| Dear Ivan: 74 Does Not Equal 102 |
| Written by Dave Burstein |
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Verizon DSL and FIOS sales have been much too low, so cutting prices is under consideration. They probably won't do it, but Ivan explained to me a while back "We have to get cable out of the house." FIOS is better than anything the cable guys have, including DOCSIS 3.0, but it's proving hard to get people to switch. Outside of FIOS territory, cable is clobbering them. The last quarter was an improvement, but the two quarters before were among the worst suffered by any broadband company in the last decade. AT&T has a similar problem. So I looked at the details of this offer, which the website made very hard to find. Update 2/18 Checking something else, I found another intentionally deceptive web page with blazing prices in bright red that fooled me into thinking Verizon was cutting prices 10% on a two year contract. A second close look revealed "Offers available to new Verizon High Speed Internet residential customers" in very small grey type. Even more inappropriate, many poor people apparently cannot get that price. The site specifically required a credit card. There appeared to be no way to use a debit card or even to offer a deposit. Things like that are direct sabotage of government efforts to extend broadband. The poor should not pay more. The British, French and many other governments would take their carriers to court if their advertising were as deceptive as the typical U.S. carrier. Jon Leibowitz, now in charge at the trade commission, has talked about this for years. Republican Kevin Martin has spoken strongly about false advertising since 2003. With the Democrats in power, Leibowitz can and should do something. Jules at the FCC also has authority; between them they should be able craft some sensible rules. Generally, U.S. telcos respect their duopoly and don't cut prices - TV package prices have gone up since AT&T and Verizon jumped in. Verizon and AT&T generally keep prices very high on broadband and mobile, using giveaways and short term promotions to bring in customers. The dismal last few quarters could change that, but it would be a surprise. Jon, what's the downside of making a speech after you've been confirmed with a few basic principles? For example:
https://www22.verizon.com/ForYourHome/GoFlow/NewConnect/VOICECONFIG.ASPX
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The phony price in this Verizon ad can be called a "headline price" or more directly "bait and switch." The ad said $74, the price turned out to be $102 - or more. Everyone hates to discover that the price you pay is very different than the price you saw in the ad, but this deception is approved by the top of AT
&T and Verizon. Randall Stephenson, now AT&T CEO, told wall street "don't look at our headline price. That's just to draw them in. Look at the average revenue per user (ARPU)."
