Required Modem--Extra 16.3% - 32.5% Per Month?

[virtualmike]

Most people have no choice when they only have one telco, one satellite, and one cable company in their area instead of true competition. That's why they continue using these providers. And if you're a provider that basically has no competitors in terms of price, you can dictate where you can gouge your customers--by tiering serivce, bandwidth caps, charging extra for internet-only service, nickle and dime them.

I was thinking at the more micro level regarding the features. Look at all the included features on a Fusion voice line. While I really appreciate (and use!) Caller-ID, Call Waiting, 3-way calling (just to name a few), the cost to obtain those features on an AT&T line is almost equal to the voice "half" of a Fusion line.

If people didn't subscribe to the services at the current price, AT&T and the other ILECs would cut the prices to stimulate demand. Since the prices continue to rise, it would appear the demand is already sufficiently high.

Even more ironic is watching AT&T increase the cost of a landline, even as more people are dropping them in favor of using only a cell phone.

[Ben]

If we embed the cost of the equipment into the price of service, various taxes attach, which drives up overall cost for customers. This is one of the reasons that all the major service providers now separate the cost of equipment as a monthly fee.

You embed unwanted voice service in Fusion, which attaches $10+ in taxes.

Fusion is a "one size fits many" solution, and it won't always be the ideal fit for every potential customer. But for those who find it's features (including voice, free international calls, website and domain name, usenet and shell, etc) useful, it's an astounding value.

Why not make voice and the equipment rental optional to make it an ideal fit for more people?

[whereami]

Here's what I don't get about it: Why is Fusion continued to be advertised as $40/mo, when it is really $46.50/mo?

I understand that if you included the equipment cost in the price of the service instead of as a rental then taxes would attach to that amount. But you are already breaking out that $40 on the bill into $20 for phone and $20 for internet. So since the true cost which Sonic.net has control over (ie, excluding taxes) is $46.50/mo, stop telling us that Fusion costs $40/mo.

[jeffg1]

Here's what I don't get about it: Why is Fusion continued to be advertised as $40/mo, when it is really $46.50/mo?

Dane says that he needs to resort to deception (maintain "advertised pricing parity" with supposedly deceptive competitors) to compete. This is Sonic 2.0, and we can only hope that compromisimg principles has not become just another business practice.

[Guest]

At the entry level was 1.5Mbps standalone service, without voice, for $35. We couldn't cover costs at that rate, so we added voice (which has virtually no cost for us) and increased the speed to the full uncapped rate, and set the price at $39.95.
[...]
This is fundamentally why there is only one product. The cost of delivering service is the loop and the network equipment - features are basically without cost, so we include them all.

Voice may carry no extra cost to Sonic but it costs your customers an extra $10 in taxes and fees. So why not charge $40, but make voice an optional service at no charge except for fees and taxes? Could it have something to do with the fact that the largest of those fees, the so-called "Federal Subscriber Line Charge Fee", actually goes to Sonic and isn't a government-mandated fee or tax at all? (http://www.fcc.gov/encyclopedia/faqs-telephone#slc) Thus by requiring voice service as a part of Fusion, Sonic is collecting an additional $6.50 but passing it off under fees-and-taxes. (Note: $6.50 is the maximum allowed by the FCC, but even AT&T only charges $4.40)

[flacey8]

i think $6.5/month is A LOT. This would make me think twice before signing up for Sonic because this would be pushing me to pay close to $60/month. i think a one time fee is probably more reasonable, but then i understand the business side of this.

1) you want a continuing stream of income
2) you want to streamline support
3) you think this would provide better service to customers and a better user experience

All these are great, but I think the $6.5 just scares people away. Think of comcast lower tier internet (which is still quite fast) cost about $45/month (for those who doesn't need voice this is great and less expensive than Fusion). when i tell my friends that i pay $5x.xx for DSL and voice, they laugh at me. in the past, i would defend that i really like Sonic's service and i get voice (of course they would say, who needs voice!!!?). Now, with this MANDATORY fee, i m must lesser of a fan of Sonic.

If people continue to to sign up for Fusion, of course you will continue to impose the $6.5. Or maybe you just don't want so many customers so you impose this mandatory fee.

[cataha]

I have to disagree with you on a Comcast part
Yes they are much faster
But the internet usage CAPs will overpower Sonic no limit on internet usage (just google for people been banned from Comcast for overlimit usage, ATT started doing the samething exact thing with on exemption that they do charge 10-40$ for over the limit)

[dane]

AT&T also charges a modem fee, $6.00/mo for their U-verse product. Comcast charges $7.00, but does let customers opt out. So, equipment fees are a typical part of the make-up of these products today.

[flacey8]

I have to disagree with you on a Comcast part
Yes they are much faster
But the internet usage CAPs will overpower Sonic no limit on internet usage (just google for people been banned from Comcast for overlimit usage, ATT started doing the samething exact thing with on exemption that they do charge 10-40$ for over the limit)

Yes, if you are one of those that's hitting the limits, then you SHOULD pay the extra $6.5/month.

Dane - like you say about comcast, the key is a choice to opt-out.

[dane]

I have to disagree with you on a Comcast part
Yes they are much faster
But the internet usage CAPs will overpower Sonic no limit on internet usage (just google for people been banned from Comcast for overlimit usage, ATT started doing the samething exact thing with on exemption that they do charge 10-40$ for over the limit)

Yes, if you are one of those that's hitting the limits, then you SHOULD pay the extra $6.5/month.

Dane - like you say about comcast, the key is a choice to opt-out.

I'd guess you'll see less and less options. AT&T for example has a mandatory equipment fee, and they are a primary competitor in our market. Frontier also does; $7, though they do not operate in our region.