$400 off is a sucker bet

Most computer retailers in the US are now publishing their prices $400 lower than the actual price, with fine print explaining that you have to sign up for an ISP's services for three years.

MSN is the usual beneficiary of this deal (although Compuserve is making the same offer), and they charge $21.95 per month. (Most US ISPs offer the same service for $15-20 per month.)

It might look good until you do the math. $21.95/mo for 36 months comes out to the princely sum of $790.20, plus tax, not including the interest you could have earned if you had socked away $21.95 per month.

It hurts to pay "full price" for your new computer, but it hurts even more to take the discount. Don't believe the hype.

If you get $400 off the price of your computer, and then pay $790.20 at $21.95 per month (no sales tax for services) over the next three years, you're getting those 36 months of service for the net cost of $390.20 -- which averages out to $10.84 per month, a nice price for an ISP. This doesn't even take into account the additional interest you can earn by keeping that $400 in your bank and spending it gradually as the ISP bills come in.

The major drawback then becomes the fact that you're locked in to MSN or Compuserve for the full three years, whether you like their service or not. That's more commitment than I wish to give to a modem-based ISP, especially with the ongoing trends in broadband access going on everywhere these days.