Dumping ISP May Cost Customers $150

Dumpling$9 writes with a link to an article that seems to speak volumes about the modern consumer relationship with service providers. IBT reports on the outrageous fees facing users who drop their internet service contracts before they are up. "Pricing broadband competition can be difficult. Broadband is rarely priced as a stand-alone service. Whether offered by a telephone company or a cable company, it is usually bundled with other services such as voice and video. The advantage to the customer is easier billing and usually a price break. But the down side is if they drop one of the services to pursue a better deal elsewhere, they lose the discount ... It remains to be seen whether penalties for Internet customers will cut down on churn. Consumers Union in its annual cell phone survey found that nearly half of all cell phone subscribers who were considering switching carriers were deterred from doing so because of early termination penalties."

Comments

Yeah...sucks

[DogDude]

Yeah...sucks. This is a "duh" story. Of course, you don't have to sign a contract if you don't want to, and just pay more in the short term. This hasn't been news since Ma Bell was broken up.

Re:Yeah...sucks

[hazem]

This creditor is most likely a credit card company and I hardly doubt they want to discourage people from using the phone system.

Rather, they know that the people most likely to need the phone service are poor people without computers who have few other options. These people are more likely to be living hand-to-mouth and not have the money to make a payment until close to when their bill is due. These are the easiest people to screw over while they're down... either pay $15 to post an on-time payment, or send it by mail and pay a $30 late fee (oh yeah, and your new 39.9% interest rate).

They don't charge $15 to recoup fees. They do it because it will extract the most money possible from people who have the fewest options.

This is *news?*

[anomaly]

So, in summary, if you sign a contract which has a clause which requires a penalty for early termination, service providers charge you that penalty. Duh!

The business is very competitive, and there are lots of incentives to switch carriers. If you're not renegotiating with your cellular and broadband carriers when the contract comes close to ending, you're unwise.

I don't excuse the size of the fees, but they will be disclosed if you ask the terms of the agreement. Don't want to pay a fee? Don't sign up, or don't break the agreement.

Re:This is *news?*

[Grishnakh]

The business is very competitive, and there are lots of incentives to switch carriers. If you're not renegotiating with your cellular and broadband carriers when the contract comes close to ending, you're unwise.

I don't know about your country, but here in the US, there is very little competition for broadband. (Cellular is another story.) Most people have only two realistic options: cable or DSL, each from its respective monopoly. With each one, there's usually some discount for bundling, though the usefulness of bundling DSL is debatable since so many people have abandoned landlines in the past decade.

So if you get sick of your cable internet, your only option is probably DSL from your local phone monopoly. Here in the southwest, that means Qwest, with MSN as your ISP (yuk). It is possible to get a different ISP, but that'll cost you more money, probably more than your service with cable internet was. The way I see it, DSP is only useful if 1) you're really cheap, and are willing to put up with 256k and MSN just to save $10/month, or 2) you want to run your own server(s) at home and are willing to pay extra for that privelege (this is what those higher-price DSL ISPs have over everything else). For everyone else, there's cable.

Anyway, two or three choices isn't what I'd call "very competitive".

And I've never seen any option for "renegotiating" with any of these options. They're all flat-rate, and cost the same for everyone. It's not like cellular with all the wacky service plans, pricing schemes, and promotions.

Re:This is *news?*

[alisson]

Indeed. Utilities generally have no choice whatsoever. So, say you live in my area, and you want cable? Your choices are:
1) Comcast

Say you want land-line phone service? Your choices are:
1) Qwest

Say you want natural gas? Your choices are:
1) Center-point

Want electricity? Oh, gobs of choices here:
1) Xcel

Is this legal? Perfectly! Does it create competition? Not in any possible way. Does it always screw the customer, every time? Naturally. The US has essentially decided that as long as your monopoly only covers a county or two, it's not a monopoly. Because of course, no one's forcing me to live here. But if I choose to? My utility companies are forced on me.

use file-sharing against them

[solitarian]

It's easy to get your ISP to drop you.
download a lot of non-copyrighted material (you don't want to get in trouble) off of a file-sharing network. they will get rid of you and you won't be responsible for the disconnect charge.
easy.