8/20/2012 2:15 PM ET|
Stay wired without staying broke
More than two-thirds of U.S. households have broadband Internet service, and half of those (or one-third of U.S. households in total) consider their connection to be a necessity, according to a recent Pew Research poll.
So we're ripe for the plucking. Internet service isn't yet the fee magnet that phone and television services have become, but you still need to be on your guard.
Early-termination fees. One-fifth of consumers recently polled for an FCC survey said their Internet access included an early-termination fee, but most didn't know how much that fee was.
The result can be an unexpected charge if you switch providers, so this is a detail worth knowing.
Your strategy: Call your broadband provider to find out if you're under contract and what, if any, fee you might face for canceling service. In the future, ask about early-termination fees before signing up for service.
Data caps. Broadband providers tout their blazing speeds and how quickly you can download, upload and stream. Use their services too enthusiastically, though, and you may face extra fees.
AT&T, which introduced data caps to the wireless world, imported the idea to broadband. Its DSL customers are limited to 150 gigabytes of data per month, while U-verse subscribers are capped at 250 gigabytes. Stream one Netflix movie too many and you'll pay $10 per 50 gigabytes over that limit.
Since most of us don't really know what a megabyte or gigabyte really represents in terms of media consumption, The Washington Post put it into perspective: "150 to 250 GB equals about three to five hours of streaming high-definition Netflix video a day. It would be about eight to 14 hours a day of video viewed on Hulu."
Your strategy: You probably don't need one at this point, as most users won't be affected -- at least not yet. As the availability and quality of video available increases, though, more people could hit the caps. Also, analysts predict other carriers will impose limits, which could well affect more consumers.
Inadequate service. This cost isn't as tangible as a fee that shows up on your bill. But you pay in frustration and wasted time when your broadband connection doesn't deliver the speeds you were promised or suffers frequent breakdowns.
The FCC recently released the first nationwide review of residential broadband service. Its less-than-surprising conclusion: Some technologies, and some Internet providers, offer much better service than others.
In terms of technology, fiber-to-the-home services, like Verizon Fios, delivered 114% of advertised speeds, while cable-based services delivered 93%, and DSL poked along at 82%.
Some cable and DSL companies are still piling too many customers onto their networks, dramatically slowing speeds at peak times. Of the major providers, Cablevision scored the worst at delivering consistent service through peak demand times and at one point delivered only half the advertised speeds during the FCC's test.
At the other end of the scale, Verizon Fios consistently delivered the best service. Comcast scored well, while Time Warner Cable, Insight and CenturyLink ranked in the middle.
Your strategy: The FCC recommends matching your broadband subscription to your actual use. For example, if all you need is basic Web browsing, email and VoIP (digital phone) service, just about any broadband provider will do. You should shop on price and resist efforts to sell you faster tiers of service.
If you want to stream videos, you'll benefit from the consistently faster service provided by fiber and cable broadband.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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