Survey: Fiber-optic providers leading choices for Internet, TV, and telephone service

JANUARY 5, 2010 -- Verizon FiOS and AT&T U-verse receive the top scores overall; the February report from Consumer Reports also features ratings of service bundling.

JANUARY 5, 2010 -- Fiber-optic service providers for Internet, TV, and phone services scored tops overall in Consumer Reports' latest survey of telecom services. Verizon FiOS and AT&T U-verse, whose networks are based on fiber optics, received top scores for Internet and TV service and were among the better phone providers. Results of Consumer Reports' survey of some 69,000 reader experiences with telecom services are featured in the magazine's February issue.

Although coverage areas are increasing, Verizon FiOS and AT&T U-verse are not available everywhere and many consumers must consider other options for Internet, phone, and TV services. The article also includes individual ratings of these three services, which are typically bundled, from various providers.

In areas where telco-delivered service is not available, a highly-rated cable company is the next-best choice for many households. Consumers may not have an option when choosing a cable provider because a majority of homes only have one cable company available in their area. According to Consumer Reports' survey, better cable companies include Wow, Insight, and Bright House, which although small, received scores that rivaled those of the fiber companies and are fine alternatives in areas that they are available.

Consumer Reports' survey also found that satellite TV had strong points. While DirecTV and Dish Network scored below fiber and the best cable services for TV service overall, they were on par with those top providers for channel selection and picture and sound quality.

The survey found that bundling Internet, TV, and phone service has many satisfied customers. Overall, 85% of readers who get all three services from one provider said they would probably or definitely bundle telecom services with the same company. And bundling has its advantages -- triple-play bundles can help maximize savings as low rates may be guaranteed for a longer period of time and extras, such as free installation. However, consumers can likely take advantage of providers' promotional rates even if they buy just one or two of the services. Bundling also allows for integrated services such as the display of caller's phone numbers on the TV screen.

However, bundles still come with snags, as providers accustomed to offering single services grapple with supporting a group of them. About 60% of those surveyed by Consumer Reports said they had at least one problem with their bundled service. Billing issues led the pack -- notably bills that were higher than expected due to extra taxes and fees or bills that were hard to understand.

When a bundle's promotional-price period is about to expire, consumers should renegotiate with their current carrier. Many readers of Consumer Reports' Electronics blog reported success in doing so. Switching carriers is disruptive, but consider doing so if the current provider won't match offers that others are providing.

Overall there were fewer problems with bundling for cable companies, perhaps because cable has been offering bundles longer. Despite the possible drawbacks of bundling, Consumer Reports recommends consumers opt for a bundle if it offers the desired services at a price that is attractive.

Cable bundles are the easiest to find as most neighborhoods have at least one service provider. Consumer Reports estimates that about one in four households can now get fiber-optic service, though the percentage in suburban areas and networks continue to grow. Being wired for fiber doesn't ensure availability of all services via the technology, at least not yet. For example, some bundles still package fiber phone and Internet with satellite TV. But choosing fiber may expand options for consumers as a growing number of bundles from Verizon and AT&T include the option to add cell-phone service too.

More than 20% of U.S. households have dropped home phone service entirely and rely solely on their cell phones. Consumers considering doing so should make sure that they can receive service from their cell carrier in at least one location in their home and are comfortable with the 911 limitations of cellular because in some places, 911 operators cannot locate a caller unless they provide them with their location.

Not ready to cut the cord? There are other voice-over-Internet (VoIP) options aside from those offered by major telecom providers. Vonage and Skype were among the highest-scoring phone service providers in Consumer Reports' ratings and were noted for their value. Another low-cost option is Magic Jack, a $40 device that allows consumers to make calls from their computer for a flat fee of $20 per year.

The complete report also features information to help consumers choose a service that suits their needs and a guide to negotiating for the best price on telecom services. Ratings are available in the February 2010 issue of Consumer Reports.

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