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CR: Fiber-optic providers are leading choices for internet, television, and telephone service

January 5, 2009

February report reveals why Verizon FiOS and AT&T U-verse are best choices overall; how service-bundling can cut bills and what to know before choosing a provider

YONKERS, NY — Consumers looking to cut costs without sacrificing satisfaction for Internet, television, and telephone service should consider bundling with Verizon FiOS or AT&T U-verse. In Consumer Reports’ latest survey of major telecom providers and bundled services, featured in the February issue, Verizon FiOS and AT&T U-verse, whose networks are fiber-optic based, were the most consistently satisfying providers for their Internet, television, and telephone services.
Because Verizon FiOS and AT&T U-verse are not available everywhere, many consumers must consider other options for Internet, phone and TV services. The article also includes Ratings of these three services, which are typically bundled, from various providers.
In areas where telco-delivered service is not available, a highly-rated cable company is the nextbest choice for many households. Consumers may not have an option when choosing a cable provider because a majority of homes only have one cable company available in their area. According to Consumer Reports’ survey, better cable companies include Cox, Cablevision and the smaller Bright House and Wow, which are fine alternatives to fiber-optic service providers for all three services in areas that they are available and also offer Internet and telephone services.
If television service is a priority and fiber-optic service isn’t available, satellite service may be a fine option. Consumer Reports suggests opting for a bundle that includes DirecTV. It scored higher than all the major cable companies and Dish Network, the other major provider of satellite service, for TV picture, sound and channel selection. It is also offered in hybrid bundles along with DSL Internet and landline phone service from some telephone providers.
Bundling Prices Decline
Intense competition for cable and satellite customers between AT&T U-verse and Verizon FiOS high-speed fiber providers has driven down rates for Internet, phone and TV service and is likely the reason that companies allow these savings to continue past the promotional period. In the past year, bundles of the three services have dropped in price by up to 20 percent, to as low as $80 a month. Bundling makes sense for many households, especially for those consumers who are served by one of the fiber carriers or one of the better cable companies. Consumer Reports’ latest survey found that subscribers were very satisfied with Internet, phone and TV from the best telecomm providers. However, bundling doesn’t come without some problems. The survey revealed a high incidence of complaints about billing, and fees with some providers’ triple-play packages. Despite its high marks overall, Verizon FiOS was below average for customer service to its triple-play customers. Cable companies that bundle services had fewer customer-service problems overall.
How to Choose
�� Check alternatives. Only a small percentage of homes have two cable companies to choose from; most only have one. Satellite is more widely available, provided a home has an unobstructed view of the horizon to the southwest. DSL is widely available in urban and suburban neighborhoods. While fiber-optic service, such as Verizon FiOS and U-verse from AT&T, is spreading fast, it is still only available in about 8.5 million homes in about one-third of the states.
�� Weight the case for bundling. With most providers, signing up for more services equals more savings. Bundles allow for integrated services, such as display of callers’ phone numbers on the TV screen, which is offered with some phone/cable packages. Tripleplay offers often come sweetened with more extras, such as free installation. Consumers may also be guaranteed low rates for a longer period of time with triple-play than when subscribing to services one at a time.
�� Don’t rule out à la carte. Taking fewer than three services from any one provider allows flexibility. Spreading service among a few carriers also eliminates the possibility that a network or equipment failure will knock out all telecomm services. Although bundles usually ensure maximum savings, Consumer Reports found at least one instance where the cost of the service taken individually was actually lower than when it was part of a package.
�� Consider phone safety. Cable VoIP and fiber phone service require a battery back-up to use during power outages. These battery backups may be provided or have to be purchased for an additional fee. Additionally, if an outage lasts longer than the battery backup, consumers may be left without a phone for the remainder of the outage. Emergency 911 service varies among technologies. Consumer Reports recommends supplementing VoIP service with basic landline service for use in 911 calls.
�� Fine-tune by other attributes. Consumer Reports Ratings reveal that providers differ in more than their customers’ overall satisfaction. Consumers should determine which TV providers carry programming they desire. Keep in mind that fiber and satellite usually have a termination fee but cable does not.
How to Get the Best Price
�� Check rates, then check again. Consumers should scour the provider’s Web site for the best deals, and ask a customer rep if the price quoted is the company’s absolute best offer. Consider checking again. Consumer Reports found that rates could change, seemingly by the representative who took the call.
�� Negotiate. It can pay off, particularly in areas where there’s competition between a cable provider and a traditional telephone company, and when a promotional rate is expiring. Ask for a reduced price or free extras, such as installation or a premium channel at no cost.
�� Ask for sample bills. Before finalizing a deal, ask for a summary of all charges for the first and subsequent months. Confirm that the figures include all taxes and fees, and onetime expenses such as a charge to keep an existing phone number. Try to get all the information in writing. Check the figures later against the actual bills.
�� Fine-tune extras. As a rule, consumers shouldn’t pay more for higher-speed Internet service unless they are doing a lot of downloading or sharing of lengthy videos or other very large files. Most VoIP and fiber-based phone plans include caller ID, answering service, and unlimited local and long-distance calling in the U.S., Canada and Puerto Rico, and sometimes other countries. Check that these features don’t disappear or that the bill doesn’t increase once the promotional period ends.
The complete report and Ratings are available in the February 2009 issue of Consumer Reports, wherever magazines are sold. Portions of the story are available for free online at www.ConsumerReports.org.
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Melissa M. Valentino 914.378.2432 or Lauren Hackett 914.378.2561
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