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Verizon tiered data plans charge for bits, not speed

By | June 20, 2011, 1:26pm PDT

Summary: Word is leaking around the web today that the Verizon tiered data plans the company has warned about are about to become reality. Surprisingly, rates will be the same for 3G and 4G data service.

Word is leaking around the web today that the Verizon tiered data plans the company has warned about are about to become reality. These are not confirmed by the company but the information is pretty detailed and paints an ugly future for smartphone and tablet data consumers. The surprising information is that Verizon is apparently charging the same for 3G and 4G with these new plans.

The plans offer a paid tier of data beginning July 7 that is reportedly priced as follows:

  • 2GB:$30
  • 5GB: $50
  • 10GB: $80
These monthly fees apply to smartphones and are surprisingly not dependent on 3G or 4G connections. According to the leaked information these rates apply to either service, even though Verizon’s 4G LTE network is many times faster than the older 3G network and doesn’t cover nearly as big an area as the 3G network. Apparently Verizon has decided that a bit is bit when it comes to charging, not concerned with how fast they are moved around the network. Customers who want to add tethering, the ability to share the phone’s data connection with other devices, will need special plans that include that service. The following monthly rates will apply for plans including tethering:
  • 4GB: $50
  • 7GB: $70
  • 12GB: $100

These tethering plans lump regular data caps with tethering consumption for the rates as indicated. Hitting the data cap in any month does not shut down the service, Verizon charges a hefty $10/GB overage fee.

Tablets will get their own data plans with Big Red, with two tiers available for the slates. A 1GB monthly plan will cost $20 while a 2GB plan will be priced at $30. It’s a safe bet this excludes the ability to use the tablet for tethering.

The leaked information indicates that existing Verizon customers with unlimited data on their smartphones will be grandfathered in for the duration of their contracts. Any upgrading of equipment has historically been treated as a new contract so those with grandfathered unlimited plans may want to hold on to that older equipment as long as possible.

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James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long.

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James Kendrick has no affiliations or relationships that need to be disclosed.

Biography

James Kendrick

James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long. Prior to joining ZDNet, James was the Founding Editor of jkOnTheRun, a CNET Top 100 Tech Blog that was acquired by GigaOM in 2008 and is now part of that prestigious tech network. James' writing has appeared in many print publications: Smartphone and Pocket PC Magazine, Information Week and Laptop Magazine to name a few. James' coverage of the mobile technology sector has regularly appeared in the New York Times, Salon.com and CNN/ Fortune online. Not just a writer, James has filmed numerous video reviews and how-tos that have garnered well over a million viewers. He has appeared on local news segments and been interviewed by the Associated Press on mobile technology topics. Additionally, James has been podcasting about mobile technology for years.

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RE: Verizon tiered data plans charge for bits, not speed
JACOBSONR 14th Oct
Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.
I wish Apple would use some of their pile of cash to either buy an existing phone provider or else start their own cell data network. This charging by the bit is just a bunch of BS.

There is no way that Apple can move completely to the cloud with data plans like this.
It's absolutely stupid that they treat users like this. And personally I think this metering by the bit is absolutely stupid. What they should charge you for isn't how much data you suck down, they should charge you for the average rate at which you consume data, which should be calculated monthly and applied to the bill. I can easily see plans like this
Note these are AVERAGE use values, calculated at the end of a month:
250MB/day - $X
500MB/day - $XX
1GB/day - $XXX
2GB/day - $XXX

And so on... You'd pick one of the plans which reflects your common usage and if your average exceeded the usage at the end of the month, you'd pay the overage of whatever they see profitable.

However, I think that metering is awful anyway. If you're gonna meter, do it fairly enough so that users that barely use don't over pay for an amount of data they'll never consume, and users who use and abuse monthly pay through the nose!


I know I'm with AT&T and I got the 2GB plan to be safe. Never mind that I don't use my data NOW because I prefer WIFI, but the fact that I MUST buy a 2GB plan to avoid unnecessary overages is pathetic. When I do travel, I expect my phone to be oh...I don't know, USEFUL?!

But it's similarly pathetic that you have to rely on WIFI to do much with your phone...life is no better than when the iPhone first debuted. If it's not because the mobile networks are slow, it's because they charge way too much toll to access the same damn information.

The customer must up-rise against the provider and teach these businesses that this model IS UNACCEPTABLE!
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@ZazieLavender

This is why I still use my old Razr phone. What good is a smart phone without a data plan? I don't want to pay that kind of money for a phone and a plan, then be afraid to use it.

The providers want to charge the non-users a lot, then charge the users a lot more! I am OK with the providers making a profit, but the amount of profit they want to rake in is ridiculous!
@noibs

Because apple won't say, 'that's a great idea, but it should be at least 35% higher a month on account of magic?' Seriously, you're really going to use the markup kings as potential saviors in your argument? That's like electing a republican in the hope of reducing gun money to israel.
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@KittyK4t

Best analogy of the month!
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How many times?
spatula6 20th Jun
Great, now we can party like it's 1995. How many times must carriers try to meter data access, have people hate that stupid idea, then start offering unlimited access?
@spatula6: They will repeatedly try to shaft the public as long as they can get away with it. They will keep trying it over and over until "their time comes" and people just tolerate it like any other loss of personal freedom. As long as the Sheeple keep the portable device addiction, the companies will keep trying to shaft them.
I'm as much a tech geek as most, but I refuse to be bent over a barrel for the rates they charge for these smart devices. I can do a lot with the almost 400 a year I save by not having one.
The problem with these big companies is this: Where are you going to go in protest? Are you willing to accept an even poorer experience to prove your point? Most aren't. It goes back to that addiction thing.
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What, no reach around? Unfortunately I see this getting popular with the other carriers so it won't be too much longer before AT&T and Sprint (and T-Mobile if they are not part of AT&T by then) adopts this crap.
@athynz Nah, one carrier will be smart and keep the unlimited access and they will grow because of it.
@Peter Perry - AT&T had unlimited and (claimed) their bandwidth was being over-saturated, hence ending it and putting in tiered plans... looking at where their profits go, providing customers with real service is not their top priority.

Not to mention, they already get taxpayer subsidy ("welfare", "socialism", whatever the popular buzzword is today) to prop up their company - and that's gone back for at least 18 years, based on the years represented in this article: http://www.ctj.org/html/layoffs.htm
Whats the point of LTE if you can't use it because your data will run out?
How do you even know how much data you need?? If you're linking android to a work email that pushes constantly throughout the day I imagine the volume would get prohibitive in a hurry.
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@mcomins Verizon has an app and widget that shows you the bandwith you've consumed. It's called 'Data Usage'. It's not predictive, but I've been watching mine for a little while now and it's helped me quantify how much bw I've been using for data.
On top of already lower-quality audio and video...
sad
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Look at the plans again. $10 a gig isn't much worse than what you're paying per gig for the plan. I thought it was a pretty good deal.

Unless you're doing something like streaming video, these plans aren't bad. Where I live in the country, we don't have cable, but we DO have a Verizon tower 1 mile away. For $80 we get 10 gigs which allows us to do a whole lot of internet surfing, even with some video thrown in. Even at 3g, we are oftne getting near 1000kps and sometimes bursts up to almost 2000kps
@Drakaran Not sure how you do math "where you live" but $30 for 2GB is $15/GB, and $80 for 10GB is $8/GB. Regardless, do you honestly think it is worth being tiered if you have more active days/weeks/months than others?
When I go for Annual Training for the military, I can be gone from 14-30 days, with no viable net access, save for my phone. Is it fair that my formerly 'unlimited' plan covered that above average use but my new tier will not?
This is a dumb article. Should you get your gasoline cheaper because you have a 4 cylinder engine and I have a V8? Of course not!
@bruce@... But you pay less for gas in total when you have a 4 cylinder, don't you?
@the_crow1@... You just reinforced the point of the person you were responding to. Please who suck down data at higher speeds end up downloading more data and paying more for the privilege. You don't have to come up with some contrived formula to charge for speed - the hotrodders will pay more anyway, as they should.
@bruce@... great analogy. The V8 would only use gas quicker. Same with 4G vs 3G - 4G just uses up the data quicker...
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@bruce@... now that you mention it, bruce... YES! I should get my finite-supply, non-renewable, ecology-disrupting, fossil-fuels at a cheaper rate, if I am actively taking steps to reduce my rate of consumption. But what does that have to do with the cost of providing the ethereal service of bandwidth access?
The fact is, what the providers are charging for is seating on the bus... they incur the cost of making sure the bus is available when needed, and if they need to have two buses available, because nobody wants to wait for the first bus to become available again, then everyone using the bus must share the cost of maintaining the second one... regardless of individual user frequency. It matters not whether the second bus gets to leave the station fully loaded, or has to leave with only one little ol' lady...the cost of having that second bus available remains static.
Is there anyone out there, above the age of 8, that is naive enough to believe that the provider is going to absorb the cost of that second bus with a reduction of profit? c'mon! really?
Show me a business that values customer satisfaction and loyalty enough to view customer service as anything besides a profit-eating liability... and I'll show you a company that pays quality employees, in their home country, a decent living wage.
personally... I'd just as soon pay for the damn phone, if it would reduce the cost of using it.
If you hear VZ's quarterly earnings calls, it is a source of pride that they can extract a higher ARPU (average revenue per user) and want to push it higher. With close to 100m consumers they must think consumers will JUST pay... and if AT&T gets to merge with T-MobileUSA there will be far less competitive pressure anyway. Is the MetroPCS LTE network any good? Don't you get unlimited talk, text and web browsing for $45?
0 Votes
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This is ridiculous!
pantherfan690 21st Jun
They are making huge profits already from their cellular business, so much so that they use it to prop up their landline business! This stinks of monopolistic practices, raising the prices because they CAN, not because they are providing more/better services. If I remember right the cost per GB of bandwidge for an ISP is somewhere around 8 cents, a far cry from 8 dollars! I know they want to make a profit, but this is price gouging!
@DavidL98... Yes and no. If I drive a 4 cylinder and you have a V8, should I be forced to pay the same amount of money in total for gas as you do? In the same light, if you have a V8 but only drive it once a month, and I have the V4 driving everyday, would you want to pay the same amount per month for gas as I do?

My point is this...I don't want to pay $30 for 2GB if I dont use all of it in the one month. Conversely, if I have a heavy month and go over the 2GB limit, I don't want huge overage fees. In summary, they should charge you for the ACTUAL monthly usage, if they continue with the tiered plan. In all honesty, unlimited means unlimited, not unlimited until we decide to gouge you for more money.
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Hefty overage charges?
kidtree 21st Jun
How is $10/GB a hefty overage charge? It's the same as the mid-level $50/5GB rate. OK, it's all a pretty hefty charge, but the overage is right in line with the rest.
As for ZazieLavender's suggestion of metering by average usage per day X the number of days, doesn't that multiply out to charging by the bit?
I keep looking for a way to use smartphone tethering to allow me to drop my landline/DSL, so this news bums me out as much as anyone else, but sending complex data addressed to individuals over the air is complicated & expensive technology, and I suspect it will always cost more than we'd like.
The tethering plans seem reasonable, but here's the million dollar question - if they can provide 12GB for $100, why can't they offer an unlimited plan for $125??? I WANT to use my notebook/netbook with a 4G MiFi the same way I use DSL at home, except the direction carriers are currently heading, that's never going to happen!!!

This is all indicative of poor infrastructure - rather than boost capacity to meet demand, which would be the right thing to do, carriers resort to throttling usage. It's hardly a question of revenue either, because if that were the case, carriers would be raking in MORE money from users paying premium for unlimited. Money that could in fact be used to modernize/support their back end. Anybody who argues that carriers need to run a legitimate business are talking out of their ass, because there is a very real market now for heavy/serious users that simply isn't being met.

I'll admit I watch a few videos from Hulu/Netflix, but my "modest" consumption still tops 25GB/month on average. Is there any point in offering faster speeds if caps will limit users to low-bandwidth activities like web surfing and email? Should I really have to pay $250+ if I do need that 25GB in a given month? Going forward has always meant giving more, not taking away and having less!

Clearwire's unlimited 4G service would seem good for $45/month, and sadly the only choice left, except the damn thing doesn't work:

http://lgponthemove.blogspot.com/2011/01/accessory-corner-clearwire-4g-clear.html
@lgpOnTheMove
Cough-Spluetter - are you kidding.

Double-charging Tethering rip-off.

If you have 5Gb data plan, you should be free to use it how you want. Anthing less is anti-competative and stinks of greed.

Anti-trust class action anyone ?
This is why innovation is down in America.
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