discount by threatening to leave, your account gets marked, and you can only get a discount from then on by upgrading your service in some way.

I think the introductory discounts are sometimes eating so much into the profitability that customers who engage in the tactic as a matter of course offer the service providers so much of a lower profit potential long-term that there isn't a business case to be made for working hard to keep that customer's business. At worst, the secondary providers are gaining as many customers from other suppliers through this means as they are losing, while the primary providers are able to focus their operations on extracting additional revenues from the least price-sensitive customers.

That's not to say that people shouldn't try to get a lower price, but rather that people should avoid perceiving the work they have to go through in this regard as punitive or negligent on the part of the service provider. They're not in business to save you money. Quite the opposite. So perceiving your own business as so much more valuable to them than it is, in the context of other business demographically categorized the same way, is going to lead your logic astray.

We have FiOS here. I've compared my FiOS pricing with Comcast pricing where FiOS doesn't operate. It's within 10%. There's really not much of an advantage to be had even with multiple providers.

Deregulation was just supposed to open the market to additional competitors - so those companies can make some of the profit that the legacy providers were making - so it was just about more companies splitting the profits of the market. More competitors would have significantly lowered prices if prices weren't already pretty close to the value of the services. Consumers don't pay for things that aren't worth it - they do without things that are truly not worth the price.

While I am not going to disagree with your overall assertion, I believe anyways, you are over thinking some of this. Especially concerning the consumer end of it. I think most people do understand companies do not have feelings, but this doesn't preclude us from using emotional terms directed at them. I know my golf club doesn't have feelings when I curse at it and verbally threaten to break it in half if it doesn't start to perform better, but I still do it. :)
The venom in which is directed at cable/satellite/internet companies is based on their practice of not following the classic "loyal customer" marketing. Customer loyalty cards at businesses, car dealership discounts for return customers, rewards programs, discounts for repeat restaurant customers, etc... They impose the opposite strategy which is counterintuitive to consumers. Offering lower rates to the new customers, but charge higher rates to long term "loyal" customers.
FWIW- I have never been flagged and I have called Direct Tv and have got reductions for over 5 years now. I really never even threaten them. I would not think it foolish that they don't build it into their model. Lower the price for the callers as they proved they will take action and let the lazy people pay the rack rate. We all know each one of these businesses can tell you how much marketing money is spent to sign on and retain a customer. It's better to receive a little less for an existing customer, that to lose all those dollars. If they did want to take it to the bottom and deny the rate reduction, almost all of them have short windows of turnaround to be considered a new customer anyways.
 
The venom in which is directed at cable/satellite/internet companies is based on their practice of not following the classic "loyal customer" marketing. Customer loyalty cards at businesses, car dealership discounts for return customers, rewards programs, discounts for repeat restaurant customers, etc...
I question drawing the analog between video service providers and car dealerships and restaurants, instead of drawing that analog between video service providers and cell phone service providers or security system monitoring service providers -- in other words, other industries where what is provided is a virtual pipeline. Comparing video service providers to restaurants a bit like comparing American Airlines to Apple -- it is just a non-illuminating analog.

They impose the opposite strategy which is counterintuitive to consumers.
My point was that it was only counter-intuitive due to faulty assumptions on the part of those specific consumers fostered by unfounded expectation.

FWIW- I have never been flagged and I have called Direct Tv and have got reductions for over 5 years now.
I think both DirecTV and Dish Network realize how little they have to offer as compared to Comcast and Time Warner, so they're more generous. By the same token, some Comcast customers haven't gotten tagged yet, either due to that policy not being applied to their area, or because they've upgraded (perhaps without recalling the upgrade or having the upgrade register as such), etc.

Lower the price for the callers as they proved they will take action and let the lazy people pay the rack rate.
Absolutely but again after a while if all it takes is a phone call who's the fool? Comcast and Time Warner and others have drawn lines, in some areas.

We all know each one of these businesses can tell you how much marketing money is spent to sign on and retain a customer.
And they can tell you just when the continual discounting is no longer worth it to them.
 
The venom in which is directed at cable/satellite/internet companies is based on their practice of not following the classic "loyal customer" marketing. Customer loyalty cards at businesses, car dealership discounts for return customers, rewards programs, discounts for repeat restaurant customers, etc... They impose the opposite strategy which is counterintuitive to consumers. Offering lower rates to the new customers, but charge higher rates to long term "loyal" customers.
.

That describes my feelings pretty well. It's a pita to change phone, internet and TV providers, but that's what you have to do to get the best deals. It would be so much nicer if longevity and loyalty on the part of the customer yielded the best deals, but clearly not so. It means constantly staying on top of what contractual period you're in the midst of and which providers will provide the best "newbie" deals when you switch.

In terms of competition, I find that towns that give an exclusive distributorship to a cable company are doing their residents a disservice. In suburban Chicago, some smart towns have two active cable companies. Around here, those are commonly Comcast and WOW. I'm familiar with three cases that have that situation and in all three prices are lower and offerings more generous than we have in our "Comcast monopoly" town.

It's disgusting doing business with Comcast. I've let the town fathers hear that on numerous occasions.
 
I question drawing the analog between video service providers and car dealerships and restaurants, instead of drawing that analog between video service providers and cell phone service providers or security system monitoring service providers -- in other words, other industries where what is provided is a virtual pipeline. Comparing video service providers to restaurants a bit like comparing American Airlines to Apple -- it is just a non-illuminating analog.

My point was that it was only counter-intuitive due to faulty assumptions on the part of those specific consumers fostered by unfounded expectation.

I think both DirecTV and Dish Network realize how little they have to offer as compared to Comcast and Time Warner, so they're more generous. By the same token, some Comcast customers haven't gotten tagged yet, either due to that policy not being applied to their area, or because they've upgraded (perhaps without recalling the upgrade or having the upgrade register as such), etc.

Absolutely but again after a while if all it takes is a phone call who's the fool? Comcast and Time Warner and others have drawn lines, in some areas.

And they can tell you just when the continual discounting is no longer worth it to them.

You are over thinking it again. I am not disputing your assertions as to why those companies are different in their billing schemes as that is irrelevant to the emotions of the consumer. What all of the "non-illuminating analogs" have in common is they are bills or purchases consumers make each month. They all collectively come out of the monthly expenses which does in fact tie them together. I am not disputing whether they are correct in their practices as that is above my pay grade, but as a consumer I know where the resentment comes from and it won't go away just because there is a justification for it.
 
as a consumer I know where the resentment comes from and it won't go away just because there is a justification for it.

+1 Nicely put.

A mugger knows it's best to overcome his victim with surprise and an overwhelming show of force. That usually results in the crime being a quick robbery and not a fight with injuries or death. Despite the justification for how they do their job, I still think muggers, and Comcast, are evil.
 
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While I am not going to disagree with your overall assertion, I believe anyways, you are over thinking some of this. Especially concerning the consumer end of it. I think most people do understand companies do not have feelings, but this doesn't preclude us from using emotional terms directed at them. I know my golf club doesn't have feelings when I curse at it and verbally threaten to break it in half if it doesn't start to perform better, but I still do it. :)
The venom in which is directed at cable/satellite/internet companies is based on their practice of not following the classic "loyal customer" marketing. Customer loyalty cards at businesses, car dealership discounts for return customers, rewards programs, discounts for repeat restaurant customers, etc... They impose the opposite strategy which is counterintuitive to consumers. Offering lower rates to the new customers, but charge higher rates to long term "loyal" customers.
FWIW- I have never been flagged and I have called Direct Tv and have got reductions for over 5 years now. I really never even threaten them. I would not think it foolish that they don't build it into their model. Lower the price for the callers as they proved they will take action and let the lazy people pay the rack rate. We all know each one of these businesses can tell you how much marketing money is spent to sign on and retain a customer. It's better to receive a little less for an existing customer, that to lose all those dollars. If they did want to take it to the bottom and deny the rate reduction, almost all of them have short windows of turnaround to be considered a new customer anyways.

The problem today with most large corporations, is that they seem to hire the dumbest individuals they can find to interact with their customers.

Another issue is that the local office has largely been done away with. This is what steered me away from the satellite providers. At least Comcast has a storefront where I can swap out bad boxes and modems.
 
+1 Nicely put.

A mugger knows it's best to overcome his victim with surprise and an overwhelming show of force. That usually results in the crime being a quick robbery and not a fight with injuries or death. Despite the justification for how they do their job, I still think muggers, and Comcast, are evil.

Thank you Youbet, and don't feel like your opinion is an outlier. Out of a 2011 survey Dish, Cox, AT&T,Charter, Comcast, Time Warner all made the 19 Most hated companies in America. I imagine those companies are thankful that airlines, and utilities offend consumers also and are dispersed throughout the list also.

http://www.businessinsider.com/most-hated-companies-america-2011-6?op=1
 
Mr. buu forgets two important facts as he defends these service organizations:

1. They (the providers) are the ones who initiated and allow special "deals" and price reductions on their service. They made it univerally known that they can be "worked".

2. End users are the ones who write the checks.
 
In terms of competition, I find that towns that give an exclusive distributorship to a cable company are doing their residents a disservice. In suburban Chicago, some smart towns have two active cable companies. Around here, those are commonly Comcast and WOW. I'm familiar with three cases that have that situation and in all three prices are lower and offerings more generous than we have in our "Comcast monopoly" town.

We have two cables running by our house - Time Warner and WOW.

I was fairly content with Insight (now Time Warner) - the TV stuff was fine and they had decent internet.

Then WOW came through and dug up our back yard. I didn't switch right away, but the best internet offering from Insight wasn't fast enough on the upstream side to work well with my ATT microcell.

So I switched to WOW to get 50/5 internet speeds (a big improvement over 25/0.7) and have been quite happy with it. The TV channels are roughly equivalent for about the same price.

We do save a couple of bucks by not buying a second cable card for the bedroom TV since we get good over the air reception up there and our second TiVo works fine with that. Especially since we basically only watch the 10 O'Clock news with a slight time delay as we fall asleep.
 
The problem today with most large corporations, is that they seem to hire the dumbest individuals they can find to interact with their customers.

Another issue is that the local office has largely been done away with. This is what steered me away from the satellite providers. At least Comcast has a storefront where I can swap out bad boxes and modems.

When I was working for the customer service agency who runs DirecTV, Comcast, and a ton of other companies' customer service sectors, I had no experience. The only requirement was a highschool diploma, and half of the people in my training class could barely spell. During the job, we were mostly there to perform basic functions, they didn't give us system permissions to cancel programs or give significant discounts. Every couple of weeks there was a new batch of trainees, and a new batch of people hightailing it outta there.

They bring in anyone and everyone who is willing to go through it. I imagine only the dumb people stay. I was 18, and blasted with too much racism, obscenities, and just mean-spirit to stay for more than a couple months. The company didn't give us anything to help people anyway, so I pretty much just spent half the nights crying after work. I knew I could get something else, but more of the slower folk probably knew they couldn't.

But it was a stay at home job, so that was nice I guess. :LOL:
 
A mugger knows it's best to overcome his victim with surprise and an overwhelming show of force. That usually results in the crime being a quick robbery and not a fight with injuries or death.

Edward Thatch, aka... Blackbeard used this method. No matter what you see or read about him today, he never killed a person during his days of pirating.
 
I have Dish at home and Fairpoint cable at work. They both keep me supplied with many wasted channels, and few I actually watch. For me a must watch is FSU men's basketball. When we are playing Duke or UNC, it will always be on a major network. But when the GT's and WF's roll around, you will be searching. ESPN3 ends up with many of those games, and Homey don't play that. There is always a link to a free streaming site on the game thread, and I clicked it one time. I spend two days cleaning all the malware of my work laptop, then found out it had got my home PC and laptop too, because I use Chrome. Well after that, I listened to a lot of games on the radio.
 
You are over thinking it again.
I wasn't overthinking it before, nor now. You just don't like what I explained. You could just say that - say that you'd prefer to ignore the nuances and conditions that mitigate the complaints you want to make.

The problem today with most large corporations, is that they seem to hire the dumbest individuals they can find to interact with their customers.
They actually don't. They hire the least expensive individuals. See above for explanation.

Thank you Youbet, and don't feel like your opinion is an outlier. Out of a 2011 survey Dish, Cox, AT&T,Charter, Comcast, Time Warner all made the 19 Most hated companies in America.
Hate fostered by rhetoric just like that you've been demonstrating, rather than based on any actual agreement/specifications-based comparison to comparable companies offering a comparable product under comparable environmental circumstances.

Mr. buu forgets two important facts as he defends these service organizations:

1. They (the providers) are the ones who initiated and allow special "deals" and price reductions on their service. They made it univerally known that they can be "worked".

2. End users are the ones who write the checks.
I forgot nothing. I'm simply not willing to be blinded by consumer bias.
 
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...
I forgot nothing. I'm simply not willing to be blinded by consumer bias.

I don't think it is bias. If you look at that list of 'hated' companies, they mostly (all?) are in areas with little real competition. It's one of the reasons I don't have cable. It isn't good for my blood pressure to deal with them (I don't follow sports, so it is easier for me to go w/o).

You are probably too young to remember Lilly Tomlin's telephone operator character's line (from the days before the Bell break-up) "Sir, we are the telephone company. We don't care. We don't have to."

A company in an industry with lots of competition, and relatively lower barriers to entry, cannot treat customers poorly for long. They will move to the competitors.

One large company with generally outstanding customer service is Apple. Will success spoil them? I don't know, I think they still have some fears, they were the underdog for so long.

-ERD50
 
While I'd love to cut my cable cost I'm a huge sports fan and there aren't really any other options if you want to watch live sports on a regular basis.

This is my situation exactly. If there were a non-cable sports alternative, I would cut cable entirely.
 
I wasn't overthinking it before, nor now. You just don't like what I explained. You could just say that - say that you'd prefer to ignore the nuances and conditions that mitigate the complaints you want to make.

They actually don't. They hire the least expensive individuals. See above for explanation.

Hate fostered by rhetoric just like that you've been demonstrating, rather than based on any actual agreement/specifications-based comparison to comparable companies offering a comparable product under comparable environmental circumstances.

I forgot nothing. I'm simply not willing to be blinded by consumer bias.

You evidently do forgot sometimes, as I am not "demonstrating" any "hate rhetoric" at all. It is understandable though. If I was busy wearing out the pages of my thesaurus trying to find a $5 word when a nickel word would suffice just fine, I would forget the main purpose of the the other posters comment was too. I simply was explaining why consumers feel the way they do, and no amount of contracts or apples to apples comparison is going to change that.
 
I have been "flagged" by Comcast, and so have no way of communicating with them. Phone calls become a joke, to see how long they can make me wait. The last time, the rep deliberately cut my service off in the middle of the call. After an hour of trying to troubleshoot and get back online, I went to the office, and they told me my account had been disconnected. BTW... no venom or arrogance on the call on my part, even though the blood pressure was at an all time high.
One incident?... no... not by a longshot. I have been with Comcast before it was Comcast broadband (Home.com I think), in 1995...tranferring service between Il and FL for the past 18 years... each time having a problem, since the company is bifurcated, and one part of the business does not talk to the other.
Every move comes with a letter threatening to charge me with nearly $500 with of equipment that I don't have, or failure to refund overpayments. Not EVERY time, but more often than not. This year, it was a charge for my own modem... added $7/mo. then going to the office where they refuse a refund, but agree to take the charge off... That happens for 1 month, the the second month, the charge reappears.
No choices... no other provider... no help from the city or the state attorney general.
Now, for internet, we have only one choice... Infinity Fast Internet....supposedly speeds up to 20MBPS... In fact, have never reached 6MBPS even with the Blast boost... Most of the time, the speed is about 2.6 and often drops to 1.5. If I call and the tech comes out, he will tell me that I'm getting more than 5MBPS, and there is no guarantee about the actual speed.

The charge for the Tech visit will be $60.

So I pay for 20MBPS, because there is no other offer. $64.95/mo. The town next door, has AT&T competition, so the same 20MBPS speed costs $54.95, and the customer has a choice for a slower speed...3MBPS for $29.95. (that's the speed I get, and pay $65 for).

To avoid tension in our lives, I have accepted all the charges, and pay whatever they ask. Fighting city hall is fast tracking a heart attack.
I guess you can tell, though that I have no love for Comcast.
EOR... (End Of Rant)
 
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.........Every move comes with a letter threatening to charge me with nearly $500 with of equipment that I don't have, or failure to refund overpayments. Not EVERY time, but more often than not. This year, it was a charge for my own modem... added $7/mo. then going to the office where they refuse a refund, but agree to take the charge off... That happens for 1 month, the the second month, the charge reappears.

Speaking of equipment, we have had service with Comcast at least twice and are currently with AT&T Uverse. Shortly after we turned in our antiquated Comcast-supplied, but rented, DVR's, we were sent a bill for $400+ for not returning one. Fortunately, DW saves the "turn in and acquire" receipts they give you. I guess we had a dozen or so since the aging DVR boxes are of poor quality and recycled by Comcast to other customers. We had several bad DVRs which accounted for the many receipts.

We had to bring the receipt to their office to get the proposed charge cancelled. It's just hard dealing with these folks as everything seems to be a problem. I won't waste the bandwidth here discussing the flaky Comcast service we had.
 
A company in an industry with lots of competition, and relatively lower barriers to entry, cannot treat customers poorly for long. They will move to the competitors.
*And* where consumers can freely and easily switch to the competition without penalty. This is why so many cell phone services and TV services have tried to bait you with cheap stuff up front and then hold you hostage for 1-2 years.

Of course, especially in the cell phone industry, the marketplace is specaking and it's increasingly sick of those contracts, so more of the players in the market today (including some of the major legacy players) are ditching contracts entirely. The market is speaking in that direction, and it's good that the players in the market are seeing it and (mostly) responding to it.
 
*And* where consumers can freely and easily switch to the competition without penalty. This is why so many cell phone services and TV services have tried to bait you with cheap stuff up front and then hold you hostage for 1-2 years.

Of course, especially in the cell phone industry, the marketplace is specaking and it's increasingly sick of those contracts, so more of the players in the market today (including some of the major legacy players) are ditching contracts entirely. The market is speaking in that direction, and it's good that the players in the market are seeing it and (mostly) responding to it.

I agree, Ziggy. Just last week after successfully lowering my Internet bill, they offered me this "special" where I could get the IPhone 4 for a penny, and get into a 2 year contract at $80 plus fees and taxes. I told her to call back the next day and I would think about it. Well to begin with I checked and it was the exact deal they have on their website, some special! Then anyone with math skills will know they are getting taken to the cleaners on these subsidized phones. I am on a no contract,and I could buy this phone directly from my carrier for $327, and have a monthly bill of at least $40 a month cheaper. Payback time of buying the phone as opposed to this "special" would be less than 9 months, and then I would be saving $40 a month for the rest of the 24 month period.
 
Then anyone with math skills will know they are getting taken to the cleaners on these subsidized phones. I am on a no contract,and I could buy this phone directly from my carrier for $327, and have a monthly bill of at least $40 a month cheaper. Payback time of buying the phone as opposed to this "special" would be less than 9 months, and then I would be saving $40 a month for the rest of the 24 month period.

Indeed. You can get unlimited talk/text/data for $45 per month with a new smartphone costing, let's say $400.... *or* you could get the phone "free" and be locked into a similar plan for $80 a month for 24 months. Doing the math, by paying for the phone up front you pay $1480 over two years, compared to $1920 with the "free" phone. And this also holds true for lower usage. In April I got a low-end smartphone (Android 2.3) and started service with H2O Wireless for $10 for 30 days, giving me a combination of 400 minutes of talk or texts (5 cents is deducted per minute of talk or per text, and I only use wifi for data), plus if you refresh with another $10 before the 30 days are up the time is added on and the unused balance rolls over. I spent like $80 for the phone and it's not high end but it's good enough and it's more than enough for my needs. Five months later, I have about $37 worth of service stored up.

(I still have a very old T-Mobile plan which rolls over for a whole year for $10 after spending $100, but T-Mobile doesn't work here yet -- only AT&T comes here.)
 
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