TCS - There is No Free Lunch

There is No Free Lunch

by by Andy Reti, President
Prescott Computer Society
From the November 1999 issue of the I/O Port Newsletter

Everywhere you turn these days, you find offers for very low cost computers for sale. Ads in newspapers and computer magazines tout some very good computers for incredibly low prices. $299.95 for a 300MHz computer!!! If you look long enough, you can even find some computers for "free"

Is there a catch?

Or the question should be: "Where is the catch?"

If you look in the fine print, these offers usually require you to sign up with an Internet Service Provider (ISP) for about three years for a monthly fee of somewhere around $20.00 to 30.00. As a result you usually get a rebate of about $400.00 off the list price of the computer.

There are a number of problems with this scheme. First, you pay between $240.00 to $360.00 a year for the ISP service or a total of about $720.00 to $1080.00 over the three years. That is a pretty hefty sum for an initial rebate of $400.00. (My calculator says that the Present Value of $20.00 monthly payments at 6% for 36 months is almost $1,000 - in other words you should be getting $1,000 off on the price of the computer.)

Another factor is that you are locked in with one ISP for three years. What if their service deteriorates to the point where you would want to leave them? What if you leave the area and cannot connect to them, or have to pay a toll call?

With more and more competition, prices of ISP services have been gradually declining. But you have signed up to pay $20.00 or $30.00 a month come hell or high water. As ISP service prices decline over the years, your neighbor will be paying maybe $8.00 to $10.00 a month for the same service. How will you feel about that? Also, a major shift in ISP services is on the horizon: Digital Services, Cable, Wireless Services are coming soon. But you will be stuck with what you signed up for, or may have to pay a lump sum to get out of your commitment before you can switch.

What about those "free computers"?

Usually they require you to accept advertising banners on your screen which take up 20% to 30% of your screen real estate. The ads cannot be turned off and some of them must be "interacted with".

What does that mean?

I read in PC World, that a blue stripe appears on your screen, with a color bar which slowly descends along the blue bar. If you do not interact with the ad (place an order or at least look at its contents) by the time the color bar reaches the bottom of its travel, your computer is automatically disconnected from the Internet. To me that is a huge pain, and your "free computer" is no longer free. Can you imaging the hassle and aggravation of such a scheme?

So, before getting that $299.95 computer or that free machine, think of the real costs and the inconveniences. Then, if you decide to go ahead, at least you have made a commitment with your eyes open.

But, believe me, there is no free lunch.



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