Make Them Fear You, Cut the Cord

Monthly bills for cable television, home phone, and cellular service can easily add up to nearly $200 these days. You’re also paying for Internet on top of it, right? Yikes! If you’re sick of paying so much for so little – and brave enough to take the leap – you can choose fantastic entertainment and communication options at a fraction of the cost.

In early 2009 I dropped the land line, fired my old cell provider, and canceled cable TV. I’ve saved thousands of dollars already, and feel stupid that I waited so long. My entertainment choices are vast and growing, and I actually like my phone service better than before. Here’s an in-depth guide to my cord-cutting journey. I hope you’ll find that making the cut works for you, too.

Photo by Scott Swigart

Before You Begin, Know What You’re Getting Into

Cord cutting takes time, up-front investment, and flexibility. Also, cable and phone companies in the US are monopolies. They make a ton of money, and they use it to lobby for legislation that’s favorable to their interests. Now that people are are starting to ditch high prices and poor service for things like streaming online video, broadband providers have already started to cap bandwidth, preventing truly unlimited access to the options I’m detailing. I’ve never come close to my cap thus far, but the risk exists.

Although the number of cord cutters is small right now, I believe that it’s only going to grow. There’s a major conflict of interest when Internet providers also provide television and phone service, and someday they may increase restrictions to the point where these techniques become unworkable.

In general, I don’t recommend cord cutting if you…

  • Have an older TV (5+ years) – we need to connect the Internet to your TV, and so it needs to have the right connections in back
  • Live in a place with poor over-the-air television reception (or have no place to put an antenna, inside or out) – if you don’t care about live or local TV, this may not be as much of an issue, but it’ll take a lot more work to watch major network shows
  • Have slow/dialup Internet service – we’ll need high speeds to pull this off, but even basic DSL should be fine
  • Don’t use a cell phone or have poor reception at home – you absolutely must have some way to dial 911 in an emergency
  • Have to watch the latest and greatest shows as soon as they are released – popular shows are often delayed and you might even need to wait for it to be released on DVD (gasp!)
  • Are really into professional sports – many home games won’t be available, even if you pay for a season pass online
  • Get easily frustrated by technology – you’ll be configuring things, fiddling around to get things as you like, and dealing with the glitches and hiccups that often crop up with tech

 

Part One: Googlize Your Home Phone

Using Google Voice, you can get a free telephone number that rings both your cell phone and your home phone, gives you voicemail with email notifications and message transcriptions, and even offers free calls in the United States and Canada (at least until the end of 2011, after which there’s a chance we may get charged a penny or two per minute).

Plug your regular home phone into a little $45 box from Obihai that’s connected to Google Voice via the Internet (I use the OBi100), and you can use it to send and receive calls, get caller ID, and check voice mail just like you normally would.

Warning: Make sure that you have a cell phone that works at home if you go this route. 911 Emergency calls can’t be made with Google Voice, and if power gets cut or the Internet goes down, you’ll lose service.

Part Two: Torch That Contract Cell Phone

Non-contract cell phones are a phenomenal bargain. They use the same networks as the big three (Verizon, Sprint, and AT&T) and offer many excellent phones to choose from. I like having a smartphone, so I use Virgin Mobile USA to get unlimited data, email, and texting with 300 voice minutes per month for $25 (now $35).

Although I’m not the biggest fan of the company, primarily because of the atrocious customer service, I’m willing to deal with it because I get the features I want at an affordable cost. If you don’t care for the fancy stuff, I hear that Straight Talk service is decent and they have one of the best price points in the industry. Again, you’ll sacrifice some customer service, but I’ve had lousy service from the big three, too, and I’d rather pay less.

Keep in mind that you’ll need to pay full price for the phone up-front instead of subsidizing it with contracts. Do the math, and you’ll see that over time it’s more than worth it (see below). Consumer Reports has more advice on cutting your cell phone bill (also linked above) that’s definitely worth a look.

Part Three: Use the Internet and the Air for TV

To take advantage of the greatest number of options, you’ll need a TV that’s capable of connecting to newer equipment, and you’ll need a high-speed Internet connection. Specifically, look for one or more HDMI plugs on the back of your set, and opt for DSL or Cable Internet service.

Don’t pay high prices for HDMI or other audio-visual cables! Premium brands can cost as much as 15 times more than you should pay. I get most of my cables and adapters from Monoprice, and am astounded at how much cheaper it is for their perfectly good gear.

HD Over the Air

With nothing but a cheap antenna, chances are you can get plenty of HDTV programming right over the air. In fact, the quality is even better than you’d get with cable because the signal isn’t compressed to fit in with everything else they send.

In addition, with the recent switch from analog to digital television, terrestrial stations have started broadcasting multiple channels of content in addition to their usual programming. In my area, extra channels include things like local news and weather, sports, classic movies, sitcoms, and the arts.

Keep in mind that if you have an older TV that can’t decode digital television signals, you’ll need to purchase a converter box. Also, I live in a place that gets terrible reception, and find that on a few stations the weather and other factors can sometimes affect what I’m able to watch. The higher up you put your antenna, the better, because with digital TV reception, it’s usually all or nothing.

If you’re OK with watching these programs when they air, all you’ll need to do is connect the antenna to your television and tune in at the right times. I prefer to record my shows for watching later (and skipping commercials), however, so I use a Home Theater PC (HTPC) running Windows 7 as my DVR.

For a less flexible but significantly easier, all-in-one option, consider a Tivo box. It’ll record over-the-air shows and provide Internet streaming video, too. Plan to add an extra $20 per month to whatever other plans you choose.

If I were to get an HTPC today, I’d look at something like the $400 Asus EeeBox PC EB1021, perhaps adding a cheap external hard drive if I found myself running out of space. The computer connects to an antenna via an HD HomeRun network tuner ($100), and uses the impressive Windows Media Center that comes bundled with Windows to get programming information and manage video organization, recording and playback, along with an optional Logitech Harmony Remote ($70) to make it easy to use from the couch.

Stream Video Online

When you connect the Internet to your TV, a whole new world opens up. Streaming services like Netflix and Hulu Plus ($8 per month each) make vast libraries of movies and television shows available for instant viewing. Amazon.com offers free streaming to their Prime customers, and pay-per-view access to many of the latest movies and shows are available through Amazon.com, iTunes, and Vudu. Most major networks also have free streaming video on their web sites for various programs, although this varies.

Some programming simply isn’t available online (legally), or is limited to just a few episodes to get you “hooked”. This is especially true for premium cable shows on HBO and Showtime. As a result, you may want to consider just one streaming service coupled with DVD rentals from Redbox or Netflix (for another $8). Also, due to complicated licensing agreements, things constantly appear and disappear within streaming video catalogs. This annoying churn seems to have decreased over time, however, and plenty of stuff remains accessible for long periods.

To connect the Internet with your TV, people in the market for a new set have it easiest. Many flat-panel televisions now integrate streaming video from the major players right within the TV itself. Look for logos that indicate this capability, as each manufacturer seems to come up with a different name for this feature.

If you have an HTPC, you’re also golden. Windows Media Center has Netflix embedded within it, and it’s easy to install Hulu Plus as an add-on. Boxee is another great program to collect and organize web-based video programming, and any modern web browser can access Amazon’s On-Demand video, Vudu’s premium movies, or any video web site like YouTube or DailyMotion.

In addition to the Tivo described above, which adds the ability to record over-the-air programming to these streaming video services for an additional monthly cost, you can opt for an Internet streaming appliance that does all of the work for you. Right now I’m most impressed by the $70 Roku 2 HD. Just plug it into the Internet and your TV, and it takes care of the rest.

Breaking it Down

Let’s break down the numbers with a typical example, assuming you already have a television, and that your current monthly cable, home phone, and cell phone expenses average $150. Prices quoted are valid as of the article publishing date.

Initial Equipment
Obihai OBi100 for home phone:  $45
New Cell Phone with Contract-Free Carrier:  $100
Antenna (I use one from Antennas Direct):  $40
HDHomeRun Network TV Tuner:  $100
HTPC:  $400
Harmony Remote:  $70
Total Initial Investment:  $755

Monthly Charges
Cell Service:  $40
Netflix: $8
Hulu Plus or Netflix DVDs: $8
DVD/Streaming Video Rentals:  $4
Total:  $60

Total Monthly Savings:  $90
Months to Recoup Initial Investment:  8.39

Swap the HTPC/HDHomeRun/Harmony Remote configuration for a Tivo with lifetime updates (avoiding the monthly service charge), and the initial investment increases by $30. Either way, it pays for itself in three seasons. If you get four years out of the equipment (and it could last far longer), you’ll save $3,780.

You can go even cheaper if you stick with live over-the-air TV, get a device like the Roku HD 2, and stick to one streaming service. Then, we’re talking an initial investment of $255, a monthly fee of $48, a monthly savings of $102, and a four-year savings of more than $4,700 (taking just 2.5 months to recoup the initial investment).

Conclusion

If we’re careful to live within our means, it’s perfectly fine to indulge in luxuries like a full cable package, especially if it’s central to our downtime. Many of us, though, can no longer afford such outrageous prices for the lousy services these cable and phone monopolies provide. Thankfully we now have a choice, and can send an important message to these behemoths of government-mandated industry.

If you’re willing to be flexible and dare to cut that cord, you may share my experience that the sacrifice quickly becomes unnoticeable. The extra money in your pocket each month, however, will be quite noticeable, indeed.

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