Fusion Product Changes

March 1, 2012 – 5:31 pm

Today we have made changes to our Fusion service in order to further simplify the product, to improve service delivery, and to lower costs.

Previously Fusion was a bit confusing – it’s one product, but was offered four different ways: residential single-line, residential dual-line, business single-line and business dual-line. This meant four different price points, and business users basically paid more for less: a $10 to $20 higher monthly fee, plus a penny a minute for all their calls. (More on this below!)

We have also found that residential dual-line service was rarely purchased, with only one out of twenty customers selecting this product. When it was, there were more delivery challenges due to the household wiring, and more cancellations due to delivered speed concerns.

We often found that these residential customers didn’t actually want the two phone lines, and instead were hoping for more speed, generally seeking 20-40Mbps. While bonded Fusion is double the speed of a single line, it was sometimes being purchased by folks located at longer much longer distances who were desperate for more performance. For a speed-hungry consumer on a very long loop, they frankly might be better served by a cable broadband service at those locations.

On the other hand, even at longer lengths and slower speeds, the single-line service is a compelling value: unlimited and uncapped broadband at the maximum speed that we can deliver plus home phone with unlimited usage for $39.95. It’s a very nice deal. Two lines for seventy dollars plus the applicable voice taxes just isn’t a very good fit, and it shows in the signup and churn numbers.

We have also been studying resource usage by our business customers, and we’ve found that from the perspective of voice usage, they actually use less than the average home user! This was a surprise to us, and it created an opportunity: simply eliminate the $0.01 charge that our business customers have been paying for calling. So, that’s in effect from today – Fusion phone service is now very simple: free calling, regardless of location type.

Based upon all of these findings, today we have reduced the Fusion service to two very simple products:

  • For Residential customers:
    • Unlimited broadband and home phone for $39.95
  • For Business customers:
    • Two phone lines plus double speed broadband for $89.95

Of course both of these products include all of our free features like FaxLine electronic fax, a free domain name with Personal Web Hosting, 15 email accounts, Free International calling, Voicemail and voice features like Caller ID.

For currently users of the two products we have eliminated (residential two-line service, and business one-line service) we will continue to provide the service to these customers at the current price points, so nothing changes for these established customers. (One bonus: for the business customers, they will no longer be billed for their voice usage!) For a new home customer who really wants the two line service, we will deliver the faster business service to a home location.

We are also changing the way that we provide equipment. We found that when customers re-use a modem from another provider, they often spend a lot of time get it set up, and it is always in question if there is trouble with the circuit. Is the problem the modem, or the line? If it’s the modem, who is responsible, and how much time does the customer have to spend with us to get that worked out? With an older ADSL1 modem that lacks ADSL2+ support, the customer’s speed will be limited to 8Mbps, potentially much slower than it would be with a modern unit. Also, does that old modem have a full set of the necessary filters, for all the regular telephone devices in the home?

So, equipment is now provided free for every new customer. The basic kit for residential customers includes everything that’s required, including new phone line filters, a splitter, Ethernet and phone cables and the modem itself. This should make getting set up with Fusion easier than ever, and if there is trouble – our staff know the product well, if there is trouble, we can easily swap or replace it if the modem is at fault. Of course, even things that are free there is a catch: sales tax, and shipping and handling. However, we know that the provided equipment and setup kit will make setup and support much easier for our new customers.

For those who want a device with Wi-Fi, an advanced kit is also available. It includes a modem with four-port Ethernet router and Wi-Fi access point, now offered at a discounted price of $19.95.

For our business customers, we now provide a ZyXel dual-line bonding ADSL2+ modem which has four Ethernet ports and built-in Wi-Fi. It’s a great small office solution, delivering dual-line Fusion speed and convenient Wi-Fi access.

Finally, in an effort to keep monthly recurring costs as low as possible, we are now charging a line activation fee of $35 for the residential service, or $85 for the two-line business service. This keeps most of the one-time costs of circuit ordering and provisioning in a one-time payment, so we don’t have to amortize these one-time expenses into the monthly rate that customers pay forever.

Over the last couple years, we have made many changes to improve our Fusion service, and I’m excited to be continuing the product evolution. Our team is working hard to make the product easier, faster and more useful for you, at the best possible price point.

 

  • Jezra

    Can current customers take part in the $19.95 wireless upgrade?

  • Anonymous

    No, the free & reduced cost modem inclusion is a new offering, sorry.

    -Dane

  • KS, Belmont

    Hmm, it’s sad there’s no option for “these residential customers [who] didn’t actually want the two phone lines, and instead were hoping for more speed”.  Wouldn’t it be possible to offer a bonded solution with only one phone line (at less than 2.25x (ideally less than 2x) the cost of a single line?

  • Anonymous

    No, I’m afraid not. The costs are not in the phone service, they are in the copper loop rental itself. Voice (and voicemail, caller ID, etc) is just a feature, it doesn’t have substantial cost. Our goal is one simple product, with ALL the features – no add-ons, no nickel and dime pitches. This is why we keep adding features, at no extra cost, like FaxLine, free international calling, etc. There is more to come too!

    -Dane

  • Thomas H

    I currently have a adsl whole house splitter. Do you offer an adsl 2+ whole house splitter from instead of individual filters which I heard can be problematic? If not, can you recommend a brand and model that works best with Fusion.

  • Milky Joe

    Hi Dane,

    Voice has a substantial cost for the customer, though. The municipal fees for SF customers of the bonded product were on the order of about $25 per month. That’s roughly a 35% effective price penalty for customers who just wanted faster Internet and didn’t care about voice service!

  • Anonymous

    Joe,

    This is true – voice has $9-$12 in taxes and fees, per line. But, we are struggling with growth, and product simplification is key for our survival, and delivery of consistent and quality service to our customers. The product is and will be “one size fits many”, but clearly we won’t have the ideal product for every consumer due to the lack of flexibility.

    A unified product is part of our strategy — you’ll see us continue to drive more features into the voice and data components of the product. Clearly, not every customer will find value in all of the features, but a single product at a single price point greatly simplifies things, allowing us to incorporate additional features without having to bill for them, and without having to build software around all of that billing.

    There are a few other small points that activating the voice on the port helps with:
    a) Having voice on a pair makes it less likely to be “stolen”. Believe it or not, technicians in the field looking for a pair to deliver on will listen for dial tone, and if there is none may assume a pair is idle, and will take it, despite it not being available in the inventory.
    b) Delivering voice as a mandatory feature means that customers who have voice + DSL today with another carrier must port over their number – AND, as a bonus, their proven, working pair. If instead we offered data only, it
    would arrive on a new pair, using the crufty long-unused copper that is
    unproven.
    c) Delivering voice as a mandatory feature means customers must port their
    number and copper over, which is already wired throughout the premise. This
    allows for self-installation, and saves the technician install fee that is
    required for a new loop (as would be required if, for example, voice was
    not included.)

    It’s a set of interconnected issues, and we believe that to scale the
    product we need a single product, single network configuration and price
    point, and we must leverage the advantages of long-working copper where
    possible too.

    -Dane

  • http://tristantom.com Tristan

    Hi Dane,

    I’m on an older original plan; residential dual line for $65., no phone line. Is it possible to keep the bonded dual line for internet but get one phone line? Should I/can I stay with what I have? I do benefit from the additional up speed with dual lines, I think.

    Or, should I just get your current residential one line service?

  • Anonymous

    Tristan,

    You can stay with what you have, or switch to the grandfathered two line residential for $69.95. We do not offer a one-line product.
    -Dane

  • Richard

    Great, straight information.

    It makes me want to sign up!  (Oh hang on, I already did that, in 2001.)
    Very “soft” sales work like this (and the decades of active involvement in various forums) seems like a good use of CEO time to me.  Build the brand by appealing to people who don’t want branded BS!  I do hope it’s working for Sonic also.

  • http://tristantom.com Tristan

    Thanks. The only thing holding me back from switching to the two line residential is the voice line taxes which would likely add about $15-$20. to my monthly bill.

  • Dana

    If I was going to to purchase a new modem/wireless router anyway but wanted to get the same one you offer, what would that be? Seems like it would make support easier.

  • Anonymous

    The retail price of the wireless router is $59.95, and we can certainly sell that product to you at any time!

    -Dane

  • http://www.jezra.net/ Jezra

    I am certainly interested in the wireless router as well. What is the make and model of the wifi router?

  • Anonymous

    Currently we offer a ZTE W300 Wi-Fi DSL modem/router. It supports for Ethernet devices plus Wi-Fi with 802.11g. It’s a good basic modem/router, but doesn’t offer the N speed performance for Wi-Fi that really recent (and more expensive) routers like the Apple Airport do. FYI.

    -Dane

  • http://profile.yahoo.com/K52BMU3XDUMYW7MDR4Y6QKNTQI Steven

    Argh! I just ordered new service on Tuesday (still waiting to receive any equipment) and paid for the modem and everything. It’s still a good deal, but it would have been nice to save myself the money by waiting another two days!

  • Anonymous

    Don’t feel too bad, new orders are subject to an activation fee, so it comes out pretty similar in total.
    -Dane

  • http://profile.yahoo.com/K52BMU3XDUMYW7MDR4Y6QKNTQI Steven

    Phew, thanks Dane!

  • W Lau

    doh , you announce this 2 weeks after I sign up and was too cheap to buy your modem.

  • John Aney

    Did Sonic.net or DirecTV raise the rates for the bundled packages recently?  The spreadsheet link referred to in the 09/01/11 posting from Dane in the Sonic.net TV forum indicated that a bundled package with Fusion and DirecTV choice is $51/month for the first year, and I just got off the phone with billing and they said it’s now $90/month for the first year.  What gives?

  • Anonymous

    Pricing for the DTV bundle will vary based upon the programming package and number of TVs and DVR equipment. I would suggest phoning and talking to Jenny in billing, she is the product manager for this service.
    -Dane

  • r.

    Dane- I appreciate the service you are trying to offer here, while at the same time maintaining an operating business.

    I am in the process of moving to CA and setting up new internet service. Although I do not need any voice service at all and it really frustrates me to have to pay for a service that I will not use (and even more so the taxes on said unused service), this seems to be the lesser of the evil options available in current broadband offerings in the US.

    If you are true to your word on trying to offer a simple product line I guess I just need to lean on all of the other consumers to not use the POTS service on their bundled broadband, and eventually dry loop will become the majority preference and thus a required offering to your marketing strategy. I can only hope you haven’t grown into an unfriendly shareholder driven big business by then, or the government hasn’t just re-named all of the POTS taxes to “emergency broadband access” taxes and shifted them over =P

    All other performance-related things (various maddening anti-incentives provided by each company) being equal, I’m happy to support a shop who’s CEO is accessible and active in engaging his consumer. Lose that edge and you’ll disappear into the crowd and I’ll be hunting for an alternative again.

  • Gsparent

    I agree the phone line taxes is keeping me from an upgrade also.

  • John Aney

    Thank you, Dane.  I will!

  • Charlie

    Would you be so kind as to quantify what a ‘very long loop’ is? 
    Your site tells me my location is at 13,330 feet.  Where does that put me, “long loop” wise?

  • Anonymous

    13,000 feet is very long – you should expect rather slow speeds, 1.5-3Mbps roughly, the average at that distance is around 2Mbps. See the chart here: http://www.dslreports.com/forum/r26910859-New-Fusion-average-speed-distance-chart

    -Dane

  • Zbob

    When will Fulton 7 West 3rd Get on line? Or, Dane will it be prime for SR Fiber to The Prem? bobm

  • Xiaomingzhou

    Currently I am using one-line resident Fusion, the DSL download speed is around 110KB/s due to home far away from CO. I am wondering is 2-line product would make the DL speed faster?

  • Steve Cabito

    Hi, Dane. Thanks for all the work you’ve done for us over the years (wifi at the JC, downtown on the buses, A+ support, member tools, and more). I’m a firm believer in loyalty, having been an ISP myself, but all the chest-beating about gigabit access for $70, 20 mbps access for $39, people in Albania or wherever with ungodly-fast connections for half what I’m paying makes me want to start shopping around. I’m within the S.R. city limits (Sonic’s backyard) and feel hamstrung, unable to move forward from my 6 mbps service for five years now. That’s an awfully long time. Is there anything on the horizon?

  • http://twitter.com/WillieFDiazSF William Diaz

    I personally felt the same as you, I paid, bought my own equipment and by the time my service was active, this promotion went into affect. Fortunately after talking to Dane about it, he offered to switch me to the new rate plan option with the equipment Sonic supplies, but Id be paying $13 shipping fee plus $39 activation, which ironically came out to more than my own purchase of my modem and new router – the stuff I wanted based on performance and looks.. I also get to keep it all in the end too. So it kinda made me think the deal really is in buying what you want to start, skipping activation fees.

  • http://twitter.com/WillieFDiazSF William Diaz

    Dane, I think the new pricing for Fusion is a great idea, obviously a value, but perhaps adding a mid-level option will get more people to upgrade. $49.99 or $55.99 for Bonded ADSL2+ (40mbps) and ONE phone line. I know Id be tempted to upgrade if it was only $10 more for the speed alone. Dont need two phone lines or the tax associated with that, but I would like more speed.

  • http://twitter.com/WillieFDiazSF William Diaz

    R. You are always welcome to sign up for naked DSL from AT&T and get roughly 1/2 or 1/4th the speed Sonic offers for a bit less. You can also sign up for Comcast, and pay $50+ for the same data speed Sonic can offer you. Except in Comcast’s case, you WONT have a phone at all. In both AT&T and Comcast’s cases, you would also have a cap on your data of 150GB or 250GB respectively. 
    Sonic, even with the landline phone, and taxes associated, is actually a better deal, because you arent feeding the mega conglomerates that suck, getting by far better customer service (ones that will actually call you back) and are getting unlimited internet not capped internet. The bonus is that you are getting a landline, thats bolted into the copper wire, not that VoIP crap that Comcast sells that goes down all the time, and certainly (in my previous experience, do not know if it still happens) the per call taxes that are associated with it.

  • Andrew

    Why don’t you have an internet only option? I don’t need a phone line anymore like a lot of us who have mobile phones and realize now that there is no need for two phone numbers. 

  • Andrew

    And, can I send you back the modem you sold me in October for  $99 and get a refund and have you send me the $19.95 version? Or issue a credit?

  • A.M.

    Is there any option for existing 1-line customers to get the grandfathered two line residential fusion at $69.95? I had had some discussions with sonic tech support about upgrading and the process for doing so w/o disrupting my service, only to find it no longer offered when I wanted to place the order. (I’m not keen on going with the business fusion offering price I can get Comcast business for $75.) 

  • sonicnet

    No, I’m afraid not, we’ve retired that product entirely. Existing customers can retain it, as long as they don’t move or make changes, but we don’t provision it anymore.

    -Dane

  • Rick Stone

    I don’t understand why two lines is more than twice the price of a single line.  Because of where I’m located I get terribly speeds and have been considering a bonded line, however $80 a month is a bit steep.  Ninety bucks a month is worse.  Might be time to start shopping around.

  • Kellin

    Can I use my own Motorola SurfBoard Modem and AirPort Extreme when I sign up for service? I would really prefer to have/use my own hardware.

  • sonicnet

    The Motorola Surfboard is a cable modem, so you won’t use that. We supply a modem, which you can connect your Airport to.
    All of that being said, this is the current offer – in the future, our equipment offering will be different. So, use the web page for full product info: http://fusion.sonic.net/
    -Dane

  • Kellin

    Thank you so much for the reply. Is it possible to get Internet ONLY from Sonic.net or do I have to have a phone line?

  • sonicnet

    No, Fusion is a single simple unified product – there are no choices of speed or features such as phone or broadband.
    -Dane

  • http://www.ivpcapital.com/blog Michael Elling

    Price and simplicity are powerful stimulants; especially when price reflects marginal cost!  Ford made do with 1 color (well not really a color) for 20 years as it drove the cost of a car from $3,000 to $280.  http://bit.ly/JQybBkA similar event happened in 1996 when a little Canadian GSM player offered 400 minutes for $40.  Fully 80% below market rates!  Fancy that!  http://bit.ly/x3gWuK

  • Andrew

    Still no response to why you don’t offer just internet, other than your rational that it’s simpler (for you) and that we all should have land lines, anyway. When a company does not listen to their customers and simply tells them, no, we know what you need  and you are obligated to pay more than the services you want, they generally fail.  It appears that you are forcing us to pay for telephone service that we don’t want, to add to your revenues, as you know that most, if not all of your customers have mobile phones and could very well do without a landline.  And please don’t tell me why I should have a landline, now, in 2012. If I don’t want one, I don’t want one. But I’m forced to pay for one with your service. I would like to support a local company, but it’s hard to do when it’s not price competitive with Comcast.

  • sonicnet

    We have made a choice to offer a single, all-in-one product. It will clearly fit the needs of many but not all prospective customers. I’m sorry if the Fusion product doesn’t have the flexibility you would prefer.

    -Dane

  • Mike

    Dane, just to add some more fuel to the dry-loop fire: I am getting reimbursed for my internet connection through my company, but due to IRS requirements I can ONLY be reimbursed for internet. If the cost delineation between internet and phone is not clear on the bill, then the reimbursement is half the total bill.

    I’m paying half the cost of a service I don’t use, in addition to all the taxes and fees.

    The most dissatisfying part of it all is your extremely weak justification for bundling. I neither want nor need voice. I cannot imagine that offering dry-loop service significantly complicates the internals of your company. If it is REALLY that confusing to costumers, make it a feature you have to call in and ask about.

    I feel like you’re withholding information. I really want to go with sonic.net, but this specter of doubt is what’s keeping me from making the move.

  • Emsunion

    I’ve been really wanting the bonded fusion for a long time to improve speed, but after just calling CS its actually going to cost your residential customers more AND there is $150 set up fee PLUS the first month of service at $85 that’s $235. At least the modem is free, it used to be $99.

    It should be encouraged for ALL customers to want bonded fusion, not just business customers.

    Pretty surprised Sonic has taken this approach

  • sonicnet

    See the article for more details, but we just haven’t found the residential bonded product to be as viable as we had hoped. As we learn, we make changes to the products to adapt to the requirements and the market.

  • Jeff

    Just what differentiates the residential and business products, anyway? If you can offer the business 2-line product to residential customers for $90 a month, couldn’t you instead offer the residential 2-line product to everybody for $70 a month?

  • sonicnet

    The economics of the product don’t work at that level, when the installation, equipment and marketplace are all taken into consideration.

  • A.M.

    Was $70/month viable in the residential market alone? If it was, why not offer the business product at a $20 discount for residential users? 

  • sonicnet

    No, we didn’t find the bonded product at $69.95 was viable. Too many challenges in loops, installation, equipment, churn, etc. Additionally, very few people purchased it, so the combination of these factors led to the simplification and elimination.

  • zachlipton

    I’m saddened to learn about these changes. I had researched Fusion a few months ago and was planning on making the switch now, only to find out that my chosen product (bonded residential Fusion) is no longer offered. I actually do want two phone lines and fully understand that I’m unlikely to get a full 40Mbps out of bonded ADSL2+.

    Under the old plan, I could get two lines+bonded DSL and a static IP for––I think it was––~$70/mo (plus double phone taxes). Now, it’s $90/month, a much larger activation fee, a mandatory $150 installation fee, and $10/month extra for the static IP. It would actually be cheaper (albeit far more insane) to purchase two residential Fusion lines and aggregate them together at the router level than to order the business product for home use. I’d go for $80/mo bonded residential service with a static IP (double the single-line, plus taxes), but forcing me into the business product is too big a jump.

    Sonic is a company I like and want to do business with, and it’s just killing me that when I was about to make the call to sign up, I’m now researching other providers and options again.

  • zachlipton

    I forgot. I’ll also have to pay to rent a modem now, even though I’d prefer to just own the thing. I’d even buy your supported model, but am not all that inclined to pay $6.50/mo forever to rent a $80-$100 device. Add it all up, and it’s increasingly hard for me to do what I came here to do in the first place: switch to Sonic.

  • http://www.facebook.com/people/Soren-Spies/1359820255 Soren Spies

    This sort of simplification to drive down costs and drive up features is exactly why I like being a Sonic customer. I can’t even get Fusion, but I am still proud of this change.

    For those whining about “paying for services not used,” we need to improve the tax situation through our government reps and we need to understand Sonic’s point that the voice service is actually quite cheap for Sonic so they’re just passing along that cheapness to their customers.