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Consumer Watch
Contributing Editor Anne Kandra helps you avoid the gotchas and pitfalls of buying and using technology products.
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Consumer Watch: The Cable-or-Satellite Conundrum

TV lovers finally have a real choice. Here's how to pick the right service.

Anne Kandra

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Photograph: Bill Duke
Television used to be simple: You'd grab the remote and settle in with a cold one to watch the Monday Night Football broadcast from your local cable company.

Of course, if you happened to live beyond the reach of civilization as defined by the closest cable conglomerate, things got a little more complicated. You might have had to shell out a thousand dollars or more for a satellite dish the size of a garage door and then spend weeks figuring out how to get it to talk to your TV.

Those days are gone. No longer does satellite TV mean installation headaches and a large unsightly appendage on your house (now it means a much smaller unsightly appendage). Satellite service has evolved into a direct competitor to the long-monopolistic cable TV industry.

The nation's leading cable companies are countering by expanding and beefing up their own networks, adding services such as high-definition TV signals and movies on demand.

And the battle isn't just about entertainment anymore. Cable and satellite providers also offer services like high-speed Web connections, in some instances provided by their business partners.

So which technology will offer you the smoother ride to this broadband promised land? If you're considering signing on with a new service, here are a few key considerations to help you decide.

Installation and Setup

Advantage: Cable Aside from the wait for the technician, cable setup is about as hassle-free as it gets. With cable, there's no equipment to buy up front, though you may end up paying a monthly fee of about $5 to rent a digital cable converter box--which you'll need if you want lots of channels, HDTV, or movies on demand.

Satellite installation is a little more involved. You buy the equipment instead of renting it, though often you'll get a deal in which you receive the equipment and professional installation for free.

Once you have the dish, you must precisely align it to a particular set of coordinates to receive the signal. You'll need an unobstructed view of the southern sky (called line-of-sight) and a place to mount the dish where it won't be damaged by high winds or other outside forces.

DirecTV and Dish Network--the two major satellite service providers in the United States--will schedule professional installation and setup for your dish and receiver when you sign up for service.

Service and Support

Advantage: Satellite One benefit of cable is that the local office of your cable company handles customer service. The disadvantage? The local office of your cable company handles customer service.

Recent studies conducted by J.D. Power and Consumer Reports show poor customer-satisfaction rates among the major cable service providers.

In contrast, the J.D. Power study found, consumers tended to give top marks to DirecTV and Dish Network.

Monthly Costs

Advantage: Satellite One of the most common gripes of cable TV customers is that their bills keep heading skyward with no cap in sight. (The J.D. Power study reported a 41 percent increase in average monthly cable spending between 1998 and 2003, compared with an 8 percent increase for satellite service.)

Still, the monthly costs of cable and satellite service are generally in the same ballpark for roughly comparable packages: You can expect to pay between $40 and $50 per month for the most basic digital cable or satellite service plan. Beyond that, plan prices can rise to $100 a month or more, depending on features and extras such as HDTV, movies on demand, and premium channels. In general, however, cable tends to have more additional taxes, service charges, and costs for individual features than satellite.

Channel Selection

Advantage: Toss-up Satellite might have a slight edge in channels offered, but either service will supply enough variety to effectively obliterate entire blocks of your life.

One key difference: Cable service plans include local and community broadcasting; on satellite, you may have to pay an extra $3 to $5 a month for local stations, or you might not be able to get them at all. Both DirecTV and Dish Network list available local stations on their Web sites.

Internet Service

Advantage: Cable You can bundle unlimited lightning-fast Internet service right along with your cable package, usually for an additional $40 or so a month. Though DirecTV and Dish Network offer bundled Internet service (the latter has partnered with EarthLink DSL, and the former sells a satellite-based service called DirecWay), both services are generally slower and more expensive than cable.

Features and Extras

Advantage: Toss-up In most cases, if you already have a high-definition TV, digital cable will let you watch whatever's being broadcast in that format, as long as you subscribe to those channels and have an HD-capable cable box (the box adds a few bucks to your monthly bill; some companies charge about $50 for installation).

To watch HDTV via satellite, you'll need a special HD dish and receiver, which typically start at about $400 (though you can sometimes find less expensive deals if you sign a long-term contract). On top of that, plan to add another $10 or so per month for an HD package that includes sports, movies, HBO, and more.

Another hot feature is a TiVo-like digital video recorder built into your set-top box. This feature costs cable subscribers about $10 a month, where it's available. Satellite customers can plan on paying $250 or more for a DVR (though DirecTV is currently offering the device for about $100), plus about $5 a month for service.

And the Winner Is...

If bundled Internet service is important to you, cable is likely the answer. If you want a choice in providers, and attentive customer service, your solution might be a mere 22,000 miles away.

Anne Kandra is a contributing editor for PC World. You can send her e-mail at consumerwatch@pcworld.com.

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