Junk mail arrives at our house by the truckload it seems. And most of it goes right into the recycle bin. But every once in awhile something grabs my attention and the other day this advertisement from Verizon did just that:
If you're not appalled by this ad, let me explain why you should be. Verizon seems to be offering an incredible deal—super fast internet for only $20/mo., and what's more they're even guaranteeing that rate FOR LIFE! Seems too good to be true? Yeah. The only thing good about this deal is that they won't also steal your car and burn your house down.
The reason they can offer this price for LIFE is because they are offering high-speed internet at speeds so slow they're bordering on false advertising. They're guaranteeing download speeds of 768 kilobits per second (kb/s) which is pretty much bottom-of-the-barrel when it comes to high-speed internet. For the same price you could probably get speeds at least 5x and maybe as much as 10x what Verizon is offering. My service is 6Mb/s (1Mb = 1024kb) for which I pay under $30/mo.
For many people, 768k isn't terribly unusable, and Verizon will certainly deliver on their promise to provide such speeds. But the point is, their price is high (not quite rip-off territory, but awfully close) by today's standards, and with the pace that technology is advancing, it's clear that for every month Verizon charges you that $20, they are taking more and more of that as profit. Clearly they are banking on those who don't know that "high speed internet" is not a one-size-fits-all affair, which makes it slightly more aggravating.
And they'll be happy to continue ripping you off at the same price—until you die! A good analogy would be this: in 1990 you lease a 3-year old personal computer for $20/month for life. Seemed like an OK deal at the time, but now it's 2011 and you're stuck with a computer that doesn't even have internal storage—for $20/month.