The Rising Cost of At-Home Tech

By Peter Osnos

As we move closer to relying entirely on the Internet, the free information services of the past are being eliminated, extending the divide between the haves and have-nots

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A recent rundown we conducted on our monthly bills for communications, home entertainment and digital information was striking. The bill for Cablevision in Connecticut was $232.64, covering cable (including HBO and Showtime) and broadband for our PCs. Our BlackBerrys were another $84.18 and $81.28. The two land lines were a relative bargain at $32.11 and $57.16. The best deal was a phone card for overseas calls (mainly to Beijing) at two cents a minute.

Ironically, it is many impoverished countries that are using cheap cell phone technology to close the gap with developed nations.

Now, there are extenuating circumstances. As a consultant, my wife often works from a home office, and I do a lot of work (this piece, for example) at home also. Except for the cable bill, however, it is hard to separate the purely business from the personal calls and emails in what has become for so many of us a 24/7 rhythm of interaction with friends, families and colleagues. But add it all up and home technology has become a significant item in the household budget. As recently as the mid-1990s, dial-up AOL was about $20, and we probably had basic cable, but television was essentially still free, and cell phones were just for calls and, with a two-year contract, the devices mainly were provided gratis.

All that added technology has also put pressure on electricity bills (ours can run as high $400 a month) and on the power grids that support the added equipment. USA Today reported recently that electric bills are so inflated in part because cable, satellite and other pay-TV boxes are always operating, even when they are not being used. According to the Natural Resources Defense Council, the 160 million set-top boxes in U.S. homes cost $3 billion to operate, and two-thirds of that power -- costing $2 billion -- was wasted, because, as one NRDC senior scientist told USA Today, they are "energy vampires," drawing a full quota of energy even when they are not on. The cable industry is working with manufacturers on more efficient equipment, a spokesman said, but it will be years before the overwhelming majority of set-tops are replaced.

In early June, we had a glimpse of what the accumulating demand can do to the local infrastructure when a brief heat wave (a couple of days in the high 80s) produced a full-fledged blackout in our neighborhood of about 4,000 customers that lasted two days. Connecticut Light and Power said that its circuitry simply couldn't handle all the central air conditioners, computers and other gadgetry being powered up -- iPads, iPods, e-readers, game consoles and, for the swanky among us, swimming pools and elaborate home entertainment systems. Whining about these expenses -- which do pay for services that make home life more comfortable, convenient and entertaining -- will not inspire sympathy. But, as most of us take a hard look at finances in the aftermath and continuing consequences of the great recession, the high cost of technology is a factor.

It is easy enough to cut back on the frills, and there are signs that cost-conscious consumers are stripping down their cable packages in favor of on-demand access on laptops and tablets. Cable and satellite bills include fees for hundreds of channels, and surveys show that most customers watch only a handful of them. But there are also signs that this approach also adds costs. You want unlimited Pandora without commercials? You'll pay for it. Mobile apps, games, GPS, single-issue magazines and so forth have been identified as a significant source of revenue. The add-ons for digital equipment are all small items, yet still can accumulate to a tidy sum.

So, aside from the impact on our household budgets, why does the rising cost of technology matter? The reason is that this upward trend is extending the divide in our social fabric between the haves and have-nots. A major study last year by Free Press, a respected public interest advocacy group, showed that that the United States has fallen significantly behind other countries in the expansion of broadband access. "At the turn of the century," the report concluded, "the United States was ranked fifth among the world's nation in broadband penetration, according to data from the International Telecommunications Union. By 2007, we had dropped precipitously to 22nd place just barely ahead of isolated island states such as Barbados." Ironically, it is many impoverished countries that are successfully using cheap cell phone technology to begin closing the gap with developed nations.

The free information services of the past are gradually being eliminated or reduced. Public libraries, an invaluable resource for Internet access -- as well as books -- are under severe local budgetary pressures in many parts of the country, including New York. Telephone books are disappearing because they are an environmental nuisance. Telephone information calls can now cost up to $2. The assumption is that shifting material onto the Internet seems to be cost-free, when in fact we are paying the telecommunications providers whatever price they set. The move to digital communications -- with all the benefits we attribute to the process -- is irreversible, and the costs have been accepted by those who can afford the changes with barely a ripple.

Expanding broadband to redress the digital divide was an early agenda item for the Obama administration. But there is so much else to grapple with now, little momentum seems left for that effort. In the meantime, enjoy all that today's technology provides -- a considerable bounty. After all, you are paying for the pleasure.

Image: Yutaka Tsutano/Flickr.

This article available online at:

http://www.theatlantic.com/technology/archive/2011/07/the-rising-cost-of-at-home-tech/241210/