Hawai'i Tech
Weighing the cost of high technology
By Vicki Viotti
Advertiser Staff Writer
One thing technology hath wrought that's not so wholesome: It's given us all a taste for goodies we can't always afford. People don't always notice the addiction taking hold until the bills kick them in the head.
"It's one of those things that may creep up on them," said Kathy Durham, a Makakilo resident who now is an Internet consultant but worked for 20 years in the banking industry. "Each item doesn't sound like much, but it really adds up.
"First you get Internet access, then you decide you want cable (Road Runner service), and, once you have all the bells and whistles, then you need a new computer!
"Now there are Palm Pilots, and cellular connections, then you want a digital camera so you can e-mail all your pictures to your family."
Durham describes a fairly typical tech-spending progression. Although Durham claims she hasn't succumbed to this syndrome, many others have.
Consider: Just 10 years ago, the average consumer had a household electric hookup, a telephone, basic cable and a VCR, for which they rented tapes from the local video store.
No computer, no fax, no Internet hookup, no cell phone, no digital cable, not to mention a DVD player, membership in a DVD rental club, a digital camera or high-speed computer connections.
The difference can be literally hundreds of dollars a month. Home electric, phone and cable bills totaled less than $100 a month for most households, and a VCR was a once-a-decade investment.
But even as basic electrical and telephone rates have risen, the telephone has been joined by the cell, at anything from $50-$100 a month, depending on plan and usage, and you've added a second land line for the fax.
There's the computer at $1,000 a pop, plus upgrades every couple of years, and a second computer for the kids because they kept hogging yours (and that might mean another phone line). A high-speed Internet connection runs another $50 a month. The full digital cable treatment — or satellite service — can easily run $100 a month.
And then you need a new, big-screen TV to go with your $200-$700 DVD player, and suddenly you're buying DVDs at $20 each.
Market surveys indicate that converts to the Internet stand at the front ranks of the digital spending revolution. According to the 2000 O'ahu Gallup Poll of Media Usage, Internet-access subscribers represent nearly two-thirds of the Island's adult population, compared to one-fourth of the total three years earlier (see graph).
Other favorite objects of our spending frenzy include portable stereo/CD players (60 percent of all households have one) and video camcorders (owned by 55 percent).
Virtually every home has a TV and 83 percent of homes have a VCR. Other electronic toys are also on the rise. A digital camera — not even on the viewscreen three years ago — is now in 12 percent of homes.
One of the few categories to show a decline in popularity last year is the beeper: Owned by 49 percent of 1999 households, only 40 percent of those surveyed last year said they owned one.
Clearly, the cellular phone has overtaken the pager: More than two-thirds of the households have at least one cell now. And wireless phone contracts have added to the financial burdens pushing people over the edge, said Ron Sorrell, a retired financial consultant who now helps the nearly bankrupt to chart a course out of the red ink.
"A cell phone is the latest credit-card fad," said Sorrell, who works for the Hawai'i Credit Counseling Service. "Before you know it, they've used more minutes than they've paid for, and then the charges really go up.
"And when a cell phone company can't get payment, they turn it over to a collection agency that is nastier than a son of a gun."
Sorrell said that all the sundry tech expenses, everything from DVDs for the home theater system to Internet access, contribute to the credit-card debt. But it's the cell bill that most often throws people, he said; when they sign up, they got a phone for free and figure they can afford the budget price plan.
"I point out in the areas of their debt, if you've got 10 percent of your take-home pay going to cell phones, that's too much.
"Then, with late charges, interest fees, the collection agency ... Usually, I see their eyes open real wide," Sorrell said. "It's more than they expected; that's the key word."
Mililani resident Randy Prothero owned a graphic-arts equipment company until recently and relied on his cell phone as a time saver. In his case, it even saved him money, he said, because he used to make pay-phone sales calls from the road.
Prothero was an early adopter of digital "toys," and he underscored that the investments were hard to avoid in his field.
"It's a technology-driven industry," he said. "From the start, I saw that I could either stay current or get kicked to the curb."
But he acknowledged the keep-up-with-the-Joneses mentality that fuels tech spending sprees.
"Once you buy your first PC, you're in for life; that meter never stops," he said. "You always have to buy upgrades. The CD-ROM, the cable modem ... it's a trap, but once you're in, you'll never know how you lived without it."
Prothero remembers his pre-cellular days, for example, when a car problem meant hours of roadside walking to phones and waiting for salvation.
"My wife broke down out on H1 recently. She called AAA on her cell phone. In about 10 minutes, they came, and she was out of there. And I thought, 'This is beautiful.' "
