Misleading marketing, or a Netflix moment?

[Guest]

This is an open letter to Dane

Dear Dane:

I heard about Sonic.net a couple of months ago and it sounded intriguing. Faster internet at a good price, good customer support, a relatively painless changeover. It looked like moving to from ATT to Fusion could be a good thing.

It took some time as I did some research, searched the web for info, read the forums here and finally figured it that it could be one of those rare things - a product that wasn't too good to be true. I decided to make the switch. I had done the price calculations, checked the distance to the CO, etc. It was just a matter of finding a good time to make the switch.

First week in July I call to pull the trigger, and ended up not doing it. It turns out things had changed, and not for the better. What had been a $40/month service (plus taxes) is now a $46.50/month service. That is because I now must rent a piece of hardware from you with no option of opting out or buying the hardware outright.

When I first looked, it appeared that there was a modem supplied with the service (possibly a special offer, as it seemed the cost of the modem was waived at that time - I could be mistaken). But now Instead of getting a new modem from you outright that I could just use to replace the old modem in my network, I must now rent (forever, I assume) a box that includes things I don't need as I have them already - namely a router with N+ wifi. In the first year of service I will pay more in rental fees than the cost of this box, paying for something I already have just to get something I need for your service.

In reading the forums it appears to me that it was very recently that you sold hardware outright, and had a couple of options for people's needs. I can understand that it is better to standardize hardware - it can reduce user error, make customer support more responsive and make troubleshooting more effective. I have no issue with that. And I can also understand that an all-in-one product may meet the needs of many of your new customers.

What I object to is being forced to rent a piece of hardware when I have no need of many of its' features. I object to paying many times more than the hardware is worth during the time I am a customer. I also object to marketing that claims a service is one monthly price, while requiring another monthly payment in order obtain that service. It may be good for splash ads, but I believe it is still misleading.

I have now hesitated to make the switch. ATT is overpriced for what one gets speedwise, but it has been very reliable for me for many years. And the price has not changed. Yes, Fusion will be cheaper even with the monthly rental fee, but only by a few bucks. Your price is now close to parity with standard ATT DSL and phone. And I have to wonder if there will be future "adjustments" that will also add to the price.

I'm not against a fair profit. I would be very willing to pay a fair price to buy hardware from you that meets your technical needs. It seems you have a good service that appeals to many people. If your product is a sustainable business model, then I wish you success and a good profit margin. Based on the posts on the forums, customers are clamoring for your service. I would like to be one of them.

But your new price structure gives me pause. I have to now decide if the effort to change carriers is worth it, for a possible increase in speed and service. It may still be so, but you have tipped the scale farther away from yes.

With all respect,

SAC

[Emily]

I couldn't have said it better than this poster. I came back to look at sonic again after a month or two and am shocked that you are forcing customers to pay $6.50/mo ($78 annually) to rent a piece of DSL equpiment. That sits wrong with me. I'll stay with slow, slow ATT until you come back to offering more hardware options.

[Aubrey]

I completely agree.

I am also considering Sonic, but that $6.50/mo rental cost is something that adds to the price of the service. I would much rather buy it outright and be done with it, because I will have paid for it several times over for the length of time I hope to stay with Sonic; or at least until it has to be replaced with something to handle Sonic.net fiber to my home.

I wouldn't use most of the features on the rented modem either. I have my top level gateway that has all settings for my network, including wireless, so that way if I switch ISPs (which I have), it is a simple matter of changing where the WAN cable is plugged.

Federal, state, and local taxes for telecom services are brutal. Then add the $6.50 on top of that, and I'm almost in $60/month territory. Anything you can do to lower the cost helps me justify the reason to change my service. I know you have no control over taxes, but you could reconsider your policy on the rental requirement so I can reduce my monthly cost. If you are trying to keep your advertised price low, why not say the service is just $1.95 a month, but the fine print will require the customer to rent a modem for $44.50/month? OK, that won't go over too well either. If you want the extra $6.50 a month of revenue on the service, you'll have to add that to the cost of the service to keep from infuriating potential customers.

When I was doing my research for alternatives to AT&T and Comcast, I really liked what I saw in Sonic.net. This required rental fee seems very out of character with the policies and attitude I have read about in your blogs and articles. This rental fee seems like a step backward.

[thulsa_doom]

There has also been a lively discussion of the rental program accompanying our new gear at http://corp.sonic.net/status/2012/06/28 ... equipment/, where our CEO has been addressing many of the points raised here.

[Guest]

Sonic is now following business practice of Comcast and AT&T?

[georgeharter]

First of all, current Sonic customers don't need to rent new equipment. Secondly, the total cost of $46.45/mo plus tax is still less than half the cost of AT&T's regular plans for equivalent service. I just added it up today. Although it's almost impossible to calculate the real rates of AT&T plans because of deceptive advertising, it's still probably north of $100 for Elite Internet and Home Phone with unlimited nationwide calling and all features. Of course, somewhat less if you are only planning on being on this planet for another 6-12 months. What are you people whining about??? Sonic could definitely improve customer service and important information to new users, but so could everyone else!

[dane]

But your new price structure gives me pause. I have to now decide if the effort to change carriers is worth it, for a possible increase in speed and service. It may still be so, but you have tipped the scale farther away from yes.

I certainly understand your concerns, and very much appreciate you sharing them here in a productive way.

Our move to equipment rental to new customers is bound to displease some potential new customers, and it remains to be seen if the benefits that we hope will manifest due to this change outweigh the obvious cost increase.

I am hopeful that outfitting our customers with better equipment than we've provided before will be good for both customers and for us, as it does come at a cost. We have seen some early indications that are positive, for example we got this email from a customer yesterday:

Folks,

A few days ago i called you up and signed up for your new Pace router for a
extra $6.50/month in the expectation that it would, as advertised, speed up
my connectivity and in the hope that it would finally solve the problem of
frequently dropped DSL connections that had plagued me for years and that
was the primary factor (in addition to your politics) driving my change to
you from AT&T last fall.

Well, i've been running your new router for four days now, and can report
that my rate of dropped connections has changed from many times a day to
zero, at least so far.

Thanks to everybody from Dane on down.

Your ecstatic customer,

Louis B,
San Francisco

The new Pace equipment has some tangible benefits, which I'm hopeful will reduce customer frustration and allow for delivery of a more reliable service overall.

If you were considering signing up but are now put off by new cost, it is very good for us to hear that here, and while it's disappointing to read a post that says this, it's better to hear it than for us to be ignorant. Thank you.

[Dave]

I was a happy Sonic.net customer at the place I lived some years back before a couple moves. The reputation for excellent customer service, value, and none of the crap pulled by other ISPs was well earned and lead me to recommend them to many people in the years since.

I've had my eye on the Fusion DSL service for awhile now, and when our AT&T uVerse modem died I figure it was a good time to switch since it is now available here. I have another compatible modem, but AT&T wouldn't activate it since it wasn't provided by them. Fortunately I knew that Sonic.net would function as long as it met the standards. I called up the sales number tonight to check on prices and times and was told that I could use my modem, but I would have to pay an equipment rental fee anyway.

What?? There must be some mistake! I am talking to Sonic.net? The service is $40 / month, right? That's what I saw advertised.

That's right.

But there's also a mandatory additional charge whether or not I use my own equipment? If it's part of the monthly price, and not optional, why isn't it advertised as such?

I decided not to order the service. I figured the sales person I spoke with must have been confused, so I came online to search for more details, and found this thread and the recent Blog post. This cannot be! I come to Sonic.net because I know there are no gimmicks, no games, just straightforward service. Don't throw away your sterling reputation this way. If your costs or margin are too low, raise your prices, that's fine. But don't become just another service provider that I cannot trust and must carefully scrutinize the fine print for gotchas to let me down. For now, I will stop recommending Sonic.net to my friends.

Please, please reconsider this change and return to providing honest excellent service for a transparent cost.

[Luc]

Misleading marketing and a brain dead Netflix decision. BTW I dumped Netflix on the last possible day, when the $9.99 stream and 1 at home ended. I don't plan on ever going back. Love how Netflix stock tanked, they deserve every penny lost.

Get rid of the complex CAPTCHA, they have easy to read ones. Have to enter unreadable text several times to post, that's BS.

Called today to switch two households from ATT to Sonic, but the new $6.50 per month extra fee for equipment is a deal breaker. The last time I called to do the same the $35 activation fee killed the deal. Now the $35 + $8.72 shipping + $6.50 equipment + taxes makes it too much. After the first month it's $57.50 a month. $39.95 my a*s, there is $17.55 in hidden fees. You guys are starting to act like ATT.

Why piss people off with disingenuous advertising. Be up front (front page) with your pricing and do away with this extra monthly cost that is hidden as an equipment fee. You rent us an $89. basic modem for $6.50 a month, whether or not we need it. Shame!!!

Everyone I have talked to likes their Sonic service. It's fast, reliable, no contracts, friendly customer service, why would anyone leave with all the pluses. So why gouge in perpetuity with this ridiculous equipment fee.

Sorry Sonic, I already have an internet provider bending me over, why should I switch to a new perpetrator.

Let me know when you change your bad ways and dump the mandatory hidden fees.

[email protected] aka ATT

[Guest]

I had seriously considered changing over to Sonic, went to reconsider today and found a new mandatory $6.50 month modem rental charge?! Sonic's service doesn't cost $39.95/mo as advertised. Really, tell it like it is: $46.50/mo plus taxes. Take the extra $6.50 month out of the small type and put it up there in the same large, red type face as the $39.95. Why mislead people deliberately with your font/type/graphic design choices?

Also: $78/yr ($6/50/mo) is a galling price to pay to lease a modem that should cost between $30-$50 to own.