Internet providers are not your friends

I know that Internet providers are not my friends, but I forget. I get taken in by the ads letting me know they are there to make my life easier and more enjoyable. They are there to help my kids learn.

I have two Internet accounts – both from the same company. One account allows access in Minneapolis in the Minneapolis metro area and the other in northern Wisconsin. I will say up front that I am lucky to be able to split my retirement time between two locations and to afford two Internet accounts. I do feel lucky. This is not the issue. My Wisconsin place is located in one of the poorest counties in Wisconsin and many of my neighbors with kids depend on the same Internet access I have if they can afford access at all.

My Minneapolis account is 20 Mbps. My Wisconsin account costs about half again as much and is far slower. Unless you experienced the Internet from the days of the acoustic modem, it will likely be difficult to understand just how slow slow is. I can watch the individual components of a web page load. I cannot teach from here because the upload speed will not support a video signal. Cindy and I have become dependent on online services. I have to be careful when working because the online service may time out without my knowing this has happened. Work I assumed has been saved may not be saved.

Every once in a while, we become convinced that our Internet connection must be having difficulty and we call the provider. Sometimes there is a problem and sometimes there is a fix. Sometimes there is no problem and we are reminded just how slow our connection is. Today was one of those days. We were asked to run a speed check and we found that our connection speed was 1.53. It turns out that this is actually faster than we pay for. Our plan (at $66 per month) is 1.51.

Now, this might be the end of the story, but this would not be in keeping with my title. I understand enough of the reality of Internet access to know that digital connections at a distance in rural areas offer special problems and are more expensive because of the lack of subscribers. Fair enough. However, when making the call to the provider, Cindy happened to ask if any new plans were available that offered better bandwidth (we have had the present plan for three years).

It turns out that things have improved. In addition to the 1.51 plan, there are also now 10 and 15 Mbps plans. Great. The 15 Mpbs play costs more than 10 Mpbs plan and requires that you pay for new equipment. Here is the thing that is weird. Both plans, even with the cost of the new equipment, are less expensive than our present plan.

How is this possible? It might make some sense that we would not want to purchase new equipment (although the annual cost would be less). Why, if the cost of the 10 Mpbs plan was less than what we were presently paying for 1.5, would a company not simply flip the switch to give you better bandwidth even at the same higher price?

Here are a couple of take aways:

Do not assume your provider will pass new opportunities on to you. There is evidently no obligation  your provider will inform you of new opportunities at lower prices. The only logic that applies here is the logic of the provider making more money at a lower investment. You will have to ask.

The next time you hear the argument that competition will take care of companies doing the right thing and the government needs to stay away from regulation, take such claims with a grain of salt. You cannot assume that competition actually exists and you certainly cannot assume that companies operate according to anything but a profit motive.