Bundled Services: Bargain Or Nightmare?

Bundled Services: Bargain Or Nightmare?

Having telephone, cable TV, and high-speed Internet service provided by one company and all on one lower monthly bill may sound convenient, but such offers may not be as great as they appear. Any time you buy multiple services from one provider, there’s some risk, says James R. Hood, founder of the consumer advocacy Website ConsumerAffairs.com.

You basically have two types of bundled communications services to choose from: 1) package deals offered by cable companies, such as Comcast, Time Warner Cable, and Charter Communications Inc.; and 2) package deals offered by telephone carriers, namely AT&T Inc., Verizon Communications Inc., and Qwest. If you order through a phone company your bundle will likely include cellular service plus a landline phone, DSL Internet, and satellite TV. If you order through a cable provider, you will get cable TV, cable Internet, and digital phone service.

Companies are luring consumers with advertisements for these services at rock-bottom prices. Package deals from telephone carriers range from $125 to $145 a month, while most cable companies have deals for under $100 (that’s without wireless service). However, “the most obvious problem is when you put all your eggs in one basket, you’re a lot more vulnerable to service problems,” says Hood. For example, if the carrier or service provider experiences a power outage, you’re not just stuck making do without cable and Internet access; your phone service may be down, too.

Also worth considering is the “experience factor,” or service reliability. A company that has a long-standing history and solid track record for providing dependable service in its industry may have trouble navigating in uncharted territory. As a result, there may be glitches with a service that is relatively new. When Hood switched his phone service to a cable provider, his telephone was out for a week. “The same guy kept coming to fix it and each time he was puzzled because he thought he had fixed it the last time,” he says.

The bargain pricing deserves a second look as well. These deals are often limited offers, so you have to be sure that any savings will be actual savings, says Bob Williams, director of HearUsNow.org, a project of Consumers Union, which advocates affordable telephone, cable, and Internet service. “A lot of folks, when they reach the end of the introductory offer, are having sticker shock in what they have to pay for their service,” he says.

Think you can just go with another company once the promotional pricing period is over? Think again. Some companies will penalize you for switching again. “A lot of these plans require you to lock in the service for a certain period of time and have hefty fees if you change your mind,” says Williams. “So if you find a better deal, it might cost you to take advantage of it.”

Despite such weak spots, for some, the bundled packages may be worthwhile. After all, you can save money in some cases by having one consolidated bill. And if you have a cell phone or