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Americans spend more on tech bills than utilities, report finds

Terrie Krumal, education and marketing coordinator at Consumer Credit Counseling Services, teaches classes on personal finance and how to rein in costs.

Staff photo by Chris Stewart Terrie Krumal, education and marketing coordinator at Consumer Credit Counseling Services, teaches classes on personal finance and how to rein in costs.

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In this photograph taken by AP Images for Time Warner Cable, Time Warner Cable displays their product at the 2012 International CES in Las Vegas, Tuesday, Jan. 10, 2012.

Jack Dempsey, AP Images for Time Warner Cable In this photograph taken by AP Images for Time Warner Cable, Time Warner Cable displays their product at the 2012 International CES in Las Vegas, Tuesday, Jan. 10, 2012.

Many consider Internet services, mobile devices ‘21st-century utilities.’

By Dave Larsen, Staff Writer Updated 8:48 AM Thursday, January 19, 2012

Most Americans are spending more per month for wireless mobile, broadband Internet, and cable or satellite TV than to heat their homes as communication services become necessities of daily life, according to a new report.

The study found that 63 percent of U.S. households spend 35 percent more on technology bills than utilities such as electricity, natural gas and water.

“Technology is now the real utility as increasingly households spend more on a combination of technology bills to stay connected than their utility bills,” said Vishal Darr, co-founder of iYogi, the remote technical support company that conducted the survey.

Consumers typically spend 6 to 12 percent of their annual income on traditional utilities, according to the U.S. Department of Energy.

People spend an average of $94 per month on mobile services, and from $20 to $180 per month on Internet service bills, according to the iYogi report.

Half of the survey’s 1,083 respondents subscribed to bundled packages that included Internet, TV and phone services from a single provider.

Consumer Credit Counseling Services has seen an increase in local clients’ expenses for Internet, cable TV and cellphones, said Terrie Krumal, education and marketing coordinator. In contrast, utility bills have remained fairly constant, she said.

“When we sit down with them, the most common remark is: ‘I didn’t realize how much money I was spending,’ ” Krumal said.

The nonprofit credit counseling service is part of Graceworks Lutheran Services and helps people with credit and debt problems at offices in Dayton, Springfield and Sidney.

Water, electricity and natural gas are “20th-century technologies,” said Mark Cooper, research director for the Consumer Federation of America, an association of nonprofit consumer organizations. “We can debate the cable or multichannel video, but certainly  broadband and cellular are the utilities of the 21st century.”

Communications services becoming household essentials are signs of a “progressive economy,” Cooper said. “That’s the way you measure yourself as a 21st-century society, is by making these (technologies) basic services (essential) for daily life.”

The U.S. ranks ninth worldwide in broadband penetration, with 63 percent of households receiving high-speed Internet service, according to a 2011 Federal Communications Commission report.

In Ohio, 61 percent of households used broadband Internet at home in 2009, up from 7 percent in 2001, according to the U.S. Department of Commerce.

Cooper said people without broadband are generally considered deprived. “They can’t fully participate in daily life because so much stuff goes over the Internet,” he said.

John Draper of Beavercreek said his monthly technology expenses include cable television,  high-speed Internet and five cellphones for his family members. “It’s all under one bill,” Draper said. He wasn’t sure of the monthly cost, but said it was affordable.

“We didn’t know what we were missing until we had cellphones, and now we don’t know how to live without cellphones,” said Draper, a financial planner who uses his iPhone for business to stay in touch with his office and clients. “It’s part of life,” he said.

Krumal said technology bills are one of the first areas where people with credit or debt problems can reduce their expenses.

People need heat, electricity, water and food to live, “but they don’t have to have cable,” she said.

Convincing clients to drop communications services to help them get out of debt is a struggle, especially with younger people who feel the need to stay connected through texting.

“They see it as a connection to their family and friends. It’s hard for them to give that up,” Krumal said.

Cooper said he was surprised that communication service costs haven’t dropped as the technologies have gained wider acceptance. “They are so important people are willing to pay for them,” he said.

Contact this reporter at (937) 225-2419 or dlarsen@DaytonDailyNews .com.

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