Step 2: Bottle Cutter
or more appropriately, "score-er". I found this one online for around $15. There are many different kinds, but they all essentially do the same thing. Which is score the bottle all the way around, allowing you to use the method of your choice to turn the score into a perfect crack.
Make sure to apply steady pressure as you turn the bottle, and try not to slip. You want a straight line all the way around, and only one time around.