On the Soapbox

NetZero has been plastering the TV with their ads lately, and any ad that I hear or see too many times annoys me, but the recent NetZero ads featuring their CEO Mark Goldston are particularly irksome.

Look, we all know that every Internet provider takes you to the same Internet ... So why pay more to get there?

Yes, it's true that it's all the "same" Internet (unless you're in China, Saudi Arabia, et al.), but in case anyone hasn't noticed, the nature of the Internet has changed such that the vast majority of sites are no longer dialup-optimized. Flash ads (ugh), videos, high-resolution images are all the norm. And then there are the increasing number of interactive web apps that are unusably slow without the necessarily bandwidth. So anyone listening to the ad who understands the Internet would be able to immediately answer his rhetorical question: If you pay a mere 50% more (last I checked, basic 768K DSL packages are around $15/mo, which isn't that much more than NetZero's $10/mo), you can get speeds that are over an order of magnitude faster and that would enable the practical use of much of the "modern" Internet. But of course, the ad doesn't mention that this is effectively a 33% price cut for a 90% performance and usability hit, and most Internet users do not understand enough about bandwidth to recognize that this is a ridiculously unbalanced trade-off.

As a further insult, NetZero offers a $15/mo service that it calls "HiSpeed 3G", both of which evokes thoughts of broadband (since a number of broadband providers name their service "High Speed", and "3G" is generally associated with cellular data networks). Of course, it is neither. In the small fine print (that is exposed only when you click a link at the bottom of the NetZero website), it states that this service is also dialup. And that for many types of data, such as MP3's, images, executables, compressed files, encrypted connections, etc., this service is no faster than regular vanilla dialup. Well, of course! The only way to "accelerate" dialup is to compress the data stream, which only works when the data is compressible in the first place. So they charge 50% more (equivalent to the price of basic DSL!) for a compression hackjob? The audacity of marketing!

The problem isn't so much that NetZero is advertising these services (they are certainly free to do so), but there is a line between advertising and outright deception that marketers (not just NetZero, to be fair) often cross, and this is one such blatant transgression. Hiding relevant information (that this is an order of magnitude or two slower than broadband and is entirely unsuitable for the modern Internet) and using purposefully deceptive marketing terms ("3G") is just wrong and harms the free market (by reinforcing asymmetric information).

Which brings me to the final insult: the latest NetZero ads now claim that the United States can "save" $16 billion per year if everyone switched to dialup, and the ad presents this statistic in a dramatic way that seems to suggest that this is just what the current recession calls for. Which, of course, cannot be further from the truth. Getting people to cut back (and in the process throwing a roadblock in the development of Internet technologies by helping preserve the numbers of low bandwidth users out there) is the last thing this economy needs. Anyone who understands recession economics would cringe at this very notion, since the key problem in a recession is that people cut back, fearing uncertainty, which reduces income, thus fulfilling those fears (basically, people are falling into autarky at an individual level!). But of course, it plays well with people's psyches, which is why a lot of advertisers are doing this sort of thing. In their scramble to grab an ever-shrinking pie, they are causing the very shrinkage of the pie (the media and the seemingly incompetent outgoing and incoming government aren't helping either, but I'll save that for a future post).