I was snookered the other day by a Verizon FIOS flyer touting a $79 combo deal.  After cutting through the facade, I realized that if I wanted a similar set of services with Verizon compared to my existing Comcast offerings, I’d be paying a hefty premium.  Even in the face of “better service” from Verizon, I couldn’t justify making the switch.  The switchover costs are probably much more expensive than you think – here’s why:

It started with the initial flyer with FIOS splashed all over it.  I recalled being offered a $99 triple play from Verizon a few months ago.  At that time, I had opted not to switch since the costs didn’t justify it, they couldn’t port my number, and I was able to easily save 44% on my Comcast Bill with a simple chat session .  Well, when I saw $79, I figured, “Hey, they’re really looking to court new customers now, let me check this out!”.  Well, the fine print actually read that this was ONLY for “FIOS TVand phone” – internet was extra.  So, this deal was no better than prior offers – actually, worse.  However, since I saw this as an opportune blog post, I let the customer service rep elaborate on just what it would cost to get an equivalent package.

Current Comcast Package:

• Triple Play Bundle: Phone, Internet, cable
• Phone and Internet are basic/standard
• Cable – in addition to the typical several hundred channels, we have the HBO, Showtime and Starz packages.  These come free based on the deal I worked out with Comcast when I threatened to leave for FIOS previously
• HD Package/HD-DVR
• No additional boxes needed, unlimited TVs (we have 3: kitchen, family room, master BR)

Comcast Final Cost Before Taxes:  $110

Verizon Requirements to Duplicate My Current Comcast Package:

• Phone/FIOS basic – cost $79.99
• Additional for Internet – cost $40.00 (Full Triple Play Starter is $119.99)
• HD DVR – cost 15.99
• Box for Each and Every TV – cost $3.99 ea x 2 = $8 [note: many households have more than one TV]
• Premium channel Package (equiv HBA, Show, Starz) – cost $25 [note: not everyone watches premium channels]
• 1 time Signup Fee – cost $49.99 *excluded from analysis as a one-time cost
• Free gift card of some sort * also excluded from analysis as a one-time cost

Verizon Final Monthly Cost Before Taxes (excluding one-time fees/gift cards): $169

*Note that this was an introductory year offering only – I’ve heard that after the first year, Verizon jacks your rate by at least $10/month.  It’s business and they’re viewed as the better game in town, why wouldn’t they?  But, consider this as a future cost as well.  Greater increases than your existing service provider who’s working harder to retain you.

*Verizon’s cost is net of taxes as well.  Since they wouldn’t provide estimated taxes over the phone (they don’t want you to know your additional tax liability until you’re already a customer and recieve your first bill.  It wouldn’t be rocket science to quote you what your neighbor’s bill says for equivalent offerings), I compared both on a pre-tax basis assuming the taxes are roughly equivalent between the two.

So, on an annual basis, you’re going to pay $59*12= $708 more for Verizon service over Comcast.  Of course, I’m using a reduced Comcast cost basis, but as I outlined previously, anyone being offered both services in the same area should be able to utilize the same tactics I did to win an immediate 15-20% reduction in your bill since Comcast fears losing more customers to Verizon.  I like to look at investments and expenses over multiyear periods, usually 5 or 10.

Conservatively, over a 5 year basis, you’re paying over $3500 more to use Verizon than Comcast.

What do you get?

• Verizon claims their download speeds are faster.  This isn’t really a big deal to me; we’re nowhere near watching all content through the internet yet (TVs aren’t going away any time soon) and I’m not a master internet pirate uploader.  Frankly, I don’t think people surfing around, shopping here and there or doing a blog post would notice a performance difference between the two.
• HD Quality – I’ve seen claims that FIOS offers a better HD picture than Comcast HD as well.  Again, I haven’t noticed the difference between houses that have different services on similar HD TVs and I don’t waste away my weekends watching every football game played around the country – it’s just not that important to me.  The HD quality through Comcast seems sufficient to me.
• Comcast had greater On-Demand offerings at last check.  Perhaps Verizon has improved recently, but that was my last data point when I last considered.

What are your thoughts?  Did I miss anything in my analysis?  Is it worth the extra money?

©2010 Darwin's Finance. All Rights Reserved.

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3. How I Saved 44% on my Comcast Bill-Chat Transcript ($1104 per Year)
4. Weekend Reading – Balloon Boy Edition

It’s only fitting that I’m writing this post from my iPhone so it will be a bit shorter than normal. But I wanted to both demonstrate the utility my new iPhone has brought me as well as do a quick review of how it has changed my efficiency and flexibility as a blogger, investor and everyday web surfer.

A few weeks ago, my son killed my cell phone with a juice box. While I was initially frustrated by the 2nd major expense he brought us following a toilet/toy combo gone awry, it was actually an opportune time to destroy my phone if one existed. The new 3GS had just launched and I’d been toying with the idea of getting either a blackberry or iPhone. He just expedited the decision for me a bit.

Without going through every spec and new feature, as there are several blogs out there doing that better than I can, I’ll just share a few examples of what it’s done for me given my personal situation.

This week alone, I’ve been on vacation with the family and with no computer access I’d normally be completely disconnected from email, the blog and the Internet. I know, a real vacation probably should be devoid of such connectivity. But in my case, I’m really just checking stuff out here and there while things are slow. Right now for instance, it’s nap time for everyone else and I’m just hanging out so I figured I’d try and do a post. Earlier in the day I closed an ad deal and last night while laying in bed I accepted and replied to a few comments on the blogs. Had I waited a full week, I may have missed out on some blog income and I’d have a huge queue of disconnected comments to approve when I got back.

While I’m not a hardcore day trader by any means, I do conduct some trades here and there. At the moment, I have some open positions and given the recent market action, I wanted to lock in some gains. Without having to go through the hassle of calling up my discount broker, getting quotes and paying a premium for phone-executed trades, I just did a few quick ones through the phone.

The new model comes with a surprisingly impressive camera and video camera as well. Lugging around a digital camera and video camera everywhere just isn’t practical but you almost always have a cell phone in the pocket. Just today, my son caught his first catfish and he was so excited. He was yelling to take a picture. I just whipped out the iPhone and shot some video as he reeled it in and took some pics. An awesome feature I hadn’t even really thought about was how easy it is to just forward pictures and videos through email by simply hitting the forward button on a picture. Back in the day I never even got around to downloading pictures onto the computer in real time…and video? Forget it. Now I can just send picture and video files instantly.

I’ve been using it as a real time gps device as it actually works better than my out of date garmin from a few years ago. To be able to just go to the map function and google a store or name and then map it is incredibly convenient.

On top of all the built in features, there are tons of apps ranging from gas buddy to financial calculators to pedometers. I can’t say I’ve taken full advantage of everything Apple has to offer just yet but I will say I now “get it” why all these enthusiasts are so nuts about Apple products.

Disclosure: I’ve been long AAPL shares since 95 and have been selling covered calls as outlined here in Apple Covered Call Strategy

©2010 Darwin's Finance. All Rights Reserved.

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