Bundled service isn’t right for everyone. Is it right for you?
Dear Consumer Advisor,
What is bundled service, and why is AT&T constantly sending me glossy advertisements for it? Do I have to buy a package of services from them, and will it be cheaper if I do?
Signed, Happily Unbundled
The vast majority of us in California have AT&T or Verizon as our local phone company. And lately these two giants have been promoting their bundles more than ever. So what is bundled service? Is it really more convenient, and does it really save us money?
To decide what’s best for you, there are a few basic things you need to know. There are four types of landline calls: local, regional or local toll, domestic long-distance, and international long-distance. Area codes do not determine whether a call is local or regional toll. Local calls are within 12 miles of your area.
For rural customers, anything beyond 12 miles is local toll. For metropolitan areas, 13-16 miles is the ‘ZUM’ area. Calls in the ZUM area can be billed as local calls; that is, customers in these metropolitan areas can get their local calling zone extended with a ZUM plan. For AT&T customers, this is the Metro Plan. Verizon customers must check with the company to see if ZUM calling is available in their area.
You have the option to have all four types of landline calls handled by different companies. Many consumers use the same phone company for regional toll and long distance calls, even if that company is not their local phone service provider.
Now that we’ve got that straight, let’s talk about bundles. Bundles come in two types. You can have a bundle of local, local toll, and long distance service from one company (like Verizon’s Freedom Value plan), or you can expand that to have a bundle of phone service, Internet, and TV from one company, like AT&T’s Triple Pack and Quad Pack. (AT&T and Verizon are not offering video services everywhere in California yet but will probably do so in your neighborhood soon.) Bundling is touted as convenient because the customer only has to pay one bill. And bundling can provide savings for some customers.
However, there are downsides to bundling. Having everything on one bill can make it hard for consumers to decipher how much they are paying for individual services. As we all know, billing formats are not user-friendly. Having everything on one bill can actually be inconvenient when billing disputes arise. Many TURN members have experienced being shuffled back and forth through different departments trying to get information on charges in their consolidated bill.
Furthermore, bundles often include features customers don’t want. AT&T recently raised prices on many popular calling features to encourage customers with “stand-alone” service to switch to bundles. Customers who were getting features like Caller ID on a stand-alone basis got a nasty surprise last month when they saw the prices for individual services rise by as much as 57%. Then, just as AT&T had urged, they had to consider getting a bundle simply to avoid paying a bundle!
Companies like getting customers into bundles because it means they are more likely to keep that customer. Studies have confirmed that bundled customers tend to stick with their carrier even when problems arise. But that doesn’t mean bundles are right for everyone. Like you, I have been happily unbundled for years!
Address your consumer questions to TURN at 1-800-355-TURN (8876) or firstname.lastname@example.org.
$AViNGS TiP If you do decide to bundle your local, local toll and long distance through your local phone company, be careful about what plan you choose. Take note of your calling patterns (how many minutes spent on local toll and long distance calls) or request information on your calling patterns from your phone company. Then pick two or three plans to try out in case your first choice doesn’t save you money like you expected. Bundles that include cell or Internet service may also include early termination fees, so choose carefully and read the fine print.